December 01, 2015

BUS 462.01
Sang Kim

Homework for Chapter No. 13

Quality in Practice:
Leadership at Advocate Good Samaritan Hospital
Leadership Changes at Alcoa
Case:
Johnson Pharmaceuticals
 Quality in Practice: Leadership at Advocate Good Samaritan Hospital

Overview:
Advocate Good Samaritan Hospital (GSAM), a part of Advocate Health Care located in
Downer’s Grove, Illinois (a suburb of Chicago), is an acute-care medical facility that, since its
opening in 1976, has grown from a mid-size community hospital to a nationally recognized
leader in health care. However, it was not always nationally-recognize. In 2004, Good Samaritan
was true to its name- a “good” but not “great”, hospital. Quality was generally perceived as
good, but nursing care was seen as uneven; associate satisfaction was pretty good but not
exceptional, physician satisfaction was mixed, and patient satisfaction was at best mediocre;
technology and facilities were increasing falling behind other hospitals; and it was struggling
financially in highly competitive market. Its leadership was determined to achieve, sustain, and
redefine health care excellence, so it embarked on an organizational transformation to take the
organization “from Good to Great (G2G)”. By 2006, the G2G journey had achieved some
breakthrough results in patient satisfaction and clinical measures, and had spawned leading-edge
innovations in health care. However, key questions remained: How would they ensure long-term
sustainability? How would they create a legacy for the future? How could they hardwire best
practice? How could they achieve repeatable excellence? Their response was to become a
process-driven organization by embracing the Baldrige Criteria.
Key Learning Points:
In order to put changes into the hospital, Good Samaritan Hospital introduce the “Great to Good
(G2G)” program which included, establishing an inspiring vision: To provide an exceptional
patent experience marked by superior health outcomes, service, and value; enrolling leaders in
the vision; creating alignment, ownership, and transparency to support the vision. Quoting
Gandhi, the president recognized that “you must be the change you want to see in the world.” He
recognized that transforming an organization cannot be delegated. Leadership needed to create a
sense of urgency, explain the “why”, and over-communicate by a factor of 10. Although G2G
program created a basic foundation for Good Samaritan Hospital but it wasn’t enough to fully
address the question they need to continuously improve their organization as well as their
leadership. Which then came the idea of Good Samaritan Leadership System (GSLS). The
GSLS ensure that all leaders at every level of the organization understand what is expected of
them. Patents and stakeholders are the center of the leadership system. Driven by their mission,
values, and philosophy, all leaders must understand stakeholder’s requirements. At the
organization level, these requirements are determined in the Strategic planning process and used
to set directions and establish and cascade goals. Action plans to achieve the goals are created,
aligned, and communicated to engage the workforce. Goals and in-process measures are
systematically reviewed and course corrections are made as necessary to ensure performance
plans. This focus on performance creates a rhythm of accountability and leads to subsequent
associate development through the Capability Determination/Workforce Learning and
Development System and reward and recognition of high performance. Development and
recognition ensures that associates feel acknowledge and motivated. Stretch goals establish in the
SPP and a discomfort with the status quo prompt associates to learn, improve, and innovate
through the performance improvement system. As leaders review annual performance, scan the
environment, and recast organizations challenges, communication mechanism are used to inspire
and raise the bar. Lastly, the Good Samaritan Hospital introduces another program called
GSAM. GSAM has a systematic eight-step governance process that cascade guidance from the
Advocate Health Care Governing Board and senior leadership to the GSAM Governing
Council/Senior Leadership Team and to all associates. Guidelines and procedures at all
organizational levels ensure that the overall intent of governance is achieved and track through
measures and goals. The process ensures transparency and equity for all stakeholders via
Governing Council committee oversight, independent audits and through the diver’s composition
of the board. Annual review of metrics, the mission, vision and philosophy, and Standards of
Behavior ensures accountability and compliance.
Problems to be addressed:
Like every good organizations, a good leadership can heavily influence how people act and how
people work. For GSH, the problem arose when in 2004; Good Samaritan was true to its name –
a “good”, but not “great,” hospital. Quality was generally perceived as good, but nursing care
was seen as uneven; associate satisfaction was pretty good but not exceptional, physician
satisfaction was mixed, and patient satisfaction was at best mediocre; technology and facilities
was increasingly falling behind other hospitals; and it was struggling financially in a highly
completive market. As the case addresses, the GSH was actually struggling not because their
overall structure was falling behind because there was no set stander of leadership to fix the
problem before it arose. Although, G2G was a start but it wasn’t enough to address the questions
GSH wanted, which is why they introduce GSLS program. Based on my observation, the
program GSH created did not require a lot of money but it did take a lot of time. There are a lot
of leadership traits but implementing the right one can be difficult at times. In the military, when
the Battalion level fails to do their role, the company will fail follow as well because there is no
infrastructure. For GSH, they did the right thing by creating a vision and a mission to create a set
of standers they must meet. Without these two components many business fail because they have
