Leading in a Multi-entity System, Part 2

Challenges and Concepts for the Local Hospital Leader

In a previous article, I discussed the rationale for, and challenges associated with, the formation of large, multi-entity systems, and suggested steps that system-level leaders might take to improve their success at realizing the potential of those systems.  In this article, I want to examine the challenges of one of the most critical, and difficult, roles in the formation and operation of a multi-entity system, the local entity leader. Standing between the expectations of the system and those of numerous local stakeholders, entity leaders can feel they face a no-win situation where one party or the other will feel dissatisfied and unsupported. Managing any disruptive change is tricky business. Managing change that advances the common good of the collective organization to the detriment of a part of the organization is especially fraught with leadership challenge.

There are no easy answers to this dilemma but here are a few thoughts for entity leaders that might be helpful to navigate the turbulence with greater success:

1. Embrace your role as a system leader. It is important that local entity leaders embrace their role as system leaders and consistently reflect it in their words and actions. Local stakeholders often want entity leaders to “fight” to protect their entity from change initiated at the system level. Local leaders must avoid this posture. It is equally important that local entity leaders not be seen as merely instruments to implement the system’s decisions without concern or regard for the local impact. Ideally, local entity leaders position themselves as system leaders who credibly act as the voice of the entity in system-level decisions to promote the long-term strength and stability of the entity’s mission through its relationship to the system.
2. Cultivate an understanding of and appreciation for “system-ness.” An entity that chooses to become part of multi-entity system presumably does so in the belief that the system strengthens its ability to sustain and advance its mission over the long term. Inevitably, though, being part of a larger system means, on occasion, subordinating local preference to support the strength of the whole. The more local leaders cultivate an understanding of the overall benefit of “system-ness” among key stakeholders, the more effectively they will navigate through decisions that do not advance the individual preference of the entity. This must be done actively and consistently, not defensively in the context of a controversial system-level decision. It is also helpful to personally engage system leaders in this dialogue as their presence can build familiarity and trust between them and the local stakeholders.
3. Build trust with your system colleagues as a credible, engaged and articulate voice for the local market. Being an effective system leader does not mean passively accepting and supporting system-level decisions regardless of their local impact. Nor does it mean fighting to “protect” the local entity, from system-level decisions which may have negative local consequences.Effective local leadership in a system context means supporting the decision-making process by providing an objective, articulate picture of the predicted impact within the local market to ensure the system-level decision is made with full benefit of that intelligence.  Local leaders must actively work to build strategic relationships with their system-level colleagues so there is a foundation of trust that feedback provided by the local leader is in support of what is best for the system and not to protect local interests or resist change.
4. Own system-level decisions/rationale as your own. Hard as it may be, once a system-level decision has been made local leaders must own that decision as their own, even if it is not the decision they would have made. Ideally, system-level decisions are made in a manner that addresses the local needs of all the affected entities and their stakeholders. Inevitably, though, there will be decisions that advance the overall organization at the expense of some entities. There will also be good faith differences of opinion over what is best for the whole. Hopefully, the leader has participated in the decision-making process and understands the rationale that led to the decision. Armed with this information, the local leader is equipped to address local stakeholders in a manner that will help promote their trust in that leader and with the system overall.

   It is critical that the leader resist the temptation to assuage the frustration of local stakeholders by assigning responsibility for the decision to the system. While this might help preserve relationships in the moment, over time it erodes the confidence and credibility of the local leader who is seen as powerless to shape important decisions.

   It is also critical that local leaders enthusiastically support decisions once made, and do all they can to assure successful implementation. Indifference, or a mindset of “compliance,” is not sufficient as it encourages resistance among employees and other local stakeholders. Following implementation of a decision, gather data to assess local impact against the metrics of success so that, if necessary, the system can modify its decision should the data indicate adjustments are in order.

5. Engage mid-level leaders to understand, own and translate the system vision, values and decisions. The task of building support among local employees and stakeholders cannot be done by the senior executives alone. Mid-level leaders play a vital role in developing support for “system-ness” among employees and stakeholders. Front line employees look to mid-level leaders to translate what they hear from senior leadership. Given that, it is important that mid-level leaders be given the opportunity to develop “ownership” of system-level decisions by engaging in dialogue to share and work through their concerns, and to promote understanding of the underlying rationale for system-level decisions.
6. Actively leverage “system-ness” to create local value. Delivering exceptional performance across a balanced scorecard becomes more challenging all the time. Being part of a multi-entity organization can provide local entity leaders with a whole new array of levers to pull as they seek to reduce costs, improve quality and advance other important performance metrics. Rather than waiting for change to be initiated by the system, local leaders should explore ways in which they might leverage their relationships within the system to create new value. The simplest way to do that is to adopt the posture of a learner, connecting with colleagues across the system to explore opportunities to improve the efficiency or reliability of key processes through adoption of best practices. There may also be opportunities to share costly human or other resources across sites to improve capacity utilization and reduce costs. In addition to creating measurable value, actively leveraging system resources helps break down local resistance by demonstrating in a tangible way the benefits of “system-ness.”

As organizations continue to evolve into large, multi-entity systems, it is critical that leaders at both the system and entity level become skillful at managing through the unique challenges of that environment. There are no easy answers. It requires careful attention and skillful leadership to build a foundation of trust, a shared vision, and a leadership team which is aligned and skillful at navigating disruptive change across the system. Executive coaches have extensive experience in the system setting and can help your leaders and teams develop those skills and realize the potential of “system-ness.”