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HIStalk Interviews Russ Richmond, MD, CEO, Laudio

February 9, 2024 Interviews No Comments

Russ Richmond, MD is co-founder and CEO of Laudio of Boston, MA.


Tell me about yourself and the company.

I’m a lifelong entrepreneur. I’m also a physician, and through that and other activities, I’ve walked the halls of over 100 hospitals and I understand how they run. I have focused my life on building solutions software for hospitals.

I’m the founder and CEO of Laudio, which is an AI-enhanced platform for the frontline leaders or frontline managers in health systems. We support these frontline leaders with workflow that saves them time and drives improved employee retention and engagement, operational efficiency, and improved patient experience.

How much health system employee burnout and turnover can be tied to manager-level behavior rather than organization-wide policies like compensation?

Our best guess is that 60% to 70% of the employee’s engagement, which is the proximal metric for turnover, is influenced or driven by their direct reporting relationship with their manager. Health systems assume that it is always compensation related. I’m not saying that compensation isn’t a very important thing, but we know that frontline workers attach much more to their managers than they do to the overall organization. We know that by improving the bond between a frontline worker and their manager, we can greatly influence their propensity to stay engaged and employed at that organization.

People often say that they love the company, but can’t stand the boss.

People don’t quit jobs, they quit managers. Managers have a tremendous amount of influence on the mental wellbeing of their employees, and anyone who has had a bad boss knows that well.

But what we have learned inside health systems is that they have a special issue, which is that the frontline managers have very large spans of control. It’s not uncommon to see team sizes of 50, 70, or 100 direct reports into a manager. That really stretches the bandwidth of that manager to do traditional management.

The biggest lever is to increase the frequency of timely, relevant connections between the managers and their teams in a way that feels personalized, in a way that makes a big team feel smaller. That in and of itself can drive a tremendous improvement in engagement and retention. If a manager takes the time to have a one-on-one interaction with their team member every month, the likelihood of that team member quitting falls by over 40%. It’s just that the managers sometimes don’t have time to do that.

Beyond that, it’s the intuitive things, and a few counterintuitive things, that make a difference. First, managers showing that they care about the wellbeing of their employee when they do interact with them. How is their schedule? Have they worked too many shifts in a row? Are they forming relationships on the unit and inside their teams? Celebrating or recognizing good work done? These are the types of actions that managers can take that can make a real difference. 

Then somewhat counterintuitively, even when managers interact with team members on accountability-related issues — like corrective action with a worker who is always coming in late — that actually drives an increase in retention. Because all of a sudden, the frontline worker knows that someone is paying attention to them, that someone cares about whether they are there on time.

It can be a wide array of interactions, but the key is that they have to happen, happen regularly, and happen in a way that’s not a bulk email, not pro forma, but in a caring, personalized way.

What is the disconnect between what executives expect and what managers do?

Many executives don’t appreciate the challenge these frontline managers are up against. Huge spans of control, extending to the number of systems that they need to interact with and operate, the administrative burden that they face, and just getting their regular work done in terms of documentation, getting data into the right place, and setting the schedule. Because they are disconnected from that everyday reality, it’s harder for them to support and coach these frontline leaders. It’s harder for them to connect their agenda, which may be system-wide performance improvement, with the everyday actions of the frontline leader.

Laudio solves for that. It connects the overall system wide agenda — say, improving retention of full -time employees, reducing contract labor, or improving HCAHPS scores — with specific daily actions that frontline managers can take that and that fit into their workflow in an efficient way. That’s where we have focused our efforts on solving that problem.

How does a health system define its goals and then package up individual tasks that frontline managers should be doing?

We have live API integrations into the systems around these managers. That includes the HR information systems, like Oracle or Workday. That includes the time and attendance systems, like UKG. That even includes Epic, where we get patient geolocation information. The data aggregation is handled through our platform. 

Once we have the data in one place, it’s just a matter of working with the senior leaders in the health system around their priorities. Some of them have priorities, especially in today’s day and age, around reducing turnover or reducing incremental overtime. In that case, we are pushing those types of actions through Laudio. Some of them have priorities in saving their frontline leaders time, because they can see that they are overburdened. In that case, we are working with the frontline leaders on automating their work and creating more operational efficiency. Some of them have priorities in patient experience or quality, and in those cases, we are emphasizing those workflows.

