NURS 6050C: Policy and Advocacy for Improving Population Health

4 hours ago
Amy Miller
RE: Discussion - Week 7
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NURS 6050C: Policy and Advocacy for Improving Population
Health
Main Question Post. The Patient Protection and
Affordable Care Act of 2010 created several positive healthcare
policies such as affordable health care, lifting the preexisting
health condition clause from health insurance, requiring
facilities to make healthcare charges public knowledge, and
enforcing healthcare providers to become active in improving
quality and health outcomes for patients (Library of Congress,
n.d.). The act addressed a combination of the health care
drivers of cost, quality, and access. According to a report
released by the White House Press Secretary on April 17, 2014,
“The Affordable Care Act is working. It is giving millions of
middle class Americans the health care security they deserve, it
is slowing the growth of health care costs and it has brought
transparency and competition to the Health Insurance
Marketplace.” (The White House, 2014). However, the price
some healthcare providers had to pay a heavy financial - forcing
some providers out of business. The negative side of the act is
seldom portrayed in the news and media.
Section 3131(a) of the act required payment for home
health services to be rebased over a period of four years
(Centers for Medicare & Medicaid Services, 2013); resultant in
a 2.8% reduction beginning in 2014 for four consecutive years
totaling a reduction in payment of 11.6%. The reductions were
placed along with mandates for quality reporting, new forms,

and new processes resulting in increased administrative
overhead costs while shouldering the burden of financial
reductions.
Initiating a Change in Policy Process
Living in a rural community, I witness firsthand the
lack of access to care as there are limited numbers of primary
care providers. Couple the limited access to providers with the
amount of paperwork and forms that must be signed by a
physician and patients are not referred to home health services
as often as one should be – the result is the patient presenting to
the emergency room or a hospitalization to have one’s health
care needs met. Currently, Medicare and Medicaid do not allow
physician assistants or advanced practice registered nurses
(APRNs) to sign the necessary orders and plan of care for home
health services – only a “doctor of medicine, osteopathy, or
podiatric medicine” may sign for services (Government
Publishing Office, 2014, p. 693). I would like to use the
knowledge gained as an APRN to legislate for this mandate to
be changed and allow both physician assistants and APRNs to
sign for coverage of home health services.
The Kingdon Model would be utilized for the
legislation process by finding the three streams of problem,
policy, and politics to coordinate with the above-mentioned
issue (Milstead, 2019, p. 24). The problem would consist of the
burdensome amount of paperwork imposed upon physicians to
cover home health services coupled with the limited amounts of
physicians in the area serving as primary care providers. The
policy portion would be to establish a law or mandate that
removes the current mandate imposed by the Centers for
Medicare and Medicaid Services that precludes non-physicians
from signing for home health coverage. The politics portion
would involve aligning with the appropriate lobbying group to
get a legislator on board to create a bill to bring the topic to the

floor for a vote. Finding the right time to bring the issue to the
forefront would assist in ensuring the bill passed with the
appropriate number of votes. Now is the time as government
continues to search for ways to balance the budget and lower
the cost of healthcare. Services by an APRN are less costly
than services provided by a physician.
References
Centers for Medicare and Medicaid Services. (2013, November
22). MLN matters home health
prospective payment system (HH PPS) rate update for
calendar year (CY) 2014.
Retrieved from https://www.cms.gov/Outreach-and-
Education/Medicare-Learning-
Network-MLN/MLNMattersArticles/Downloads/MM8515.pdf
Government Publishing Office. (2014). Code of federal
regulations 2014 CFR. Retrieved from
https://www.govinfo.gov/content/pkg/CFR-2014-
title42-vol3/pdf/CFR-2014-title42-vol3-
sec424-22.pdf
Library of Congress. (n.d.) H.R.3590 - Patient Protection and
Affordable Care Act. Retrieved
from https://www.congress.gov/bill/111th-
congress/house-bill/3590/
Milstead, J.A. (2019). Health policy and politics: A nurse’s
guide (6th ed.). Burlington, MA:

Jones and Bartlett Publishers.
The White House Office of the Press Secretary. (2014, April
17). Fact sheet: Affordable Care Act by the numbers.
Retrieved from https://obamawhitehouse.archives.gov/the-press-
office/2014/04/17/fact-sheet-affordable-care-act-numbers
Operational and Budget Planning
Learning Objectives
After reading this chapter, you should be able to:
• Describe broad operational issues such as systems and
systems thinking, information systems,
consensus building, and the role of policies.
• Evaluate the differences between operational planning and
budget planning.
• Discuss how to involve everyone in the operational planning
process.
• Assess the issues involved in getting operational planning
done before the start of the new
fiscal year.
Chapter 8
Evgeny Tomeev/iStock/Thinkstock

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CHAPTER 8Section 8.1 Broad Operational Issues
No strategy is useful unless it can be implemented, and no
strategy can be implemented
with any degree of success without operational and budget
planning (refer to Figure 1.1).
This chapter explains how to do such planning, why it is
important, and other essential
process issues.
8.1 Broad Operational Issues
Operational planning involves preparing detailed organizational
plans for the coming
fiscal year. It includes programs, projects, and activities that the
organization is already
doing as well as new ones required by any change in strategy.
Detailed plans by organi-
zational unit are part of operational plans. Finally, it includes
coordinating all these activi-
ties to make sure they support stated strategies. Some aspects of
operational planning
are more encompassing than just planning programs, projects,
and tasks for people to
do. These include systems and systems thinking, management
information systems, the
need for consensus in decision making, and organization-wide
policies. Not only are these
issues more encompassing, but they also are determinants of
effective strategy execution
and should be taken into account.
Systems and Systems Thinking

For the most part, our world is made up of systems—from the
galactic solar system to the
human body, which has many subsystems of its own, such as the
immune, reproductive,
digestive, and cardiovascular systems. Organizations are
complex social systems, consist-
ing of individuals and units that work
together (or not) to produce services
for their customers. Complex sys-
tems are self-regulating systems; that
is, they are self-correcting through
feedback. HSOs must be responsive
to feedback, such as the organiza-
tion’s patient volume figures, quality
performance results, and other met-
rics important to success. Engaging
in systems thinking means viewing
your HSO as a system with interact-
ing, interdependent components and
realizing that what is done must ben-
efit the integrated whole and not just
a particular part at the expense of
other parts.
The systems approach to understand-
ing organizations also examines the
nature of the boundaries between the
organization and the outside world. The more permeable an
organization’s boundaries,
the more the organization is able to place its finger on the pulse
of the competition, the
Blend Images/SuperStock
Organizations—including HSOs—are complex social

systems, consisting of individuals and units that work
together.
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marketplace, and industry trends. Boundaries may be created,
for instance, by employer
apathy toward staff member development. An HSO that does not
send employees to con-
ferences and training establishes a less permeable boundary
between the organization
and the industry. Open systems with permeable boundaries are
preferred to closed sys-
tems for their greater functionality and innovativeness. Viewing
an organization as an
open system requires strategic thinkers to consider the complex
interactions the system
has with its environment, as well as the ways in which the
different units within the orga-
nization (known as subsystems) import and export ideas,
services, and other resources.
Additionally, systems are characterized by subsystem
interdependence. For example, to
add a new clinical service, the service director must interact
with the finance department
to learn about the costs and collaborate with physicians and
other members of the clinical
team to create a development strategy. In some HSOs,
functional units act as if they are
isolated from the others. For example, a hospital materials
department may order sup-

plies without knowledge of inventory levels on the units or
expected patient volumes. In
both strategic and operational planning, managers must be
cognizant that affecting one
part of the system affects other parts. Furthermore, operational
decisions must benefit the
whole organization and not just a particular functional area to
the detriment of others. The
performance of any system, including an HSO, is thus never
equal to the sum of the per-
formance of its parts considered separately, but rather the
product of their interactions
(Ackoff, 1986).
In operational planning, tactics should be coordinated between
functional units of the
organization, especially those between which there is an output–
input relationship. The
higher one’s position in the organiza-
tional hierarchy, the more emphasis
must be placed on having a system-
wide perspective and maintaining
awareness of the purposes and goals
of the entire organization. Even at a
basic operational level, tremendous
coordination is needed. As Russell
Ackoff (1986), one of the most influ-
ential management thinkers of our
time, says, understanding how one
unit’s activities affect and are affected
by other organizational activities
is a benefit that “cannot be realized
unless the planning is comprehen-
sive, coordinated, and participative”
(pp. 202–203).

