Trojan Horse with a Bow Tie

University Hospital of Louisville
Jim Taylor: Trojan Horse with a Bow Tie

by
Birute Regine and Roger Lewin

The genre of management that Jim Taylor brought with him to the University of Louisville Hospital (ULH) when he became president and CEO in August 1996 was different not only from what ULH people had experienced during the tenure of Humana and then Columbia Healthcare, but also different from that which prevails in most organizations. But it is one that is becoming increasingly favored in today's fast-changing business environment, because it is more in tune with the realities of the nature of organizations and the web of connections within which they operate. The new management genre is based on the recognition that business organizations are organic entities that adapt and evolve through time, and where prediction and control are much more limited than the prevailing, mechanistic models of management have assumed.

Taylor came to embrace this new management genre mostly through experience and intuitive insight, but also through learning about the new science of complexity, which, he says, "validated what I had come to believe was right."

Learning as he goes

Taylor grew up in Western New York state, around Niagara Falls, and then in Canton, Ohio, where his father was a hospital administrator, one of the first wave of people who were professionally educated for the job. "I remember when I was a child, my father would take me to his hospital on Saturdays, and I watched as he would walk around talking to people, to everybody," he recalls. "He knew as much about the housekeeper's family as he did about the doctor's family. Everyone in the hospital was important to him, no matter what they did." This behavior sowed a seed in the young Taylor that eventually matured and sank deep roots in his system of values.

He had observed his father placing value on everyone in the hospital, not for what they did but for who they were: individuals, with hopes and fears and aspirations. He had absorbed a value that is central to working optimally with organizations as complex adaptive systems: that is, everyone deserves respect, and this is the pathway to developing genuine relationships throughout the organization. And genuine relationships fuel the creativity of organizations, through rich and open interaction among their people.

As often happens in families, the young Taylor was determined that he would not do what his father did: he was not going to be a hospital administrator. Instead, his first job out of college was as an industrial engineer with Republic Steel, in Massillon, Ohio, where he found himself amid the traditional, mechanistic style of management, where managers were assumed to know everything, and they told the workers what to do. "There I was, a 21-year-old kid, with a white hard hat, clipboard, and stop watch, telling the people in blue hard hats what they were supposed to be doing," he recalls. "I hated that, for several reasons. First, it was the idea that all people needed to be motivated was a financial incentive. People want money, of course, but it's not everything. They want to be treated as people, not just cogs in this machine." he says.

The second reason for Taylor's dislike of the white-hat mentality stemmed from his experience in summer jobs in tire factories around Akron, Ohio, where he was on the other side of the white hat/blue hat divide. "I knew that the workers had lots of ideas about what didn't work and how to improve things. But nobody ever asked them," he says. "It was the separation of those people who - think' and those who - do' that was the core of mechanistic management. But I saw that if the - doers' had been given a chance to - think' as well, and to implement their ideas, they would have done a whole lot better than a guy who knew nothing, but had a college degree and a stopwatch."

A complexity science style of management recognizes that an organization can benefit tremendously by tapping into the skills of everyone in the organization, particularly those on the front line, because these are the people most familiar with the day-to-day problems. And because the interaction of a diversity of views and skills leads to rich emergence. And it is not just the organization that benefits: its people do, too, because they are more fulfilled. For Taylor, these insights were from simple observation and experience, and, as with his placing value on genuine relationships, it would be many years later before he would come across these behaviors in the context of complexity science.

Taylor's unsatisfying stint as a mechanistic manager came to a premature end when, after less than a year, he was drafted into the Army. This was the Vietnam era. Taylor became a medical supply officer, and spent four years in Okinawa, Japan. "Half the people I worked with were Japanese, and half were young American GI's," he says. "Most of the Okinawans spoke some English, but many weren't great. Because the Okinawans were the stable part of the unit, they often were teaching the GI's, and the GI'S were smart enough to let themselves be trained. Given the language problem, maintaining relationships among the work team demanded a lot of work. "It became very clear very quickly that in that environment, where we had to ensure that enough drugs and bandages got to the front line, that relationships among the people in the group were very important, because of the diversity of cultures," says Taylor. "That was a great learning experience." The learning was on two fronts: first, it reinforced the recognition of the power of relationship building in eliciting the best in a group of people working together; and second, that diversity founded on a web of relationships, can be a source of strength, not detriment, in a group, just as complexity science principles suggest.

