Innovations occur every day in the healthcare industry in the form of new medications, new treatments, and novel implementations of prior treatments. Effective healthcare leaders are leading innovation regularly. This chapter will explore two innovation leaders in healthcare and how their actions benefited their employees, organizations, and patients. The story will also examine how these Chief Executive Officers (CEOs) worked to create a culture of continuous innovation. The chapter will focus on their influence on the people around them and discuss previous research on the characteristics that made them successful innovation leaders.

Description

Matt and Kate are CEOs who lead healthcare organizations and who are both successful because of their leadership style. Vice presidents in their organizations have seen the positive impact of Matt’s and Kate’s actions in themselves and others (Jones, 2014). They demonstrate a strong level of engagement, trust, and support. When leading innovation, creative work often springs from the choices made by CEOs. The leadership characteristics demonstrated by Matt and Kate embrace the competency model of innovation leaders (Gliddon, 2006). Each leader takes action to support idea generation within their executive leadership group, identifies innovations, and encourages others to do the same.

Because of their inclusive, supportive, and empowering leadership styles, they have worked with their team to evaluate and implement innovations brought forth by a diverse array of team members at many different levels in their organizations. Their executive team has a high level of engagement and openness. By building a culture of continuous innovation, this positive attitude circles back up with a multitude of organizational benefits including idea-sharing, ethical patient-focused decision-making, and advocacy for others. They also embrace both exploratory and value-added innovations. The healthcare industry is an important place to grow both types of innovations. New ideas need to be considered as well as modifying existing ideas in order to continue to evolve better patient care and improved outcomes.

In a hospital, outpatient clinic, or long-term care facility, employees may be asked to adopt a policy, procedure or process as the result of regulatory changes, insurance payment adjustments, special emergencies, or new research. There is a fatigue that accompanies this type of change, but innovation leaders find a way to open channels of communication, rally their employee base, and focus on why the change needs to happen. For example, when a CEO uses their high level adaptive abilities coupled with an aptitude for leveraging resources, they can help executive leadership team members and employees decrease the change fatigue by scanning for organizational needs that, in turn, prepare employees to react in unison rather than in reactive crisis mode (Jones, 2014).

Innovation leaders in healthcare focus on building organizational talent to assure that, whenever a challenge presents itself, they are able to view it from multiple perspectives which can often lead to innovation. When a CEO shares the same perspectives with executive or mid-level leadership teams, they then empower those they lead. The focus of this chapter is to demonstrate how the interactions between the CEOs and their leadership teams forged a culture of continuous innovation within their organizations. When a CEO actively engages their direct reports and other employees, the interactions breed innovation as a result of role modeling and support. Likewise, these interactions can form an innovation network team that helps to solve problems at different levels in the organization. Although these two stories are set in healthcare, the characteristics and actions explored may be applicable to innovation leaders in many other types of organizations.

The story

Matt’s and Kate’s stories will provide a fresh perspective on ways to understand innovation leadership in a healthcare environment. Healthcare has some unique needs when it comes to leadership and that opens up opportunities for those who can adapt quickly, leverage internal and external resources, create strategies to benefit the organization, utilize ethical decision-making, and continually build internal talent. Herzlinger (2006) suggests that the multitude of issues facing healthcare, such as medical errors, soaring costs, and the evolving landscape of regulatory changes, makes innovation difficult. Why is innovation trickier in healthcare versus say a technology company? When working with people, one cannot just create a prototype and keep trying until it works. As healthcare is focused on working with people, people’s lives and well-being are at stake. For example, if a new cell phone application is developed and tested over and over again to see what works and what does not work, chances are no one may get hurt. That model is not as easily implemented within a healthcare environment. While innovations in patient treatments may be addressed in clinical studies, innovation with people is still well within the reach and responsibility of healthcare providers. The time spent fostering relationships within a healthcare organization can cultivate an exciting foundation for innovative thought and problem solving, a much-needed focus.

