What makes a great organization?

I have a really great client. Initially, I thought I was just feeling the excitement of a new project before the reality of the change process sinks in and things take the inevitable turn for the worse. But as time went on and the hard work of data analysis, identification of operational shortcomings and recommended restructuring continued, I still found myself saying, “This is a great place!”

I began to wonder if I could articulate why I described this particular organization this way. To explore the question, I asked myself:

• How is the culture or environment distinct and different?
• Is there something unique about the leadership style that has a positive effect on this organization?
• What’s unique about a particular leader?
• How much difference does one person actually make?

Organizational traits

As I started jotting down thoughts and observations, the first thing that came to mind was that “great” organizations (those that put patient care first, retain talent, are resilient when it comes to uncertainty and thrive rather than survive) exude a sense of optimism and a higher energy level than most even though they are faced with the same challenges all organizations face. The entire organization has a sense of being principled and honest, and there is an inviolable code as to how people are treated. For example, when something is communicated from the top, there is always only one version, so trust is high and the rumor mill is rather silent. Instability isn’t created by fear of the unknown.

It is not a democracy by any means — in fact, less so than most. But leaders in many organizations struggle with tough decisions, which often involve delivering bad news. Another of my clients calls this “the slow no” — everyone already knows the outcome but leadership is too timid to say it. Great organizations have strong leaders and an impressive central team that not only have the best interest of the organization in mind, but also value individual employees at every level. (I noticed senior executives at this organization knew the names, stories and circumstances of staff at all levels.)

Timelines on everything are shorter, too, which translates to less wasted energy. There is clear comprehension of what is and isn’t negotiable, and people always seem to know next steps and deliverables. There is no ambiguity. Even the timeline for terminating people seems shorter. Outliers are dealt with before permanent damage is done to the organization and to others. There is a very strong focus on the bottom line, but along with that there is a willingness to take risks and make long-term investments.

The executive leadership is dynamic and supportive, creating an environment that is professionally fulfilling on many levels. For example, this organization recognized that many of its management team were better versed in hospital operations than physician practice management, so the organization sponsored eight people through MGMA’s credentialing process. A lengthy monthly session was held to study each module, with a leader assigned to guide the “students” through each topic. All eight people passed the Certified Medical Practice Executive exam on their first try. Sure, this organization had checkmarks in all the boxes we usually look for, including:

• Magnet nursing status (American Nurses Credentialing Center’s recognition program for quality patient care, nursing excellence and innovations in professional nursing practice)
• “Best Place to Work” recognition from the local community
• Excellent resident match statistics
• Healthy balance sheet
• Donor/community support

But that is the “me too” list that every organization strives for and sometimes achieves. Organizations may regard such a list as a sign of excellence but it is rarely what sets them apart. What I was sensing from this particular client was so much more.

Individual traits

Great organizations are led by individuals who are bright, optimistic, informed, visible, visionary as well as practical. These professionals always possess a sense of humor and are the sort of people with whom you actually enjoy associating because their honesty, integrity and trustworthiness are evident. Too many of us have witnessed incredibly gifted leaders who eventually fail because they had no moral compass in their personal or professional lives. Organizations need leaders who know how to do the right thing and have the courage to do so without question.

How they do it

One of the first things I observed was that decisions were made lower down the chain of command — people in the jobs are empowered to change the jobs. People doing their jobs make decisions about changes that affect them directly. The result is greater productivity and improved morale. Furthermore, when bad decisions are made, people doing the jobs identify the problem quickly and make necessary adjustments. Great organizations listen to internal stakeholders. In other words, everyone matters. The cashier at the hospital cafeteria might be a better judge of employee morale than a human resources executive. Individual growth is a high priority, and so an environment is created where everyone believes that what he or she does is important and makes a difference in helping the organization not only achieve its level of excellence, but continually strive to stay there.

Great organizations have a common value system that permeates the enterprise. There is a clear and consistent understanding of what is important and what needs to be accomplished at all levels. The emphasis is on performance and results versus process and procedure. Great organizations do not have a rigid hierarchy, even though everyone knows who is in charge. Without rigidity, these organizations are better at acknowledging the proverbial elephants in the room and confronting them. History is used as a basis for lessons learned, not to define the organization. Energy is focused on the future not the past.

