How to Identify High Performing Leaders in Healthcare

The differences in finding leaders for healthcare companies, what you should be looking for and how you should conduct leadership assessments.

By: Leadership Dynamics team


6 min

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How to Identify High Performing Leaders in Healthcare

This article is part of our series on leadership assessment

For investors in the healthcare sector, good leadership teams should look different to those in other commercial enterprises.

If a business is ultimately a function of its leadership team, then the leadership team has to be suited to the market it operates in. For example, in tech, change is fast paced so leaders must be highly curious about the market, adaptable to challenges and stay on top of new technologies. In healthcare, the stakes are high for failure, so leaders must be detail-oriented and highly focused on execution. 

Healthcare companies, though they are a good investment with a steady visibility of revenue, when their reputation is damaged by a failure, it is very hard to get it back, and unlikely to see a return for its investors. The point is, choosing the right leaders for healthcare is incredibly important. So, in this article, we will explore what makes a good leader in healthcare, and how to conduct leadership assessments to find and develop future leaders.

What makes a good leader in healthcare?

Practical, detailed and risk-averse

High-performing leaders in the healthcare industry exhibit a range of characteristics that contribute to their success. One of these key traits is being practical. The ideal CEO is more of a COO – someone who understands the industry challenges, prefers administration and detail to vision and risk taking. 

In an industry where accuracy and attention to detail are crucial, it's essential for leaders to have a thorough understanding of the complexities that impact their operations. They excel at breaking down complex tasks into manageable components and focus on execution to drive results.

Exceptional leaders in healthcare also have strong risk management skills. They are risk-averse, recognising the impact that unforeseen events can have on patient safety and service delivery. By implementing robust processes and systems, they proactively identify potential risks and work to mitigate them, ensuring the highest quality of care for their patients.

The qualities of a good leader in healthcare are similar to most in other sectors, but they skew mainly to being a good “operator”. In healthcare, there is not much need for visionaries, as any change needs to be carefully considered and risks mitigated before setting off.

A leader's effectiveness in the increasingly regulated healthcare sector is often linked to their ability to navigate complex regulations and strike a balance between meeting such requirements and driving organisational excellence.

One of the primary challenges healthcare leaders face is staying informed about the constantly changing regulatory landscape. They must keep abreast of updates to laws and guidelines that govern patient safety, data protection and reimbursement systems. A dedicated and skilled leader stays aware of these changes and identifies potential impacts on their organisation, assessing the measures needed for timely adaptation and compliance.

High-performing business leaders in healthcare have the ability to communicate the importance of regulatory requirements to their teams. Instead of merely treating regulations as bureaucratic obstacles, competent leaders embed a compliance-focused culture throughout the organisation. They invest in employee training, ensuring staff members are well-informed about relevant regulations and understand their roles in maintaining compliance. This approach fosters accountability and cultivates a conscientious approach to healthcare services.

In addition to compliance, savvy healthcare leaders leverage regulatory frameworks to drive innovation within the organisation. For example, the pandemic has transformed the way healthcare businesses operate, necessitating the development of new products and services. Proactive leaders recognise opportunities for innovation within the bounds of regulatory constraints, collaborating with government agencies and other stakeholders to develop guidelines that support the emergence of novel solutions.

What makes a good team in healthcare?

Nuanced diversity

Research conducted by McKinsey has demonstrated a positive correlation between diverse leadership teams and financial performance. Companies with greater diversity, particularly in terms of gender and ethnicity, tend to outperform their peers. This finding underlines the importance of cultivating a varied team in the healthcare sector. 

A critical aspect of diversity is cognitive diversity, which refers to the differences in how individuals think, process information, and solve problems. Cognitive diversity promotes a wide range of perspectives, fostering innovation and creative solutions. By including individuals with different backgrounds, experiences, and expertise, a healthcare leadership team can benefit from a wider variety of innovative ideas and strategies. 

