Quint Studer’s Leadership Challenge: Putting Values before ...



Quint Studer’s Leadership Challenge: Putting Values before DollarsJessica ColemanUniversity of West FloridaQuint Studer’s Leadership Challenge: Putting Values before DollarsFrom Enron in the 90s to the more recent banking scandals, leaders frequently make decisions based solely on the bottom line. Quint Studer, founder and chairman of the board of Studer Group, a medical consulting firm in Pensacola, Florida, has built his brand around values-based leadership that puts the emphasis on doing the right thing. He has held many jobs before his current one, and they have all influenced his leadership style greatly. However, one instance in particular stands out to him as a game-changer. When he was COO of Holy Cross Hospital in Chicago, he had a boss that role modeled values-based leadership. He learned a great deal there, and went on to start his own company based on a similar philosophy. As a new employee of Studer Group, I have been inundated with these values-based messages in my first few months there. Recently, I began to wonder where all of Studer’s ideas for Studer Group’s culture originated. So, I sat down with him to discuss his past and how that has helped to shape his present. Primarily, the research I conducted was focused on values-based leadership, leadership role-modeling, and communication between leaders and their staffs. I found that all of these things go hand-in-hand. In the following pages, I will recount one experience Studer recalls as having the most profound effect on him, his major takeaways from the experience, and how the experience has shaped him as a leader today.The Leader and the Leadership ChallengeQuint Studer was working at Holy Cross Hospital in Chicago when he learned something that he would never forget. As COO, one of his jobs was to negotiate physician agreements, particularly group agreements. The hospital did not have a NICU, but was in desperate need of neonatologists, doctors capable of caring for the many cocaine-positive children born there (nearly 30% of all births, according to Studer). So, they had to subcontract for the services. At the time, Holy Cross was not known for its neonatology unit, and they had a hard time finding a group of physicians to contract to work there. Eventually, they found the Levy Group, whose physicians agreed to work with the hospital.However, over time, Holy Cross’s star began to rise, and more groups became willing and even eager to work with them. So, they decided to put the contract out for bid, to see if they could get a better offer. “We started doing better. And when we got better, we got better managed care contracts. We got better payers. So now we were more attractive. In the past, we couldn’t really find neonatology units that wanted our place,” Studer said (personal communication, Oct. 14, 2013).When the results came back, the Levy Group was not the lowest bid. So, Studer excitedly took this information to his boss, Mark Clement, expecting to get instructions to go with the lowest cost estimate.“I was pretty excited because it’s the same services, but we were going to save 100-, maybe 150,000 dollars at a hospital that needed it,” Studer explained (personal communication, Oct. 14, 2013).Studer was shocked to find that his boss did not give him the go-ahead. Clement took a moment to think about it, then told him to stay with the Levy Group. Studer couldn’t believe it. He was throwing away the hospital’s money! Or, so Studer thought. In essence, Clement was choosing to reward the group that stuck with them through the hard times. “Mark said, ‘I just don’t feel comfortable switching because this group was with us when nobody else wanted to be with us. So, now that we can get somebody else, I don’t feel right. They were with us when we were in tough times, so we should be with them when we’re not in tough times,’” Studer explained (personal communication, Oct. 14, 2013).At first it was hard for Studer to understand Clements’s decision. It seemed so contrary to common business sense. However, as Clement explained the reasoning behind his decision, it became clear to Studer that it was the right decision. There was a lot at stake here. Spending more money than absolutely necessary could have backfired with hospital leadership. But, Studer says all was well. Because Clement put the hospital’s values first, everything else fell into place. They continued their partnership for years and together built a successful neonatology unit at Holy Cross. “I think it resonates any time you see someone make tough decisions and it has positive effects,” Studer said (personal communication, Oct. 14, 2013).Analysis of the ExperienceStuder says he learned several things from that one short experience. He learned the importance of putting values before dollars and rewarding and recognizing people that uphold those values. Communicating with staff and explaining the “why” of leadership decisions was another big takeaway for