The Blue Ridge A C A D E M I C H E A LT H G R O U P Report 4 In Pursuit of Greater Value: Stronger Leadership in and by Academic Health Centers Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 The AHC Leadership Milieu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 AHC Leadership Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 The Shape of Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 A New Dimension of AHC Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Strengthening AHC Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 About the Blue Ridge Academic Health Group . . . . . . . . . . . . . . . . . . . . . . . . 29 About the Core Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 About the Invited Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Appendix 1: The Means of Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 Reproductions of this document may be made with the written permission of the University of Virginia Health System by contacting: Elaine Steen University of Virginia Health System Box 800413 Charlottesville, VA 22908 Fax: (804) 243-6078 E-mail: ebs9g@virginia.edu. In Pursuit of Greater Value: Stronger Leadership in and by Academic Health Centers is the fourth in a series of reports produced by the Blue Ridge Academic Health Group. The recommendations and opinions expressed in this report represent those of the Blue Ridge Academic Health Group and are not official positions of the University of Virginia. This report is not intended to be relied upon as a substitute of specific legal and business advice. Copies are available at a cost of $10.00 each. To order, see the enclosed form. For questions about this report, contact: Don E. Detmer, M.D. University of Virginia (804) 924-0198 E-mail: ded2x@virginia.edu. Copyright 2000 by the Rector and Visitors of the University of Virginia. The Blue Ridge Academic Health Group Report 4 In Pursuit of Greater Value: Stronger Leadership in and by Academic Health Centers The Blue Ridge Academic Health Group Mission The Blue Ridge Academic Health Group seeks to take a societal view of health and health care needs and to identify recommendations for Academic Health Centers (AHCs) to help create greater value for society. The Blue Ridge Group also recommends public policies to enable AHCs to accomplish these ends. Members Enriqueta C. Bond, Ph.D., President, Katherine W. Vestal, Ph.D., Vice Burroughs Wellcome Fund President, Cap Gemini Ernst & Young U.S. LLC Robert W. Cantrell, M.D., Vice President and Provost, University of Virginia Health System Invited Participants Don E. Detmer, M.D., Dennis Gillings Roger J. Bulger, M.D., President and Professor of Health Management, Judge Chief Executive Officer, Association for Institute of Management Studies, Academic Health Centers University of Cambridge* Richard A. Couto, Ph.D., Professor of Michael A. Geheb, M.D., Senior Vice Leadership Studies, Jepson School of the President for Clinical Programs, Oregon University of Richmond Health Sciences University Mary Jane Kagarise, R.N., M.S.P.H., Jeff C. Goldsmith, Ph.D., President, Associate Chair and Professor of Surgery, Health Futures, Inc. Department of Surgery, School of Medicine, University of North Carolina Michael M.E. Johns, M.D., Executive Vice at Chapel Hill President for Health Affairs and Director, the Robert W. Woodruff Health Sciences Center, Emory University Staff Peter O. Kohler, M.D., President, Oregon Cap Gemini Ernst & Young U.S. LLC Health Sciences University Katherine Fitzgerald, Senior Manager Edward D. Miller, Jr., M.D., Dean and Chief Executive Officer, Johns Hopkins Jacqueline Lutz, Associate Director Medicine, The Johns Hopkins University University of Virginia John G. Nackel, Ph.D., Managing Director for New Ventures, Cap Gemini Ernst & Charlotte Ott, Senior Executive Assistant Young U.S. LLC Elaine Steen, M.A., Policy Analyst** Mark Penkhus, M.H.A., Chief Executive Officer, Vanderbilt University Hospital George F Sheldon, M.D., Chairman and . Professor, Department of Surgery, School of Medicine, University of North Carolina * Chair at Chapel Hill ** Editor Introduction its production modes (i.e., from cottage It is axiomatic that what is needed is to manufacturing to knowledge-based). the delivery of health care via a Across AHCs, financial threats abound as seamless web of health professional a result of reduced government support services oriented to the patients’ and and declining clinical revenues. the public’s best interests rather than In many cases, governance structures are each profession’s self-interest. being or need to be modified because – Roger J. Bulger, The Quest for the governing boards do not always operate Therapeutic Organization, 2000 to facilitate needed change and internal decision-making processes are not always efficient. Moreover, the career path of AHC leaders is often antithetical to the The unprecedented challenge for development of skills necessary for AHC leadership is this: to supply the effective leadership. Further, a coherent vision and direction necessary to strategy to build future leaders is lacking in most AHCs. Planning for future leader- catalyze the appropriate reengineer- ship is often equivalent to establishing a ing and reinvigoration of the AHC so search committee when a key position that its extraordinary talents, becomes vacant. resources, and services can best be realized in the pursuit of new discov- An array of societal, economic, and technological forces are creating a new eries, improved health professions and as yet uncharted terrain for AHCs. training, and better health care serv- AHC leaders must address demographic ices and policy. shifts, new capabilities arising from infor- mation and communications technology, – Michael Johns and Thomas J. Lawley, Leading and growing consumer expectations for Academic Health Centers, 1999 speed and customized products and services. These changes require that organizations assume new roles, acquire Leaders of academic health centers new capabilities, develop new business (AHCs) have always experienced a wide- models, and interact with both customers range of formidable challenges during and staff in new ways. their tenure. AHCs are complex organiza- tions to lead because of their multiple AHC leaders are facing a new frontier missions, substantial size, highly special- where they need the ability to cope with ized products and services, diverse inter- a different landscape from week to week. nal and external constituencies, and An organizational vision that motivates culture marked by autonomy of faculty staff is more important than ever. Leaders and departments. They operate as need to predict and direct change rather academic, business, and (in many cases) than just react to it. They need to interpret public organizations simultaneously, in an myriad messages from the environment industry that is in the midst of evolving and convert them into a framework that 2 guides both long-term strategies and rou- Previously, the Blue Ridge Academic tine operations. They must forge an orga- Health Group (Blue Ridge Group) nizational culture that embraces constant concluded that AHCs: change and successfully adapt and trans- • can and should provide greater value to society. form their organizations while preserving core values. • must transform themselves in response to the changing needs of society and changing market forces. Leaders have no option but to assess and in some cases add to their own skills to • can achieve the needed transformation by keep pace with the changing environment taking greater advantage of business practices and facilitate excellence in others as they used in other industries, leveraging the capabilities of information technology and strive to achieve organizational success. electronic commerce, expanding their focus on For example, electronic connectivity and managing population health, and partnering with greater reliance on relationships beyond a range of external parties within their regions. organizational lines require new technical • should be active participants in the effort to and communications skills and knowl- build a value-driven health system edge. Changes in the composition of the (Blue Ridge Academic Health Group 1998a, 1998b, 2000, and 2001) workforce, consumer expectations, and (see Exhibit 1). interactions with the media are increasing the importance of humanistic dimensions To achieve these objectives AHC leaders of leadership (i.e., leaders must care will need to possess the full set of essential about more than the bottom line). leadership skills for contemporary organi- Organizational members not only need to zations and to apply those skills to participate in shaping their jobs and transforming their organizations for developing clearly defined performance success in the 21st century. Moreover, expectations, but they must also be AHCs will need a cadre of individuals offered opportunities to develop the skills throughout the organization with these needed to meet their job requirements leadership skills. and expectations. Against this backdrop, the Blue Ridge If these already complex organizations Group explored the issue of what AHC are to succeed in meeting these new leadership should look like today and in challenges, adroit leadership is essential the coming decade. This examination was at a variety of levels, not just at the top. accomplished through review of the liter- Formal and informal leaders throughout ature and a two-day meeting at which the the enterprise need to be given opportuni- Blue Ridge Group heard presentations on ties to make decisions as a means of leadership models and discussed leader- developing and practicing leadership ship challenges facing AHCs. This report skills. Otherwise organizations risk a presents the Group’s findings and seeks to shortage of future leaders or discontinuity address three questions. What notable during inevitable leadership transitions. challenges do AHC leaders face? What are the relevant leadership skills for AHC leaders? How can AHCs cultivate leader- ship skills within their organizations? 3 During the course of in the form of teams or community through their its work, the Blue Ridge individual work units. roles as developers and Group concluded that disseminators of new effective leadership within In addition, the AHC as knowledge, educators of AHCs requires that AHCs an organization is recog- future health profession- learn from and help to nized as having the poten- als, and providers of high- shape the environment in tial to be a leader because ly specialized care. which they operate by of the number and size of Moreover, many AHCs also providing leadership its spheres of influence. represent a significant beyond their organiza- Despite the dominance of share (i.e., budget and tions. Thus, not only does market forces and accom- personnel) of their parent this report call on AHCs panying increased visibili- university, qualify as large to strengthen leadership ty of third-party payors in employers, and provide within their institutions, shaping the health care significant percentages of it also encourages AHCs sector, AHCs continue to patient care within their to demonstrate value- influence the health care communities and regions. driven leadership within their communities, regions, and the entire Exhibit 1: health care sector (see A Value-Driven Health System recommendations in (Blue Ridge Academic Health Group, 1998a) Exhibit 2). A value-driven health system is grounded in the principle that a healthy population is a paramount social good. The For purposes of this system promotes and improves the health of the population report, the senior ranking by providing incentives to health care providers (both public AHC official (e.g., vice and private), payors, communities and states to optimize president or dean) is population health status and by rewarding cost-effective considered to be the AHC population health management. Such a health system leader. The leadership of would achieve better health outcomes and improve the health of citizens over the long-term while achieving cost AHCs is considered to savings for all stakeholders. include the senior ranking AHC official, other senior Two kinds of incentives exist within a value-driven health administrators, the gov- system. First, there are incentives for individual citizens (patients), health care professionals, health delivery organi- erning board, and presi- zations, payors, and communities to seek and maintain dent of the parent univer- health. Health insurance premiums, reimbursement rates, sity (if applicable). At the and grants to communities can all be structured to reward behaviors and strategies that advance health. Second, same time, leaders exist providers compete for populations to manage on the basis throughout all levels of of quality and efficiency (where quality is defined in terms of AHCs. Some of these are health of the community or region as well as health of individuals). To do so, however, requires a fully insured formally appointed (e.g., population (universal coverage) so that population health department chair); others management strategies can be implemented. It is assume their position by anticipated that in a mature value-driven evidence-based default; still others appear system, universal coverage will be less expensive than in the current system. 4 The AHC Leadership Milieu M edical school deans are serving an health management) create new average of 2.8 years, down from an aver- challenges for both health professional age of 3.6 years between 1980 and 1992, school curricula and investment in infor- and 5.8 years between 1960 and 1979 mation systems that support the clinical (Aschenbrener, 1998; Petersdorf, 1997; enterprise. For example, AHC leaders Sheldon, 2000). An estimated 20 percent must determine how much to invest in of medical schools are currently without knowledge management and e-health deans (Sheldon, 2000). Department chair initiatives to keep pace with the burgeon- positions are in a similar situation with ing information economy (Blue Ridge approximately 40 chairs of surgery being Academic Health Group 2000 and 2001). vacant and some being open for long periods of time. These statistics suggest Funding is not the only challenge facing that at least some AHCs are experiencing AHC leaders. Some schools are experienc- significant management gaps and lack of ing difficulty recruiting faculty to teach leadership continuity. These disconcerting core undergraduate courses and finding statistics are not surprising when viewed ambulatory placements for their students in terms of the nature of the job. AHC (Blumenthal, Weissman, and Griner, leaders face high expectations, multiple 1999). Schools also face uncertainty roles (i.e., clinician, scientist, educator, surrounding the appropriate numbers, administrator, entrepreneur, fund raiser, mix, appropriate training for, and avail- organizational merger specialist), a ability of future health professionals (e.g., diverse constituency, responsibility 18 percent drop in medical school appli- without commensurate authority and cations between 1996 and 1999 and a 3.6 resources, and a faculty that is not easily led (Petersdorf, 1997). AHC leadership challenges are complicat- ed by eroding revenue streams which Exhibit 2: Leadership Recommendations have resulted in some AHCs experiencing budget deficits, staff turnover and 1. AHCs should seek leaders with the ability (i.e., qualities reduction, and organizational restructur- and experience) to transform their organizations and to ing (Commonwealth Fund Task Force on work with their communities to build value-driven health systems. Academic Health Centers, 2000; Pardes 2. AHCs should develop the leadership skills of their 2000). All AHCs face difficulties in professionals and students to build stronger finding resources to make needed invest- organizations and value-driven health systems for their ments. AHC educational structures that communities. 