Journal 2

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Healthcare organizations (HCOs) are facing a future of rapid change and financial restructuring. This change continuum directly impacts your effectiveness as a nurse leader as you attempt to realign nursing within the framework of new business models.

Just as not-for-profit HCOs must infuse new models of leadership to better meet these future challenges and

facilitate ongoing business success in a highly competitive market, so too must nurse leaders. This article will provide

a look back at the history of nursing leadership models in not-for-profit HCOs and suggest a new nursing leadership

model for the future. The article will deal with only the not-for- profit HCO environment, although there’s recognition that these constructs may be applicable to other HCO environments as well.

A lesson in history Historical development of HCOs included management infrastruc- tures built on bureaucracies and authoritative leadership. Nursing leadership models aligned with these organizational models in an effort to create organizational infrastructures that were cohesive and

sustainable. These early concepts allowed for the building of internal structures that cre-

ated organizations and business models within the constructs of a not-for-profit

environment. As HCOs moved into the 20th century, leadership models began to

change to address specific attributes of increas- ingly complex societies, organizations, and historical events.1

Nursing leadership models moved from authoritative to more participative ideology that provided fundamental concepts of leader- ship that facilitated the need to change the business model and healthcare delivery system in not-for-profit HCOs. Organizations shifted to a perspective of looking at success in terms of leader- follower relationships.2 Two predominant models influenced the nursing leadership and HCO landscape during this time. The Trans- actional Leadership model and the Burns Theory of Transforming Leadership provided a measure of success in facilitating growth and financial stability for not-for-profit HCOs within the healthcare delivery marketplace. Additionally, these models provided a new framework for nursing leadership that would guide the profession of nursing to greater levels of recognition within the spectrum of healthcare providers. Although the Transactional and Burns models provided a significant foundation for leading not-for-profit HCOs

By Kathleen M. Matson, MHA, MSN, RN

Revisiting the past, revamping the future:

The leadership edition

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Revisiting the past, revamping the future

into the new era of healthcare deliv- ery, there remains some question about their effectiveness as the HCOs face increasingly complex questions related to financial and business strategy sustainability.

Transactional leadership The balance of people and task con- cern is a trait congruent with the Transactional Leadership model, which supports a philosophy of exchange between leaders and followers. Transactional leaders

commitment, to enhance compli- ance, and to usurp the resistance that was met as some organizations began to change how healthcare was delivered.4 As trust in the leader grew, nurse leaders were able to engage followers in achiev- ing radical visions of the future.

Theory of transforming leadership Burns’ leadership theory is based on the construct that a moral foun- dation is at the core of leadership and this foundation will facilitate a

Nurse leadership models that merge best practices of transactional and transformational leaders into a cohesive leadership model of transactional transformation have the best chance of improving healthcare.

engage staff members in meeting goals or completing tasks by offer- ing rewards or recognition in exchange for productivity.1 As fol- lowers are rewarded, trust in the leader grows.3 The exchange of trust is based on proven success by the leader. The leader builds influ- ence and power by demonstrating innovative visionary characteristics and decisive decision making.4

This theory, based on expert power, was a useful nursing lead- ership model in the early metamor- phosis of HCOs as organizations began to decentralize structures and move away from former authoritative leadership modeling. Nurse leaders who subscribed to the transactional model of leader- ship used their influence to gain

transformation of leaders and fol- lowers.5 As not-for-profit HCOs moved through the early years of the 21st century, it was necessary for nurse leaders to embrace the power that existed between leaders and followers. This power, based on the leader’s ability to motivate others toward visionary goals and aspira- tions, provided a sense of value to the employees of HCOs as they began to be primary forces in future success. Organizational cultures changed as followers were trans- formed and the basis of power for both leaders and followers was based on mutual support and common purpose. These changes aligned well with the developing consumer-driven healthcare landscape.2

Compare and contrast The Transactional model doesn’t recognize the value of identifying specific follower ability and willing- ness tendencies and using this to determine specific leadership style, which is a foundational element of Burns’ Transformational theory. The difference between these two theories lies in the transactional belief that leader power is driven by proven success, whereas Burns believes that leaders and followers transform each other.4 Burns’ recog- nition of the two-way relationship between leaders and followers fur- ther enhances the resulting trans- formation of others to higher levels of development and function.6 Both theories provide necessary concepts that led to the ongoing develop- ment of HCOs through the early 21st century.

Nurse leaders, in their adoption of one of the models, became poised to lead nurses within their organizations toward future goals of integrated, collaborative practice models. The elements that most sig- nificantly altered the internal orga- nizational structures of HCOs were centered on involving the employee base in both vision identification and vision achievement. Although Burns’ model speaks more to the employee or follower engagement in vision identification, both models provide motivation of some form for employees or followers to achieve the leader’s vision of the future. This is essential in the con- text of recent and future HCO sus- tainability in the current landscape of quality, cost, efficiency, and consumerism.

What lies ahead? Although trends toward for-profit HCOs rose in the late 1990s and early 2000s, the need for not-for- profit HCOs remains apparent.

