Effective Physician Leadership Series
In today's podcast, we learn how nonprofit board membership enables you to acquire management and leadership skills.
If we wish to demonstrate our executive skills on our resumé and our LinkedIn profile and describe them during our interviews, we need to know what they are.
So, today we start by describing the 5 domains of business management that physicians must understand to move into an executive position.
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Nonprofit Board Membership and the 5 Business Management Domains
The list is in order from easiest to obtain to the most difficult.
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Financial Management Skills
A healthcare manager must be to understand and read financial reports, especially profit and loss statements and a balance sheets. Also, knowing the difference between cash and accrual accounting is important. Finally, a very useful skill is being able to create, explain, and follow a budget.
-
Data Management Skills
Typically the most common and easy for us to understand is quality improvement. Metrics such as mortality and complication rates, and length of stay are critical in healthcare.
There are also patient satisfaction surveys. These are the Medicare-required patient satisfaction surveys, which can affect how much an institution is paid. In more general terms, being able to apply statistics and epidemiology, and understanding biases and confounding of data are also important.
-
Business Management Skills
Time management, productivity tools, and analytical skills are important. Negotiating and contracting are necessary skills. Sales and marketing and project planning are other essential skills for healthcare managers and leaders.
-
Leadership Skills
There are specific types of skills that fall into the leadership category. These include thinking strategically, communicating well, and being persuasive. Leaders must place a strong emphasis on ethics and accountability. Nurturing personal growth, and knowing how to promote the vision, values, and mission of an organization are needed. Finally, developing and maintaining a positive culture in an organization is critical. -
Talent Management Skills
This is the most challenging area. It includes attracting and recruiting staff, onboarding, orientation, setting up compensation, understanding benefits, and managing direct reports day to day. Since much of that is taken care of by the HR department, it can be difficult for a still-practicing physician to develop expertise in these areas.
Summary
When pursuing a nonclinical job, especially if it involves management responsibilities, skills from these five domains will be critical to acquire. This is especially true if the job involves upper management in a large corporate environment, such as a hospital, pharmaceutical company, or insurance company.
In the second part of this discussion (Episode 255), specific examples of expertise acquired while volunteering in nonprofit organizations will be described.
NOTE: Look below for a transcript of today's episode.
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Links for Today's Episode:
- How to Quietly Build Leadership Skills As You Serve a Nonprofit – 016
- 5 Steps I Took to Be a Hospital Executive – 175
- How to Pursue a Nonclinical Career in Hospital Management – 080
- NewScr!pt
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Transcription PNC Podcast Episode 254
How Nonprofit Board Membership Can Be the Key to Leadership Experience
John: Let's get to our main content today. Again, we're going to start with the end in mind. And so, if you're looking for some kind of a nonclinical career that involves management and executive position, even if it just has some leadership involved in it, but it's nonclinical, nontraditional, there are going to be some skills that you're going to have expected to have learned to apply in that kind of position.
The issue always is how do I get those kinds of experiences when I'm working clinically? Sometimes it can happen in your job. If you run your own office or if you're the chair of a committee at the hospital, you'll get some of those skills. But I'm going to talk about a way to get many of those skills that you can then talk about in your resume and your cover letter and so forth.
That's why we always start with the end in mind. The end of mind is you're trying to get that job that requires some management, some executive duties. And so, you have to be able to demonstrate in three major situations that you have those skills and that's going to be in your resume and you might allude to them in your cover letter, on your LinkedIn profile, and then also during your interviews. Think about that. "I have to demonstrate these. So, I have to be able to put something into my resume."
How does that work? Well, in the resume, they don't necessarily want to see a list of jobs you've had or volunteer positions or work that you've done on the side by your role. What they really want to see in that resume, and I talk about this in other settings, I've talked about resumes on the podcasts, I've interviewed Heather Fork. There are things you can look at to get into more detail on the actual definition and the content of a resume.
But the bottom line is they want to see examples where you demonstrate those skills. To say, "Well, I have a degree in such and such" it doesn't really matter if you haven't actually taken that degree and implemented the skills you learned by obtaining that degree or in other areas that can show that you can do the job that they are hiring you for. Keep that in mind.
