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Part 1: How a CEO Empowered Staff to Save $3M and Their Jobs

 |  By Philip Betbeze  
   March 25, 2011

"I could be retired in the Hamptons right now," said the Chicago hospital CEO.

He said it in a joking kind of way, but it's clear Mark Newton knows he's given up a lot to be the president and CEO of Swedish Covenant Hospital, a 120-year-old, 206-staffed-bed community facility on Chicago's North Side.

Newton, who's led the hospital since 2000, is a healthcare entrepreneur with the MBA to prove it from the Kellogg School at Northwestern University. He came into hospital leadership after a career in marketing for Baxter Worldwide, an international pharmaceutical and medical device company.

"Initially it was a management challenge, and now that's evolved to a sense of appreciation for the ability to impact people in a positive way. I appreciate the intellectual challenges this provides. I could've gone to work for Goldman and I could be retired in the Hamptons right now, and there are times when I think that was a career choice mistake," he says with a chuckle.

But only rarely does he have those thoughts anymore. Newton sees himself as a healthcare entrepreneur, and says his breed is scarce in hospital leadership. And more important than what he's given up is what he's gained.

"I have so much appreciation for when you solve one of these issues and see how it helps people," he says.

By one of "these issues," Newton is talking about patient volume declines that came with the recession. Other leaders, when faced with similar challenges, enacted layoffs or other draconian cost-cutting measures.

But before we get into how Newton avoided doing that, a little background is necessary. He comes by his entrepreneurship naturally, and his early life prepared him to find unconventional solutions to common problems.

When he was 11, Newton noticed a lot of litter accumulating around the new Glenview McDonald's. He wrote the manager, asking for a job cleaning up the litter in the area. And he got it, even though, he says, "I was technically underage."

He took the $840 he made over the next three years and bought McDonald's stock. That purchase eventually allowed him to pay his way through college, buy a car, spend a summer in Europe and complete graduate school.

"Looking at new ways to solve old problems is part of who I am," he says. "I learned the benefit of that through [the McDonald's] circumstance."

Unconventional leadership is how he describes his style, meaning that he and his lieutenants—as well as the rank and file—see the value of taking risk. There are benefits of taking risks, he says. Leaders and organizations separate themselves from the pack by being able to change quickly.

"In healthcare, people are risk-averse. Complexity is often the excuse for that, and it's there, but you have drive through it. Lean into the change."

In his case, leaning into the change meant he would forego any draconian measures to save money.

"I've been disappointed in many business leaders over the years on layoffs," he says. "They are sometimes necessary, but they're very simple strategies. It doesn't take a smart person to say I'm going to lay off people."

Instead, after a very frank discussion on the challenges Swedish faced, he challenged his staff to find ways to cut costs themselves.

How Swedish Covenant Hospital staff rose to the challenge is a story in and of itself, and we'll tell it next week, in Part 2: How a CEO Empowered Staff to Save $3M and Their Jobs

Philip Betbeze is the senior leadership editor at HealthLeaders.

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