In June 2001, Tropical Storm Allison laid waste to Houston. That October, Ron Girotto, The Methodist Hospital System’s former COO and CFO, came out of retirement to serve as interim president and CEO, a post made permanent a year later.
So began a 10-year journey to repair the Methodist Hospital System, an academic medical center and health system that now includes five facilities in four Houston-area communities with more than 13,000 employees.
Girotto concentrated his reconstruction efforts on the Methodist culture and its underlying values. Known as “a hospital with a soul,” its mission statement is centered on serving people in a “spiritual environment of caring.”
Girotto said focusing on the system’s core values would result in the workforce alignment and commitment necessary for success. This focus exemplifies a fourth dimension of leadership.
Traditionally, leadership development focuses on understanding oneself, leading groups and leading organizations. The fourth dimension does not displace these skills; it adds to them.
Leaders must still understand their personality styles and behavior preferences and how others perceive them. They also must be able to discern styles and preferences in others and develop interpersonal communication skills to influence them and form effective teams.
Further, they must develop organizational skills to work across boundaries, communicate overall direction and lead change. Fourth-dimension leadership takes leaders outside of their organizations.
Founded on the pillars of purpose, ethics and value for multiple stakeholders, it requires an expanded set of competencies to articulate the organization’s larger purpose,focus on organizational rather than personal success, and embody the organization’s brand promises — externally and internally — including elements that express its larger purpose, social legitimacy and ethical responsibility.
Fourth-dimension leadership is oriented externally, but it permeates organizational and interpersonal relationships and is rooted in self.
These leaders understand their own moral standards and apply them with courage and commitment. They map their personal values against the organization’s.
They address conflicts between what the organization says and how people treat one another and behave, and they provide mechanisms for their co-workers to do the same.
Interpersonally, they create trust based on competence, reliability and reciprocity in relationships. They also communicate truthfully and with transparency.
Aligning the Four Dimensions
Organizationally, fourth-dimension leaders recognize other people’s diverse motives and foster behaviors and processes that engage and empower employees to create value.
As a result, these leaders stand where individual values, interpersonal behavior, organizational systems and culture and external openness intersect. From there, balancing ambition and authority with humility and service, they work to align these four dimensions.
Girotto used many of these fourth-dimension competencies to turn the Methodist system around. First, he redefined the cultural foundation of the Methodist system in a set of values summarized as “I CARE”:
Integrity: “We are honest and ethical in all we say and do.”
Compassion: “We embrace the whole person and respond to emotional, ethical and spiritual concerns as well as physical needs.”
Accountability: “We hold ourselves accountable for our actions.”
Respect: “We treat every individual as a person of worth, dignity and value.”
Excellence: “We strive to be the best at what we do and a model for others to emulate.”
As CEO, Girotto mandated the I CARE values, centering the organization on a larger purpose based on service.
He honored the source of these values in Methodist’s heritage and history, and because the values aligned with his personal and professional values, he could lead by example.
This enabled employees to fulfill the Methodist brand promise of a spiritual environment of caring with their behavior.
All employees were trained to live the I CARE values. Some 170 sessions were conducted during an 18-month period. The values were communicated at every level and emphasized in new employee orientation.
Senior leadership, including medical staff and board members, all participated, and expressions of commitment were solicited and received from every workforce unit.
The organization implemented programs that exemplified the values, and rewards were provided to recognize employee demonstrations of I CARE.
I CARE took many forms, including:
• System-wide practices such as No One Dies Alone and memorial services for grieving loved ones.
• Recognition for individual patients, such as a baby shower for a cancer patient and a birthday party for a 100-year-old patient.
• Employee volunteer service activities, such as a relief trip to Haiti.
As a result of these activities, Methodist experienced steady and dramatic improvement in employee retention and recruitment, patient satisfaction and quality.
Voluntary turnover fell to 10 percent by 2010, a reduction of 50 percent. The number of employment applications increased approximately tenfold, and the number of applicants rose from a little more than one per job opening to nearly 20 per opening.
