Essentials of strategic planning in healthcare by jeffrey p harrison

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Learning Objectives

C H A P T E R 2

TRANSFORMATIONAL LEADERSHIP MAXIMIZES STRATEGIC PLANNING

Debra A. Harrison, Jeffrey P. Harrison

After you have studied this chapter, you should be able to

➤➤ identify,➤describe,➤and➤discuss➤the➤theoretical➤concepts➤of➤leadership➤in➤healthcare➤

organizations;➤

➤➤ explain➤the➤importance➤of➤assessing➤the➤performance➤of➤healthcare➤organizations;➤

➤➤ describe➤the➤situational➤and➤environmental➤factors➤that➤influence➤effective➤decision➤making;➤

➤➤ identify➤and➤describe➤personal➤leadership➤orientation,➤styles,➤and➤strengths;➤

➤➤ describe,➤apply,➤and➤critique➤selected➤leadership➤skills➤essential➤to➤effective➤management➤

of➤healthcare➤organizations;

➤➤ define➤and➤describe➤the➤concepts➤of➤team➤building➤and➤conflict➤resolution;➤

Transformational leaders don’t start by denying the world around them. Instead, they

describe a future they would like to create.

—Seth Godin

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➤➤ analyze➤leadership’s➤role➤in➤developing➤a➤strong➤ethical➤culture➤and➤nurturing➤a➤

learning➤organization;➤and

➤➤ compare➤transactional➤leadership➤to➤transformational➤leadership➤and➤discuss➤

where➤each➤falls➤on➤the➤hierarchy➤of➤leadership➤styles.➤

Key terms and concepts

➤➤ Charisma

➤➤ Code➤of➤ethics

➤➤ Ethics

➤➤ External➤rewards

➤➤ Groupthink

➤➤ High-performance➤work➤processes

➤➤ Internal➤rewards

➤➤ Magnet➤Recognition➤Program

➤➤ Management➤of➤change

➤➤ Morale

➤➤ Transactional➤leadership

➤➤ Transformational➤leadership➤

IntroductIon At the time of this writing, a search of the term leadership in Google generated 490 mil- lion hits. An Amazon.com search for new books on leadership yielded 663 released in the past 90 days, with 216 coming soon. There is no shortage of information on leader- ship theories, qualities, skills, and styles. There are autocratic, participative, situational, transactional, and transformational theories of leadership, and more. This book focuses on the leadership needed in strategic planning and, more specifically, strategic planning in healthcare.

A conversation about healthcare nearly always includes the word change. Every aspect of healthcare has been affected by recent change, including reimbursement, qual- ity, safety, and cost reduction (Delmatoff and Lazarus 2014). As our complex healthcare environment undergoes radical reform, its leaders will need to practice transformational leadership skills instead of rely on only traditional problem solving. Leaders must develop a process for embracing and directing change in a way that will allow organizations to grow and prosper. The key to this process is transforming both self and team, which positions an organization for extraordinary results (Chartrand 2010).

In recent literature on healthcare leadership, many authors compare and contrast transactional leadership with transformational leadership (see Exhibit 2.1). This chapter considers and elaborates on these two models and the question of which approach is the more suitable for leaders in healthcare. It also discusses the role of the leadership team in plan execution and engagement of staff in the planning process.

Transactional

leadership

Model➤of➤leadership➤

that➤emphasizes➤giving➤

rewards➤for➤good➤

performance➤or➤taking➤

corrective➤action➤for➤

poor➤performance.

Transformational

leadership

Model➤of➤leadership➤

that➤emphasizes➤

flexibility,➤selflessness,➤

and➤interpersonal➤

motivation➤to➤maximize➤

individual➤and➤group➤

potential.

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The transactional leadership model emphasizes rewarding employees for success- ful completion of a task and taking corrective action for performance that does not meet expectations. It is sometimes called managerial leadership because it is focused on enforcing policy, not necessarily changing the future. This type of leadership is effective in emergency situations as well as for projects that need to be carried out in a specific way. It assumes that employees are motivated by self-interest or external rewards, such as money, or the threat of punishment.

The transactional approach is firmly integrated into healthcare. Traditionally, care has been provided in a hierarchical structure with physicians as the leaders, which gave them a level of control that superseded that of other healthcare providers and prevented a collaborative approach.

Transactional leadership in healthcare organizations is also well suited to the stan- dardization of high-performance work processes—processes used to systematically pur- sue ever-higher levels of overall organizational and individual performance—to increase patient safety (Baldrige Performance Excellence Program 2015). Doing something the same way every time helps to prevent errors and harm to the patient. These processes allow for maximum efficiency and use technology to avoid duplication and reduce the chance for error. They result in a standardized outcome. In addition, specific policies and procedures must be followed consistently, such as those pertaining to confidentiality, human research subject protection, medication administration, universal protocol, and site marking for surgical procedures. In all these situations, a transactional approach is highly functional.

However, healthcare is complex and constantly changing—fertile ground for the trans- formational leadership style. Faced with rapidly changing technology and demographics, and

External rewards

Tangible➤incentives➤

outside➤an➤individual➤

that➤motivate➤that➤

person➤to➤perform,➤

such➤as➤money➤and➤

gifts;➤the➤threat➤

of➤punishment➤for➤

nonperformance➤could➤

also➤be➤a➤motivator.