Change is no longer something sudden and sporadic. Instead it is a consistent force in the healthcare industry and something successful leaders engage in rather than run from. Many industries face regulatory changes and shifting market targets. This is also true for hospitals, long term care facilities, and physician practices, to name just a few. Healthcare leaders often need to shift an entire organization in order to respond to a new practice or reimbursement model. In doing so, they and their leadership team are charged with convincing the stakeholders of that organization to move along with them. These situations require that healthcare CEOs arrive with a skill-set ready to facilitate, identify and grow talent, have a vision beyond the current issues, and foster employee engagement that seeks pioneering solutions. Essentially, the leader needs to fit the organization and thus, the term executive fit applies to change. In a study by Chen (2012), it seems that fit is an evolving metric. Even though a leader might have been the best match at first, it does not necessarily mean they will continue to be so going forward. Executive leadership fit is a critical concept for healthcare CEOs because, without it, the daunting task of developing innovations for better healthcare outcomes may fall short for patients and for employees.

Our first innovation leader, Matt, is described by his subordinates as someone who allows them the freedom to look for new ideas and explore new solutions to the increasing challenges they face. He leads a team of executives at a medium sized acute-care facility. Matt helped to select the majority of the C-level leaders and says that he selected individuals who share his passion for excellence and inclusiveness. He also describes the importance of having each of his leadership team members share his vision for empowering employees to think outside the box. He believes that without this and a shared vision, it would be difficult to make many of the changes and adjustments that are a daily necessity of modern healthcare organizations (Jones, 2014).

When he took on the role of CEO, the organization was on the verge of bankruptcy. He knew what steps would need to be taken in order to turn the organization around and make it a competitor. This was no small task as this market was saturated with acute-care facilities vying for local patients. He took a slow and methodical approach addressing each aspect of the organization to build a shared mission and vision. During this transition, he utilized his skills to consider the financial needs of the organization and his employees (Jones, 2014).

Change was needed and innovations were a must. He set out to learn what each employee needed from him and how he would support their development. He understood that social infrastructure, in leadership, is where it all starts. He knew that if he developed the team and provided examples that set a strong precedent for role-modeling behaviors, each of his executive leaders would pass this knowledge along to their department directors and supervisors.

Matt was interested in the personal development of his employees. His level of engagement and concern included knowing the names of his employee’s children and recent life events. This created a sense of loyalty toward the organization and was substantiated each time he visited employees. His executive leaders stated that he made a sincere connection, bringing about a true sense of caring and trust in their problem-solving abilities. His employees extended this approach to those around them, developing a willingness to think more broadly and deeply about solutions. But, how does this process start? Matt puts each person in the right place with the right assignment. His employees are free to share innovations and Matt provides validation by explaining how the innovations are making a difference. Understanding that a vice president may not get it right the first time and then mentoring them is critical (Jones, 2014). Matt makes sure each member of the team knows he has their back.

When his subordinates were asked about how he responded to daily crises, they described similar experiences of thinking beyond the current situation, networking, and making things happen. For example, Matt was able to use his networking abilities to find housing for a group of employees who had lost their homes. It was not typical of a CEO, but it met his employee’s needs. That is innovation in this group of employees. He looked at a problem from different perspectives and it rubbed off on those around him. Matt was able to dive deep into details and develop broad strategy. In one instance, when the organization was struggling with a large-scale problem for which Matt was not an expert, he brought his team together, reminded them that they had the skills necessary to respond to the issue, and then let them lead. Three of his executive leaders were interviewed and all agreed that having his support allowed them perform their jobs with the confidence they needed to look for innovative solutions and to empower others to do the same (Jones, 2014). This is truly a gift in leadership and mentoring supports the development of innovations.

Our second innovation leader, Kate, has leadership characteristics that are similar to Matt’s. She also carefully chose leaders who embodied her passion for thinking beyond and looking for new ways to develop solutions. Because she did not see her job as authoritative, she welcomed ideas and solutions that originated outside her office. She encouraged those working with her to think about how to motivate their employees to look beyond the expected. She stressed the importance of mentoring and that employee growth makes the organization grow (Jones, 2014). How was Kate different from the other leaders that her employees had worked for over the years? Her employees stated how personal her approach was, how she kept everyone in the loop, and how she brought her team closer by empowering them. She is a CEO who is part of her team and she encourages her team to be a part of her decisions to gain their buy-in. She encourages members of her team to be comfortable when coming to her with new ideas (Jones, 2014). Thus, innovation may more freely take place in environments where employees feel comfortable sharing new ideas and making decisions because their leader has made it clear that it is a safe place.

