Heidrick & Struggles recently sat down with Paul Kempinski, the president and CEO of Children’s Mercy Kansas City, one of the largest integrated and academic pediatric healthcare systems in the country. Paul’s career spans over four decades in healthcare delivery, during which time he’s worked with numerous prominent organizations, including the Nemours Alfred DuPont Hospital for Children in Wilmington, Delaware, Via Health in Rochester, New York, and Rush University Medical Center in Chicago, Illinois.

Kempinski shares his experience leading a culture transformation and his perspective how an organization can assess and then develop its people so it consistently retains a pipeline of strong leaders. He also shares what skills he thinks are most vital for current or aspiring CEOs in healthcare to possess, and what successful organizations are going to be doing that will differentiate themselves for the future.

Heidrick & Struggles: There are a number of topics that we wanted to explore and some really great things that we’re going to talk about today, but let’s start with the big news, the current event, and that is after more than four decades in healthcare, you’ve recently announced your retirement.

Paul Kempinski: Well, first of all, thank you. As you can imagine, when you make a decision to retire after over four decades of being involved in healthcare leadership, there is a lot of reflection that goes into that decision, and then you begin to just reflect upon the journey and it’s been an amazing journey. 

It’s been fraught with great successes and celebrations, but also challenges and failures and occasional rejection, and I’ve learned as much from those experiences as I have had from the successes that I’ve had the benefit of participating in. 

Heidrick & Struggles: Let’s start with culture because culture transformation, not just in pediatric health systems, but really across all organizations regardless of industry. A few years ago, you embarked on a journey to optimize the culture at Children’s Mercy. We would love to learn a little bit about what that journey has entailed—why you decided to get started on something like this, what the goals were, and maybe some of the lessons learned along the way?

Paul Kempinski: Maybe I can paint the picture as to why the culture investment became so important for us. It really started before Covid. So, when I came here six years ago, you had a new CEO coming in on the heel of a prior leader who had been leading Children’s Mercy for nearly 25 years, with a lot of growth and a lot of advancement.

So, I was brought in to be a change agent in this organization, and we did that, you know, after several months of a listening tour and putting a new team into place. We’re charting a new strategic plan. We’re beginning to move people’s cheese, if you will, and then comes the pandemic. And of course, the pandemic catalyzed an incredible change in all of society at that time.

I’m so proud of how we led our children’s health system through that pandemic, but that was an incredible amount of change that needed to trigger an amount of agility and nimbleness as an organization that perhaps the entire industry was not used to. So, we learned a lot from it, but our culture was rocked as a result of the change that was already going on through a new CEO and now exacerbated by a pandemic.

So once we came out of that, and we began to feel the impact of the great resignation that was occurring and the impact on our employees’ well-being, we knew we needed to reinvest in a culture that was already strong and ensure that it was activated to its fullest potential because as you know, and everybody out there knows, our organizations, our missions, our strategic plans are all empty vessels unless they are brought to life by people who feel meaning and purpose every day when they come to work, feel that they are valued and feel that they are engaged. So, we decided to make a strategic investment in nurturing and fostering the great culture that already existed and make it the best that it can be on a sustainable basis.

And that journey started with me as the CEO. By nature, the CEO is the culture champion for the organization, through a set of guiding behaviors that ultimately instill that accountability for delivering on the culture every single day through our own individual behaviors. So that’s the investment that we made, and those are some of the attributes of it. It began with literally what we described as an unfreezing process for us as leaders.

It facilitated a look inward so that we can see how our leadership has been influenced by our personal and professional journeys, and it’s an intimate process. It gets us all out of our comfort zones. But that vulnerability and that look inside ourselves, that unfreezing process is the initial catalyst for how we learn to bring our best self to work every day, casts the shadow for others who are following our leadership, develop those guiding behaviors that define our individual accountability to our values.

And that's really how it’s begun and we’ve made incredible progress, and I can give you some statistics if that would be helpful to your listeners. You know, we started out with a 48% favorability score in terms of engagement for our team members. 

Today as we sit here, we’ve achieved 65% favorability on that engagement score. So, we’ve made incredible progress. It requires care and feeding all the time. We are extrapolating this work throughout the entire organization, which takes time. But the journey has been worthwhile and it is foundational to everything else that we have achieved and we are working on as an organization.