Because we're looking at what we can show on a resume and in a LinkedIn profile, then we really need to get some hands-on experience. It's hard to do that when you're working clinically, you're not going to get a side job in a business or something to do those. But let me talk before we get into how to get those, and I may end up breaking this up into two episodes because it's a lot to cover in one 25-minute episode.
I'm going to spend the first half of this talking about what those skill sets are. Sometimes you can get those experiences in different ways. For example, maybe you have some experiences from before you went to medical school or nursing school if we're talking to other clinicians. So, keep that in mind. Or maybe there's some post residency experiences that you have, or sometimes you'll be able to use some of the skills that you've learned doing clinical medicine or practicing, and those are so called transferable skills. Let me talk about that for one minute.
Let's say that you want to demonstrate that you have a skill of being able to present something to a board of directors. Well, obviously presenting some kind of presentation to a community group or to a physician group would demonstrate definitely a transferable skill to now being able to do that in front of a board of directors. There's really not that much difference. That's kind of a no brainer.
Another example. Let's say that they want you to have some kind of project management skills. The job that they're asking you to do requires you from time to time to take on a new project, develop a new service or a new way of doing things. Well, maybe if you've developed a new clinical program at a hospital or in a medical group, that would be a demonstration of a transferable skill, again, developing a new service line.
Now, one thing I do want to mention is that obtaining and having a business degree is not the same thing as having management or leadership experience. Those are actually two separate things. One is knowledge base, and you can learn about things, the definition of things, and learn specifics about marketing and finance. Some of those things we're going to talk about today. But that's not the same as implementing those skills. And so, sometimes on the job training, even if it's a non-paid job is better than let's say an MBA or some kind of business instruction.
Let's really get into what are those five management or executive skill sets that many of these jobs are going to be looking for, whether it's in pharma, whether it's at a hospital or health system, whether you're an editor for a publishing company, you're going to need some of these management skills. And I'm going to take my lead from the American Association for Physician Leadership. That's where the model that I'm using today, these five areas of experience and expertise. And so, let's get started by defining those first. Let me list those. Here we go.
You have financial management skills, data management skills, business management skills, leadership skills, and then finally, the talent management skills. I put them in this order, not because there is really any set order, but I put them in this order from the number one as the easiest to obtain in a volunteer position to those that are more difficult to obtain. Again, financial, data management, business management, leadership, and then talent management, or HR, those kinds of things are the most difficult to get in general.
But let me give you little more detail on those five areas. Number one is financial management skills, or just simply knowledge and expertise in finances. What are some of the requirements or the examples of what you would need to know and how to do in that area? It's things like the following. Just being able to understand and read financial reports. That means do you know what a PNL is? And can you look at a PNL, compare different PNLs, understand the difference, which one's good, which one's bad, which one shows growth, which one doesn't? Then you have a balance sheet that usually goes with that. Those are the two primary financial reports.
But then again, you need to know the difference between a cash and accrual-based accounting system. You're going to maybe need an understanding of healthcare finances, which are different, especially if it's a nonprofit than other businesses, pharma financial reports, when you look a lot different than a hospital financial report. For example, in hospitals, there's a lot of write-offs because of the way hospitals are paid. That can also apply to large groups.
And then the other big piece of that is understanding budgets. And to take it even a step further, understanding budgets is very important. But being able to create a budget is really a skill that most of us are not going to develop in even most of the jobs we're doing. But even as CMO, I reached the point where I had to really be able to explain my budgets, defend my budgets, and then adjust my budgets with the help of my directors on an annual basis. For most of us just understanding what a budget is and understanding the need for setting a budget well before the beginning of the next fiscal year is extremely important.
The other thing that comes up, that's pretty useful in a lot of organizations, and that's portfolio management. And even in the hospital I worked with, of course, we had investments and the finance committee at the hospital sometimes would have to make decisions and work with their brokers and how to invest those monies.
One thing that a hospital does and other large corporations do is have a number of days of cash on hand. That means if you were to stop receiving any payments whatsoever, your organization can continue to go and make its payroll and pay all its bills for so many days. But a lot of businesses have maybe 30, 60, 90 days. The average hospital has a little bit over a hundred days of cash on hand. The hospital I was at times had almost a year's worth of cash on hand, which is a very positive thing. I doubt that's true today after coming through two years of a pandemic.
Finance committee, knowing finances is something we don't learn in med school and residency, obviously, but it's an area that's important. And particularly those things that I talked about in the last couple of minutes. Now later, I'm going to tell you which of those things can be gained through volunteer work, and how you can gain knowledge of those things through volunteer work.