Prompted by his Army experience, during which time he also received an MBA from the University of Hawaii, Taylor decided that going into the world of hospital administration wasn't so bad after all. He attended graduate school where he took a degree in Hospital and Health Care Administration at the University of Minnesota. In 1980 he joined the Medical Center Hospital of Vermont, in Burlington as a Chief Operating Officer. Two years later, he became CEO, a position he held for 13 years. During this time, he devoted a lot of energy talking with CEO's of other hospitals in the state, and others directly or indirectly involved in healthcare, building what he describes as "a strong network of relationships." His motivation included a concern for the center's own future, but more generally it was a concern for the health of the community as a whole. "I spent time helping to build trust with the leadership in many organizations in the community, identifying needs, linking people together," he says. "The relationships need to have substance, and this substance comes from meeting mutual needs." Taylor places great value on this kind of work. He calls himself "a relationship manager."

Within his hospital, Taylor was figuring out what his job as CEO was, and how best to do it. He saw what complexity science would later come to espouse: that in a complex environment of many parts that are constantly changing, prediction is severely limited. You can set yourself a goal, and then begin to move toward it. But on the way you are likely to find that the goal is no longer valid, and that something else is more desirable or appropriate. And so you set another goal. "I always wanted to get to the right place, even though I didn't know what eventually it would be," he now says. "You go step by step and have to have confidence you will get where you want to be. I tried very hard with people to say, 'I'm not in charge of the future. I can't make everything okay for everybody. You've got to make it okay for yourself. All I can do is create an environment in which you can do what you have to.' Eventually many of the people got that."

At the same time, Taylor was drawing on his earlier experience at the tire factory, and on his gut instinct, developing a conviction - and practice - that people throughout the organization know what the problems are, and how to fix them, and know how to advance the organization. His job, as relationship manager within the organization, was to create an environment in which people felt confident that they could act, and not just sit back and nurse resentment that no one would listen to them. This perspective is precisely what the principles of complexity science address in viewing business organizations as complex adaptive systems, in which the collective behavior of the whole emerges from knowledgeable, individual behaviors at all levels.

At the end of 1993, Taylor happened across complexity science, through VHA's leadership initiative program, Curt Lindberg's vehicle for introducing complexity science ideas to the health community. The program provided a context for conversation about the new science. "I don't do a good job just sitting here by myself, thinking about things," he now says. "I really need conversation and stimulus with others, and for the first time in my career, here was an opportunity to do that. It was wonderful." Nevertheless, Taylor wasn't learning something new so much as seeing a way of understanding what he already knew intuitively, placing it in a framework of science and providing a language for discussion. "It was sense-making for me," he recalls. "It gave me a context in which I could reflect on the way I had been working and about how things might be in the future, but I'm not sure it changed the way I worked very much. It did give me the courage to abandon some things that I had done before that I had felt didn't make a lot of sense, but I had done them because that's what was expected of me." It did change how Taylor defined an organization's success, however. "It is no longer in terms of a preferred future," he says, "but rather a successful movement in an understood direction. Organizationally, it isn't the fulfillment of a detailed strategic plan, but rather continuous progress on a continually changing strategic agenda, learning, adapting, and improving along the way." There is uncertainty in this way of working, of course. And there are expectations to be changed. "People expect the CEO to have the answers," says Taylor, "so when problems come along they expect the CEO to fix things. I realized that the only thing I could do - any CEO could do - is refuse to fix things. Not because I didn't want to, but because, if I'm honest, I know I can't, at least not in a way that is beneficial for the health of the organization in the long term."

In 1995, the Medical Center Hospital merged with another hospital and a physician practice, forming Fletcher Allen Hospital. Taylor understood that, because of the need to improve relationships between the doctors and the two medical centers, it would be best if the CEO of the new hospital would be a physician. He therefore decided not to fight for the top job, a move for which he was highly respected, and instead accepted a senior post with responsibility for community-wide relationships with other institutions, an ambassador for external relations. The new CEO had been the Dean of the Medical School and his management style was very much in the traditional mold of command and control, with an obsession with writing business plans as a way of charting a course to the future and how to get there.

