LeadershiLeadership Style of Mountain West Health Plans Inc - Case Study Example

Leadership Style of Mountain West Health Plans Inc of the Table of Contents Table of Contents 2 Introduction 3 Understanding Leadership style of Mountain West Health Plans Inc. 3 Analysis of the Leadership Style 4 Future Recommendation for the Business 7 Conclusion 8 References 9 Introduction Leadership is one’s ability to motivate, influence and enable a group of people to lead them towards a common organizational goal or success. What separates a leader from a manager is his ability to influence people around him to motivate them towards a common goal, unlike managers who tend to use authoritative power and control. In an organization a profound leadership is necessary to achieve organizational success and keep the employees motivated. Great leaders like Franklin Roosevelt, who became the American president, led the country through the tough times of ‘the great depression’. He also led USA rise into power and led the army to battle during the World War 2 (Samant. 2014). This study highlights the leadership styles followed by Mountain West Health Plans Inc. Understanding Leadership style of Mountain West Health Plans Inc. Mountain West Health Plans Inc. is a health insurance company based in Denver. The company has witnessed several changes in leadership styles which had affected the employee’s work efficiency and revenue generation. The customer service department was formerly headed by Evelyn Gustafson (Draft, 2013). Evelyn had worked herself up from the post of a customer service representative, and thus knew all the hassle and difficulties in that job. Being an internal candidate, she could realize when an employee is under work pressure, stressed out or is facing any problems. Being empathetic she used to offer work breaks frequently, and also offered trainings to develop their skills. Little effort was given on the output of the employees. During Evelyn’s time the turnover rate was around 10% and she continued with this leadership style even if several attempts were taken by the management to increase the efficiency and reduce the cost of the company. Considering the fact that nearly 70% of the budget goes to employees’ salary, the turnover rate of 10% was very low (Nayar. 2013). The Senior Vice President of service and operations, Martin Quinn, who was worried about the company’s low output, hired Erik Rasmussen after Evelyn retired. After Erik took over, he made some changes in the leadership style, which was quite different from Evelyn’s style. He emphasized more on the efficiency and output of the service executives by increasing the sales call volume and pushing the targets at a higher level. There were no training or motivation from his end; he strictly focused on the output. As a result, the turnover increased three times to 30% but unsatisfactory feedback started coming from the subscribers as well as from the subordinates end (Mind Tools, 2014). Analysis of the Leadership Style As observed from the applied leadership styles, both of them have its pros and cons. Referring to the Blake Mouton Managerial Grid (The Managerial Grid, 2014), it can be said that Evelyn followed the ‘Country Club Leadership Style’. In this type of leadership approach more attention is given towards the need of the people, i.e., the employees in order to create a friendly, comfortable work place environment. The Country Club Style makes the employees happy and content but it also hampered the target achievement and revenue generation of the company. It incurred extra costs to the company and the turnover rate was also lower, which was not a favourable situation from the financial point of view. According to the managerial grid, Erik’s leadership style was ‘Authority- Compliance’ type. This style of leadership mainly focuses on the end result and works on reducing the human element interference to a minimum level, i.e., focus on output and efficiency is of primary importance than focus on people. Erik increased the turnover by increasing the sales call volume and removing any room for training or motivation. As a result, it also generated negative feedbacks, because the employees were pushed out of their comfort zone. There was lack of internal culture analysis and also there was lack of participatory approach to achieve changes. In case of Evelyn’s Country Club Style, building relationship is more important rather than position, authority and power. More emphasis is given on development of a healthy work environment. Evelyn got admiration from her subordinates, for the way she dealt with them by putting herself in their shoes. Her style is dependent on trust that she had gained from her subordinates. The employees could open up to her with work related problems quite freely. Also, she motivated the employees to go through rigorous training to improve their skills. She believed that better performance can be achieved by putting employees in a comfortable environment, rather than putting coercive techniques on them. Employing coercive techniques may in turn reduce social bonding which in this case led to negative feedback from both subscribers as well as subordinates. Her superiors were concerned about the department’s low output as it was hampering the revenue generation of the company and a company should be concerned about its financial aspects, in order to keep itself running without having the fear of going bankrupt. Her leadership style can also be called moral and servant leadership. Moral leadership tries to mark the wrong and chooses to do right in the practice of leadership. Servant Leadership works to look after subordinates needs and comfort as well as achieving the organization goal. After Evelyn’s country club style was replaced by Erik’s Authority- Compliance style, he used power and authority to push the representatives to cross the previous turnover value. Although Erik succeeded and pushed the turnover to 30% but it was at the cost of dissatisfied subscribers and subordinates. He got admiration from his superiors but not from his subordinates. From the point of view of the brand value and the image of the company, this is not favourable either (Cameron. 