no clue what their goal is.
Key Issue for Discussion:
How does GSAM reflect the concept of strategic leadership?
A. GSAM was created that each organization level has some who has an over-watch to see if the
intent of governance is achieved and tracked through measures and goals
What leadership behavior, practice, and theories are evident in this example?
A. A strategic leadership trait, throughout the organization, a higher member of the GSH has
goal and intent that must be met.
How does the GSAM Leadership system model align with the Baldrige Criteria Framework?
State specific items in the criteria that are evident in this model.
A. The Advocate Health Care Governing Board and Senior Leadership to the GSAM Governing
Council/ Senior Leadership Team and to all associates. Guidelines and procedures at all
organization level ensure that the overall intent of governance is achieved. Overall, this are the
senior leadership who set guidelines like Baldrige Criteria framework is build upon.
Thought provoking questions:
Why do you think GSH in Downer’s Grove, Illinois face such devastating leadership failure?
A. Probably due to the fact that, the leadership in GSH in Illinois never had a vision and goal to
set an intent for workers to achieve.
Do you think GSH should develop a plan that small problem should be fixed at the lowest level
than the higher management?
A. I think so based on the case as it states that the number one priority for GSH is the patient and
the stakeholders, who are mostly dealt at the lowest level than mangers.
 Quality in Practice: Leadership Changes at Alcoa
Overview:
Alcoa ranked as the 79th largest firm in the 2005 Fortune 500, employs approximately 129,000
people worldwide and had 2004 annual sales of $23.96 billion. Alcoa has been known for
progressive, innovative management. It treats its employees well, tries to avoid layoffs and plants
closures unless forced to make changes as a result of continued negative results, and has unions
at only about 15 of its 47 locations. Nevertheless, at Alcoa’s industrial magnesium plant in Addy,
Washington, a crisis of epic proportions rocked the plant and rattled the company, leading to
some key leadership changes that ultimately resulted in dramatic improvements in safety,
productivity, and profit.
Key Learning Points:
As new plant manager, Don Simonic made sure his leadership style has he used during his
College football years were being implemented to the plant management. Based on the case, the
plant had been designed with an open-system, team based culture, adapted form socio-technical
system theory. It was structured similar to the way the Procter and Gamble had set up its soap
plants, and was considered a leading-edge organizational design. The process for producing the
industrial magnesium was highly advanced and technical, and the innovative work team structure
seemed to fit the technical systems characteristics. The plant attracted visitor’s form inside and
outside the company who wanted to benchmark the operation and talk to team members. The
organization structure included: Autonomous, self-directed teams with no immediate
supervisors. Teams were responsible for their own work areas; Hourly employee leadership that
consisted of a team coordinator, safety person, training person, and team resources on each team;
Supervisors, call shift coordinators, with four of five team reporting to them, who were
connected to the team coordinators. Shift coordinators generally stated at arm’s length, because
if they intervened in team operations, they would get in trouble. Employees were empowered,
but unable to face critical decisions that needed to be made to stem the crises. The Crosby
identified lack of clarity in decision-making and authority as the main culprit in the plant’s
environment. The new leadership model, conceived by the Crosby and the plant leaders,
involved major changes in goal-setting and decision-making practice. It required: New Clarity in
goal-setting; A consultative, instead of a pure consensus approach to decision making; coming to
grips with the need to cut cost pragmatically. As the turnaround proceeded, Simonic decided that
cutting staff was essential to meeting the new goals. First, all temporary and contract workers
were laid off. As leaders were explaining the fact that had led to a decision to lay off an
additional 100 workers, an hourly worker revealed a breakthrough that his team had made to
significantly reduce the down time required to turn a magnesium smelting furnace around. This
process involved switching over to a new crucible once the other was filled. The new team
approach required more labor, but cut the downtime from the usual one-and-half-hour
turnaround time to just one hour. Simonic called off the impending layoffs. When the new
process was implemented on all nine furnaces in the plant, the savings reached $10million. This
was more than the wages of the 100 employees, who were allowed to keep their jobs. Simonic
always had clear goals and objectives he wanted the team to approach, as a result of this process,
one person was made responsible for every project or task, known as single point accountability.
This proved to be a critical change that was used instead of the consensus approach, which was
previously the only way to perform projects. McCombs and Simonic believed that for single-
point accountability to succeed, it was necessary to establish the “by whens’- when particular
tasks would be accomplish. After making clear to the teams and employees what was expected,
they started achieving goals better. Another successful approach Simonic brought to the plant
was an idea called “cadre.” During the turnaround, Simonic and the Crosby would work with the
cadre, a group of key people, chosen from a vertical slice of the employees, who engaged in two
specific roles: (1) observing and evaluating the change process as it played out while (2)
simultaneously participating in the process. The Cadre became skilled resource for the plant on
leadership development, change management, conflict management, quality, and work process.

