Leadership and Strategy in Healthcare

Leadership and Strategy in Healthcare

Leadership and Strategy in Healthcare,  President Taiwan Hospital Association Taiwan.

Hospital leaders should formulate and communicate vision for the institution. They should also continuously keep evolving the vision and motivate the followers to accomplish the mission.

It appears that everyone knows what leadership is. However, it is not easy to define the word leadership. Webster’s New World English Dictionary explains “leadership” as “the capacity to be a leader” or “ability to lead”. Indeed, there are many legendary leaders in business history, such as George Eastman of the Eastman Kodak Co., Henry Ford of the Ford Motor Co., Andrew Carnegie of the Carnegie Steel Co., Samuel Moore Walton of the Wal-Mart, Robert Noyce of Intel, Konosuke Matsushita of the Matsushita Electric Industrial Co., and YC Wang of the Formosa Plastics Group. These giants are characterised by their ability to tell the difference between the seemingly impossible and the genuinely impossible, by their courage to bet on the vision of market potential, by their ability to shape the market vision into the company mission and to be the message for customers, employees, and investors, by their ability to deliver more than what they have promised, and by their will of not to look back1.These giants are born with these characteristics. A competent leader, nonetheless, is a person who is striving for excellence, able to make an enjoyable atmosphere for his people, able to hug and kick, able to make a quick decision, able to handle a crisis, able to stay clean about a sour mission, and having passion, persistence and partnerships, and able to work with a team and build a consensus. There is no difference for a hospital manager as compared to a business leader. Hospital leaders should formulate and communicate vision for the institution. They should also continuously keep evolving the vision and motivate the followers to accomplish the mission. The leader should be aware of his own emotion, able to manage his own emotion, able to read the emotion of his people, and able to manage the relationship with his people. There appear to be two basic styles of leading people. Julius Caesar was a field general of the late Roman republic, who greatly extended the Roman Empire before seizing power and making himself the Roman emperor. As a field general, he required the respect and support of his soldiers and needed personal charisma to win popularity. Erwin Johannes Eugen Rommel was the German Field Marshal, served in France, Italy and Romania. He commanded the 7th Panzer Division assisting Italians in North Africa, which became the Africa Korps. He accomplished a series of brilliant battles driving the British back hundreds of miles and gained his nickname of “Desert Fox”.

However, he faced shortage in supplies and tanks, under constant and close surveillance of the Gestapo and Hitler and, thus, required the respect and support of his soldiers as well as the German people back home to accomplish his work. In contrast, The Duke of Wellington who defeated Napoleon at Waterloo in 1815 and Bernard Law Montgomery, Field Marshal of the Eighth Army, who defeated Erwin Rommel in Egypt were leaders with different executive style. They were fully supported by their boss with a clear-cut mission to win the war.

The leader should shape a strategy for the institution. In early 1970s, Mr. YC Wang, Board Chairman of the Formosa Plastics Group, decided to build a non-profit hospital to serve the middle and lower income family in Taiwan, to provide equal service to all peoples with low cost, and to become a major center for medical education and research. He wished to recruit the best physicians and to install the best equipment for the hospital. During that period, Taiwan was developing from an agriculture-dependent to an industrialised society. There were only few tertiary referral hospitals with a total of less than 3,000 beds capable of performing open-heart surgery or brain surgery to serve a population of 14.84 million people.

Although there were 11,518 beds countrywide, more than 70% of the hospitals were operated by the government with a size of less than 200 beds; less than 30% of the hospitals were operated by the private sector and the size was very small, usually less than 50 beds. Good medical service was a luxury. The university hospital or the few medical centers were like the white ivory tower not accessible to the ordinary people. Visiting a hospital was like visiting a bureaucratic government office, patients had to pay a guarantee-deposit before hospital admission, frequently requiring a special “red-envelope” tip for service by physicians.

Meanwhile, there were 6 medical schools with approximately 800 graduates annually. The few university hospitals and medical centers were not sufficient for post-graduate training of these 800 medical graduates. There appeared not much future for the new physicians. As a consequence, the new medical graduates went abroad for opportunity. It was under these circumstances that Mr. YC Wang shaped his mission.

The first Chang Gung Memorial Hospital was opened in December 1976. It was a “patient-centered” and “service-oriented” hospital with service encompassing primary clinic care to tertiary inpatient care. The hospital applied the 4Cs of business management to the operation: Capital, Corporation, Consumer and Communication. It radically revolutionised the medical practice in Taiwan and quickly dominated the market of medical service. During 1980s, other intenders duplicated the strategy and eventually changed the medical system in Taiwan, providing the background for the implementation of National Health Insurance Program by the government in 1995. Presently, 70% of the health providers are privately owned and 30% publicly owned. The Economist listed Taiwan as the second healthiest country in the “World Healthy Nations List” in 2000. Chang Gung Medical Group consists of 6 hospitals with 8,500 beds, 2 universities, 1 health village for senior citizens and one nursing home, the hospitals serve 10% of the population in Taiwan and share 8% of total expense of the National Health Insurance Program annually.

The success story of Chang Gung Medical Group may serve as an example of leadership and strategy in hospital management. It fits the model of “Blue Ocean Strategy” recently proposed by Kim and Mauborgne2. It eliminated the guarantee-deposit, the red-envelope tip, and patient discrimination,it reduced the price of hospital service, the patient waiting time, and the complexity of paper work,it raised the accessibility, efficacy and quality of care, and salaries of personnel, it created ease of hospital visit, incentive of physicians, nurses and technicians as well as a new form of healthcare.


1. Collingwood et al: Harvard Business Review on Breakthrough Leadership. Harvard Business School Press, Boston, Massachusetts, 2002
2. Kim WC, Mauborgne R: Blue Ocean Strategy. Harvard Business School Press, Boston, Massachusetts, 2005.

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Leadership and Strategy in Healthcare