There is a class of systems thinking
that has been applied to clinical
healthcare systems that stemmed
from James Quinn’s analysis of best-in-service companies such
as Nordstrom and
McDonald’s. He found that these companies organized around
and continually improved
frontline interactions with customers, which Quinn (1992)
labeled as a microsystem,
© Karen Kasmauski/Science Faction/Passage/Corbis
A boy with cystic fibrosis takes a lung capacity test. The
doctors, nurses, and other healthcare professionals
who work with him form what can be called a “clinical
microsystem.”
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the smallest replicable unit of the company. This concept has
been applied to healthcare
delivery with Dartmouth researchers defining a clinical
microsystem as “the combina-
tion of a small group of people who work together in a defined
setting on a regular basis—
or as needed—to provide care and the individuals who receive
that care (who can also be
recognized as part of a discrete subpopulation of patients)”
(Foster, Johnson, Nelson, &
Batalden, 2007, p. 336). A clinical microsystem has linked

processes and shares informa-
tion and technology to produce services that are measured as
outcomes. In many HSOs,
these systems are embedded in larger systems within the
organization. Examples of clini-
cal microsystems include primary care practice, specialty
practice, brain trauma program,
cystic fibrosis program, inpatient care unit, emergency
department, and outpatient kid-
ney dialysis unit. Some HSOs are using the clinical microsystem
model or other system
dynamics models to improve performance.
Management Information Systems
Every day, at every level in the organization, decisions are
being made. Earlier chapters
focused on strategic decisions, while this chapter and the next
focus on operational deci-
sions. Simple decisions require a person’s knowledge and
experience; however, in some
organizations, an established policy may govern decisions in
routine situations. Startup
HSOs operate with the entrepreneur making all the decisions
seemingly “off the cuff,” as
speed is of the essence and the entrepreneur knows what he or
she is doing.
The more complex decisions become, the less one person or
even a group is able to act
independently. Should local radio advertisements for our walk-
in clinic be continued for
another month? That would depend on how effective the
advertisements had been in
increasing revenue, and without those data the right decision
could not be made. Should

the hospital hire another nurse case manager? Without knowing
the patient volumes,
costs, utilization data for targeted patient populations, and so
on, that question also could
not be answered. And these are operational decisions. We
already know that strategic
decisions need a lot of data to be analyzed and processed before
they are made; opera-
tional decision making is no different.
Cleveland Clinic Health System (CCHS), considered by some to
be one of the best HSOs
in the United States, has an extensive information system that
supports strategic and
operational decision making. Balazs Nemeth, head of Clinical
Resource Management and
Decision Support for East Region of CCHS, notes that being
one of the best is not enough:
“We want to be the best system” (PQ Systems, n.d., para. 3).
With the exception of startups, no organization can afford to be
without a management
information system (MIS). Typically, MIS refers to a broad
range of data-driven decision
support systems that provide information about an
organization’s administrative func-
tions associated with the provision and use of patient care
services (Sandefer & Seidl,
2013). These systems are crucial to the operation of the
organization and include, but are
not limited to, general accounting and finance systems,
operations and plant management
systems, patient health record systems, and customer
relationship management systems.
By definition, these systems must supply the basic information
needed by managers for

making decisions. The extent to which a system succeeds in
doing this determines the
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quality of decisions made (Mason
& Hofflander, 1972). Even before
the advent of computers, there were
information systems, usually in the
form of reams of paper and informa-
tion stored in people’s minds.
An MIS is more than a stream of
unprocessed data that people can
access. Unprocessed data is a data-
base, not an MIS. An accounting sys-
tem is an example of a database. The
data needed for day-to-day opera-
tions in an HSO are stored in various
databases, which should be acces-
sible for later analysis during strate-
gic and operations decision making.
Ideally, these databases are linked
in a central data repository, or “data
warehouse,” which is the source of
information for various analyses: identification of areas of
excess variances from best
practices, cost accounting and case-based budgeting, studies of
factors contributing to
clinical outcomes, prediction of healthcare resource utilization,
evaluation of the revenue
stream and factors controlling it, and so on.

There are several types of data-driven decision support systems
that support effective
strategic and operations decision making, including predictive,
action, and executive
information systems.
Predictive Information Systems
Predictive information systems permit decision makers to draw
inferences and make
predictions from the data. Asking the system “what if”
questions given certain assump-
tions gets a response in the vein of “if that were done, then this
is what can be expected
to occur.” The system cannot evaluate the outcome; it just
provides the information. A
financial-planning-simulation model is a good example; other
examples unique to health-
care are models that predict mortality rates in patient
populations and resource use among
health plan enrollees.
Action Information Systems
A more advanced type of decision-making system embodies the
organization’s criteria for
choice and actually makes decisions on which the organization
can rely and act. A linear-
program model for optimizing utilization of operating rooms to
minimize costs and use
available staff is a good example. So-called action information
systems automatically
make the correct decisions, like process-control applications,
that are acted upon immedi-
ately (Mason & Hofflander, 1972). One example is an
automated inventory control system
that generates an order to replenish supplies when an item

reaches its reorder point.
© Owen Franken/Terra/Corbis
Even before the advent of computers, HSOs maintained
information systems, usually in the form of paper-
based files.
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Executive Information Systems
An MIS specifically designed to support the decision making of
senior managers is often
called an executive information system (EIS). This system
provides direct access to timely,
accurate, and actionable information. Typically, the EIS is in a
useful and navigable for-
mat so managers can easily explore trends, identify broad
strategic issues, and drill down
into the data for answers to strategic questions. An EIS cannot
simply be purchased and
installed. Its implementation requires the integration of many
databases and capabilities.
Kelly (2002) suggests that EIS capabilities include the
following:
• Design that is specific to manager’s information needs
• Ability to access data about specific issues and problems
• Extensive online analytic tools including trend analysis,
exception reporting,
and data-mining capabilities

• Ability to aggregate data into meaningful reports
• Capability of accessing a broad range of internal and external
data
• Interface that is easily navigated
• Capability of being used by executives without assistance
• Ability to present data in a graphic form
Enterprise Resource Planning
Over the past few years, more HSOs have put in place
administrative and clinical elec-
tronic information systems to better support operations planning
and strategic manage-
ment. The creation of enterprise resource planning (ERP)
capabilities is a process that
attempts to electronically integrate and manage all of the
individual computer systems
in an organization’s departments. ERP is often the term given to
a variety of applications
that support administrative functions, such as materials
management, the general ledger,
accounts payable, and payroll. Ideally, for strategic and
operational planning purposes in
HSOs, ERP capabilities can integrate data from back office,
patient care, and support ser-
vice systems (see Figure 8.1). In organizations with such
integrated information systems,
strategy formulation is facilitated using data from the system
and is easily updated as
conditions change.
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Figure 8.1: Overview of ERP in HSOs
The enterprise resource planning capabilities in a healthcare
services organization use a single software
program to integrate and manage all of the organization’s
departments and functions as well as serve
each department’s specific needs.
Building Consensus
Operational planning is, in essence, a string of decisions that
have to be made quickly at
whatever level that planning is done. Unless there is
consensus—complete agreement—
on a decision by a group of people, majority rule takes over.
There is nothing intrinsically
wrong with that, except that it introduces the possibility that a
minority is not committed
to the decision. So how can consensus be built when there are
differences of opinion?
Back O�ce Systems
HR management
Payroll management
Accounts/Financial management
Inventory management
Supplier management
Patient Care Systems
Diagnostics
Pharmacy
Physiological monitoring
Electronic health records

Automated care plans
Personal health records
Order entry
Support Service Systems
Patient billing
Scheduling/appointments
Dietary
Linen/laundry
Biomedical waste
Transportation
Charge capture
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If time allows, it is best to get more
data on the alternatives to aid in the
decision-making process; however,
that is not always possible. It may
be that the lack of consensus is due
to different positions and political
ploys, not just different opinions. It
is frequently easier to get managers
and people to agree first that con-
sensus is desirable (as well as pos-
sible) than it is to obtain it (Ackoff,
1986). The additional time and effort

it takes to achieve consensus is more
than compensated for by the surge
in motivation after agreement has
been reached.
Role of Policies
A policy is an organizational directive designed to guide the
thinking, decisions, and
actions of managers and their subordinates (Pearce & Robinson,
2005). A policy plays
several roles and serves several purposes. First, it saves higher
management from wasting
time making decisions that could be handled just as well lower
down the hierarchy. Sec-
ond, it empowers people lower in the organization to make
those decisions, often where
they should be made. Third, policies address issues that crop up
frequently, so the amount
of time saved is considerable. Finally, the decisions themselves
could save the organiza-
tion money, for example, by limiting the insurance plans
accepted by the HSO.
In addition, policies
• establish indirect control over independent action
immediately;
• promote uniform handling of similar activities;
• ensure quicker decisions through using standardized answers;
• institutionalize basic aspects of organizational behavior;
• clarify what is expected and facilitate smooth execution of
strategy;
• provide predetermined answers to routine problems (Pearce &
Robinson, 2005).

Examples of policies include the customer recovery policy at
University of Wisconsin
Hospitals and Clinics that allows registration staff to offer
complaining patients some
compensation to relieve their concerns, such as free parking or a
vendor retail coupon
(Berkowitz, 2010, p. 248). ZoomCare (2013) has a strict policy
of not accepting patients
covered by Medicare, Medicare Advantage, Medicaid, and
Tricare insurance because of
the low reimbursement rates. Interfaith Community Health
Center (2013) in Bellingham,
Washington has a policy of not prescribing narcotics or
controlled substances. Patients
requiring such treatment are referred to a specialist for pain
management.
West Rock/The Image Bank/Getty Images
When consensus is not achieved, a decision is often
based on majority rule.
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CHAPTER 8Section 8.2 Operational Planning and Budget
Planning
Discussion Questions
1. All organizations are systems, yet they themselves contain
many systems. Is this possible?
Explain.
2. How might one manage the microsystems to improve the

functioning of the larger system?
3. How can “systems thinking” improve operational decision
making?
4. If some management information systems are simply
databanks, are they really systems?
Explain.
5. Can an information system provide an HSO with a
competitive advantage? If so, how?
6. The point was made that consensus in decision making means
total buy-in to the decision
and smoother implementation. How might you tell the
difference between real consensus
and several people just “going along” with the majority?
7. If consensus is desirable to achieve, whatever happened to
dissent? Isn’t dissent also con-
sidered a spur to better decision making? Discuss.
8. A downtown physician clinic has a policy of not validating a
patient’s parking receipt unless
the patient was there for an office visit. One day, a patient of
the clinic came in to see a
nurse who happened to be off that day. When he asked to have
his parking permit vali-
dated, the front desk registrar refused. What should the registrar
do—stick to the policy and
risk angering or perhaps losing a patient or make an exception?
Policies should be developed in written form, widely distributed
throughout the HSO,
and discussed at all meetings once finalized. In written form,
employees can constantly
refer to them as an authoritative source until they become
second nature.

