Tracking a Turnaround
The Story of a CEO and a Hospital in Trouble
The newly hired president and CEO of a local medical center faces a daunting task: Under intense public scrutiny, he must save a complex, rapidly failing organization whose culture is marred by indecision and distrust — and do so in an environment of increasing health-care costs and decreasing insurance payments. As if this challenge weren’t enough, the CEO then agrees to meet with outsiders during his first six months on the job to answer questions about his performance in a series of videotaped sessions.
Unlikely as it sounds, that’s what happened when Professor David Garvin asked Paul Levy, CEO of Boston’s Beth Israel Deaconess Medical Center, if he would serve as the subject for a multimedia case study currently taught in the MBA Program’s General Management elective and in the AMP Executive Education program. “I told David that there was a possibility I wouldn’t succeed,” says Levy, who accepted the position in January 2002. “He said, ‘We don’t care. It will be a good case study either way.’”
“I wanted to get the unvarnished story as it unfolded in real time,” says Garvin, noting that he and his coauthor, Assistant Professor Michael Roberto, sat down with Levy and a team from the HBS multimedia production group every few weeks to videotape sessions for the case. Garvin and Roberto then spent several months editing and organizing some twelve hours of tape into bite-sized clips. “Students get to see what a leader does to execute a turnaround on a day-by-day basis,” comments Roberto. “You can’t do that in a written case.”
The fact that the case is limited to Levy’s point of view is its greatest strength and its greatest weakness, Garvin remarks. Students enjoy an up-close perspective of one CEO’s management style; but the case is just that, he reminds them, one perspective.
“Paul Levy: Taking Charge of the Beth Israel Deaconess Medical Center” includes written case materials as well as extensive video footage of interviews with Levy; e-mail correspondence; internal memoranda; and newspaper articles. Students can access the multimedia materials through a month-by-month calendar of events, or view the same material grouped into “activity threads.” Each thread is a unified set of tasks or activities that involve a common challenge. Additional material is organized under the heading “themes.” These are primarily video clips in which Levy reflects on his leadership style or his approach to broad challenges such as communications, change, and decision-making. About thirty multimedia cases are currently available in CD format through Harvard Business School Publishing.
Classroom response has been overwhelmingly positive. Taught near the end of the semester, Roberto notes that it gives MBA students a chance to reflect on what kind of manager they want to be. “It also evokes a lot of emotion,” he adds, particularly after Levy fires his COO.
“The class is universally in awe of Levy, but it often bifurcates after he fires the COO,” Garvin agrees. “Participants in the AMP program are more accepting of his actions, but some of the MBA students are uncomfortable with such a public display of power.” Adds Roberto, “The case is like a mirror. It’s about the students as much as it is about Paul Levy.”
As for Levy, his turnaround of the medical center was complete as of this year. In fiscal year 2004, the organization was running a $25 million surplus. “Taking part in the case caused a good deal of self-evaluation,” says Levy, who visits the classroom after the case has been taught. “I hope it was helpful to the students. So far, everyone applauds when I walk in, so I guess they think I did reasonably well.” So it seems does the medical center’s board, which recently renewed Levy’s contract.
— Julia Hanna