Even though he got on well with the CEO as an individual, Taylor balked at his style of management. Having been liberated from the shackles of a mechanistic mind set, Taylor could not go back to it. Others were unhappy, too. "There were people all over the organization who were frustrated because they were spending more time writing work plans than they did doing any work," he recalls. "But it was the way leadership was trying to control what went on. Business plans can be useful, of course, if they are short term and relatively limited in scope. But when you go beyond a context where there is considerable certainty and considerable agreement, they quickly lose their utility." The fact that few plans remained valid for very long, because circumstances were constantly changing, apparently made little impact on the hospital management's passion for them.

Initially, Taylor believed that his own experience in organizational leadership and the new CEO's in dealing with physician organizations would make for their being a "powerful team." But their very different ways of working got in the way. "I was always willing to allow things to move towards an end that was right, without necessarily knowing what that end might be," explains Taylor. "Whereas he very much had a specific end in mind and a specific way of getting there." Taylor tried engaging the new management in a conversation about complexity science ideas, giving out relevant articles and books. But to no avail. No interest was sparked. Taylor very soon found himself not contributing to the organization as he had wanted; and increasingly he was perceived as an outlier. Nine months after the merger he was asked to leave.

Moving Through Dilemmas

Even though Taylor had effectively been fired from his job, he didn't feel that he had failed. More that there had been a clash of incompatible philosophies and practices. He had faced what many people learning about complexity face, "How to introduce a complexity perspective of organization and management in a linear, command and control environment?" The question itself is fraught with contradiction, that is how to explain something essentially non-linear in a linear way.

And now there was the prospect in Louisville of "bringing to another organization something different than I had experienced at Fletcher Allen." And Taylor faced a dilemma. "I had become very excited about complexity ideas, and I knew them to be powerful and personally liberating," he explains. "But I also knew that the ideas can sound very foreign to people at first, and threatening, too. So how was I to talk about my approach, without scaring people away? How was I to be honest in an interview, without jeopardizing my chances of getting a job? Because I did want to get a job!" His strategy was to talk about a complexity-guided way of working, and its efficacy, but without using the language of complexity science. "I got through that OK," says Taylor, "and apparently I didn't scare them too much, because I got the job. Even my bow tie didn't scare them!"

Taylor is not in the typical CEO mold: the big ego, slap-on-the-back, guy-in-charge type. Rather, his power is in quiet calm, reassuring presence, and a charisma that invites deep loyalty through genuine relationship, not one that demands it through being dazzling. His dress may be described as dapper, including the aforementioned bow tie. It's a picture of conventionality. But, as management guru Tom Peters says, if you are going to be radical in business organizations, dress conventional. And Taylor is nothing if not a radical. When the ULH board hired him, they didn't know that they were getting the organizational equivalent of a Trojan horse, because in some ways they didn't know what they were getting.

When, in August 1996, Taylor became CEO of ULH, he faced many of the attitudes he had left behind in Fletcher Allen's management, but with, in some respects at least, a more sympathetic environment. There was the issue of how you plan for the future; and there was management style.

In February 1996, ULH had changed status from for profit to not-for-profit. The previous year, Columbia/HCA's contract as ULH management was canceled, and a new one put out to bid. Two not-for-profit hospitals, Jewish and Alliant (now Norton), which were neighbors and sometimes competitors of ULH in downtown Louisville, formed an alliance and tendered a successful proposal, thus forming what in June 1995 came to be called the University Medical Center, Inc., a not-for-profit corporation. UMC, which took over management of ULH on February 6, 1996, is an affiliation between the Jewish and Norton hospitals and the university, and manages ULH's operations, more as trustees than hands-on management. Nevertheless, it is an unusual, somewhat ambiguous alliance, as UMC's board has representatives of Jewish and Norton hospitals on it (in company with university representatives), and these in some respects are competitors of ULH. Jewish and Norton people therefore have access to, and some control over, ULH's plans, but the arrangement is not reciprocal. Taylor's skills as a relationship manager would clearly be put to a severe test in this arrangement.

