The relationship between a CEO and CFO has always been an important factor in steering a hospital or health system in the right direction, but now many healthcare leaders say it’s never been more important for the two roles to evolve and grow together in a strong working relationship.
“Now, more than ever, the collaboration between CFO and CEO is so vitally critical at simultaneously managing the protection of performance while building the relevance for the future at an organizational level, and you have to be able to hold all of these tensions in tandem,” Darian Harris, CEO of Burlingame, Calif.-based Sutter Health Mills-Peninsula Medical Center, said during the panel, “Finding Common Ground: How CEOs and CFOs Can Align Amid Industry Uncertainty,” at Becker’s 16th Annual Meeting in Chicago.
When it comes to which risks to absorb, mitigate or accept, Doug Watson, executive vice president and CFO of Minneapolis-based Allina Health, said it’s a three-part framework: align on mission and values, build an integrated long-range financial plan and maintain ongoing communication, including solutions like weekly leadership team check-ins.
“If you’ve got a clear path on where you are trying to go and what you are trying to accomplish, it’s much easier to take those inbounds and say, ‘Where are we going to put this?’ or ‘Is this something we’re willing to take the risk on?'” Mr. Watson said. “You’ve got to chart a course to say, ‘We’re going to accept risk in some areas, but it’s all in furtherance of that longer term goal.'”
Robert Chestnut, CFO of Lawrence, Kan.-based LMH Health, echoed this, and warned against leaders trying to solve all problems at once in order to “take the temperature down.” He stressed the importance to strategically look at an issue and determine the bandwidth an organization has to tackle it.
“From my standpoint … even the CEO’s paradigm is only a certain part of the pie,” Mr. Chestnut said. “There are a lot of other things that aren’t being considered, especially, like, allocation of capital. It takes a village to figure this stuff out. It has to be a collective effort.”
Dustin Riccio, MD, president and CEO of Paterson, N.J.-based St. Joseph’s Health System, said the perfect CEO-CFO relationship to him looks like one major thing — trust. Dr. Riccio said it’s important to ask your senior leaders to step outside their comfort zone to learn something new, which will ultimately improve communication overall.
Dr. Riccio also called for an end to the “C-F-no” mantra, a mentality he said has largely stopped, but is important to redirect and ensure finance leaders can be enablers.
“That means sitting down with the CEO and defining what the direction looks like, then figuring out how we can make that look, not saying, ‘We cannot make that happen,'” he said.
When asked what advice he had for a CEO-CFO pair struggling to find their footing, Mr. Harris pointed to alignment.
“We talk about the priorities at the end, but aligning on the how and tensions together, acknowledging that and being willing to make decisions in the absence of complete information [is important], that’s where a lot of friction comes through,” he said.
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