Addressing the Leadership Gap in Healthcare

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1 A White Paper Addressing the Leadership Gap in Heathcare What s needed when it comes to eader taent? Issued June 2010 / Revised June 2011

2 CONTENTS Introduction Prioritizing Competencies Understanding Effectiveness Identifying the Gap Cosing the Gap Concusion About the Research Resources Contributors

3 Heathcare eaders know about change. The need to adapt as individuas, as organizations and as an industry is obvious. What is ess apparent are the eadership skis that are most important in today s uncertain and compex environment. For decades, US-based heathcare providers, insurance companies, pharmaceutica and device firms have been operating in a shifting andscape. Advances in technoogy and new standards of care, new business modes, a growing popuation and changing demographics have propeed ongoing change in the heathcare sector. Reguation, access to care, cost pressures and ega and ethica considerations add to the compexity, as does heathcare reform. In this context, it can be difficut to know if organizations have the eadership taent they need to set direction, create aignment and gain commitment among empoyees, partners and stakehoders as they seek to provide safe, highquaity patient care. To hep our heathcare cients better understand and focus the deveopment of eaders, CCL anayzed eadership effectiveness data from neary 35,000 peope working in the fied. This report shares the detais of the study, introduces CCL s heathcare eadership framework and offers strategies for deveoping eaders. 2

4 introduction The heathcare sector is experiencing significant and rapid change, with dramatic change yet to come. In an evoving and chaenging environment, heathcare organizations must ensure high eves of technica and professiona expertise. At the same time, they must deveop the eadership capacity needed to adapt and succeed in the future. The specific chaenges faced by heathcare organizations and heathcare eaders are not one-dimensiona nor easiy characterized. CCL recognizes that hospitas, heathcare systems and other organizations in the heath sector face a range of compex needs. Through the ens of eadership deveopment, CCL has distied common strategies and practices that cutivate high-performing heathcare organizations. 3

5 As part of this work, CCL has identified six essentia organizationa capabiities shown in the mode at the right. Organizations that deveop a eadership strategy and cuture that deveop these six capabiities have a competitive advantage. To hep our heathcare cients deveop their eadership strategies specificay to deveop capabiity No. 3, Taent Transformation CCL conducted a study using its Benchmarks competency framework to answer two important questions: What eadership competencies are 1 most important for heathcare-sector organizations? CCL s Benchmarks 1 research has identified 16 key eadership skis and five deraiment factors (warning signs that a eader s career is in jeopardy). A the competencies are important; however, some are more critica than others in various industries or organizations. Gaining carity about what matters most within the heathcare sector aows organizations to set a eadership strategy and individuas to direct their earning and deveopment. 2 How we do heathcare sector eaders perform those competencies? Organizations and individua eaders aso need a cear picture of how eadership skis match up with organizationa priorities. This begins with identifying and understanding eadership strengths and weak spots, then determining how we individua strengths aign with organizationa needs. Significant discrepancies between areas of strength and areas of need indicate eadership gaps and hep to focus deveopment and earning. To answer these questions, we anayzed a sampe of 34,899 eadership-effectiveness evauations taken between 2000 and These data come from peope working across the heathcare sector (incuding empoyees of arge hospita systems, regiona providers, insurance firms, state and federa heathcare agencies, pharmaceutica firms, and medica device manufacturers) who were asked to evauate the eadership competencies of a boss, peer or direct report using CCL s Benchmarks 360-degree feedback survey. Each evauator rated the reative importance of key competencies for success and the effectiveness of their coworkers at executing each competency. (See About the Research on page 19.) 1 CCL's Benchmarks Assessment is used across a wide variety of companies as their main 360 degree assessment instrument. 4

6 The key findings of the CCL study: The top priority for eadership deveopment in the heathcare sector is to improve the abiity to ead empoyees and work in teams. This finding speaks to the importance of creating an organizationa cuture of coaboration. Leaders in heathcare organizations generay shoud deveop a more participative management stye, improve their abiity to buid reationships and ead teams, and earn to dea more effectivey with probem empoyees. Heathcare organizations aso need to create strategies to provide current and future eaders broad, cross-organizationa experiences and earning. Heathcare eaders have gaps in severa areas that are essentia for earning and ong-term success: having a broad functiona orientation, sef-awareness and career management. Organizationa training and deveopment, succession panning and individua feedback, coaching and deveopment efforts shoud address these gaps. This supports what CCL has been hearing from hospitas about the needing for their empoyees to be abe to work effectivey across boundaries and communicate more effectivey. Heathcare eaders have important strengths, too. The abiity to adapt to change and to meet business objectives are strong points for heathcare eaders. They are resourcefu, straightforward and composed, fast earners and wiing to do whatever it takes. These findings show that heathcare organizations have a poo of adaptabe and committed eaders a powerfu asset in today s compicated word. Leadership gaps the disparities between eadership priorities and current skis provide vauabe information. With this insight, heathcare companies can deveop meaningfu eader deveopment strategies, take steps to buid the capabiity of peope in key roes and begin to grow the eadership capacity of the organization. 5

