MGMT 655: Survey of Management
FINAL PAPER: PAUL LEVY
Ivan Alexander
Estela Gonzalez
Soo Jeoung Han
Scott Morgan
Avinash Naganathan
Eric Puls
Qian Shao
1. Introduction
This paper provides an analysis on Paul Levy's managerial performance during his time serving
as the president and Chief Executive Officer (CEO) of the Beth Israel Deaconess Medical Center
(BIDMC). Several main aspects of his management approach will be highlighted and related to
some of the key course components that have been discussed throughout the semester. Levy's
performances in the areas of leadership, motivation, and teamwork provide a wide array of
examples and discussion materials that are strongly correlated within the unit of study in this
management course. These aspects will be discussed in detail throughout the following sections
accompanied by examples and arguments that focus on either the strengths or weaknesses of the
actions that have been taken to accomplish the goal of ensuring the success and recovery of the
BIDMC.
2. Leadership
There were several managerial skills Paul Levy utilized when he was appointed as the president
and CEO of the BIDMC which contributed to his success. Employing good leadership was a
necessity due to the many problems between the different administrators, board members, and
employees. In addition, he needed to garner various forms of power to be able to effectively
perform his duties, which was an area that was overlooked by his predecessors. For instance, Mr.
Levy already had personal power to bring to the job due to his multiple degrees from the
Massachusetts Institute of Technology (MIT), and his work experiences with other difficult
projects such as the cleanup of Boston Harbor. He also maintained a position as executive dean
of administration at Harvard Medical School while serving on the selection panel for the very
position that was eventually bestowed upon him.
Upon becoming CEO of the BIDMC, he gained the positional power necessary to truly bring
about solutions to the problems faced by the medical group, and he had legitimate power due to
his formal position as the head of the organization which allowed him to make executive
decisions and strategies that would ensure a smooth operation of the medical center.
Additionally, he had the reward power to offer praise and promotions, and at the same time, the
coercive power which allowed him to punish individuals who did not perform up to the set
expectations. For example, his ownership of power was clearly shown when he removed the
Chief Operating Officer (COO) and the Chief of Orthopedics for not performing their jobs
adequately. He felt that both of their performances were hindering the advancement of the
organizational goals, specifically due to lack of clear channel of communications and conflicting
managerial styles, and it was therefore necessary to remove them. However, he also showed a
great deal of respect for the individuals by allowing both the COO and the chief of orthopedics to
decide how they would want to make their announcements regarding the firing. Exercising his
authority in a manner that still preserved the dignity of the people involved indicates Levy’s
respect towards those with whom he worked.
Additionally, Levy showed referent power through his interactions with the staff of the BIDMC.
When he spoke to the search coordinators, he set specific conditions for his hiring that had to be
met which included: the removal of the board from the day-to-day activities of the hospital, a
reduction in size of the board, and a start date in early January. Setting these requirements
allowed Levy to acquire respect from the board by proving that he was a leader who was willing
to earn peoples’ respect, be open, democratic, team-oriented, and act in the best interest of the
hospital. A great example of this particular quality occurred when he asked the administrators,
chiefs, and thousands of employees to sign off on the new plan before approaching the board of
directors with it. This demonstrates the leadership skills he exercised by being a considerationtype leader and building a sense of unity to improve the condition at BIDMC.
The actions he made at the beginning of his tenure were critical in establishing his presence as a
leader in the hospital. He explained the possibility of selling the hospital to a for-profit company
and mentioned that this idea was temporarily removed from the table when he agreed to take the
CEO position. This decision produced a positive effect among the staff and administrators. In
addition, he released the Hunter Group’s report on the state of the hospital to all of the
employees, but rejected some of the report’s recommendations which he felt did not meet the
mission of the BIDMC. It would have been easier for Levy to wait and assume the CEO position
after the report came out and to simply accept all of their rigorous suggestions for fixing the
hospital, even if it compromised the primary mission of the BIDMC. Instead, Paul Levy chose
to start before the report was released and create a strategic plan with the other hospital
administrators to find a solution for BIDMC’s problems. Moreover, he utilized the Hunter report
and improved upon their suggested plan, showing that he was a leader that was capable of
initiating operational strategies while considering various inputs from other sources.
Levy
personally helped develop the recovery plan and then fully released it to all the personnel to ask
for feedback while being honest about the layoffs that would be occurring in the near future.
By creating and executing a goal-oriented, deadline-driven, and potentially successful recovery
plan, he was able to gain the respect and trust of the board, chiefs, and employees of the hospital,
which were very important factors that contributed to his overall success during his time as the
CEO of the BIDMC. He started out with the clear goal of keeping BIDMC as a successful nonprofit and independent hospital that cares for its patients. Subsequently, he began to forge a
more effective working relationship between the administrators, the hospital chiefs, and the
various employees working for the hospitals under the CareGroup umbrella. These actions
clearly illustrate his effectiveness and wide-ranging abilities as the leader of the BIDMC.
3. Motivation
Paul Levy was also effective at motivating the employees at BIDMC to support him despite
repeated failures of the previous management to improve the hospital’s financial and
administrative environment. Before Levy entered as CEO and president, there was a lack of trust
within the hospital that led to various communication barriers.
On his first day, Levy
strategically sent a mass email to everyone working at the hospital which established a sense of
inclusiveness. He promised to share information and to include them as part of the problemsolving process. Through this email, he made each individual employee responsible for the
success of the hospital. The partnership created a favorable attitude toward him and the hospital,
which was critical in obtaining commitment and support from the employees.