The second area is data management skills. Data management in healthcare, typically the most common and most easy for us to understand is quality improvement and patient safety data. That's everything from mortality rates, complication rates, that also includes length of stay, the risk adjusted usually in the healthcare environment, but that's not the only data that one needs to learn how to work with.
Besides that, there are things like patient surveys. That's the form of data. You get patient satisfaction surveys, that's HCAHPS or CAHPS. CAHPS is a generic term, HCAHPS is for hospitals. And then hospice has such things, nursing homes have such things. These are the Medicare required patient satisfaction surveys, which affect how you're paid. Again, another form of data management and data monitoring, understanding statistics and epidemiology, understanding biases and confounding and data. Those would be the big ones. Even the financials are a form of data that you need to understand which we've already talked about. There is overlap in these different five experience areas that you need to know about to be a good executive and get certain jobs.
The third one, this is more of a generic term - business management skill. What is unique to, let's say, running a business that we haven't already talked about? It does include financial report reading and understanding. It does include a little bit of quality and statistical analysis. But when we're talking about this group of business and management skills, we're talking about time management and understanding productivity tools, analytical skills, that's a little hard to measure. But how about negotiation? Techniques for negotiation, contract negotiation. That could be for an individual employment contract, which as physicians, a lot of times we don't get into, unless we own our own practice.
Contracting with a union. I was a volunteer for a board. I was the health board of the local county and it was one organization that I was in where the employees were unionized. I was the president of that board for several years. And as such, I was involved with the negotiations. And in fact, later on, even though I was no longer the president, because I had the experience negotiating and working with the union, I was put on the task force to help negotiate the subsequent ones. That's a skill you won't learn in med school or residency obviously, but it falls in that general rubric of a business or management skill.
Project planning. Now all of us know how to do project planning at some level. We're going to do a project at home. We're going to put in some landscaping. We're going to repair something. We're going to work with contractors to add an addition to our home. Those are all projects. But in business you get some big projects. And how do you learn if you're going to be working in a situation where those kinds of projects are happening on a regular basis? You need to know how to run those projects if it happens to fall in your department or your division. So, project planning is an important part of business and management skills.
And then usually sales and marketing fall under that. Again, something we rarely learn about while we're going through our medical education, but just about any business, including nonprofits, including hospitals, including hospices and nursing homes need to know how to do sales and how to market themselves. Because the secret to being successful in most cases is growing. Companies that remain stagnant, they're not growing, they tend to struggle quite a bit. There's always seems to be easier to be successful, have a bottom line by growing.
So, it's important that you do some sales and marketing to understand that in certain jobs, because it's going to be critical in almost any business. And even on something practical, like how to write a Gantt chart? A way to show how a project is planned out from step A through Z, and then over time, a Gantt chart.
And then another good thing to understand and know about is a SWOT analysis. Now it's not like a SWAT team and the police. A SWOT stands for Strength, Weaknesses, Opportunities, and Threats. It's a way to analyze your position in a market. Usually get a team together and you look at what your strengths are, what your weaknesses are, what opportunities are in that market and what threats are in that market. You put all that information together and it becomes very useful in doing strategic planning, which is long term planning, really, or even just management planning, which could be a six to 12 month planning cycle. And again, that all falls under business management skills.
The next one is leadership skills. It's really a set of skills that can be defined. It sounds rather vague. We all have our thoughts of what a leader is and what a leader does. A leader is usually someone who's very focused, who thinks strategically, who communicates well, and gets buy-in by all those around them. But there's some specific types of skills that fall into the leadership category. Focus on ethics and accountability. Leaders really are the ones that inspire others to follow. They usually have a lot more background and they spend a lot more time thinking about succession planning, both for themselves, and those around them.
A little bit more direct understanding, but this goes into business as well, and that's managing direct reports on a day-to-day basis. Particularly when you're the leader, let's say you're the CEO. And then you have 5 to 10 VP levels around you. You have to create a very strong united cohesive team that works together very effectively to run a large organization. We're talking hundreds of millions of dollars in health systems and hospitals, and even billions of dollars when you get into pharmaceutical companies.