7 prioritizing competencies Many organizations and management experts deveop competency modes by which they evauate individua eadership skis, pan deveopment and manage the taent pipeine. Identifying the most important competencies for an industry sector or an organization is not (or shoud not be) a haphazard process. To gain a deeper understanding of the competencies that heathcare organizations need most, CCL turned directy to the peope who work in the sector. Thousands of mid- and senior-eve managers participate in CCL s eadership deveopment programs annuay. They compete CCL s Benchmarks assessment aong with their supervisors, peers and direct reports who rate their eadership behaviors, providing us with a vast database of information on the competencies required for effective eadership and the ski eve of managers in each area. It is from this database that we were abe to anayze heathcare-sector eadership needs. 6

8 Benchmarks is a 360-degree survey consisting of 155 behaviora descriptor items custered into 21 scaes. Sixteen of the scaes rate eadership skis, and five of the scaes rate deraiment factors. The Benchmarks skis are: 1. Resourcefuness. Can think both strategicay and make good decisions under pressure; 9. Buiding Reationships. Knows how to buid and maintain working reationships with can set up compex work systems and engage co-workers and externa parties; can negotiate in fexibe probem-soving behavior; can work and hande work probems without aienating effectivey with higher management in deaing peope; understands others and is abe to with the compexities of the management job. get their cooperation in non-authority reationships. 2. Doing Whatever It Takes. Has perseverance and focus in face of obstaces; takes 10. Compassion and Sensitivity. Shows gen- charge; is capabe of standing aone yet is uine interest in others and sensitivity to open to earning from others when necessary. empoyees needs. 3. Being a Quick Study. Quicky masters new 11. Straightforwardness and Composure. technica and business knowedge. Is steadfast, reies on fact-based positions, doesn t bame others for mistakes and is abe Decisiveness. Prefers quick and approximate actions to sow and precise ones in many management situations. Leading Empoyees. Deegates to empoy- 12. to recover from troubed situations. Baance between Persona Life and Work. Baances work priorities with persona ife so that neither is negected. ees effectivey, broadens empoyee opportunities, acts with fairness toward direct reports and hires taented peope for his/her team. 13. Sef-Awareness. Has an accurate picture of strengths and weaknesses and is wiing to improve. 6. Confronting Probem Empoyees. Acts decisivey and with fairness when deaing with 14. Putting Peope at Ease. Dispays warmth probem empoyees. and a good sense of humor. 7. Participative Management. Uses effec- 15. Differences Matter. Demonstrates a tive istening skis and communication to respect for varying backgrounds and perspec- invove others, buid consensus and infuence tives. Vaues cutura differences. others in decision-making. 8. Change Management. Uses effective strategies to faciitate organizationa change 16. Career Management. Deveops, maintains and uses professiona reationships, incuding mentoring, coaching and feedback to manage initiatives and overcome resistance to change. own career. 7

9 Whie a the competencies are eements of effective eadership, the respondents (both sef-report and observers) are asked to rate the importance of the 16 eadership skis within their organization. Respondents indicate reative importance for success among the 16 eadership skis by identifying the eight that they beieve to be more important than the other eight; compiing data permits a rank-ordering anaysis. The eadership skis ranked most important for success by peope in heathcare organizations: The skis ranked east important for success: Leading Empoyees Resourcefuness Straightforwardness and Composure Change Management Participative Management Confronting Probem Empoyees Compassion and Sensitivity Putting Peope at Ease Differences Matter Career Management Figure 1 Importance for Success Rankings Benchmarks Competencies Leading Empoyees Resourcefuness Straightforwardness and Composure Change Management Participative Management Decisiveness Buiding and Mending Reationships Doing Whatever It Takes Being a Quick Study Sef-Awareness Baance between Persona Life and Work Confronting Probem Empoyees Compassion and Sensitivity Putting Peope at Ease Differences Matter Career Management Rank Number in Sampe 34,899 8