3. AHCs should work with and develop the capacity of lag developments in the clinical arena their governance bodies to provide strong leadership, require overhaul. Greater demands on sound guidance, and effective decision making for their health care professionals to manage an institutions. 4. AHCs should partner with professional organizations and ever-growing base of knowledge and specialty societies to strengthen leadership skills of their apply new methodologies (e.g., faculty and students, to help create and support needed evidence-based medicine or population change within AHCs, and to advocate for necessary changes in the health care system. 5 percent decrease between research enterprise (for (Maccoby, 1999; Blue 1999 and 2000) the first time in many Ridge Academic Health (Association of American institutions). Finally, Group 2000). As a result, Medical Colleges, 2000; AHCs must confront like all health care organi- Pardes, 2000). Industry issues of collective zations, AHCs are con- thought leaders calling for responsibility (e.g., excess fronting changes in the patient-centered, interdis- capacity) and competition means of their work, val- ciplinary care, patients from new sources or risk ues, definition of quality, increasingly involved in cutbacks and outcomes and roles of health profes- managing their own care imposed by regulation or sionals, as well as organiza- (largely through better competition (Fein, 2000). tional structures, systems, access to medical knowl- and skills. Organizations in edge and electronic con- AHCs are part of an the learning production nections to their health industry whose produc- mode are likely to be inter- care providers), and evi- tion modes are still evolv- active rather than bureau- dence that varying levels ing. While retaining cratic, rely on cross-func- of quality and safety are aspects of its original cot- tional teams rather than being achieved by health tage or craft production hierarchy, use interactive care provider institutions mode, health care has dialogue and shared goals point to the need for adopted and continues to rather than top-down com- change within the clinical adopt elements of a man- mands, and require leaders arena (Institute of ufacturing production who are synthesizers and Medicine, 1999). Growing mode. Simultaneously socializers rather than ana- competition for research health care is being driven lyzers or energizers. funding from private into a knowledge or industry along with learning production mode demands for better by advances in informa- accountability are driving tion technology and con- efforts to manage the sumer expectations 6 Exhibit 3: The Transformation of Health Care CRAFT MANUFACTURING LEARNING Structures/Roles • Organization Cottage industry Factory/bureaucracy Interactive system • Economic role of physician Sole proprietor, Employee Entrepreneur Large-system stakeholder small partnerships • Physician role in team Authority +Provider Partner-teacher • Patient role Submissive, trusting Customer-client +Partner-learner Values Caring Efficiency Knowledge creation Personal trust Scale Individual development Expertise Uniformity Social development Model of Care Biomedical +Prevention +Epidemiological Individual skill +Outcome measures +Psychosocial Focus Individual +Institutional +Community -> Global +Electromechanical +Information Technology Hand tools +Chemical +Biogenetic Systems • Quality control Peer review +Statistical processes +Continuous improvement • Cost control Unregulated Profit-based Shared responsibility • Learning Individual +Organizational +Community Organizational Skills Mentoring Monitoring Team Competence Master-apprentice Administration Leadership Model Distributed leadership dialogue Functional expertise Visionary-interactive Leadership Thinking Analyzer Energizer Humanizer Note: The (+) symbol indicates that the characteristic in the column to its left also holds true for this column. Source: Reprinted with permission from the Association of Academic Health Centers. Originally published in M. Maccoby, On creating the organization for the age of learning, in Creating the Future: Innovative Programs and Structures in Academic Health Centers, C. H. Evans and E.R. Rubin, editors, Washington, D.C.: Association of Academic Health Centers, 1999, p. 7. 7 AHC Leadership Challenges A HCs clearly need to trol style operations centered, interdisciplinary embrace, adopt, and sus- towards decentralized services. tain profound changes for decision making as a long term success. They means of being responsive Identifying and articulat- are, however, diverse to customer needs ing core values is a neces- organizations and at vary- through both speed and sary task for AHC leaders. ing stages of preparedness ability to customize. Yet, During a Johns Hopkins to embark upon large- in many AHCs, core val- Medicine leadership scale and deep organiza- ues may seem to be con- retreat, senior executives tional change. There is no tradictory or under siege were divided into five single strategy or set of from external forces. groups and asked to iden- strategies that will assure tify core values of the success for all AHCs. It is As identified in Exhibit 3, organization. Working essential that AHC leaders the values associated with independently, each group identify needed changes, the three production identified the same set of assess their organizations’ modes evident within values – integrity, honesty, capacity for transforma- health care differ (i.e., per- collegiality; excellence tion, and evaluate their sonal trust and expertise (being number one in all personal readiness to lead versus efficiency and uni- that we do); innovation; such an effort. Reflecting formity versus knowledge transmitting knowledge to upon the state of AHCs creation and social devel- the world; and alleviating (to the extent that they opment). AHCs operate in suffering by translating can be generalized) and both the business and aca- basic information. This the framework provided demic realms. Faculty exercise provided the by the Leadership Mirror members are often trou- AHC executive with a (see Appendix 1), the bled when the market means of determining Blue Ridge Group identi- views the fruit of their how well established and fied specific challenges labor as commodities and clear the organization’s AHC leaders face as they are uncomfortable when values were at that point plan and implement patients are called cus- in time. It also reinforced desired changes. tomers. Autonomy and the institution’s values academic freedom are sec- among senior leaders. Shared values and a clear ond nature to most facul- vision provide a sense of ty, but they are being The process of identifying purpose and continuity, asked to demonstrate or clarifying AHC core motivate staff, and con- accountability and values may require con- tribute to organizational respond to organizational siderable effort. AHC success (Collins and enterprise needs. Health leaders can begin by initi- Porras, 1994). These professionals, particularly ating dialogue about the foundational elements of physicians, are taught to organization’s true core the organization are grow- assume responsibility and values versus habits or ing in importance as function independently. norms erroneously organizations move away Meanwhile, health care is assumed to be core val- from command and con- evolving toward patient- ues. Subsequently, AHC 8 leaders and staff can focus on identifying ulty and staff, electronic bulletins) new approaches that can be used to (Griner and Blumenthal, 1998a). achieve core values in the changing environment. For example, improving Achieving a shared vision among top health might be an AHC core value. leaders – including the governing body – Excellence in the clinical arena previously increases the likelihood of securing relied upon a great deal of physician creative change (Bulger, Osterweiss, and independence and focused predominantly Rubin, 1999). For example, the board and on care given to individual patients with- university president along with the vice out consideration of aggregated results. president of the University of Cincinnati Now it is far more likely to depend on Medical Center provided a united front in teamwork, interdisciplinary approaches, advocating large scale changes that placed patient involvement, explicit assessment of corporate need over that of individual satisfaction as well as a focus on value and units. This joint commitment overcame population health outcomes. Achieving well-entrenched departmental resistance this core value will depend on actions of and provided a springboard for future AHC staff and investment by the AHC enterprise-wide changes (e.g., privatiza- in needed training and information tion of the hospital and closing of one technology capabilities. facility). Once identified, core values provide the Although a solid relationship with the foundation for the organization’s vision AHC governing body is pivotal for AHC and mission and underlie all of its strate- leaders, AHC experience with effective gies and policies. Values and vision need governance varies widely. Private institu- to be shared throughout the organization. tions often have the opportunity to build Continued promotion of the vision has the boards that preside over them. In con- been linked to success of collaborative trast, public AHCs or universities do not projects and will become more important have the same level of influence over gov- as collaboration becomes more prevalent ernance. Although governing boards are within AHCs (Bland et. al, 1999). The expected to serve as trustees, acting to high rate of routine turnover within protect and preserve the institution for AHCs (e.g., new students and residents) future generations, boards of public insti- makes articulating core values and tutions may see themselves not as vision an ongoing task for AHC leaders. guardians of the institution but as repre- Moreover, as the AHC workforce becomes sentatives of the special interests that led more diverse, greater effort is needed to to their appointment (Duderstadt, 2000). bridge generational and cultural differ- ences among staff to achieve shared val- The current climate increasingly requires ues throughout the institution. Some quick decisions from governing bodies AHC leaders are using new communica- that are often accustomed to acting with tion approaches to communicate with fac- great deliberation rather than speed. An ulty and staff that provide both timely important challenge for public higher information as well as opportunity for education today is assuring lay boards of input (e.g., town meetings involving fac- the experience, quality, and clarity of role 9 necessary to govern com- making (Griner and implemented a decision plex institutions. Each Blumenthal, 1998b). Both making structure com- AHC (and university) changing organizational prised of ten teams of 15 needs a core of influential configurations (e.g., members (e.g., operations, trustees who understand mergers or alliances with clinical performance the institution, can pro- external partners) and the improvement, marketing, vide useful criticism, and need for enterprise-wide managed care, clinical support its efforts. decision making are driv- research). These teams ing changes in AHC orga- serve as a resource to busi- Achieving a more “sophis- nizational structures. ness units, have decision- ticated level of gover- For example, Emory making authority on mat- nance” may require con- Healthcare was created ters within their purview, tinued educational efforts through the consolidation and make recommenda- by the senior AHC execu- of Emory’s clinical facili- tions on broader issues to tive and university presi- ties (including The Emory senior leadership. dent (Bulger, Osterweis, Clinic, The Children’s and Rubin, 1999). Center, Emory University AHCs often fail to deliber- Alternately, it might entail Hospital, Crawford W. ately develop, communi- creating a sub-board of Long Hospital, cate, or apply their oper- the overall university that Emory/Adventist Hospital, ating model (i.e., the has specific responsibility Wesley Woods Center of concrete plan of how the for overseeing the AHC Emory University, and a organization will operate (Commonwealth Fund limited partnership with in the marketplace) Task Force on Academic Columbia/HCA’s metro- (Nackel, 2000). Rather Health Centers, 2000). politan Atlanta facilities) than articulating how Some AHCs have sought (Saxton et al., 2000). This leaders want the organiza- to strengthen governance structure provides admin- tion to behave, the kinds and improve the flexibili- istration consolidation of relationships they want ty and speed of decision and coordination, but to establish with business making by reducing the allows each entity to partners, how they will role of the state or parent operate as a distinct busi- interact with staff, and university through ness unit. Emory’s what they want to be restructuring. For exam- Woodruff Health Sciences known for in the market- ple, Oregon Health Center (WHSC) has place, AHCs may have Sciences University implemented a new gov- relied on traditional prac- (OHSU) has become a ernance structure that is tices as the basis for their quasi-public corporation headed by the executive operations. As a result, (Blumenthal, Weissman, vice president for health translating strategies into and Griner, 1999). affairs and WHSC direc- daily activities and defin- tor, who is also chairman ing the organization’s cul- Equally important, AHCs and chief executive officer ture become more diffi- require rational organiza- of Emory Healthcare. cult within these tional structures that Within the clinical enter- organizations. Moreover, facilitate internal decision prise, Emory has also AHC organizational struc- 10 tures (e.g., clinical departments or finan- process, AHCs have articulated an operat- cial reporting systems) may inhibit imple- ing model and identified how various mentation of the chosen operating model organizational characteristics need to be (e.g., multi-disciplinary curriculum or an transformed (see Exhibit 4). These AHCs enterprise-wide approach to resource are now working to educate their organi- allocation). zations on the need for change as well as implementing new processes (e.g., routine Several AHCs are collaborating on a proj- use of performance measures) to support ect with the University HealthSystem their new operating model (Blue Ridge Consortium and Cap Gemini Ernst & Group, 1998a; Garson, 1999; Geheb, Young U.S. LLC (e.g., UAB, OHSU, 1999; Geheb, 2000; Harrison, 1999). University of Cincinnati) and have begun to make explicit use of an operating The Blue Ridge Group identified three cul- model. This project, known as the Funds tural issues that will likely impede AHCs’ Flow Study, strives to enable AHCs to ability to implement profound changes. align their business practices with mis- First, AHC leaders need to continue to sion-driven initiatives. As part of this promote the shift away from “a loose Exhibit 4: Changing AHC Operating Model 4 CHARACTERISTICS TRADITION TRANSFORMATION Accountability Individual personal goals Individuals with personal goals aligned with enterprise goals Governance Individual Units (SOM, departments, Common oversight to establish and hospital, practice plan) oversee enterprise goals Culture • “Religious” defense of noble work • “Business-like” defense of noble work • Individual objectives • Common objective • Cacophony (multiple voices) • Polyphony (multiple voices) • Innovation with inconsistent • Innovation with consistent results application • Risk • Entitlement Organization Fiefdoms Collaborative units Finances • Independent financial models • Common financial language • Variable accounting standards • Single accounting standards • Risk held centrally • Risk at operating unit • Deal making • Strategic investment (Return on • Unclear view of funds flow Investment) • Secrecy • Clear view of funds flow • Confusion • Openness • Clarity Other metrics Poorly defined Defined by mission Decision making Slow, imprecise, chaotic, idiosyncratic, Deliberate, precise, organized, paced, and non-strategic and strategic Source: Reprinted with permission from the University HealthSystem Consortium. Originally published in M. Geheb, Transforming AHCs: Operating in a New Economic Environment, Oak Brook, IL: University HealthSystem Consortium, 2000, p. 4. 