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Chapter 9: Leading the Healthcare Supply Chain

Learning Objectives

Describe the concepts, theories and models of leadership in the context of the healthcare supply chain.

Discuss leadership principles and how to implement those principles in leading healthcare supply chain operations.

Relate, discuss and provide areas of integration between the Transformational Leadership Model and the Dynamic Culture Leadership Model.

Distinguish the differences between two or more leadership models.

Merge principles of leadership to develop a personal leadership framework for leading the healthcare supply chain team.

Evaluate the benefits and limitations of three leadership models within a healthcare supply chain context.

Introduction

Leadership theory serves as the basis for understanding the actions of leaders.

Throughout the course of this chapter we will look at several prominent leadership theories and models.

Some of these models are standalone and work to explain industry phenomenon and others are designed to be integrated into a personal leadership model.

It is important to note that while some theories are more applicable in certain situations, there is no one “best” theory.

In some cases, it may even be appropriate to use parts of one theory, called constructs, with the constructs from another.

Motivation and Inspiration

Motivation is all about getting a person to start and persist on a task or project.

Inspiration is the emotive feeling of value a person experiences while performing a worthy task or project.

Leaders use motivation and inspiration to influence subordinate actions.

Inspirational motivation in health organizations can be achieved when the leader passionately believes in the vision and is able to motivate others through this passion.

Ethics and morality play a key role in motivating others as well; collectively, they represent a crucial characteristic for a leader to possess.

To gain widespread support, the organization must demonstrate the sincerity of its mission and stay true to the values it supports as an organization.

Locus of Control

To understand where or how people are motivated and inspired, it is important to recognize each person’s perspective on influence.

People with a strong internal locus of control (a belief that they control their own destiny and success) orientation believe that events in their lives are determined more by their own actions than by chance or uncontrollable forces (leaders and managers tend to be “internals”).

In contrast, people with a strong external control orientation believe that events are determined mostly by chance or fate and that they can do little to improve their lives.

As a health leader, it is important to understand those people you lead—specifically, to understand which subordinates are more internally oriented and which are more externally oriented.

Group Affiliation

Schutz’s theory of affiliation suggests that individuals form groups in response to three kinds of needs:

Inclusion need: need to be included

Control need: need for status and power

Affection need: need to give and receive warmth and closeness

These needs are cyclical; groups pass through observable phases of inclusion, control, and affection.

Group Affiliation

When a leader balances a subordinate’s need for inclusion with his or her needs for control and affection within a group environment, the seeds of a powerful organizational or group culture are planted.

In a study published in the research literature in 2007, charismatic leadership attributes used by leaders positively contributed to social identification processes and to social identity applied to the workplace.

This suggests that leaders can positively influence group affiliation.

Goal Setting Theory: A Motivational Theory

The goal setting theory was originally developed by Edwin Locke and it is an effective motivational and inspirational leadership approach.

Goals are the aim of an action or behavior.

Individuals must commit to set goals to produce results; the more difficult (challenging yet reasonable) the goal, the better the individual will perform.

Individuals need leadership support (feedback, reward mechanisms, and required resources [time, training, and material goods]) to maximize performance when applying goal setting.

Goal-setting theories provide specific explanations for why people are motivated.

Difficult, specific, and mutually developed goals will assist individuals in being motivated.

Goal Setting Theory: A Motivational Theory Disadvantages

Leaders should be cognizant of risks of goal setting, which include excessive risk taking, and excessive competitiveness.

Indeed, goal failure can reduce subordinate confidence and create unwanted stress.

Although goal setting is extremely useful, many individuals are motivated more by climate [current atmosphere or ‘feeling’ of the workplace; an easily changed phenomenon], culture, and affiliation.

Interpersonal Relationships

For health leaders (or any other leaders, for that matter), interpersonal relationships are required, are beneficial, and enhance leadership capability and success.

If honesty, inclusion, and sincerity (the building blocks of trust) are the basis of your quality communication, and if that communication is culturally competent, then you can maintain your role while building relationships.

A health organization leader should establish, enhance, and grow relationships with a myriad of organizational stakeholders both internal and external to the organization.

