Case F: Controlling Performance Management Jacob Victory

1. What is your interpretation of what happened in this case?Assume for the moment that Josh was successful at improvingperformance and that this was why he was being transferred.

The New Vice President
“He is not a nurse,” smirked the pediatric nurse director. “He’sgoing to be a piece of cake,” mocked the other with mischief
gleaming in her eye. They were referring to Josh Webber, their newboss who was starting
that morning as the new vice president of the pediatric division.Josh was not new to the organization. He was a young and eagerexecutive and had paid his dues working for five years as the righthand of the Visiting Nurse Service of America’s (VNSA) presidentand CEO. Thereafter, he was promoted to operations director of theorganization’s highly profitable rehabilitation ser- vices divisionand then promoted to director of performance management, where heworked for more than a year with the pediatric division’sadministra- tor and her team to improve the division’s business andclinical performance.
Josh, holding a box of files and walking confidently with hispolished shoes tip-tapping on the tiles outside of his newadministrative suite’s en- trance, had heard the exchange betweenthe nurse directors. The comment struck Josh as odd because the twodirectors had worked closely with him over the last year and recentimprovements in the division’s operational per- formance had beenhighly praised by VNSA leadership.
“Time to don your game face, Josh!” he thought to himself. Sighinggently, Josh put on a toothy grin, turned the corner and greetedthe two di- rectors enthusiastically as he entered the suite. Thenurse directors didn’t miss a beat and greeted Josh with a warm,“Welcome aboard, Josh!”
The Maternal and Pediatric Service Line
The maternal and pediatric service line was only one part of theVNSA, the nation’s largest for-profit home health agency.
Under the current CEO’s tenure, the VNSA had become a national homecare agency. It employed 30,000 nurses, rehabilitation therapists,social workers, and home health aides, and served almost 500,000patients in six states annually. The agency earned a healthy marginon its annual $5 bil- lion revenue base and, with a conservativemanagement team at its helm, the VNSA was only geared to becomebigger and more influential in enforcing federal long-termhealthcare policy. Its many divisions and programs focusedprimarily on the home-bound frail elderly, especially those in thelong-term care population who made up the Medicare, Medicaid, anddually eligible marketplace. At an annual growth rate of 8 to 10percent, the VNSA was a force in the market, offering short-term,skilled nursing and professional services via its adult, pediatric,community mental health, long-term care, rehabilitation therapy,and palliative and hospice programs. It also operated a lucrativemanaged care company that offered myriad managed care plans to alarge market base of elderly and long-term care patients; more than200,000 members were covered under these plans.
Yet, while the organization’s primary focus was on long-term careand the geriatric population, the agency’s roots had been laid byits maternal and pediatric division, VNSA’s first program, whichhad been founded more than 170 years ago. Now composed of tenpediatric programs, the division annually served more than 35,000mothers, newborns, and children via numerous programs that focusedon short-term skilled care, pediatric care management, andevidence-based preventive services and family-focused programs.Deemed the largest organization of its kind in the nation, VNSA’sstated mission was to serve the most vulnerable populations,especially those who lacked access to healthcare. Almost 90 percentof the patients served lived below the poverty line and wereinsured by Medicaid or enrolled in Medicaid managed care plans.Most of these patients had complex illnesses and, more often thannot, came from socioeconomically compromised environments. Atypical patient profile included a 15-year-old mother withC-section wound care complications; a two-month-old boy with abrain tumor who recently had his left arm amputated; a 14-year-oldgirl with the mental capacity of a 3-year-old experiencing severecardiac and respiratory complications and multiplerehospitalizations—and the list continued on for thousands ofsimilar patients. VNSA’s charitable care and community benefitprograms were a hallmark of its mission, and the maternal andpediatric service line was at the mission’s core.
With annual revenues of $50 million, the pediatric division washistori- cally under-reimbursed and had a loss of $18 million everyyear. Seven of its ten programs were grant-funded, and two werefunded by VNSA’s board of directors’ Charitable Care Benefit Fund.The program that relied on tradi- tional insurance mechanisms forreimbursement was responsible for nearly all of the division’sdeficit.
Despite the annual losses, the VNSA board of directors consideredthis division untouchable. A subset of VNSA board members andcommunity pediatricians also composed the pediatric division’sadvisory board, and these individuals and the division’s chair—afull board member and an influential member of society—were keyfixtures with respect to their commitment, sup- port, and advocacyfor the maternal and pediatric services the division pro- vided tothe communities it served. From a branding perspective, VNSA’sexecutive management shared in the board’s view and actively usedthe ma- ternal and pediatric division in the agency’s publicrelations efforts to market the company as one that focused oncommunity benefit, despite its for-profit status. Moreover, thedivision was the lead recipient of VNSA’s philanthropic endeavors.Millions of dollars were raised for the program, but not enough toreduce the deficit. Yet because VNSA was a highly disciplinedagency in which most of its business leaders annually exceededtheir business and clini- cal targets, the pediatric division stuckout like a sore thumb. In internal man- agement meetings, executiveleadership notably demanded that the division’s management minimizeits financial deficit and had directed a harsh eye and even harshercommentary toward the division because it had not historically metits budgeted business targets. Its clinical outcomes were averageat best, although its customer satisfaction ratings wereconsistently among the high- est of all programs in theagency.
Not surprisingly, the administrators of the pediatric divisionturned over frequently. In the last six years, there had been fourvice presidents be- cause the burnout rate was high. Other issuesstemmed from a lack of insti- tutional support in providing thedivision with adequate business oversight. The program directors inthe division were either nurses or social workers who had beenpromoted up the ladder; these directors maintained the per-spective of frontline clinicians, and focused primarily on ensuringthat the sick children were served. Being labeled a “communitybenefit” program (a euphemism for “a program that makes no money”)and watching their se- nior leaders leave because they were“routinely beat up on at meetings,” as one nurse director put it,made the program’s leaders wary of every new vice president who wasbrought in to lead the division. “How long will this one last?” wasa frequent question.
Josh was wondering the same thing.
Who Is on Deck?
Six pairs of eyes stared at Josh. All six of his direct reports satin front of him, one next to another. “Welcome to Josh’s LeadershipAssimilation,” said the regional head of VNSA’s organizationaldevelopment (OD) human resources division. “In the next three hoursyou will learn about Josh, his management style, his goals, and hisobjectives for the next year,” he continued. Standing in front ofthe room, Josh stared back and, being a visual person, thought thathe was “looking at the living and breathing version of thedivision’s organization chart.”
The next three hours were eye-opening. The OD representative hadasked the group to describe Josh. Words such as young, a man,articulate, competitive, takes-no-prisoner type, poised, ambitious,seemingly courteous, soft-spoken, deep thinker, all-business wereonly some of the terms used. Then the group was asked what theywanted to know from Josh. Most wanted to know
•   how “hands-on” he planned to be in managing theirdivisions,

