Literally on the verge of bankruptcy in 1997, Northwood Health Systems hired “turnaround specialist” Pete Radakovich as its new President & CEO. Radakovich, using his 35 years of executive management experience in four distinctly different industries, custom-designed a strategic business model that required hundreds of thousands of hours and more than a decade to implement at Northwood. This strategic business model, and the resulting improvements in performance and success it produced, clearly differentiate Northwood Health Systems from many other health care organizations.
Northwood’s strategic business model begins with a focused, well-articulated mission, which is clearly and consistently communicated to employees. This element of the strategic business model acts as a filter for day-to-day decision-making within the organization.
The second element of the model is a defined set of requirements/attributes for the workforce. Northwood seeks employees with lots of initiative, a strong work ethic, a positive attitude, and a willingness to do “whatever it takes” to fulfill Northwood’s mission. Northwood values employees that have a passion for excellence.
The third element of the strategic business model is Northwood’s management infrastructure. Comprised of a massive number of procedures, processes, and systems, the components of Northwood’s management infrastructure are technical constructs which have been skillfully developed, implemented, and integrated. Northwood employees are trained to utilize this custom-designed, sophisticated management infrastructure to continuously improve performance in each area of the organization. Northwood’s management infrastructure consists of (1) a strategic planning system, (2) a formal, disciplined regulatory compliance system, and (3) state-of-the-art communication systems.
As a cornerstone of Northwood’s management infrastructure, state-of-the-art communications systems and information technology play a crucial role in the delivery of cost-effective (profitable) high quality health care. Northwood’s innovation and utilization of advanced technologies creates a progressive environment that incorporates a variety of components including a corporate intranet, custom designed software applications, electronic medical records, electronic forms, telemedicine and video conferencing.
Northwood’s strategic business model is a rare combination of a focused mission, sophisticated management infrastructure, and dedicated employees, all operating in a performance-based culture. Each element of the strategic business model is vertically and/or horizontally integrated with the other elements of the model. It has been a key contributing factor in Northwood’s remarkable transformation from the verge of bankruptcy in 1997, to a world-class organization providing “cost-effective (profitable), quality care.” In turn, Northwood has reinvested its profit, providing extraordinary community benefits through charity care, financially supporting patients, and helping other non-profits in the local community achieve their charitable missions. Northwood’s strategic business model skillfully balances the financial and quality of patient care demands of the behavioral healthcare industry, and provides a model worthy of consideration by other behavioral health care providers.