Unconventional Leadership

by Nancy M Schlichting

  Chapter 2: Learn to Turn It Around

  Before I got the call to join HFHS, I considered accepting an opportunity at a premier children’s hospital in Seattle. It boasted an all-female board; the business was growing; and it was a well-funded institution. HFHS presented a dramatically different picture. In 1997, prior to my arrival, HFHS lost money and was draining cash at an alarming rate; there was no growth; and employees and physicians were demoralized. The organization was in the grips of a crisis while the surrounding community of Detroit was experiencing economic instability and massive population decline.

  Given the two paths, I chose Detroit. I gravitate toward big, challenging, complex problems, because they present an opportunity to create positive change.

  This chapter examines the art of the turnaround. In particular, it explores the reality of turnarounds in tough markets and industries. I have led four organizations safely through turnaround situations, and while HFHS is the best known, each one has been a case study that shows what happens when you put people and quality above all else, which unites teams around better ways of working together. In examining how my own unconventional leadership intersects with transformation, I will describe each of these cases and the tools I have used to succeed.

  Chapter 3: Use Quality to Achieve High Performance: The Baldrige Framework

  One of my greatest moments as an unconventional leader came in 2011 when HFHS won the coveted Malcolm Baldrige National Quality Award, the nation’s highest presidential recognition for innovation, improvement, and visionary leadership. I got the phone call when I was at home on the morning of my fifty-seventh birthday, and in that instant it felt like we had just won an Oscar.

  I tell the story of our Baldrige journey for two reasons. First, the account itself is inspiring. It took us seven years to prevail and no one thought we had any real shot at the prize when we applied, during the dark days of the 2008–09 recession and while we were grappling with sharp spikes in uncompensated care. I will talk about what put us over the top to win. Second, the journey itself was instructional and transformational in terms of thinking and doing things differently. In health care, we sometimes pull off the most miraculous surgeries only to destroy the customer experience with poor valet parking, an insensitive manner of communicating, or cold coffee. Every interaction in health care counts. I will describe how our efforts became the basis for improvement and best-in-class innovation across the board, and I’ll show that these efforts can be applied anywhere.

  Chapter 4: Find the Disruptors in Your Organization—and Listen to Them

  At HFHS, I have made a practice of recognizing the disruptive people across the organization—and supporting them. These are the people who have the ideas that will drive change. I have seen it time and again. One such disruptor (our chair of surgery, Dr. Scott Dulchavsky, who also works with NASA) proposed installing public health kiosks inside churches all across Detroit. It was a fairly radical idea—and yet these kiosks have been enormously successful in helping members of the community learn about health and wellness and in expanding our understanding of community needs in Detroit.

  Another visionary disruptor partnered with me in creating a $360-million hospital designed to serve as a community center for health and wellness, and that looks and feels like a luxury hotel, complete with gourmet cuisine and a unique retail complex. This, the first Henry Ford Health System hospital built since 1915, was complicated to execute and was initially criticized by some of the media and some competitors, but it has been extremely successful. Now we use its hospitality strategy as a model for all our hospitals, and it has been copied by hospitals around the world.

  I will describe many other ways we’ve innovated, and will explain how and why innovation has changed the game for us. The bottom line is that we’ve expressly made it a part of the core fabric of our organization in order to counteract the debilitating pressures and inertia that come with day-to-day business. I self-identify as a leader of positive change, and I will show how to create a culture where innovation is a driver of growth.

  Chapter 5: Make a Large Company Feel Small

  The early years of Ford Motor Company illustrate one of Henry Ford’s greatest priorities—to attract outstanding people. He hired a cadre of individuals who shared his vision and would make the company into one of the world’s best. I myself began my career in health care directly out of college as a minimum-wage worker, and held a number of jobs between nurse aide and chief executive. The universal lesson I learned from each position is that every individual in an organization matters and all employees need to be engaged in a common vision. I like to say that we treat surgeons just like housekeepers—with great dignity and respect. None of the twenty-three thousand jobs at HFHS is easy, but my mission has been to create an environment where people can bring their best. As the late Maya Angelou said so beautifully: “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”1 I will describe how I put that idea into practice as an unconventional leader.

  Chapter 6: Being Different: The Strength of Diversity

  Picking up where I left off in chapter 5, I will transition to a related subject—thinking differently about people. Like many CEOs, I have seen firsthand that diverse teams are a staple of innovation and serve as a lever for creating a high-performance workplace. In addition, ample academic evidence shows that diversity is good for the bottom line.2 Rather than elaborating on that well-established argument, I will focus on my own simple talent philosophy: first, solving complex problems requires bringing together many different types of people. Health care is a complex field, and yet it is not especially diverse in the executive ranks. I’ve tried to change that. Second, whether you are recruiting internally or externally, it is essential to take risks. Hiring people with nontraditional backgrounds and unusual experience pays dividends almost every time—I will talk about unorthodox hires for key positions that worked specifically because they disrupted the norm. I will also explain how I used this same talent philosophy to find and recruit the person who will succeed me.

