(Updated Tuesday, March 8.)
When I'm introduced as the new chief executive officer of HealthSouth Corp., I'm often asked, "Why did you take that job?"
On the surface, it's an understandable question. HealthSouth is not only working through serious legal challenges resulting from massive accounting fraud perpetrated by members of its former management, but it's also facing a changing environment (related primarily to the "75% rule" which substantially reduces the number of conditions eligible for inpatient rehabilitative care) and an operational infrastructure that has been neglected.
But I've always loved a challenge, and I can't think of anywhere I'd rather be. I have dedicated my career to healthcare and believe HealthSouth is in a "sweet spot" in the healthcare continuum. The long-term demographic trends of an aging population and the continued shift of services to an outpatient setting play to our strengths in post-acute and ambulatory services.
When I arrived in Birmingham the interim team had stabilized the business but appropriately left it to the permanent management team to establish the strategic plan and long-term vision. This has been a multifaceted process, and we are well aware that we are looking at a several-year turnaround. We are setting the strategic course by analyzing healthcare trends with validation from independent consultants, according to each of our four service lines and determining growth opportunities accordingly. No guesswork, just reality.
Early in my tenure, I established five principles that are still guiding my senior leadership team and me. While particular to HealthSouth's situation, they may offer lessons for other management teams in other, more "normal" circumstances:
* Get the right management team in place and look outside of healthcare for fresh ideas. From the beginning, I recognized that the turnaround and success of HealthSouth would require a team effort. As a former competitor of HealthSouth's, I knew I was starting out with an ace in the hole: the quality of care provided by HealthSouth's 44,000 employees was highly regarded. What I needed was a senior management team that would supplement and support these efforts. In addition to me, we have a new chief operating officer, chief financial officer, chief administrative officer, chief compliance officer and general counsel, along with four new division presidents. Two members of this team came from outside the healthcare industry, and most of them are new to HealthSouth. I believe it is essential for a company to be stimulated by new and innovative ideas and perspectives.
* Set a clear strategic direction for the company and make sure it's based on facts, not intuition. My major priority has been to focus our attention on the future of HealthSouth-not on its past. Our strategic vision, corporate culture, management team, operational plan and priorities are grounded in reality and designed to capitalize on our company's strengths. For too many years at HealthSouth, the multibillion-dollar fraud distorted not only how others viewed the company but also how the company viewed itself. Now we have refocused our resources on our operating divisions. Our strategy of expanding into other post-acute services and targeting our outpatient services growth in core markets has been clearly communicated throughout the company.
* Ground the company's culture in the field operations-not the corporate office-and treat everyone with respect. I believe all companies need to have their cultures "housed" where people are interacting and serving customers (in our case, treating patients). At the new HealthSouth, we are creating a culture based on quality, honesty, integrity, compliance and mutual respect.
Recently, I had a facility administrator tell me how she previously had to purchase her own paper and pens, while corporate resources were used to purchase expensive corporate jets and lavish offices. That will not happen in the future. In Birmingham, Ala., we are making sure corporate employees know their mission is to support the work of the employees who have dedicated their lives to caring for others.
* Establish a solid operational and information-system infrastructure upon which to build and grow and ensure appropriate controls are in place. In order to realize our strategic vision and build the corporate culture I've described, there must be the appropriate infrastructure-organization, policies, protocols, systems and reports-to support it. One of my biggest surprises since taking this job has been the woefully inadequate infrastructure at HealthSouth. We are working to install new systems and protocols that will provide us with the financial and clinical information that senior managers and facility administrators need to manage the business in real time. By implementing these changes, we will not only improve our existing operational infrastructure but will also create a solid platform for growth.
* Establish priorities and learn to say "no." Perhaps the most difficult step has been acknowledging that, while there is still so much to be done, we have limited time and resources. Setting priorities is vital to our company's future success. We can't accomplish everything at once. Being disciplined enough to say "no" to nonmission critical initiatives is essential. Where will capital dollars be spent first? Which systems need to be implemented now? What can wait? As CEO, I have to set priorities, and I do have our long-range goals of quality, profitability and shareholder value always at the forefront of my mind.
Ours will be a closely watched turnaround. We expect a lot of attention over the next several months and perhaps even years. And that's OK-we know we have a lot of work ahead of us. But we also know we are building a strong foundation for future growth-grounded in reality and based on solid, ethical business principles. I remain optimistic about the future of HealthSouth and I am very proud to be its CEO.
Grinney is president and chief executive officer of HealthSouth Corp., Birmingham, Ala.