Problem to be addressed:

A the time of this case (in the late 1980s) the plant was facing two severe problems; an
unacceptable rate of serious injuries that averaged 12.8 per year, and five years of unprofitable
operations. No clear, easily implemented solutions were apparent for the first problem, but
corporate management had suggested that layoffs of 100 or more employees were all but
inevitable in order to stem the tide of red ink. Operating statistics bore out the depth and breadth
of the problem. Prices of magnesium had dropped, and units selling for $1.45 on the open market
cost $1.48 to make at Alcoa’s plant. Quality control was below what was needed to counteract
market forces, with magnesium recovery at only 72 percent of the raw material being processed.
The apparent cause of plant problems consisted of a complex mix of lack of accountability, and
low morale, especially among hourly employees. Corporate management stressed safety above
all, and profitability second. The death of an employee, who was related to seven other
employees, and the unacceptable financial losses, led senior corporate management to decide that
a change in plant management was essential. Doc Simonic, a former college student coach, with
Alcoa experience, was tapped for the job of plant manger. His turnaround team members
included the then-personnel manager, Tom McCombs, and outside consultants Robert and
Patricia Crosby. Unfortunately, Addy didn’t sustain the momentum of the turnaround. In 1992,
Simonic and McCombs left to help turn around other Alcoa plants. Corporate management
continued to reduce the workforce. They eliminated all the department heads and everybody
ended up reporting to the shift superior or plant manager. This caused lack of clarity about
leadership and authority in decision making all over again, and as McCombs explained, “They
stripped away the leadership that could have supported the change efforts afterwards.” Perhaps
because of the pervious success and the skill gained in the previous turnaround, Crosby believed
that the second recover that occurred some time after Simonic and McCombs left was going to
be much easier. The pant appeared to be back on track and headed for success again, but the
fortunes of business intervened. There was another drop in the price of magnesium, and the
Addy plant lost its competitive edge. In fall of 2001, the plant was closed down and
approximately 350 employees lost their job.

Discussion Questions:

1. From a strategic management point, the firm should of just closed down the plant rather than
lose money and deteriorate. They could of also, see this problem in the first place and understand
that they need more leadership in their organization.
2. Situation leadership, Simonic was a ex-college football coach who knew that the best way to
control an organization, every must become a team and work as a team in order to create a well
structure organization. Also, Simonic was very coaching type of a person.

