Beth Israel Deaconess Medical Center(BID), initiated from the merger of two big hospitals in 1996 with the sole purpose of getting competitive and comparative advantage in the medical market, in reality, failed. The management in 2002 designated Paul Levy as chief executive officer to come across the financial burnout that was eroding all the stakeholders (employees, patient, community et cetera). Employees were skeptical as Mr. Levy had no history of experience in medical field. But his undisputed efficient resource allocation skills and straightforward decision-making ability under the availability of specialist within an organization help to reinvigorate the institution.
It all started with the merger of two distinctive institutions dreaming of synergy effect. They have divergent cultural background and management philosophy. Beth Israel practiced participative management approach whereas Deaconess Hospital was inclined towards rule-based management concept as propounded by Max Weber. These doctrines which build the corporate culture of those hospitals should have been accessed prior to the merger as values, practices, and beliefs are hard to be given up (Drucker, 1986). These could have had demotivated the employees and crawl the merger to bleed an accumulated loss of $100 million for next six consecutive years.
Mr. Levy rather than choosing an aggressive transformational change which in general demands re-engineering and re-designing of all organizational process mastered in managing loopholes that were critical to the success of organization. As supported by Ciara Moore and David Buchanan (2013) in their research entitled “Sweat the small stuff: A case study of small scale change process and consequences in acute care.”
Firstly, the organization structure was made lean and thin; he laid off hundreds of employees. In general, it is inferred that inverse co-relation exists between employee expenses and the net profit of the company. But, I would have suggested focusing on reducing other operational expenses or adding up other product variants to increase sales revenue. History has been culprit to lay off employees as organization behaves them as a liability during their worse times.
Secondly, he focused on revitalizing the relationship between employee and management. An institution is a corporate individual guided by policies, plans, and strategies. Mr. Levy allocated Mr. Murray to prepare performance and compliance goal. These guidelines clearly define the protocol to work with, enriching and making employee and department jobs responsible and rewarding. As postulated by the system theory of management, an organization is a combination of the sub-system, each department of an organization is equally essential for the achievement of the common goal; Mr. Levy hired Dr. Epstein as chief operating officer look after the non-clinical objectives. The successful integration of clinical and non-clinical goal lead to the achievement of the common objective.
Further, Corporate Governance which builds on the principle of accuracy, fairness, and transparency was incorporated by Mr. Levy. He appointed Mr. Zeidel as the chief of medicine who mandated in reducing the cost and harm to its valued customers, prioritizing customer first. Results of infection rates, complication rate, department wise performance and financial goals were quantified, sorted and stored so it could be retrieved in future for decision making. In fact, knowledge management was practiced. Irrespective of reservation from Board of Directors, Levy was successful in performing liaison role; he disclosed hospital performance data in his blog which soon get the daily visit of over 10000, these not only motivated employees for their hard earned commitment but also were impliedly promoting its success and softly countering its competitors. Training along with quality and safety focused programs and periodic meeting for the review and update of progress was mandated.
To conclude, nine years of Mr. Levy involvement has brought significant positive impact in BID. His skill of focusing on constellation leadership where he appoints specialist loyal to him to manage the pool of workers was useful. Similarly, instead of centralizing, he delegated certain powers to lower line staffs; his distributed leadership promoted accountability and responsibility in the organization. His systematic, step by step integrative approach has help BID till 2010 to earn annual revenue of over $1.2 billion employing 6000 staffs.
Bibliography
Drucker, P. F. (1986). Innovation and Entrepreneurship. Harper Collins publisher Ltd.
Moore, C., & Buchanan, D. A. (2013). Sweat the small stuff: A case study of small scale change process and consequences in acute care. Health Service Management Research.
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