The affiliation agreement that formed the University Medical Center, Inc. included a requirement for a strategic plan. Outside consultants had recommended a six-month, $500,000 effort to come up with such a plan. "For the first six months I was here, nobody would do anything, because they didn't know what the strategic plan was," Taylor says. "They wanted to see a document that gave them permission to go ahead and do the things that needed to be done."

In a slow processes of attrition, Taylor argued that people knew what the strategic issues were, and all they had to do was figure out how to work with them. "My position was that I knew that a strategic plan would be a waste of time and money," he says, "but I wasn't saying that you don't have to deal with strategic issues. Of course you have to do that. You can't just sit back and let everything happen without doing anything. It's a matter of how you do it and what perspective you have. I said we were going to be action oriented, and learn as we go. It's hard to get people comfortable with the idea that step-by-step is good enough, and not fall back to the idea that we can plan our way out of this. But action, not planning, is how you move forward." Management practice guided by the principles of complexity science is very action oriented, very pragmatic, because it recognizes the power of constant experimentation and the potential of small changes leading to large effects. But action must be combined with learning, because, as Taylor says, "Action and no learning are as deadly as no action at all in complex systems."

Taylor didn't base his arguments explicitly in a complexity science framework, however, because he thought it might be intimidating, or at least confusing. "It's better," he says, "to translate these ideas into behaviors within the environment. Once people experience it, the ideas make more sense." So he worked with realities. The strategic issues were already known, so it was more productive just to get on with the job. Eventually the push for a formal plan quietly evaporated. At the same time, Taylor trimmed down the organization's bureaucracy and created an environment in which people might feel free to make decisions at all levels. And, once people had experienced complexity ideas in action, Taylor introduced the principles of the science explicitly into the organization. The impact of Taylor, as a man and a messenger of a new way of working, has been tremendous, both in terms of people's morale and fulfillment (see "The University of Louisville Hospital Story: The Difference between Day and Night"); and in the bottom line. The affiliation agreement that gave substance to the UMC and its stewardship of ULH included a guarantee of a cash flow to the university of $30 million over a period of three years. As it turned out, Jewish and Norton didn't have to part with a single cent, because ULH generated the cash flow itself, and more.

When Jewish and Norton Hospitals joined forces with the university to pitch for the contract to manage ULH, they saw potential benefit in having ULH as part collaborator, not just a competitor, as it had been under Humana and Columbia. The arrangement in some ways parallels what happens a lot in the high-tech business, where economic webs of companies include a mix of competition and collaboration among them. To be successful there has to be a degree of trust and commitment to the notion of doing things "for the good of the whole." In its fledgling state, the partners of UMC were short on these requirements, as evidenced in the attempt to rationalize adult oncology among the three hospitals. For Taylor, building relationships with Jewish and Norton was a top priority when he joined ULH, because, he said at the time, "collaboration is our future." The oncology project was therefore a test case.

The oncology project, which had been written into the affiliation agreement, was not so much to bring the three hospitals' facilities physically together; rather, it was an intent to evolve to a state of rationalized delivery of different aspects of treatment. Within ULH, the prospect of giving over some treatments to Jewish and Norton was viewed by some people as losing out. Taylor's response was that it was important in this alliance "to lead by example," hoping that ULH's partners would reciprocate. "We have to ask ourselves, 'Are we willing to forgo some things that might benefit our organization for the benefit of the whole?'" says Taylor. "I believe we should." But, he recognizes, this isn't easy. "People have a hard time acting for the good of the whole, when the part they live everyday is felt to be under attack, and in the present health care environment, it can feel like that."

As month after month of negotiation passed, it became increasingly apparent that the UMC partners were not as committed as they needed to be to giving up what they already had for the benefit of the whole, and the push to integration gradually slid toward failure. "The lesson that some people have learned from the oncology project is that this collaboration stuff is all words and no action," says Taylor. "That's unfortunate, because our competition is not in these 24 blocks of downtown Louisville. It is regional. And we should have a commitment to - the whole' being successful for the benefit of the community." As a result of the frustrations over the oncology project, some successful initiatives within ULH, in digestive and infectious diseases, were pursued very much with a ULH, rather than a medical-center wide, focus.