Because we are a platform that surrounds the frontline leader, it’s just a matter of, from an organizational level, determining what to emphasize first and foremost. Then once we are seeing good results there, we can move on to the next area.

I’m still thinking about a hospital manager having 100 direct reports covering a 24-hour schedule. Is healthcare unusual in that regard?

Yes, it is unusual. I have not seen another industry like it. Normal executive span of control is between six to maybe 12 people. Even when you get to 20 people, which is a low span of control inside an acute care facility, you are way beyond that. 

I think it comes from the guild-based practice of medicine, where practitioners were meant to be individual contributors in an era that wasn’t as team-based and wasn’t as technically challenged. We live with it today, and it has become a more or less a permanent part of the economics of health systems. They have a hard time affording span-breakers and hiring more managers, because most health systems are working to reduce their labor expenses. It becomes what can we do for our managers to give them more capacity to take on these larger team sizes and to still drive the results that we need in the system.

I would assume that a lot of those folks were promoted into management because of their own job performance among peers rather than having managerial aspirations or talents.

That’s correct. Managers in health systems are almost never hired horizontally from other organizations outside of healthcare, and very rarely are they hired horizontally inside a facility or organization. What you see almost all the time is individual frontline workers getting promoted into being a frontline manager when their manager leaves, which we call a battlefield promotion.

In the context of a battlefield promotion, it’s difficult to ensure that that new manager has acquired all of the management best practices, skills, and training that will be needed to be good at that job. It’s a very different job than the one they had been doing. This is where we believe that software can at least be part of the solution, and that we can hardwire a lot of the management best practices through our system and also introduce best practices as they are discovered so that they can become immediately diffused to the managers versus waiting for them to go to get a master’s in healthcare administration or to take some type of a training program that that health system may offer.

Software has a tremendous advantage in supporting especially new managers, but all managers, to quickly acquire some of the skills they need to do a great job.

Do managers get adequate employee feedback from hallway conversations, or is a formal feedback mechanism required?

It is very difficult for a manager in a hospital to get accurate feedback, because they are managing a unit that is working 24×7 while working 40 or 50 hours of the week. They are not regularly interfacing with the entire employee base. When they are, it’s often in the context of putting out a fire. I put that in quotes, such as handling on a patient issue, a physician complaint, or a near-term operational priority like a staffing gap. 

Employee voice tools effectively gather feedback regularly and efficiently. They help managers understand their unit better by highlighting only the key issues that require action. This saves time and enables quick responses to important matters. It’s a great use of technology.

What are early warning indicators for burnout that an overburdened manager can detect so they can at least take action to retain an employee?

Health systems are collecting a lot of employee-specific data continuously all the time. The problem is sorting the signal from the noise, figuring out what is relevant, and then in the context of a busy unit, finding the right way to connect on it. 

Our software helps prioritize and identify the individuals who need the manager’s attention most, using AI and risk models. Then we connect the manager to the evidence-based best next action with that frontline employee. That can vary dramatically, depending on the core issue. It could be helping them iron out their schedule if they have an unusual working pattern where they are always on weekends or something undesirable. It could include helping them think about their promotional pathway and clinical ladder to give them a longer-term view in the system. It could be reviewing complimentary feedback from their patients and recognizing them for a job well done. It really depends on the situation and the individual worker. 

Where Laudio has a real advantage is that since we are collecting all this information, we are understanding what the managers are doing with it and the actions that we are taking. We have created an evidence-based dataset of which actions can support the workers the most. We publish a new use of evidence every week in a part of our website called Laudio Insights, where in a non-commercial way, we are trying to promote the practice of what we call evidence-based leadership. Everyone can benefit from what we are learning around what makes the most difference for managers and how they can use this evidence to practice differently.

What are your company priorities over the next few years?

Continuing to focus on helping create management actions that will drive new levels of impact in health systems. We can handle the data aggregation and analysis that is done automatically in our machine. We are starting to turn our frontline managers into super-powered frontline managers and make them more efficient.

In the future, we want to continue to pull new and different data sources into our system to help them to achieve new horizons of impact. This could include things like the supplies that are used inside each unit. It could include all of the sensors that are in patient rooms around handwashing or whether the patients are being rotated on their beds. We see a future where more and more of this data and information is integrated into a single source of recommendation for the manager so that they can make the impact happen without having the analysis, risk modeling, and data aggregation get in the way.

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