10 The second category of eadership competencies incuded in the heathcare sector study invoved eadership deraiment factors. Decades of research show five characteristics that can sta or break a management career: Probems with Interpersona Reationships. Difficuties in deveoping good working reationships with others. Difficuty Buiding and Leading a Team. Difficuties in seecting and buiding a team. Difficuty Changing or Adapting. Resistant to change, earning from mistakes and deveoping. Faiure to Meet Business Objectives. Difficuties in foowing up on promises and competing a job. Too Narrow Functiona Orientation. Lacks depth to manage outside of one s current function. These characteristics have been identified by a series of CCL studies that compared managers who continue to be considered for promotion and those who eave the organization non-vountariy or reach a pateau. Based on research from CCL and others, these factors severey imit a eader s effectiveness and ong-term success. 9

11 understanding effectiveness In competing the Benchmarks assessment, respondents aso rate an individua eader s effectiveness at executing each of the 21 competencies (both the eadership skis and the deraiment factors). Heathcare eaders were rated most effective in the foowing categories: From the deraiment ist, heathcare eaders were east ikey to fai in the areas of: Differences Matter. Putting Peope at Ease. Adapting to Change. Meeting Business Objectives. Being a Quick Study. 10

12 The three skis that observers rated the owest were: The deraiment factors that were most probematic for heathcare eaders were: Sef-awareness. Too Narrow Functiona Orientation. Leading Empoyees. Difficuty Buiding and Leading a Team. Confronting Probem Empoyees. Figure 2 Leadership Effectiveness: How do Heathcare Leaders Perform? Benchmarks Competencies Differences Matter Putting Peope at Ease Being a Quick Study Resourcefuness Doing Whatever It Takes Straightforwardness and Composure Decisiveness Compassion and Sensitivity Baance between Persona Life and Work Change Management Participative Management Buiding and Mending Reationships Career Management Sef-Awareness Leading Empoyees Confronting Probem Empoyees Rank Ave. Rating Number in Sampe 34,899 (Note: the Benchmarks rating scae for these competencies is based on a five-point scae, with five being the best score.) 11

13 Figure 3 Deraiment Factors: Are Heathcare Leaders at Risk? Number in Sampe: 34,899 Too Narrow Functiona Orientation Difficuty Buiding and Leading a Team Probems with Interpersona Reationships Faiure to Meet Business Objectives Difficuty Changing or Adapting Rank Ave. Rating Note: In the deraiment section of Benchmarks, the rating scae is inverse, i.e., 1 is good and 5 is poor. The top five deraiment factors are presented in order of how ikey one is to derai as a resut of that factor. The deraiment factors, therefore, are ranked from higher scores to ower scores (i.e., from most ikey to derai to east ikey to derai). 12

14 identifying the gaps Our research shows that eaders and managers in the heathcare sector are skied in important areas such as adapting to change, meeting business objectives and being resourcefu. They are reported to be straightforward, quick studies, comfortabe to be around and skied at deaing with individua differences. However, heathcare managers and eaders fa short in severa crucia areas. The study showed the ski ranked as most important for success in the heathcare sector the abiity to ead empoyees rated ower than 14 other competencies in terms of eader performance. Heathcare eaders put a high vaue on the abiity to ead others, yet there is notabe room for improvement in how eaders perform in this competency. Heathcare eaders were aso rated ower in performance on reated high-vaue abiities confronting probem empoyees, buiding and mending reationships and participative management. 13

15 These findings impy that the chaenges in eading empoyees in heath-sector organizations are significant. Leaders can benefit from further deveopment of the interpersona and eadership skis needed to create direction, aignment and commitment within the organization. This work invoves skis such as coaching empoyees, deegating effectivey, hiring taented peope and impementing change through others. Heathcare eaders aso need to pace greater focus on gaining the experience and skis needed for future roes and future chaenges. The study showed that eaders coud improve in the area of sef-awareness and career management, meaning organizations coud benefit from a stronger focus on strategic taent deveopment and preparing eaders for the future. Efforts can and shoud be made at both the individua eve and at the organizationa eve to understand how to improve and foster eadership deveopment in areas where a gap or imitation is identified. In the foowing section, we offer insight into each of these issues and suggestions for addressing them. LOWER EFFECTIVENESS HIGHER EFFECTIVENESS Higher Importance Leading Empoyees Participative Management Resourcefuness Straightforwardness and Composure Mid-eve Importance Buiding and Mending Reationships Sef-Awareness Being a Quick Study Doing Whatever It Takes Lower Importance Confronting Probem Empoyees Career Management Differences Matter Putting Peope at Ease Deraiment Factors Too Narrow Functiona Orientation Difficuty Buiding and Leading a Team Adapting to Change Meeting Business Objectives 14