Heidrick & Struggles: That’s a good segue into our next question is around succession. How does an organization assess and then develop its people so it consistently retains a pipeline of strong staff, strong supervisors and managers, and ultimately strong senior executives within the organization?

Paul Kempinski: When I came to Children’s Mercy, there was no formal succession planning at the time. And when I was looking at this leadership team and beginning to build it. I built it and you know, my goal was to create the dream team here at Children’s Mercy, and we recruited some phenomenal leaders who had deep experience in prominent children’s health organizations from across the country. But I also knew that I was expending some capital by not promoting from within, other than on a few specific situations. So while I was formulating my executive team, I also made a commitment to myself and the organization that we would invest in cultivating and developing talent from within, and creating an intentional and strategic approach to succession planning so that as we turn over the CEO role, and the executives that are going to form the next generation of leadership, we have talent from within that has the potential to candidate successfully for these roles. 

So, it started with a couple of things. First of all, we created the Berry Institute. That is our unique approach to cultivating and investing in developing talent from within so that we have high performing leaders that can nurture the culture that is so important to our success. And when that culture is right and strong, we will continue to generate world-class outcomes for the care of the kids that we care for.

So, I’m very proud of the progress that’s been made in the Berry Institute, and we have real life examples right now. Our chief nursing officer in this organization is somebody who’s been in the organization for 20-plus years, and when we had a chief nursing officer position open, she was not ready for that role yet. But we invested in her and we developed her. And when that position became open again, she was the ideal candidate and is now excelling in that role. 

We also then had to develop the sophisticated approach to succession planning. So, we use a traditional nine-box framework and we go through an executive team in terms of evaluating our talent base in the organization and essentially creating a depth chart and an individual development plan for every leader in the organization. Starting with me, the succession plan for me was developed in concert with the board and our HR team so that there was a depth chart and a plan that had a couple of people that could candidate successfully for my position when it becomes available as it is now becoming available, and we are pushing that process all the way through the executive team and the senior leadership team.

It doesn’t create guarantees that all of these folks will successfully move up, but it does create an individual customized approach for every leader that wants to grow in this role to know where their strengths are, where their growth opportunities are, and then we customize approaches to develop them. It could be a coaching experience; it could be an internal educational module. It could be an external program that we partner with, but it’s individualized, it’s customized, and I think we are making very, very strong inroads in that process. 

Heidrick & Struggles: Honing in on the skills that you think are most vital for current or aspiring CEOs in healthcare to possess, what would those top few skills be and what would your recommendation be to other organizations as to how to develop those skills among their existing workforces? 

Paul Kempinski: I would say that first of all, you know what we’ve learned and what I’ve learned in my 41 years of healthcare leadership is that subject matter expertise is the easy thing to come by, or it can be developed, it can be learned, but emotional intelligence and ability to cultivate relationships and relationship capital and an ability for a CEO, and all executive leaders, to manage diverse complex relationships within the organization and in the community is tantamount to effective leadership.

We serve many masters. Fundamentally, we serve patients and families, but we also have to serve our colleagues inside the organization. We have to serve our donors. We have to serve community stewards. We have to serve the business community. And those relationships and the relationship capital all has to be managed—and there are complexities, and there can be occasional conflicts and disagreements—but the ability for the person that sits in these seats to manage them, nurture them, to be transparent about what the organization’s challenges are is all critical, and I think constitutes the success of current and future CEOs and the executive teams that support them. 

And I would say diversity, not just in the traditional sense, but also in the sense of ensuring that our teams are diverse in their perspectives, their backgrounds, how they bring themselves to the table, how they think. I want people around me that are going to say, “Paul, there’s another way of thinking about this,” or, “we have another idea.” Those are the high-performing teams and the ability and the humility and the vulnerability to say, “You know what? Maybe I’m not right. Maybe there’s a way of taking good and making it better.” That to me is characteristic of great leadership. 

Heidrick & Struggles: Earlier in this conversation, you talked about coming to Children’s Mercy and being a change agent, that there were things that were lacking when you got here, but also things that needed to change, and healthcare has been in an era of transformation recently. There’s been a lot of disruption, a lot of change. 

Many organizations are looking for ways to change and to disrupt the status quo. What does it mean to be a change agent, and what factors should organizations consider as they look to disrupt the legacy ways of doing things in hopes of being better, smarter, faster, cheaper in the delivery of their care?