8.2 Operational Planning and Budget Planning
In most organizations, operational
and budget planning are combined
into the same process. However,
because the two are significantly
different, they will be discussed
separately.
Operational Planning
At the conclusion of the strategy for-
mulation process, the vice presidents
and physician leaders of the different
functions, in functionally organized
HSOs, take the strategic decisions to
their departments and, with their key
managers, draft functional objectives
to be achieved by the end of the next
fiscal year. In other types of organi-
zations, key operational units get to do the same thing. For
example, in finance, exam-
ples of operational objectives (with the addition of the
quantitative element) might be to
meet or exceed budgeted net income, maintain cash collections
at or above net revenue,
© Artur Gabrysiak/iStock/Thinkstock
The operating units in an HSO must decide how to meet
the objectives given to them by the end of the fiscal year.
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Planning
and increase annual fee-for-service insurance revenue. Quality
objectives could be built
around issues of clinical and service performance and even
patient satisfaction.
The directives then go to the actual operating units that must
meet those objectives. Their
challenge is to decide what must be done to meet the objectives
by the end of the fiscal
year. This may mean continuing to do what they have already
been doing, changing what
they have been doing, or even changing an objective if it
appears to be impossible. They
must develop a series of tasks and specify who will be
accountable to do what, when, and
for how much, with a clear output and summary of their efforts.
The operating units then submit their draft plans to their
managers, who coordinate with
other plans in the functional area and modify, if necessary, the
objectives and budgets.
These then go to top management, who reviews them with
knowledge of other plans
from the other functional areas. Because no first draft is ever
perfect and usually goes
over budget, the plans are sent back down for revision. The
iterative nature of the opera-
tional planning process means that, in practice, draft versions of
plans could go up and
down the hierarchical chain more than twice (see Figure 8.2).
The revision process takes
place in a succession of meetings, at the end of which planning
documents are revised.

After one or two more iterations, top management approves and
finalizes the operational
objectives, budgets, and tasks before the fiscal year begins.
Only if they have changed
significantly might the board get involved again.
Figure 8.2: Operational planning process
During the operational planning process, draft versions of plans
could go up and down the hierarchical
chain more than twice before final approval. This figure
incorporates budget planning, which will be
discussed later in the section.
CEO and
Board
Functional
VP Level and
Physician
Leaders
Managers,
Employees,
and
Physicians
Approve chosen
strategies and
organization-wide
objectives, programs,
and contingencies

Review functional
plans and
adjustments made
to match available
resources
Set unit objectives,
activities, budgets,
and accountabilities
Negotiate
adjustment to
plans to match
allocated budget
Final
approval
Set functional
objectives
Consolidate
functional plans
and budgets
Final
approval
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Planning
Project Management Tools
For smaller companies, project management software exists to
help in operational plan-
ning at the department or unit level. This software is especially
useful for initiatives with
lots of smaller tasks that must be done both sequentially and in
parallel. PERT (Project
Evaluation and Review Technique) has been around for a long
time and is an operational
tool used in project management to analyze and represent the
tasks involved in complet-
ing a given project.
The most valuable use of PERT is helping project managers
determine when a project
will be finished and the likelihood that it will be completed on
time. Each task is mapped
on a network diagram clarifying which tasks must be completed
before others can be
started and which tasks can be done simultaneously. For
instance, suppose one of the
operational plans of a community health center is to implement
a colon cancer screening
initiative. There are three major tasks that need to be
completed: changes to the comput-
erized patient record system to allow for data mining to identify
patients needing to be
screened, staff training in the use of the data mining
capabilities, and creation of a patient
notification system. First, the record system software changes
must be planned with pro-

grammers and updates completed. Staff training can start before
the computer updates
are completely finalized. Last, the system can begin generating
patient notifications. Each
of the three major tasks might include 10 or 20 substeps. By
using a PERT chart, the health
center can interconnect the substeps in a sequential timeline that
allows them to see the
minimum and maximum time frames for the major tasks and all
the different substeps
that are required.
Online project management solutions are widely available. Most
Web-based project man-
agement tools offer the same basic options, including task
allocation and tracking, resource
allocation and management, risk management, scheduling
timelines and deadlines, doc-
ument archives, and communication. Online project
management solutions offer users
transparent, easy access to files and communications, which in
turn enables improved
teamwork, enhanced time management, and improved task
efficiency.
Reward Systems
Once the detailed departmental plans are finally approved, it is
important to put in place
a reward system that will motivate the achievement of
operational, and hence strate-
gic, objectives. This system of rewards incentivizes people to
excel and achieve beyond
expectations. Rewards are primarily (but not exclusively)
financial and vary by hierarchi-
cal position.

Incentives make up approximately 10% of CEO pay at HSOs,
according to a 2012 survey
of 262 leaders from a variety of organizations, including
hospitals and health systems
(HealthLeaders Media Intelligence Unit, 2012). Hospital CEOs
listed operating margin
(67%), patient satisfaction (60%), clinical quality (54%), and
financial efficiency (44%) as
the four top factors for their current incentive payments.
The rewards given to middle managers are typically tied to
functional or operational objec-
tives such as productivity, cost savings, quality improvements,
and myriad others. The
rewards include performance bonuses, promotions, raises, profit
sharing, and possibly
stock options. Employees’ and supervisors’ rewards are
generally tied to contributing to
the achievement of functional or operational objectives as team
players and may include
spa81202_08_c08.indd 233 1/15/14 3:50 PM
Planning
some combination of profit sharing, bonuses for
exceptional and timely work, and raises.
Monetary reward possibilities, however, are much
more limited in nonprofit organizations because the
use of financial rewards such as ownership incen-
tives, stock-based pay, and profit sharing is impos-
sible or inappropriate, due to the non-distribution

constraints (Brickley & Van Horn, 2002). Other
rewards, while nonfinancial, are nonetheless
important. Intangible rewards range from fre-
quent words of praise (or constructive criticism),
to special recognition at organizational gather-
ings or in its newsletter, increased autonomy, and
more opportunities for continuing education.
Both financial and nonfinancial rewards require
accurate measurements of the organization’s per-
formance that, in turn, typically depend on a reli-
able and up-to-date MIS. In creating the reward
system, executives have to guard against the
temptation of functional departments to set their
operational objectives too low in order to increase
their rewards for achieving those objectives. Some
experts maintain that organizations should never
offer a promotion as a reward for two reasons: It
destroys the organization’s carefully constructed
compensation system, and promotions should be given only to
individuals who are ready
to assume the greater responsibility of the higher position. Case
Study: Geisinger Physician
Compensation Tied to Strategic Priorities illustrates how one
HSO links rewards with goals.
© Mark Airs/iStock/Thinkstock
In creating a reward system, executives
should guard against the temptation
of functional departments to set their
operational objectives too low in order to
increase their rewards for achieving those
objectives.

Case Study: Geisinger Physician Compensation Tied to
Strategic Priorities
Geisinger Health System, an integrated delivery system in
Pennsylvania, has a national reputation
for delivering high-quality, cost-efficient healthcare. Achieving
this reputation has been enabled, in
part, by how the salaried physicians are rewarded. Geisinger
Health dedicates approximately 20%
of total expected physician compensation to achievement of
strategic priorities.
Geisinger employs more than 800 primary care and specialty
physicians. Each month, these physi-
cians receive a paycheck representing 80% of their base salary,
which is calculated according to
workload and other factors such as skills, training, intensity of
services, and other activities such
as research, teaching, and administrative duties. It is expected
that employed physicians meet
defined work unit requirements. However, Geisinger is not just
focused on productivity. Thus,
approximately 20% of the salary of employed physicians is tied
to achievement of strategic quality,
efficiency, and patient volume goals. Physicians receive these
incentive payments twice a year—in
March and September. The March payment reflects the
physician’s July–December performance,
and the September payment reflects the physician’s January–
June performance.
(continued)
spa81202_08_c08.indd 234 1/15/14 3:50 PM

Planning
The following is a useful checklist for designing a financial
incentive-compensation
(reward) system:
• The performance payoff should be significant—perhaps 10%–
12% of base pay,
while 20% will command the attention of the potential
recipient.
• Incentives should extend to all workers, not just the top
executives.
• The reward system should be administered with scrupulous
care and fairness.
• All individuals should know what the reward system is at the
beginning of the
year or else they won’t be appropriately motivated.
• Incentives and the performance targets on which they are
based should not be
impossible to achieve.
• Payoffs should occur as soon as possible after results have
been acknowledged.
• Confine payoffs only to results achieved. Payoffs should not
be made for behav-
iors such as putting in long hours for a long period, or even
going the extra mile
but coming up short. Once an exception is made for one person,
they will be
made for more, and the reward system will quickly get out of
hand (Thompson,