16 cosing the gaps Heathcare organizations seeking to invest in their eaders shoud aign organizationa needs, system-wide eadership capabiity and individua eader deveopment. To cose the eadership gap in the areas identified in this study, organizations and individua eaders wi need a soid understanding of the skis and behaviors required to be effective in each area. Here, we offer a starting point for understanding six areas that heathcare eaders and organizations shoud emphasize: Leading empoyees. The abiity to ead empoyees is a highy variabe ski, requiring strong 1 sef-awareness and interpersona savvy. In addition to being skied directors and motivators, managers and executives who are effective in eading empoyees wi invest in others. They push decision-making to the owest appropriate eve, deveoping empoyees confidence in their abiity to take action. They consistenty coach empoyees and provide chaenge and opportunity. With this mindset of deveoping others, skied eaders find and attract highy taented and productive peope. 15

17 Participative Management. Strong eaders use participative management to invove others, 2 buid consensus and infuence decisions. Managers who vaue participative management encourage others to share ideas, information, reactions and perspectives and they isten. They communicate we, keeping others informed, invoving others in change and paying attention to mutipe perspectives. 3 Buiding and Mending Reationships. Managers who estabish and maintain soid reationships are respectfu, dipomatic and fair. They are abe to reate to a kinds of peope and easiy gain support and trust of peers, higher management and customers. Skied at negotiation, these managers get things done through coaboration and by finding common ground. They try to understand what other peope think before making judgments or making decisions. Sef-Awareness. Effective eaders have an accurate picture of their strengths and weaknesses 4 and the impact that their behavior has on others. Someone with a high degree of sefawareness seeks feedback and vaues refection and earning. A sef-aware manager wi admit persona mistakes, earn from them and move on to correct the situation. 5 Broad organizationa perspective. When a manager s orientation is too narrow, he or she is imited in terms of eve of responsibiity and movement across departments or functions. A promotion woud be seen as pushing this person beyond their current eve of competence, and a ack of understanding of how other departments operate is viewed as an inabiity to coaborate. In contrast, eaders with a broad organizationa perspective have worked in mutipe departments or functions over time. They have experience working with groups or on teams with competing interests, expertise and points of view. They have deveoped tactica or technica ski, but aso appreciate strategic and organization-eve issues. 6 Buiding and eading a team. Managers who are effective team eaders set cear goas and expectations. They are abe to resove confict, motivate team members and hep individuas understand how their work fits into the goas of the organization. They seect the right mix of peope for the team, bringing together peope who coectivey have the expertise, knowedge and skis needed to compete an assigned task or ongoing work. 16

18 Organizations wi aso want to provide eaders with opportunities for assessment, chaenge and support as they seek to improve these or other eadership competencies. Assessment invoves information about current strengths, deveopment needs and current eve of effectiveness. Most heathcare professionas understand the power of data for managing the technica aspects of their work medica tests can narrow the scope for accurate diagnosis and treatment, for exampe. Simiary, organizations shoud understand the eadership behaviors and skis that are needed for the ong-term heath of the organization and find ways to accuratey measure them. 360-degree eadership deveopment assessment toos are often most detaied and hepfu, but informa assessments and ongoing feedback are beneficia, too. Chaenge provides opportunity to grow and earn for exampe, an experience that is new and requires new skis. Heathcare organizations shoud hep empoyees at a eves and across functions understand the importance of stretch assignments and how to get the most out of them. Just as physicians earned through rotations and residency eary in their careers, heathcare eaders shoud have eadership assignments or roes that aow them to try new things, work in different ways and manage change. Support provides guidance and reassurance about strengths, current skis and estabished ways of thinking and acting. Individua coaching, action earning and team coaching are effective ways to provide earning and performance support for administrators and organizationa management, as we as for physician eaders, nursing professionas and care teams. Finay, the most successfu heathcare organizations create a eadership strategy that buids essentia skis and behaviors of individua eaders AND invests in its cuture. Cuture, in concert with the business strategy, drives outcomes. Through a cuture of coaboration, peope throughout the organization can deveop a fu spectrum of capabiities required to ead into the future. 17

19 concusion In uncertain times, heathcare companies cannot afford to pour resources into generaized eadership deveopment, hoping that somehow they wi end up with the right outcomes. Yet, they know eadership taent and technica expertise are necessary to meet the popuation s heathcare needs, manage operations and find innovative and effective soutions to compex chaenges. We-targeted eadership deveopment initiatives, then, are essentia for success. Using CCL research as a starting point, heathcare organizations have the opportunity to re-assess their organizationa eadership capabiities and begin focused efforts to deveop eaders and create a cuture of coaboration. 18