High-performance

work processes

Work➤processes➤used➤

to➤systematically➤

pursue➤ever-higher➤

levels➤of➤overall➤

organizational➤and➤

individual➤performance➤

(emphasizing,➤e.g.,➤

quality,➤productivity,➤

innovation➤rate).

exHIbIt 2.1 Two Contrasting Leadership Models

Focus

Main goals

Motivating questions

Alignment

Sources of power Control via organizational hierarchy

Relationships and team engagement

Policies and procedures Mission, vision, and values

How can we do things right? Should we be doing this at all?

Tools

Approach Linear thinking or status quo Problem solving and innovation

Reward and punishment Inspiration and motivation of others

Efficiency and increased productivity

Effectiveness and performance-driven metrics

Managerialism

TransactionalModel Elements Transformational

Leadership and team

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under pressure to improve clinical care, healthcare organizations need to plan strategically to move ahead. The healthcare field will need leaders capable of motivating employees, manag- ing change, and unifying everyone in the organization through a common cause—dynamic people who inspire followers to pursue their visions. The real question in the future may not be which style of leadership is needed but rather at what time each style is most useful.

tHe concept of transformatIonal leadersHIp The growing complexity of healthcare has increased the need for multidisciplinary teams composed of physicians, nurses, pharmacists, respiratory therapists, dietitians, and other professionals as well as managers, directors, and administrators. The transformational leadership model emphasizes a shared vision, motivating others to become the best they can be, and internal rewards such as the enjoyment that arises from the job itself. People will follow someone who inspires them, is enthusiastic, and leads with vision and values (Kumar 2013). A transformational leader is able to communicate the mission and vision of the organization, examine new perspectives, solve problems creatively, and develop and mentor employees. Transformational leaders are generally energetic, enthusiastic, and pas- sionate. This style is often described as leading rather than managing.

The transformational leadership model was introduced by James MacGregor Burns in 1978. Burns described transformational leadership as a process in which leaders and followers (e.g., employees, volunteers) raise one another to higher levels of motivation (Burns 1978). Researcher Bernard M. Bass expanded on Burns’s original ideas and pub- lished a book in 2005, Transformational Leadership, with coauthor Ronald E. Riggio. The theory expounded in the book is referred to as Bass’s Transformational Leadership Theory and includes four components of transformational leadership: intellectual stimulation, individualized consideration, inspirational motivation, and idealized influence (for a fuller explanation, see Highlight 2.1).

The transformational leadership model uses transactions and interpersonal relation- ships to meet organizational goals necessary to achieve a vision (Rolfe 2011). John Paul Jones, Eleanor Roosevelt, Winston Churchill, Dr. Martin Luther King Jr., Lee Iacocca, John F. Kennedy, Ronald Reagan, and Barack Obama could all be considered leaders who used a transformational approach to prompt dramatic change. However, transformational leaders are not necessarily famous figures. The owner of the restaurant Zazie in San Fran- cisco had been a waitress in the past and thus knew that her workers deserve to have careers and benefits as others do. She instituted a surcharge of $1.25 on all orders; transparently notifies customers of the charges; and uses that to pay for health, dental, and retirement benefits for her 35 employees. Many of them have been working for Zazie for more than 20 years. When asked if her profit margin is lower than other restaurants that do not offer benefits, she said that the mean profit margin is 5 percent for most competitor restaurants, while hers is 22 percent in a good year. She is a transformational leader. Her innovative approach—providing a full benefits package to historically underserved employees—has

Internal rewards

Feelings➤that➤arise➤

out➤of➤performing➤

an➤activity➤and➤that➤

motivate➤an➤individual➤

to➤perform,➤such➤as➤

the➤enjoyment➤from➤

creating➤a➤work➤of➤art➤

or➤playing➤a➤sport.

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yielded low turnover, motivated workers, and loyal customers (McFadden and Fieldstadt 2015).

How transformatIonal leadersHIp worKs

Transformational leaders focus on linking their followers with goals and values by develop- ing a common cause. When they do so successfully, they become motivators, facilitators, educators, and visionaries. Followers develop a high degree of confidence in their direction and a sense of loyalty. As discussed in Chapter 1, the organization’s vision should be widely

Highlight 2.1 Bass’s Transformational Leadership Theory

Bass➤proposes➤a➤theory➤of➤transformational➤leadership➤that➤is➤measured➤in➤terms➤of➤

the➤leader’s➤effect➤on➤followers➤(Bass➤and➤Bass➤2008).➤It➤describes➤four➤components➤of➤

transformational➤leadership:

1.➤ Intellectual stimulation:➤Transformational➤leaders➤challenge➤the➤status➤quo➤and➤

encourage➤creativity➤among➤followers.➤They➤allow➤followers➤to➤learn,➤explore,➤

and➤experiment.➤Transformational➤leaders➤increase➤their➤followers’➤awareness➤of➤

problems,➤helping➤them➤to➤view➤the➤issues➤from➤a➤new➤perspective.➤This➤process➤

of➤intellectual➤stimulation➤creates➤an➤environment➤that➤encourages➤innovation➤

when➤faced➤with➤rapid➤“white-water”➤change.

