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Chapter 14: Strategic Leadership

Strategic Healthcare Management: Planning and Execution

by Stephen L. Walston

Learning Objectives

Understand that strategic leadership is a combination of strategic thinking and strategic management.

Learn the components of strategic thinking.

Comprehend how refusal to question assumptions can cause severe organizational problems.

Realize the importance of feedback to strategic thinking.

Know how strategic management must allocate resources for today’s mission and tomorrow’s vision.

Be familiar with the components of strategic management.

Recognize the level of engagement and decision making leaders need to achieve to manage strategically.

Strategic Leadership

“[T]he ability to influence others to voluntarily make day-to-day decisions that enhance the long-term viability of the organization, while at the same time maintaining its short-term financial stability.”

—Rowe (2001, 85)

“Rare is the business leader who can articulate and instill a long-term vision and manage the day-to-day operations with the requisite obsession for detail.”

—Rowe and Nejad (2009)

Components of Strategic Leadership

Strategic Management

Strategic Thinking

Strategic Leadership

Strategic Thinking

Involves collecting, collating, and assembling disparate pieces of information to make decisions

Defined as distinctive management activities “whose purpose is to discover novel, imaginative strategies which can rewrite the rules of the competitive game; and to envision potential futures significantly different from the present” (Goldman 2007).

Leaders May Fail to Recognize The Changing Environment

Executives may be good managers, but past success can make them myopic to change.

Many leaders have difficulty adopting a new perspective of the world and new assumptions, especially when old assumptions have served them well.

Across history, leaders have made critical errors by clinging to outdated assumptions. During the American Revolutionary War, for example, many British leaders made poor assumptions regarding the ability of those living in their North American colonies to wage war.

Leader Don’ts

Don’t say things like, “Since I am the boss….”

Don’t think you have to always be right.

Don’t establish unmoving positions and refuse to listen to others.

Don’t show anger or grow red in the face if someone challenges your view.

Don’t categorize those who disagree with you as a fool or a knave.

Those who do these things destroy an organization no matter how talented or brilliant they are (Rein 2010).

Example: our Assumptions about old and young workers are wrong

Exhibit 14.2

Hubris

Leaders can allow their past successes to cloud their judgment and induce hubris, excessive pride, and arrogance.

Hubris often causes leaders to ignore other perspectives and sometimes even to denigrate the opposition.

Hubris also can develop when leaders isolate themselves from new knowledge and outside thinking.

Feedback

Too often leaders surround themselves with like-minded individuals or create an environment in which honest feedback is lacking.

Machiavelli stated that a prince (leader) should always be a greater asker and a patient hearer of the truth but should be most angry if he finds that one has scruples about telling him the truth.

Strategic thinkers must break through these barriers and open the feedback and learning loops to increase the flow of new knowledge and understanding.

Encourage Strategic Thinking

Leaders can engage in the following activities (Goldman et al. 2009; Rein 2010):

Create personal development plans for key employees. Needed core competencies should be identified and built. Career paths should be mapped.

Maintain a focus on continuing education for all employees. Educational offerings should include university degrees, certifications, on- and off-site training, and conferences.

Develop mentoring programs for new and newly promoted employees.

Establish ground rules for meetings that encourage open conversation and honest feedback.

Rotate personnel into different job functions. Allow different people to engage in strategic planning, task forces, and initiatives.

Network with outside professional organizations and peers within the same industry and in other industries.

Constantly question and examine one’s own opinions and assumptions.

Surround themselves with people who look at the world differently than they do.

Be concerned with ideas, ethics, and values and how they are communicated to and lived by all personnel.

Base decisions on organizational values and ethics.

EXAMPLE: TEXAS HEALTH RESOURCES

The organization selected six core leadership behaviors that all executives should emulate:

1. Values-based leadership

2. Focus on excellence

3. Action orientation

4. Managerial courage

5. Visionary thinking

6. Sound decision making

Strategic Management

Involves building and allocating resources both to meet the needs of today and to fulfill the vision of the future

Allocates resources to encourage, create, and maintain competencies and behaviors to exact both short- and long-term success

A Leader Practicing Strategic Management

Allocates resources appropriately, efficiently, and effectively to fulfill today’s mission and tomorrow’s vision

Identifies and develops key organizational competencies to meet the organization’s mission and vision

Organizes time appropriately to allow adequate consultation and timely decision making in both formal and informal settings

Engages top executives throughout the strategic process

Manages meetings effectively

Leads from the front; is actively involved in leading the change

Chapter Questions

What is the relationship between strategic thinking and strategic management? How do they complement each other? How do they contrast?

Why might it be difficult to possess both strategic thinking and strategic management skills?

How do learning and innovation encourage strategic thinking?

What is the relationship between an organization’s mission and vision and strategic thinking and strategic management?

As environments change, why must assumptions behind decisions likewise change?

How can hubris impede strategic thinking?

How does feedback improve strategic thinking?

What might be some of the core competencies leaders need to practice strategic management?

How is meeting/committee management a core function of strategic management?

Why is it necessary for a leader to be involved in all phases of strategic planning?

Chapter Case

Read the case “Halburt Hospital Need for Change.”

Review the questions that follow the case.

Chapter Assignment

1. Write a two-page paper describing the differences and interactions between strategic thinking and strategic management. Address why many leaders often fail to think strategically. Include experiences you have had with leaders for whom you have worked.

2. Interview a healthcare leader. Ask him/her what the leader of an organization can do to encourage learning and innovation. Find out how the organization’s executives encourage strategic thinking throughout the organization. Ask how involved executives are in strategic planning.