3. Simonic leadership trait is not that hard as the case describe, it actually simple leadership style
that many organization like the military uses, from my understanding it just matter of how
someone can leader without enforcing to much authority.

Thought provoking questions:

Do you think because Simonic was a ex-college football coach, it helped him vision his
leadership organization?
A. Yes, every good leader knows that it’s the workers who runs the organization and not the
leaders.
What other style of leadership did Simonic use?
A. I would have to say strategic leadership, because he built a basic chain of command that he
wanted his team to have as well as a goal and a vision.
 Case: Johnson Pharmaceuticals

Overview:
Johnson Pharmaceutical is a large manufacturing that was highly motivated to meet quality
challenges. It implemented an ISO 9000- compatible quality system to ensure not only FDA
compliance requirements, but also customer satisfaction. As the internal audit division audited
the manufacturing plants of the organization, it became apparent that some plants were meeting
the challenges; while other continued to struggled in both the quality and the regulatory aspects
of production this fact was evident in the reports of internal findings and in FDA inspection
reports.
Key Learning Points:
Johnsons Pharmaceutical is well known Pharmaceutical brand name, as a leading provider of
many different pharmaceutical goods, Johnson’s & Johnson’s required that their Pharmaceutical
sector maintain high standers of quality control. Although, Johnson Pharmaceutical is a large
manufacturer that was highly motivated to meet quality challenges. It implemented an ISO 9000-
compatible quality to ensure not only FDA compliance requirements, but also customer
satisfaction. Although, many of the manufacturing plants share similar resources and
environments, some reason Johnson Pharmaceutical sector is falling behind. In the case its states
that, although, the plants are similar in many ways, they differ in terms of leadership, as each
plant has its own CEO. The CEO, as the leader of his or her plant has its own responsibility for
ensuring the successful implementation of a quality system. The key learning point to understand
from this case is that unlike any other manufacturing plants, when it comes to manufacturing
pharmaceutical goods that require high standers, and strict regulations, an act of leadership is as
important as manufacturing pharmaceutical goods. It may not seem important that everyone
should be a leader but in an environment that one mistake can fatally kills a person due to lack
leadership can seriously damage the firm. In the army there is a saying that “problems should be
solved at the lowest level before it is ever moved up to higher,” in this case to the CEO.
Problems to be addressed:
For the most part, the manufacturing plants share consistent resources and face similar
environments. All were issued the responsibility of meeting the expectations of the quality
system through the same mechanism. All understood the consequence of not conforming, that is,
of jeopardizing their manufacturing license as bound by the consent decree. The issue then
became why some plants could successfully design and implement the requirement of the quality
system, whereas other could not and still cannot. Although the plants are similar in many ways,
they differ in terms of leadership, as each plant, has the responsibility of ensuring the successful
implementation of quality system. The plants also differ in their organizational members, those
who are to be led by the CEO. The relationship between the leader and the organizational
members is critical to a plant’s ability to implement an effective quality system; with
effectiveness being a measure how successfully a plant can comply with FDA regulations and
internal quality standards. Both Plants have a similar culture that can be best described as
conserving, reflecting a level of rigidity in response to the eternal environment, but
demonstrating organizational commitment. The strategy used by the leader in Plant A was a
combination of moderate amount of inspiring actions, whereas the strategy used by Plant B’s
CEO was a combination of moderate to low amount of structuring actions, with moderate to high
amount of inspiring actions.
Discussion Question:
1. Each CEO needed to understand that based on their organization they must adapt to and
understand how their organization will run smoothly.
2. Delegating, each employee must understand what their organizations intent is in order to
understand their roles and responsibilities are to the organization
3. No, because all levels of the organization participated in their roles as leaders making sure
each level of the organization are informed and are meeting the intent of the business.
Thought provoking questions:
Why is pharmaceutical business require higher regulation?
A. Probably due to the fact that their business can cause death, and can cause serious damage to
the plant, in the worst case lose the license to produce manufacturing goods.
Do you think ISO 9000 was needed by the Johnsons Pharmaceutical?
A. It may seem not as important but I think Johnson Pharmaceutical did the right thing to create
ISO9000 in to their organization to meet the highest quality standers.