Healthcare Administration

5 Types of Leadership Styles in Healthcare

July 27, 2020 |

AdventHealth University

Healthcare leaders work in a dynamic field characterized by a constant push to deliver the most efficient, safe, and high-quality care possible. To succeed, they must lead administrative and clinical teams while effectively managing resources. In an industry known for shifting regulations, rapidly evolving technological and clinical advancements, rising costs, and growing ethical concerns, healthcare leaders must constantly adapt and innovate solutions.

Effective leadership plays a crucial role in shaping the culture of a healthcare organization and ensuring its ability to tackle complex issues related to healthcare delivery. Managers can use a variety of leadership styles in healthcare. These varying approaches to management and leadership give leaders different ways to relate to, interact with, and motivate those under their charge.

Importance of Leadership in Healthcare Organizations

The healthcare industry presents many challenges. Providers are expected to deliver the most efficient and high-quality care possible, while working long hours in stressful and ever-evolving work environments. Navigating these challenges requires effective and ethical leadership.

Healthcare leaders plan, direct, and coordinate healthcare services. This may involve leading a specific department or managing an entire facility. Their work includes the following:

Integrating new technologies
Ensuring that operations comply with laws and regulations
Improving efficiency and quality

Healthcare leaders also set goals and objectives, manage finances and monitor budgets, and communicate with clinical staff and department heads. Accomplishing these tasks requires not only a vast array of skills but also significant leadership qualities, including the following:

Integrity. Healthcare by its very nature deals with moral issues regarding life and death. As such, it demands the highest ethical standards. Healthcare executives set the moral tone for their staff and it must be infused with integrity.
Vision. Healthcare executives need to see the big picture. Leading a staff into the future requires preparation, goal setting, and a clear vision.
Strong listening skills. Leaders earn respect when they demonstrate respect. Listening to others and seeking out staff opinions allows leaders to hear the best ideas and learn important information. It also shows staff members that leaders value their contributions.

Benefits of Strong Healthcare Leadership

Studies have found links between leadership styles and the quality of care. High-quality care is:

Safe
Effective
Reliable
Patient-centered
Efficient
Equitable

Quality of care serves a critical role in achieving high levels of productivity, an important goal for any healthcare facility. In healthcare, high levels of productivity refer to increasing the probability of achieving desired health results.

Effective leadership has been positively associated with increased patient satisfaction and lower rates of adverse health results. Additionally, because effective leaders better retain and support staff, they can indirectly affect mortality rates in patients and positively affect other healthcare quality indicators.

Healthcare professionals may need to employ a variety of leadership styles to address different responsibilities and respond to the issues they face. A closer look at styles of leadership and examples of how each might apply to a leadership challenge in the healthcare industry helps to illustrate this point.

Transactional Leadership

Transactional leadership highlights the importance of organization, supervision, and group performance. As the name suggests, it views the relationship between healthcare executives and staff as transactional. By accepting their positions, staff members implicitly agree to obey leadership. Staff members accept and complete the orders given to them, and in turn healthcare leaders pay them salaries.

In this type of leadership style, rewards and punishments serve as motivational tools healthcare executives use to encourage compliance with their directives. For example, when staff members follow specific procedures, they may earn recognition, but when they fail to follow them, they can face reprimand.

Transactional leaders emphasize:

Respect for rules, standards, and procedures
Clearly defined roles
Close supervision

The reasons for using this approach have to do with certain assumptions made by those who employ transactional leadership styles, including the following:

Individuals do their best work when under a clear chain of command.
Close supervision ensures that people meet their work objectives.
The main goal of staff members is to follow the orders and instructions of their superiors.

Transactional leadership doesn’t tend to encourage creativity or inspire problem-solving. However, it can prove very beneficial when addressing straightforward problems. In situations that require focus on achieving specific tasks, as may be the case in crises, a transactional leadership approach can effectively get things done and keep everything afloat.

Healthcare Leadership Challenge: Cybersecurity

The healthcare industry relies on digital technology. Although the digitalization of healthcare information facilitates doctor-patient coordination, improves communication between healthcare providers, and automates many administrative tasks, it can also be a security liability.

Cybersecurity is one of the top current issues in healthcare administration. Digital health records can be an attractive target for cybercriminals and connected medical devices and equipment can provide entry points into the information technology (IT) systems of healthcare organizations.