11 confederation of independent faculty The attitudes and styles of leaders within members and autonomous departments” an AHC can promote or impede a collabo- toward an organizational culture that rative culture. Although never mandated “acknowledges the exquisite interdepend- to do so, the primary care departments at ence of diverse units” and an organization the University of California, Irvine, focused on the needs of the enterprise College of Medicine (i.e., family medicine, (Blue Ridge Academic Health Group, general internal medicine, and general 1998a; Kirch, 1999). By increasing collab- pediatrics) cooperate extensively in edu- oration among and accountability from cation, patient care, and research individuals and units, AHC leaders will (Scherger et al., 2000). This model reduce the time spent mediating disputes. evolved gradually over many years. As To do so, however, AHC leaders will need faculty experienced success collaborating to create and communicate a vision that on multidisciplinary medical school appeals to the common interests among courses and eventually residency pro- diverse disciplines so that they will be grams, they realized that “working togeth- willing to cross traditional barriers. er not only makes sense educationally, but also saves crucial amounts of time and In some instances, AHC leaders can take resources” and serves as a model of pro- advantage of external factors to shape fessionalism for students. Today the pri- organizational culture. The University of mary care faculty “share educational Massachusetts Medical Center (UMMC) resources, a research infrastructure, and developed “a genuine sense of community” clinical systems, thus avoiding duplicative among its faculty and administrators from use of valuable resources while maximiz- its inception as a result of external skepti- ing collective negotiating abilities and cism about its formation (Bulger, mutual success.” Osterweis, and Rubin, 1999). This hostile environment combined with intense polit- Second, AHC leaders need to foster a ical and public scrutiny resulted in both learning environment for all organization- department leaders and faculty members al members. Beyond being educational being more team-oriented than those at institutions, AHCs need to be “organiza- some AHCs. This team orientation has tions where people continually expand proved to be a strategic strength for the their capacity to create the results they institution. In addition, UMMC under- truly desire... where people are continual- stands and is driven by its mission to edu- ly learning how to learn together” (Senge, cate health professionals for the state and 1990). To achieve sustained high perform- provide care to central and western ance, AHCs need to take full advantage of Massachusetts. It recognizes that it is dif- their organizational knowledge and pro- ferent from medical schools in the Boston vide sufficient opportunities for all staff to area and does not seek to copy them. develop fully. This issue is particularly Clarity of mission and an institutionally- important in the learning production focused organizational structure have pro- mode where organizations need to learn vided a solid foundation for innovation “how to change and adapt to competition, and robust performance at UMMC. information technology, and new values of customers and employees” (Maccoby, 12 1999). In this mode, front line staff focus These cultural shifts can be reinforced on meeting customer needs while their through development and use of explicit supervisors focus on translating front-line performance measures at the organization- experiences into organizational learning. al, unit, and individual level. Faculty per- formance evaluations are becoming rou- Both formal training and informal incen- tine in many AHCs and appointment tive programs can contribute to success in letters are becoming more explicit about this area. Emory Healthcare formed the the institution’s expectations for faculty Learning Council to anticipate and coor- performance (Griner and Blumenthal, dinate learning needs of the components 1998a). To influence culture and desired of its integrated delivery system (Franklin behavior, robust evaluations need to incor- and Moore, 1999). The Learning Council porate the full set of desired behaviors created a competency assessment feed- (e.g., institutional citizenship, mentoring, back program to facilitate learning among establishing external relationships) and staff. This program is based on a 360- not just those criteria traditionally consid- degree feedback approach and includes a ered for promotion and tenure decisions. survey tool, a survey feedback report, a In addition, these cultural issues can be guidebook, and a coaching process to incorporated into educational curricula for assist participants in formulating and students and health professionals. For completing a personal strategic plan. The example, medical schools can expose their Mayo Clinic has established the Clinician- students to the need for institutional citi- Educator award to promote educational zenship when they address professional innovation and scholarship by funding values in the curriculum. the development of educational projects (Viaggiano, Shub, and Giere, 2000). The complexity of leadership is growing Similarly, the University of Virginia Health in contemporary organizations, yet “few System provided grants to faculty to people who become leaders in academic encourage informatics development and medicine aspire to, plan for, or seek train- innovative use of information resources ing to develop leadership skills” (Watson, 1997). (Daugherty, 1998). Unlike the corporate world, past experiences of AHC leaders Third, strengthening institutional citizen- do not necessarily translate into leader- ship is another important cultural shift for ship preparation. The traditional route for AHCs. AHC faculty need to develop AHC leadership is through academic strong identification with their institutions achievement rather than business experi- and not just with their disciplines. AHC ence or training. Young faculty may be success requires that faculty support the discouraged from pursuing mid-level enterprise and contribute to its advance- management positions that provide need- ment. While AHC leaders need to provide ed experience for future leaders because a shared vision around which the organi- of a perception that management is zation can rally, individual members need “something that academics do when they to be ready to be a part of the team. can no longer cut it as investigators or cli- nicians” (Commonwealth Fund Task Force on Academic Health Centers, 13 2000). Moreover, some of the attributes draw (Chow, Coffman, and Morjikian, and cultural processes associated with a 1999). Undergraduate health professional skilled clinician or researcher may be education can contribute to leadership counter productive in the leadership development through student contact arena (Schwartz et al., 2000). with faculty who model effective leader- ship behaviors and varying leadership For example, most vice presidents and styles, discussions of the nature of profes- deans were medical students who trained sionalism and values of health profession- to be assertive, independent physicians. als, and assigned projects that require use These same leaders were likely medical of leadership skills (e.g., communication, school faculty in an environment that tra- collaboration, understanding diverse per- ditionally values individual autonomy and spectives). A limited number of medical rewards individual achievement, not schools offer dual-degree programs in behavior that supports a larger community medicine and business, but these students of interests. Many AHC leaders were prac- appear to be most interested in careers ticing physicians who experienced the directing hospitals and insurance compa- autonomy of decision making and empha- nies rather than the public sector sis on the singularity of the physician- (Sherrill, 2000). patient relationship. Once in a leadership position, however, these same individuals Several AHCs have leadership programs must be skilled at collaborative behavior. focused on residents. The University of Academic advancement and recognition Washington School of Medicine devel- usually comes with achievements in a spe- oped a course that helps senior residents cialized research or clinical domain. After to refine teaching and supervisory skills. ascending the ladder of academic reward Leadership, problem-solving, managerial and recognition, however, AHC CEOs find techniques (e.g., setting goals and provid- themselves in a web of relationships and ing feedback), and communication among in need of breadth to relate to diverse con- various team members are explored stituencies, not depth of medical special- through sample cases and videotaped ization. As a result, typically AHCs are not vignettes of situations likely to be known for having strong leadership habits, encountered (Wipf, Pinsky, and Burke, the vocabulary of leadership does not per- 1995). The University of Minnesota vade these institutions, and leaders often Internal Medicine Residency Program learn on the job. offers residents the Physician Management Pathway (PMP) to expose Training can play a significant role in them to medical administration and lead- leadership development when it focuses ership (Paller et al., 2000). PMP exposes on conceptual ability, teachable interper- interested residents to management con- sonal skills, and personal growth. cepts, provides them the opportunity to Attempting to develop leadership skills is begin developing leadership skills, and not, however, likely to yield significant provides career mentoring through a benefits while learners are focused on monthly seminar series, a preceptorship mastering their discipline or before they with a physician-executive, and a super- have professional experience on which to vised project. 14 A variety of leadership and management desired work force competencies, and the development programs are offered nation- planned work products of the organiza- ally and internationally for organizational tion (Morahan et al., 1998). In particular, leaders in health care generally and AHCs leadership training should relate knowl- specifically (Association of American edgeably to the health professions and Medical Colleges, 2000b; Cambridge their evolving societal roles. For example, University, 2000). Some institutions have the Johnson & Johnson-Wharton Fellows developed in-house programs to meet the Program in Management for Nurse needs of their faculty and staff. The Executives focuses on developing leader- University of Virginia (UVA) Darden ship skills needed for collaborative and Graduate School of Business innovative partnerships. Toward that end, Administration developed a program for it addresses self-knowledge, strategic department chairs in the UVA School of vision, risk taking and creativity, interper- Medicine. Participants meet one weekend sonal skills and communication effective- per month for a year and cover topics ness, and managing change (Chow, such as strategic thinking, marketing, Coffman, and Morjikian, 1999). finance, operations, organizational behavior, leadership skills, and managing education. The ultimate test for a leader is not whether he or she makes smart The American Council on Education (ACE) offers a professional development decisions and takes decisive action, program for faculty and senior adminis- but whether he or she teaches trators to become skilled in the leadership others to be leaders and builds an of change that could serve as a model for organization that can sustain AHC leadership development programs (American Council on Education, 2000). success even when he or she The ACE Fellows Program provides indi- is not around. vidualized, long-term (i.e., a semester or – The Leadership Engine: How Winning year), on-the-job professional develop- Companies Build Leaders at Every Level, ment. Fellows are mentored by a team of Noel M. Tichey and Eli Cohen, 1997 experienced administrators (usually the president and vice presidents) of another institution, participate in seminars with Coaching and mentoring of individual other fellows, attend national meetings, and teams of faculty and staff are neces- and are encouraged to visit other campus- sary to prepare them for future leadership es, corporate settings, or universities opportunities but are more often used for abroad as part of the program. technical skills than leadership skills. Both coaching and mentoring offer AHC It is important to assure that such pro- leaders an opportunity to convey organi- grams meet leadership development needs zational values and emphasize desired through consistency with starting point cultural attributes (e.g., collaboration) and culture of learners and alignment while responding to the specific needs of with strategic organizational priorities, individuals (Henry and Gilkey, 1999). 