In July 1998, a new dean was installed at the medical school, and this offered the possibility of improved collaboration among the three hospitals, because there had been a degree of lack of trust between Jewish and Norton CEOs and the previous dean. However, this coincided with Norton acquiring a number of other hospitals in the area, and this immediately altered the dynamic between it and the Jewish Hospital group. Where once there had been healthy collaboration between the two not-for-profit hospital groups, both of which were committed to their community, there developed instead an steadily increasing sense of competition between them. The two hospital groups' willingness, and ability, to collaborate with ULH was also affected, detrimentally. As a result, Taylor says he is "less optimistic than I was that the alliance between the three hospitals will develop in the way it might have, which may change what we can do at ULH."

This discouraging development is a good example of how the actions of organizations in an economic web of which you are a part can have a impact on your own organization, even though those actions were not directed specifically against you. In complex systems, everything is connected to everything else. It is also an illustration of how long-term plans can so easily be derailed by unforseen events in a complex environment.

For managers schooled in traditional leadership roles, the lessons of complexity science in the business context pose a dilemma, says Taylor. "If you accept the complexity point of view, you will certainly feel better about why the old explanations about organizations and the leadership job aren't working." Essentially, you cannot control what is inherently uncontrollable. And you cannot predict what is largely unpredictable, despite what MBA courses traditionally teach future business leaders. But, if you cannot predict and you cannot control, what is leadership? That's the dilemma. While this dilemma stirs fear in many managers, in Taylor it brings a sense of liberation and hope. "There is a sense of liberation about saying that nobody has the answer, that nobody can have the answer," he explains. "I can make a difference in doing the best I can. That's an important recognition for me to make, for anybody to make for themselves. That doesn't mean I don't sometimes feel anxious. I do. If you're not anxious living in this business environment, I think you must be asleep. So I'd say it's not a matter of whether you are anxious or not; it's a matter of dealing with your anxiety." Taylor recognizes that this philosophy of leadership can sound like an abdication of leadership. "It makes no sense to feel responsible for something that you cannot do, which is to know what the future will be," he says. "But you can feel responsible for helping the organization create conditions so that you can navigate the future, even though you don't know what it will be and even though there's some anxiety in it."

Hope is an important antidote for anxiety, says Taylor. "I have gained hope because I know what I can contribute and therefore how to define expectations for myself," he says. "Hope brings an inner calm that comes from the ability to balance anxiety about what an unknowable future may hold and the excitement of finding out." These insights of how hope helps people move through difficulties rather than just coping or denying them transform the meaning of leadership, shifting the focus from the leader to his or her people. "As a leader, I know it is my job to help the people with whom I work find their own hope, and to do that you have to have unity of value, a shared value. And trust. You can do remarkable things in an organization if there is trust," says Taylor. "If, as a leader, you can generate these qualities, you can bring hope to those in your organization; and then you can say that you have succeeded in the leadership role." In an external survey of ULH's management team in July 1999, 95 percent expressed themselves to be either "hopeful" or "strongly hopeful" about their organization and its future.

The leader/philosopher: intuitive, holistic, reflective

Taylor's success as a leader can be attributed in part to how he makes choices, which also reflects a certain style of leadership. Taylor's style is somewhat cryptic, because his choices are often guided by his intuition and instinct. To allow your instinct to be a more prominent reality takes, as Taylor says "a certain confidence," because it requires, as he says, "letting your gut begin to do things rather than doing what you've been taught to do in a book." Giving validity to gut feelings, instinct, and intuition is in fact a rich source of information for those leading complex adaptive systems. In this new and highly connected economy, it's not enough to depend on facts alone for decision making - rarely can you have all the facts; the business environment is too complex. And often important aspects of the environment have already changed by the time facts are gathered.

For Taylor, listening to his gut manifests sometimes as "it didn't feel right." It didn't feel right to motivate people by money only, and not consider other reasons why people work. It didn't feel right to improve processes without involving the people who were part of them. It didn't feel right for him to be directive and to perpetuate a patriarchal view of leadership. It did feel right, on the other hand, to learn as you go and to engage people to make things better. It did feel right to move in an understood direction and not try to plan for certain outcomes.