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HCOs, regardless of profit status, remain under the regulatory eye of federal, state, and other municipali- ties. This generality of oversight requires the not-for-profit entity to determine how to meet the ongoing financial and regulatory compliance requirements within the constructs of the not-for-profit designation. Increased regulatory focus on elec- tronic care environments, financial incentives for quality, and reporting of specific outcomes related to care creates an increase in the need for HCOs to develop specific strategies to meet financial, quality, and effi- ciency targets.7 The costs associated with healthcare delivery continue to escalate as population numbers increase and new pockets of health- care needs become apparent.

Significant burdens are placed on not-for-profit HCOs with the passage of recent legislation such as the American Reinvestment and Recovery Act (ARRA) of 2009 and the Patient Protection and Afford- able Care Act (PPACA) of 2010. ARRA poses significant challenges to HCOs to implement electronic health records that will provide appropriate reporting of specific areas related to Meaningful Use.7

It’s incumbent upon nurse lead- ers to recognize the challenges of these initiatives within the context of efficient and effective nursing care models. Both ARRA and PPACA serve as focal points for the future vision of the not-for- profit HCO leader as strategies for success must be developed that focus on a quality, cost, and out- come equation. Nursing leadership strategies must include engage- ment of followers in a way that will ensure ongoing business sus- tainability in this future of financial uncertainty as costs continue to rise and reimbursements continue to trend down.

Of importance in this discussion is the recognition that just as the regulatory and financial constructs of HCOs are changing, so are the societal impacts that influence how organizations operate from within the context of the employee and consumer. HCOs are complex enti- ties with a variety of interrelated elements. The design, structure, and processes are the essential compo- nents that enhance the organiza- tion’s ability to meet preset goals. HCOs face the challenge of a con- stantly changing environment requiring innovative and visionary approaches to problem-solving.8

Society’s impact on organizations can’t be discounted as the cultural norms of a society at large create the infrastructure of employee bases within the organization.2

Today’s HCOs employ four gener- ational cohorts with differing work values, ethics, and cultural norms. Nursing and organizational leaders must align systems, such as perfor- mance management, rewards and compensation, and succession plan- ning, with daily work requirements so that organizational accountability is imbedded within the culture of the organization.9 To this end, a new leadership model is needed if not- for-profit HCOs, and the nursing support systems within those organi- zations, are to survive the rapidly changing healthcare marketplace. The success of transactional and transformational leadership in select situations demonstrates that both models possess the framework for engaging followers toward a vision. Merging the two allows leaders to enhance opportunities to facilitate follower engagement and sharing of organizational vision and missions.

Revising the models Two factors remain intact as nurs- ing and HCOs move toward the

future. Successful nurse leaders must find innovative ways to engage followers in meeting future visions and followers must be part of the vision setting if they’re to be expected to actively and enthusias- tically facilitate the achievement of these visions. As not-for-profit HCOs face uncertainty on the finan- cial and reimbursement front, nurse leaders must offset this uncertainty with a strong, unified organiza- tional structure that’s committed to moving forward into the next gen- eration of healthcare service deliv- ery in the United States. How will this be accomplished?

It would appear that the strongest opportunity to be successful will lie in nurse leadership modeling that merges the best practices of transac- tional and transformational leaders into a cohesive leadership model of transactional transformation (TT). This proposed hybrid model may provide the conceptual framework needed to change existing HCO and nursing leadership infrastructure while providing employees with a sense of value that’s gained through empowerment.2

The TT leader uses both motiva- tion and the people and task per- spective to accomplish change and reach a new vision of healthcare delivery. In looking at the frame- work for each model, one can see the convergence of ideas when focusing on the end result for the follower. In the transformational model, the follower is transformed as visions are achieved and the fol- lower experiences the success of his or her actions. This interaction is based on one person engaging oth- ers for the purpose of an exchange.5

The followers are interested in what the exchange will result in from a self-perspective, not necessarily how the exchange will influence the greater vision. The transformational

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Revisiting the past, revamping the future

leader engages the followers to work toward a vision that, when realized, will transform leaders and followers to higher levels of func- tion and motivation.5 Conversely, the transactional model depends on an actual transaction that’s awarded when a goal is achieved. It’s the merging of these two constructs that will create the successful healthcare leader of tomorrow.

The balance of transformation and transaction will become increas- ingly important as nurse leaders face future complex issues in health- care delivery and the cultivation of a workforce that can actively partici- pate in a fluid environment. It would appear that change will be the continuum as HCOs attempt to accommodate work flow and work environments to meet the ever- increasing demands for high-quality healthcare at lower costs in conjunc- tion with improved accessibility. Nurse leaders must be prepared to implement organizational change with the knowledge that such change will create stress on the employees as organizational infra- structures become progressively more volatile.2 This stress will be increasingly evident in some of the current workforce generational cohorts as different values and rewards are appreciated by different generational cohorts. How nurse leaders blend these values, beliefs, and norms to leverage the strengths of each cohort will be an important consideration in future success.