2.➤ Individualized consideration:➤Transformational➤leaders➤cultivate➤relationships➤by➤

encouraging➤and➤supporting➤individual➤followers.➤They➤use➤social➤skills➤to➤foster➤

the➤sharing➤of➤ideas,➤and➤they➤recognize➤contributions.➤They➤encourage➤their➤

followers➤and➤provide➤them➤with➤developmental➤opportunities➤that➤often➤lead➤to➤

enhanced➤team➤building➤and➤improved➤group➤dynamics.

3.➤ Inspirational motivation:➤Transformational➤leaders➤have➤a➤clear➤vision➤and➤

articulate➤it➤clearly➤to➤followers.➤They➤also➤motivate➤others➤to➤pursue➤goals➤with➤

passion.➤This➤behavior➤is➤often➤called➤charisma—leadership➤charm➤that➤provokes➤

strong➤emotions➤and➤loyalty➤in➤followers—and➤is➤linked➤to➤having➤a➤compelling➤

vision.

4.➤ Idealized influence:➤Transformational➤leaders➤serve➤as➤role➤models➤for➤followers.➤

If➤a➤follower➤trusts➤and➤respects➤his➤leader,➤he➤will➤emulate➤this➤individual➤and➤

internalize➤her➤ideals.➤Such➤leaders➤purposefully➤do➤what➤they➤want➤others➤to➤

do,➤instead➤of➤just➤talking➤about➤it—sometimes➤called➤walking the talk.➤For➤

transformational➤leaders,➤failing➤to➤walk➤the➤talk➤or➤to➤adhere➤to➤a➤professional➤

code➤of➤ethics➤can➤have➤a➤negative➤impact➤on➤trust➤among➤followers.➤

Charisma

Leadership➤charm➤

that➤provokes➤strong➤

emotions➤and➤loyalty➤in➤

followers.

*

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accepted throughout the organization and congruent with the leader’s vision. Followers often internalize the leader’s values and moral convictions and thereby perceive a need for change. As a result, they are motivated to pursue goals that are higher than they could accomplish individually.

Motivation differs among individuals and may stem from external or internal sources, which are often related to situational or organizational factors, values, and ideals. Common internal motivation techniques include the use of personal charisma, individual attention to the follower, intellectual stimulation through assignment of tasks, and emotional appeal. Several common attributes are seen in leaders who are transformational (see Exhibit 2.2).

Leadership styles could be considered a hierarchy (see Exhibit 2.3). Along the trans- actional–transformational continuum of leadership, there are a series of leadership styles. At the bottom of the hierarchy is the directing leadership style. Leaders who take a directive approach use authoritative command to communicate with and motivate their subordi- nates. The second level of the hierarchy is the participating leadership style. Leaders who take a participatory approach coach their subordinates and serve as role models. The next level up is the delegating leadership style. This leadership style affords subordinates some independence and self-direction, for the purpose of improving performance. At the top of the hierarchy is the transformational leadership style, which empowers the group and heightens subordinates’ awareness of the organization’s mission, vision, values, and goals, as wel as the role of these factors in the organization’s strategy. Higher strategic awareness can lead to increased morale—positive emotions and a sense of common purpose among members of a group—and greater productivity.

Morale

Positive➤emotions➤

and➤sense➤of➤common➤

purpose➤among➤

members➤of➤a➤group.

exHIbIt 2.2 Attributes and

Personality Characteristics of Transformational

Leaders

Attributes and personality characteristics contributing to the success of transformational leaders include the following (Rolfe 2011):

Attributes • Being visionary or futuristic • Flexibility • Ability to catalyze followers • Excellent communication skills • Motivation • Invocation of group respect, • Goal orientation shared vision, and improved • Expertise culture

Personality characteristics • Self-knowledge • Charisma • Self-confidence and • Intelligence

positive self-image • Ability to empathize • Authenticity with followers

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The transformational leadership approach is considered highly effective in improving patient safety. In a descriptive correlational study conducted in 41 nursing departments across nine hospitals, a safety climate survey and multifactorial leadership questionnaire were completed by staff nurses. A transformational leadership style was demonstrated to be a positive contributor to a good safety climate and decreased a culture of blame. Lead- ers must concentrate on developing transformational leadership skills to not only improve relationships with their staff but also improve patient safety and promote continuous improvement (Merrill 2015). For situations—whether organizational, political, economic, or social—in which followers are frustrated, stressed, or unhappy with the current state of affairs, a transformational leader can use her skills to defuse the tension. If an individual is able to emerge from the group to represent its desires and needs in such situations, that individual is likely to become a leader. From this position of authority, the leader is able to influence the course and direction of events to bring about change, often with revolutionary results. Leaders such as Genghis Khan, Cyrus the Great of Persia, Gandhi, and the Roman Emperor Constantine I are examples of individuals who stepped up in this manner, won the hearts and minds of followers, and radically changed the world.