So, if you want to be a leader in that setting, you have to work with your direct reports very effectively. There's a lot of performance management understanding how to recognize people, promote people and really an understanding in the executive role of an org chart. Usually when you go into a job as a medical director or a CMO or CMIO or something like that, you kind of handed the org chart and say, "Well, this is how it's going to be."
But the further up you get that chain to be the leader of the organization, then you're going to be asked to actually create the org chart and you're going to move things around. And it's not set in stone. This director may not always report to this VP. Maybe switch to another. That is especially true, as a CMO like myself came into an organization. Do I report to the COO? Do I report to the CEO?
Let's see some other ideas about leadership. You have to be very good at communication. Clinicians are usually good at communication, whether it's nurses or others on the team. But there's a different type of communication in leadership. Again, inspirational, understanding how to talk to different stakeholder groups. Is it a large group, a small group? Is it a board? Is it the community?
How to focus on nurturing growth, as I mentioned, as an important topic for an effective manager and leader. And how to promote the vision, the values, the mission, and develop a culture. That's much more important for a leader in one of the top-level positions. But even if you run a division or department, those skills can be very useful. And sometimes you have to actually create the mission and the vision and the values, either together with a team or with your board, depending on the structure. That's what I would say about leadership.
And by the way, the leadership skills are the most difficult to get early on because you're not starting as a leader. Even if you're doing some of the other things we talked about in terms of financial, the data, the business management skills, the leadership skills will come later, but you want to grab those as soon as you can. Get an opportunity to work on those. And a lot of that comes from running projects, which will help you learn management skills and that kind of thing.
All right, I do want to talk about the fifth one. And this is the most challenging. That's talent management skills. It includes HR, includes things like attracting and recruiting, onboarding and orientation, setting up compensation, understanding benefits, managing direct reports day to day. Performance management. What to do with a poor performer? How to encourage good performers? How to use recognition? I mentioned that a little bit under leadership. These are things that are tough to get into because even if you get a chance to be a medical director or you're on a board or even a subcommittee of a board, most of that stuff is taken care of by the HR department.
One of the things I recommend in any situation where you're eventually going to get to a nonclinical job is to try to have at least one or two people report directly to you. It's so many times that you can be in an office if you're in a large group and you have all these people working around you, working for you, but they don't actually work for you. They don't report to you. They report to their manager. The nurse reports to the nursing director. The MA's report to somebody else. And so, it can be a weird structure. It's common, but if you think about it as a physician, who are you reporting to? Do you have someone that you're directly responsible to? It's usually another physician. They like to have physicians manage physicians.
But how do you get the experience in that job or in some other job, even a volunteer job, managing people? Well, most of the time, if you're volunteering, then there is no reporting. The other people are reporting to their boss who's not a volunteer. That's why I put the talent management as the last one. But I'm going to talk about how you can get a little bit of experience in there, but don't sweat it because everybody knows that. And unless you actually run a business, you're not going to have a lot of experience with talent management.
Really that's what I wanted to start with in part one of this presentation. Those are the five areas that a lot of nonclinical jobs, particularly if it involves working at a management or executive level, that you're going to need to obtain skills in and can be very challenging. But now here's where we're going to get into in part two, how to overcome that challenge and actually develop some real skills that you can leverage to get that first job. And I'm going to give you real examples of organizations I've worked in. Probably mostly one organization, but I've been on multiple of these nonprofits volunteer type organizations where I was able to get different skills, doing different jobs on a volunteer basis at different organizations. Let's get into that next time.
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Transcription PNC Podcast Episode 254
How Nonprofit Board Membership Can Be the Key to Leadership Experience
John: Let's get to our main content today. Again, we're going to start with the end in mind. And so, if you're looking for some kind of a nonclinical career that involves management and executive position, even if it just has some leadership involved in it, but it's nonclinical, nontraditional, there are going to be some skills that you're going to have expected to have learned to apply in that kind of position.
The issue always is how do I get those kinds of experiences when I'm working clinically? Sometimes it can happen in your job. If you run your own office or if you're the chair of a committee at the hospital, you'll get some of those skills. But I'm going to talk about a way to get many of those skills that you can then talk about in your resume and your cover letter and so forth.
That's why we always start with the end in mind. The end of mind is you're trying to get that job that requires some management, some executive duties. And so, you have to be able to demonstrate in three major situations that you have those skills and that's going to be in your resume and you might allude to them in your cover letter, on your LinkedIn profile, and then also during your interviews. Think about that. "I have to demonstrate these. So, I have to be able to put something into my resume."
