A huge transformation of the health care sector is underway, and it’s having a big impact on hospitals and health systems. Many organizations are expanding outpatient services and enhancing the patient experience. In this emerging model, hospitals and systems are deploying digital technology not only for patient care but for consumer-oriented experiences as well.

The convergence of industries into care delivery also is accelerating the digital, consumer-focused trend in health care. Retail, pharmacy management, insurance and care management companies are blending with digital technology organizations — while operating clinics and hospitals — to become new health care organizations. And they are introducing myriad new leaders to the health care field.

Trustee talking points

  • With models for health care delivery continually changing, leadership selection and development are becoming ever more crucial for hospitals.
  • Organizations — including hospitals and health systems — move through life cycles, each with its own characteristics.
  • Each stage of the life cycle demands its own type of leadership.
  • Boards need to ensure that management's talents and personalities correspond to the organization's evolution.

Even employers are jumping into the health care market. Most noteworthy earlier this year was the announcement of a new nonprofit health care venture among unlikely bedfellows: Amazon, Berkshire Hathaway and JPMorgan Chase. These partners are poised to remake health care for their more than 1 million employees and families. They join the ranks of existing nonhealth care employers that have created on-site health clinics offering diagnostic services for their employee health plans, in partnership with traditional health systems.

All of these organizations are at different stages of development, so their long-term success will be decided by many factors. The most important issue they will need to address, however, is leadership development in a changing sector where there is no longer a clear business model. It is well-known that organizations evolve and develop through life cycles with distinct stages. Managerial personality types aligned with each respective stage are going to be vital for organizational success.Organizational life cycle

In the above chart, each of the six potential stages of the organizational life cycle has a distinct shape. A startup, such as the Amazon and friends venture, must manage itself differently from a mature health system or an inpatient hospital in distress. The organization’s behaviors at any stage must be chosen carefully to ensure that it succeeds in the marketplace. Arguably, the inpatient hospital is in need of revitalization to sustain itself, while the mature health system is more focused on fine-tuning its operations to the needs of its service area. Both organizations must engage in those activities appropriate for realizing their long-term success.

Each stage of the life cycle requires certain characteristics for the organization to compete and succeed. To move from one stage to the next requires a new personality, that is, a new culture. The organizational personality characteristics in the chart below illustrate the differences at each stage.

Each set of characteristics is unique to each stage. A Stage 1 startup, for example, generally is driven by a founder focused on a single goal. This focus is crucial for the organization to emerge in the marketplace and establish itself. By comparison, both Stage 3 “professional” and Stage 4 “mature” organizations are either cautious or risk-averse, as they wish to protect their gains to avoid Stage 5 and aspire to Stage 6.

These personality characteristics demand leaders who are aligned with the characteristics of the next desired stage in the organization’s evolution. Therefore, leadership at a Stage 6 “sustaining” organization must begin to demonstrate a similar Stage 1 characteristic, such as entrepreneurship, to evolve for continued growth.

Organizational personality characteristics

Stage 1: Startup

  • Proactive
  • Focuses on single goal
  • Founder-driven

Stage 2: Hockey stick

  • Quick to react
  • Multifocused
  • Uses command and control

Stage 3: Professional

  • Systematic
  • Cautious
  • Consensus-building

Stage 4: Mature and consolidating

  • Protective
  • Risk-averse
  • Has well-developed administrative structures

Stage 5: Declining

  • Ritualistic (form valued over substance)
  • Hierarchical
  • Nonactive (believing less is more)

Stage 6: Sustaining

  • Entrepreneurial
  • Structurally systematic
  • Nimble (sufficient flexibility to be proactive)

Source: Larraine Segil (www.lsegil.com). Adapted with permission.

Who is your type?

As organizations plan for new leadership, they must understand the types of leaders needed at each stage of the life cycle. Such an understanding enables them to match leaders to the appropriate or desired stage.

In the past, health care organizations approached leadership selection by relying on previous hospital leaders as models of success. Today, however, the field is changing in new ways, such as integrating physicians with health plans — and evolving toward an outpatient care management system, where physicians are leading the transformation. This is a natural progression for leadership development as boards of directors look to integrate health care operations and improve patient care.

Going forward, the convergence of insurers, providers, suppliers, retailers, digital providers and consumer services will require different leadership talent. Leaders who resemble the managerial types described in the chart below are more likely to support the organization’s evolution through its life cycle and into its next cycle of growth.

Managerial personality types

Stage 1: Adventurer

  • Risk taker
  • Has a personal vision
  • Driven (sense of urgency)

Stage 2: Warrior

  • Boldly determined, self-confident
  • Results-focused
  • Omnipresent, somewhat informal

Stage 3: Hunter

  • More formal than informal
  • Good team and consensus builder
  • Systematic approach to management

Stage 4: Farmer

  • Highly formal
  • Member of established career networks
  • Conforms to expected behavior, risk-averse

Stage 5: Politician

  • Highly risk-averse, isolationist
  • Polite but self-protective
  • Bureaucratic

Stage 6: Visionary

  • Risk taker, but results-oriented
  • Assertive, confident
  • Team builder (empowers, inspires hope)

Source: Larraine Segil (www.lsegil.com). Adapted with permission.

Test for success

To fully understand a potential leader’s likelihood of achieving success, organizations must have a comprehensive assessment of the leader’s track record and leadership style. There are three key methods to assess leaders:

  • Analytic assessments: Use data and algorithms to array leaders according to performance outcomes and thus to predict leadership effectiveness.
  • Assessment centers: Provide observations of the leader in action to understand strengths under multiple scenarios.
  • Leadership style/personality assessments: Understand the natural tendencies of the leader and determine which stage is the best fit.

To match talent to the optimal stage for success, organizations also can use existing management systems to build an organizational profile, from which the board can develop or attract leaders for the appropriate stage. Examples of such systems include:

  • Classic strategic planning assessments, including data on market position, financial viability, service-line life cycles, organizational outcomes and skills, and consumer behavior, as well as a traditional SWOT (strengths, weaknesses, opportunities and threats) analysis.
  • Analytics about the organization’s current leaders, including management-style assessments.
  • An annual, integrated calendar for aligning management systems.

These latter tools permit the organization to determine the relative stage in which it is operating and how the current management profile fits with reality. It is critical for the organization to align management talent with financial and strategic systems so that success can be assured.

Staying on track

The annual calendar is critical to a successful transformation at each stage of the life cycle. Deployment of such a calendar enables the board and management to develop, review and track the strategic, capital, financial, operating and talent plans, including who is responsible for key areas. Otherwise, this critical work may be overlooked as urgent needs overshadow important priorities. Establishing an annual integrated review cycle provides a lens to view and determine what actions must be taken to help the organization evolve and/or revitalize.

Leadership talent can be developed in a number of ways, including leader reassignment to parts of the organization that are in different stages of the life cycle. In this fashion, emerging talent is exposed to the unique set of characteristics needed for transformation — and thus to become well-rounded leaders ready to lead the newly evolved health care organization. It is not uncommon for major corporations to be led by a CEO who has spent time in a variety of operational, staff and C-suite roles. Alternatively, executive relationships and leader exchanges with other industries can provide organizations with new ideas, styles and methods — all to build leadership depth with a more comprehensive skill set across the administrative team.

Alignment of leadership to the appropriate or desired stage of the organizational life cycle can yield new and revitalizing results for your hospital or system. To take this important step is to help your organization avoid getting stuck or sliding unknowingly and unprepared into another stage of the life cycle.

Vic Buzachero (vbuzachero@triscendnp.com) is executive vice president of TriscendNP LLC in Dallas.