Nurse leaders are charged with the responsibility of influencing individual performance of staff members to improve organizational efficiencies. In order to meet this goal, TT leaders must have the req- uisite knowledge and skill sets to address issues related to today’s multigenerational workforce. Although specific generational

attributes may be perceived as nega- tively impacting the work environ- ment, an opportunity exists to create positive workplace gains through skillful blending of each generation’s strengths and weaknesses.10 Nurse leaders will be better equipped to address the unique needs of the current workforce with knowledge regarding specific generational ten- dencies.11 Of importance in address- ing nurse leadership competence in dealing with the multigenerational workforce is the ability to negotiate rewards and recognition within the context of generational values. This identification along generational cohort lines will serve as a founda- tion for leaders to determine fol- lower attributes that align with visions and improve productivity.

Introducing a hybrid design Leadership models contain specific constructs and conceptual frame- works that provide guidance to oth- ers in applying the model to prac- tice.9 A theoretical framework must exist to provide conceptual struc- ture to the model. The TT model is supported through a principal- agent theory construct. The princi- pal-agent theory is a social science theory that conceptualizes the rela- tionships associated with delegated decision making.

The basic premise of the theory is that the principal, in an effort to reach a desired outcome, contracts with an agent to produce the prod- uct. The agent then receives some type of recompense for product.12

Applying this to the TT model, one can envision the principal as the leader and the agent as the fol- lower. The agent’s product will result in some type of recompense. This would be determined in the reward structure that’s identified by the leader in conjunction with the follower’s identified values and

beliefs. In healthcare, the compen- sation may come in the form of rewards or professional recognition or financial compensation. The the- ory recognizes the complex levels of relationships that exist among the organization, patients, and care- givers in an HCO. Of importance when assessing this theory’s appli- cation is the ability to identify the roles of principal and agent in an effort to understand the intended outcomes in relation to the deci- sions rendered.

The principal-agency theory facil- itates the functions of both TT lead- ers and followers. Easily identified principals and agents exist, and outcomes are the visions put forth by leaders. In the area of patient care, the principal-agent relation- ships are multiple and complex. Physician-allied health, physician- patient, allied health-patient, and patient-family relationships are some examples of principals and agents whose outcomes or products are predicated on delegated deci- sion making as a function of the relationship.

Using this construct, the TT model can move beyond leader/ follower relationships in relation to the HCO and move to a more inte- grated leader/follower model that can be applied to healthcare delivery systems as well. This chain of rela- tionships is congruent with the theo- retical concept that agents may pro- mote their interests over those of the principal.12 The TT model recognizes that at times the follower’s (agent’s) motivation may be based on a value that’s more important to the agent than the leader’s (principals) vision. The result, however, will still be realization of the vision and achiev- ing satisfaction in the way of a reward of value to the follower.

TT leadership will require nurse leaders to adopt a new perspective

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of followers as both those to be inspired and motivated by vision and by a reward or transaction that will result from goal or vision achievement. This changes the nurse leader’s ability to influence and motivate through emotion and requires the leader to identify the values of the followers to appropri- ately determine the transactional opportunities. Followers, as well, must be able to effectively articu- late individual reward or incentive requirements. This follower identi- fication of value will be an essential component of the TT model. There are specific leader and follower requirements within the constructs of the model. These requirements transcend the traditional transac- tional and transformational models. Nurse leaders will now depend on followers to be transparent in their values and beliefs. In addition, new levels of leadership transparency will be needed as followers will demand to know how the leader envisions meeting the goals of the organization.

TT leaders must be prepared to fully understand the social and professional culture of followers. In healthcare, the generational cohorts present specific challenges to lead- ers in identifying goals and values of the workforce. TT nurse leaders must employ effective communica- tion strategies to provide insight into future visions. This communi- cation of vision must include all levels of the organization in the planning and change design. These efforts will foster a sense of power and decrease mistrust and misun- derstanding. When employees adapt to change and are able to experience the tangible positives related to change, the new status quo is established.8 This is the crux of the TT leader’s success. Regard- less of what motivates each person

to engage in: 83-99. The vision, the result must be vision realization. This is the stress point for the TT leader: Know your follower’s val- ues and desires for this will become the fulcrum for motivation and vision realization.

Dynamo leaders The future of not-for-profit HCOs is complicated by the changing financial and regulatory landscape of healthcare. This changing land- scape requires a new approach to healthcare nursing leadership that will provide a means for leaders to engage followers within the context of the increasingly complex and regulated healthcare environment.

To meet these challenges nurse leaders must adopt a new model of leadership that embraces the values of followers and the current generational impacts on organiza- tions. Moving to a hybrid leader- ship model, the TT leadership model, gives leaders a conceptual framework for leadership that allows for the intricacies of the current and future follower issues and accommodates for the pres- sure points related to regulatory and financial changes within the healthcare market. The TT leader blends the constructs of transac- tional and transformational leader- ship models to create a new dynamic between leaders and followers.

Successful future nurse leaders will require strategic alliances between leaders and followers that are the foundation of the TT leader- ship model to propel new visions of the future forward. TT leadership provides both leaders and followers with avenues to leverage the tal- ents, values, beliefs, and norms of multiple generational cohorts toward achieving visions for future organizational success. NM

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