exHIbIt 2.3 The Hierarchy of Leadership Models

• Inspires strategic awareness

in team

• Maintains superordinate goals

• Empowers employees

• Makes decisions with a team

• Focuses on quality

• Aligns vision and goals

• Emphasizes we-ness over I-ness,

putting others above self

• Increases morale

• Maximizes productivity• Cooperates with

employees

• Consults with employees

on decisions

• Builds goal consensus

• Leads and coaches

• Provides job enrichment

• Guides according to

shared values

• Models roles

Transforming

Participating

Delegating

Directing

• Has a growing commitment to

vision

• Provides team autonomy

• Performs leader mentoring

• Provides resources for success

• Provides feedback

• Measures performance

• Enhances team motivation

• Derives style from command

authority

• Encourages following over

collaboration

• Sees job as task related

• Supervises

• Exercises unidirectional

authority

• Considers only short-range goals

• Is knowledgeable about external

and internal environment

• Has good communication skills

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wHy Is transformatIonal leadersHIp Important to study? Transformational leadership is important to an executive’s success and is a critical resource in an organization’s ongoing strategic planning process. No well-known leader of our time has become successful or has led an organization to success without first understanding the principles of transformational leadership. At the core of all the attributes of a transforma- tional leader is personal integrity and ability to maintain the public’s trust (Manion 2011). Without integrity, there is no trust.

To thrive in the dynamic field of healthcare, organizations must engage in careful strategic planning. To bring about the goals in their strategic plans, organizations need to tap their greatest resource—people. Transformational leadership leverages this resource by motivating individuals to adopt goal-oriented behavior that supports the organization’s mission, vision, and values.

etHIcs as a foundatIon for leadersHIp and strategIc plannIng Although a comprehensive discussion of ethics is beyond the scope of this book, it is impor- tant to note that ethics can be summarized as a sense of moral duty, values, and obligation. It is central to leadership, strategic planning, and motivating followers to accomplish mutual goals consistent with the organization’s values. An organization’s failure to uphold business ethics can lead to disastrous consequences, including bankruptcy or closure. In healthcare, examples of corporate ethical problems include HealthSouth’s 2003 accounting scandal and American pharmaceutical giant Pfizer’s kickbacks scandal (SEC 2003; see Highlight 2.2).

etHIcal consIderatIons of tHe HealtHcare leader

Transformational leaders must be attuned to the organizational culture in which they function. Many ethical models exist, and the ethical model upheld by one culture may differ from the one upheld in another. For example, perspectives on healthcare issues such as abortion, genetic engineering, and euthanasia vary from organization to organization.

In an attempt to regulate corporate ethical behavior, the federal government and other organizations have enacted laws and established principles of ethical conduct. In 2002, Con- gress passed the Sarbanes-Oxley Act in reaction to a number of major fraud cases involving large US corporations. In healthcare, numerous professional organizations have established their own codes of ethics. For example, as part of its credentialing process, the American College of Healthcare Executives (ACHE) requires that healthcare executives maintain the highest level of ethical behavior. The Preamble to ACHE’s Code of Ethics, which provides a guide to standards of behavior and ethical conduct for healthcare leaders, appears in Highlight 2.3.

Following the Preamble, the ACHE (2011) Code of Ethics provides healthcare execu- tives with specific guidance on professional conduct and addresses the importance of honesty,

Ethics

Moral➤duty,➤values,➤and➤

obligation.

Code of ethics

Guide➤to➤standards➤of➤

behavior➤and➤ethical➤

conduct.➤

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C h a p t e r ➤ 2 : ➤ T r a n s f o r m a t i o n a l ➤ L e a d e r s h i p ➤ M a x i m i z e s ➤ S t r a t e g i c ➤ P l a n n i n g 6 9

integrity, respect, and fairness. The Code of Ethics goes on to delineate the healthcare execu- tive’s responsibilities to patients, the organization, employees, and the community. Like many other professional codes of ethics, it also provides clear guidance on a healthcare executive’s responsibility to report the ethics violations of others.

tHe role of transformatIonal leaders In managIng tHe strategIc plannIng process Defining the goals of the organization is a key component of strategic planning. Organi- zational goals must meet three basic conditions with regard to organizational values and standards:

Highlight 2.2 When Corporate Ethics Lead to Harm

In➤2003,➤the➤US➤Securities➤and➤Exchange➤Commission➤(SEC)➤announced➤that➤it➤was➤filing➤

fraud➤charges➤against➤HealthSouth➤Corporation➤(HRC)➤of➤Birmingham,➤Alabama,➤and➤

its➤CEO➤and➤chairman,➤Richard➤M.➤Scrushy.➤HRC➤is➤the➤nation’s➤largest➤provider➤of➤out-

patient➤surgery➤and➤diagnostic➤and➤rehabilitative➤healthcare➤services,➤with➤specialized➤

rehabilitation➤hospitals➤in➤33➤states➤and➤Puerto➤Rico.➤Shortly➤after➤HRC➤became➤publicly➤

traded➤in➤1986,➤at➤Scrushy’s➤instruction,➤the➤company➤began➤to➤artificially➤inflate➤its➤

earnings➤to➤match➤Wall➤Street➤analysts’➤expectations➤and➤maintain➤the➤market➤price➤for➤

HRC’s➤stock.➤Between➤1999➤and➤the➤second➤quarter➤of➤2002,➤HRC➤intentionally➤over-

stated➤its➤earnings➤by➤at➤least➤$1.4➤billion➤in➤reports➤filed➤with➤the➤SEC.➤Scrushy➤person-

ally➤profited➤from➤the➤artificially➤inflated➤earnings.➤He➤sold➤more➤than➤7➤million➤shares➤of➤

HRC➤stock➤between➤1999➤and➤2003.➤He➤also➤received➤salary➤and➤bonus➤payments➤based➤

on➤HRC’s➤reported➤earnings➤(SEC➤2003).➤Scrushy➤was➤eventually➤convicted➤of➤money➤

laundering,➤extortion,➤obstruction➤of➤justice,➤racketeering,➤and➤bribery,➤and➤he➤spent➤

time➤in➤a➤federal➤prison➤and➤paid➤hundreds➤of➤thousands➤of➤dollars➤in➤fines.

