As Niccolo Machiavelli wrote 500 years ago in The Prince, “It ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new. This coolness arises partly from fear of the opponents, who have the laws on their side, and partly from the incredulity of men, who do not readily believe in new things until they have had a long experience of them.”

These words still ring true today, particularly for those willing to step up as change agents and assume hospital and health care leadership roles. The political peril is compounded by the complexity of the organization that the prospective new leader is entering.

Bigger challenges ahead

Each hospital is an amalgamation of many different operations and support services. Today’s health care systems often include a number of hospitals as well as physician groups, home health agencies and, increasingly, insurance companies. Each of these entities has a different business model. It is impossible for any single leader to have expertise in all aspects of the business.

As management guru Peter Drucker said in 2002, “Health care is the most difficult, chaotic, and complex industry to manage today.” It has only gotten worse in the past 15 years.

In addition to the complexity inherent in health care, organizational leaders are subject to intense pressures to:

  • Ensure patient safety.
  • Achieve high quality.
  • Provide high levels of patient satisfaction.
  • Maintain a vibrant professional workforce.
  • Stay ahead of their competitors in providing the latest state-of-the-art technology.
  • Attract the highest-quality physicians to their medical staff.
  • Actively engage with leaders of other businesses and nonprofit organizations in their community.

And they are expected to do all of this while maintaining a financially healthy operation in a business with razor-thin operating margins.

The potential risks are daunting as well. Health care provider organizations are under regular threats from:

  • Reimbursement reductions through claims denials.
  • Malpractice litigation.
  • Strikes by various components of the workforce.
  • Frequent changes in regulations.
  • Shortages of physicians and other clinical expertise. 
  • Unanticipated actions that can result in public relations fiascos.

It’s no wonder that the turnover rate for hospital CEOs is the highest of any field, with the tenure of a hospital CEO averaging about 3 years. CEOs constantly need to balance acting quickly and decisively in response to urgent business imperatives with taking the time to understand the root cause of an issue and leading a team through a collaborative approach to implementing the best possible strategy to address the problem.

Success factors

Despite all these challenges, leaders are responsible for the culture of their organization. The choices they make about what is important and how they lead their organization to achieve success has a greater impact on the organization’s success than any other activity in the health care system.

The high turnover rate makes the CEO role of “keeper of the culture” more difficult, as it is increasingly common for CEOs to be new to their organizations. They may come into the position with a positive track record of achievement at other institutions, but that reputation will only carry them through the first three to six months of their tenure.

In short order, they need to develop credibility and positive working relationships with a wide array of stakeholders, including the board of directors, their direct reports, the medical staff, and key business and political leaders in the community. And remembering the warnings of Machiavelli, a CEO who has been brought in as a change agent to fix one or more underlying problems is likely to upset one or more of these key stakeholders.

So what does it take to be a successful health care leader? Nothing more than the wisdom to accurately predict strategic opportunities and threats, the savvy to read the political tea leaves, the executive presence to engender the respect of those who are getting to know the CEO, the warmth to engender the trust of those who report up to him or her, and the personal character to embody all of these while acting as a servant leader.

There are great leaders out there who embody all of these traits. They are in high demand. A hospital or health system that wants to attract them needs to offer them a compelling reason to take on the challenge of entering a new environment and serving as a change agent.

Those responsible for recruiting top talent should first ask, “What does our organization have to offer?”

Paul DeChant, M.D., MBA, is a senior adviser at Simpler Healthcare, a Truven Health Analytics company (now a part of IBM), and the former CEO of Sutter Gould Medical Foundation. He is based in San Francisco and is the author (with Diane W. Shannon) of Preventing Physician Burnout: Curing the Chaos and Returning Joy to the Practice of Medicine.

The opinions expressed by the author do not necessarily reflect the policy of the American Hospital Association.