How does that work? Well, in the resume, they don't necessarily want to see a list of jobs you've had or volunteer positions or work that you've done on the side by your role. What they really want to see in that resume, and I talk about this in other settings, I've talked about resumes on the podcasts, I've interviewed Heather Fork. There are things you can look at to get into more detail on the actual definition and the content of a resume.
But the bottom line is they want to see examples where you demonstrate those skills. To say, "Well, I have a degree in such and such" it doesn't really matter if you haven't actually taken that degree and implemented the skills you learned by obtaining that degree or in other areas that can show that you can do the job that they are hiring you for. Keep that in mind.
Because we're looking at what we can show on a resume and in a LinkedIn profile, then we really need to get some hands-on experience. It's hard to do that when you're working clinically, you're not going to get a side job in a business or something to do those. But let me talk before we get into how to get those, and I may end up breaking this up into two episodes because it's a lot to cover in one 25-minute episode.
I'm going to spend the first half of this talking about what those skill sets are. Sometimes you can get those experiences in different ways. For example, maybe you have some experiences from before you went to medical school or nursing school if we're talking to other clinicians. So, keep that in mind. Or maybe there's some post residency experiences that you have, or sometimes you'll be able to use some of the skills that you've learned doing clinical medicine or practicing, and those are so called transferable skills. Let me talk about that for one minute.
Let's say that you want to demonstrate that you have a skill of being able to present something to a board of directors. Well, obviously presenting some kind of presentation to a community group or to a physician group would demonstrate definitely a transferable skill to now being able to do that in front of a board of directors. There's really not that much difference. That's kind of a no brainer.
Another example. Let's say that they want you to have some kind of project management skills. The job that they're asking you to do requires you from time to time to take on a new project, develop a new service or a new way of doing things. Well, maybe if you've developed a new clinical program at a hospital or in a medical group, that would be a demonstration of a transferable skill, again, developing a new service line.
Now, one thing I do want to mention is that obtaining and having a business degree is not the same thing as having management or leadership experience. Those are actually two separate things. One is knowledge base, and you can learn about things, the definition of things, and learn specifics about marketing and finance. Some of those things we're going to talk about today. But that's not the same as implementing those skills. And so, sometimes on the job training, even if it's a non-paid job is better than let's say an MBA or some kind of business instruction.
Let's really get into what are those five management or executive skill sets that many of these jobs are going to be looking for, whether it's in pharma, whether it's at a hospital or health system, whether you're an editor for a publishing company, you're going to need some of these management skills. And I'm going to take my lead from the American Association for Physician Leadership. That's where the model that I'm using today, these five areas of experience and expertise. And so, let's get started by defining those first. Let me list those. Here we go.
You have financial management skills, data management skills, business management skills, leadership skills, and then finally, the talent management skills. I put them in this order, not because there is really any set order, but I put them in this order from the number one as the easiest to obtain in a volunteer position to those that are more difficult to obtain. Again, financial, data management, business management, leadership, and then talent management, or HR, those kinds of things are the most difficult to get in general.
But let me give you little more detail on those five areas. Number one is financial management skills, or just simply knowledge and expertise in finances. What are some of the requirements or the examples of what you would need to know and how to do in that area? It's things like the following. Just being able to understand and read financial reports. That means do you know what a PNL is? And can you look at a PNL, compare different PNLs, understand the difference, which one's good, which one's bad, which one shows growth, which one doesn't? Then you have a balance sheet that usually goes with that. Those are the two primary financial reports.
But then again, you need to know the difference between a cash and accrual-based accounting system. You're going to maybe need an understanding of healthcare finances, which are different, especially if it's a nonprofit than other businesses, pharma financial reports, when you look a lot different than a hospital financial report. For example, in hospitals, there's a lot of write-offs because of the way hospitals are paid. That can also apply to large groups.
And then the other big piece of that is understanding budgets. And to take it even a step further, understanding budgets is very important. But being able to create a budget is really a skill that most of us are not going to develop in even most of the jobs we're doing. But even as CMO, I reached the point where I had to really be able to explain my budgets, defend my budgets, and then adjust my budgets with the help of my directors on an annual basis. For most of us just understanding what a budget is and understanding the need for setting a budget well before the beginning of the next fiscal year is extremely important.