15 The most effective mentoring occurs ity of institutional vision or goals. In con- through example (e.g., solve problems as a trast, Baylor College of Medicine has a team with leader as head). Departments strong leadership tradition (Bulger, that do not have regular departmental Osterweis, and Rubin, 1999). It relies meetings or in which attendance is irregu- heavily on internal appointments for lead- lar are missing an important opportunity ership positions, actively plans for leader for the chair and senior faculty to mentor succession, and uses former CEOs as younger staff. advisors to ensure smooth, short transi- tions with minimal uncertainty. There is no more delicate matter to The need for AHC leaders to reach beyond their organizations has been take in hand, nor more dangerous to growing over time. They have gone from conduct, nor more doubtful of suc- gathering data about their markets, to cess, than to step up as a leader in working on targeted community projects, the introduction of change. For he to establishing informal and formal who innovates will have for his ene- relationships with a variety of groups (such as employers, third-party payors, mies those who are well off under industry, other parts of the university). It the existing order of things, and only is increasingly important that AHCs not lukewarm support in those who only respond to but also influence their might be better off under the new. environments. External structural barriers that inhibit internal collaboration (e.g., – The Prince, Nicollo Machiavelli,1532 accreditation requirements that do not keep pace with changing clinical care structures) require attention by AHC lead- Succession planning is critical to the con- ers. It is also important that AHCs attend tinued development of leadership capabil- to the development and strengthening of ity and ability of an organization to sus- external relationships. A 1997 study by tain high performance. Rarely do very the Association of Academic Health successful large corporations recruit their Centers concluded that “the relationship leaders from outside the firm; they groom between an AHC and its community is a their own leaders and, in so doing, main- critical leverage point as the AHC under- tain and align institutional vision and goes transformational change” because goals (Collins and Porras, 1994). Yet with that relationship “can facilitate or side- rare exceptions succession planning does track efforts by the academic health cen- not occur within AHCs. Typically, AHCs ter to create partnerships, increase cost conduct national searches to fill key effectiveness, reshape the workforce, vacancies and emphasize “intellectual fire- introduce new products, or modify the power” over understanding of culture or class sizes or composition of health pro- interpersonal skills (Commonwealth fessions schools” (Bulger, Osterweis, and Fund Task Force on Academic Health Rubin, 1999). Centers, 2000). This kind of tactical deci- sion making can lead to a lack of continu- 16 The Shape of Leadership T here are myriad definitions of leader- ment for continual innovation and knowl- ship. Senge describes it as “the capacity of edge creation; they do so by investing in a human community to shape its future, new infrastructure, through support and and specifically sustain the significant inquiry, and through leadership by exam- processes of change required to do so.” ple – establishing new norms and behav- He believes that leadership grows from iors within their own teams. the “energy generated when people articu- late a vision and tell the truth (to the best Leaders who seek change that extends of their ability) about current reality” beyond organizational lines or confront (Senge et al, 1999). Thus, leadership diverse groups within their organization entails “defining a vision that people can require additional capabilities. Innovative rally around, developing a strategy to leaders use stories that permit organiza- achieve the vision, and motivating a tions to build new practices or fundamen- group of people to achieve the vision” tal beliefs and values. Their stories may (Kotter, 1996; Nackel, 2000). Some schol- also question taken-for-granted assump- ars link the purpose of leadership with tions that stifle any organization’s ability specific kinds of change such as reducing to adapt to a changed environment. Their the gap between a group’s values and its stories and values may be taken from one practices, or increasing social capital (i.e., domain (such as faculty meetings) and the communal bonds, moral resources, told in simpler fashion in another (such and collective goods that people invest in as legislative hearings). one another as members of a community) (Couto, forthcoming). Leaders reach a wide range of groups most successfully by framing their stories Organizations typically have three kinds to appeal to basic concepts common to of leaders (Senge, 1999). Local line leaders different domains (Gardner, 1994). The focus on creating better results within more diffuse a group, the more a leader their unit. They have “accountability for must reach for common ground. For results and sufficient authority to under- example, Albert Einstein could not take changes in the way that work is administer Princeton University based on organized.” Network leaders or community a shared knowledge of theoretical physics. builders move about the organization car- He would need to know the minds and rying ideas, support, and stories. They motives of administrators, faculty, stu- participate in broad networks of alliances dents, board members, alumni, and other with other like-minded individuals, help organizational constituents. Genius does line leaders directly and by putting them not make this leap from one domain to in contact with others from whom they another; leadership does. can learn, and make executive leaders aware of the support change initiatives Transforming leaders shape and are need from them. Executive leaders have shaped by their followers in the pursuit of overall accountability for organizational significant change. They raise expecta- performance but less ability to influence tions for themselves and others. work processes directly. Their primary Transforming leaders achieve success by role is to create an organizational environ- conveying new stories to and learning 17 new stories from others collaboration needed for should have integrity, pro- (Couto, 2000; Couto, change (Couto, Forth- vide genuine attention to Forthcoming). Innovative, coming; Nackel, 2000). the customer and employ- transforming leadership Leaders seeking to trans- ees, be constantly learning uses “new stories about form their organization and updating technology the nature of problems face both organizational and expertise, and offer and solutions that permit and personnel develop- adequate and useful infor- people to conduct tasks of ment activities as well as mation for employees and significant change” leadership and manage- customers. In addition, (Couto, forthcoming). It ment tasks. Generally, health leaders are expect- attempts to raise the level these activities comprise: ed to demonstrate caring of a group’s practices to and compassion, involve- its values and may • setting direction for the ment in the community, organization through vision, increase the amounts and strategy, an operating model, and financial health for improve the forms of and stretch goals their organizations social capital. Innovative, (Health Forum, 1999). • shaping the culture transforming leadership expresses old and new • ensuring competency AHC leaders also face truths through familiar development (including both growing expectations. For technical and leadership and new stories. Such sto- example, deans previously skills for staff and self) ries move us from ensured that educational exchanges of mutual ben- • establishing connections programs met accredita- efit that further common to the environment tion standards, distributed interest to willingness to • providing sound resources (without having sacrifice for a new state of management of routine to disclose how much was affairs. This form of lead- operations and new given to whom), aided initiatives (i.e., change ership is particularly rele- management) department chairs in vant for AHCs in light of recruiting faculty, the challenges and These leadership activities attempted to keep people changes they face (such as are primarily derived from happy, promoted the achieving a shared vision the Leadership Mirror, a school, and rewarded out- among diverse constituen- leadership model that can standing achievement cies, strengthening the be used to assess organi- (Aschenbrener, 1998). AHC through enterprise- zational readiness for suc- Today, deans must design wide decision making, or cessful business transfor- educational programs to creation of a value-driven mation. (See Appendix 1 address societal and health system). for a full description of workforce needs, reduce the Leadership Mirror). costs, right-size the facul- Whatever their end goal, ty, establish direction and effective leaders use tangi- Expectations for leaders encourage collaboration, ble processes and behav- are growing. A series of promote integration with iors to convert their consumer focus groups other AHC units and out- vision into reality and concluded that leaders in side partners, and foster manage the conflict and the twenty-first century institutional alignment. 18 Similarly, in addition to bearing responsi- contribute to success. These include bility for the performance, reputation, and advocacy of the vision by the leader, pro- success of academic and clinical pro- motion of a cooperative environment, grams, department chairs are now expect- assurance of real participation, ongoing ed to: evaluation of a project, and using human resource development effectively (i.e., • share collective responsibility for success of training and aligning rewards with desired the AHC (by being well-informed about the environmental context, participating in strategic behaviors) (Bland et al., 2000). planning, and modeling core values of the AHC) Analysis of the leadership literature from • assume more responsibility for managing the cost of education and research the perspective of AHCs reveals several themes (see Exhibit 5). First, the confu- • explore new relationships with industry, health sion generated by the rapidly changing care partners, or community agencies environment requires that leaders orient • develop people (i.e., select people whose their organizations through articulation of competencies match the needs of the core values and motivate their staff organization, set expectations for performance through creation and effective communi- and assess productivity in relation to those expectations, and ensure that faculty and staff cation of a creative vision. Second, collab- have the coaching, mentoring, and opportunities oration within and beyond AHCs will for learning necessary to continue their continue to increase and requires specific professional and personal growth) and skills for AHC leaders and organizations. • participate in succession planning Third, ongoing personal development or (Aschenbrener, 1998; Johns and Lawley, 1999) transformation is a component of effective leadership (Goleman 1998a and 1998b; Not surprisingly, these new expectations Nackel, 2000) (see Appendix 1). are driving the need for leaders to possess additional skills. Whereas in the past, aca- demic and clinical achievement were pri- mary selection factors for AHC leaders, interviews with current and former deans revealed that interpersonal skills and per- In this period of transformation, sonality characteristics as well as manage- when what was certain and estab- ment training and experience contributed lished will become vague and unpre- to success in their roles (Yedidia, 1998) dictable, the essential leadership (see Exhibit 5). These findings are consis- task will be to bring coherence, tent with research by Goleman, who found that although technical skills and cogni- structure, and meaning to a world of tive abilities are threshold capabilities, changing norms and expectations. effective leaders are distinguished by their – Core Competencies for Physicians, emotional intelligence (see Exhibit 5). Edward O’Neil, 1999 Analysis of the literature on successful educational curricular change and organi- zational change identified a series of lead- ership characteristics and actions that 19 Exhibit 5: Leadership Competencies And Characteristics Identified In The Literature SOURCE HEALTH LEADER COMPETENCIES AND CHARACTERISTICS Goleman (1998a and Self-awareness: knowing one’s preferences, resources, and intuitions 1998b) on Emotional • emotional awareness, accurate self-assessment, self confidence Intelligence Self-regulation: managing one’s internal states, impulses, and resources • self-control, trustworthiness, conscientiousness, adaptability, innovation Motivation: emotional tendencies that guide or facilitate reaching goals • achievement drive, commitment, initiative, optimism Empathy: awareness of the feelings, needs, and concerns of others • understanding others, developing others, service orientation, leveraging diversity, political awareness Social skills: adeptness at inducing desirable responses • influence, communication, conflict management, leadership, change catalyst, building bonds, collaboration and cooperation, team capabilities Eastwood (1998) on Blend of “visionary, prophet, analyst, manager, coach, and mediator with skills in- Leadership in AHCs formed by practical knowledge” Strongly motivated Possess a great deal of energy Self-knowledge Self-confidence Broad perspective Integrity Other directedness (including respect and ability to assess the abilities and motiv- ations of others) Ability to communicate Ability to listen Ability to select good people Ability to handle uncertainty Ability to handle praise and criticism Ability to act and take risks Ability to use power Ability to make difficult decisions Yedidia (1998) on Qualities Academic and clinical achievements to be Considered in Personality traits: Selecting a Dean • patience with process • openness to diverse points of view • capacity to act decisively • penchant for taking pride in the accomplishments of others Management experience: • prior experience in addressing complex, cross-cutting issues • ability to attend to a variety of issues at once • capacity to incorporate a view of institution-wide needs in decision making • insider status (both potential asset and potential liability) Franklin & Moore (1999) Capacity to amass critical resources quickly on Skills Needed to Lead Ability to cross traditional boundaries and form alliances Integrated Delivery Cognitive flexibility Systems Ability to integrate and interpret information 20 SOURCE HEALTH LEADER COMPETENCIES AND CHARACTERISTICS O’Neil (1999) on Physician Ability to develop creative vision and convey it using stories Leaders Ability to align organizational efforts with vision through communication, focus, and continued involvement Ability to develop partnerships, alliances, and acquisitions Ability to manage change, including • self-knowledge • ability to resolve conflict (i.e., manage expectations, processes for decision making and participation, and commitment to broader organizational goals and vision) • create a culture that recognizes diversity of ability, provides training and environment, and ensures that people grow in their professional work • link the leadership agenda to the developing ability of its members • develop a diverse executive team that is aligned with the vision and strategy of the organization Chow, Coffman, & Systems perspective as well as competencies in vision development, taking risks, Morjikian (1999) on innovating, and managing change Nursing Leaders Bland et al. (1999) on Ability to build a shared vision and keep it visible Leadership of Ability to bring diverse partners together Collaborative Curricular Ability to negotiate and handle conflict Changes in Medical School Project management capabilities (e.g., organizational skills, accountability systems) Knowledge about various domains involved in the project including the traditions and politics of each Halverson (1999) on Skills Inclusiveness: bring everyone who is part of problem or part of solution to the table Needed for an Integrated • be willing to share control Community Health • seek out new and different people to participate System • listen carefully to community perceptions • gain common vision and agreement on goals Innovation: overcome constituent