American➤pharmaceutical➤giant➤Pfizer➤Inc.➤agreed➤to➤pay➤$2.3➤billion,➤the➤largest➤

healthcare➤fraud➤settlement➤in➤the➤history➤of➤the➤US➤Department➤of➤Justice,➤to➤resolve➤

criminal➤and➤civil➤liabilities➤arising➤from➤the➤illegal➤promotion➤of➤certain➤pharmaceuti-

cal➤products.➤Bextra➤is➤an➤anti-inflammatory➤drug➤that➤Pfizer➤pulled➤from➤the➤market➤in➤

2005.➤Pfizer➤promoted➤the➤sale➤of➤Bextra➤for➤several➤uses➤and➤dosages➤that➤the➤US➤Food➤

and➤Drug➤Administration➤specifically➤declined➤to➤approve➤due➤to➤safety➤concerns.➤The➤

civil➤settlement➤also➤alleged➤that➤Pfizer➤paid➤kickbacks➤to➤healthcare➤providers➤to➤induce➤

them➤to➤prescribe➤these,➤as➤well➤as➤other,➤drugs.➤Six➤whistle-blowers➤received➤payments➤

totaling➤more➤than➤$102➤million➤from➤the➤federal➤share➤of➤the➤civil➤recovery➤(DOJ➤2009).

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E s s e n t i a l s ➤ o f ➤ S t r a t e g i c ➤ P l a n n i n g ➤ i n ➤ H e a l t h c a r e7 0

1. They must be consistent with and directly related to the values of the organization.

2. They must have specific information that explains their relation to institutional standards.

3. They must specify actions that will be taken to live up to the values and standards of the institution.

For any organization, goals that are clearly measurable and attainable and that ensure accountability are the primary prerequisite to achieving success. An organization’s staff must not only understand its goals and the goals of its leaders but also embrace those goals as fundamental principles supporting change in the organization (Manion 2011). Suc- cessful transformation of any organization depends on its transformational leaders’ ability to articulate these goals and get everyone in the organization motivated to achieve them.

Leaders using the transformational approach should draw on the expertise of their staff to maximize the success of the strategic planning process and chart the organization’s course through difficult periods. Transformational leaders understand that their staff mem- bers are the most knowledgeable about the factors often overlooked in strategic planning and that the entire team’s support is necessary to operationalize the strategic plan. Such operational support is essential to the success of new business initiatives and the long-term well-being of the organization.

Transformational leaders may successfully use the following strategies (Rubino, Esparza, and Chassiakos 2014):

1. Uphold integrity above all else. Dishonesty and insincerity will destroy relationships and trust, making it difficult to have followers. Being true to values and honest in interactions is critical.

2. Get down in the trenches. Transformational leaders do not ask people to do something they would not. Respect from followers comes from this willingness to walk in their shoes.

3. Communicate, communicate, communicate. Keeping open lines of communication is important. Sharing information and organizational goals and objectives increases the understanding and commitment of others.

4. Have a meeting. Gaining consensus on decisions is important, and more input is better. By discussing ideas—even the bad ones—with leaders, followers gain confidence and courage. This leads to employee engagement and valuable perspectives.

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C h a p t e r ➤ 2 : ➤ T r a n s f o r m a t i o n a l ➤ L e a d e r s h i p ➤ M a x i m i z e s ➤ S t r a t e g i c ➤ P l a n n i n g 7 1

5. Keep the mission of the organization in mind. Transformational leaders are driven by the mission, vision, and values of the organization and seek to make the connection between these concepts and business decisions. This approach reinforces the importance of all employees to the mission, even the housekeeper or patient care technician.

Highlight 2.3 American College of Healthcare Executives Code of Ethics

Preamble

The➤purpose➤of➤the➤ACHE➤Code of Ethics➤is➤to➤serve➤as➤a➤standard➤of➤conduct➤for➤mem-

bers.➤It➤contains➤standards➤of➤ethical➤behavior➤for➤healthcare➤executives➤in➤their➤profes-

sional➤relationships.➤These➤relationships➤include➤colleagues,➤patients➤or➤others➤served;➤

members➤of➤the➤healthcare➤executive’s➤organization➤and➤other➤organizations;➤the➤com-

munity;➤and➤society➤as➤a➤whole.

The➤Code of Ethics➤also➤incorporates➤standards➤of➤ethical➤behavior➤governing➤indi-

vidual➤behavior,➤particularly➤when➤that➤conduct➤directly➤relates➤to➤the➤role➤and➤identity➤

of➤the➤healthcare➤executive.

The➤fundamental➤objectives➤of➤the➤healthcare➤management➤profession➤are➤to➤main-

tain➤or➤enhance➤the➤overall➤quality➤of➤life,➤dignity➤and➤well-being➤of➤every➤individual➤

needing➤healthcare➤service➤and➤to➤create➤a➤more➤equitable,➤accessible,➤effective➤and➤

efficient➤healthcare➤system.

