Submitted to the Chairman - Essay Example

Executive Summary The major forces driving a paradigm shift are the ever0changing internal and external business environment and the advancement of information and communications technology. To remain competitive in any sector requires leaders who have the unique competency to cope with the changes at short notice. However, this can to be done with the long-term objectives in mind. The global financial crisis has created conditions where the leadership challenges have only compounded. During this time the leaders have to be bale to see what needs to be done, understand the forces at play and have the courage to take initiatives. The leaders have to be revolutionary and creative in their approaches. Informational learning through seminars and training programmes are no more effective. Transformative learning has to take place through experience with the challenges. The healthcare sector, even though like any other business, has its own unique challenges such as uncertainties, powerful professionals at play, high utilization of technology, shortage of professionals and inconsistent external demands. All of these challenges can be mitigated by developing leaders through transformative learning, with a focus on the strategic goals and a long-term perspective. Table of Contents 1.0 Introduction 1 1.1 Major forces driving the paradigm shift 1 1.2 Impacts of these forces on the healthcare industry 2 2. Leadership Challenges 2.1 Challenges caused by the GFC 3 2.1.1 Long-term perspective 3 2.1.2 Coping with the shortage of leaders 4 2.1.3 Transformative learning 5 2.1.4 Focus on the corporate vision 7 2.2 Challenges in the healthcare sector 8 2.2.1 Long-term focus 8 2.2.2 Coping with the shortage of leaders 9 2.2.3 Transformative learning 10 2.2.4 Focus on the corporate vision 11 3.0 Conclusion 11 References 13 Appendix 15 Report submitted to the Chairman 1.0 Introduction The Chairman returned from an industry leaders’ seminar with two major concerns – a paradigm shift from an Industrial Age to an Informational Age that is transforming what it means to be an effective leader, and new business models and leadership thinking and practices must emerge if businesses are to survive in the new environment as result of the GFC. These concerns have been addresses in the context of the healthcare industry. 1.1 Major forces driving the paradigm shift The leadership so far was meant for a world of slower change, limited information flow and clearer boundaries. With an accelerated pace of technological change and the proliferation of the internet, people today have a keenness to have a voice in the decision-making (Rosell, 2000). Globalization has led to better education systems which have awakened the consciousness of the people for better governance and leadership. Reflection has become a commonly adopted mode of finding innovative ways to deal with problems. The basic assumptions are eroding and today clear boundaries do not exist between groups, organizations and sectors. This is what Clawson means when he says that a new plant cannot be proposed by one department without considering the costs. People today have broader vision that they used to, which again is due to the changing pattern of education and the forces of globalization. People have shared goals and flatter organizational structures which reduces the time taken for arriving at decisions. The diversity of workforce and global networks has given rise to virtual teams across the globe. The external forces have to be scanned realistically by the senior leadership because remaining competitive and changing the strategy at short notice has become imperative (Mackenzie, 2007). Again, internal forces need to be paid attention to. A strong corporate culture with deeply embedded values may no longer support the ongoing and overlapping change required. Overall, the pace of technological change has accelerated rapidly while the leadership has been designed for a world of slower change (Rosell, 2000). Thus, the forces that demand a paradigm shift in leadership include technological changes, the internal and external forces and the increased socialization process. 1.2 Impacts of these forces on the healthcare industry The healthcare sector is like any other business and major societal changes in the last three decades warrant a change of leadership in the healthcare sector as well (Vance & Larson, 2002). The internal forces in the sector include gender and cultural diversity. Besides, the hospital structure and the culture are the determinants of the leadership style. Fewer people are entering the nursing profession while the hours at work have increased pressure (RRA, 2010). Medical errors have multiplied and unnecessary deaths have been occurring. These challenges require innovation in the way the complex situation in the sector is managed. The healthcare settings are influenced by complex social and political forces, with shrinking reimbursements, shortages of health professionals, increasing demand to use performance and safety indicators (Stefl, 2008). In addition the leaders are expected to do more with less. The external forces that demand a change in leadership include globalization of organizations, the rapidly changing work environments and information revolution caused by the technological changes that have been taking place (Vance & Larson, 2002). This is what Clawson refers to as a paradigm shift from Industrial Age to Information Age. Studies reviewed by Vance and Larson suggest that leadership does make a difference in the outcome such as quality patient care and improvements in organizational quality and productivity. Leadership in the healthcare can be challenging because it is not the individual practitioners but the organization as a whole that matters. The healthcare sector is a regulated environment and there has been a change in how the health care service providers communicate with their audience (Anon, 2010). They are subject to budget constraints on how they deliver the product messages to the market place. They no more use sporting or social events or overseas meetings unless they can justify the costs. All these factors require much more than the transformational or the transactional form of leadership. 