Kate believes in developing a process early and validating its importance with a variety of metrics. In regard to decision making, she stresses the importance of clear expectations, being decisive in crisis situations, and following through in the patient’s best interest (Jones, 2014). Being inclusive is a powerful way to lead innovation and one has to consider many variables when caring for a patient. Although measuring innovation can at times be difficult, it is easy to see when a leader’s actions create an environment of creativity and originality. The organizational culture shows little sign of stagnation. Innovation leaders and employees actively seek feedback, validation, and provide support to one another. One person can make a difference, and for the employees at these two healthcare facilities, a big difference was felt throughout the organization.

Discussion

CEOs who successfully lead healthcare organizations through a crisis were found to have similar characteristics. Eight themes emerged that suggested their success was rooted in their leadership behaviors, however, the biggest impact was the effect that the leader’s behaviors had on others (Jones, 2014). These eight themes include: (a) letting leaders lead, (b) leveraging resources, (c) doing what is right, (d) crisis adaptability, (e) partnering, (f) building organizational talent, (g) meaningful visibility, and (h) strategic foresight. These themes, in combination with the competency model of innovation leaders, can build a foundation for developing innovation leaders in healthcare.

Madjar (2005) suggests that if an organization places a CEO who supports innovation at the helm, supports them emotionally, and provides them with adequate resources, the organization becomes innovative as the result of having that specific CEO at the helm. Dryer (2009) describes innovation as the secret sauce everyone was looking for in a leader and that top executives did not necessarily need to take on the burden of developing innovations, but instead facilitated others in doing so. The two leaders discussed in this chapter are examples of these concepts. Both Matt and Kate brought in employees they felt embodied their key characteristics. This is a critical step when a building a team that can think on their feet and make a difference throughout the organization (Jones, 2014). Dryer (2009) found that the most creative executives did five things well: (a) associating, (b) questioning, (c) observing, (d) experimenting, and (e) networking. Likewise, Dryer (2009) found that creative executives spent more than 50% of their time on these activities.

House’s (1996) path-goal theory suggests that leaders make an impact when they directly connect with other employees (Jermier, 1996). Individual connections allow innovation leaders to know their followers. Understanding an employee’s aspirations and skill set can lead to a mentoring experience that cultivates innovation. These leaders engage so often and with such a variety that followers feel empowered and trust that the CEO will consider their ideas. Likewise, they encourage a culture of continuous innovation throughout the organization. Matt and Kate displayed the characteristics of successful innovation leaders. Therefore, as we search for innovation leaders to solve the challenges facing the U.S. healthcare system, we may want to look for leaders who have many of the characteristics described in this chapter and throughout this book. Innovation leaders who are CEOs should be ready to lead at every level of the organization and personally mentor those they that they interact with most, their executive leaders.

Summary

The focus on innovation leadership in healthcare is due to the significant competition and economic uncertainties. Innovation leaders may give organizations an edge in a crowded marketplace. In an industry that must make safety and efficacy its top priority, there is a need to shift to a cutting-edge business mindset. The two leaders described in this chapter displayed the skills necessary to help those around them flourish. They helped to develop innovations that benefit patients and families who come to healthcare providers at the most vulnerable of times.

References

Chen, G and Hambrick, DC, 2012, ‘CEO replacement in turnaround situations: executive (mis)fit and its performance implications’, Organization Science, vol. 23, no. 1, pp. 225–243.

Dryer, JH, Gregersen, H and Christensen, CM, 2009, ‘The innovators DNA’, Harvard Business Review, Available at https://hbr.org/2009/12/the-innovators-dna [Accessed 25 Aug. 2017].

Gliddon, DG, 2006, ‘Forecasting a competency model for innovation leaders using a modified Delphi technique’. PhD. The Pennsylvania State University.

Herzlinger, RE, 2006, Who Killed Health Care?McGraw-Hill Education, New York.

House, RJ, 1996, ‘Path-goal theory of leadership: Lessons, legacy, and a reformulated theory’, Leadership Quarterly, vol. 7, no 3, pp. 323–352.

Jermier, JM, 1996, ‘The path-goal theory of leadership: A subtextual analysis’, Leadership Quarterly, vol. 7, no 3, pp. 311–316.

Jones, MC, 2014, ‘Leadership illuminated by crisis: Characteristics of effective hospital CEOs’. PhD. The Pennsylvania State University.

Madjar, N, 2005, ‘The contributions of different groups of individuals to employees’ creativity’. Available at https://pdfs.semanticscholar.org/def8/5f3bce1ce2c8b88ef42c19531dba9b630666.pdf [Accessed 25 Aug. 2017].