traditions, harness collective ingenuity to arrive at new approaches • explicitly discuss value of innovation • create an innovations fund • create structured ways to learn from failure Integrity: provides the basis for trust and support among diverse participants • communicate • use a policy of full disclosure • ensure actions are consistent with words 21 A New Dimension of AHC Leadership A s our knowledge of the The health care communi- Yet, along with significant biological mechanics of ty is just now beginning potential to improve health continues to deep- to reap the benefits of health, these develop- en and our understanding advances in information ments raise a complex set of the social components and communications of issues (e.g., equity, effi- of health continues to technology, nanotechnolo- cacy, and funding) that broaden, the U.S. health gy, robotics, tissue engi- must be addressed. The sector faces the opportuni- neering, genomics, and health sector will need to ty to achieve a significant- pharmacogenetics. New determine how to balance ly higher standard of per- models of health care allocation of resources formance. This management are emerging among these highly opportunity arises amidst with growing involvement sophisticated technologies a multitude of existing of patients in their own and primary health needs shortcomings and emerg- care. Increasing connect- such as nutrition, screen- ing technological capabili- edness in the health care ing, or immunization. ties that point to the need sector and the economy for and potential to at-large reduces (although Health care in the future achieve a new vision for by no means eliminates) will be more than the ill- and level of health in this the difficulty associated ness care, illness preven- country early in the 21st with developing a system- tion, and public health of century. The continued atic approach to managing the past. It will also existence of a large popu- the health of individuals include identification and lation of uninsured citi- and populations and cre- treatment of the determi- zens, varying levels of ates opportunities for sig- nants of health at the quality and safety nificant administrative societal level as well as achieved by health care cost savings (Blue Ridge value-driven services that provider institutions, and Academic Health Group, meet the care needs of continued escalation in 2001; Goldsmith, 2000). individuals. As the pro- costs of health care with- The potential to monitor duction modes of health out accompanying population health, cus- care evolve, the industry improvement in health tomize diagnostic and will be able to draw upon status of the population therapeutic services for the strengths offered by signal needed changes individual patients, and each. Ultimately, health (Blue Ridge Academic offer facile routine inter- care may successfully Health Group, 1998b; action between health combine the trusting Institute of Medicine, care professionals and physician-patient relation- 1999). The possible shift patients could stimulate ship of the craft mode, in health care financing the next major transfor- outcome measures and modes (i.e., from defined mation in the delivery of efficiency of the manufac- benefit to defined contri- health care (on par with turing mode, and trans- bution) creates an oppor- the introduction of sanita- formation of information tunity to introduce tion techniques and dis- and experience into useful changes (Goldsmith, covery of antibiotics). knowledge in the learning 2000). mode (Maccoby, 1999). 22 Such profound change within the health system, define and communicate the care domain is, however, inhibited by lim- framework needed for a value-driven sys- ited and diffuse leadership of a sector tem, become value-driven organizations, populated by many diverse constituencies model and assess value-driven behaviors, with well-entrenched interests. Thus, educate value-driven health professionals there is an urgent need to assimilate cut- and patients, and advocate for value-driv- ting-edge theories and proposals with nas- en health policies. First and foremost, cent technological capabilities into a AHCs need to envision the future clearly coherent vision that will motivate the and convey it in different ways to reach a myriad groups to coalesce and work col- variety of audiences so that others can laboratively toward a radically different embrace it and will be motivated to create and dramatically improved future health a “new world order” for health care. system. In short, innovative transforming leaders are needed to take full advantage Progress will also require that AHC lead- of imminent technological achievements ers cultivate a culture of change within to improve health in the U.S. their own institutions so that their enter- prises can be transformed into value-driv- Progress is evident in some of the areas en organizations. As such, they can devel- that would provide an infrastructure for a op, model, and evaluate health value-driven health system (e.g., tools for organization and professional behaviors population health management, evidence- consistent with value-driven health care. based medicine, robust information sys- They can identify skills needed to practice tems, health professionals as proficient in such a system, educate future health knowledge managers) (Blue Ridge professionals about those behaviors and Academic Health Group, 1998b). skills, and disseminate knowledge about Considerable work remains, however, in best organizational practices across the other areas such as: entire health sector. • universal coverage • reimbursement mechanisms that offer health maintenance incentives to both health professionals and patients Unfortunately, physicians and scien- tists who currently hold key leader- • expanded understanding of professionalism to include care of population as well as care of ship positions in academic medicine individuals are superbly knowledgeable within • willingness to shift resources away from medical their disciplines, but have had little applications towards other factors that contribute directly to the health of a population systematic management training, (e.g., housing, education, nutrition, employment) leadership education, or guided executive experiences. Moreover, there is not yet a sustained effort to create a true health care system – Training Future Leaders of Academic Medicine, Morahan et al., 1998 in the U.S. To drive such an effort, AHCs must articulate the vision for a new health 23 By providing innovative, Alternatively, when AHCs nities and regions to com- transformational leader- respond in an ad hoc municate the concept of a ship in the health sector, manner as forces buffet value-driven health sys- AHCs necessarily position them, they risk damage to tem, to develop strategies themselves amongst those their organizations and to for increasing responsibil- at the forefront and sus- the public’s health inter- ity among local citizens tain their ability to train ests. Although this for maintaining their future health profession- endeavor represents a health, and to share lead- als and develop future huge stretch goal, AHCs ership opportunities asso- health leaders. are well-positioned to cre- ciated with building a ate a coherent platform value-driven health sys- for change and align the tem. Working collabora- various interest groups for tively on this endeavor action. Their traditional will increase the social role as educators, innova- capital of all participating tors, and thought leaders parties with ultimate ben- provides them with influ- efit accruing to the com- ence in the health com- munity as a whole. munity through connec- Success in this arena will tions to and credibility depend on AHCs being with many different con- open to ideas from their stituencies. collaborators and seeking innovative approaches to Although AHCs can make community issues. The significant contributions American Network of to the development of a Health Promoting value-driven health sys- Universities, established tem, they cannot nor by the Association of should not seek to bear Academic Health Centers, the full burden of leader- can contribute to progress ship. One of the key con- on this front as it seeks to cepts of value-driven raise health promotion on health is that risk and the agendas of AHCs, responsibility are shared increase the effectiveness by all participants and of AHCs’ health promo- that contributors to the tion efforts, and strength- health system are defined en partnerships between broadly and extend to AHCs and local commu- civic and business leader- nities (Association of ship as well as health Academic Health Centers, leadership. AHCs should 2000). work with their commu- 24 The logic for a new leadership para- provide responsive point of service digm is compelling. The order once delivery. As a result, ponderous provided by chains of command, structures and systems, and the spans of control, and standards of authoritarian personalities that they protocol becomes an impediment to sometimes spawned, are now action in time sensitive, competitive dysfunctional. market environments. Power, author- – Growing Effective Leadership in ity, and decision making must all be New Organizations, John D. Henry and Roderick W. Gilkey, 1999 dispersed before organizations can 25 Strengthening AHC Leadership There are many ways that AHCs can • developing team leader skills through mentoring, educational opportunities, and low risk projects strengthen the leadership capabilities within their organizations. The Blue Ridge • attending to leadership abilities in the selection Group focused its recommendations on of faculty and staff who participate on committees, task forces, and project teams four areas likely to yield notable benefits – careful selection of AHC leaders, devel- • attending to succession preparation as part of opment of leadership skills among organi- strategic planning for the institution zational members, working with govern- • fostering institutional citizenship in faculty, staff, ing bodies, and collaborating with and students through educational programs, communities to build value-driven health communication opportunities, explicit systems. expectations, and performance evaluations • strengthening formal and informal mentoring Recommendation 1 (e.g., include as part of performance expectations) and acknowledging individuals AHCs should seek leaders with the who serve as role models ability (i.e., qualities and experience) • encouraging and rewarding collaboration across to transform their organizations and to departments and disciplines work with their communities to build value-driven health systems. • considering leadership potential in the admissions process for health professional Recommendation 2 school candidates AHCs should develop the leadership AHCs can make progress toward strength- skills of their professionals and students ening their collaborative leadership capa- to build stronger organizations and bilities and advancing development of a value-driven health systems for their value-driven health system by: communities. • drawing upon experiences of a wide range of AHCs can make progress toward community representatives (e.g., community health, public health, and education strengthening their internal leadership professionals; public officials; philanthropic capabilities by: agencies; and other parts of the university) • articulating skills and characteristics critical for • participating in assessment of community or successful leadership and incorporating those regional health needs to determine how the criteria into recruitment and promotion efforts AHC can contribute to the effort to advance for all faculty and staff the health status of the population (e.g., provide resources for development of a regional health • providing continual development opportunities database) for AHC professionals oriented to meeting both the needs of the organization and the • advancing efforts to improve population health individual’s professional development plan status through educational programs for students, professionals, and patients • identifying and nurturing potential future leaders through explicit mentoring, comprehensive • allocating institutional resources to encourage appraisals with direct feedback from both research on population health issues supervisors and peers, and opportunities for both individuals and teams to attend • initiating health policy debate on the need for leadership development programs and requirements of value-driven health care at local, state, and national levels 26 Recommendation 3 Effective leaders... translate the AHCs should work with and develop the vision into stories that explain the capacity of their governance bodies to changing environment, tie the organi- provide strong leadership, sound guid- zation’s values to these changes, ance, and effective decision making for their institutions. and point to ways in which the work of those inside the organization can To make progress in this area, AHC leaders can: and should change. – Core Competencies for Physicians, • continue and strengthen efforts to educate Edward O’Neil, 1999 governing boards about immediate and longer term challenges facing AHCs (e.g., visit other AHCs or attend national meetings together) To make progress in this area, AHCs and • initiate conversation with board members on their respective roles in the changing economic their partner organizations can: climate and boundary conditions that enable leaders to act effectively • review curricula of existing leadership and related programs to determine if they are • ensure that all members of governance bodies consistent with current climate and needs of and the AHC leadership team clearly understand AHCs (e.g., do the programs address relevant and acknowledge conflict of interest laws and leadership skills and tasks and offer a balance issues between leadership and management issues) • continue development and use of performance • determine if the focus of leadership and measures that provide effective assessment of management programs should be broadened organizational and leadership performance to include emerging developments in health care and evolving nature of professionalism within • encourage board members to play an active health care (e.g., interdisciplinary care, governance role while supporting the population health management, knowledge management team in its designated role as management, health informatics including managers of the enterprise ehealth and bioinformatics) • include institutional citizenship skills in both Recommendation 4 undergraduate and professional education programs AHCs should partner with professional • evaluate the benefits of establishing a leadership organizations and specialty societies to fellow program for AHC faculty and staff based strengthen leadership skills of their on the model provided by the ACE fellow faculty and students, to help create and program support needed change within AHCs, and to advocate for necessary changes in the health care system. 