him. Finally, he realized that role modeling expected behaviors and values can often be more influential than simply stating them – nonverbal communication can be even more effective.According to many experts, clearly communicated values in an organization help to streamline performance among employees. Graber et al., suggested that a common theme in the current literature is that “leaders should possess a strong foundation of personal values, principles or ethics. Another recurring thought is that the values of the leader should reflect the organization’s values, which are transmitted to or at least accepted by the organization’s members” (2008, p. 180). Explaining the ‘why’ of any action is an ingrained action at Studer Group today. Many emails have an entire section dedicated to explaining why the information enclosed is important. If people know why, they’re going to move quicker and they’re going to move more seamlessly because it makes sense to them. And that’s really the goal. You’re looking to improve performance. The ‘why’ is one of those ways to get better performance because you’ll do it and you’ll do it when no one’s watching (personal communication, Oct. 14, 2013).At Holy Cross Hospital, Mark Clement understood this. He did not simply hand down a decree to Studer to use the Levy Group. He explained the reasoning behind his decision so that Studer could fully understand why he was being asked to do something that he initially didn’t agree with.Weaver, et al., conducted a study by interviewing 20 employees who reported having an “ethical role model” at work. Many of these participants noted that their role models modeled fair treatment of all employees, which included “offering explanations for decisions (informational justice) rather than just handing them down” (2005, p. 321).Studer said he also believes employees have to know the “how” as well as the “why”. Studer, who owns the local Pensacola baseball team, the Blue Wahoos, recently attended a game in which attendees were asked to pick up a bag and start collecting trash. Studer says he was one of the first to start because he wanted to set a good example. “My gut feeling is I bet people saw that,” he said (personal communication, Oct. 14, 2013).By role modeling values-based behaviors, leaders can show rather than tell employees what they expect of them. According to Weaver, et al., people learn a great deal more from observing ethical behaviors than through personal experience. By watching how an ethical role model navigates a tricky situation, employees can then apply the same reasoning to any other tricky situation they themselves may encounter (2005, p. 314).Likewise, Grojean et al., found in their content analysis that non-verbal communication from leaders can be a powerful method of conveying values. “The leader behavior exhibited when role modeling not only activate desired values in the follower, but these behaviors also develop, identify, and activate value-appropriate normative prescriptions for follower behavior” (2005, p. 229). American Express incorporates ethical role modeling in their leadership development programs. Their code, in part, states: “An important part of a leader’s responsibility is to exhibit the highest standards of integrity in all dealings with fellow employees, customers, suppliers, and the community at large” (as cited in Weaver et al., 2005, p. 326).In an article from 2005, Studer gave 15 recommendations for encouraging good behavior from employees. One of these recommendations involved clear communication. “If you don’t spell out which behaviors are acceptable and which are not, you can’t hold people accountable for them” (15 tips, p. 11).Clement explicitly showed Studer what was expected of him at Holy Cross – to uphold a system that valued loyalty.Impact on Studer’s Leadership StyleStuder says his leadership philosophy was reinforced at Holy Cross. His philosophy, he says, in a nutshell, is “you have to do the right thing even if it costs you money” (personal communication, Oct. 14, 2013). I believe his leadership could best be described as ethical or values-based.In their literature review, Brown and Trevino suggested that ethical leaders are seen as “fair and principled decision-makers who care about people and the broader society, and who behave ethically in their personal and professional lives” (2006, p. 597).His company, Studer Group, is founded on three main values expressed in his healthcare flywheel – purpose, worthwhile work, and making a difference. All tenured employees can recite these from memory upon request. It is a culture of shared values to which everyone who works there has ascribed. In Hardwiring Excellence, he says that all work should rest upon these values. “By continually reinforcing how daily choices and actions connect back to these core values at the hub of the flywheel …, leaders will reinforce these behaviors and effect change more quickly” (2003, pp. 26-27).His most recently published book, A Culture of High Performance