As a
counterbalance, he also laid out the facts about the current condition at the BIDMC and informed
everyone that the threat of selling the BIDMC to a for-profit hospital existed. By communicating
this information Levy created a sense of urgency within the community. The possible sale of
BIDMC meant insecurity of jobs for doctors, nurses, and staff. In addition, should the sale
become inevitable, all doctors would lose their Harvard affiliated professorship as a result.
This communication process served as a means of establishing a goal or indicator of
achievements for the hospital. In this particular example Paul Levy was utilizing negative
motivation. Negative motivation impels individuals to act in a way that forces them away from
an adverse outcome, which in their case was selling the BIDMC to a for-profit hospital. A goal
was set, and this gave the staff, doctors, nurses, and administration a sense of responsibility and
contribution for the success of the hospital. Responsibility is a strong motivator which has the
ability to influence employees’ attitudes. It enforces the idea that the work they produce on a
daily basis provides value which will benefit the hospital. By making the employees responsible
for the success of the hospital, Levy provides powerful motivation towards achieving the
common goal.
Levy also provided motivation when he posted the Hunter report on the hospital’s public website.
Along with making this report public, he highly encouraged all employees to give feedback to
the hospital’s management.
He received hundreds of suggestions all of which he replied to
through email.
Through these actions Levy showed appreciation for employee concerns. From the feedback he
received it was clear he was effective in motivating employees to become more active and
involved in the workplace. By opening a public channel for employees to review and express
their opinions on the hunter report, he received more than 300 emails of suggestions from the
employees. This fact demonstrated his success in stimulating his employees’ participation in the
workplace, which is one of the most effective motivation techniques. His timely replies to the
suggestion emails also contributed to motivating his employees. After receiving the reply emails
from Levy, the employees felt as though he respected and took their suggestions seriously.
Motivation theory suggests that successful managerial behavior, such as making employees feel
respected and included in decisions, will lead to positive employee performance. Therefore, in
this case, those BIDMC employees who received the reply emails from Levy were presumably
more motivated to support the decisions made by management.
4. Teamwork
In the area of teamwork, one task Levy performed effectively was the process of team formation.
There were several cases in which he seemed to have an inherent knowledge of what functions or
resources were required by the different teams and groups within the BIDMC. One example of
this was regarding his selection criteria of the hospital’s board of directors. Before he was even
hired, one of the requirements he laid down to the selection committee was the necessity to
shrink the board’s size if he was to accept the job. The size of a group is a very important aspect
to consider in the team forming process, and he knew that the size of the board was too big to
operate efficiently. He managed to shrink the board size down to a group of 15 committee
members resulting in a board that worked more efficiently and no longer suffered from
miscommunications regarding each individual’s responsibility and contribution.
Another example of successful team forming by Levy is the task force that he assembled to
implement the recovery plan. These teams were a vital part of the turnaround process of the
hospital which started with careful consideration of several aspects of the composition of the
team. In his interview on March 5, 2002, Levy spoke in detail about how the teams were formed
based on the task requirements that would support the overall recovery mission of BIDMC. The
first characteristic that he considered was team size. He stated that the teams should be “big
enough to have a critical mass, but not so big that people don’t participate.” The second
characteristic he spoke about was regarding the background of the team members where he
mentioned that the teams should have “a reasonably broad representation of the hospital...but you
can’t have it totally representative.” The third aspect was regarding the skills and knowledge of
the team members. Levy stated that “you want to have people who actually know something
about the area and have a key role to play in carrying out the recommendations.” In all three of
these aspects, it was clear that a delicate balance was required in carefully choosing the right
team members that would be able to contribute in achieving the goals. Levy understood this
concept, and the success of his task forces showed the effectiveness and careful thoughts that he
poured into the process of forming these teams.
Another strength that Levy showed in his team management skill was his ability to understand
the importance of shared core values within a team. In an interview, he stated that “a team
generates its best work when its members share the same core values, then everything can be
framed around those values.” Once the core values were determined, they traveled across the
organization and led to tactical and straight communication amongst the various employees
which was an essential element to building a positive working team. Furthermore, he said that
every decision made was in context of those core values, not only to the hospital but also to
society. This shows that Levy understood the core aspects of teamwork which includes working
with difficult people and being able to observe the bigger picture in the organization.
One aspect of teamwork where Levy could have done better was in organizational politics. One
of his steering committees decided to close the dialysis unit in the hospital and outsource it
because there were companies which solely did dialysis as a business. These companies could
perform the task more efficiently and at a cheaper cost, so the hospital chose not to compete in
this area and instead focus on improving the quality of other services that were offered. When
the COO informed Levy that some doctors were questioning this decision, Levy asked the Chief
of Medicine to reiterate the facts about the decision to those doctors. Even though the Chief of
Medicine was part of the decision he sent out an email to the doctors stating that “Paul had said
this decision is final and it’s over.” This action laid all the blame on Levy. In this situation, Levy
should have restated the reasoning behind the decision and explained to the doctors once again
why it made fiscal sense for the hospital to outsource dialysis. By presenting this information as
a team effort to save the hospital, Levy would have been more effective at building coalitions
and alliances within the organization.
5. Conclusion
The qualities that have been previously discussed in detail have provided Paul Levy with the
means to successfully accomplish the enormous responsibilities that he had in ensuring the
recovery of the BIDMC. As discussed, not every decision he made was the best course of action
that could have been taken in the various situations that he encountered. However, Levy
certainly showed and exerted many qualities that demonstrated his knowledge and mastery in
various managerial concepts. Throughout his tenure, he showed a wide range of awareness with
not just the topics that were covered in this paper, but also in other areas of management such as
communication, self-management, organizational design, and strategic skills. The combination
of these managerial skills allowed him to be successful in leading the BIDMC away from failure
and towards recovery and overall success.