2. Leadership Challenges 2.1 Challenges caused by the GFC The paradigm shift in leadership had become a strategic imperative because of the challenges posed by the ever-changing business environment. However, the global economic downturn has again changed the business environment. Organizations have been forced to change their strategies to cope with the meltdown. This has again brought in fresh challenges for leadership and for the organizations. 2.1.1 Long-term perspective Economic downturns are the times when strategic decisions have to be taken. Customer relationships tend to damage and productivity and motivation is slow. Short-term cost reduction can prove to be very costly. This situation should be viewed as an oppurtunity to invest in their people, build stronger relationship with the existing customers, and build the next generation of innovation based on priorities (Amish, 2009). During economic downturn strong leadership can ensure that the cost-cutting trend is stopped, long-term is focused upon. Leaders have to think beyond the set pattern Leadership Point of View (POV) during such times consists of seeing what needs to be done, understanding the forces at play and having the courage to initiate appropriate action (Clawson, 2000). Strong leadership would also use this period to build the foundation for strong organic growth. Thus, at this time of crises, leaders cannot work with short-term perspective. There has to be a conservative approach with long-term business objectives. 2.1.2 Coping with the shortage of leaders Over the next five years, organizations would face an acute shortage of leaders because half of senior managers are leaving in the next five years, according to The McKinsey Trends Quarterly (Bolt & Hagemann, 2009). Global crises only further highlight the need for leadership. The leadership qualities that would be needed over the next five years include strong track record of performance, strong interpersonal skills, strong communication skills, having drive and ambition and the ability to create and articulate corporate vision and strategy. These leaders have to be developed and nurtured to face the post-crisis period of growth. People would have to be provided with an oppurtunity to prove their leadership. They would have to be put under situations and given a chance to prove their worth. Today hierarchical organizations are not considered the most efficient way to achieve corporate goals. Because of the advancement in information and telecommunications technology, the transaction costs are lowered, the markets have become flexible and the network-type structure have become more efficient means of achieving the goals (Bolt & Hagemann, 2009). Thus, in the years to come, to be able to cope with the impact of the global crisis, leaders would need to be qualified to develop mental maps, language and interpretations with shared meaning. Diversity of the workforce implies that shared values can no longer be taken for granted. The fundamental foundation for leadership has to be change and not stability. The business environment is constantly changing and the new leadership should be able to cope with this change. This can be possible not through informational learning but through transformative learning. 2.1.3 Transformative learning The magnitude of change that is taking place and will take place, once the economic downturn is reversed, the mental maps and models will no longer be effective. Those maps will no longer correspond to the world of experience. Practitioners are already on the lookout for newer models and more effective ways of leadership. Leaders today do not have the oppurtunity to learn from the experience of others or even to learn from their own reflections. The traditional forms of leadership are eroding as people do not share the same assumptions and the language (Rosell, 2000). Hierarchies are flattened and this heightens the importance of training and development (Amish, 2009) but Johnson (2008) finds that effective leaders are effective because they have a more valid and effective way of handling complex issues. Informational learning through training programs and seminars has limited potential to transform mental models. The economic downturn has had an impact on training and development. The average impact on training budgets has been a decline of about 14 percent and companies are still unsure of the direction they would take in the near future. Organizations have set their priorities of the areas where the training budget is to be spent (Appendix A). There is cost savings attitude as organizations are keen to invest in in-house training. E-learning is another area of focus as can be seen from the table. This reflects pressures to deliver more training content to the widest possible audience. Investment is also prioritized for informal learning and, leadership and executive development. However, during the crisis period transformative learning increase the leader’s effectiveness by developing new mental models (Johnson, 2008). These mental models are effective in dealing with the challenges that leaders face. Disorienting events are an important source of leadership learning. This was found during a study conducted at the Center for Creative Leadership. The two highest-ranking categories of learning experience listed by successful executives were “hardships” and “challenging experiences”. Hardships include business failure and the failure to attain promotion while challenging experiences include managing a turnaround operation or being given increased responsibility in terms of people and function. This is precisely the type of leadership that is required as the GFC unfolds. The leaders have to take responsibility for their own development. They must know how to obtain and use the feedback. They must learn to reflect on performance and change their behaviour when necessary. Leaders must have the ability to seize new oppurtunities, forecast trends and have the ability to adjust future development accordingly (China Chemical Reporter, 2009). 