•   how available he wanted them to be when he neededthem,

•   how he was going to manage a group of clinicianswhen he had no
clinical training, and

•   how and why he obtained his currentpromotion.
Only two in the group genuinely wanted to know how he was going tohelp them perform better, while the other four scoffed. LorannStutters, a director who ran two disease-based programs foradolescents, blatantly asked, “We know you’ve been brought here to‘fix’ this division; how long do you plan to spend here before youposition yourself for your next job?”
Did she really just say that? Josh thought to himself. He enduredthree hours of people venting about the history of the program; ofquestions about his intentions for the business; of sly glancesthat questioned his every answer; and of probing questions that hadmore venom than substance. Only two of the directors remainedmostly quiet and asked thoughtful questions about the strategicpositioning of the division.
After the meeting, Lucas Red, the OD representative leading themeet- ing, gave Josh a piece of paper that listed the five keyimpressions the directors had of Josh; this information had beencollected prior to the meeting.
1. Josh is a male under 35 years of age, but he looks like he justturned 20. 2. Josh is too ambitious. 3. Josh knows how to present acomplex idea in a simple, succinct way. He
is a good public speaker. 4. Josh is the “golden boy,” havingserved as the CEO’s special assistant. It
is obvious how he got this promotion. 5. Josh is a nonclinician;how can he possibly understand patient care issues?
“This is going to be a fun ride, Josh,” he said to himself, tryingto nurse his bruised ego. Josh walked back to his office, sat down,and started to draw an organizational chart.