There is no better method to build relationships than going to visit people in their own environment or location; this kind of “management by walking around” is a powerful approach.

Factors to Strengthen Relationships: Communication

A relationship encompasses the feelings, roles, norms, status, and trust that both affect and reflect the quality of communication between members of a group.

Communicating with someone in a manner that provides both content and positive relationship information is important.

Language, tone, and nonverbal communication all work together to provide communicative meaning that is interpreted by another person.

People believe nonverbal communication more than verbal communication.

People communicate emotions primarily through nonverbal communication.

Factors to Strengthen Relationships: Disclosure

Disclosure relates to the type of information you and the other person in the relationship share with each other; disclosure is one factor that can help you “measure” or evaluate the depth and breadth of a relationship.

Disclosure or self-disclosure is strongly and positively correlated with trust; that is, more trust means more disclosure.

Factors to Strengthen Relationships: Trust

Trust is built and earned over time through honest interaction (communication and experiences).

It is an essential component of a quality, positive relationship.

Honesty, inclusion and sincerity are directly linked to building trust.

Honesty means being truthful and open concerning important pieces of information that you share with another person.

Inclusion entails including the other person in the relationship in activities and experiences that are important to the other person, to you, and to both of you.

Sincerity is meaning what you say, meaning what you do, and not keeping record or account of the relationship (not keeping score).

Factors to Strengthen Relationships: Cultural Competence

Every stakeholder group, and every individual, has a varying culture of uniqueness.

Understanding those cultural issues—“walking a mile in someone else’s shoes”—is a factor important to building solid interpersonal relationships.

Understanding and modifying your approach to relationship building and enhancement based on cultural differences will serve you well in leadership positions.

Communication and Culture

The preference for oral communication may be difficult for health leaders to enact, but nonetheless important.

Although verbal communication may be time consuming, given employees’, and the public’s, need for such communication, it is a very valuable tool that is essential to achieve success.

Communication contributes tremendously to the culture and climate of the health organization.

A response—feedback—is an essential aspect of the communication process.

Obstacles to communication, called noise, either in the channel or in the mind of the receiver, may contribute to an inaccurate understanding of the intended message.

Communication is the main catalyst behind the motivation efforts and strategies utilized by leaders.

Media Richness Theory

The Media Richness Theory explains and predicts why certain types of technologies, called media channels or media, are effective (or not effective) in communication efforts.

This theory is important to health leaders, in that selecting the appropriate communication media channel, such as a face-to-face meeting, a telephone call, or an email, can predict the likelihood of successful communication to others, such as superiors, subordinates, and peers.

This theory indicates that ambiguous or potentially ambiguous messages should be sent with richer media to reduce the level of potential (or actual) misunderstanding.

Media Richness Theory: Ambiguity Vs. Uncertainty

Ambiguity—also called equivocality—is based on the ability of the receiver, in this context, to ask questions.

In other words, does the receiver know which questions to ask and how to get started?

Different from ambiguity is uncertainty, although these two constructs complement each other.

Uncertainty is “having the question answered” and having the appropriate information to proceed with an action, task, or project.

Uncertainty is a measure of the organization’s ignorance of a value for a variable in the [information] space; equivocality is a measure of the organization’s ignorance of whether a variable exists in the [information] space.

Media Richness Theory

It is vital for leaders to reduce ambiguity and uncertainty to the greatest extent possible.

The richer the media utilized, the greater the chance of leader communication success, the greater the chance of reducing ambiguity, and the greater the chance of reducing uncertainty.

Unfortunately, richer media, such as face-to-face communication, cost more in terms of resources (e.g., time, travel, meeting space) than less rich media.

Figure 9-1

Media Richness Theory

Health leaders will be more effective if they master the basics of the media richness theory. Following are some important points to reflect on for leadership success:

Select media channels to reduce ambiguity.

Select media channels to reduce uncertainty.

The more complex the issues, the more group members like face-to-face meetings.

Computer-mediated communication (CMC) deals more with tasks but less with group relationships.

CMC may increase polarization.

CMC works best with linear, structured tasks.

CMC increases individual “information processing” requirements.

People with technological skills gain more power in CMC group communication.