This kind of diversity leads to a balanced behavioural profile across the C-suite. Balance across behaviours is essential for ensuring all aspects of a team's responsibilities are met. This includes a mix of analytical thinkers, creative problem-solvers, and individuals with strong interpersonal skills. Balancing these behaviours within a healthcare leadership team enables them to make informed decisions, while also valuing the input of each team member. 

The best teams are made up of diverse healthcare leaders but in a more nuanced way than in non-healthcare companies. It’s desirable to have a team with varied backgrounds, experiences and behaviours in leadership roles across all sectors, but each sector will skew towards a certain type of leader. In healthcare that's an "operator".

A CEO and a COO need to be in the weeds of detail in order to manage a healthcare company safely, and there is only so much a CMO can do if clients are local authorities with a defined budget. Leadership teams need to be diverse in problem solving, but tend to skew towards pragmatic and execution focused people.

How to conduct leadership assessments in healthcare organisations

1. Uncover domain and situational experience

Domain experience, or market sector area experience is the individual’s experience of companies and their market and customer focus. Situational experience shows how the businesses they previously worked in have created value. Whether inorganically via M&A trade exits, or organically with levers such as internationalisation, digital transformation or operational efficiency improvements.

Assessing potential leaders’ experience usually begins with the CV and the interview, which are useful to assess a leader's domain-specific knowledge and expertise in the healthcare field. This can be achieved through competency-based interviews or by reviewing an individual's track record in leading successful healthcare projects or initiatives. Healthcare leaders must have a solid understanding of industry trends, regulatory requirements and technological advancements to drive the organisation forward.

However, it has become increasingly clear that, by themselves, CVs and interviews are poor predictors of future performance. The main problem is that CVs focus on tangible achievements rather than the underlying behaviours that drive performance.

2. Employ people analytics

People analytics tools are able to fill the gap and dig deeper. Data-driven tools like personality tests such as MBTI, FFM and HPI have long been in use to build personality profiles and identify leadership styles. However, they still fall short in accurately predicting future performance. 

The piece that is left out with these methods is an understanding of individuals’ behaviours. A subset of people analytics tools that is gaining popularity is behavioural analytics. These tools provide a larger advantage in leadership assessment, as they look deeper than personality traits and  allow companies to make better-informed decisions and reduce subjectivity in the recruitment process.

By focusing on actual behaviours, rather than inferred personality traits, this approach can more accurately estimate performance levels. This data-driven approach has the potential to greatly improve the accuracy of leadership assessments and can help employers identify candidates who are more likely to excel in high-growth businesses.

Using our behavioural assessment model, PACE, leaders and leadership teams are benchmarked against high-performing behaviours based on data from the past ten years of successful private equity exits, highly relevant to private equity investors.

When should you assess potential leaders in healthcare?

The short answer is: regularly. Keeping a leadership pipeline healthy is important especially in private equity backed companies where a value creation plan is set to a schedule. Hiccups caused by unplanned and unprepared for leadership changes can diminish returns drastically. This is why succession planning is key.

Succession planning in the healthcare industry plays a vital role in maintaining leadership sustainability and ensuring the continued success of an organisation. Due to the unique challenges associated with healthcare succession planning, it is essential for organisations to focus on identifying and developing high performing business leaders who can drive the company forward.

One key aspect of succession planning in healthcare is proactively identifying potential leaders within the organisation. This process involves assessing individuals based on their skills, experience and ability to align with the company's vision and goals. By creating a pool of potential leaders, organisations can ensure they have a robust pipeline of talent ready to fill future leadership roles.

In addition to identifying potential leaders, it is crucial for healthcare organisations to invest in their professional development. This can involve providing ongoing training, coaching and mentorship programmes that are tailored to the specific needs of the healthcare industry. By investing in the development of their high-potential employees, organisations can build a strong foundation for future leadership sustainability and drive overall progress.

Moreover, maintaining clear and open communication during the succession planning process is vital. Transparent communication not only ensures that employees are well-informed about their potential career paths but also allows organisations to address any concerns or uncertainties that may arise. This approach fosters a healthy work environment that supports employee retention and contributes to the overall success of the organisation.

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