Healthcare➤executives➤have➤an➤obligation➤to➤act➤in➤ways➤that➤will➤merit➤the➤trust,➤confi-

dence,➤and➤respect➤of➤healthcare➤professionals➤and➤the➤general➤public.➤Therefore,➤health-

care➤executives➤should➤lead➤lives➤that➤embody➤an➤exemplary➤system➤of➤values➤and➤ethics.

In➤fulfilling➤their➤commitments➤and➤obligations➤to➤patients➤or➤others➤served,➤health-

care➤executives➤ function➤as➤moral➤advocates➤and➤models.➤Since➤every➤management➤

decision➤affects➤the➤health➤and➤well-being➤of➤both➤individuals➤and➤communities,➤health-

care➤executives➤must➤carefully➤evaluate➤the➤possible➤outcomes➤of➤their➤decisions.➤In➤

organizations➤that➤deliver➤healthcare➤services,➤they➤must➤work➤to➤safeguard➤and➤foster➤

the➤rights,➤interests➤and➤prerogatives➤of➤patients➤or➤others➤served.

The➤role➤of➤moral➤advocate➤requires➤that➤healthcare➤executives➤take➤actions➤neces-

sary➤to➤promote➤such➤rights,➤interests➤and➤prerogatives.

Being➤a➤model➤means➤that➤decisions➤and➤actions➤will➤reflect➤personal➤integrity➤and➤

ethical➤leadership➤that➤others➤will➤seek➤to➤emulate.

Source:➤Reprinted➤from➤ACHE➤(2011);➤please➤see➤ache.org➤for➤updates➤made➤since➤the➤

publication➤of➤this➤book.

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E s s e n t i a l s ➤ o f ➤ S t r a t e g i c ➤ P l a n n i n g ➤ i n ➤ H e a l t h c a r e7 2

Transformational leaders need to maintain a delicate balance between using and relaxing their authority. Leaders cannot (and should not) do and be all things. Thus one of the critical activities of the transformational leader is developing a leadership team.

establIsHIng tHe leadersHIp team

The first step in developing a leadership team is to identify employees who think, act, and respond in a manner that supports the organization’s mission, vision, and values. A team must have the attitudes and ideals that underlie a synergistic and functional leadership group.

Transformational leaders want high-performing employees on the team. However, intel- ligent, driven individuals can be difficult to manage because of their individuality. These nontradi- tional thinkers are important because they may prevent groupthink—a process by which groups develop monolithic thinking. Research shows that groups produce better outcomes than any individual alone. When individuals are encouraged to share their thoughts and ideas in a group, the decision-making process may be slower, but the decision is better. Greater volumes of input lead to more plausible and innovative solutions (Macleod 2011). Whereas a domineering leader can stifle the functioning of their team, a transformational leader is able to manage a highly skilled and diverse group of individuals in a manner that is most effective for the organization. A transfor- mational leader also keeps the team focused on results (Rubino, Esparaza, and Chassiakos 2014).

Managing a team by striking a balance between leading the team itself and trans- forming followers into leaders is part of the fine art of transformational leadership. Trans- formational leaders understand that they must remain open to the input and direction of their team members and are adept at promoting effective interaction among them. Through delegation and empowerment, the transformational leader allows others to embrace the direction and operations of the organization (see Highlight 2.4 for some real-life examples).

transformatIonal leadersHIp: Integral to magnet desIgnatIon

Magnet designation is awarded by the American Nurses Credentialing Center (ANCC) to hospitals or systems that have demonstrated excellence in nursing practice. It has become a high benchmark and is a key factor in the U.S. News & World Report Best Hospital scoring. The Magnet Model provides a framework for achieving excellence in nursing practice and serves as a road map for organizations seeking Magnet Recognition. The four components of the model are transformational leadership, structural empowerment, exemplary professional practice, and new knowledge innovations and improvements. All results are verified by empirically proven outcomes (ANCC 2015). ANCC places considerable emphasis on the chief nursing officer (CNO) as a transformational leader. It describes such a leader as one who develops a strong shared vision and philosophy, communicates expectations effectively, develops and inspires others, and leads the organization to meet strategic priorities (Clavelle et al. 2012).

The Magnet Recognition Program, a credentialing program that recognizes health- care organizations for quality patient care, nursing excellence, and innovations in professional

Groupthink

Within➤a➤group,➤

the➤tendency➤to➤

maintain➤harmony➤by➤

incorporating➤minimal➤

input➤and➤making➤rapid➤

decisions.➤

Magnet Recognition

Program

Sponsored➤by➤the➤

American➤Nurses➤

Credentialing➤

Center,➤a➤program➤

recognizing➤healthcare➤

organizations➤for➤

quality➤patient➤care,➤

nursing➤excellence,➤

and➤innovations➤in➤

professional➤nursing➤

practice.