  I will also discuss my own experiences as a gay woman in business, including being anonymously outed and passed over for promotion expressly because of my sexual orientation. Being out in the open for twenty-five years has made me a better leader, intent upon fostering a safe and comfortable environment where people can bring their unique gifts and true selves to work each day.

  Chapter 7: Detroit: Partner for Renewal

  Over the course of more than a decade leading HFHS, I can attest to one thing, which remains constant even as all else around us is engulfed in change: we are defined by the community we serve. As such, we have a dual responsibility to serve and improve that community. Just as Henry Ford introduced higher wages that stabilized his workforce and gave workers the ability to buy the very cars they made, we have a business and moral imperative to be a resource and partner for the people of Detroit.

  The reality we have faced during my tenure as chief executive is a city marked by deep decline and desperate poverty—a situation we work every day to help turn around. In this chapter I will examine Detroit in crisis and our struggle to expand and to attract top talent to America’s most impoverished metropolitan area in the midst of the 2013 municipal bankruptcy. I will talk about the city’s amazing history and immense challenges—from the founding of Ford Motor Company in 1903 and the city’s heyday as the automotive capital of the world, to the race riots, crippling population decline, urban decay, and a debilitating crime surge. I will also talk about the many hopeful steps along the path to future community renewal and economic recovery. Finally, I will highlight the many personal lessons I learned as a leader during Detroit’s time of crisis and the ongoing attempts at renewal.

  Chapter 8: Face the Future

  Chapter 8 explores how Detroit’s future, the evolution of health care, and my own future all dovetail. For me, one of the rewardin
g things about being in health care for so many years is recognizing progress in many areas, including patient centeredness and improved patient safety in the U.S. And yet, we have a long way to go to create affordable care, create effective access to care for all Americans, attain Six Sigma levels of health care quality, eliminate health disparities for many groups of patients, and increase funding for medical research. I will shine a light on mergers in health care and health-care reform, naming my own successor, and the ways that we can do things differently in order to move the needle. I will also describe my unconventional perspective on succession planning and how I see things playing out for me in the future.

  It is my hope that the stories in the chapters that follow will be inspirational for women and men who aspire to lead, and of interest to CEOs who have asked how HFHS won the Baldrige National Quality Award for performance excellence. However, more than anything, I hope that all readers will find the advice useful in confronting their challenges and in their search to find their own unconventional paths to change and success.

  CHAPTER ONE

  Risk Rejection and Be Bold in Your Career

  Leadership is exciting because it brings with it so many surprises and curves in the road. As with any extreme sport such as rock climbing or surfing, you need to be mentally equipped to lean into the highs and lows. And it is not just high-level leadership that delivers a dose of personal risk. Simply stepping up to accept greater responsibility, for any of us, requires a degree of confidence and courage.

  In one of my first jobs after finishing graduate school and a fellowship, I was the associate director of planning at Akron City Hospital, a teaching hospital in Akron, Ohio. It was the perfect opportunity for me because the position allowed me to interact with a number of different leaders within the hospital and to learn about the entire hospital operation. What I saw was a mixed bag: the organization was filled with smart, accomplished people brimming with ideas and idealism, and they did important work in the community. But I also saw waste, inefficiency, and a lack of communication as well as an absence of risk taking. There were many departmental silos, an absence of cross-functional teams, and too many people looking to the top for all of the answers.

  Then something unexpected happened. The chief operating officer position opened up, and one of my strongest internal supporters urged me to apply. The idea seemed absurd to me at first but the encouragement I received from this seasoned executive made me think. I realized that in this role I could make more of a difference at the hospital, and the possibility lit a fire under me. With a level of confidence and self-determination that surprised me, I wrote a letter to the CEO outlining my strategic vision and making the case for why we would make an excellent team. After a week with no response, I wondered if my bold move would prove to be career limiting! At last, the CEO called me in. We talked for hours about how we could create exciting plans for the hospital. To the shock and surprise of virtually everyone on the leadership team, I was hired, and I found myself managing my former boss and a slew of other excellent people who had decades more experience than I did. That experience launched my journey as a leader and taught me my most valuable career lesson to date: when it comes to becoming a leader, courage is one of the very best levers for personal success.