also focuses a great deal on the importance of a company’s values. He says connecting work to values is the best possible way to make employees feel that they are making a difference (2013, p. 279).Further, Lichtenstein suggested that in the current era of constant CEO scandals, it is important to foster a values-based organizational climate.Business now almost universally accepts that the primary leadership task is value creation for shareholders and stakeholders. This is especially true in the midst of an era when we’ve seen leaders’ and directors’ remuneration, stock options, and payoffs disconnected from company performance, and in some cases, value destruction (2013, para. 13).Dolan and Altman agreed with this idea. “The most distinguishing characteristic of inspirational effective leaders has been their relentless insistence upon sticking to their personal values. They embody a sense of personal integrity and radiate a conviction of purpose, vitality, and will” (2012, p. 23). Communication and transparency at all levels are also paramount at Studer Group. “I don’t think we can be confident that we are doing a good job at communicating until the cashiers in the cafeteria have the same information about the organization’s goals, direction, and progress that the vice presidents have” (Hardwiring Excellence, 2003, p. 211). Communication up and down the ranks is encouraged at Studer Group. It is important “I used to drive people crazy at Baptist [Hospital, in Pensacola] because I was always talking to employees,” Studer said during our interview. “I don’t believe in the chain of command” (personal communication, Oct. 14, 2013).In The Great Employee Handbook, he further confirms this belief. “Knowing the why also keeps you (and your coworkers) connected to the purpose of your work (e.g. serving customer needs). It’s when you feel this connection that you are motivated to do what needs to be done to serve customers, fellow team members, and the entire organization” (2012, pp. 70-71).Seeing a leader make an important decision based on values confirmed some of the leadership ideas already germinating in Quint Studer’s mind. It was early in his career when he was fortunate enough to work under an ethical role model that placed values before dollars in his business decision-making. The episode at Holy Cross Hospital, though seemingly small and inconsequential, still resonates with Studer today.While he says it didn’t shift his perspective of leadership, it did reinforce many of his own ideas. When he started Studer Group in 2000, he brought with him many of these ethical constructs that he learned earlier in his career, at Holy Cross and elsewhere.But the one experience of choosing to reward the Levy Group’s loyalty in particular taught him a great deal. He learned the importance of values-based leadership, the significance of communicating your reasoning or ‘why’ to employees, and the value that a good, ethical role model can have in an organization.The tables have since been turned, and now Studer is the ethical role model for the hundreds of employees in his organization, not to mention the hundreds of hospital leaders that he and his employees work with. In essence, he has come full-circle, providing his employees and clients with a framework for conducting ethical business. In his own words: “You have to do the right thing even if it costs you money” (personal communication, Oct. 14, 2013).ReferencesBrown, M. E., & Trevi?o, L. K. (2006). Ethical leadership: A review and future directions. Leadership Quarterly, 17(6), 595-616. doi:10.1016/j.leaqua.2006.10.004Dolan, S. L., & Altman, Y. (2012). Managing by values: The leadership spirituality connection. People & Strategy, 35(4), 20-26.Graber, D., & Kilpatrick, A. (2008). Establishing values-based leadership and value systems in healthcare organizations. Journal of Health And Human Services Administration, 31(2), 179-197.Grojean, M. W., Resick, C. J., Dickson, M. W., & Smith, D. (2004). Leaders, values, and organizational climate: Examining leadership strategies for establishing an organizational climate regarding ethics. Journal of Business Ethics, (3), 223-241. doi:10.2307/25123388Lichtenstein, S. (2012). The role of values in leadership: How leaders' values shape value creation. Integral Leadership Review, 12(1), 1-18.Studer, Quint. (2003). Hardwiring Excellence. Gulf Breeze, FL: Fire Starter Publishing.Studer, Q. (2005). 15 tips on creating a standards-of-behavior contract to encourage employees' best behavior. Employment Relations Today, 32(1), 11-18. doi:10.1002/ert.20047Studer, Quint. (2012). The Great Employee Handbook. Gulf Breeze, FL: Fire Starter Publishing.Studer, Quint. (2013). A Culture of High Performance. Gulf Breeze, FL: Fire Starter Publishing.Weaver, G.R., Trevino, L., & Agle, B. (2005). “Somebody I look up to: Ethical role models in organizations. Organizational Dynamics, 34(4), 313-330. doi:10.1016/dyn.2005.08.001 ................
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