Page 1 of 11
Archives of Business Research – Vol. 12, No. 6
Publication Date: June 25, 2024
DOI:10.14738/abr.126.17129.
Wilson, A., Randolph, Y., & Samis-Smith, P. (2024). The Hospital Turnaround That Wasn't: A Leadership Perspective. Archives of
Business Research, 12(6). 83-93.
Services for Science and Education – United Kingdom
The Hospital Turnaround That Wasn't: A Leadership Perspective
Asa Wilson
Management Department, Southeast Missouri State University
Yvonne Randolph
Management Department, Southeast Missouri State University
Phrosini Samis-Smith
College of Nursing & Health Professions, Valparaiso University
ABSTRACT
The concept/reality of an at-risk hospital is discussed in terms of its attributes and
performance shortcomings. A hospital case example of a four-year turnaround
intervention is presented. The case identifies a leadership style associated with a
presumed turnaround initiative. The discussion’s goal is to link visible performance
improvement outcomes with a contradictory leadership approach. This case
underscores the difference between a difficult management strategy presenting
itself as a dynamic, innovative leadership front.
Keywords: Hospital turnaround, Leadership style, Organizational behavior
"Dark spruce forest frowned on either side of the frozen waterway. The trees
had been stripped by a recent wind of their white covering of frost, and they
seemed to lean toward each other, black and ominous, in the fading light. A
vast silence reigned over the land. The land itself was desolation, lifeless,
without movement, so lone and cold that the spirit of it was not even that of
sadness.
White Fang, Jack London
INTRODUCTION
The above epigraph is a metaphor of the distress inherent in an at-risk healthcare organization
that has lost its way and not fulfilling its mission. Such facilities face demands of surviving yet
retain a hope that their former potential can be restored. The hope is for a quick restoration
accomplished without minimal upset to the hospital’s original culture. Applying London's [1]
depiction of “the savage, frozen-hearted Northland Wild" to a turnaround hospital may seem
overdramatic though London has portrayed spirit of a lost entity. Also, this epigraph is a useful
for understanding the leadership components of a turnaround that wasn't.
Discussions have taken place recently about the concept of a turnaround in healthcare
organizations (Sloma, [2]; Moore and Simendinger, [3]. This situation has fostered an interest
in hospital turnaround strategies [4]. In addition, former healthcare administrative
practitioners are transitioning themselves into turnaround experts [5]. Also, rural and urban
hospitals have encountered operating difficulties that have placed their going concern status at
Page 2 of 11
84
Archives of Business Research (ABR) Vol. 12, Issue 6, June-2024
Services for Science and Education – United Kingdom
risk. Thus, one purpose of this paper is to highlight the error of declaring a turnaround
accomplished before a lasting turn has occurred. Further, a case example demonstrates that it
is possible to create the appearance of a turnaround when a true restoration has not been
achieved.
Also, turnaround discussions focus on techniques required to reverse negative trends. The
assumption is that a successful turnaround results from applying actions unrelated to the
leader's character. This paper underscores the leadership attributes essential for a successful
turnaround by highlighting counterproductive qualities. The argument is that a turn cannot be
accomplished by a sterile executive intervention. Rather, a true turn places demands on the
senior executive requiring sincere, personal involvement – a necessity may run counter to a
leader's style.
This study is a case example of an apparent hospital turnaround demonstrating several
leadership issues highlighted by Manion [6,7]. Since resolving organizational weaknesses
requires a precise, focused leadership intervention, the turnaround environment amplifies the
impact of leadership behavior on an organization. Further, Manion’s pragmatic approach to
healthcare leadership identifies leadership attributes that distinguish management from
leadership. These conversation points provide the framework for challenging the argument
that a significant turnaround occurred in the case study organization. Manion's conversation
points help document the turnaround that wasn't. These points also support that the leader's
character and resultant style progressively pervades and determines the organization’s
operating style. The organization's culture is a clear reflection of the senior leader's character
style - for better or worse. A turnaround health facility is not fulfilling its mission. It is an
organization with clear weakness driven by a root issue.