  Before outlining my leadership philosophy, informed by Henry Ford and my experiences in Detroit, I will talk about how I came to be an unconventional leader. The path I took is relevant for a number of reasons. First, I hope that it will provide inspiration to younger leaders. Often, the people I meet ask how I came to lead a 23,000-person organization and manage a number of turnarounds. They, and others, are hungry for diverse role models, and I hope that I can offer something that fires them up to lead. Next, I have been a student of leadership for as long as I can remember, and the trends and takeaways from my career translate into practical advice for anyone who aspires to lead. Finally, I look at the important and valuable Lean In movement that Sheryl Sandberg has pioneered and I see that every person’s path to success is vastly different. I have leaned in for nearly all of my life, but I recognize that not all people have the same outlook and objectives that I do. Yet, leadership reaches far beyond business and into communities, schools, churches, homes, and families. I hope that the model I have set as an unconventional leader shows people in all walks of life that leadership is everywhere. It is everyone’s job to lean into it in some way, shape, or form. Let me begin by telling you how I have done it.

  First, the Facts

  My career in health care began when I was a teenage volunteer working at Akron City Hospital in Ohio. I wanted hands-on experience, and Akron was the only hospital in the area that allowed fifteen-year-olds to volunteer. Right off the bat I tested the boundaries of what student volunteers were usually permitted to do. I was assigned to the surgical suite with the doctors and nurses, assisted in the recovery room, and provided information to families in the waiting area. The director of volunteers was my advocate at the time, in part, she said, because she saw something distinctive in me—perhaps I was more mature than some other kids my age and I was certainly more focused than most. But the real differentiator was that I stepped up and asked for more responsibility than my peers. I had been waiting for years—since my mom’s illness when I was nine—to get into a hospital and really learn. Being proactive gave me a head start that advanced my career.

  Right after college, I worked in radiation therapy at the Duke University Comprehensive Cancer Center. I still remember the names of many of the patients we cared for, and the experience forged and framed the way I think about the idea of courage. I saw how patients persevered to conquer their fears and also how they helped one another cope with uncertainty. More than anything, working with cancer patients renewed my appreciation for life and reinforced my belief in the human spirit. If these patients could look death in the face and continue to fight, and even support one another, then I should be able to proceed full speed through my life and career without being blocked or stopped by trepidation or uncertainty.

  I was there for a year before starting in the MBA program at Cornell. I was fortunate (and somewhat amazed) when I was later selected to do my administrative residency in New York at Memorial Sloan Kettering Cancer Center. I was born in New York City, so it felt a little bit like home to me. Within two weeks of starting, at age twenty-three, I became the on-call administrator for nights and weekends. It was a bit frightening, but also thrilling, to step up and be handed that level of responsibility. More than just courage and a steady hand, success in the position required a lot of training and support. A number of the people I worked with there, many of whom mentored me, are still my good friends. From there, following graduate school, I went to Chicago as a fellow for the American Hospital Association and the Blue Cross and Blue Shield Association. I worked with the CEOs of both organizations and gained a unique grounding in national public policy and the differences between the delivery system side and the insurance side of health care. The experience fueled my interest in problem-solving innovation, and since that time I have gravitated toward places that had a stake in both the delivery and financing of health care. That fellowship also gave me my first experience reporting to two chief executives and an understanding of the politics of management.

  It was during my fellowship in Chicago that I met Gail Warden, who was the COO of the AHA and later president and chief executive officer of Henry Ford Health System from 1988 to 2003. Gail, who became my longtime sponsor and advocate, took an interest in me and after my fellowship suggested that I go back to Akron City Hospital to work for Al Gilbert who was a classmate of Gail’s at University of Michigan. He believed Al would be an excellent mentor to me—and he was absolutely correct. With that, I returned to the place that gave me my start at age fifteen. It was in Akron that I learned to promote myself at the risk of rejection. Hired as assistant director of operations (serving one year) and then associate director of planning (serving two years), I took a flye
r and applied for the COO job. I wrote Al Gilbert to make my case, and that letter, with its compelling message, earned me the job.

  It was an incredible leap of faith by Al—an act of courage on his part that I will never forget.

  There were numerous firsts for me in Akron over a period of five years: my first critical turnaround situation; my first major cost-reduction initiative; my first chief operating officer role. It was also the first time I needed to scramble to change minds and secure support from a broad group of leaders within the organization.

  When I went on to Riverside Methodist Hospital in 1988, when I was in my early thirties, I was a little more seasoned and a lot more grounded in professional experiences and crisis management. Riverside Methodist, located in Columbus, Ohio, was part of a system of hospitals, and I was recruited as chief operating officer of a one thousand-bed teaching institution that employed six thousand people. I was later promoted to president and then CEO. I was there for eight years, with never a dull moment. Riverside Methodist represented my second financial turnaround, but this hospital was financially stable and located in a city that, unlike Akron, was a growth market. Even as we drastically cut costs, we did a lot of major construction to grow the hospital. All the while, I grappled with extreme corporate politics, personal life challenges, and dramatic lessons about organizational culture.