When Henry Ford Health System CEO Nancy Schlichting hired Gerard van Grinsven from the Ritz-Carlton to work on the West Bloomfield, MI hospital, people thought she was crazy — van Grinsven, after all, was a veteran hotel executive who had also worked at Peninsula, Mandarin Oriental and others, rather than a pure health care leader.
Now retired from Henry Ford, Schlichting today is on the board of 11 organizations, including the Walgreens Boots Alliance, Duke, Michigan State and she works as a technical advisor for a venture capital firm. Schlichting is also an Executive in Residence at Cornell, where she mentors students and an officer of the Detroit Symphony Orchestra.
Health Evolution Editor-in-Chief Tom Sullivan spoke with Schlichting about how she boldly forged ahead with a new vision for health and wellbeing in a setting that did not resemble a traditional hospital while competitors publicly took shots at Henry Ford for doing so, her advice for the next generation of CEOs, the biggest business risk she took in a successful career, the value of bringing in people from other industries, and more.
Health Evolution: As a former CEO and one who is still very active in the industry, what advice would you give to the next generation of health care executives?
Schlichting: We’re becoming too corporatized in health care. The bigger the organizations get, the more detached they become from their communities. In my view, that’s very dangerous. It’s so important that leaders even in large organizations stay connected, listen, learn and inspire people because these are tough jobs and they don’t get easier, they only get harder — and know what people are capable of because they’re frankly capable of a lot more than you probably think. A question that doesn’t get asked enough is how do you trust your organization to do the right thing and what do you put in place when you can lose control and gain control? People always think you can put more controls in place but if you can trust people they can do more and take some risks.
Health Evolution: Speaking of risk, what would you say is the single biggest one you have ever taken?
Schlichting: The West Bloomfield hospital and going ahead with the project particularly at that time. It could have been a disaster, high risk. We had to hire 1,200 people at once, we had no revenue and we were able to be cash flow positive within a year. We had just gone through the financial crisis, in Detroit, so that was risky. What you realize is sometimes when things are most difficult those who take the risk create great rewards. If you believe in yourself, your organization, your team, anything is possible – but you really have to believe in it.
Health Evolution: That’s the hospital project that Gerard van Grinsven was driving. What was the bold vision? What did the model look like?
Schlichting: Gerard wanted to create a hospital that didn’t look like a hospital, a center for health and wellbeing, an environment of healing. West Bloomfield has a greenhouse for growing our own organic vegetables, a spa designed around patient care that also allowed staff to have wellness, and a demonstration kitchen to teach people how to cook. The culinary wellness transferred throughout the entire system – we brought food, design and safety, from west Bloomfield into the rest of the health system. He made food desirable in a hospital environment. We had 200 people show up for a lunch that didn’t have any medical appointment. West Bloomfield opened in 2009, amidst the financial crisis, and Gerard probably saved my career (chuckles …).
Health Evolution: Hindsight being what it is, and despite the risk, the work was successful. But you have said that people thought you were out of your mind at the time. Other leaders, such as Steve Klasko, have described similar situations …
Schlichting: Our competitors thought I’d lost it. That was fantastic. One of our major competitors ran ads on TV saying: ‘We’re not the Ritz-Carlton, we’re a hospital.’ Then they went out and hired some people from Ritz-Carlton. Redesigning health care requires people with a different way of thinking and observing things we don’t see because we’ve been in the space so long.
Health Evolution: Indeed, you’ve espoused hiring people from outside health care and you were something of a pioneer in doing so with that project. What inspired you to start that practice?
Schlichting: It’s interesting, I believe in balance. I’m not someone who thinks everyone should come from outside of health care because of its complexities and nuances. But we had the opportunity to build a brand new hospital in a highly competitive market in the Detroit area, when it was declining. I was worried that if we were conventional we would not succeed. So I wanted someone familiar with health care. Gerard already had connectivity to us, but he really saw things differently and had a vision for what we could do that was terrific. We surrounded him with the best clinical people possible, including a chief medical officer and chief nursing officer, because we had to make sure we were clinically stable and driving outcomes.
Health Evolution: What are some of the other projects inspired from outside the traditional health care realm?
Schlichting: We also partnered with the College for Creative Studies to create the Model G — named after the Ford Model T — a patient gown that’s been selling across the country for several years and producing a modest amount of revenue for us.
Health Evolution: We began this interview by discussing how health care is becoming more corporatized. What can CEOs do to make their organizations thrive in that environment?
Schlichting: One of the most important things you can do is communicate in all different ways. What you are thinking about, what they’re thinking about, and create leadership systems because the more people understand, the more effective they are. I remember the day I realized I lost complete control of the organization: I met someone who was new to the hospital and told me she was working on the global health initiative – I didn’t know we had one. Obviously, we empowered people and they were doing stuff. They got outside money for it and didn’t ask. It’s now a huge focus.
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