Over the last half century, for the CEOs and senior managers of health care organizations, the meaning of leadership has gone through two transformations. In the kinder, gentler past, financial pressures were mild, and quality was considered unmeasurable. In the absence of compelling metrics for “output” or pressures to contain costs, business success depended on preserving relationships, brand building, and crisis management, and these were the skills prized in health care leaders.
The surge in medical progress that began in the 1960s, which resulted from increased investments in research in the years after World War II, drove the first transformation away from this status quo. Untreatable diseases became treatable, and some even became curable. For example, innovations like coronary artery bypass graft surgery, coronary angioplasty, thrombolysis, and statins for cholesterol reduction transformed cardiology from a passive to an active discipline. Almost every area of medicine had analogous advances.
Before these advances, medicine had been a field in which physicians made diagnoses, predicted prognoses, and relieved suffering. But now, health care providers could actually change the future, often for the better, and sometimes for the worse. There were many more medications and operations that might help patients live better and longer lives, but occasionally the wrong drug was given, and procedures went awry. As medicine became more active, the safety and quality of care began to attract more attention, and health care leaders have had to learn the skills needed to improve them within their organizations—like measuring data and organizing personnel to reliably perform at their best.
And it turns out that improving care is different work from keeping the peace. Leaders must be willing to enter into conflicts and manage them well. They must excel at negotiation. Simultaneously, they must have empathy for their patients, and, as in any business sector, they must deploy emotional intelligence to broker good relationships with their personnel. That work is especially complex with physicians and nurses, who are rightly proud of their professional standing and the quality of their work.
The second transformation in health care leadership has come in response to the other side of the equation from patient outcomes: costs. Health care spending rose about 2.5% per year faster than the growth of the rest of the economy after 1970, accounting for an increasing share of the U.S. economy. The federal government started to try to apply the brakes on spending with the Balanced Budget Act of 1997, which cut payments to doctors and hospitals. For a time, providers were able to get increases from commercial insurers that made up for the lower payment rates for Medicare and Medicaid payments, but those times have come to an end. Instead, leaders must learn to make the difficult strategic decisions—and to understand the efficiency of the operations behind them—in order to contain costs.
These two transformations mean that today’s health care CEOs and C-suite teams face pressures to improve quality and costs. These leaders must broker complex relationships while simultaneously driving improvement in performance. For health care leaders, these roles require a special mix of soft and hard skills. Health care executives need to lead change management in organizational cultures that have traditionally celebrated autonomy. They need to understand the difference between leadership and management, and bridge the gap between them—keeping an eye on the horizon as well as the dangers in the waters immediately before them. They need to build real teams that work together to improve quality and efficiency, without losing the intense individual motivations that draw people into health care.
The need for improvement in performance has also meant that senior executives in health care have to define their organization’s culture, orienting it around a clear purpose and shared values. The leaders themselves must “walk the walk” of those values. And words and phrases that have been rhetorical flourishes—like “improvement,” “high reliability,” “trust,” “teamwork,” and “resilience”—are now operational imperatives.
To help health care leaders improve performance, this volume of Must Read articles collects Harvard Business Review’s definitive articles on leadership in any sector, as well as some pieces chosen specifically for a health care readership.
The collection begins with four landmark Harvard Business Review articles on the nature of leadership and the makeup of leaders. Daniel Goleman defines the aspects of emotional intelligence that are core competencies for leaders, including empathy, which has moved from a “nice to have” to a “must have” for executives as well as clinicians in health care. Peter Drucker’s foundational thinking on the role of a leader shows how leadership and management practices exist on a spectrum; they are not separate types of work for separate people. John Kotter’s treatise on change management is a nice complement to this way of thinking in that it offers another perspective on the differences between leadership and management, even while providing a framework for how leaders can drive change in their organizations. Jim Collins’s article defining “Level 5 Leadership” provides a description of what it means to put all these elements together in a package that enables a leader to take an organization through challenge and change.
The other articles we’ve included address some of the special challenges for leaders in health care in today’s era. Ronald Heifetz and Donald Laurie’s article on “The Work of Leadership” describes how leadership in times of turmoil requires more than having a vision and aligning a workforce; they offer key principles for how leaders should create a context for change. Amy Edmondson’s article “Teamwork on the Fly” acknowledges both the importance of teamwork and the reality that teams often have to be pulled together for special initiatives—like the care of a complex patient. That means that leaders need to develop the skills to inspire and enable this quick ability to form teams on the fly—what she calls “teaming”—that can become a critical competitive differentiator for providers.
Paul Rogers and Marcia Blenko’s article “Who Has the D?” touches a sensitive nerve in a lot of health care organizations, where it often seems that no one has clear decision-making rights and responsibilities. This article offers leaders a solid framework for determining and communicating which decisions get made by whom.
Deborah Ancona and her colleagues acknowledge that no one has all the skills to do everything expected from the leader of an organization with complex functions—like so many of those in the health care sector. Instead, they describe how leaders can build a “distributed leadership” model that spreads key skills, tasks, and functions, and doesn’t unrealistically ask any one person to do everything.
Robert Kaplan and David Norton’s article on using the balanced scorecard is critical reading for leaders who understand that they must also manage.
And the last two articles, which more deliberately address the health care sector, describe some of the specifics of what elements of the organization a health care leader must manage and how they can involve clinicians in that work.
We have chosen these articles because, collectively, they help define the range of skills and perspectives that are essential for leading complex work through times of change, with increasing pressures from a marketplace that demands improvement in both quality and efficiency. We offer them with full awareness that health care is a special sector, with unusually high stakes for its personnel and its patient-customers. But there are nevertheless valuable lessons for health care leaders from the other business sectors, especially as health care grows more strategic, cost aware, and patient focused. The insights from this collection can enable health care leaders to better understand the skills they need for their most important work.