More cliques and coalitions form with CMC than with face-to-face communication.

Burns’s Transformational Leadership Model (1978)

Two of the more recent theories of leadership discussed a great deal are transactional and transformational leadership theories.

Transactional leadership was first described by Max Weber in 1947 and was resurfaced in 1981 by Benjamin Bass, who hypothesized that transactional leaders believe workers are motivated by rewards.

The transformational leadership model is a situation-influenced theory that suggests the situation influences the leader to adapt a style most fitting to the specific circumstances at hand.

In practice, a combination of these approaches is the most practical leadership strategy to undertake in health organizations.

Burns’s Transformational Leadership Model (1978)

James MacGregor Burns, who, around 1978, distinguished between transactional and transformational leadership styles.

Burns believed the transactional leader lived in keeping with certain values, such as fairness, responsibility, and integrity.

Transformational leadership is sometimes viewed as the opposite end of the pole from transactional leadership, though in reality that perception is inaccurate.

Transformational leaders are charismatic; they have vision, empathy, self-assurance, commitment, and the ability to assure others of their own competence; and they are willing to take risks.

Burns’s Transformational Leadership Model (1978)

Burns (1978) described leadership as “a stream of evolving interrelationships in which leaders are continuously evoking motivational responses from followers and modifying their behavior as they meet responsiveness or resistance, in a ceaseless process of flow and counter-flow.”

Building on Burns’s work, Bernard Bass argued that rather than the two leadership styles being polar opposites, there was a linear progression from transactional to transformational leadership.

According to Bass, transformational leadership must be grounded in moral foundations that include inspirational motivation, individualized consideration, intellectual stimulation, and idealized influence.

Burns’s Transformational Leadership Model (1978)

From this discourse, Bass (1985) proposed a theory of transformational leadership that is measured in terms of the leader’s influence on subordinates or followers.

Subordinates or followers “connect” to the transformational leader through trust, admiration, a sense of loyalty, and respect for the leader.

Transformational leaders, in turn, create an environment that propels subordinates and followers to greater performance and greater deed than previously expected, in three ways:

(1) by making followers aware of the importance of their performance and task outcomes;

(2) by replacing their own self-interest with the good of the group, team, and organization; and

(3) by energizing and motivating followers’ higher-order needs

Transformational Leadership Four Constructs

Charisma: The leader influences followers by arousing strong emotions and identification with the leader.

Intellectual stimulation: The leader increases follower awareness of problems and influences followers to view problems from a new perspective.

Individualized consideration: The leader provides support, encouragement, and developmental experiences for followers.

Inspirational motivation: The leader communicates an appealing vision using symbols to focus subordinate effort and to model appropriate behavior (role modeling; Bandera’s social learning theory).

Multi-factor Leadership Questionnaire (MLQ)

Transformational leadership can be measured by an instrument called the Multi-factor Leadership Questionnaire (MLQ).

Using this tool, global attributes, specific traits, and combinations of assessments have been applied to validate forecasts of retrospective and concurrent transformational leadership through measurement.

Transactional Behaviors

Contingent reward: clarification of work required to obtain rewards.

Active management by exception: monitoring subordinates and corrective action to ensure that the work is effectively accomplished.

Passive management by exception: use of contingent punishments and other corrective action in response to obvious deviations from acceptable performance standards.

Leadership As Managing Organizational Culture

There is a growing trend to incorporate organizational culture into leadership theories and models.

Leaders build culture in everything they do—from role modeling, to assigning responsibilities, to communicating with others, including how they communicate and what they do not do or do not say.

Models with an organizational culture emphasis require leaders to determine, develop, and maintain an organizational culture that can best meet the expectations—if not thrive—in the external environment.

This perspective envisions a more important and dramatic role for organizational culture as a construct—a leadership role—compared to that assigned under the situational leadership philosophy.

Leaders must now create culture!

The Dynamic Culture Leadership (DCL) Model

Leadership in this model is recognized at three levels as the critical ingredient in the recipe for overall success: at the personal level, at the team level, and at the organizational level.

The challenge is to focus the knowledge, skills, and abilities of organizational leaders appropriately and to empower the total organization to complete its mission, reach its vision, and compete successfully in an environment that constantly changes.