Strickland, & Gamble, 2008).
Financial rewards should never be made when the
organization’s revenue is below a level
to make them possible or for average or below-average
performance.
Case Study: Geisinger Physician Compensation Tied to
Strategic Priorities
(continued)
Goals that support the strategic aims of Geisinger Health are
defined at the service-line level, and
physicians are financially rewarded for achieving the goals in
their service area. For instance, a
goal for emergency department (ED) physicians is to reduce the
percentage of patients who leave
without being seen to less than 1.5% of all ED patients.
Specialty physician incentive payments are determined by work
in the following areas: quality,
innovation, legacy (educational and research missions), growth
(increase in populations served
by Geisinger), and financial (units of work for patients in fee-
for-service contracts). The areas are
weighted, with approximately 40% of a specialty physician’s
incentive payment based on four to
five service-line-specific measures of quality that have been
jointly agreed to by physician leader-
ship and Geisinger senior management. Only 25% of specialty
physician incentive payments are
based on meeting financial goals.
Primary care physician incentive payments are based on work in
similar areas. System-wide strate-
gic goals such as improving care for patients with chronic

diseases (e.g., diabetes) and improving
patients’ satisfaction are examples of quality expectations tied
to incentive payments for pri-
mary care physicians. The physician’s citizenship—
collaboration and teamwork with colleagues—
accounts for 6% of incentive compensation (Lee, Bothe, &
Steele, 2012).
spa81202_08_c08.indd 235 1/15/14 3:50 PM
Planning
1. Some HSOs are content to keep doing what they have always
done. In fact, the strategy and
organization-wide objectives eventually comprise their
operational plans added together.
How would you persuade such organizations to do planning the
other way around?
2. How does an organization specifically benefit from doing
operational planning? (Contrast
with an organization that might do no operational planning.)
3. Some HSOs operate “on the edge” and are forever “putting
out fires.” Operational planning
isn’t even in their lexicon. If you had an opportunity to talk to
the CEO of such an organiza-
tion, what would you say? How might the conversation go?
4. If you were the CEO of a hospital, what type of rewards
would you offer managers for stay-

ing within budget and meeting operational goals? Are financial
rewards the best way to
motivate people to excel and achieve beyond expectations?
Explain the advantages and
drawbacks of different types of incentive rewards.
Budget Planning
Budget planning is the process of matching available
organizational financial resources
(cash on hand, a line of credit or loan, and any investment) with
what the organization
needs to spend to implement its strategies. It includes revising
requests for money from
organizational units until their requests and available resources
match. What each organi-
zational unit is finally approved to spend constitutes its budget.
The finance department begins the process by coming up with a
comfortable estimate
of financial resources that is the sum of what the HSO has and
could obtain (through
additional borrowing or equity
investment). Given knowledge of
each department’s current spend-
ing and the spending implied by the
new strategic initiatives, it further
arrives at a tentative budget total for
each department or cost/profit cen-
ter. That budget figure is given to
each departmental manager as they
do their planning for the year. When
they come up with their initial plan
to meet the functional objectives,
they itemize every dollar it might
cost to do so. If their estimate equals

or comes in under the budget figure,
there is no problem. If their estimate
exceeds the budget figure, they try to
adjust as much as they can but more
often will say that the job can’t be
done for the budgeted amount.
© leungchopan/iStock/Thinkstock
Making precise financial resource predictions is often
a difficult task, given the perpetual uncertainty of
regulations and reimbursement in the healthcare
industry.
spa81202_08_c08.indd 236 1/15/14 3:50 PM
Planning
The perpetual uncertainty of regulations and reimbursement in
the healthcare indus-
try makes precise financial resource predictions a difficult task.
HSOs often base future
resource predictions on historical financial relationships—
volume versus revenue, and
volume versus expenses. For instance, Fairview Park Hospital in
Dublin, Georgia “deter-
mines their budget based on prior year usage, gauging future
treatment and service usage
on percentages from the previous year to project future
volumes” (Fruitticher, Stroud,
Laster, & Yakhou, 2005, p. 174).
As Figure 8.2 shows, departments may get their plans back from

an upper-management
review with a mandate to reduce spending in some way to match
the budget. Either
departmental members become creative and find a way to
deliver the mandated reduc-
tions or they respond that the only way to get the two numbers
to match is to modify the
objectives. Of course, the latter reply must include their
reasoning for the position, and
their supervisor then becomes their advocate.
The revised plans are resubmitted so that the CEO and top
management have the ben-
efit of looking at all the departmental plans and budgets. At this
point, they can be per-
suaded that implementing the strategy will indeed take more
money than they thought
and see whether they can raise the additional capital. If they
can, then higher budgets
are approved that match the estimated spending from all
departments, and the budget-
planning process ends. If they can’t, then some or all
departments are told that they must
meet their objectives with the available budget. For example, if
adding two people was in
the business office plan to help reach its customer service
objectives, then it might have to
get the same objective accomplished with existing staff. The
process ends when depart-
mental budgets finally match available financial
resources together with their commitment to
achieve their functional objectives.
Normally, operational and budget planning
should be enough to enable each organizational

unit and, by extension, everyone in the organiza-
tion, to know what they have to do and accom-
plish during the coming fiscal year. However,
some organizations also engage in profit plan-
ning, which is the process of arriving at an esti-
mate, month by month, of the profit the whole
organization intends to achieve. For each month,
the total company budget is subtracted from esti-
mated revenues; the sum of the monthly profits
equals the overall profit objective for the coming
year. Profit planning is not widely used and is con-
sidered unnecessary by some strategic planners.
The budget planning process can also be thought
of as a process for reducing costs. Not only does it
ensure that spending will be covered by projected
financial resources, but it also is a forcible func-
tion for reducing costs. It is human nature to take
the easy route or continue doing what you have
Corbis/SuperStock
Costly “sacred cows”—such as shoe
covers—are not unique to healthcare,
but they may be especially prevalent in
hospitals.
spa81202_08_c08.indd 237 1/15/14 3:50 PM
Planning
always done. That will happen unless someone requires it to be
done for less. The very

requirement forces the consideration of alternatives.
For-profit business entrepreneurs are often faced with this
problem when writing their
business plan and trying to seek startup capital: Their first pass
at a cash-flow projection
often shows that the business might not make enough money, or
even make any money
at all, which is certainly not what the entrepreneurs or potential
investors want to hear.
All the assumptions must be reexamined and, with more
research and thought, revised
figures should be produced of both the revenue model and the
expenses. If the revised
business plan looks better but still doesn’t come close to
achieving the 20%–40% ROI
required by typical investors, at this point the entrepreneur
should consider any and all
alternatives for achieving the targeted revenues for less cost.
More attractive margins, at
least on paper, won’t be possible until he or she is forced to
consider lower-cost alterna-
tives. Having had to put so much thought into the revised
estimates also makes defending
them easier.
The budget planning process is an ideal time to force people to
examine ways of reducing
costs, which might not happen any other way. David
Kaczmarek, director at the Chicago-
based consulting firm Huron Healthcare, notes that costly and
wasteful “sacred cows are
not unique to healthcare. But they do seem to have a special
affinity to hospitals” (2011,
para. 8). Kaczmarek suggests that operating room practices such
as using shoe covers and

requiring hospital-laundered scrubs are needless “resource-
consuming anachronisms”
(2011, para. 36).
1. What risk is the organization running when it approves
expenses that exceed anticipated
financial resources?
2. Departments in publicly funded (city, state, and federal)
HSOs are well known for trying to
spend their entire budget allocations so that they will be funded
again the following year at
least at the same level. If they do not, they might be viewed as
not “needing” their budget
allocation and so be allocated a lesser amount. What is wrong
with this process?
3. What do you think might happen when, midway through the
year, expected financial
resources fail to appear (for example, Medicare rates are
lowered or funding from a govern-
ment agency is slashed)? What options might an organization in
this position have?
4. Whose responsibility is it in the organization to reduce costs?
5. What would prompt an individual or departmental unit to
investigate how something done
in its area could be done at lower cost?
6. In your opinion, what “sacred cows” in healthcare delivery
could be eliminated or done at a
lower cost?

spa81202_08_c08.indd 238 1/15/14 3:50 PM
CHAPTER 8Section 8.3 Involve Everyone
8.3 Involve Everyone
Just as it is a mistake to do strategic planning with the
participation of only the top manage-
ment group, so also is it a mistake to do operational planning
with just middle managers.
To be sure, middle managers bear the brunt of the responsibility
for operational planning
because they will be called upon later in the year to implement
the plans. But make no
mistake, everyone in the organization is and ought to be
involved, not only in operational
planning but also in carrying out the plans.
By virtue of their size, small HSOs have no option but to
involve everyone. Yet exceptions
abound. The manager for a small medical equipment provider
complained of being left
out of the planning process entirely. The company was being
squeezed by its large cus-
tomers, who were forcing the price down to maintain their own
profitability. The custom-
ers said that if this firm could not supply medical equipment at
the desired price, there
would be lots of other suppliers that would. The president and
co-owner of the company
was the one who negotiated with these large clients for future
business. Time and again,
he approved a price point that was below cost, because he was
convinced that he wouldn’t
get the business otherwise, and he never checked first with the

manager, who could have
advised him of current costs and margins. The result was that it
put enormous additional
pressure on reducing costs while margins all but eroded. This
scenario was repeated many
times, and this was a management team of only three people.
In large HSOs, it is all too common not to involve the rank and
file in operational planning.
In many organizations, information is divulged or passed down
only on a “need to know”
basis. People at the bottom just do what they are told. This is
not what happens at health-
care organizations recognized by the American Nurses
Credentialing Center (ANCC) as
magnet facilities. The Magnet Recognition Program (MRP)
recognizes healthcare orga-
nizations for quality patient care, nursing excellence, and
innovations in professional
nursing practice (ANCC, 2013). One criterion that applicants
must meet is involvement
of nurses in budget development. A
2008 MRP recipient, Wheaton Fran-
ciscan Healthcare–St. Joseph in Mil-
waukee, Wisconsin, has a shared
governance operations council where
direct care nurses are provided an
opportunity to tell management what
resources they need to be effective
in their job. These resources may
include requests for new equip-
ment, additional education time, and
staffing changes. This input is used
by unit directors and patient care
supervisors to prioritize operating
and capital budget planning needs.

