After finding he wasn’t the “best fit,” the River’s Edge Hospital Commission chose to release CEO Joe Stratton from his contract only six months after he started the job.
“We want to make sure we have the right fit for the culture at River’s Edge,” said St. Peter City Administrator Todd Prafke, who recommended the release. “Nothing bad went on. It’s just imperative for the health of our organization that we can work with the right fit.”
After CEO George Rohrich, who served for six years, retired in early December, the hospital was without an official leader for about three months, although Chief Financial Officer Lori Zook stepped in as the interim chief executive. That changed when Stratton, who was hired in November, started his tenure March 2.
The decision to release Stratton came on the recommendation of Prafke after Stratton’s six-month review, conducted by the Hospital Commission. The two-year contract between Stratton and River’s Edge includes a provision that either party may terminate the employee’s employment at any time with or without cause or reason or without prior notice. The contract also states that within the first year of employment, Stratton will receive a three-month severance following a release from the contract.
A summary of Stratton's review laid out Prafke's and the Hospital Commission's concerns: "Those concerns include management effectiveness and the lack of ability to articulate a clear vision globally or about any aspect of the hospital even when those steps have been clearly definied. In addition, I remain concerned about Mr. Stratton's ability to connect with the hospital staff and lead the organization in an effective way that includes, but is not limited to, demonstration executive presence, relatability to staff and bringing energy to the teams that he directly supervises. To date, he has not developed a trusint relationship with your teams, nor has he proved a positive environment for growth, development or performance of your teams. These are critical areas, as his role is to maintain the standards, set expectations and get work done through others while keeping the strategic plan and Studer process in mind."
Effective Sept. 4, Paula Meskan, chief nursing officer, is serving as interim CEO.
Chief Experience Officer Stephanie Holden noted that, while River’s Edge has a multi-layer hiring system to properly vet candidates, there is still room for mismatches.
“… overall, River’s Edge really changed its hiring practice and how we search for candidates and the interview process. Because we have a pretty special culture and a strong sense of being able to provide high quality patient care, it’s out best practice to look at the individual to see how well they’ll fit in the organization,” Holden said. “That includes phone interviews and coming in for interviews with the supervisor, and from there, peer interviews which the supervisor gets feedback from.”
She added, “We followed all of those steps in the CEO process; and the CEO process is even a bit more lengthy and a bit more in depth. But it’s not unusual for us to do all the right things in the hiring process, but over time, during that maybe probationary period, we find that it maybe wasn’t the best fit.”
Six months ago, the hospital, with the retirement of former CEO Rohrich, was celebrating years of sustained growth and newfound successes. After years of financial losses and low morale, Rohrich and an otherwise all-women executive team led the way, as the hospital utilized new strategies and systems to turn things around.
The hospital’s partnership with Studer Group, for example, has been key to how the hospital handles and works with its employees, resulting in a dramatic decrease in turnover. Another partnership with Orthopedic and Fracture Clinic of Mankato has been crucial to the hospital’s revenues, helping to increase the number of surgical and post-surgical patients.
All that being said, whoever was to take Rohrich’s spot as the new CEO had big shoes to fill. The shoes just didn’t quite fit on Stratton. Prafke, the Hospital Commission and the hospital executive team agreed that it was best to cut ties early and start fresh with a new CEO search.
“I think it’s clear that it is very important to get ahead on something like this, and that’s the basis for change in this instance,” Prafke said. “It’s clearly important, because we need to ensure that the culture we’ve instilled continues to progress and move forward. We don’t need a change agent; we need someone who can see the vision and help us move forward and help drive that success.”
The hospital remains in good shape, according to Holden, even despite the ongoing pandemic.
“We just finished the construction project in July, so that was kind of our big area of focus. I’d be foolish to ignore the COVID-19 pandemic, and a lot of hospitals in the sate and country took a huge hit with staff layoffs and revenues down. And we certainly experienced that; we had days or weeks where we were maybe doing one surgery,” Holden said. “But we came into that pandemic very financially sound, and that made the difference for us. And during that time, we were able to receive just over $6 million in grant funding and enroll in the Paycheck Protection Program, which kept our staff whole. In that regard, the hospital was and still is in a strong position, and certainly the change in the CEO isn’t related to that.”
Before starting the new CEO search, Prafke said he’ll meet with the executive team to review the search process and decide if there is anything that needs to be changed. Once that is decided, the executive team will present the Hospital Commission with a search plan and timeline to be approved.
There is no clear timeline yet on the hire of a new CEO, but Holden expected to know more by the end of the month.