All organizations have limited resources, which is one reason great organizations understand they cannot excel at everything. It’s difficult for an organization (or individual) to say, “We are not good at (fill in the blank).” However, when an organization’s leaders can admit to this, they are forced to redefine the mission and determine the areas where they can excel. In focusing their efforts, these organizations take the risk to be great at something rather than becoming mediocre at everything. Many professionals believe they must invest equally in the “popular services” that everyone else invests in — often neurosciences, cardiovascular services and cancer care. While all of those areas are important, most organizations fail to admit that the resources are not there to invest in all at the same time and then begin to chip away at resources that were promised to other programs. In comparison, great organizations define their priorities and see those priorities through to completion before investing energy and resources elsewhere.

In an ego-driven business (where some leaders are superstars and many more assume they are), leaders who recognize they are not born knowing all the answers are a rare commodity. The best leaders are not self-promoters; however they do have a healthy and realistic self-confidence. They value team input, especially those points of view that may not align with their own. Great leaders have a sense of curiosity and a desire to learn from anyone they encounter. They also invest more in mentoring and developing others.

Much has been written about strategic and visionary leadership that need not be repeated, however some characteristics warrant comment. Great leaders understand details; they don’t operate solely at the 30,000-foot level. They know how to read a spreadsheet and operate the copier and coffee pot. They are able to synthesize large amounts of information. They are intelligent, knowledgeable and focused. And above all, they are realistic. They make rational decisions based on facts they fully comprehend. They are critical thinkers and understand the environment in which hard decisions must be made and the consequences (intended and unintended) of their actions.

Great leaders recognize the magnitude of the problems they face without becoming defensive. They spend very little time defending the past and rationalizing why things are as they are. They don’t have time to make excuses. They don’t unravel in the face of adversity. They are persistent and possess an indefatigable drive to improve the performance of the organization and all those associated with it. Their enthusiasm is contagious — they take pride in being part of the team. Great leaders instill confidence.

It should come as no surprise that great leaders build great teams. What is unique is the level of accountability within these teams. Slackers and complainers are simply not tolerated. Doing nothing is never an option. If team members don’t want to do what’s suggested, they must find alternative plans of action. Talent is appreciated and nurtured. Underperformance is never accepted.

Great leaders are tough, fair, decisive, energetic and courageous. Their personal style falls between tyranny (being autocratic and directive in a crisis) and laissez-faire (not micromanaging competent people and processes), depending on the situation. They flex their style. They are visible and approachable. They possess personal charisma and a sense of humor — often at their own expense and never in a way that puts others down.

In spite of the abilities of great leaders, there are situations where they cannot transform a terminally dysfunctional organization. Perfectly competent people with a track record of great performance can fail in the face of negative culture, adverse politics or attempts to undermine leadership by those who are committed to perpetuating the past.

Making a difference

Most organizations eventually and subtly take on the personality of a leader. It permeates the organization over time. Ethical leaders who are happy in their roles are more productive, energetic, creative and resourceful. This attitude is contagious and builds healthy competition as well as stability within an organization. All of us have seen organizations transformed, whether it’s prompted by the arrival of a chairman in an academic department or a leader for hospital departments or physician practices.

In our industry, there seems to be an underappreciation of the incredible talent most organizations possess within their own four walls. When I’m asked to bring a perspective and breadth of experience to my consulting clients, I often want to say, “Your answer is to appreciate, respect and empower people within your organization.” Get out of their way! Stop putting up obstacles and creating an environment that demoralizes and defeats even the most effective people. Performance always suffers when this happens.

I’m optimistic about the future for my client, but factors such as solid financial performance, clinical excellence, modern facilities and technology, and committed and caring nurses, though crucial, are not where I place my optimism. Instead it rests on the shoulders of a small group of individuals, and one leader in particular, who understand that excellence requires a constant and courageous quest for a better future. This path involves risk, hard work, tough decisions, an extraordinary team, willingness to make needed changes, chaos and uncertainty, and an uncanny ability to enjoy the journey. And that’s what’s so great about it.