2.1.4 Focus on the corporate vision During the crisis regulatory and government support are forthcoming easily and people get used to them. However, as situation improves and the supports are withdrawn, businesses and employees resist the withdrawal. This is the time when leaders have to prove their capability to cope with the situation. They must have the conviction to push what is right and not what is politically desired. They would need to articulate the long-term vision of the firm or the country clearly and they must be able to steer the stakeholders towards the corporate vision (Seng, 2009). This can be possible only when they have earned the credibility and the trust of the people they lead. Developing leaders itself is a long-term commitment. Succession planning is very important which means that the potential leaders have to be systematically identified early and trained accordingly. They need to move out of their comfort zones and their traditional strengths. The key leadership challenges that arise during crisis are not specific to any sector. What matters is how these challenges are taken up. Leadership might not be able to mitigate all the risks and problems but the problems would have to be addressed in a sensible manner, orderly fashion and in a way that is easily understood and accepted by the maximum number of people including the stakeholders (Epress, 2010). Hence, during crises, leadership has the challenge of sense making – they should be able to diagnose the fast-moving situation. They have the challenge of meaning making (communicating what is happening and why it is happening), the challenge of decision making (making policy judgments under time pressure), the challenge of coordination and the challenge of delimitation. They also face the challenge of accountability, learning and remembering. 2.2 Challenges in the healthcare sector While quality care is the most critical element in healthcare, the industry has to transition to an innovative business model. The leaders would require specific experiences and competencies to adapt and success in the changing business environment (RRA, 2010). Carroll and Edmondson (2002) suggest that organizational learning quality and other outcomes and this requires leadership at all levels through out the organization. This implies leadership at the executive level, at the level of the line managers, and at the informal network levels. Interdependencies have to be seen from a different perspective by leaders. 2.2.1 Long-term focus Healthcare leadership cannot be handled by a single person in any organization. High levels of uncertainties exist in the healthcare sector and the leaders would require new competencies. The leaders would have to drive their own team through untraveled path and make adjustments in real time. They should ensure that momentum is not lost, no unwanted delays in decision making and they must also ensure that revenue supports ongoing operations. This visionary change requires building a culture that embraces all the goals simultaneously. This also ensures a long-term focus by organizations during the global economic downturn. The healthcare sector is complex as it has multi-specialty functions and departments, experts such as physicians and nurses, scientists and researchers. Effective leadership requires a reflection and review of the past approaches. Change should not be a special effort (Plsek, 2003). They should be able to learn and unlearn as they go along. They should be able to adapt to changes as the situation demands. The challenges for the sector in the coming years can be met if staff at all levels is encouraged to think creatively and contribute. This is because innovative ideas can come from anywhere in the organization. 2.2.2 Coping with the shortage of leaders The healthcare sector is unable to attract and retain health personnel. This adversely impacts the leadership positions. Team work and information exchange are very crucial to over come the challenges faced by the healthcare sector during the global downturn. In the Information Age, information should not be hoarded but it should be shared with all. This would automatically reduce the hierarchical and the bureaucratic attitude of the management and the leaders. As has been discussed in the previous section, there is going to be shortage of leaders in the next five years. By adopting the innovative model of leadership, leaders would emerge when they are entrusted with responsibilities. When the command-and-control leadership is eliminated and whoever is close to the data is given the responsibility, the outcome would help the organization to identify the potential of that individual (Clawson, 2000). It would also help to create new leaders thereby reducing the shortage of leaders. High level management support can be taken but local, line leaders and informal network leaders are the ones that deliver best. Line leaders are critical for encouraging and supporting practical experiments and learning efforts (Carroll & Edmondson, 2002). The informal network leaders would be able to take care of the reduction in participating in sporting events and other meetings. The informal network leaders act as the bridge between the external and internal resources, they create effective communication structures, and they also find ways to build coalitions within the existing power structure. Thus, they build a relationship, which is the essence of leadership. 