The other thing that comes up, that's pretty useful in a lot of organizations, and that's portfolio management. And even in the hospital I worked with, of course, we had investments and the finance committee at the hospital sometimes would have to make decisions and work with their brokers and how to invest those monies.
One thing that a hospital does and other large corporations do is have a number of days of cash on hand. That means if you were to stop receiving any payments whatsoever, your organization can continue to go and make its payroll and pay all its bills for so many days. But a lot of businesses have maybe 30, 60, 90 days. The average hospital has a little bit over a hundred days of cash on hand. The hospital I was at times had almost a year's worth of cash on hand, which is a very positive thing. I doubt that's true today after coming through two years of a pandemic.
Finance committee, knowing finances is something we don't learn in med school and residency, obviously, but it's an area that's important. And particularly those things that I talked about in the last couple of minutes. Now later, I'm going to tell you which of those things can be gained through volunteer work, and how you can gain knowledge of those things through volunteer work.
The second area is data management skills. Data management in healthcare, typically the most common and most easy for us to understand is quality improvement and patient safety data. That's everything from mortality rates, complication rates, that also includes length of stay, the risk adjusted usually in the healthcare environment, but that's not the only data that one needs to learn how to work with.
Besides that, there are things like patient surveys. That's the form of data. You get patient satisfaction surveys, that's HCAHPS or CAHPS. CAHPS is a generic term, HCAHPS is for hospitals. And then hospice has such things, nursing homes have such things. These are the Medicare required patient satisfaction surveys, which affect how you're paid. Again, another form of data management and data monitoring, understanding statistics and epidemiology, understanding biases and confounding and data. Those would be the big ones. Even the financials are a form of data that you need to understand which we've already talked about. There is overlap in these different five experience areas that you need to know about to be a good executive and get certain jobs.
The third one, this is more of a generic term - business management skill. What is unique to, let's say, running a business that we haven't already talked about? It does include financial report reading and understanding. It does include a little bit of quality and statistical analysis. But when we're talking about this group of business and management skills, we're talking about time management and understanding productivity tools, analytical skills, that's a little hard to measure. But how about negotiation? Techniques for negotiation, contract negotiation. That could be for an individual employment contract, which as physicians, a lot of times we don't get into, unless we own our own practice.
Contracting with a union. I was a volunteer for a board. I was the health board of the local county and it was one organization that I was in where the employees were unionized. I was the president of that board for several years. And as such, I was involved with the negotiations. And in fact, later on, even though I was no longer the president, because I had the experience negotiating and working with the union, I was put on the task force to help negotiate the subsequent ones. That's a skill you won't learn in med school or residency obviously, but it falls in that general rubric of a business or management skill.
Project planning. Now all of us know how to do project planning at some level. We're going to do a project at home. We're going to put in some landscaping. We're going to repair something. We're going to work with contractors to add an addition to our home. Those are all projects. But in business you get some big projects. And how do you learn if you're going to be working in a situation where those kinds of projects are happening on a regular basis? You need to know how to run those projects if it happens to fall in your department or your division. So, project planning is an important part of business and management skills.
And then usually sales and marketing fall under that. Again, something we rarely learn about while we're going through our medical education, but just about any business, including nonprofits, including hospitals, including hospices and nursing homes need to know how to do sales and how to market themselves. Because the secret to being successful in most cases is growing. Companies that remain stagnant, they're not growing, they tend to struggle quite a bit. There's always seems to be easier to be successful, have a bottom line by growing.
So, it's important that you do some sales and marketing to understand that in certain jobs, because it's going to be critical in almost any business. And even on something practical, like how to write a Gantt chart? A way to show how a project is planned out from step A through Z, and then over time, a Gantt chart.
And then another good thing to understand and know about is a SWOT analysis. Now it's not like a SWAT team and the police. A SWOT stands for Strength, Weaknesses, Opportunities, and Threats. It's a way to analyze your position in a market. Usually get a team together and you look at what your strengths are, what your weaknesses are, what opportunities are in that market and what threats are in that market. You put all that information together and it becomes very useful in doing strategic planning, which is long term planning, really, or even just management planning, which could be a six to 12 month planning cycle. And again, that all falls under business management skills.