27 Conclusion T oday’s AHC leaders need more than Needless to say, energy, commitment, technical expertise, extensive managerial staying power, and a sense of humor are experience, and strong people skills (i.e., also prerequisites for the job. emotional intelligence). They must have vision for where health care should be in AHCs face the challenge of transforma- the twenty-first century, be able to share tion across each of their missions. They that vision effectively with diverse audi- cannot, however, transform themselves ences, and be able to develop alliances within a vacuum. They must strive to that will work towards that vision. They shape the environment in which they must also have a vision for where their operate so that they are better able to organization fits in that future health sys- reach their ultimate goal of improving tem and be able to transform their organi- health in this country. The current climate zation for future success. Thus, they must requires that AHC leaders extend their attend to leadership tasks of: role from their organizations to their com- munity and health care generally. AHCs • developing an operating model and need to help define the attributes of the implementation strategies future health sector. The Blue Ridge • forging a culture supportive of learning Group believes that the potential to create and change a health system for the nation has never • establishing stretch goals and performance been greater and that AHCs should act on measures for the organization, for themselves as the opportunity to shape a system that individuals, and for their staff truly meets the needs of the public. • ensuring that professional development opportunities address both technical and Despite its daunting nature and consider- leadership capabilities able risks, the role of the AHC leader offers the potential to shape the future of • building solid relationships with their governing boards and health in this nation in the coming decade, perhaps for the rest of this centu- • planning for continued organizational success ry. By leading instead of reacting, AHC through future leaders leaders can take advantage of the unique set of opportunities presenting itself to this generation of health professionals. The U.S. health sector needs transforma- We are living at a time when a new tion. With inspired leadership, AHCs can help to make it happen. form of leadership – leadership as the ability to inspire, empower, and exert broad influence – supplants leadership as the exercise of central- ized power and control. – Growing Effective Leadership in New Organizations, John D. Henry and Roderick W. Gilkey, 1999 28 About the Blue Ridge Academic Health Group The Blue Ridge Academic Health Group Other participants are invited to seeks to take a societal view of health and Blue Ridge Group meetings to bring health care needs and to make recommen- additional expertise or perspectives on dations to academic health centers to help a specific topic. them create greater value for society. The Blue Ridge Group also recommends pub- Blue Ridge Group members collectively lic policies to enable AHCs to accomplish select the topics to be addressed at annual these ends. meetings. Criteria for selection of report topics include relevance to AHCs’ opera- Three basic premises underlie this mis- tions, consistency with AHCs providing sion. First, health care in the United value to society, the likelihood of being States is experiencing a series of transfor- able to make specific recommendations mations that ultimately will require new that will lead to productive action by approaches in health care delivery sys- AHCs or other organizations, and the tems, education, and research. Second, ability to frame useful recommendations the recent upheavals in health care have during two-day meetings. been largely driven by financial objec- tives. Yet, the potential exists for funda- Before each meeting, an extensive litera- mental changes in health care to improve ture review is conducted. During the health and manage costs. Analysis and meeting, participants reflect on emerging evaluation of the ongoing evolution in trends, share experiences from AHCs, and health care delivery must address this hear presentations on specific issues. impact on the health of individuals and Most of the working session is dedicated the population, as well as on cost. Third, to a discussion of what AHCs can and AHCs play a unique role in the U.S. should be doing in a particular area to health care system as they develop, apply, achieve visible progress, or a discussion of and disseminate knowledge to improve what public and private policy and phil- health. In so doing, they have assumed anthropic organizations can do to facili- responsibilities and encounter challenges tate the efforts of AHCs to fulfill their other health care provider institutions do societal mission. The results of the not bear. As a result, AHCs face greater group’s deliberations are presented in risks and opportunities as the U.S. health brief reports that are disseminated to care system continues to evolve. targeted audiences. The Blue Ridge Group was founded in March 1997 by the Health Policy Center at the University of Virginia and the Health Care Consulting leadership at Ernst & Young, LLP (now Cap Gemini Ernst & Young U.S. LLC, CGE&Y). Group mem- bers were selected to bring together sea- soned, active leaders with a broad range of experience in and knowledge of academic health centers in the United States. 29 About the Core Members Enriqueta C. Bond, Ph.D. otolaryngological societies and has taken President an active leadership role in many, includ- Burroughs Wellcome Fund ing the American College of Surgeons, the American Society for Head and Neck Dr. Bond is the president of the Burroughs Surgery, and the American Broncho- Wellcome Fund. She formerly held a Esophagological Association. Dr. Cantrell number of research and administrative received the Mosher Award for clinical positions at the Institute of Medicine, research, has published numerous articles, National Academy of Sciences; and lectured nationally and internationally. Department of Medical Sciences, Southern Illinois University’s School of Medicine; and the Biology Department at Chatham Don E. Detmer, M.D. College. Dr. Bond also serves on several Dennis Gillings Professor of advisory committees and boards, some of Health Management which include the Council of the Institute Director, Cambridge University Health of Medicine and the National Center for University of Cambridge Infectious Diseases, Centers for Disease Control and Prevention. She has authored Dr. Detmer heads the health policy and and co-authored more than 50 publica- management center within the Judge tions and reports in science policy. Institute of Management at Cambridge University’s business school. He chairs the Board on Health Care Services of the Robert W. Cantrell, M.D. Institute of Medicine and is a board mem- Vice President and Provost ber of several organizations including the University of Virginia Health System China Medical Board of New York, the Nuffield Trust in London, and the Dr. Cantrell is vice president and provost American Journal of Surgery. He has for the Health System at the University of authored numerous scientific publica- Virginia. Also a surgeon-educator and tions. Dr. Detmer earned his medical medical administrator, he is the former degree at the University of Kansas after president of the American Academy of undergraduate studies there and at Otolaryngology-Head and Neck Surgery. Durham University of England. He con- As a captain in the U.S. Navy, he served as ducts his work with the Blue Ridge Group chair of Otolaryngology-Head and Neck through a professorship at the University Surgery at the Naval Regional Medical of Virginia where in the past he served as Center in San Diego, California. Dr. vice president and provost for health sci- Cantrell was also the Fitz Hugh Professor ences and university professor. and chair of the Department of Otolaryngology-Head and Neck Surgery at the University of Virginia School of Medicine. He has been a consultant to the Surgeon General of the U.S. Navy and to the National Institutes of Health (NIH). Dr. Cantrell is a member or fellow of 33 30 Michael A. Geheb, M.D. Professor of Medicine and Senior Vice Company, a private merchant bank in President for Clinical Programs biotechnology and health sciences. He is Oregon Health Sciences University currently an associate professor of med- ical education at the University of Dr. Geheb is professor of medicine and Virginia. He is a former lecturer in the senior vice president for Clinical Graduate School of Business at the Programs at Oregon Health Sciences University of Chicago. He has also lec- University. Dr. Geheb has also served as tured on health services management and professor of medicine, and was the first policy at the Harvard Business School, the director and chief executive officer of Wharton School of Finance, Johns the University of Alabama at Birmingham Hopkins, Washington University and the Health System. Prior to that, Dr. Geheb University of California at Berkeley. Dr. was associate dean for Clinical Affairs, Goldsmith has served as national advisor and director of Clinical Services at the for health care for Ernst & Young LLP, State University of New York at Stony was director of Planning and Government Brook University Medical Center. Dr. Affairs at the University of Chicago Geheb’s professional associations include Medical Center, and special assistant to the American Federation for Clinical the Dean of the Pritzker School of Research; the Board of Directors of the Medicine. Dr. Goldsmith has written for University Hospital Consortium; and the the Harvard Business Review and has American Board of Internal Medicine’s been a source for articles on medical tech- Board of Directors. Dr. Geheb is co-editor nology and health services for The Wall of the textbook Principles and Practice of Street Journal, The New York Times, Medical Intensive Care and co-editor for Business Week, Time and other publica- the Critical Care Clinics series. He also tions. He is a member of the editorial speaks frequently to national audiences board of Health Affairs. He earned his on health care policy issues related to aca- doctorate in Sociology from the demic productivity and financial models University of Chicago in 1973. for academic clinical enterprises. Jeff C. Goldsmith, Ph.D. President Health Futures, Inc. Dr. Goldsmith’s consulting firm assists a wide range of health care organizations with environmental analysis and strategy development. He is a director of Cerner Corporation, a health care informatics firm, and of Essent Healthcare, a hospital management firm, as well as a member of the Board of Advisors of Burrill and 31 Michael M.E. Johns, M.D. Peter O. Kohler, M.D. Executive Vice President for Health Affairs President Emory University Oregon Health Sciences University Director The Robert W. Woodruff Health Sciences Dr. Kohler is president of Oregon Health Center Sciences University. After holding posi- Chairman of the Board and Chief Executive tions at the National Institutes of Health Officer (NIH), he became professor of medicine Emory Health Care and chief of the Endocrinology Division at Baylor College of Medicine. Later he Dr. Johns heads Emory's academic and served as chairman of the Department of clinical institutions and programs in the Medicine at the University of Arkansas health sciences and is a professor in the and then dean of the Medical School at Department of Surgery. A former dean of the University of Texas Health Science the Johns Hopkins School of Medicine, he Center in San Antonio. Dr. Kohler has was professor and chair of the served on several boards. He has been Department of Otolaryngology-Head and chairman of the NIH Endocrinology Neck Surgery at Johns Hopkins. Before Study Section and chairman of the Board that he was assistant chief of the of Scientific Counselors for the National Otolaryngology Service at Walter Reed Institute of Child Health and Human Army Medical Center. Dr. Johns is a Development. Currently, he is chairman member of the Institute of Medicine and of the Institute of Medicine Task Force on the Executive Council of the Association Quality in Long-term Care and past-chair of American Medical Colleges and a fel- of the Board of Directors of the low of the American Association for the Association of Academic Health Centers. Advancement of Science. He serves on the Dr. Kohler received his B.A. from the Governing Boards of the National University of Virginia and earned his M.D. Research Council and the Clinical Center at Duke Medical School. of the National Institutes of Health, and on the Advisory Committee for the Director of the Centers for Disease Edward D. Miller, Jr., M.D. Control and Prevention. He is the presi- Dean and Chief Executive Officer dent of the American Board of Johns Hopkins Medicine Otolaryngology, editor of the Archives of Otolaryngology-Head and Neck Surgery, Dr. Miller is chief executive officer of and is a member of the Board of Trustees Johns Hopkins Medicine. His former of Genuine Parts Company. Dr. Johns posts include chairman of the Department received his bachelor's degree and contin- of Anesthesiology and Critical Care ued with graduate studies in biology at Medicine; interim dean of the School of Wayne State University. He earned his Medicine; professor of anesthesiology and M.D. at the University of Michigan School surgery and medical director of the of Medicine. Surgical Intensive Care Unit at the University of Virginia; E.M. Papper Professor at Columbia University; and 32 chairman of the Department of University of Missouri, he was awarded a Anesthesiology in the College of Ph.D. in health care systems design from Physicians and Surgeons. Dr. Miller has the Department of Industrial Engineering. authored and co-authored more than 150 scientific abstracts and book chapters. He received his A.B. from Ohio Wesleyan Mark L. Penkhus, M.H.A. University and his M.D. from the Chief Executive Officer and Executive University of Rochester School of Director Medicine and Dentistry. Vanderbilt University Hospital Mr. Penkhus is chief executive officer and John G. Nackel, Ph.D. executive director of Vanderbilt University Vice President, New Ventures Hospital. Prior to joining Vanderbilt, Mr. Cap Gemini Ernst & Young U.S. LLC Penkhus was a partner and business unit leader for Healthcare Consulting (Mid- Dr. Nackel is the managing director, New Atlantic area) in Washington, D.C. for Ventures with Cap Gemini Ernst & Young Ernst and Young LLP, and served as a U.S. LLC. Prior to this position, he served national leader for academic health cen- as national director, Health Care ters. During his career he has worked Consulting. While with CGE&Y he has with a variety of organizations as an inno- worked in various positions and directed vator, and change agent with a special numerous projects in the U.S. and inter- emphasis on strategic, operational and nationally. He has served the pharmaceu- financial performance improvement. Mr. tical and life sciences, managed care, and Penkhus received his B.S. degree from provider segments of the health care Iowa State University, a master’s degree in industry. In his New Ventures position, he Hospital and Health Care Administration oversees the firm’s spinoff companies and from the University of Iowa, and his MBA strategic investments. Dr. Nackel has pre- from Rensselaer Polytechnic Institute in sented papers and keynote addresses at New York. He is also a graduate of the more than 200 professional society and Advanced Management Program, health care trade association meetings. He Wharton School of Business, at the has published more than 30 articles on University of Pennsylvania. applications of cost and quality improve- ment, information systems and health sys- He is a fellow of the American College