Skip to main content

HL20: Nancy M. Schlichting—Leadership for the Organization and the Community

 |  By Jim Molpus  
   December 13, 2012

In our annual HealthLeaders 20, we profile individuals who are changing healthcare for the better. Some are longtime industry fixtures; others would clearly be considered outsiders. Some are revered; others would not win many popularity contests. All of them are playing a crucial role in making the healthcare industry better. This is the story of Nancy M. Schlichting.

This profile was published in the December, 2012 issue of HealthLeaders magazine.

 "We have also built and doubled the size of the organization, but you make some very hard choices. It is not just what you do but how you do it."

As visionary as he was, auto pioneer Henry Ford could not have dreamed in 1915 when he financed and built the hospital bearing his name in Detroit that in another century it would be his healthcare system—not just his automaker and its brethren—at the table leading the rebirth of a region hit hard by the loss of more than a million jobs.

This year, the Detroit Regional Chamber elected Henry Ford Health System CEO Nancy M. Schlichting as its chairman for the year. While Henry Ford Health system ranks eighth in the chamber's list of largest employers in the region behind the Big Three automakers, healthcare is one of the industries that region is looking to for leadership out of its economic woes. Schlichting appreciated the symbolism of her appointment.

"They have never had a healthcare system leader do that," she says. "It has always been the big autos and banks. It's kind of symbolic of the role that healthcare is playing in the Detroit community."

Henry Ford would have been proud to have Schlichting leading his health system. After joining the health system in 1998 as chief administrative officer, she quickly assumed the top leadership role in 2003. Since then she has reinvented the culture at Henry Ford around solid fundamentals of performance and quality, all while keeping a close eye on changes in the healthcare marketplace and the Detroit area in particular. She created a culture built around careful accountability and measurable improvement, culminating in the 2011 Malcolm Baldrige National Quality Award. During her tenure the $4 billion, five-hospital health system started an audacious "No Harm" campaign with the goal of reducing all causes of patient and employee harm by 50% in three years. In 2010, she oversaw the creation of the Henry Ford Physician Network to tie Henry Ford's 1,200-member employed physician group and another 1,700 affiliated providers into a single ACO-style regional network for clinical integration and quality.

Schlichting says her role as CEO boils down to doing three things correctly. First is, of course, leadership itself, which she defines as "how you build the team, how you create the culture, and how you manage conflict," she says. "It's also how you provide leadership both within and outside the organization. And it is having a good sense of yourself and what drives you—your values and guiding principles that help you make decisions that are not always perfectly aligned with everything."

Schlichting says she relied on those values when she and her leadership team made the difficult decision to close Henry Ford Macomb Hospital, Warren campus, this year after years of declining census and revenues.

"It was tough," she says. "I have closed three hospitals in the past 10 years. We have also built and doubled the size of the organization, but you make some very hard choices. It is not just what you do but how you do it." The "how" in this case was to close the hospital but to find new assignments in the health system for the approximately 500 affected employees. "We just could not make it work at this hospital. The scale was too small, but we tried everything," she says. "We did not want the employees to suffer so we made the decision that we were going to absorb those 500 people into the organization. It was a cost hit for us, but it would have been a cost hit no matter what we did. Those issues really define our organization."

The second leadership quality that defines her is "having clear and sometimes risky strategies," she says, which for her included investing in the health system's main inner-city campus at a time when other employers were leaving.

"We did it because our hospital in Detroit, the flagship, is a jewel," she says. "It had been undervalued, underappreciated, and under-invested in for a long time. I also wanted to tell the community we had not abandoned them in any way. While we were building a hospital in the suburbs, we were very committed to the city. Those things end up being very strategic but are also symbolic of who were are and what we stand for."

The third leg of her leadership is definitely one that fits the time and the city's history: solid results.

"The third in my three buckets is operating performance. You have got to get results. You can have the smartest strategy and a great team that all love one another, but if you don't create results you are not going to be around for very long. You have to create outcomes that are effective, appropriate, and something that is sustainable. And that is tough in today's environment. There is a lot of pressure on all aspects of operations."

Schlichting does not get too caught up in fads or leadership tricks. She lets people use a variety of tools that work toward the desired goal. In addition to her reliance on leadership, strategy, and performance, she attributes her success as CEO to something she kept as a personal trait when she started in healthcare leadership: openness.

"I didn't start my career thinking I was going to hire a chief wellness officer," she says. "I didn't start my career knowing I would hire someone from the Ritz-Carlton to run a new hospital and redefine the way we deliver healthcare. But I did start my career knowing that I was going to be open all the time to new ideas and new thinking and people who could bring their gifts to the organization. That is the thing that doesn't change. It's really your own inward makeup of who you are."

Jim Molpus is the director of the HealthLeaders Exchange.

Tagged Under:


Get the latest on healthcare leadership in your inbox.