At St. Joseph’s Hospital, informa-
tion related to departmental budgets
and overall organizational finances is
shared with nurses through staff and
leadership meetings (Erny, 2009).
Cultura Limited/SuperStock
One reason to involve everyone in an HSO is that it
makes it easier to get people to stop doing things that
either block new initiatives or hinder the organization’s
productivity.
spa81202_08_c08.indd 239 1/15/14 3:50 PM
CHAPTER 8Section 8.4 Get It Done on Time
As the discussion of organizational change in Chapter 2 made
clear, smooth and enthusi-
astic implementation of any task is not possible unless those
who are to do the work are
involved in the planning. This is much easier said than done. It
depends to a large extent
on the kind of culture that exists in the organization. Cultures
that are command-and-
control or bureaucratic are by their very nature not inclined to
involve everyone as they
should. Open, adaptive, innovative, nimble organizational
cultures as discussed in Chap-
ter 2 would not be able to progress without involving everyone
and seeking their input,
especially in planning and suggesting new ideas. This culture of
openness requires the
implementation of participative leader–member behavior, which

encourages supportive-
relationship behavior and the open sharing of ideas during
decision making and strategic
and operational planning. As noted in Section 8.1, building
consensus is important during
operational planning and is also important for organizational
change.
Another reason to involve everyone in the organization is to
make it easier to get people
to stop doing things that either get in the way of new initiatives
or are no longer useful
in helping the organization be more efficient and productive.
Change involves dropping
old habits if new ones are to take their place. Change will stall
or not take hold to the
extent that people cannot or will not forget what they used to
do. It is therefore wise to
involve everyone and make sure they understand what they have
to do and why; how
their jobs, roles, and expectations are changing; and how and
why they will benefit from
the changes. They should also have a mechanism for repeating
the new imperatives often
until force of habit takes over and the changes and
improvements become second nature.
1. The ease with which everyone in the organization can be
involved in operational planning
depends on the organization’s culture. Might involving
everyone actually change the cul-
ture? Comment.
2. This section advocated involving everyone. Surely not

everyone? Would this include the
people loading supplies on the receiving dock? The maintenance
staff? The mailroom clerk?
The secretaries? Comment.
3. If you don’t agree that everyone should be involved, where
might your cutoff be? Give rea-
sons for your answer.
4. If you advocate a cutoff, explain why that might be superior
to involving everyone.
8.4 Get It Done on Time
The operational planning process should be timed so that by the
time the new fiscal year
starts, all the strategic decisions, operational plans, and budgets
are completed. Final
approval of the plans and budgets should be completed within a
couple of weeks of the
start of the fiscal year. Bear in mind that both strategic and
operational planning takes place
in addition to people’s regular daily activities. But how long
should the strategic and opera-
tional planning processes take? There is no simple answer.
Consider four scenarios—among
many—beginning with the best or ideal situation:
spa81202_08_c08.indd 240 1/15/14 3:50 PM
Case Study: Strategic Planning Process at Henry Ford Health
System

Henry Ford Health System, headquartered in Detroit,
Michigan, is a nonprofit integrated healthcare deliv-
ery and insurance system that offers services across
the care continuum through nine business units with
a diverse network of facilities throughout southeast
Michigan. The health system’s strategic planning pro-
cess, which is repeated annually, spans an entire year.
During the first 6 months scheduled, facilitated meet-
ings are held with the board of trustees, the system
performance council, senior leaders in the business
units, and key community stakeholders. These discus-
sions result in identification of short-term (1-year)
and long-term (3-year) strategic initiatives and orga-
nization-wide measures of success.
Each strategic initiative owner creates detailed action plans that
include estimated revenue,
expense, and capital projections. This information is used by the
finance department to refine
the system’s 3-year operating and capital budgets. The system
strategic plan for the next 3 years
is approved by the board of trustees each October. The system
and business unit level strate-
gic plans and budgets are then communicated to all leadership,
employees, partners, and suppli-
ers through meetings, newsletters, and emails/podcasts. System
and business unit action plans
and performance targets are communicated to departments and
integrated with departmental
and individual performance management plans. As action plans
are implemented by the assigned
strategic initiative owners, progress is reviewed at biweekly
organizational performance review
sessions. Progress toward achieving system-wide strategic
initiatives is evaluated at least twice a
year. What is learned during these reviews becomes part of the

strategic discussions at the start of
the next cycle (Henry Ford Health System, 2011).
Pixtal/SuperStock
If one runs out of time with the operational
planning process, one can shorten the
approval cycle. Instead of going all the way up
the hierarchy, plans should go up to the next
higher level where they can be refined.
• The HSO is used to formulating strategies, and much of the
required research is
done throughout the year. It is performing well and is used to
transforming stra-
tegic decisions into operational plans and can get those plans
approved in one
cycle. The two processes together, especially for small to mid-
size companies,
take no more than 2 months.
• Like the scenario just described, but for a well-performing
larger HSO with more
divisions and vertical layers, coordinating operational and
budget planning
takes longer but still gets done within 2 to 3 months.
• This HSO is not performing very well and has financial
problems, but because
it has some experience with strategic and operational planning,
operational and
budget planning takes no longer than 3 months.
• This HSO is constantly putting out fires, lurching from crisis
to crisis; strategic
and operational planning take back seats, if done at all. If

anything is done, it will
probably be done badly, with changes continuing to be made
after “approvals”
have been given. The time frame needed for planning is
impossible to estimate.
The ideal situation is illustrated in Case Study: Strategic
Planning Process at Henry Ford
Health System.
spa81202_08_c08.indd 241 1/15/14 3:51 PM
There are organizations, of course, that are run autocratically,
with the CEO telling every-
body what to do and being the only one to approve anything. In
this situation, the com-
bined processes should not take long at all, perhaps 2 to 4
weeks. This was not included as
a scenario in the preceding list because, although it might take
the least amount of time,
it doesn’t qualify as a “best” or “ideal” scenario. However, it
often works in that kind of
organization.
Sometimes, the process takes longer than anticipated, and the
deadline of the new fis-
cal year is missed. What usually happens is that the full
operational planning process is
aborted, and whatever stage it has reached is hurriedly
approved. After all, the start of
the new fiscal year cannot be changed. One way around this
dilemma is to shorten the

approval cycle. Instead of going all the way up the hierarchy for
every approval cycle, as
shown in Figure 8.2, plans should go only to a higher level,
where they are refined much
further. This will shorten the operational planning cycle.
For an organization that has not previously done operational
planning, 2 months is a rea-
sonable allowance for the first time. In each successive year,
familiarity with the process
and everyone’s ability to produce better plans should enable the
HSO to be more accurate
in scheduling the process without any drop in quality. It is best
to start strategy formula-
tion as late in the fiscal year as possible while leaving enough
time for decent operational
and budget planning. The time frame of 3 months, mentioned
earlier, is a whole quarter
and, really, too long to devote to planning, mainly because
conditions will have changed
during such a long planning process. For a large organization
that has many layers and
planning units, operational planning does take more time than
anyone would like.
Should a company ever abandon the operational planning
process if time is running out?
The short answer is no. As long as management approves what
should be allocated and
achieved during the first month of the fiscal year, there will be
that additional month to
finish the process properly. In the next chapter, we consider
some tools that large organi-
zations can use to speed up both strategic and operational
planning and keep the “intru-
sion” of planning in people’s busy lives to a minimum.

1. Suggest one way in which operational and budget planning
could suffer if the process were
rushed.
2. Imagine that the operational planning process was well into
its third month and already
extant conditions had changed (for instance, Medicare
reimbursement rates are unexpect-
edly slashed). What should the HSO do? For example, should
plans at the lowest levels be
changed first or only those plans most affected by the changed
conditions?
3. Should just the plans in question 2 be changed or should the
budgets be changed as well?
4. With more experience in operational and budget planning, it
should be possible to get it
done in less time each year. Exactly how important is getting it
done quicker?
spa81202_08_c08.indd 242 1/15/14 3:51 PM
CHAPTER 8Summary & Resources
Summary & Resources
Chapter Summary
• Operational planning focuses on planning the projects,
programs, tasks, and

activities the organization needs to implement its strategies and
includes both
what it already does as well as additional programs it must do
the next year.
• Budget planning focuses on getting all operating units to
spend what they need
to spend to do what they must do without exceeding the total
financial resources
that the HSO has or may have at its disposal for the coming
year. As plans take
shape for each operational or functional unit, they inevitably
undergo changes
until their estimated costs match the estimated financial
resources allocated to
that operational unit.
• Operational planning is carried out more effectively when
everyone involved in
the process understands that everything is part of a larger
system, that anything
they do affects other parts of the system, and vice versa. That
understanding,
called systems thinking, is critical in operational planning.
• Having access to the right information for management
decision making and
action is vital—HSOs could not operate without such
information. Many such
systems are nothing more than databanks, forcing the user to
make sense of
and interpret the data. Transforming them into systems such as
ERP (enterprise
resource planning) makes such data far more useful, but they
require consider-
able investment, not only in capital, but also in transforming the

way people
work and learn.
• Operational decisions should be based on consensus at each
decision-making
level, which means complete agreement. Getting a majority
vote, for example,
means there is a minority that disagrees with the decision,
which in turn means
that implementation will be that much more difficult.
• The policies in an organization are in effect the rules that
guide behavior in often-
encountered situations. That way, in such situations people will
make the correct
decision all the time. Having the policies in writing allows
people to refer to them
at any time and gives them the force of law (which, in the HSO,
they are). Policies
can cover, for example, how consumers and the environment
and vendors are
treated, as well as mundane subjects like what can and cannot
be included in an
expense report. Operational planning must take into account the
organization’s
current policies.
• Operational planning is the process by which objectives are
translated into proj-
ects, programs, tasks, and activities that get progressively more
detailed the fur-
ther down in the organization the process goes. Budget planning
is done at the
same time. Operational units must develop their plans while
staying within the
budget allocated to each one, requiring first drafts to undergo

