As a search professional who specializes in executive recruiting for the healthcare industry, I applaud the commentary in your Aug. 19 issue ("CEOs with the right stuff are worth the big money," p. 25) and its emphasis on a mix of nonfinancial performance parameters as the basis for incentive compensation for senior healthcare executives.
In healthcare, as in other businesses, if you pay attention to the critical success factors that drive your business-customer satisfaction, quality, ready availability of product, excellent customer support, etc.-the bottom line will take care of itself.
All too often, our healthcare clients shy away from developing an effective performance measurement approach for their executives because "it's too complicated to administer," "the board won't understand it," or "it would be too expensive to install the mechanisms to capture the data." As many sectors in American business can attest, the healthcare industry is missing a major opportunity to align the institutional interest with the personal interest of its senior managers.
We encourage our clients to experiment. While the trial-and-error approach to executive compensation seems risky, experience teaches that quantum improvements in the state of the art are usually accompanied by experimentation.
PHILIP H. GRANTHAM
Columbia Consulting Group