The Hidden Threat to Patient Care: Average Leadership at the Top Driving Harm

Low performing executives just biding their time and not taking risks cause peril in their organizations.

In the ever-evolving landscape of healthcare, one of the greatest risks to patient care transformation and patient safety isn't lack of resources, technological innovation, or medical expertise. It's average leadership. Despite the pressing need for healthcare institutions to innovate, adapt, and lead change, many are hampered by a pervasive culture of mediocrity, particularly within the executive suite. At the heart of this problem lies a combination of risk aversion driven by high compensation packages and an alarming pattern of leaders surrounding themselves with equally average performers. The consequences are staggering, influencing everything from organizational culture and staff morale to patient outcomes and long-term sustainability. This problem is systemic. Lower performing healthcare organizations seem to never break the pattern, whereas higher performing organizations, rarely see a substantial decline. If you are a patient going to a lower performing healthcare organization, your risk significantly increases.

High Compensation and the Fear of Risk

C-suite executives in healthcare are often among the highest-paid individuals in their organizations. According to a 2022 study by the Lown Institute, executives at nonprofit hospitals were frequently paid far more than their clinical counterparts, with some CEOs earning over $3 million annually. While compensation itself isn't inherently problematic, it creates a significant disincentive to take bold actions or embrace necessary risks that our healthcare system is in need of to achieve our transformation objectives.

High compensation creates a comfort zone, a place where risk-taking could endanger one’s financial and professional stability. Many executives become highly protective of their roles, preferring to play it safe rather than push for transformative change that might draw scrutiny or temporarily disrupt metrics. This lack of action, is often shared as a sense of responsibility to being conservative and sensitive to the needs of the organization. In essence, the security of their position becomes more important than the mission of improving patient care. A learned “me” before “we” mentality where there is really no team in a team sport.

This phenomenon mirrors the findings in Clayton Christensen's theory of "The Innovator’s Dilemma," where organizations fail to adopt disruptive innovations not because of incompetence, but because of a rational desire to protect existing revenue streams and roles. In healthcare, this often translates to stagnant leadership and a failure to embrace models of care that might disrupt traditional hierarchies. Failure to adopt the latest evidence-based practice because of the disruption doing so will cause to all levels of an organization. It results in the lack of true transformation, where leaders must take risks, and fail and fail often, to learn and grow into a better, improved future state.

The Performance Scale Problem: Only Hiring Below or Equal to One's Competence

Consider a leadership performance level scale below from worse (1) to best (5):

1. Not meeting expectations

2. Meeting many expectations

3. Meeting expectations (average)

4. Excellent

5. Extraordinary

   
   

Executives scoring themselves (or realistically functioning) at levels 2 or 3 often feel threatened by those who operate at a 4 or 5. Rather than hiring individuals who might challenge the status quo or bring superior ideas and execution, these leaders gravitate toward "safe" hires for colleagues, those at their level or below. This behavior isn’t just self-preserving; it's self-defeating and it results in a very low performing executive leadership team where no one challenges each other.

The logic is clear: a 2 or 3 fears exposure or being overshadowed. A more competent subordinate could highlight deficiencies, drive change that exposes stagnation, or, worst of all, become a natural candidate to replace them. Consequently, the leadership ecosystem becomes saturated with mediocrity. In contrast, truly high-performing leaders (4s and 5s) seek excellence around them. They are confident enough to hire talent equal to or better than themselves, knowing that surrounding themselves with excellence elevates the entire organization and elevates their performance as well. They understand that rising "tides lift all boats," and the success of an individual positively impacts everyone. The higher up in the organization a person is the greater the compensation and therefore the greater the risk to bring in a high performer. With many executives serving in a revolving door of tenure lasting as little as a few years. Being conservative is the name of the game to get to the end of the tenure. Who is the last person you remember a few years from retirement that blew the doors of the transformation bus?

This insidious behavior of deliberately hiring of "milk toast" leaders, individuals who are competent enough to maintain operations but pose no threat to the current hierarchy stifles progress. These leaders lack vision, avoid tough calls, and prioritize harmony over progress. They are chosen not for what they can do, but for what they won’t do: challenge the status quo and threaten a C-Suite executive's job.

The organization pays the price. When low-risk hires proliferate, transformation becomes impossible. It becomes an organization of caretakers rather than change agents. Staying the same in a healthcare environment means you are falling behind, sometimes rapidly.

The Spread of Healthcare Mediocrity: Organizational Consequences & Impact on Patient Care

This tendency results in a culture dominated by 2s and 3s, competent perhaps, but uninspired and unambitious. The damage of such a leadership team ripples throughout the organization resulting in:

• Conflict Aversion: Difficult conversations are avoided. Decisions are delayed or watered down. Innovation stalls because no one wants to challenge the groupthink. 