This model is intended to fit within the situational and transformational leadership paradigm with an emphasis on organizational culture development.

DCL Basic Assumptions

Due to the very dynamic nature of the environment (in this case, the health industry), it is critical for the leadership and management team to bring multiple knowledge, skills, abilities, perspectives, and backgrounds (DCL leadership alignment assessment) to the organization to enable it to successfully and proactively navigate the external environment and focus the internal people and resources on the mission, vision, strategies, goals, and objectives of the organization.

DCL Basic Assumptions

Leadership is defined as the ability to assess, develop, maintain, and change the organizational culture to optimally meet the needs and expectations of the external environment through focusing the collective energy of the organization on the mission, vision, strategies, goals, and objectives of the organization.

The leadership and management team should consciously determine the culture of the organization and guide and direct culture through communication improvement, organization-wide strategic planning, decision-making alignment, employee assessment and empowerment, and knowledge management and organizational learning (process constructs).

DCL Basic Assumptions

Based on the predetermined organizational culture, mission, vision, and strategies, consistency of leadership and management are paramount.

Situational and environmental assessment and scanning are key to adjusting organizational culture, mission, vision, and strategies.

Transformational leadership and management (including transactional leadership approaches), where both the science and art leadership and management are in concert with the external environment expectations, provide the best approach to lead people and manage resources in a dynamic world.

The Dynamic Culture Leadership Model

Optimized leadership is certainly attainable for any person and any organization, but it usually requires concentrated effort to overcome past habits, ideas, and tendencies.

Ultimately, individual leaders make up the leadership team.

Figure 9-2

Reproduced from Ledlow, G., & Cwiek, M. (2005, July). The process of leading: Assessment and comparison of leadership team style, operating climate, and expectation of the external environment. Proceedings of Global Business and Technology Association. Lisbon, Portugal.

Leadership Versus Management

The characteristics of “leadership” as compared to “management.”

Table 9-1

Science Versus Art

Table 9-2

DCL Leadership Process

Briefly, the DCL model incorporates both constructs and “process” constructs as part of the DCL system.

In essence, model constructs are primarily the descriptive model.

Figure 9-3

DCL Leadership Process

Leaders who regularly follow the sequence shown have the best potential to deal with change in their environment, while building a culture that will be effective even during times of change.

Members of the leadership team must be ever thoughtful in maintaining their consistency relative to the organizational mission, vision, strategies, goals, and values, but also in terms of the model’s constructs and pro

The overriding theme is that leadership envisions, develops, and maintains an organizational culture that works amid a dynamic environment.

A summary of model constructs and process constructs follows

Figure 9-4

DCL Model Constructs

Science of leadership includes all technical elements involved in leading and managing an organization, such as quantitative and qualitative analysis, decision-making assessments, finance and budgeting, job analysis and design, planning structures and processes, computer skills, and the like. Each process construct of the model has both science and art aspects; an integration of the two must be consistently used to ensure successful leadership of an organization.

Art of leadership includes the elements involved in interpersonal relationships, network building and maintenance, intuition, coalition development, and the like.

DCL Model Constructs

Technical competence, relationship building, emotional intelligence, morality and trust building, and environmental and situational analyses are required at sufficient levels (and should be at high levels) across the leadership and management team to successfully lead people and manage the resources of the health organization.

Congruent vision, mission, strategies, goals, and organizational values are essential so that a culture of consistency is developed throughout the organization. The leadership and management team must consciously assess the external environment (macro and micro factors) and predetermine these directional, competitive, adaptive, and cultural development strategies for the organization.

The external environment comprises all organizational stakeholders (anyone or any group that influences, serves, gets service, or is connected to the organization), the macro environmental factors, the micro environmental factors, and the synthesized set of expectations of the health organization.

DCL Model Process Constructs

Communication improvement is the leadership and management team engagement in predetermined modeling, training, rewarding, and assimilating of the communication environment into the organization in the means that best contributes to an effective organizational culture. In health organizations, a confirming and supportive communication environment that is cognizant of media richness of communication channels and competent in conflict management should be the most effective, efficient, and efficacious.