several revisions
in order to balance these two requirements as they go up and
down the organiza-
tional hierarchy. One of the unheralded benefits of budget
planning is the creativ-
ity unleashed in order to reduce costs.
spa81202_08_c08.indd 243 1/15/14 3:51 PM
• Everyone in the organization should be involved in
operational and budget plan-
ning, not just managers and supervisors. When this happens,
new ideas have
a chance to surface, consensus is more likely, and
implementation goes more
smoothly.
• Operational and budget planning have to be done fairly
quickly just before the
start of the new fiscal year. Doing this is difficult without
compromising the
process and because involvement is an additional burden on top
of day-to-day
responsibilities. The risk with taking up to 3 months to do
operational and bud-
get planning is that conditions will change during the process,
requiring plans
to be further changed as a result. Experience helps, as does
revising plans first
before submitting them up the ladder for approval.
Web Resources

http://www.clinicalmicrosystem.org
The Dartmouth Institute Microsystem Academy is a globally
recognized leader in research,
education, and development of healthcare systems of care based
in clinical microsystem
applied research.
http://www.naccho.org/topics/infrastructure/accreditation/strate
gic-plan-how-to.cfm
This is a National Association of County and City Health
Officials booklet titled Strategic
Planning: A How-To Guide for Local Health Departments.
http://www.nursecredentialing.org/Magnet/
The Magnet Recognition Program- sponsored by the American
Nurses Credentialing
Center provides a model for involving staff in accomplishing
organizational goals to
achieve desired outcomes.
Key Terms
action information system A system that
automatically makes (the right) decisions
that are acted upon immediately.
budget planning The process of matching
available organizational financial resources
(cash on hand, a line of credit or loan, and
any investment) with what the organiza-
tion needs to spend to implement its cho-
sen strategies. It includes revising requests
for money from organizational units until
their requests and available resources
match. What each organizational unit is
finally approved to spend constitutes its
budget.

clinical microsystem The combination
of a small group of people who work
together in a defined setting on a regular
basis—or as needed—to provide care and
the individuals who receive that care.
enterprise resource planning (ERP)
A process that attempts to electronically
integrate and manage all of the individual
computer systems in an organization’s
departments.
executive information system (EIS)
A system that supports the decision mak-
ing of senior managers.
spa81202_08_c08.indd 244 1/15/14 3:51 PM
http://www.clinicalmicrosystem.org
http://www.naccho.org/topics/infrastructure/accreditation/strate
gic-plan-how-to.cfm
http://www.nursecredentialing.org/Magnet/
management information system (MIS)
A system that must supply the basic
information managers need for making
decisions.
operational planning A process that
involves preparing detailed organizational
plans for the coming fiscal year. It includes
programs, projects, and activities that the

organization is already doing, as well as
new ones required by any change in strat-
egy. It includes detailed plans by organiza-
tional unit. Finally, it includes coordinating
all these activities to make sure they sup-
port stated strategies.
PERT (project evaluation and review
technique) An operational tool useful in
planning, scheduling, costing, coordinat-
ing, and controlling complex projects.
policy An organizational directive
designed to guide the thinking, deci-
sions, and actions of managers and their
subordinates.
predictive information systems Permits
decision makers to draw inferences and
make predictions from the data.
reward system A system that incentivizes
people to excel and achieve beyond stated
objectives.
systems thinking The realization that
affecting one part of the system affects
other parts and that what is done must
benefit the whole and not just a particular
part at the expense of other parts.
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spa81202_08_c08.indd 246 1/15/14 3:51 PM

Leadership, Governance,
Values, and Culture
Learning Objectives
After reading this chapter, you should be able to:
• Describe what strategic leadership entails.
• Compare the differences and similarities between leaders and
managers.
• Discuss why strategic success depends on finding,
developing, and evaluating capable leaders.
• Compare and contrast governance in for-profit and nonprofit
HSOs.
• Examine the relationship between an HSO’s organization and
the strategy it is pursuing.
• Analyze the importance of organizational values and culture
and the extent to which they can
enable or hinder strategy implementation.
• Explain how and why organizational change is inevitable and
desirable if an HSO wants to
improve its competitiveness and performance.
Chapter 2
Noel Hendrickson/Photodisc/Thinkstock

spa81202_02_c02.indd 39 1/15/14 3:47 PM
CHAPTER 2Section 2.1 Strategic Leadership and Developing a
Vision
This chapter focuses on the roles of power, leadership,
organizational culture, values, and
attitudes toward innovation as they relate to strategic planning
and management (refer
back to Figure 1.1 in order to see the components of the
strategic management model for
Chapter 2). The importance of leadership, the roles of top
management and the board of
directors, values and culture, and organizational change all
affect the quality of strategic
planning and are in turn affected by it.
2.1 Strategic Leadership and Developing a Vision
In articles in the business press and the literature, the words
manager, leader, executive, and
administrator are often used interchangeably. Consider,
however, the implied judgments
in the descriptions of a person as “a
real leader” versus “just a manager,”
and it becomes evident that the terms
are different.
One might assume the only person
who creates a vision is the individ-
ual at the apex of an organization,
such as the HSO administrator or the
president of a health system. This is
certainly not the case. Leaders can be
found at any level in an organization.

A leader is anyone who can visualize
a better state of affairs and persuade
others that such a vision makes sense.
A leader is anyone who is dissatisfied
with the status quo, has suggestions
for improvement, and is able to con-
vince others of the merits and bene-
fits of such changes. By contrast, managers are responsible for
implementing changes and
achieving performance objectives. Managers do not need to be
leaders, although what
they do is nonetheless critical to an organization’s success.
What makes leadership “strategic”? Strategic leadership
involves creating a vision and
strategy that helps the organization succeed at its mission in
both the short and the long
term. Whereas leadership may be required for bringing about
changes or improvements
to parts of the organization, strategic leadership determines the
long-run survival and
success of the entire organization.
Power in an Organization
All types of executives have the authority to force others to do
what they want done.
Executives with leadership capabilities more often use
communication and a range of pro-
social influence tactics (e.g., reward, rationality, and
friendliness) to gain others’ coopera-
tion (Lamude, Scudder, Simmons, & Torres, 2004). Leaders
have the power to influence
Blend Images/SuperStock

True leaders use influence rather than authority to get
people to do what they want them to do.
spa81202_02_c02.indd 40 1/15/14 3:47 PM
Vision
or affect the people around or under
them. This is true regardless of
whether they hold leadership posi-
tions. There are five types of power
in an organization.
Legitimate power is the authority
derived by virtue of occupying a
position in the organization. The
higher the position a person occu-
pies, the greater the authority or
legitimate power that person holds.
Expert power is derived from a per-
son’s unique competencies, skills,
and experience. For example, a group
surviving a crash on a mountainside
is likely to willingly follow the mem-
ber with survival knowledge and
skills. Referent power is derived from
subordinates’ or followers’ respect,
admiration, and loyalty to the leader;
it is often referred to as leadership charisma. Leaders who have
the ability to give or with-
hold meaningful incentives hold reward power. Incentives can
be tangible rewards such

as pay raises, bonuses, or preferred job assignments or
intangible rewards such as verbal
praise or respect. A leader or manager in a position to punish a
subordinate is said to have
coercive power, which could take the form of firing someone,
denying a raise or bonus, or
reassigning the person to an undesirable location (Jones &
George, 2007).
Transactional leadership has been the dominant style in many
healthcare organizations
(Schwartz & Tumblin, 2002). Transactional leadership relies on
interactions between the
leader and follower, with followers rewarded for meeting
specific goals set by leaders.
For instance, hospital governing boards often set performance
expectations (financial and
quality criteria) by which the CEO is evaluated and rewarded.
The CEO, in turn, sets
performance expectations for top management, top management
sets performance expec-
tations for middle managers, and so on. Leaders in the
hierarchical healthcare environ-
ment are followed primarily because the followers benefit. For
example, the relationship
between hospital leadership and the hospital’s organized
medical staff is transactional in
that leadership relies on the independent physicians caring for
hospitalized patients to
assist the organization in meeting financial and quality
performance goals. The physicians
benefit from providing this assistance—they have a hospital in
which to care for their
patients that is financially strong and has a good reputation.
Mission and Vision Statements

Healthcare organizations—indeed, any kind of organization—
need mission and vision
statements. Like many terms in the business lexicon, these are
misunderstood and often
misused.
Thomas Northcut/Digital Vision/Thinkstock
A physician who has received many years of medical
training and achieved a position of authority in a
healthcare organization can be said to have both
legitimate and expert power. Whether she has referent
power will depend to a large extent on her own charisma.
spa81202_02_c02.indd 41 1/15/14 3:47 PM
Vision
Mission Statements
A mission statement is a concise statement of an HSO’s reason
for being—its purpose,
what it actually does, and for whom. It describes what services
are provided for which tar-
get market, as well as how the organization considers itself
different or unique. A mission
statement should not contain descriptions of values, strategies,
or objectives (although
many organizations make this error). It could also contain a
description of what the
HSO’s consumer will experience when using its services
(known as the customer value
proposition).

