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  Praise for

  Unconventional Leadership

  and Nancy Schlichting

  “The defining challenge for leaders today is to reimagine what’s possible in their fields—to do what other organizations can’t or won’t do, and thus get to the future first. That’s what Nancy Schlichting has done throughout her career, and with this insatiably readable and relentlessly useful book, she shows you how to do it too. Nancy is one of the most inspiring change agents I’ve ever met, an unconventional leader whose uncommon sense can teach all of us about where leadership itself is going.”

  —William C. Taylor, cofounder and founding editor,

  Fast Company; author of Practically Radical

  “In the early 20th century, Henry Ford took over a struggling hospital in Detroit and turned it into a world-class medical center. In the early 21st century Nancy Schlichting repeated the process at the same hospital, using the same innovative and unconventional leadership methods as my great-grandfather. Unconventional Leadership: What Henry Ford and Detroit Taught Me About Reinvention and Diversity tells the story of how Nancy turned around the Henry Ford Hospital and Health System. Under her leadership, in the middle of a global recession and the first bankruptcy of a major U.S. city, the hospital flourished and earned a worldwide reputation for excellence that culminated in the coveted Malcolm Baldrige Quality Award. Leaders and would-be leaders would do well to read this book and apply its lessons.”

  —Bill Ford, executive chairman, Ford Motor Company

  “Our Plan to Win at McDonald’s was all about making the business better, not just bigger. Nancy Schlichting has done the same with amazing results throughout her impressive career. This book deserves wide readership for its inspirational look at how to remaster your leadership practices with an eye to the quality of the company, instead of the bottom line.”

  —Jim Skinner, former CEO, McDonald’s

  “Nancy Schlichting is an authentic, unconventional, and extremely successful leader. Her willingness to take smart risks and invest in people consistently transformed health-care systems. Moreover, her grit and candor are inspiring. A must-read for anyone interested in leadership.”

  —Risa Lavizzo-Mourey, president and CEO,

  Robert Wood Johnson Foundation

  “Sometimes, leading a team to victory isn’t about taking the traditional path. Instead, it can take imagination, risk, and the ability to turn obstacles into opportunities. Nancy Schlichting has done this both personally and professionally. I strongly recommend this book to any leader looking to take their team to the next level.”

  —Mike “Coach K” Krzyzewski, head coach of men’s

  basketball at Duke University

  “In the 21st century, a different type of leadership is required to achieve change that is truly transformational. Leaders need to be flexible, innovative and willing to challenge the status quo to make meaningful progress on increasing the accessibility and affordability of health care. In her book about unconventional leadership, Nancy tells the story of her journey, and outlines what we need to do to achieve transformative change, on a personal and professional level.”

  —Bernard J. Tyson, chairman and CEO, Kaiser Permanente

  “The Ford Foundation proudly carries on a tradition of service and leadership that Henry Ford began almost 80 years ago. I have rarely seen that tradition better represented or articulated than in Unconventional Leadership. Schlichting demonstrates that leadership practices can be thoughtful, positive, and courageous without sacrificing effectiveness. This book is a must-read for any leader interested in managing and motivating people for high performance and impact!”

  —Darren Walker, president, Ford Foundation

  “Nancy’s blend of compassion, bravery, and practicality will give all leaders, current and aspiring, the confidence to find and pursue their own form of unconventional leadership. Her strategies will help you to remain resilient in the face of adversity, to the benefit of both yourself and your company.”

  —Ginger Graham, president and CEO, Two Trees Consulting

  First published by Bibliomotion, Inc.

  39 Harvard Street

  Brookline, MA 02445

  Tel: 617-934-2427

  www.bibliomotion.com

  Copyright © 2016 Nancy M. Schlichting

  All rights reserved. No part of this publication may be reproduced in any manner whatsoever without written permission from the publisher, except in the case of brief quotations embodied in critical articles or reviews.

  Library of Congress Cataloging-in-Publication Data

  Schlichting, Nancy M.

  Unconventional leadership : what Henry Ford and Detroit taught me about reinvention and diversity / Nancy M. Schlichting. — First Edition.

  pages cm

  Includes bibliographical references and index.

  ISBN 978-1-62956-095-3 (hardback) — ISBN 978-1-62956-096-0 (ebook) — ISBN 978-1-62956-097-7 (enhanced ebook)

  1. Leadership. 2. Leadership in women. I. Title.

  HD57.7.S354 2015

  658.4′092—dc23

  2015032976

  To Pam,

  who has given me a life I never thought I would have.

  To Allie and Nick,

  who have added so much to my life.