Strategic planning (includes operational planning) is the structured, inclusive process of planning to determine a mission, vision, strategies, goals, objectives, and action steps that are consistent with organizational values and that meet the external environment’s expectations of the organization. Subordinate, internal, and external stakeholders should be included, as appropriate to level and responsibilities, in the planning process. Continuous and “living” planning is a cultural imperative in dynamic environments.

DCL Model Process Constructs

Decision-making alignment involves aligning decisions with the strategic and operational plan while understanding reality-based decision making (i.e., pushing down decisions appropriately and using policies and standing operating procedures for routine and consistent decisions).

Employee enhancement is the assessment of employee knowledge, skills, abilities, experience, and trustworthiness and the practice of increasing or reducing responsibilities (such as making decisions) appropriate to the unit, group, and individual in line with the organizational culture as part of development and the strategic and operational plans.

DCL Model Process Constructs

Knowledge management and organizational learning involves capturing what the organization knows and what it has learned so that improvements to effectiveness, efficiency, and efficacy can be achieved. Leadership, willingness, planning, and training are facilitators of organizational learning.

Evaluating, reflecting, and retooling is the leadership and management team’s honest assessment of the DCL model cycle and ways to improve the cycle in the next repetition.

Busch, M., & Hostetter, C. (2009). Examining organizational learning for application in human service organizations. Administration in Social Work, 33(3), 297–318.

DCL Assessment Categorization

Leadership team assessment and alignment are important. This figure illustrates the leadership team assessment (Step 1 in DCL Process Figure) for 10 members of a hospital leadership team as it compares to the current operational environment and the expectations of the external environment.

Figure 9-3

DCL Assessment Categorization

There is a tension between what the leadership team tends to be (more leadership oriented with a reasonable science and art balance) and the more management and science emphasis in leadership demanded by the external environment; the operating environment can be found between that tension.

The external environment requirements, as perceived by the leadership team, are skewed toward management and science (the “analytical manager” quadrant).

The perception of leadership would lead one to believe that the external environment requires greater cost control, accountability, and adherence to policies and rules, although relationships are still important, as is some leadership focus.

An assessment that looks at leadership as a team, across organizational levels, operating environments, and external environment needs, is far better than simply relying on only individual leader assessments.

Comparison: Two Community-Based Hospitals

Two community hospital leadership teams were assessed using the DCL Leadership Alignment Assessment Tool.

The first hospital is a military community hospital in the Western United States and the other hospital is in the North Central/Midwest United States.

The two hospitals, with similar services and case mix indexes, are highlighted.

Table 9-3

Hospital Comparisons

When comparing the two hospitals, both Hospital A (Federal) and Hospital B (nonprofit) are skewed strongly towards “Leadership” and somewhat towards “Science.”

Hospital A is slightly higher on both areas than Hospital B.

There is a moderate amount of diversity in the area of “Art” and little in the “Management” area for both hospitals, with Hospital B having slightly higher scores.

Both hospitals leadership teams demonstrate the Analytical Leader, as compared to the Relationship Leader or Relationship Manger team composites.

The perceived operating environment for both Hospital A and Hospital B is fairly balanced. However, Hospital B is now slightly skewed towards “Art” and Hospital A towards “Science.”

Hospital Comparisons

The external environment requirements, as perceived by Hospital A, are skewed toward “Management” and “Science” (the Analytical Manger quadrant), and for Hospital B, slightly skewed toward “Leadership” and “Science” (analytical Leader).

For Hospital A, the perception is that the external environment requires greater cost control, accountability and adherence to policies and rules, whereas with Hospital B, there is a balanced focus on vision and decision making based on analysis.

Hospital Comparisons

When leadership style by organizational level is compared, there is much more propensity for “Leadership” than “Management” as you go down the organizational hierarchy. However, and most interestingly, Level 3 and Level 4 are balanced with a slight skew for “Art” and “Science” for both Hospital A and Hospital B. At this level of the organization, both scientist and artist are needed to deal with dynamic environments.

The DCL Leadership Alignment Assessment summaries and charts follow.

DCL Scores

Table 9-4

Table 9-5