Leadership Styles and Management Structures Within Health Care Organizations

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The health care industry is adapting to rapid changes in privacy laws, policy and regulation, requiring organizations to revisit their governance styles. This overview outlines leadership styles, management structures and the different ways that technology drives change.

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Hybrid Management and the New Public Management Reform

Hybrid management involves giving health professionals positions in management. There are two types of hybrid management structure, rational-legal and charismatic.

Rational-Legal Vs. Charismatic

Rational-Legal leadership ties an organization’s authority to legal rationality, legitimacy and bureaucracy, requiring a systematic and logical approach to leadership.
In contrast, charismatic leadership does not have a strict structure. It is based on an individual’s impact instead. This leadership style connects distinct groups and gives an authority the influence to lead them.

Charismatic Leadership in Practice

In the United Kingdom, a group of health practitioners used a charismatic management structure to establish a specialized diabetes foot-care practice.

Implementing a charismatic structure of management allowed these health practitioners to demonstrate their knowledge, clinical skills and public confidence, despite lacking formal credentials. This resulted in a 50 percent reduction of major amputations.
However, The Case of the “Diabetes Specialist Podiatrist” published by the Sociology of Health & Illness Journal noted that “A lack of formal admission rights and their status as supplementary prescribers constrains their role, ensuring their continued dependence upon medical colleagues.”

New Public Management

New Public Management (NPM) is a method of management implemented by governments wanting to hold public institutions accountable for delivering a high quality of care and allocating resources based on performance.
NPM was introduced in the 1980s due to “mistrust in self-regulated knowledge and of the need to enhance the efficient use of resources.”
However, these reforms have limited clinicians’ ability to move into management roles. According to a research proposal published by Aarhus University, “The initial intentions of the politicians may very often change down through the hierarchy, and it may often conflict with the daily routine experiences, which results in complete different outcomes than first anticipated.”

Transactional, Charismatic, Transformational and Servant Leadership

The four main leadership styles — transactional, charismatic, transformational and servant — may vary, but they each have the ability to improve poorly-structured organizations.

Transactional leadership works by establishing an exchanging process between leaders and followers. While transactional leadership encourages strong planning and budgeting skills, it does not foster skills involving cognitive and affective competence.
Charismatic leadership inspires followers to place organizational and departmental interests above their own and to strive for greater ambitions than expected. While charismatic leaders have a clear vision for future goals and strong affective competence, they may be lacking in cognitive and technical competence.

Transformational leadership requires leaders with a strong vision and a belief that shared values are necessary for fostering relationships. It is characterized more by cognitive competence than it is by technical and affective competence. Implementing this style of leadership is essential for struggling organizations.
Servant leadership is characterized by leaders who put the needs of others before their own interests. Even though servant leaders have plenty of affective and cognitive competence, they can lack technical competence.

How Leadership in Health Care is Changing and Struggling

As mobile technology and big data continue placing more strain on health care leadership and management, patients are expecting more control over their treatment and a quicker response time from their care providers.

How Changes in Health Care Are Impacting Leadership

The health care environment is becoming more complex, causing health care leaders to struggle as they try to keep up with new technologies.

Mobile technology is improving patient-doctor connectivity, and patients are demanding timely responses from a plethora of platforms, including patient networks, telemedicine and social media.

Big data is causing an increased demand for specialized tech roles to ensure compliance with HIPAA regulations, which is placing a strain on human resources and organizational structure.

According to a report published by the Health Research & Educational Trust (HRET) titled “Building a Leadership Team for the Health Care Organization of the Future,” 60 percent of health care leadership teams are larger than they were three years ago.

Leadership Struggles Within the Health Care Industry

By conducting evaluations, Success Profiles, Inc. has found that the number of “B-”, “B” and “B+” leaders who are struggling has grown over the past several years.

In 2009, only 17 percent of the aforementioned health care leaders were struggling while 80 percent were succeeding. By 2013, the percentage of leaders who were struggling had reached 42 percent.
According to the results of Success Profiles, Inc.’s analysis, effective leaders exhibit several characteristics. They must be practical and methodical as well as adventurous and engaging.

Questions Health Care Leaders Should Ask Themselves

According to Tom Olivo, the president of Success Profiles, Inc., health care leaders should ask themselves the following questions about their organization.

Does the organization have ways of ensuring that its employees are able to handle the complexity of their assigned roles?
Is there a clear strategy in place for developing talents and capabilities that is able to meet future demands?
Does the organization have a method for objectively measuring the effectiveness of its entire leadership team, including executives, directors and managers?

As management structures and leadership styles continue evolving in response to an increasingly complex health care environment, leaders and health care practitioners must make an effort to develop the technical competence and soft skills required to adapt to these changes.