2.2.3 Transformative learning Organizational learning enhances the capacity for effective organizational action through knowledge and understanding. In the healthcare sector learning takes place through individually focused training and repetition to enhance the skills. However, due to the global economic recession, the healthcare sector too is likely to cut down on its training and development budget, which could adversely impact the sector. Most nations have cut down on their healthcare budget while there has been a decline in the growth rate in the sector (Carron, 2010). Effective leadership is hence essential to determine how training and development can be maintained during this period. To meet the challenges in the healthcare, leadership as suggested by Clawson (2000) may prove to be beneficial. This type of leadership could help meet the challenges of sense making and meaning making. Power does not rest with a single person or office. Power should be given to the one who is closest to the key challenges facing the organization and who has access to data relevant for effective decision-making. This would be an information-based expertise where the upper management cannot reach. This is the transformative learning as proposed by Johnson (2008). This would enable to meet the challenges in the downturn – to keep the staff motivated because fear of redundancy demotivates the employees. 2.2.4 Focus on the corporate vision Public organizations globally are undergoing a transformation and this requires that a leader must be able to initiate a revolution or have the ability to create a vision for the future. Conflicts and contradictions create a profound need for strategic perspective. It requires formulating different point of vies focusing on the corporate vision and taking into account the main organization areas – the culture, the organization structure, the environment and the objectives (Frączkiewicz-Wronka, Austen & Wronka (2010). Although the health sector is the same as any other business, it does on certain grounds – inconsistent external demands, high utilization of technology, uncertainty, and domination by powerful professionals. Leadership has to ignite change but this change does not mean to initiate something new or exciting. Leaders must be able to propel the existing goals and corporate vision to realization (Harding, 2010). 3.0 Conclusion Thus it can be seen that leadership does not have to follow a set pattern. The success of an organization depends upon the unique competencies of the people. They are constantly under the pressure of decision-making and development of long-term strategies. Leaders are not necessarily appointed by the management and leadership need not be acquired by the top management. The right leader would be able to recognize the future potential leaders and this is precisely what is required today in the turbulent times. While the forces of change had warranted innovative leadership, the economic downturn too requires leaders that have visionary change embedded in their system. Leadership that was traditionally used for a slower pace of change but today the pace of change has accelerated. Even the global economic downturn is a change and things could change again tomorrow. There are internal and external force of change that have to be recognized by the right leader. The health care sector faces several challenges but these can be overcome if the power does not rest with a single authority. Instead, it should be vested with the one who is closest to the point where decision making is required. This is precisely what Clawson meant when he said there is a paradigm shift from the Industrial Age to the Information Age. In the Information Age information should be shared and utilized. Such a person is an effective leader. The effective leaser would be able to inculcate a culture of change where change is not a special effort; it becomes a habit. References Amish, N.A. (2009). Extraordinary Leadership for Challenging Economic Times. MWorld; Winter2008/2009, 7 (4), 3-4 Anderson, C. (2009). Economic Impact on Training Investments. Chief Learning Officer. November 2009. 8 (11), 52-54 Anon. (2010). SECTOR ANALYSIS: How the recession has hit meetings planners across the board. Retrieved online 18 May 2010 from http://meetingsreview.com/asia/news/2010/02/24/How_the_recession_has_hit_meetings_planners_across_the_board Bolt, J.F., & Hagemann. B. (2009). Future Leaders. Leadership Excellence; Oct2009, 26 (10), 11-11, Carroll, J.S., & Edmondson, A.C. (2002). Leading organisational learning in health care. Qual Saf Health Care, 11, 51-56 Carron, S. (2010). Medical imaging Industry 2010 – A phoenix rising? Retrieved online 18 May 2010 from http://www.frost.com/prod/servlet/market-insight-top.pag?docid=189150885 China Chemical Reporter. (2009). ChemChina: Leadership throughout the Global Economic Crisis. China Chemical Reporter; 7/6/2009, 20 (19), 22-23 Clawson, J.G. (2000). The new infocracies: implications for leadership. Ivey Business Journal. Retrieved online 18 May 2010 from http://www.iveybusinessjournal.com/view_article.asp?intArticle_ID=219 Epress. (2010). A leadership perspective on economic crisis management. Retrieved online 18 May 2010 from http://epress.anu.edu.au/anzsog/global_economy/mobile_devices/ch01s02.html Mackenzie, M. (2007). Leadership in the Information Age: A Culture of Continual Change. Bulletin of the American Society for Information Science & Technology, Apr/May 2007. Retrieved online 18 May 2010 from http://findarticles.com/p/articles/mi_qa3991/is_200704/ai_n19430476/ Plsek, P. (2003). Complexity and the Adoption of Innovation in Health Care. National Committee for Quality Health Care Rosell, S.A. (2000). Changing Frames: Leadership and Governance in the Information Age. Retrieved online 18 May 2010 from http://www.viewpointlearning.com/publications/books/changing_frames.pdf RRA. (2010). LEADERSHIP FOR A TRANSFORMING HEALTH INDUSTRY. Retrieved online 18 May 2010 from http://www.russellreynolds.com/content/leadership-transforming-health-industry Stefl, M.E. (2008). Common Competencies for All Healthcare Managers: The Healthcare Leadership Alliance Model. Journal of Healthcare Management. 53 (6). Seng, W.K. (2009). Singapore Promotes Good Governance And Leadership. Retrieved online 18 May 2010 from http://www.thegovmonitor.com/world_news/asia/singapore-promotes-good-governance-and-leadership-18182.html Vance, C., & Larson, E. (2002). Leadership Research in Business and Health Care. JOURNAL OF NURSING SCHOLARSHIP. 34 (2), 165-171 Appendix A Read More