Paul Levy: Taking Charge of the Beth Israel Deaconess Medical Center
On January 7, 2002 Paul Levy became president and CEO of the Beth Israel Deaconess Medical Center (BIDMC). He faced many challenges: a deteriorating financial situation, several years of flawed implementation, and intense pressures from public officials for a rapid turnaround. This multimedia case study describes Levy's first six months on the job, as well as a number of the meetings and discussions that took place before he accepted the position. It uses video, e-mail correspondence (with disguised names), memorandums, reports, newspaper articles, and excerpts from Levy's daily calendar to show how an experienced executive went about "taking charge" of a large, troubled organization.
The problem with most such accounts, which cover a manager's first 90-180 days, is that they are retrospective and thereby clouded by the wisdom of hindsight. They also tend to omit crucial details because memories are short (and selective). During this production, we avoided such problems by scheduling the interviews from the very start of the process—checking in regularly with Levy throughout his first six months to create an accurate, real-time account of his progress.
It was determined early on that a flexible way to deliver and track the variety of elements in the multimedia case was needed. A simple, yet effective XML tagging scheme was developed to mark each element for its unique type, segment number, activity thread, and date. Key activities and events (e.g. Paul Levy meets with the Selection Committee, Paul Levy is offered the job, Paul Levy meets with reporters, the Recovery Plan is approved by the board, etc.) appear on the relevant days. Students can then click on the activity or event and a page comes up listing associated materials including all relevant video clips, e-mails, memos, and the like.
Professor Garvin offers some recent observations now that the case has been taught a number of times by him and his colleagues in both the Advanced Management Program and the second year MBA program. In both the AMP and MBA programs, the Paul Levy classes are extremely highly rated and well received.
Professor Garvin states, "We now recognize that the materials can be used to teach three broad lessons. First, they illustrate a very distinctive approach to leadership—what Ron Heifetz, in his book Leadership Without Easy Answers, calls "adaptive leadership." This involves a leader helping an organization face up to and resolve its problems, rather than a leader who dictates solutions him or herself. Second, the materials can be used to teach the "taking charge" process: how executives enter a new situation, successfully gain control, and begin to shape the organization's agenda and direction. Third, the materials can be used to show how effective turnaround leaders "create a receptive environment for change," using their skills in communication and persuasion to set the stage for acceptance, create the frame through which messages are interpreted in desirable ways, manage employees' moods so that they neither become dispirited nor complacent, and provide reinforcement so that new behaviors are practiced and eventually adopted.
There were several benefits to creating this case as an online multimedia experience. One specific feature worth noting was the creation of an administrative interface, which allows the faculty to block certain dates on Levy's calendar, thus concealing some content which may offer clues to the final outcome. This would typically be done when the material is being taught over a two-day period. This tool, which is available to faculty 24 x 7, as well as a multimedia case with the flexibility to be taught more than one way, has proven to be a powerful addition to the HBS curriculum.
Professor Roberto suggests the following. "Students get to see what a leader does to execute a turnaround on a day-by-day basis. The richness of the multimedia case takes them closer to the actual daily work of a manager than any written case that I have seen. The case is like a mirror. It's about the students as much as it is about Paul Levy. Students reflect on how Levy handled a series of difficult situations, and they begin to think about how they will behave as managers in similar circumstances. The multimedia case doesn't simply present a neat little retrospective story about a turnaround in the way that a written case often does. Instead, students wade through Levy's day-to-day activities and hear him talking about the situations in real time, and they build their own story of how this turnaround took place."
Professor Garvin offers a final update. "Paul's turnaround plan was expected to take three years, moving the organization from a $58 million loss in 2002 to breakeven in 2004. As of the middle of this fiscal year (2004), they were projecting a $20-25 million surplus, so they are well ahead of budget. By all accounts, the turnaround has been a stunning success."
For more information and to purchase the Paul Levy case, go to HBS Publishing.