  CONTENTS

  INTRODUCTION Unconventional Leadership: My Personal Journey

  CHAPTER 1 Risk Rejection and Be Bold in Your Career

  CHAPTER 2 Learn to Turn It Around

  CHAPTER 3 Use Quality to Achieve High Performance: The Baldrige Framework

  CHAPTER 4 Find the Disruptors in Your Organization—and Listen to Them

  CHAPTER 5 Make a Large Company Feel Small

  CHAPTER 6 Being Different: The Strength of Diversity

  CHAPTER 7 Detroit: Partner for Renewal

  CHAPTER 8 Face the Future

  Notes

  Index

  Acknowledgments

  INTRODUCTION

  Unconventional Leadership: My Personal Journey

  My desire to become an innovator in health care was something I thought about and began acting on from a very early age. In fact, I was in elementary school. This was many decades before I led Henry Ford Health System, long before I turned around consecutive organizations in the middle of crisis and recession, and well in advance of my struggle to come to terms with being gay and the impact it would have in my career.

  Henry Ford, the icon and inventor, was an inspiration to me when I began reading about great leaders in my early teens. But even before that, I was influenced by occurences much closer to home—deeply personal experiences that guided my thinking and fueled my desire. For me, a trio of events forged an indelible perspective and taught me to think of hospitals as dark, scary institutions, where patients and families were at the mercy of an uncaring system: at age five, I spent a long week in the hospital undergoing tests and evaluations after hardly eating anything for a number of weeks. My grandmother had just died and the sudden loss left me feeling not only frightened and unsettled but also acutely anxious. When evening came around in the children’s ward, I was completely alone because no visitors were permitted after hours—not even parents. The rules were absolute and the nurses enforced them with rigid formality.

  Later, when I was nine, my mother was hospitalized for a month with a life-threatening condition. It was a rare type of tumor that, although benign, was the size of a grapefruit. She had complications and underwent three separate surgeries. None of the four children in our family, ages two to twelve, was allowed to visit her. We were paralyzed with dread and anxiety, thinking that we might never see her again. When my mother finally returned home, she had lost so much w
eight that my youngest sister, Joan, didn’t recognize her and ran away from her, hiding behind me. Two years later, I remember my father losing his brother and sister on the very same day to unrelated illnesses after both endured chronic hospitalizations during which the information was sparse and the outlook bleak. That experience devastated my father and made a lasting impression on me.

  Watching people suffer, with hospitals failing to adequately address the needs of patients and their families, shaped my desire to improve the system of care. I believed that I could do better, and that idealistic desire to create something far superior has remained with me every moment since. Over the years, I came to understand that the situation in health care was much more complex than I realized as a young child. The intricacies of balancing medical standards with financial and fiduciary responsibilities can give rise to conflicts of interest that are difficult to address. However, I also recognized that the opposite was just as true—the problem and solution sets were so elementary as to be starkly apparent. The reality was that health care needed to improve, and to move that needle we had to do things differently.

  I set out as a youngster with a plan to turn the established system on its head—starting in the operating room. Surgeons were the most respected, and arguably the most skilled, individuals on the team at the time. They wielded incredible influence. In aiming to be a surgeon, I felt that I would be in a position to help rewrite the rules of health care. However, my earliest training did not go quite as I envisioned. When I began my undergraduate degree at Duke University, I planned to matriculate immediately to medical school. To my surprise and dismay, I found that I grew weak at the sight of blood, and was not equipped to handle the emotional side of medicine. How ironic: I desperately wanted to become a pioneering physician but I didn’t have the stomach for clinical medicine!

  That first roadblock threw me for a loop—until I uncovered the proverbial silver lining that put everything into focus. I had an aha moment. As I considered my options, I turned to Henry Ford and other innovators and leaders who had captured my intense interest over the years. I realized that there was a business side to health care, and it could be used as a powerful lever to drive change from a place that I never knew existed. Working on transformation from the helm of leadership and operations meant that I could go outside the traditional healthcare sector for business models and ideas that could be adapted and transplanted all across health care. And that is exactly what I have done.

  I have tried to take the nontraditional path forward in my career, as chief executive at Henry Ford Health System, and prior to that as a leader at hospitals and health organizations across the United States. In the service of setting a much higher standard within health care, I have developed a reputation for pursuing the unexpected. During my tenure, for example, the health system closed three hospitals and still doubled in size. As a math equation, that doesn’t make a lot of sense, but I will show that it happened because people across the organization came to believe that HFHS is a safe place to innovate and do things differently. Together we changed the system for the better.

  Unconventional Leadership

  In the pages that follow I will talk about “unconventional leadership” and how its tenets have aided me and the teams I have worked with, in turning around a number of organizations, winning the Malcolm Baldrige National Quality Award at HFHS, and ultimately creating a high-performance health system that is widely considered a model for organizations within health care and beyond.

  Unconventional leadership is by far more fun and exhilarating than the traditional route, but it requires courage and a willingness to commit to difficult change. And it will look and feel different in every case. This book presents a mode of operating rather than a template or model. For me, thinking and acting differently was easier because I don’t look much like many of the people around me. I am not a typical CEO operating in a traditional setting. I am a female chief executive of a large organization at a time when fewer than 5 percent of top leaders in Fortune 500 companies and fewer than 18 percent of hospital CEOs are women. My colleagues and I operate in an industry where disruption is common, and we reside in a city—Detroit—that has been in the grip of desperate economic decline and social upheaval.