A mission statement answers the questions “What do you do?”
and “What is your raison
d’être (reason for being)?” For many HSOs, the answers have
not changed for many years.
With today’s fast-moving transitions in the healthcare industry,
many organizations are
revisiting their mission statements to determine if they are still
valid. The ideal time to do
this is at the end of the annual strategic planning process.
When crafting a mission statement, care should be taken in how
broadly or narrowly the
HSO is characterized. For example, an organization could
conceive of itself as a primary
care clinic or as a public health clinic, the latter precluding any
work or involvement in
the private sector. It could be a home health agency or a hospice
agency, the former being
broader and the latter more restrictive in the kind of services
provided and the target
consumers.
Suppose that in the course of conducting its strategic analysis,
an organization partnered
with a national health system. If its existing mission statement
characterized it as being
local in scope, then clearly the mission statement would need to
be modified and aligned
with the new reality. This is why both the mission and vision
statements are reconsidered
at the end of the strategic planning process.
Consider the following example of a poorly written mission
statement:

Care. Trust. Heal.
You might never identify this as the mission statement of a
hospital. While the statement
is short, as recommended by some management consultants, it is
probably more of a
marketing slogan than a mission. Missing is what the
organization actually does and for
whom, and so on. Contrast this with the well-written mission
statement of Mayo Clinic in
Rochester, Minnesota:
To inspire hope and contribute to health and well-being by
providing the
best care to every patient through integrated clinical practice,
education
and research. (2013, para. 1)
It is obvious from this mission statement that patients are the
primary reason Mayo Clinic
exists. How it strives to provide patient care is clearly
articulated. The customer value
proposition at Mayo Clinic is hope and best patient care.
Mission statements are a communication device—they inform
internal stakeholders
(physicians, managers, staff members) as well as external
stakeholders (consumers, com-
munity of interest, investors) about the HSO’s unifying themes
and goals that guide deci-
sion making, resource allocation, and planning. Although some
management consultants
spa81202_02_c02.indd 42 1/15/14 3:47 PM

Vision
Examples of Vision Statements
Read the following vision statements, and, using the criteria
discussed, evaluate each.
Accurate HomeCare (2013, para. 2): “Build the largest and most
trusted home care company in the
Midwest.”
The Dental Service at the Salt Lake City Veterans
Administration Medical Center “will accomplish
the following”:
1. Provide an integral part of the patient’s total health care
2. Provide appropriate and quality care
3. Provide a caring atmosphere
4. Provide timely and efficient care
5. Function as a team to maximize use of resources
6. Advocate for eligibility reform/equitable access to dental
care
7. Provide holistic care
8. Provide quality education for dentists, auxiliaries, trainees,
and the community
9. Make health promotion for patients a priority. (2013, para. 2)
discourage organizations from including value statements in
their missions, HSOs affili-
ated with religious groups are an exception. Hospitals in the
Adventist Health System, for
example, always espouse a mission that includes references to
Christ’s healing ministry
and Christian values.

Vision Statements
Does a strategic leader simply conjure up in isolation a vision
for the organization? Do
effective leaders rely on others in the organization to support
the development of a realis-
tic vision? Let us examine the nature of organization vision
statements and the approaches
used to create them. A vision statement is a concise expression
of where the organization
would like to see itself in the next 5 or 10 years. What makes an
effective vision statement
rather than one that just sounds good? At some point, the
organization will want to know
if the vision has been achieved.
The vision of Centura Health, based in Denver, Colorado, is
“Fulfill a covenant of caring
for our communities with excellence and integrity to become
their partner for life” (2013,
para. 5). While this vision sounds very good, how will Centura
Health determine if this
vision has been achieved?
Vision statements should include some type of quantitative
measure. For example, the
vision for University of California, Irvine, Medical Center and
School of Medicine is “to be
among the best (top 20) academic health centers in the nation in
research, medical educa-
tion, and excellence in patient care” (2012, para. 3). This is a
measurable vision. Ideally, the
vision statement should be concise, inspiring, memorable, and
achievable—a tall order,
but not impossible. (For a few samples of real-world vision
statements, see Examples of

Vision Statements.)
spa81202_02_c02.indd 43 1/15/14 3:47 PM
Vision
It is imperative that a healthcare organization’s strategy and
vision be completely aligned.
This is why an organization should review and, if necessary,
revise its vision statement
after deciding on the strategy and strategic direction, in case the
latter has changed.
Visionary leaders should collaborate with other top managers
and their board of directors
to craft a good vision statement that embodies their vision and
makes sense to all of the
organization’s stakeholders. Getting everyone’s agreement takes
time; however, such col-
laboration is necessary if the vision is to be truly shared and
owned by everyone. A great
vision becomes realized only when every person in the
organization makes a contribution
toward its achievement and does not merely rely on those at the
top. Table 2.1 summarizes
the differences between mission and vision statements.
Table 2.1: Characteristics of mission and vision statements
The mission statement focuses on current
activities—“who we are” and “what we do”
The vision statement concerns the future

path—“where we are going”
Current service offerings Markets to be pursued
Consumer needs being served Future service–customer focus
Operational and business capabilities Kind of organization that
management is trying
to create
1. Are most CEOs and presidents of healthcare organizations
today “strategic” leaders? Why or
why not?
2. Consider the following leaders. For each one, state the source
or sources of their power—
legitimate, expert, referent, reward, coercive—and explain the
reasons for your choice:
• Martin Luther King, Jr.
• Your mother
• U.S. surgeon general
• Michael Ellis DeBakey, world-renowned heart surgeon
• The professor of your strategic management course
3. If you wrote the mission statement for your local hospital,
what would it say? How does it
compare to the hospital’s official mission statement?
4. Why do healthcare organizations find it difficult to develop a
good vision statement?
5. If an organization has a good vision statement, why is a
mission statement necessary?
6. Vision statements typically look 5 or 10 years into the future.

Name an organization (or
an industry) where a vision statement might be developed for 20
or more years, and one
where less than a year might make sense.
7. Many organizations have vision statements that “sound nice”
purely for public relations
(PR) purposes. How can you tell the difference between the
“PR” vision statement and the
genuine thing?
8. Should every employee in the organization be able to recite
the mission statement? The
vision statement? Both? Why or why not?
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CHAPTER 2Section 2.2 Leaders and Transformational Change
2.2 Leaders and Transformational Change
Warren Bennis, a pioneer in the contemporary study of
leadership, once said, “Managers
do things right; leaders do the right thing” (Bennis & Nanus,
2012, p. i). Bennis’s words
echo a common saying in business that “leaders create change
while managers implement
change.” The way that healthcare leaders create change is by
creating a vision for the orga-
nization and then “selling” the benefits of that vision to the rest
of the organization. To
the extent that they succeed, they create followers and motivate
or influence them to put
forward their best efforts for making the vision a reality. The

leader’s vision then becomes
their vision. One test of leadership is whether the leader
actually has any followers. Who,
indeed, has the leader succeeded in influencing?
“Fundamentally, management is about
coping with complexity (control),
whereas leadership is about transfor-
mational change” (Schwartz & Tum-
blin, 2002, p. 1421). Robert Allio also
has written on the differences between
leaders and managers. The key differ-
ences he describes are summarized in
Table 2.2. He further provides five pre-
scriptions for improving the quality of
leadership. Allio contends that good
leaders must have good character and
integrity, a personal style that balances
managing with leading, a commitment
to collaboration, and adaptability.
Lastly, leaders are self-made, and good
leadership requires constant practice
(Allio, 2009).
Table 2.2: Leaders vs. managers
Leaders Managers
Take the long view Take the short view
Formulate visions Make plans and budgets
Take risks Avoid risks
Explore new territory Maintain existing patterns

Initiate change Transact
Transform Control
Empower Enforce uniformity
Encourage diversity Invoke rationality
Invoke passion Act amorally
Source: Allio, R. J. (2009). Leadership—the five big ideas.
Strategy & Leadership, 37(2), 4–12. Used with permission.
Creatas/Thinkstock
Effective leaders know how to make others feel
comfortable, using nonverbal behaviors that create a
sense of personal connection.
spa81202_02_c02.indd 45 1/15/14 3:47 PM
Is it difficult to be a leader? The list of attributes in Table 2.2
might appear daunting to a
junior person in a healthcare organization. To someone who
seeks out challenges, learns
from experience, works well with others, takes the initiative,
and in other ways “prac-
tices” leadership, it is a natural progression to leadership
positions with ever-increasing
responsibility and visibility.
Communication and Effective Leadership

Although personality, business acumen, legitimate power and
authority, and expertise
are factors in leadership ability, communication competence is
central to the practice of
influence and leadership in organizations. Without the ability to
relate to others at work
through interactions, influence and leadership are virtually
impossible. A foundation of
strong relational and communication skills is critical to the
ability to inspire motivation
within others and to encourage the pursuit of organizational
vision.
Impression Management
Leadership effectiveness and communication satisfaction within
organizations rely heav-
ily on perceptions of individuals in formal or informal
leadership positions. Thus, strong
leaders are able to manage others’ perceptions and have a
heightened degree of self-
awareness. They must be aware of what is appropriate and
expected in a given situa-
tion, possess the skills to deliver it, and demonstrate the
motivation for accomplishing
excellence.
Effective Message Content
Good leaders pay a great deal of attention to the content of their
messages. They approach
their leadership communication as a goal-directed activity,
rather than mindlessly. They
craft their messages strategically so as to provide others with a
clear, concrete sense of
their vision. The content of their formal and informal messages
should be motivational

and inspirational and succeed in convincing others that
behaving consistently with the
leader’s (or organization’s) vision is truly in their own best
interests. Needless to say, lead-
ers must also have unquestionable ethics and engage in this type
of influence carefully
and thoughtfully.
Strong Message Delivery
Effective message delivery, often referred to as charisma, is
central to leadership effec-
tiveness. Numerous research studies point to the importance of
message exchanges that
foster a sense of connectedness among communicators.
Although connection can be dif-
ficult to define, studies have isolated factors such as smiling,
using others’ first names in
conversation, appropriate touch and diminished physical
distance, making eye contact,
removal of physical barriers (for example, sitting on the same
side of a table or desk with
the other communicator and avoiding the use of lecterns during
public presentations or
meetings), engaging in some degree of self-disclosure, and
using animated facial expres-
sions as important to reducing the psychological distance
between people.
spa81202_02_c02.indd 46 1/15/14 3:47 PM
Leader Communicator Styles