20 About the Research Between 2000 and 2009, 34,899 individuas from heathcare-sector organizations competed CCL s Benchmarks assessment, a 360-degree feedback survey consisting of 155 behaviora descriptor items custered into 21 scaes (see pages 7 and 9 for definitions of scaes). The sampe spit eveny between mae and femae, had an average age of 44, and was made up of 25 percent top management and executives, 55 percent midde and upper-midde managers, 10 percent frontine and houry workers, and 10 percent who did not provide information on their organizationa eve. Sixteen of the scaes rate eadership skis, and five of the scaes rate deraiment factors. Respondents to the survey (both sef-report and observers) indicate reative importance for success among the 16 eadership skis by identifying the eight competencies that they beieve to be most important. Respondents aso rate effectiveness at executing each of the 16 competencies on a 5-point scae, with 5 representing the highest eve of effectiveness; ratings were averaged across a observers. Additionay, the respondents rated the ikeihood of participants deraiing on five scaes in the deraiment section. This study examines the reationship between importance rankings and effectiveness ratings from 34,899 observers who provided ratings on Benchmarks for the participants. Resources Coaborative Heathcare Leadership (2nd white paper) The Leadership Gap Indicator Benchmarks Deveopmenta Assignments: Creating Learning Experiences without Changing Jobs, CCL Press, 2006 Seing Yoursef without Seing Out: A Leader s Guide to Ethica Sef-Promotion, CCL Press, 2006 Keeping Your Career on Track: Twenty Success Strategies, CCL Press, 2000 Feedback Guidebook Package, CCL Press, 2000 Feedback That Works: How to Buid and Deiver Your Message Giving Feedback to Subordinates Ongoing Feedback: How to Get It, How to Use It Seven Keys to Successfu Mentoring, CCL Press, 2009 Teams Guidebook Package, CCL Press, Maintaining Team Performance Raising Sensitive Issues in a Team How to Form a Team: Five Keys to High Performance How to Launch a Team: Start Right for Success Leading Dispersed Teams Buiding Confict Competent Teams, Jossey-Bass, 2008 FYI For Your Improvement 5th Edition LEAD: Leadership Performance Too Contributors to This Paper Tracy Enright Patterson, Heather Champion, Henry Browning, Deborah Torain, Courtney Harrison, Joan Gurvis, John Feenor and Michae Campbe For more information about any of these resources, pease visit us onine: 19

21 About the Center for Creative Leadership The Center for Creative Leadership (CCL ) is a top-ranked, goba provider of executive education that acceerates strategy and business resuts by unocking the eadership potentia of individuas and organizations. Founded in 1970 as a nonprofit educationa institution focused excusivey on eadership education and research, CCL heps cients wordwide cutivate creative eadership the capacity to achieve more than imagined by thinking and acting beyond boundaries through an array of programs, products and other services. Ranked among the word's Top 10 providers of executive education by Boomberg BusinessWeek and the Financia Times, CCL is headquartered in Greensboro, NC, USA with campuses in Coorado Springs, CO; San Diego, CA; Brusses; Moscow; Singapore; Pune, India and Addis Ababa, Ethiopia. Its work is supported by 500 facuty members and staff. CCL Americas One Leadership Pace PO Box Greensboro, NC p: f: e-mai: CCL Europe, Midde East, Africa Avenue de Tervueren 270 Tervurenaan B-1150 Brusses, Begium p: +32 (0) f: +32 (0) e-mai: CCL Asia-Pacific 89 Science Park Drive Singapore Science Park I The Rutherford Lobby B, #03-07/08 Singapore p: f: e-mai: CCL Russia CCL LLC 8th Marta Street 10 Buiding 14 Moscow Russia p: f: e-mai: Other campus ocations: Coorado 850 Leader Way, Coorado Springs, Coorado, 80905, USA, p: Caifornia 8910 University Center Lane, Tenth Foor, San Diego, Caifornia, , USA, p: Africa Unity University, Sub-City: Boe, Kebee: 11, House No: 632, PO Box 6722, Addis Ababa, Ethiopia, p: India 238 Regus Connaught Pace, Leve 2, Kumar Connaught Pace, Bund Garden Road, Pune , India, p: /10 The Center for Creative Leadership is committed to a poicy of equaity of opportunity for the admission of a students regardess of race, coor, creed, sex, age, nationa origin, sexua orientation, or disabiity, and does not discriminate on any such basis with respect to its activities, programs or poicies. Center for Creative Leadership, CCL, and its ogo are registered trademarks owned by the Center for Creative Leadership Center for Creative Leadership. A rights reserved.

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