Julie has been the executive director of the Maternal-Newborn Service for 5 years and reports to the chief nursing officer (CNO). The four other executive directors of service-lines include Tim, who is the executive director of Medical-Surgical Services; Janice, who is the executive director of Critical and Emergency Services; Fred, who is the executive director of Surgical Services; and Gabriella, who is the executive director of Rehabilitation and Outpatient Services. All of the executive directors with the exception of one are about the same age (mid-to late 30s or early 40s), educated at the master’s in nursing (MSN) level (except for Julie, who has a PhD in nursing leadership), and have significant clinical experience in their service-line areas. Janice is in her late 20s, has a master’s in business administration (MBA), and is also quite experienced in critical care services.
The five executive directors work well together as a team, but do not respect the opinion, direction, and leadership of the CNO, who has been in her position for 30 years. The team perceives her to be out of date, although the physicians at the hospital are quite supportive of her. They often meet to determine ways they can work around her to accomplish their individual and collective goals. The CNO reports to the CEO, along with the chief financial officer (CFO) and the chief operations officer (COO). The CNO, CEO, CFO, and COO have all worked together for approximately 7 years. The rest of the executive team has little interaction with the executive directors, with the exception of the budget season when the executive directors work closely with the CFO and COO to develop and negotiate the budgets and approved number of full-time equivalents (FTEs) for each clinical area.
One summer, Julie goes on vacation, and while away she receives a call from Gabriella, who informs her that huge changes have taken place. The president of the healthcare system has terminated the CEO and the CNO and has fired a new CEO. The new CEO was a CFO and COO in his previous employment, but has no experience as a CEO. He has a master’s degree in hospital administration.
The reporting structure has also been changed. All of the executive directors, the CFO, and the COO will all now report directly to the new CEO. There will not be a designated CNO because all of the executive directors will fill that role. The new changes will take place immediately. The communication to the organization and the public indicates, “Changes were needed to position the organization for growth in current and future service-lines and expansion into new markets. The CEO and CNO have decided to pursue other career opportunities.”
At first Julie is very impressed with the new CEO, who is young, enthusiastic, and very financially savvy. He meets with the executive team every Monday morning to review the previous week’s performance in each service-line and to share plans for the upcoming week, He meets with each of his direct reports once per month and reviews the budget, productivity, patient outcome indicators, and satisfaction levels of staff and physicians. Julie seems to appreciate the direct communication style of the new CEO.
After a few months, Julie detects a change. As budget constraints become more apparent, the executive team is requested to tighten the belt. The proposed budget for the next year must be cut 10% across the board, and the capital budget requests become very competitive. Although Julie’s area has the greatest percentage of admission and discharges as compared to the other service areas, the reimbursement rates for her patients are significantly less than that of patient in her colleague’s service areas. Due to the way contracts have been negotiated for Medicaid and Medicare patients, Julie’s area actually loses money-the cost to provide the services for 48% of the patient is more than the reimbursement rate. When this issue is discussed week after week at the Monday report, Julie begins to see a change in the group dynamics among her colleagues. Janice is emerging as the most powerful of the executive directors, and her areas contribute the most of the hospital’s revenue picture. Janice often “hangs out” with the CEO and the two of them meet daily at the end of the day. The other executive directors notice the change as well, but no one feels it as much as Julie.
Julie never knows what to expect from the CEO. At one meeting he can be very kind and supportive, but at the next meeting he can be accusatory, belittling, and angry that her area is losing money-not because of productivity, but because of the revenue levels. He demands that she decrease staffing levels to cut expenses, and Julie tries to explain that doing so would out the areas out of compliance with required nurse-to-patient ratios. This rationale is not received well, and more pressure is placed on Julie to reduce staffing expenses. The CEO wants her to change the staff mix, using fewer RNs and adding more nursing assistants to cut expenses. Some of the meetings are brutal, and Julie often leaves feeling “beaten: and humiliated.
Julie is upset with the CEO, but after a few hours of reflective thinking after meetings with the CEO, she blames herself, thinking she should be more prepared, better able to articulate the area’s needs, and better able to manage the CEO’s aggressive nature. She dreads meetings with him, but then when the next meeting comes, he is either absolutely supportive and understanding or absolutely unsupportive and aggressive. She never knows what to expect. When she spoke with her colleagues about their relationship with the CEO, they all expressed that he was fine with them. She also met with the CFO to discuss her area’s revenue, expenses, and productivity levels. The CFO was helpful and explained that the biggest problem is the way the contracts have been negotiated and that the revenue level is not in Julie’s control. He indicated that the hospital decided to negotiate a low rate for maternity and newborn services in order to get a higher rate for critical care patients.
The situation begins to escalate for Julie beyond the one-on-one meetings with the CEO. He begins to attack and belittle her in the Monday meetings in front of her peers, laugh at comments she makes on any subject, and makes a point of reminding her peer that Julie’s area is a revenue loser. At one meeting, the CEO distributed an article that he liked from the Harvard Business Review but did not give one to Julie. When she asked if he had another copy for her, he answered, “What, little Miss PhD, I assumed you’d already know all about this.” Her peers said nothing, but Julie noticed they simply hung their heads, except for Janice who was chuckling with her hand over her mouth.
Julie, at wit’s end, finally confided to Gabriella that she was considering leaving the organization. She felt absolutely defeated and could never predict what to expect from the CEO. Gabriella listened carefully and then said, “Julie, don’t you see what is going on here? You are the classic abused woman. The CEO beats you up and you go away blaming yourself and promising to be better, He then feels guilty and treats you better the next time, but the cycle continues over and over. Now he is becoming more aggressive and humiliating to you in public. You have a choice. You can leave, but you will never see this issue to closure and it might affect your work in the future…of you can choose to break the cycle.”
Gabriella indicates that Julie is functioning in a way similar to “abused woman syndrome.” Considering the 10 principles discussed in this chapter (attached), what do you think are the dynamics among the executive directors and CEO in this case?
When working in such a dysfunctional relationship and organization, what do you think are Julie’s best options to heal herself and mange her professional career?
What leadership theory/theories is/are in use here?