Healthcare executives develop policies and procedures to protect their organizations. Their responsibilities include allocating cybersecurity budgets and investing in cybersecurity-awareness training programs.

Healthcare executives also ensure that their organizations have contingency plans if a security breach should occur. Such plans require regular reviews and testing to guarantee their effectiveness.

Transactional Leadership Benefits

Healthcare executives who favor a transactional leadership approach may be well suited to dealing with cybersecurity concerns. Their tendency toward close supervision and respect for standards and procedures align well with the requirements of security planning. Clearly defined roles and guidelines are also critical when addressing cyberthreats.

Innovative Leadership

Innovative leadership focuses on how to succeed in unpredictable circumstances and how to foster an environment conducive to innovation in a healthcare organization. Innovative thinking lies at the heart of innovative leadership.

Innovative thinking, in the context of healthcare leadership, centers on how to contend with unknown factors and unpredictability. Innovative thinking doesn’t rely on past experiences, nor does it try to sort out right from wrong. Instead, it envisions ambitious goals and strategizes how to achieve them through multiple possibilities.

Innovative leaders embrace “what if?” questions and encourage their teams to extend themselves beyond familiar solution patterns. This approach requires a willingness to stretch conventional boundaries.

Innovative leaders work to create an organizational culture in which everyone solves problems using innovative thinking. This involves developing methods that encourage staff members to think differently about how they face challenges, as well as helping them invent ways to handle limited or stressed resources.

Beyond establishing an environment that invites innovation from staff members, healthcare executives using this leadership style seek out ways to conduct their own work and management of people with more innovation. They begin by evaluating their own roles and functions. They also examine old, perhaps entrenched problems with new eyes. That may mean reconsidering a problem’s source or choosing unexpected methods to address a problem.

Innovative leadership offers healthcare executives noted benefits. Because this style of leadership invites staff members to explore their own ideas, people tend to feel more intrinsically motivated under innovative leaders. Intrinsic motivation often produces people’s best work. It can also result in high job satisfaction and reduced turnover.

Healthcare executives can apply an innovative leadership approach to several areas of concern, including the following:

Adjusting to change
Enhancing team effectiveness
Making decisions
Managing multiple stakeholders

Healthcare Leadership Challenge: Big Data

As in other industries, big data’s role in healthcare grows increasingly important. It can offer valuable insights about how to improve care management and help inform clinical decisions. Big data can also help healthcare executives:

Improve operational efficiency and effectiveness
Reduce administrative burdens
Support the transition from the fee-for-service payment model to the value-based payment model

With these benefits come responsibilities. To harness the power of data, healthcare executives need to invest in technology that can turn the data into actionable insights. They also need to ensure compliance with privacy laws about how health information can be used.

Innovative Leadership Benefits

Finding the best ways to incorporate emerging technologies calls for innovative thinking. To tap into the creativity of their staff, healthcare executives may find it helpful to use an innovative leadership approach. Collectively, staff members and leadership can explore the benefits of emerging technologies and come up with inventive ways to improve their organizations.

Charismatic Leadership

Charismatic leaders depend on their ability to communicate in a moving, emotionally charged way. By expressing their visions with power and inspiring trust, they influence those they lead and persuade them into action.

Qualities characteristic of charismatic leaders include the following:

Emotional expressiveness involves genuine expressions of feelings that affect how others feel. These feelings are typically positive but also cross the emotional spectrum.
Emotional sensitivity involves tapping into how others feel to connect emotionally.
Emotional control involves regulating emotional displays and not losing composure unless doing so makes a desired point.
Social expressiveness involves engaging others to interact socially and having excellent skills as a public speaker.
Social sensitivity involves reading social cues and interpreting social situations, and demonstrating tact and sensitivity as a result.
Social control involves the ability to connect with all types of people socially and emotionally.

These traits can help unite people around a common goal. They also allow charismatic leaders to motivate their staff members and get them invested in the visions they set forth. Because charismatic leaders are mission-driven they often succeed at instituting needed changes in their healthcare organizations.

