Leadership Style and Substance at DignityHealth

Catholic Healthcare West (now Dignity Health) may have hiredLloyd Dean as much for his leadership style as his résumé. Yes, in2000 the résumé showed eight years’ experience in health care atEvangelical Health Systems and more before that in pharmaceuticals.But something else gave him the edge. Deanstands out “as an unconventional leader in a staid,grave industry,” a 2013 profile in Fortune declared, based on suchrecent glimpses into Dean’s leadership style as follows:

• Energetic and Positive. Coworkers know Dean’s early arrivalevery morning at work by his bellowing laugh as he exits theelevators.

• Eyes and Ears. Dean will sometimes show up in sweats andsunglasses to hang in the lobbies of his hospitals so he can checkon customer service and hear their complaints. •

Customer Focus and Communication. When Dean uncovers a problem,he’ll write a memo for staff called “Just Thinking.” Staff membersrealize they should read “Just Thinking” as “Just Fix It.”

• Outreach and Engagement. Once, the late Senator Ted Kennedywas running late. He was supposed to introduce Dean at a WashingtonHilton to executives, policy makers, and congressional staff. Bythe time Kennedy arrived, Dean had already made the rounds of theroom and done Kennedy’s job for him.

• Authentic and Sincere. Kathleen Sebelius, the former U.S.Secretary of Health and Human Services under President Obama, notedthat unlike most health care CEOs with whom she consulted, Deannever failed to ask her how she was doing and to offer his help.“There’s a personal side that isn’t phony or fake,” she said.

• Personal Brand and Reputation. Dean’s personal brand offairness and integrity precedes him and affords him morecredibility with elected officials “than [with] almost any othercorporate executive,” says Willie Brown, former mayor of SanFrancisco.

• Balance and Tact. Fortune praised Dean for his poise anddiplomacy in balancing religiosity and secularity, quite a featconsidering he’s not even Catholic.”94

Teachers and CEOs Have Much in Common In a recent interview,Dean ties success as a CEO to what he learned as a public schoolteacher. Successful educators tend to have three key attributes.One, you have to be able to listen. Two, be able to take complexprinciples and ideas and put them in a language that people willunderstand. Three, motivate and create the desire in individuals tolearn—to get them to focus together on a common project. It’s thesame in business. It’s what a CEO does.

95 Personal Values Dean’s engagement with his current job runsdeep, he explains. I’d always asked myself, how can I use theopportunity I have, the gifts I’ve been given, to have an impact onthe kinds of communities that I came from? And I began to realizethat in health care, faith-based organizations were really focusedon the poor and most vulnerable. As someone who grew up in areligious family, and also wanted to help those communities, thatreally resonated with me. . . . I love health care. What greateropportunity do you have to impact large numbers of people? To helppeople really sustain life, or change the path that they’re on in apositive way?

A Historic Challenge Leadership style and substance came to theforefront in 2000, when Catholic Healthcare West (CHW) recruitedDean to save their system. CHW was in crisis and was close toinsolvent. Back then, CHW was a collection of dozens of religiousand community hospitals and care facilities. It had all started in1986, when two congregations of the Sisters of Mercy joined their10 hospitals together. The goal was to use aggregated size tobetter serve the community. Soon other hospitals were added,Catholic, Lutheran, Methodist, nondenominational, and governmentalin nature. CHW had hoped to improve operating efficiencies throughamalgamated size for more clout in dealing with vendors to controlcosts. It grew in two ways: vertically by acquiring physiciannetworks and horizontally by acquiring hospitals.

Specific Challenges at CHW: A Weak Empire James C. Robinson andSandra Dratler studied CHW’s transition in detail. They argue thatDean arrived to find a business that enjoyed few of the benefitsand many disadvantages of its size. The situation was dire. CHW hadbeen losing a million dollars a day for the last three years. 97The specifics aren’t pretty. CHW had: • Suffered severe losses fromconglomerate overexpansion. • Placed its most prominent and oftenmultiple facilities in Los Angeles, Sacramento, and San Francisco,where competition and utilization were at national lows. • Bet oncentralized billing, purchasing, and information technology (IT) atthe corporate level with poor results. • Tracked financialperformance at the regional level, allowing management to overlookoperational shortfalls when covered by investment earnings. •Developed little understanding of the incremental revenues andcosts attributable to each site and service. • Acquired hospitalswith independent community boards and medical staffs, hamperingeconomies of scale. • Failed to resolve conflicts betweencentralized corporate authority and local facilities that retainedautonomous control over spending. • Never achieved the potentialbenefit of consolidating its financial assets (because of localautonomy) to use surpluses in established markets to invest incommunities with more potential growth. Robinson and Dratler calledCHW of that time “a weak empire of strong principalities, a holdingcompany whose distinct businesses hoarded any profit and clamoredfor subsidies to cover any loss.”98 For the purposes of this case,we’re asking you to apply your problem-solving skills to CHW as itexisted when Dean took the helm. Drive your recommendations fromthe specifics above. Use what you learned about Dean from the caseand leadership styles in the chapter to inform yourrecommendations.

Apply the 3-Stop Problem Solving Approach to OB Stop 1: What isthe problem? • Use the Integrative Framework for Understanding andApplying OB to help identify the outcomes that are important inthis case. • Which of these outcomes are not being achieved in thecase? • Based on considering the above two questions, what is themost important problem in this case?

Stop 2: Use the Integrative Framework to help identify the OBconcepts or theories that help you to understand the problem inthis case. • What person factors are most relevant? • Whatenvironmental characteristics are most important to consider? • Doyou need to consider any processes? Which ones? • What concepts ortheories discussed in this chapter are most relevant for solvingthe key problem in this case?

Stop 3: What are your recommendations for solving the problem? •Review the material in the chapter that most pertains to yourproposed solution and look for practical recommendations. • Use anypast OB knowledge or experience to generate recommendations. •Outline your plan for solving the problem in this case.

Answer rating: 100% (QA)

The problem is not the leader but the way corporation work... View the full answer