Paul Kempinski: I would say it begins first with a mindset. That mindset has to be, um, inclusive of a healthy impatience with the status quo. I remember when I was being interviewed for this position at Children’s Mercy, and a board member asked me, he said, “Paul, we’ve got 88% market share in Kansas City. What’s our biggest risk?”

And I remember my answer. It’s complacency. Complacency, any organization that concludes that the current state is sufficient, is ultimately implementing a recipe for decline. So, a healthy impatience with the status quo is the first mindset characteristic that we have to have. There also has to be, and this was a challenge for us here because, when I came to Children’s Mercy, while there were things that we wanted to do differently and better, there wasn’t a significant burning platform, per se.

So being able to articulate authentically, clearly, and with simplicity what the burning platform is, especially when it’s not immediately in your eyesight, is one of the biggest challenges that we faced here. And we all know the challenges in healthcare, financial challenges. As an independent children’s health organization, we must grow.

We must continue to expand. We need to reach more kids. As an organization here in Kansas City that is very proud of its history and its impact on Kansas City, the need to grow was challenged by many. So that was a crucial conversation that we needed to have as an organization. 

So, I think it begins with a mindset. It also begins with architecting a vision for the future. So, we completely revamped our mission statement, our vision, our values as an organization, and that became foundational for us to then jumping in to what the future state might look like. We also had to acknowledge that what we were not doing is curing ills here, per se.

The previous leadership did amazing things. They inherited challenges and things that needed to be done differently as well. So, this is not criticism of the past. It’s simply an acknowledgment that we need to chart the next phase of evolution for the future so that we continue to grow. 

Heidrick & Struggles: We’ve been talking about change to position the organization well for what the future holds. In your opinion, what does the future hold? Not just in pediatric healthcare, but in healthcare delivery in general. And what are the really successful organizations going to be doing that will differentiate themselves?

Paul Kempinski: I’ll come at this largely from the pediatric perspective, but some of these principles apply beyond children’s healthcare.

Number one, what we’re seeing is an increasing pace of consolidation. And regionalization in the marketplace. We’re one of only 30-plus independent children’s hospitals in the country of about 220 children’s hospitals. So, for us, independence is sacrosanct because we believe that the greatest advancements in children’s health and healthcare come from those organizations whose mission is all about kids, and we are not subservient to a broader adult mission as most children’s hospitals are. But that creates a challenge for us. Financial strength is important and strategically the ability to reach out and expand our reach to serve more patients through partnerships and collaboration, through a little bit of bricks and mortar, but also leveraging the rapid expansion of technology and innovation that’s going on in the country as well. We have to be strategic and thoughtful about where we dock in to those technological advancements so that there are not unintended consequences related to the quality of care that we provide and the outcomes we deliver.

But the reality is we have to embrace the technology and the advancements in it, leverage it, and determine where it’s going to make sense for us. We also have to realize that the mental health crisis is not just impacting kids, it’s impacting all society. It existed before Covid. It was exacerbated by Covid, and it’s going to be with us, and it’s not just this swim lane of mental health.

Mental health is an issue that is impacting kids with cancer, kids with heart disease, kids with neurological conditions, you name it. It permeates its way into every aspect of care and healthcare and every aspect of society, including schools. So, we have to embrace that as our reality, and despite the challenges of lower than appropriate reimbursements and the need to mainstream and eliminate the stigma, that has to be part of what we do because it also impacts our own workforce. 

And the other concerning factor that we have to address are the workforce shortages and challenges that we all have. In pediatric healthcare, we know that there’s a significant shortage of pediatric subspecialists right now, and we’re beginning to see the implications of that in terms of pediatric residency programs being unable to fill their slots.

We were able at Children’s Mercy to fill 100% of our slots this year with high-quality people, but 60 pediatric training programs—a record—did not fill their residency slots this past year. So, the ability to think innovatively about how we ensure that we have the right quantity, competency, and capability of workforce, recognizing we have five generations of team members now, whose needs we’re trying to meet, is going to be incredibly important and challenging. 

So fundamentally, we have to grow. There’s consolidation. That consolidation is attempting to create economies of scale, but we do have to create mass, critical mass that’s going to enable us to deliver world-class outcomes in the safest environments with the greatest possible patient experience, and do that in innovative ways that leverage technology, but never lose sight of the fact that we are an industry that’s driven by people, and we have to nurture that culture as the foundational element for everything else that we do.