The effectiveness of Taylor's intuition for leading complex systems rests in his perspective; his intuition is guided by a holistic view - of people and of organizations. Seeing the wholeness of the system as well as the interacting parts gives him a powerful perspective in these complex times. Taylor's respect for the whole - that is, the hospital on one level and the community of which it is a part, in collaboration with other hospitals, on another level - and a recognition of all its fluctuating states enables him to value motion, and so he goes step-by-step without needing to have a specific plan with a specific outcome. Thus he is able to support the need for a physician CEO at the newly formed Fletcher Allen hospital in Vermont, rather than seek the position for himself, because of this holistic perspective and concern for the greater good. Seeing the wholeness of an organization redefines his role as leader--to be one to create an environment that encourages creativity and an ability to act. As a result, he sees the wholeness of a person in their need for self worth, and he tries to help extricate people from a fear of trying, so that they can contribute to endeavors and be successful at them. Thus, he relinquishes the traditional role of the CEO "to fix things," recognizing this is not beneficial to the whole. This extends into seeing the wholeness of relationships in that "their substance," Taylor says, "is in meeting mutual needs."

A holistic perspective permeates his choices. He speaks to the wholeness of the Board of ULH, by preparing them to do a better job so that the organization can be better; unlike many CEOs, who try to figure out ways to make a Board do what he or she wants them to do. He values the wholeness of processes by valuing all the people involved. And he sees the wholeness of the organization and the wholeness of collaboration. He says: "We're all in this together. Let's do the best thing. Not because it's good for the doctor or the hospital, but because it's good for the whole enterprise, for the greater good." Taylor's ability to listen to his intuition and grasp the wholeness of things are apt qualities for leaders in a rapidly changing environment and integral to a complexity style of management..

With intuition and holism informing each other, Taylor could be regarded as more reflective, more philosophical than most CEOs. Reflecting and making sense of things is important to him. Staff at UHL have commented on his thoughtful nature, saying it was an unusual experience for them to have a CEO who seemed more like a professor, and to find themselves in a position that was unexpected, sometimes disconcerting, but certainly refreshing--where they were learning from and with Taylor. Taylor's philosophical nature comes through in his approach to realities of the workplace, such as failures being lessons to be learned from and then to move on; or personal responsibility, that is to make your own life at work. But he doesn't just espouse these ideas; he lives them.

Consequently, Taylor's philosophical nature is embedded in a very practical, action-oriented context that is apparent in his questioning: "Why are we doing things this way?" "What else could we be doing?" His thoughtfulness brings another dimension to the workplace, where he strives to engage people on a deeper level of interaction, not just to have task-oriented conversations, but also to walk down the more difficult path of personal experience, such as discussing the trials and tribulations of effective leadership. Because of these unusual attributes, Taylor as a leader is much like a Trojan horse. You know there's something big to contend with, but you do not know what it is exactly. What you get is more than you expected: a Trojan horse with a bow tie.

Taylor's Principles of Leadership: Something to Think About

Lead by example.
The role of leaders - at all levels - is to be a relationship manager.
Have confidence that you will get to the right place, even if you don't know - and in fact cannot know - where it will be.
Be willing to forgo your own advantage for the benefit of the organization as a whole.
Be willing to forgo the advantage of your own organization for the benefit of the larger community of which the organization is a part.
It is liberating to accept the reality that no one has the answer, and that you can say "I can make a difference doing what I do best."
If you aren't anxious in today's world, then you are asleep. How you deal with your anxiety is what is important.
Unity of value is important, so that if you have something shared you are liberated from the burden of responsibility that you must find a specified future.
The organization itself is not the most important thing. What we do is most important: we care, we educate, we do research.
People will do remarkable things in an organization, if there is trust.
Be patient - but not too patient.
Dispel the myth that, if there is a problem, you can go to the CEO and s/he will fix it.
Everyone at all levels in the organizations has ideas that can help us improve. The task is to find ways of helping people act on their ideas.
Be confident that step-by-step is good enough, and will get you there.
Business plans are about achieving a defined future and about control. But the future is unknowable, and you can't control; you can only influence, for good or ill.
An organization that follows the principles of complexity science is very action oriented.
The organization must also be capable of learning, because action without learning is as bad as no action at all.
The leader's job is to be the keeper and communicator of the organization's purpose and principles, but not necessarily their author.
If people are collectively engaged in the right way, a common purpose will emerge.

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