The next one is leadership skills. It's really a set of skills that can be defined. It sounds rather vague. We all have our thoughts of what a leader is and what a leader does. A leader is usually someone who's very focused, who thinks strategically, who communicates well, and gets buy-in by all those around them. But there's some specific types of skills that fall into the leadership category. Focus on ethics and accountability. Leaders really are the ones that inspire others to follow. They usually have a lot more background and they spend a lot more time thinking about succession planning, both for themselves, and those around them.
A little bit more direct understanding, but this goes into business as well, and that's managing direct reports on a day-to-day basis. Particularly when you're the leader, let's say you're the CEO. And then you have 5 to 10 VP levels around you. You have to create a very strong united cohesive team that works together very effectively to run a large organization. We're talking hundreds of millions of dollars in health systems and hospitals, and even billions of dollars when you get into pharmaceutical companies.
So, if you want to be a leader in that setting, you have to work with your direct reports very effectively. There's a lot of performance management understanding how to recognize people, promote people and really an understanding in the executive role of an org chart. Usually when you go into a job as a medical director or a CMO or CMIO or something like that, you kind of handed the org chart and say, "Well, this is how it's going to be."
But the further up you get that chain to be the leader of the organization, then you're going to be asked to actually create the org chart and you're going to move things around. And it's not set in stone. This director may not always report to this VP. Maybe switch to another. That is especially true, as a CMO like myself came into an organization. Do I report to the COO? Do I report to the CEO?
Let's see some other ideas about leadership. You have to be very good at communication. Clinicians are usually good at communication, whether it's nurses or others on the team. But there's a different type of communication in leadership. Again, inspirational, understanding how to talk to different stakeholder groups. Is it a large group, a small group? Is it a board? Is it the community?
How to focus on nurturing growth, as I mentioned, as an important topic for an effective manager and leader. And how to promote the vision, the values, the mission, and develop a culture. That's much more important for a leader in one of the top-level positions. But even if you run a division or department, those skills can be very useful. And sometimes you have to actually create the mission and the vision and the values, either together with a team or with your board, depending on the structure. That's what I would say about leadership.
And by the way, the leadership skills are the most difficult to get early on because you're not starting as a leader. Even if you're doing some of the other things we talked about in terms of financial, the data, the business management skills, the leadership skills will come later, but you want to grab those as soon as you can. Get an opportunity to work on those. And a lot of that comes from running projects, which will help you learn management skills and that kind of thing.
All right, I do want to talk about the fifth one. And this is the most challenging. That's talent management skills. It includes HR, includes things like attracting and recruiting, onboarding and orientation, setting up compensation, understanding benefits, managing direct reports day to day. Performance management. What to do with a poor performer? How to encourage good performers? How to use recognition? I mentioned that a little bit under leadership. These are things that are tough to get into because even if you get a chance to be a medical director or you're on a board or even a subcommittee of a board, most of that stuff is taken care of by the HR department.
One of the things I recommend in any situation where you're eventually going to get to a nonclinical job is to try to have at least one or two people report directly to you. It's so many times that you can be in an office if you're in a large group and you have all these people working around you, working for you, but they don't actually work for you. They don't report to you. They report to their manager. The nurse reports to the nursing director. The MA's report to somebody else. And so, it can be a weird structure. It's common, but if you think about it as a physician, who are you reporting to? Do you have someone that you're directly responsible to? It's usually another physician. They like to have physicians manage physicians.
But how do you get the experience in that job or in some other job, even a volunteer job, managing people? Well, most of the time, if you're volunteering, then there is no reporting. The other people are reporting to their boss who's not a volunteer. That's why I put the talent management as the last one. But I'm going to talk about how you can get a little bit of experience in there, but don't sweat it because everybody knows that. And unless you actually run a business, you're not going to have a lot of experience with talent management.
Really that's what I wanted to start with in part one of this presentation. Those are the five areas that a lot of nonclinical jobs, particularly if it involves working at a management or executive level, that you're going to need to obtain skills in and can be very challenging. But now here's where we're going to get into in part two, how to overcome that challenge and actually develop some real skills that you can leverage to get that first job. And I'm going to give you real examples of organizations I've worked in. Probably mostly one organization, but I've been on multiple of these nonprofits volunteer type organizations where I was able to get different skills, doing different jobs on a volunteer basis at different organizations. Let's get into that next time.
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