• Poor Culture: An uninspiring leadership team fails to create a compelling vision or rally staff around a shared mission. This leads to a sense of drift and organizational fatigue.

• Quiet Quitting and Disengagement: When staff see that mediocrity is tolerated or even rewarded, they disengage. The best talent leaves, and those who stay become passive and demoralized.

• Lack of Accountability: Without high standards at the top, accountability deteriorates. Poor performers are left unchallenged, and excellence becomes optional.

  
  

Patrick Lencioni's Five Dysfunctions of a Team provides a potent framework to understand this breakdown. According to Lencioni, the absence of trust leads to a fear of conflict, which in turn results in lack of commitment, avoidance of accountability, and ultimately, inattention to results. These dysfunctions are endemic in organizations led by average leaders:

1. Absence of Trust: Leaders fear vulnerability and avoid admitting mistakes.

2. Fear of Conflict: Disagreements are seen as threats, not opportunities for growth.

3. Lack of Commitment: Without healthy debate, decisions lack buy-in.

4. Avoidance of Accountability: Leaders let issues slide to maintain harmony.

5. Inattention to Results: Personal ego and status matter more than outcomes.

   
   

When this is present in large health systems, you will see it correlated with low employee satisfaction and engagement, low culture of patient safety, contentious collective bargaining, lower rates of retention, especially of top talent. 

Consequences: Mission Failure and Layoffs

The impact of average leadership is not abstract, it is measurable and often catastrophic. Poor strategic decisions made to avoid risk can't immediately be measured. The impact is often felt years later, when an organization becomes financially strained. Without innovation, competitive advantage erodes and there is little ability to weather the storms. Patients notice when care quality suffers, and talented staff leave when they see no path for growth or excellence.

Eventually, these failures accumulate, leading to:

• Inability to meet the organizational mission

• Decline in patient satisfaction and outcomes

  • Increase in patient harm

• Financial shortfalls requiring layoffs or service cuts

  
  

Many healthcare organizations claim to be mission-driven, yet tolerate a leadership structure that directly undermines that mission. Only through accountability, excellence, and a commitment to high standards can these organizations return to their purpose.

Why Smaller Organizations Outperform Giants

Smaller, more nimble healthcare organizations often outperform larger ones for several reasons:

• Agility: Fewer layers of bureaucracy mean quicker decision-making.

• Bold Leadership: Leaders in smaller orgs often wear multiple hats, requiring greater adaptability and innovation.

• Mission Clarity: With fewer distractions, smaller organizations often maintain clearer alignment with their core mission.

  
  

Larger organizations, weighed down by legacy systems and risk-averse leadership, struggle to pivot. As Forbes and Harvard Business Review have both noted in various articles, smaller firms often lead the way in innovation because they are willing to take chances. This willingness is often absent in large healthcare systems where safety of the status quo takes precedence over strategic risk.

A Call to Action: Rooting Out Mediocrity

To avoid the slow decay in organizational performance and patient care caused by average leadership, healthcare organizations must commit to excellence at all levels and area, such as clinical, operational and administration. This starts with the courage to:

1. Evaluate Leadership Honestly: Boards must assess executive performance based not just on financials, but on cultural and patient-centric metrics.

2. Promote Based on Merit: High performers should be elevated, even if they challenge existing norms.

3. Hold People Accountable: Low performers must either improve or exit. Tolerating mediocrity sends the wrong message. Hold executives to the highest standards.

4. Embrace Constructive Conflict: Teams must be trained and encouraged to challenge ideas, not people.

5. Hire Courageously: Leaders must hire those smarter and more capable than themselves. As Jim Collins emphasized in Good to Great, "Great leaders build great teams by getting the right people on the bus."

   
   

Conclusion: Choose Courage Over Comfort

The transformation of patient care demands more than technology and process improvement; it requires courageous leadership. As long as healthcare organizations tolerate average leadership, especially at the top, they will struggle to innovate, inspire, and deliver the excellence patients deserve.

The current landscape offers a choice: protect comfort and compensation at the expense of progress, or embrace accountability, excellence, and bold leadership to transform healthcare from the inside out.

It’s time to stop settling for 2s and 3s and start building teams of 4s and 5s. Anything less is a disservice to patients, providers, and the mission of healthcare itself.

CMS Care Compare provides data on hospital quality. This will help make informed decisions about the type of organization delivering the care.

As customers or patients of healthcare organizations, we can protect ourselves from these organizations and the "milk toast" leaders who impede care excellence, by choosing to get care from high-performing organizations passionate about their mission and clear on their vision.

---

EvaluCare provides medical care review services for patients, families and attorneys. We are a dedicated and trusted team of practicing medical professionals. If you have concerns about the care you, a loved one or a client received, EvaluCare can arm victims with the knowledge they need to get the settlements they deserve. If you or a loved one needs medical care reviewed, email info@EvaluCare.net or visit EvaluCare.net