  Over a span of thirty years, working at the highest levels of leadership and serving on corporate boards, my tendency to buck tradition has allowed me to see difficult situations for what they are and choose the right levers for making them better.

  Even more, unconventional leadership has allowed me to become an innovator in a notoriously high risk, fast-paced environment. I’ve been through three hospital fires, numerous bomb threats, several financial turnarounds, and a multitude of business model resets—not to mention the life-and-death scenarios I am privy to every day as I work with physicians, nurses, patients, and the entire health-care team to address dilemmas as they unfold. My point is that running a health-care organization—or any large company—is like running a city: anything can happen. I have needed to think differently in order to respond in real time to all of the change and chaos.

  With so few top women leaders to turn to for support and encouragement—and even fewer who are gay—I have relied on iconic role models as I developed my leadership style. As I searched for answers over the years, the legacy of Henry Ford, the founder of Henry Ford Health System, was one of the leadership stories I tapped for knowledge and inspiration. In fact, Ford’s example was one of the things that brought me to Detroit and helped me to find a home here.

  As a lifelong student of leadership, I have found Ford’s business philosophy, known as Fordism, to be more fascinating and instructive than just about anyone’s. In my mind, he was as much iconoclast as icon. He was innovative, to be sure, but his influence went well beyond the implementation of mass production. Ford, for example, argued that high wages were essential for both economic and moral reasons. In 1914, he set a powerful precedent by doubling pay for employees on his assembly line in Detroit. In part, the move was designed to address high turnover among workers who found the job difficult and unrewarding. And Ford argued that a higher wage was not only crucial to the success of his business but also good for workers. The $5 a day pay was highly innovative and represented a radical departure from the standard business practices of his competitors at the time.

  There are a number of other reasons Henry Ford has become a touchstone for me in business. First, Ford’s vision was a game changer in automobile manufacturing and it achieved multiple objectives. Cost-effective cars manufactured by skilled workers earning steady wages revolutionized the industry. Over the span of my own career, I have always looked outside of health care in order to import improvements and ideas. In fact, I have succeeded by applying the current best practices in business as opposed to the outdated modes common within health care. In trying to think as Ford did, I believe I have achieved several goals at once—creating a thriving business, improving the patient and family experience, and also making HFHS a great place to work.

  Next, Ford was a true innovator. As an inventor, he often reinvisioned something in its entirety instead of simply fixing it when it broke. My father was an inventor as well, and I have always shared his desire to solve complex problems and usher in new ideas; the theme of innovation runs all the way through my work.

  Finally, Ford was a noted leader in Detroit during a period of the city’s history that included a number of tumultuous moments, including the onset of World War I. Remembering the way Ford managed through crises has sustained me throughout my tenure at HFHS. It informed my thinking as we continued to build the business, with the support of the Ford family, while the surrounding community of Detroit was experiencing challenges such as high levels of crime, rampant political corruption, and economic instability that culminated in municipal bankruptcy. As I tell this story, I will mention Henry Ford because HFHS is an organization that Ford originally built. This is not a history book, but I will pay homage to Ford’s legacy b
ecause his brave and exceptional example is always on my mind.

  Unconventional leadership worked for Ford and it has worked for me. Furthermore, one of the reasons I am writing this book is that I believe that all leaders, in every industry, have reason to reexamine their traditional thinking. Why? Because constant change is commonplace today. Health care is a complex field that is transforming itself from the ground up—from the way care is delivered and how patients and their families manage their health to the multitude of issues surrounding the national health-care debate. And all of these changes are mirrored across dozens of industries. As a result, the traditional rules no longer apply and every one of us needs to challenge and innovate. I hope that my leadership paradigm and tactics for success can help others progress along that same path.

  About This Book

  I am a product of the ’60s, so I believe in change and the power of everyday people to transform any situation for the better. And yet, individuals need access to the right tools to make that happen. The principles in the following chapters are based on the situations I’ve encountered over the course of thirty-five years as a leader. I am offering advice, based on my experience, so that readers can apply it in their lives, not only as business builders, and as women and men at work, but also across the wider spectrum of situations we all face as employees, parents, and citizens. This book is arranged as follows.

  Chapter 1: Risk Rejection and Be Bold in Your Career

  When I was in my late twenties I was promoted to chief operating officer at a 650-bed hospital in Akron, Ohio. Elevated above peers who were twice my age, at a time when the company was losing $1 million each month and hospital occupancy was in free fall, I knew that many of my colleagues were dubious about my experience and qualifications. But courage and confidence served me well at that time and ever since. This is when I first discovered how to work with unions and all-male boards and face potential layoffs and a host of other landmines. In this case, unconventional leadership meant forging my own model while so many women of the time were struggling to route around the gender stereotypes that kept (and still keep) them locked out of the executive suite. I will talk about the tools I used to prove myself as a woman rising through the ranks in business, and I will also offer a candid account of several vivid setbacks and how I was able to overcome them.