An animated leader relies primarily on nonverbal
behaviors such as gestures, eye contact, and facial
expressions to motivate others. An individual who
fits this profile but is not able to draw on behaviors
associated with the other styles will lack influence
in contexts other than face-to-face communication.
An attentive leader relies primarily on listening
skills in relationships with others to exert influence.
Through both verbal (asking questions, paraphras-
ing, and validating others’ positions) and nonverbal
(eye contact, head nodding, and leaning forward)
means, attentive communicators illustrate that they
value individuals and their ideas. Attentive leaders
must be careful to listen to others and actually incorporate their
perspectives into organizational
strategies and plans to maximize their credibility and impact.
A contentious leader is argumentative and challenging in
communication with others. These lead-
ers may enjoy playing the devil’s advocate and will often
challenge others to prove or support their
positions. Although the contentious communicator can be
challenging to work with, this style can
enable transformation by encouraging others to think outside
the box. This leader’s communica-
tion style and interactions with others focuses on asking
questions, raising the bar, and being intel-
lectually stimulating.
A dominant leader is similar to a contentious leader, but instead
of questioning and challenging
others, dominant leaders take charge of conversations and speak
in a strong manner. They tend
to communicate more frequently than others in meetings and

conversations. This style suits the
authoritative leader but can be precarious for leaders operating
in more democratic environments.
A dramatic leader communicates both verbally and nonverbally
in flowery and exaggerated ways.
These leaders use narratives and expressive language to convey
their positions. They may even rely
on poetry, literature, or dramatic quotations from others to drive
home their point.
A friendly leader influences others through frequent delivery of
positive feedback and praise.
(continued)
Communicator Style
Communication researcher Robert Norton (1983) identified nine
primary communicator
styles that nearly 30 years of research have consistently
supported (see feature box Leader
Communicator Styles). When applied to leadership, they give
some insight into the reper-
toire of communication behaviors available to foster leadership
and encourage influence.
As you read about each, consider the situations in which they
would be most appropriate.
Remember, although an individual may have a primary
communicator style, people can
“borrow” habits from each of the styles. The most competent
communicators are flexible
and adaptive in their approaches to different situations.
© Ed Kashi/VII/Corbis
A leadership style that is facilitative, rather

than authoritative, is preferable for a home
model of healthcare delivery.
spa81202_02_c02.indd 47 1/15/14 3:47 PM
Leader Communicator Styles (continued)
An open communicator leader expresses emotion and self-
discloses personal experiences (both
positive and negative) as a way of inspiring and influencing
others.
An impression-leaving leader finds ways to deliver memorable
messages that others think about
after the conversation is over.
A relaxed leader is calm and understated in his or her approach.
These leaders rarely reveal anxiety
or nervousness and react unflappably under pressure. They
exude confidence and composure.
Effective leaders understand that impression management,
strong message content, and
effective delivery are central to their ability to influence others.
Further, they recognize
that there is not one perfect communicator style for a leader.
Strong leaders are adept at
analyzing people and situations and selecting a message,
delivery approach, and personal
style that best fits the circumstances.
Beckhard and Pritchard (1992) note that high-performing

organizations have a strong
sense of purpose with a team-driven model of management that
involves shared,
knowledge-based decision making. Continuous learning and
improvement are encour-
aged, and employees are considered valued partners in these
efforts. Paul O’Neill, former
chairman and chief executive officer of Alcoa, suggests people
working in a healthcare
organization should be able to answer “yes” to these three
questions every day:
• Am I treated with dignity and respect by everyone, every day,
in
each encounter, without regard to race, ethnicity, nationality,
gen-
der, religious belief, sexual orientation, title, pay grade, or
number
of degrees?
• Do I have what I need—education, training, tools, financial
support,
encouragement—so I can make a contribution to this
organization
that gives meaning to my life?
• Am I recognized and thanked for what I do? (Lucian Leape
Institute,
2013, p. ES2)
1. What are some strategies leaders can use for managing how
other people perceive them?
What are some specific ways in which you already practice
these perception-management

strategies in your personal and professional life?
2. Consider each of Norton’s communicator styles as they relate
to leaders and leadership.
Identify at least two situations in which each style would be
appropriate, and two situations
in which each style would probably be ineffective. Explain.
3. What is the difference between a goal-directed message and a
mindless message? Explain
your perspective. Why is goal-directed communication more
desirable for leaders than
mindless communication?
spa81202_02_c02.indd 48 1/15/14 3:47 PM
Leadership Traits
It is well known that experience is the best teacher of
leadership. An Accenture study of
leaders in all fields found they agreed that real work and life
experiences had taught them
more about leadership than any classes they had taken (Thomas
& Cheese, 2005). When
interviewed about the making of healthcare leaders, one hospital
vice president recounted
that he had not learned leadership skills in his graduate
program: “We received technical
education on finance, operations, accounting, policy and policy
development. Even with
my degrees, I still needed a lot of mentoring in terms of
executive expectations” (Witt/

Kieffer, 2007, p. 3).
While experience is certainly valuable to leadership
development, some key personal-
ity traits can typically be found in people with leadership
positions at various levels.
The first of these is vision—the ability to see the big picture,
imagine likely futures,
and infuse that vision with passion. Integrity is a requisite trait
because it is impossible
to influence others without gaining their trust. Communication
skills, compassion, and
charisma are needed to articulate the vision and persuade others
to embrace it. Leaders
demonstrate strong moral and ethical principles. Attention is
given to all stakeholders,
not some at the expense of others. A commitment to
collaboration encourages everyone
to work together to achieve a vision. A less obvious trait of
leaders is humility. Effective
leaders typically give others credit for an organization’s success
but will accept responsi-
bility for poor results. These traits can be summed up in the
phrase emotional intelligence,
which Goleman (2004) asserts is the indispensable ingredient of
effective leadership.
Five domains constitute Goleman’s definition of emotional
intelligence: self-awareness,
self-regulation, motivation, empathy, and social skills.
Robert K. Greenleaf introduced the servant leadership
philosophy in 1970 and defined
servant leaders as those who achieve results for their
organizations by attending to the
needs of those they serve (Greenleaf, 1970). Max de Pree, the
longtime chairman and

CEO of the Herman Miller office furniture company,
personified the concept of servant
leadership in business. He characterized the art of leadership as
“liberating people to do
what is required of them in the most effective and humane way
possible” (O’Toole, 1989,
pp. xviii–xvix). This puts the leader as the “servant” of his
followers by removing
obstacles that prevent them from doing their jobs, thus enabling
them to realize their
full potential.
The importance of humility also figures prominently in the
concept of Level 5 leadership,
developed by Jim Collins. Collins’s research examined how
companies were able to tran-
sition from being merely “good” to “great.” He concluded that a
leader builds “endur-
ing greatness through a paradoxical blend of personal humility
and professional will”
(Collins, 2001, p. 20). Table 2.3 further elaborates on humility
and will as these traits per-
tain to leadership. So where might you find a Level 5 leader?
According to Collins, “Look
for situations where extraordinary results exist but where no
individual steps forth to
claim excess credit. You will likely find a potential Level 5
leader at work” (2001, p. 37).
Level 5 leadership is transformational. Leaders in high-
performing HSOs inspire and
motivate followers to achieve greatness. Studies have shown
that healthcare leaders who
promote innovation and change are critical to the success of
implementing “best practice”
patient care (Aarons, 2006).

spa81202_02_c02.indd 49 1/15/14 3:47 PM
CHAPTER 2Section 2.3 Developing and Evaluating Leaders
Table 2.3: Summary of the two sides of Level 5 leadership
Professional will Personal humility
Creates superb results, a clear catalyst in the
transition from good to great
Demonstrates a compelling modesty, shunning
public adulation; never boastful
Demonstrates an unwavering resolve to do
whatever must be done to produce the best
long-term results, no matter how difficult
Acts with quiet, calm determination; relies
principally on inspired standards, not inspiring
charisma, to motivate
Sets the standard for building an enduring great
company; will settle for nothing less
Channels ambition into the company, not the
self; sets up successors for even greater success
in the next generation
Looks in the mirror, not out the window, to
apportion responsibility for poor results, never
blaming other people, external factors, or luck
Looks out the window, not in the mirror,

to apportion credit for the success of the
company—to other people, external factors, and
good luck
Source: Based on Collins, J. (2001). Good to great: Why some
companies make the leap . . . and others don’t. New York, NY:
HarperCollins Publishers.
Many primary care providers, particularly those practicing in
rural settings, are poorly
trained in leadership skills (Markuns, Culpepper, & Halpin,
2009). With primary care pro-
viders being asked to transform to patient-centered, medical
home models of healthcare
delivery, leadership skills that are facilitative in nature, as
opposed to the more common
authoritative approaches, will be needed.
1. What leadership traits, if any, have you learned in your work
experiences? What traits may
be more difficult to learn on the job?
2. When managers are promoted to more senior positions with
substantial leadership respon-
sibilities, what problems might they encounter in their first year
in the new position?
3. What is more important to a leader’s success: high
intelligence and solid technical skills, or
high emotional intelligence? Or are these traits equally
important?
4. Do you have what it takes to be a Level 5 leader? Why or
why not?

NURS 6050C: Policy and Advocacy for Improving Population Health

NURS 6050C: Policy and Advocacy for Improving Population Health

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NURS 6050C: Policy and Advocacy for Improving Population Health