Charismatic leadership can have many benefits, such as:

The ability of charismatic leaders to inspire can strengthen the loyalty and commitment of those they lead. The social skills of charismatic leaders can create a work environment in which staff members feel appreciated. This can lower turnover rate and improve engagement.
Greater innovation. Charismatic leadership focuses on growth and innovation and treats mistakes as opportunities to learn and develop. In such an environment, staff members are less risk averse and more likely to find creative solutions to problems.
Increased productivity. Because charismatic leaders achieve high levels of trust and respect, those they lead often feel highly motivated to achieve and exceed expectations. This bolstered motivation often leads to higher-quality work and productivity.

Charismatic leadership relies on best practices. These best practices help healthcare executives strengthen the charismatic qualities that best serve them.

While charismatic leaders tend to be excellent public speakers, they also need to listen. Using dynamic listening techniques, such as asking questions and pausing after someone else speaks before responding, makes people feel heard.

Charismatic leadership can be personality-driven. As such, healthcare executives who rely on this leadership style must not let their personalities sideline sound business practices. Due to their popularity, charismatic leaders may not hear critical feedback. However, constructive criticism plays an important role in the success of a healthcare organization. For this reason, charismatic leaders must seek out criticism and create opportunities for feedback.

Finally, charismatic leaders must find ways to exhibit strength alongside compassion. They need to show consideration for those they lead and help them develop their own skills and careers.

Healthcare Leadership Challenge: Managing Worker Stress

Nurses and other healthcare providers work long hours, with duties ranging from routine physical tasks to life-or-death procedures. Healthcare teams often face worker shortages that place even greater burdens on staff members.

Demanding under normal conditions, the responsibilities and conditions of healthcare work can suddenly intensify when life-threatening events, such as weather-related disasters or disease outbreaks, occur.

Because healthcare administrators are responsible for managing employees who routinely perform work that’s physically, mentally, and emotionally taxing, maintaining staff morale is critical. Administrators are also responsible for managing physical and mental health safety programs for employees.

Charismatic Leadership Benefits

Many of the strengths of a charismatic leader can be particularly beneficial in stressful, high-stakes environments where team morale could easily suffer. The ability to connect emotionally and unite groups around common goals can encourage loyalty and commitment, thereby reducing the risk of employee burnout and staff attrition.

Situational Leadership

Healthcare leaders who use a situational leadership approach embrace the idea that different situations call for different leadership styles. Situational leaders examine the tasks before them and determine which leadership approach makes the most sense. For instance, when staff members are learning a new task for which they have limited skills, situational leaders may give many orders but also offer a lot of support. However, when staff members need to handle tasks for which they are highly skilled, a situational leader may delegate responsibilities and offer minimal guidance and support.

Situational leadership encompasses four general leadership approaches:

Telling. Leaders give directives about what to do and how to do it.
Selling. Leaders convince people to buy into their visions by interacting with them and selling their ideas.
Participating. Leaders encourage individuals to get involved by sharing their ideas and engaging in the decision-making process.
Delegating. Leaders delegate responsibilities for completing a task and offer only limited input.

Situational leaders assess several factors when deciding which of these leadership styles to employ. They may consider the type of task that needs to be completed and the nature of the team that needs to complete it. Additionally, various stages of a project may call for different leadership styles.

For example, at the beginning of a project, when team members are unfamiliar or unenthusiastic about the task at hand, leaders may use a selling style of leadership. As a project picks up momentum and team members gain confidence and skills, a leader may shift to a delegating approach.

The developers of the theory behind situational leadership suggest that leaders examine the maturity levels of the individuals or groups before choosing how to approach them. In this context, maturity refers to people’s competence and knowledge levels. The different maturity levels are as follows:

Level 1. Limited knowledge, skills, or willingness to carry out a task.
Level 2. Willingness and enthusiasm to carry out a task but limited ability.
Level 3. Competent skill levels to complete a task, but an absence of initiative.
Level 4. Advanced skills levels and high level of motivation.

Situational leadership acknowledges that a one-size-fits-all approach doesn’t always work. Healthcare executives may find great advantage in employing a leadership style that offers flexibility in addressing complex social situations.

Healthcare Leadership Challenge: Strict Regulatory Environment

Healthcare organizations invest considerable time and money in regulatory compliance. Hospitals, for example, may have to work with multiple regulatory agencies on everything from auditing to licensing.

In an effort to address fraud, the government has increased the number of compulsory audits. These audits involve a time-consuming process that requires healthcare executives to allocate extra resources.

