Saturday, January 31, 2015

What does a customer focused hospital or healthcare enterprise look like?

 James Cullen, CEO of Conach Consulting and a former hospital CEO, asked me to consider writing an article which describes what a customer-focused hospital or health system looks like, from a customer’s perspective?  The question from James was a result of the Healthcare Marketing Matters blog post, “Can healthcare providers become customer-focused enterprises?”
The question was indeed fortuitous, as the news coverage this week in various hospital and provider focused news outlets,  reported that consumerism is one of the top concerns on CEO minds these days.

 But the answer to the question is not a simple as it may seem. There is no checklist of “if I do this and this, I will be a customer-focused hospital or health system, and the healthcare consumer will think so too”. The answer to the question is really a two-part answer. And a hospital cannot arrive at the promised land of being a customer-focused healthcare enterprise, unless it accomplishes part two of the answer. 

Part One- The Health Care Consumer

Think of one’s own experiences when interacting with a customer-focused company.  One is engaged and highly satisfied. Interaction with the company in gathering information is easy, accessible, and clearly understandable across any of the platforms of my choosing.  The experience from the first contact to the last encounter is seamless, meaningful and totally integrated.  Proactive recommendations are sent and tailored to the individual healthcare consumer’s needs be that educational or preventative care. During the engagement process, trust is built and in the case of previous utilization, trust is reinforced and enhanced.  The brand promise is delivered every time. And most importantly as this is perceptual, there is an emotional connection that all that matters is “me”.  At no time do I feel or have an experience that’s it is all about the hospital and health system, making me secondary to what is taking place. The organization is responsive. Satisfaction scores exceed normalized standards.

A note regarding satisfaction. Because the healthcare enterprise may have high satisfaction scores, remember that it only measures the customer's perspective during the process of care.  It does not measure external influences or needs. High satisfaction scores while important do not make a customer-focused enterprise. Satisfaction is only one indicator of customer-centricity.  Satisfaction is a process that can be studied, manipulated, changed, and improved.

Part Two- The Healthcare Enterprise

Sometimes, one must look at the lessons of the past to find the solutions of the future, as healthcare evolves into a retail medicine, consumer-driven business model. So here is some reading homework:  MARKOR: A Measure of Market Orientation, Ajay K. Kohli, Bernard J. Jaworski, Ajith Kumar,  Journal of Marketing Research, Vol. 30, No. 4 (Nov. 1993), pp. 467-477, American Marketing Association; Harvard Business Review, “To Keep Your Customers, Keep It Simple”, Patrick Spenner and Karen Freeman, May 2012; And  McKinsey & Company, The consumer decision journey”, David Court, Dave Elzinga, Susan Mulder, and Ole Jergen Vetyik, June 2009.

Becoming the total healthcare consumer-centric enterprise requires two things. First is outward market orientation. The second is the culture and behavior to support across all levels of the organization the customer-focused business model.

Customer centricity in its pure and simplest form is really a matter of market orientation. “Market orientation refers to the organization-wide generation of market intelligence pertaining to current and future needs of customers, dissemination of intelligence within the organization, and responsiveness to it.” (Kohli, Jaworski & Kumar, 1993.)

To become a consumer-focused healthcare enterprise, and there are 20 indicators in the MARKOR scale to measure market orientation, these three can be considered to be the most important first steps:

Intelligence Generation
1.    Meeting  with customers to understand current and future needs
2.    An in-house market research department or the availability of external market research resources
3.    The ability to detect changes in customers preferences
4.    Annual surveys of customer perceptions which is different than satisfaction measurement

Intelligence Dissemination
1.    Regular interdepartmental meetings on market trends and development
2.    Important developments within the market or with key customers  are shared quickly
3.    Regular dissemination of satisfaction and perceptual  data at all levels of the enterprise

1.    Recognition of changes in customers product or service needs
2.    Alignment of product or service development efforts with customer needs
3.    Regular, interdepartmental planning to respond to changes in the business environment
4.    Responsiveness to customer complaints
5.    Making a concerted effort to modify products or services to fit customer needs

According to Walker Research and the Walker Index, these characteristics are some of the key differentiating elements of customer focused companies that are most likely to produce significantly better long term performance.

Systems to gather the intelligence to be an evolving customer-focused healthcare enterprise are one thing.  Culture and behavior are another, and is more often than not, the potential stumbling block in hospitals and health systems becoming customer-focused.

The culture and behavior of the healthcare enterprise influences and ultimately determines success.  Just because the healthcare enterprise completes one or more of the above, or a select few of the 20 MARKOR scale attributes, that in and of itself doesn’t make the healthcare enterprise customer focused. It only works if the culture and behavior of the organization is in alignment with the underlying organizational beliefs and values.

Customer-centric organizational culture and behavior fall into four areas:

Senior management
1.    Committed to and takes action on being customer-focused
2.    Drives business and financial planning based on the needs of customers
3.    Utilizes  market data in decisions
4.    Business development  is externally focused on meeting the needs of customers
5.    Marketing is a member of the senior team, trusted and is involved in all decisions
6.    Has a high level of tolerance for change
7.    Accepts innovation and has some tolerance for failure
8.    Low tolerance for and eliminates “sacred cows”

Interdepartmental relationships
1.    Interdepartmental cooperation takes place at all staff levels
2.    Formal and informal connections to departments
3.    Openness to  ideas from other departments
4.    Focus is on meeting the needs of the customer
5.    Interdepartmental barriers to meet the needs of the customer is identified and eliminated
6.    Seamless hand-off of customers between departments

Organizational systems
1.    A balanced approach to organizational structure
2.    Market-based incentive structures that focus on long-term company health
3.    Low level of “office politics”
4.    Mechanism is in placed to share customer related data
5.    Continuous evaluation and training on organizational customer centeredness
6.    Strict standards regarding customer service competency skills for all positions
7.    All touch-points  of the customer experience are integrated and seamless

Organizational Culture
1.  Organization's core values are widely shared and intensely held
2.    Senior management establishes norms of customer focused behavior by their actions
3.    There is a culture socialization program for new employees
4.    Conveys a sense of identity
5.    People-oriented
6.    Team oriented
7.    Outcome-oriented
8.    Fosters behavioral consistency

Customer centrality  cannot be marketed into existence with campaigns and forays into the market with “customer-centric messages” or internal declarations of customer focus.  Sooner or later the healthcare consumer will figure it out.  Employees will see it as the flavor of the day and wait it out until the next grand leadership vision comes around.  As in a previous post, the customer-focused healthcare enterprise is a way of life that permeates the hospital or health system with a singular focus. It is outward-looking and responsive, not inwardly focused, and unresponsive.

This is about changing the healthcare enterprise's DNA.  The customer-focused healthcare enterprise is hard to create and takes a lot of work. It’s not a box on a checklist and is not just satisfaction. But in the end, as healthcare evolves into a consumer-centric retail market, it is the only way that the healthcare enterprise can survive. Cutting costs and going lean will only go so far in retail medicine.

Time to get to work and reap the rewards.

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