of tems engineering; and is the co-author of Healthcare Executives (ACHE), a fellow the award-winning book Cost Management in Project HOPE, Washington, D.C. and a for Hospitals. He was co-editor of the member of the Johns Hopkins University Society for Health Systems’ special issue School of Hygiene and Public Health, focused on Patient Care. Dr. Nackel Department of Health Policy and received a B.S. from Tufts University and Management. Mr. Penkhus serves on sev- masters degrees in public health and eral non-profit boards and for-profit industrial engineering from the University boards in both Tennessee and nationally. of Missouri-Columbia. Also from the 33 George F. Sheldon, M.D. Katherine W. Vestal, Ph.D. Chairman and Professor Vice President, Health/Managed Care Department of Surgery Consulting Practice University of North Carolina at Chapel Hill Cap Gemini Ernst & Young U.S. LLC Dr. Sheldon’s background in graduate Dr. Vestal leads the academic health cen- medical education spans four institutions: ter sector for Cap Gemini Ernst & Young’s Kansas University, Mayo Clinic, (CGE&Y) health consulting practice University of California at San Francisco where she focuses on large-scale organiza- and Harvard University. He is currently tional change for a wide range of health chairman and professor, Department of care delivery organizations. Prior to join- Surgery at the University of North ing CGE&Y, Dr. Vestal held several exec- Carolina at Chapel Hill and was formerly utive positions in academic health centers professor of surgery in the Department of and taught at the graduate level at the Surgery at the University of California - University of Texas. Her background San Francisco. He has held several nation- includes over 25 years of operations man- al appointments, including: president of agement and consulting in the areas of the American Surgical Association; chair- business transformation, post merger inte- man, of the American Board of Surgery; gration, and clinical management. She and member of the Council on Graduate speaks nationally on issues of organiza- Medical Education. He is currently chair tional improvement and is a Malcolm of the Association of American Medical Baldrige National Quality Award Colleges, past president of the American Examiner. Dr. Vestal received her BSN College of Surgeons, and past chair of the from Texas Christian University, MS from Council of Academic Societies of the Texas Women’s University, and Ph.D. at Association of American Medical Texas A & M University. She is a Fellow Colleges. He has published 195 articles of the Johnson and Johnson Wharton and book chapters and co-authored eight School of Finance, American College of books. Healthcare Executives, and the American Academy of Nursing. 34 About the Invited Participants Roger J. Bulger, M.D. community-based health promotion pro- President and CEO gram in Tennessee. He has also served as Association of Academic Health Centers director for Vanderbilt University's Center for Health Services and chaired the Dr. Bulger formerly served as president of Nashville Coalition for the Homeless. the University of Texas Health Sciences Center at Houston, chancellor of the Since 1991, he has published two award- University of Massachusetts Medical winning books on the civil rights move- Center, and dean of its Medical School. ment in the rural South, its historical He has served as a member of numerous roots, and its current course. He also national advisory committees, has been served as the senior editor for a mono- chairman of two Institute of Medicine graph of the National Institutes of Health committees, and served on the board of on community-based interventions in the Association for Health Services health, Sowing Seeds in the Mountains. His Research. Dr. Bulger is a member of the book, Making Democracy Work Better, Institute of Medicine and currently serves deals with community-based organiza- on the boards of the American tions in the Appalachian region and has International Health Alliance and the received the Virginia Hodgkinson Award Living Centers of America. He has been of the Independent Sector. In addition to elected to membership in the National these books, he has published articles in Academy for Social Insurance and is a fel- numerous journals and has lectured low in the Infectious Disease Society of extensively. He has a BA from Marist America, the American College of College, a MA in political science from Physicians, and the Royal College of Boston College, and received his Ph.D. in Physicians. Over the last 25 years, he has political science from the University of authored numerous articles and essays on Kentucky in 1974. medical sciences and health policy. Mary Jane Kagarise, R.N., M.S.P.H. Richard A. Couto, Ph.D. Associate Chair and Professor of Surgery Professor of Leadership Studies Department of Surgery Jepson School of the University of Richmond University of North Carolina at Chapel Hill Dr. Couto is one of the founding faculty With more than 25 years experience in of the Jepson School of Leadership healthcare, Mary Jane Kagarise formerly Studies and currently holds the George M. served as assistant director of operations and Virginia B. Modlin chair there. He at University of North Carolina Hospitals teaches in the fields of community leader- in Chapel Hill and as assistant director of ship, social movements, public policy, patient services at Duke University politics, and experiential education. He Medical Center in Durham. The U.N.C. taught and served previously at Tennessee Hospitals Management Excellence Award State University in the Institute of and State of North Carolina Governor’s Government, where he developed and Award for Excellence certificate recog- directed the Kaiser Family Foundation's nized her leadership at UNC, and the 35 Duke Hospital Woman of Achievement Award acknowledged leadership at Duke. She is currently associate chair for the Department of Surgery at the University of North Carolina where she co-authored a book and several publications. Ms. Kagarise earned her bachelors of sci- ence degree from Duke University and her masters of science degree in management from the University of North Carolina at Chapel Hill where she achieved appoint- ment to Delta Omega. She was a founding board member of the Carolina Organ Procurement Agency, and served on the Board of Directors of the North Carolina Kidney Council and Board of Trustees for the National Kidney Foundation. She is an active member of the Faculty Council of the University and serves on two Institutional Review Boards for the School of Medicine. 36 Appendix 1 The Means of Leadership 37 Appendix 1 Leaders can transform their organiza- Catalytic mechanisms are policies and tions to achieve sustained high-perform- practices that “are simple, easy to compre- ance through a set of leadership and man- hend, and that result in substantially rais- agement tasks that require action on both ing the bar over current levels of perform- the organizational and personal levels. ance.” These simple procedural edicts are The Leadership Mirror is a model that a potent way of reinforcing or achieving identifies 14 elements of successful busi- desired behaviors. ness transformation and divides those tasks between leadership and manage- 2. Develop a personal transformation ment as well as between personal and framework. organizational activities (see Figure 1; Change must occur within people before it Nackel, 2000). The Blue Ridge Group can occur within an organization, therefore found this model to be a useful construct a framework to support personal transfor- in assessing the many facets of AHCs. mation is a critical element of creating an organization with sustained high perform- Pivotal leadership activities for sustained ance. Such a framework is similar to the high-performance by an organization organizational transformation platform and include the following leadership and man- includes a personal vision, mission, values, agement tasks: understanding of strengths, goals, and implementation actions to achieve personal 1. Build the organizational transformation goals. It helps leaders clarify what they platform. want to achieve and ensures that decisions The transformation platform provides the and actions are based on a clearly articulat- framework by which an organization can ed set of core values. be transformed (see Figure 2 and Exhibit 6). It defines the what, why, and how of an organization’s role within a market, O R G A N I Z AT I O N Business Transformation: industry, or community. By detailing Vision, Values, Strategy, Operating Model, Transformation Agenda, Implementation Actions the kinds of behaviors necessary to achieve internally established ALYTIC MECHANISMS CAT PERSONAL goals, it provides the basis for Building a Learning Personal Transformation: Establishment of Organizational an organization’s culture. Environment and Leadership Principal Centered, Stretch Goals Personal Point of View Culture Building Leadership NN E C T ED Establishment Behaviors: Coaching, CO of Personal Mentoring, Life Marketplace Sensitivity: Bests Balance, Motivate Innovation, Thought Others Leadership, Point of view LEADERSHIP Figure 1: Economic Webs: MANAGEMENT The Leadership Mirror Service, Delivery, Manage Skill Joint Operating to and Development Agreements Measure Culture Expression Results and Behavior Manage Reinforcement Competency to and Development Measure Results Managing the Business: Short Term Results, Compliance, Risk Management 38 3. Establish connections to the market. bests should be aligned with the organiza- Sensitivity to the environment and a tion’s stretch goals. Leaders should not framework for linkages to the market- only develop their own set of personal place enable sound decision making, pro- bests, but also encourage other individu- vide the basis for future external relation- als to formulate and accomplish their own ships, and are critical for high-performing personal goals. organizations. Organizational leaders should not only scan the environment 6. Create a leadership culture and a constantly, but also generate thought lead- learning environment. ership for their organization by generating The combination of a leadership culture and sharing new ideas, striving to be and a learning environment provides both innovative, communicating with impor- the reason and means of constant organi- tant players outside the organization, and zational renewal. A leadership culture is developing a “point of view” on the one in which an organization’s beliefs, marketplace. behaviors, norms, and standards are cen- tered on transforming the work of the 4. Establish organizational stretch goals. organization to address its opportunities Organizational stretch goals are long- effectively. It is an organization’s identity term, easy to understand, and flow from as an entity that is principled, proactive, an organization’s vision and values. They and continually changing and prepared are the “stratospheric heights to which all for changes in the marketplace. organizations who want long-term per- formance should aspire” and drive busi- Effective leadership cultures are constitut- ness transformation by motivating the ed by diverse individuals with a shared organization to examine where it needs to understanding of the organization’s vision change to achieve those goals. Creating or purpose, values, and mission. In these goals is an important part of leader- Nackel’s model, this shared understanding ship because it provides a tangible target disperses responsibility to achieve the to achieve while pursuing the organiza- permanent aspects of the business trans- tion’s vision. These goals should be formation pyramid and guides actions achievable, but require substantial energy. without the requirement of managerial oversight. Diversity in the professional, 5. Establish personal bests. experiential, and cultural background of Personal bests are organizational stretch staff is an organizational asset since it is goals on an individual level – long-term, likely to broaden the range of approaches easy to grasp, and vision-centered goals to problems thereby increasing speed in that individuals strive for as part of their designing solutions that ultimately own personal transformation process. strengthen the organization. Personal bests require an assessment of individual processes. They challenge indi- A leadership culture is characterized by viduals to consider how they currently balance among the various segments of operate and to determine how they need the leadership mirror and commitment to to change to reach their goals. Personal long-term success. It is also balanced in 39 terms of the ability to implement organi- 8. Manage the business. zation-wide changes quickly while attend- Ultimately, whether or not an organiza- ing to human needs and sustained behav- tion is successfully transforming itself can ior reinforcement. Finally, a leadership be determined through its day-to-day culture assesses progress toward the operations and the actions that create vision and mission on a regular basis short-term results. Tactical necessities through established goals and measures must closely involve the elements of the and provides mechanisms to address transformation agenda. They are the con- shortcomings or develop needed compe- crete actions and tasks associated with tencies. A learning environment is one fulfillment of the mission and vision. that is structured around the generation, They include producing valued products acquisition, and application of new and services as well as establishing and knowledge. Such an atmosphere stimu- meeting quarterly earnings or other busi- lates learning about an organization’s ness projections. environment and thus strengthens an organization’s capacity to change by con- 9. Develop competency. necting the individual and organization to Competency development is a means to the marketplace. It also empowers indi- ensuring that leaders and others in the viduals to examine how they act and organization possess the managerial skills where they need to change as part of their necessary to the achievement of the vision personal transformation. Moreover, a and values. By fostering competency learning environment provides staff with development in themselves and in others, the skills necessary for change and helps organizational leaders reinforce the learn- to create the mindset for continual ing environment at the same time as they change. acquire needed skills. Competency devel- opment is critical for ensuring the com- 7. Model personal leadership behaviors. pletion of tactical necessities and success Personal leadership behaviors – including in key business processes. Such compe- mentoring, sponsoring, coaching, and tencies may include specific technical work-life balance – are important for the expertise, process enhancement, product development of a learning organization development, sales and marketing, or and therefore contribute to the develop- service delivery. ment of a sustained high-performing organization. These activities encourage 10. Establish economic webs. learning, reinforce the vision, mission, Leadership is interconnected and must and organizational goals, and build trust not only link the personal and organiza- between a leader and individuals within tional spheres, but also the organizational the organization. (Tichey and Cohen, and external spheres. Leaders must con- 1997). nect the organization to the economy through both its suppliers and customers and strive to cultivate new partnerships that support the transformation agenda. 