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C h a p t e r ➤ 2 : ➤ T r a n s f o r m a t i o n a l ➤ L e a d e r s h i p ➤ M a x i m i z e s ➤ S t r a t e g i c ➤ P l a n n i n g 7 3

nursing practice, expects the CNO to be strategically positioned in the organization to effectively influence other executive stakeholders, including the board of directors. The CNO can and should be involved in strategic planning and is expected to have a transformational leadership style. Current research shows that such a style enhances nurse satisfaction, pro- motes a positive work environment, and reduces staff turnover (Clavelle et al. 2012; Merrill

Highlight 2.4 Transformational and Transactional Styles in the History of US Healthcare Policy

Different➤US➤presidents➤have➤developed➤different➤transformational➤leadership➤styles.➤

John➤F.➤Kennedy➤inspired➤broad➤support➤of➤the➤civil➤rights➤movement➤and➤the➤space➤race➤

with➤the➤Soviet➤Union.➤He➤was➤able➤to➤emotionally➤stir➤individuals➤from➤grassroots➤Amer-

ica➤to➤form➤networks➤of➤like-minded➤populations➤that➤all➤embraced➤a➤similar➤agenda.➤He➤

broke➤down➤barriers➤of➤race,➤gender,➤and➤socioeconomic➤status➤and➤made➤people➤feel➤

as➤though➤they➤were➤being➤personally➤addressed.➤Ronald➤Reagan➤was➤so➤successful➤

in➤establishing➤a➤transformational➤vision➤of➤traditional,➤family-based➤values➤that➤many➤

Americans➤embrace➤Reagan-based➤principles➤to➤this➤day.➤

Bill➤Clinton➤also➤engaged➤the➤American➤public➤with➤a➤strong➤message➤that➤health-

care➤is➤an➤inalienable➤right➤for➤all➤citizens➤and➤not➤an➤entitlement➤for➤those➤who➤can➤pay➤

for➤it.➤This➤concept➤began➤with➤the➤advent➤of➤Medicare➤and➤Medicaid➤during➤the➤John➤F.➤

Kennedy➤and➤Lyndon➤B.➤Johnson➤eras,➤focusing➤on➤the➤elderly➤and➤the➤poor.➤Before➤the➤

Clinton➤administration,➤healthcare➤for➤the➤middle➤class➤was➤largely➤viewed➤as➤an➤indi-

vidual➤responsibility.➤Clinton➤transformed➤the➤nation’s➤views➤on➤healthcare➤and➤made➤

reforming➤the➤healthcare➤system➤a➤national➤priority➤in➤the➤minds➤of➤Americans.➤Clinton➤

appealed➤to➤the➤idea➤that➤providing➤care➤for➤children,➤the➤infirm,➤and➤the➤elderly➤was➤

the➤“right➤thing➤to➤do.”➤

Building➤ on➤ the➤ growing➤ public➤ desire➤ for➤ comprehensive➤ healthcare➤ coverage,➤

Barack➤Obama➤was➤elected➤in➤2008➤in➤part➤on➤a➤pledge➤to➤complete➤Clinton’s➤vision.➤His➤

election➤ultimately➤resulted➤in➤the➤passage➤of➤the➤Affordable➤Care➤Act➤in➤2010.➤However,➤

Obama➤was➤not➤successful➤in➤motivating➤Congress➤to➤pursue➤a➤shared➤vision➤and➤there-

fore➤relied➤on➤a➤transactional➤leadership➤approach➤to➤complete➤the➤process.➤Congress➤

has➤reacted➤with➤consistent➤and➤unending➤criticism➤and➤attempts➤to➤repeal➤the➤law,➤and➤

so➤without➤a➤shared➤vision➤and➤purpose,➤the➤legislation➤evolved➤into➤a➤fight➤between➤

Democrats➤and➤Republicans.➤

Kennedy,➤Reagan,➤and➤Clinton➤all➤had➤an➤ability➤to➤unite➤populations➤of➤individuals➤

behind➤a➤shared➤vision,➤though➤each➤employed➤different➤transformational➤techniques➤

and➤skills➤to➤communicate➤his➤message.➤Their➤success➤in➤advancing➤agendas,➤swaying➤

populations,➤and➤reorienting➤individual➤and➤group➤values➤is➤undeniable.➤

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E s s e n t i a l s ➤ o f ➤ S t r a t e g i c ➤ P l a n n i n g ➤ i n ➤ H e a l t h c a r e7 4

2015; Rolfe 2011). The transformational leadership characteristics of the CNO are important to achieving clinical quality and positive patient care outcomes through the creation of structures and processes supporting nurse empowerment and evidence-based practice.

The➤rapidly➤changing➤healthcare➤environment➤requires➤leaders➤who➤can➤continually➤reinvent➤ strategy➤and➤successfully➤allocate➤their➤resources,➤particularly➤people,➤to➤perform➤and➤thrive➤ in➤the➤marketplace.➤Of➤the➤different➤types➤of➤leadership,➤the➤transformational➤model➤seems➤ best➤suited➤for➤this➤objective.➤Transformational➤leaders➤are➤motivators,➤facilitators,➤educa- tors,➤and➤visionaries➤who➤focus➤on➤aligning➤their➤desires➤and➤goals➤with➤those➤of➤their➤fol- lowers.➤The➤transformational➤leadership➤model➤motivates➤followers➤through➤internal➤(i.e.,➤ values-based)➤rather➤than➤external➤(i.e.,➤reward-based)➤incentives.➤Followers➤of➤a➤transfor- mational➤leader➤are➤not➤driven➤by➤selfish➤aims;➤for➤them,➤a➤sense➤of➤accomplishment➤or➤ community➤is➤a➤reward➤in➤itself.➤Though➤some➤aspects➤of➤transformational➤leadership➤apply➤ to➤most➤contexts,➤leadership➤techniques➤that➤work➤in➤one➤culture➤will➤not➤necessarily➤work➤ in➤another.➤In➤all➤situations,➤however,➤transformational➤leaders➤uphold➤strong➤ethics,➤work➤ against➤groupthink,➤and➤know➤when➤structural➤and➤procedural➤changes➤need➤to➤be➤made➤to➤ keep➤their➤organizations➤vital➤and➤competitive.