Patient satisfaction survey scores improved from below 84 percent to more than 88 percent. The Methodist system also achieved strong rankings in U.S. News & World Report and in the Fortune rankings of best places to work. In industry surveys the organization outranked other systems in trust levels.
Implementing fourth-dimension leadership concepts also enabled the Methodist system to achieve improved business outcomes for its financial stakeholders.
The company’s total net assets (just under $3.3 billion) more than doubled for the eight years ended Dec. 31, 2010, there was $2.5 billion in capital projects and a steady increase in hospital volumes as well as market share.
Driving a Change in Perception
The fourth-dimension leadership competencies that enabled these results are not confined to service firms or the health care industry. Consider the following example from the energy industry.
Journalists, politicians and academics question the effects of transforming densely settled urban and suburban areas into heavy industrial sites to produce natural gas.
Contamination and pollution result in health risks, and words and actions from opinion leaders suggest the industry is focused solely on money and profits without regard for the environment or the communities in which it does business.
Investigations into the 2010 Deepwater Horizon oil spill indicted the entire off-shore drilling industry’s array of accidents along with BP’s approach to managing safety and risk.
To counter these perceptions, the energy industry marshals an array of facts. For instance, technology has enabled the industry to meet the rising worldwide demand for fuel, power generation and petrochemical feedstock with expanded supplies, more efficient extraction, production and distribution methods, and lower emissions.
Occupational safety records that focus on individual workers, rather than processes, are touted, as are offshore industry professionals who have high job-satisfaction scores.
However, implementation of fourth-dimension leadership likely would prove more effective than these nonspecific rebuttals by providing a different industry narrative focused on purpose, value for multiple stakeholders and ethics.
In ExxonMobil’s “2010 Outlook for Energy,” Rex Tillerson, Exxon Mobil’s chairman and CEO, articulated a larger purpose for the industry.
“By enabling people to become more productive and expanding their opportunities, access to reliable, affordable energy can transform people’s lives and the communities in which they live. … Expanding access to modern energy will be essential to meeting global targets for reducing poverty and hunger and improving health and education.”
Tillerson said core industry values such as meeting the rising demand for energy must be done safely and with minimal environmental impact. Further, stated purpose and values must guide actions and yield results. Fourth-dimension leadership competencies at all levels can help.
The biggest payoff for a new leadership approach in the energy industry is in human capital. The industry’s new technologies and investments require an increasingly skilled and sophisticated workforce.
At the same time, the industry faces an exodus of experienced employees as the baby boom generation retires. Therefore, attracting and retaining new skilled talent is mission critical.
In a March Wall Street Journal interview, BP chairman Bob Dudley said, “Industry veterans speak of a generational hole in the ranks. In the late ’80s and ’90s nobody went into petroleum engineering, so now companies must rely on a cadre of aging graybeards plus an influx of newbies who can’t come on stream fast enough.”
However, the industry risks missing the most desirable talent pool because its larger purposes — its ability to align the interests of multiple stakeholders and its ethical climate — are unrecognized.
New Language for Leadership
Spectra Energy worked with Southern Methodist University to implement a leadership development program to help it retain good people, identify high potentials for succession planning and create management bench strength to support promotion from within.
A high priority was to cascade a new language for leadership throughout the organization. The new leadership model included competencies that spanned its dimensions of leadership: developing direct reports, interpersonal savvy, conflict management, team building and managerial courage.
Through the program the firm realized significant long-term benefits. Most participants were promoted to more senior roles or were given expanded responsibilities. Decision-making became faster and more efficient.
Further, based on the results of 360-degree assessments following the program, participating high potentials showed more than 70 percent improvement implementing the new leadership competencies.
The oil and gas firm’s improvements in human resources and operational and financial performance were rooted in strong gains in all dimensions of leadership.
Frank R. Lloyd is associate dean of executive education for the Cox School of Business at Southern Methodist University. He can be reached at editor@CLOmedia.com.