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Home / Questions / PROBLEM-SOLVING APPLICATION CASE (PSAC) Leadership Style and Substance at Dignity Health Catholic.

PROBLEM-SOLVING APPLICATION CASE (PSAC) Leadership Style and Substance at Dignity Health Catholic.


APPLICATION CASE (PSAC) Leadership Style and Substance at Dignity Health

Catholic Healthcare West (now Dignity Health) may have hired Lloyd Dean as much for his leadership style as his résumé. Yes, in 2000 the résumé showed eight years’ experience in health care at Evangelical Health Systems and more before that in pharmaceuticals. But something else gave him the edge. Dean stands out “as an unconventional leader in a staid, grave industry,” a 2013 profile in Fortune declared, based on such recent glimpses into Dean’s leadership style as follows:

• Energetic and Positive. Coworkers know Dean’s early arrival every morning at work by his bellowing laugh as he exits the elevators.

• Eyes and Ears. Dean will sometimes show up in sweats and sunglasses to hang in the lobbies of his hospitals so he can check on 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 members realize they should read “Just Thinking” as “Just Fix It.”

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

• Authentic and Sincere. Kathleen , the former U.S. Secretary of Health and Human Services under President , noted that unlike most health care CEOs with whom she consulted, Dean never 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 of fairness and integrity precedes him and affords him more credibility with elected officials “than [with] almost any other corporate executive,” says Willie Brown, former mayor of San Francisco.

• Balance and Tact. Fortune praised Dean for his poise and diplomacy in balancing religiosity and secularity, quite a feat considering 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 school teacher. Successful educators tend to have three key attributes. One, you have to be able to listen. Two, be able to take complex principles and ideas and put them in a

language that people will understand. Three, motivate and create the desire in individuals to learn—to get them to focus together on a common project. It’s the same in business. It’s what a CEO does.95 Personal Values Dean’s engagement with his current job runs deep, he explains. I’d always asked myself, how can I use the opportunity I have, the gifts I’ve been given, to have an impact on the kinds of communities that I came from? And I began to realize that in health care, faith-based organizations were really focused on the poor and most vulnerable. As someone who grew up in a religious family, and also wanted to help those communities, that really resonated with me. . . . I love health care. What greater opportunity do you have to impact large numbers of people? To help people really sustain life, or change the path that they’re on in a positive way?96

A Historic Challenge Leadership style and substance came to the forefront in 2000, when Catholic Healthcare West (CHW) recruited Dean to save their system. CHW was in crisis and was close to insolvent. Back then, CHW was a collection of dozens of religious and community hospitals and care facilities. It had all started in 1986, when two congregations of the Sisters of Mercy joined their 10 hospitals together. The goal was to use aggregated size to better serve the community. Soon other hospitals were added, Catholic, Lutheran, Methodist, nondenominational, and governmental in nature. CHW had hoped to improve operating efficiencies through amalgamated size for more clout in dealing with vendors to control costs. It grew in two ways: vertically by acquiring physician networks and horizontally by acquiring hospitals. Specific Challenges at CHW: A Weak Empire James C. Robinson and Sandra  studied CHW’s transition in detail. They argue that Dean arrived to find a business that enjoyed few of the benefits and many disadvantages of its size. The situation was dire. CHW had been losing a million dollars a day for the last three years. 97

The specifics aren’t pretty. CHW had:

• Suffered severe losses from conglomerate overexpansion.

• Placed its most prominent and often multiple facilities in Los Angeles, Sacramento, and San Francisco, where competition and utilization were at national lows.

Bet on centralized billing, purchasing, and information technology (IT) at the corporate level with poor results.

• Tracked financial performance at the regional level, allowing management to overlook operational shortfalls when covered by investment earnings.

• Developed little understanding of the incremental revenues and costs attributable to each site and service.

• Acquired hospitals with independent community boards and medical staffs, hampering economies of scale.

• Failed to resolve conflicts between centralized corporate authority and local facilities that retained autonomous control over spending.

• Never achieved the potential benefit of consolidating its financial assets (because of local autonomy) to use surpluses in established markets to invest in communities with more potential growth. Robinson and  called CHW of that time “a weak empire of strong principalities, a holding company whose distinct businesses hoarded any profit and clamored for 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 it existed when Dean took the helm. Drive your recommendations from the specifics above. Use what you learned about Dean from the case and leadership styles in the chapter to inform your recommendations.

Apply the 3-Stop Problem



Jul 22 2020 View more View Less

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