2008). So, keeping these factors in mind, it can be rightly said that both these styles are opposite extremes and does not yield balanced output. Thus, these styles should not be applied in an organization. Figure 1: Blake Mouton Managerial Grid High Concern for people Low Country club Team management Middle-of-the road Impoverished management Authority-Compliance Low High Concern for output (The Managerial Grid, 2014) Future Recommendation for the Business Mountain West Health Plans Inc. has seen both the extremes of leadership styles. The leadership styles of Evelyn and Erik were quite different. One of the methods of leadership would focus on the employees comfort level, but not concerned about the output. On the other hand, there was one which would give higher output and lesser focus on the employees, which led to dissatisfaction (Caddesi, & SporSalonuKarşısı, 2013). To achieve an optimum and balanced work environment, one should apply the ‘Middle-of-the-Road leadership Style’ (NBCNEWS, 2007). In the Blake Mouton Managerial grid, the Middle-of-the-road style holds the centre of the grid, which refers to applying little bit of both the extreme cases. It reflects general concern for both production as well as people. Following this style of leadership, satisfactory performance can be achieved by balancing the need to work out as well as maintaining a comfortable work environment which will boost the morale and satisfaction of the people (Day & Sammons 2013). Studies have shown that all the good bosses follow the middle path (NBCNEWS, 2007). Bosses who like to bully around should soften a bit and extremely people oriented bosses should stand up to look at the work output. Most managers or supervisors miss the mark by either being too harsh or too soft. A statistical study in the Stanford University proves this point (NBCNEWS, 2007). By collecting data from an online survey, it was evaluated and concluded that target oriented bosses may develop an aggressive approach towards their subordinates. They scored much lower on social effectiveness. On the other hand, irresolute bosses had much lower score on goal achievement and revenue generation. Clearly, both extremes are not fruitful. A trade-off is often encountered between social costs and company benefits in terms of achievements. Going towards low assertiveness enhances social benefits and going towards moderate yield leads to an increase in organizational achievements. At both the extreme the company has to incur the cost, as over bearing leaders will generate wealth and submissive leader will create healthy social culture at the work place (Toma, 2013). Conclusion From the example of Mountain West Health Plans Inc, an organisation can learn the effects of different leadership styles and how it can benefit from following the optimum path between both the extremes. The perfect manager who could generate millions and also be considered and admired as a good team leader can be formed by carefully balancing between over assertiveness and low assertiveness. This cannot be treated as a thumb rule that Middle-of-the-road will always work like a charm. Leaders should use their judgement and gauge the situation, keeping in mind both the targets that need to be achieved and also the people who work for him. It is not about pushing less, but sometimes assertive bosses need to act empathetic towards their subordinates. References Caddesi, A.M., & SporSalonuKarşısı, K. (2013). The Relationship among The Leadership Styles, Organizational Citizenship and Health Worker performance In Public Hospitals, International Journal of Education and Research. 1.6, 2-5 Cameron, E. (2008), Making Sense of Leadership: Exploring the Five Key Roles Used by Effective Leaders. 1/e United Kingdom: Kogan Pages Day, C & Sammons, P. (2013). Successful leadership: A review of the International Literature, 5-8 Draft, R.L. (2013), Management. 11/e. Stamford: Cengage Learning Mind Tools, (2014). Leadership Styles. Retrieved from http://www.mindtools.com/pages/article/newLDR_84.htm Nayar, V. (2013), Three Differences Between Managers and Leaders. Retrieved from http://blogs.hbr.org/2013/08/tests-of-a-leadership-transiti/ NBCNEWS (2007) Best Bosses Follow the Middle Road. Retrieved from http://www.nbcnews.com/id/16992365/ns/business-careers/t/best-bosses-follow-middle-road-study-shows/#.VDUucWeSyj8 Samant, S. (2014). Top 15 Greatest Leaders of All Time. Retrieved from http://listovative.com/top-15-greatest-history-leaders-of-all-time/ The Managerial Grid. (2014). Retrieved from http://eclkc.ohs.acf.hhs.gov/hslc/tta-system/operations/mgmt-admin/hr/leadership/TheManagerialGr.htm Toma, S.G. (2013). Steve Jobs and Modern leadership, Change and Leadership, 17, 261-269 Read More