revIew QuestIons

1.➤ Why➤do➤organizations➤adopt➤the➤transformational➤leadership➤model? 2.➤ How➤do➤organizations➤use➤transformational➤leadership➤to➤manage➤change➤and➤

achieve➤goals? 3.➤ In➤what➤ways➤are➤the➤transactional➤and➤transformational➤models➤of➤leadership➤simi-

lar?➤In➤what➤ways➤are➤they➤different? 4.➤ How➤might➤leadership➤ethics➤apply➤to➤the➤healthcare➤field?➤Provide➤examples.

coastal medIcal center exercIse

Does➤transformational➤leadership➤exist➤at➤Coastal➤Medical➤Center➤(CMC)?

coastal medIcal center QuestIons

1.➤ Does➤information➤in➤the➤case➤study➤suggest➤that➤at➤one➤time➤CMC➤embraced➤transfor- mational➤leadership?➤If➤so,➤why➤does➤it➤no➤longer➤embrace➤this➤style?

2.➤ Develop➤a➤plan➤or➤process➤by➤which➤transformational➤leadership➤might➤be➤imple- mented➤at➤CMC.

3.➤ Assess➤the➤level➤of➤leadership➤ethics➤currently➤in➤place➤at➤CMC.➤Address➤any➤prob- lems➤you➤see➤and➤propose➤potential➤solutions.

summary

exercIses

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C h a p t e r ➤ 2 : ➤ T r a n s f o r m a t i o n a l ➤ L e a d e r s h i p ➤ M a x i m i z e s ➤ S t r a t e g i c ➤ P l a n n i n g 7 5

IndIvIdual and group exercIses: develop an understandIng of effectIve leadersHIp traIts

Using➤the➤information➤on➤leadership➤styles➤in➤Chapter➤2➤as➤well➤as➤your➤knowledge➤and➤ experience,➤complete➤the➤following➤exercises:

1.➤ Individually,➤spend➤ten➤minutes➤writing➤down➤the➤names➤of➤five➤outstanding➤leaders➤ in➤history.➤The➤leaders➤can➤be➤religious,➤political,➤military,➤and➤so➤on.➤Below➤each➤lead- er’s➤name,➤write➤the➤traits➤that➤make➤or➤made➤this➤individual➤an➤outstanding➤leader.

2.➤ In➤your➤group,➤discuss➤these➤traits➤and➤identify➤those➤leaders➤who➤exhibited➤trans- formational➤leadership➤skills.➤Does➤the➤issue➤of➤ethical➤values➤come➤up➤in➤the➤discus- sion➤of➤any➤of➤the➤leaders?➤

3.➤ What➤leadership➤traits➤do➤you➤possess?➤What➤traits➤would➤you➤like➤to➤develop➤further?➤

American➤College➤of➤Healthcare➤Executives➤(ACHE).➤2011.➤“ACHE➤Code➤of➤Ethics.”➤Accessed➤

February➤25,➤2015.➤www.ache.org/abt_ache/code.cfm.

American➤Nurses➤Credentialing➤Center➤(ANCC).➤2015.➤“Magnet➤Model.”➤Accessed➤February➤

24.➤www.nursecredentialing.org/Magnet/ProgramOverview/New-Magnet-Model.

Baldrige➤Performance➤Excellence➤Program.➤2015.➤“Baldrige➤Excellence➤Builder:➤Key➤Ques-

tions➤for➤Improving➤Your➤Organization’s➤Performance.”➤National➤Institute➤of➤Standards➤and➤

Technology.➤Accessed➤August➤13.➤www.nist.gov/baldrige/publications/upload/Baldrige_➤

Excellence_Builder.pdf.

Bass,➤B.➤M.➤and➤R.➤Bass.➤2008.➤The Bass Handbook of Leadership: Theory, Research, and

Managerial Applications,➤4th➤ed.➤New➤York:➤Free➤Press.

Bass,➤B.➤M.,➤and➤R.➤E.➤Riggio.➤2005.➤Transformational Leadership,➤2nd➤ed.➤New➤York:➤Psy-

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Burns,➤J.➤M.➤1978.➤Leadership.➤New➤York:➤Harper➤&➤Row.

Chartrand,➤G.➤2010.➤Unreasonable Leadership.➤Ponte➤Vedra,➤FL:➤Unreasonable➤Leadership➤

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EBSCO : eBook Collection (EBSCOhost) - printed on 4/30/2019 4:21 PM via WESTERN KENTUCKY UNIV AN: 1843079 ; Harrison, Jeffrey P..; Essentials of Strategic Planning in Healthcare Account: s8993066.main.ehost

http://www.nbcnews.com/nightly-news/