40 11. Manage to and measure 13. Reinforce behaviors and cultural organizational results. expression. Robust performance measures allow lead- Behavior reinforcement entails the devel- ers to determine if the organization is opment of systems that support a learning transforming successfully and whether it environment on a daily basis. Such sys- will reach its stretch goals. Leaders need tems typically include human resources, to develop the correct set of performance communications and knowledge transfer, measures (i.e., measures that matter and pay for performance or other reward sys- are aligned with an organization’s goals) tems, and educational and training pro- and ensure that these measures are con- grams. Both financial and non-financial tinually assessed and acted upon. Some mechanisms support behavior and con- standards are traditional and fairly easy to tribute to employee satisfaction, so a com- measure such as revenues or profitability. bination of systems should be implement- Others reflect more intangible, but ed to encourage employees to strive for increasingly crucial elements of success excellence. (e.g., speed, use of intellectual capital). Effectively used performance measures 14. Develop behavior reinforcement skills. provide accountability and communicate In addition to business and technical expectations to the organization thereby competency, leaders need personal and shaping how organization members social competencies such as self-aware- behave and providing objective data need- ness, self-regulation, motivation, empathy, ed to make judgments about how people, and social skills. These soft skills include processes, and technology can be best adaptability, commitment, optimism, aligned to achieve the organization’s understanding others, communication, vision. team building, conflict management, and change catalyst, among others (Goleman, 12. Manage to and measure personal 1998a and 1998b). Developing and using results. these skills is more subtle and complex Personal performance measures enable than developing and applying technical individuals to track their progress toward skills. Moreover, leaders must not only personal stretch goals. These measures possess these skills, but also be willing to should be aligned with personal goals, use them as part of the organizational identify desired behaviors, and include change. Leaders must have the desire and expectations for results. Organizational ability to communicate, negotiate, or eval- leaders can influence the development uate. Self-motivation is a critical element and use of personal performance meas- of personal management. ures through both voluntary (e.g., encour- agement) and involuntary (e.g., require- ment of employment) means. 41 Exhibit 6: The Transformation Platform Nackel’s Transformation Platform is the • The vision is an important source of an organization’s (or first necessary component of profound individual’s) identity and purpose and defines the desired organizational or personal change (see future state. The vision should be based on the core values Figure 2). The platform comprises 5 or set of beliefs and concepts that represent the ideal state levels as described below. Virtually all for an organization or person. Both vision and values are organizations contain these levels, but long-term and largely unmalleable. They should be sus- vary in how well they articulate and use tained by the business transformation process and provide the levels. Defining a vision, mission, a sense of continuity and purpose for actions that result and operating model does not ensure from enterprise change. that leaders will be able to transform their organization. They must attend to • The mission is a strongly articulated directional statement all of the leadership and management about an organization’s or an individual’s current state. It is functions detailed in the leadership the expression of the vision for a period of time. It is more mirror (see Figure 1). dynamic, fluid, and often shorter lived than the vision. The mission describes an organization’s current business includ- ing the kinds of goods and services it offers. The mission will change over time in light of market influences and economic changes. • Strategy stems from the vision and mission to inform how the organization will act. It translates the mission into an operating model. Both the mission and strategy should change as an organization transforms its business. • The operating model is a concrete plan of how an organization will act in the marketplace. It outlines how organizational leaders want the organization to behave, what they want the organization to be known for in the marketplace, how they want to interact with employees, and desired relationships with business partners. The operating model converts strategy into daily activities and helps leaders define processes that support the desired culture. It plays a pivotal role in business transformation and is often the point of breakdown in a transformation effort. • The transformation agenda defines which of the organi- zation’s functional areas will be involved in implementing the operating model and illustrates how the mega-processes fit Figure 2: together to support the operating model and identifies The Transformation Platform which individual competencies are required to enact the operating model. It does not, however, prescribe how the organization should be structured. Vision and Values • Implementation actions are highly detailed plans of how Mission and Strategy individuals will operate on a day-to-day basis as they strive to execute the other levels of the pyramid. As a set, they Operating Model are a more granular version of the operating model and Transformation Agenda describe the high-level activities needed to fulfill the trans- (mega - processes) formation agenda. Implementation actions detail the rela- tionships among competencies, solutions, and expected Implementation Actions: results but do not prescribe how an organization ought to Ideas, Solutions, Expected Results be structured. 42 References American Council on Education. 2000. Blue Ridge Academic Health Group. The Fellows Program. 1998a Academic Health Centers: Getting http://www.acenet.edu/about/programs&a Down to Business. Washington, D.C.: Cap nalysis/CIII/fellows/home.html. Gemini Ernst & Young U.S., LLC. Association of Academic Health Centers. Blue Ridge Academic Health Group. 2000. Leadership and Organization: 1998b. Promoting Value and Expanded American Network of Health Promoting Coverage: Good Health is Good Business. Universities. Washington, D.C.: Cap Gemini Ernst & http://www.ahcnet.org/aboutAHC/activi- Young U.S. LLC. ties/Lead&org.html. Blue Ridge Academic Health Group. Association of American Medical 2000. Into the 21st Century: Academic Colleges. 2000. AAMC STAT. Health Centers as Knowledge Leaders. November 6. Washington, D.C.: Cap Gemini Ernst & Young U.S. LLC. Association of American Medical Colleges. 2000b. Executive Faculty Blue Ridge Academic Health Group. Development Resources for Academic 2001. e-Health and the Academic Health Medical Faculty. Center in a Value-driven Health Care http://www.aamc.org/about/progemph/wo System. Washington, D.C.: Cap Gemini mmed/erdlist/menwom.htm. Ernst & Young U.S. LLC. Aschenbrener, C.A. 1998. Leadership, Blumenthal, D., Weissman, J.S., and culture, and change: critical elements for Griner, P.F 1999. Academic health centers . transformation. In Mission Management: A on the front lines: survival strategies in New Synthesis, Volume 2, E. R. Rubin, ed. highly competitive markets. Academic Washington, D.C.: Association of Medicine 74: 1037-1049. Academic Health Centers. Bulger, R.J. 2000. The quest for the thera- Bland, C.J., Starnaman, S., Hembroff, L., peutic organization. JAMA 283 (18): Perlstadt, H., Henry, R., and Richards, R. 2431-2433. 1999. Leadership behaviors for successful university-community collaborations to Bulger, R.J., Osterweis, M., and Rubin, change curricula. Academic Medicine 74: E., eds. 1999. Mission Management: A New 1227-1237. Synthesis, Volume 1. Washington, D.C.: Association of Academic Health Centers Bland, C.J., Starnaman, S., Wersal, L., Moorhead-Rosenberg, L., Zonia, S., and Cambridge University. 2000. Cambridge Henry, R. 2000. Curricular change in International Health Leadership medical schools: how to succeed. Programme. Academic Medicine 75: 575-594. http://www.cpi.cam.ac.uk/courses/health/html. 43 Chow, M.P., Coffman, J.M., and Franklin, E. and Moore, R.M. 1999. Morjikian, R.L. 1999. Transforming nurs- Developing organizations by developing ing leadership. In The 21st Century Health individuals. In The 21st Century Health Care Leader, R.W. Gilkey, ed. San Care Leader, R.W. Gilkey, ed. San Francisco: Jossey-Bass. Francisco: Jossey-Bass. Collins, J.C. and Porras, J.I. 1994. Built Gardner, H. 1994. Leading Minds: An to Last. New York: HarperCollins. Anatomy of Leadership. New York: Basic Books. Commonwealth Fund Task Force on Academic Health Centers. 2000. Garson, A. 1999. A report card for faculty Managing Academic Health Centers: and academic departments on education, Meeting the Challenges of the New Health research, patient care services, and Care World. New York: The finance. In Creating the Future: Innovative Commonwealth Fund. Programs and Structures in Academic Medicine, C.H. Evans and E. R. Rubin, Couto, R.A. 2000. Community health as eds. Washington, D.C.: Association of social justice: lessons on leadership. Academic Health Centers. Journal of Family and Community Health 23: 1-17. Geheb, M.A. 1999. Combining funds flow analysis with financial goal setting. In Couto, R.A. Forthcoming. To Give Their Creating the Future: Innovative Programs Gifts: Community, Leadership, and Health. and Structures in Academic Medicine, C.H. Nashville: Vanderbilt University. Evans and E. R. Rubin, eds. Washington, D.C.: Association of Academic Health Daugherty, R.M. 1998. Leading among Centers. leaders: the dean in today’s medical school. Academic Medicine 73: 649-653. Geheb, M. A. 2000. Transforming AHCs: Operating in a New Economic Environment. Duderstadt, J.J. 2000. A University for the Oak Brook, IL: University HealthSystem 21st Century. Ann Arbor: The University Consortium. of Michigan Press. Goldsmith, J. 2000. The Internet and Eastwood, G.L. 1998. Leadership amid managed care: a new wave of innovation. change: the challenge to academic health Health Affairs 19 (6): 42-56. centers. In Mission Management: A New Synthesis, Volume 2, E. R. Rubin, ed. Goleman, D. 1998a. Working with Washington, D.C.: Association of Emotional Intelligence. New York: Bantam Academic Health Centers. Books. Fein, R. 2000. The academic health cen- Goleman, D. 1998b. What makes a ter: some policy reflections. JAMA 283 leader? Harvard Business Review (18): 2436-2437. November-December: 93-102. 44 Griner, P.F. and Blumenthal, D. 1998a. Kirch, D.G. 1999. Reinventing the acade- New bottles for vintage wines: the chang- my. In The 21st Century Health Care ing management of the medical school Leader, R.W., Gilkey, ed. San Francisco: faculty. JAMA 73: 719-724. Jossey-Bass. Griner, P.F. and Blumenthal, D. 1998b. Kotter, J.P. 1996. Leading Change. Boston: Reforming the structures and manage- Harvard Business School Press. ment of academic medical centers: case studies of ten institutions. Academic Machiavelli, N. Originally published Medicine 73: 817-825. 1532. The Prince. Norwalk, Connecticut: The Easton Press. 1980. Halverson, P.K. 1999. Leadership skills and strategies for the integrated commu- Maccoby, M. 1999. On creating the organ- nity health system. In The 21st Century ization from the learning age. In Creating Health Care Leader, R.W. Gilkey, ed. San the Future: Innovative Programs and Francisco: Jossey-Bass. Structures in Academic Health Centers, C.H. Evans and E. R. Rubin, eds. Harrison, D.C. 1999. The Cincinnati Washington, D.C.: Association of funds flow study. In Creating the Future: Academic Health Centers. Innovative Programs and Structures in Academic Medicine, C.H. Evans and E. R. Morahan, P.S., Kasperbauer, D., McDade, Rubin, eds. Washington, D.C.: S.A., Aschenbrener, C.A., Triolo, P.K., Association of Academic Health Centers. Monteleone, P.L. Counte, M., and Meyer, M.J. 1998. Training future leaders of aca- Health Forum. 1999. Leadership for a demic medicine: internal programs at healthy 21st century: creating value through three academic health centers. Academic relationships, executive summary. Chicago: Medicine 73: 1159-1168. American Hospital Association. Nackel, J. 2000. The leadership mirror. Henry, J.D. and Gilkey, R.W. 1999. Unpublished manuscript. Growing effective leadership in new organizations. In The 21st Century Health O’Neil, E. 1999. Core competencies for Care Leader, R.W. Gilkey, ed. San physicians. In The 21st Century Health Francisco: Jossey-Bass. Care Leader, R.W. Gilkey, ed. San Francisco: Jossey-Bass. Institute of Medicine. 1999. To Err Is Human: Building A Safer Health System. Paller, M.S., Becker, T., Cantor, B., and Washington, D.C.: National Academy Freeman, S.L. 2000. Introducing resi- Press. dents to a career in management: the Physician Management Pathway. Academic Johns, M. and Lawley, T. 1999. Leading Medicine 75: 761-764. academic health centers. In The 21st Century Health Care Leader, R.W. Gilkey, ed. San Francisco: Jossey-Bass. 45 Pardes, H. 2000. The perilous state of Sherrill, W.W. 2000. Dual-degree MD- academic medicine. JAMA 283 (18): MBA students: a look at the future of 2427-2429. medical leadership. Academic Medicine 75:S37-S39. Petersdorf, R.G. 1997. Dean and deaning in a changing world. Academic Medicine 72: 953-958. Tichey, N.M. and Cohen, E. 1997. The Leadership Engine: How Winning Saxton, J.F., Blake, D.A., Fox, J.T., and Companies Build Leaders at Every Level. Johns, M.M.E. 2000. The evolving aca- New York: HarperCollins. demic health center: strategies and prior- ites at Emory University. JAMA 283 (18): Viaggiano, T.R., Shub, C., and Giere, 2434-2436. R.W. 2000. The Mayo Clinic’s clinician- educator award: a program to encourage Scherger, J.E., Rucker, L., Morrison, educational innovation and scholarship. E.H., Cygan, R.W., and Hubbell, F.A. Academic Medicine 75: 940-943. 2000. The primary care specialties work- ing together: a model of success in an aca- Watson, L. 1997. University of Virginia demic environment. Academic Medicine 75 Health Sciences Center Health Informatics (7): 693-698. Enhancement Program (HIEP) Evaluation. Charlottesville: University of Virginia. Schwartz, R.W., Pogge, C.R., Gillis, S.A., and Holsinger, J.W. 2000. Program for Wipf, J.E., Pinsky, L.E., and Burke, W. the development of physician leaders: a 1995. Turning interns into senior resi- curricular process in its infancy. Academic dents: preparing residents for their teach- Medicine 75:133-140. ing and leadership roles. Academic Medicine 70: 591-596. Senge, P.M. 1990. The Fifth Discipline: The Art and Practice of the Learning Yedidia, M.J. 1998. Challenges to effective Organization. New York: Doubleday medical school leadership: perspectives of Currency. 22 current and former deans. Academic Medicine 73: 631-639. Senge, P.M., Kleiner, A., Roberts, C., Ross, R., Roth, G., and Smith, B. 1999. The Dance of Change: The Challenges to Sustaining Momentum in Learning Organizations. New York: Currency Doubleday. Sheldon, G. 2000. Personal communication. 46 Retrieval File No. CGEY – AM038