In addition, healthcare reforms require restructuring to ensure compliance with new rules. The changes in laws and the uncertainty revolving around the continuation of laws, such as the Affordable Care Act, demand flexibility and a readiness to adapt as necessary.

Situational Leadership Benefits

Complying with shifting regulations requires buy-in and commitment from an entire staff. Situational leaders’ skills at delivering directives, encouraging participation, and delegating responsibilities match well with the requirements of regulatory compliance.

Transformational Leadership

Transformational leadership focuses on empowering staff members to participate in initiating changes that can transform a healthcare organization for the better. Transformational leaders seek ways to share the leadership process with employees across all positions. The philosophy behind this leadership style is that anyone, regardless of job description, can exhibit leadership.

Transformational leaders motivate and inspire staff members to work toward the betterment of a healthcare organization. They engender loyalty by building confidence and a shared vision among staff.

They also earn respect by developing relationships with and between staff members. While transformational leaders care about achieving goals, they also focus on the individuals they lead — committed to their growth, development, and success as well.

Transformational leaders can energize a group, project a clear vision for a team’s goals and objectives, and provide direction that boosts action. As a result, they tend to succeed in increasing productivity and improving performance. They also bolster morale and positively affect job satisfaction.

James MacGregor Burns, who originally introduced this style of leadership, describes the key components of transformational leadership:

Intellectual stimulation. Transformational leaders promote creativity and encourage those they lead to take advantage of learning opportunities and innovate ways of getting things done.
Individualized consideration. Transformational leaders support those they lead by encouraging communication, idea sharing, and supportive relationships. They also give recognition to team members for their contributions.
Inspirational motivation. Transformational leaders articulate clear visions and foster passion among staff members to realize that vision.
Idealized influence. Transformational leaders act as role models. Those they lead adopt their ideals and emulate their behavior.

Healthcare executives can benefit from using a transformational leadership approach in specific situations. For example, transformational leadership works well when team members possess advanced skills in the area in question. However, in situations in which staff members lack skills and need close supervision, the transformational leadership style may not be the most appropriate or helpful.

Healthcare Leadership Challenge: New Payment Models

Another pressing issue for healthcare executives involves the shift towards value-based payment models that are tied to health outcomes. In this payment model, healthcare providers, health insurers, and third-party vendors all assume some of the financial risk. With multiple stakeholders responsible for health outcomes, healthcare providers must carefully structure and align care to ensure that they don’t lose money.

Value-based care requires healthcare providers to meet specific metrics. This requires them to synchronize workflows, collect data, and coordinate care to meet those metrics. Additionally, healthcare executives must analyze the metrics to ensure that they are attainable and accurately measure health improvements that will reduce future costs.

Transformational Leadership Benefits

Embracing a transformational leadership approach can be helpful when managing disruptive change. To meet the specific metrics required by value-based care, health executives may also find a transactional approach to leadership beneficial. Controlling costs and collecting data require strict adherence to roles and procedures.

Cultivate Your Skills in Health Administration and Business

Succeeding as a healthcare executive calls for expert leadership skills. It also demands a unique blend of health administration and business knowledge. Dual degree programs in health and business administration give aspiring healthcare executives the foundations they need in both areas.

These programs build advanced knowledge in business concepts, such as finance and accounting, organizational behavior, and business analytics. They also cover subjects relevant to health administration, such as healthcare governance, health informatics, and the healthcare innovation process. Additionally, cultivating knowledge in these areas allows graduates to construct a solid understanding of the leadership styles in healthcare that will best work for them.

Explore how the Online MHA/MBA Dual Degree program from AdventHealth University Online prepares healthcare executives to confront the challenges in healthcare administration with innovation.

Recommended Readings

Healthcare Administration: Salary, Careers, and Education

MHA vs. MBA: What Are the Differences?

What Do Healthcare Administrators Do?

Sources:

Becker’s Hospital Review, “5 Important Qualities for a Medical Leader (and One to Avoid)”

Becker’s Hospital Review, Regulatory Challenges, Strategies for Hospital CEOs

Digital Health Buzz, “5 Benefits of Digitization in the Healthcare Industry”

HealthStream, How Leadership Styles in Healthcare Impact a Staff

Indeed, Q&A: What Is Charismatic Leadership?

Innolytics, “What Is Innovative Leadership?”

Innovation Management, “What Is Innovative Leadership?”