Wilson, from experiences in four rural four facilities, has developed a symptom picture of
distressed organization [8,9]. Table 1 summarizes the symptoms that characterizing these
organizations. Table 1 is an inventory of immediately apparent attributes encountered when
entering an at-risk rural facility.
Table 1: Characteristics of an At-risk Hospital
No. Hospital Characteristics
1. Limited definition of and respect for organizational boundaries.
2. Poorly delineated lines of governance and leadership accountability.
3. Governance by oral tradition instead of well-defined policies.
4. Minimal medical staff leadership and organizational participation.
5. Proliferation of non-essential work and higher than needed staff levels.
6. Weak ability to plan, organize, and execute strategies.
7. Marked declines in statistical and financial performance.
8. Absence of defined planed initiatives to resolve the situation.
9. Former leader heralded as a godsend or condemned as a scapegoat.
10. Many staff follow self-defined job descriptions unrelated to facility’s mission.
11. Marketing, public relations, and advertising are costly and haphazard.
12. A cluster of avoided and unresolved personnel difficulties are disruptive.
13. Cause of several difficulties are defined as external to the facility.
Page 3 of 11
85
Wilson, A., Randolph, Y., & Samis-Smith, P. (2024). The Hospital Turnaround That Wasn't: A Leadership Perspective. Archives of Business Research,
12(6). 83-93.
URL: http://doi.org/10.14738/abr.126.17129
14. Information flow is inconsistent, weak, and diffuse.
15. Documentation of transactions is limited and unreliable.
16. Plant and equipment are dated, unreliable, and/or obsolete.
An investigation of the situation reveals a single root cause driving the presenting symptoms.
In each facility, organization's distress can be traced to an abdication of legitimate authority,
primarily by the governing body. The Board often weakens its authority and enables an
alternative. In cases, the Board abdicated its authority by allowing the physician Chief of Staff
to supplant the Board's role. In others, a management company filled the void created by the
Board's sidestep. Equally often, the Board yields to the senior executive by allowing this
individual to set a course for the organization. Thus, there is no direct line of leadership
authority that can be traced from the Board to the CEO throughout the organization. Instead,
there is always a form of disrupted, diluted, and distributed governance authority. Further, the
extent of this governance abdication is directly proportional to the organization’s operating
distress.
Wilson [10] posits a community’s type is a variable that moderates the extent to which a
governing body abdicates its authority. It is possible to develop a typology of rural communities
and to quantify the how hospital governance behavior is associated with a community's type
[11, 12, 13]. It follows that the design of a turnaround intervention must include an
understanding of the community in which the hospital is embedded. One community
characteristic is how it responds to expressions or assertions of leadership. Since a hospital
organization is a microcosm of its community, this style will determine the organization's
response to an improvement intervention. Though this is a testable hypothesis, a discussion of
community types is beyond the paper’s leadership scope. If a governance abdication is accepted
as a root problem in an at-risk entity, a true turnaround is one that reestablishes the Board's
governance authority and aligns hospital operations under restored oversight. Conversely, a
lasting turnaround is one that does not allow the overt symptoms to determine a corrective
course of action. If the focus is on the compelling overt operating difficulties, the executive
function will expend resources and energy covering up a root issue - a destructive dynamic that
will only frustrate efforts at symptom resolution and simply allow these issues to re-surface
later in the form of another negative symptom. Any attempt to layer positive features on a
negative governance-executive style will create the appearance of a turnaround that truly isn't.
The following case example is a framework for demonstrating that an executive's leadership
style is determinate of the organization’s dynamic. A leader's personal character is expressed
in the organization's day-to-day operating style. Schein [14] provides support for this position,
"Neither culture nor leadership, when each is examined closely, can really be understood by
itself. One could argue that the only thing of importance that leaders do is to create and manage
culture ... " Further, it is possible for a senior leader's character style to style to be
counterproductive by creating a misleading appearance of an organizational reality.
CASE STUDY ORGANIZATION SUMMARY
Organizational Profile
Faith Memorial Hospital (FMH) is a 125-bed 501(c)(3) facility in a community of 35,000 with a
three-county service area. The hospital provides routine inpatient and outpatient services. FMH