Andrew Myers gently harvests baby-lettuce leaves for the popular mixed greens salad mix at Manakintowne Specialty Growers…”, Friday, May 6, 2011. USDA Photo by Lance Cheung.

December 27, 2016; Harvard Business Review

NPQ has noted some magical thinking out there among nonprofits that assumes that a good manager from an entirely different field, or even someone with just a business background, is a preferable candidate for CEO than someone who has come up through the ranks. This is not generally true, and it is important for nonprofit boards to understand the critical importance of having an intimate knowledge of the field you are in.

There are some interesting observations about what makes a good hospital CEO in an article from last year in the Harvard Business Review. The authors write that “the separation of clinical and managerial knowledge inside hospitals was associated with worse management.”

Support for the idea that physician-leaders are advantaged in healthcare is consistent with observations from multiple other sectors. Domain experts—“expert leaders” (like physicians in hospitals)—have been linked with better organizational performance in settings as diverse as universities, where scholar-leaders enhance the research output of their organizations, to basketball teams, where former All Star players turned coaches are disproportionately linked to NBA success, and in Formula One racing where former drivers excel as team leaders.

What is it that might make a CEO with history in the field of work preferable over one without that experience? Dr. Toby Cosgrove, CEO of Cleveland Clinic, says it is “peer-to-peer credibility.”

In a recent study that matched random samples of U.S. and UK employees with employers, we found that having a boss who is an expert in the core business is associated with high levels of employee job satisfaction and low intentions of quitting. Similarly, physician-leaders may know how to raise the job satisfaction of other clinicians, thereby contributing to enhanced organizational performance.

The article suggests that the marked improvement in outcomes when a hospital is physician-led calls for the institution of well-thought-through management training programs that use both internal and external training resources.

The Cleveland Clinic has also been training physicians to lead for many years. For example, a cohort-based annual course, “Leading in Health Care,” began in the early 1990s and has invited nominated, high-potential physicians (and more recently nurses and administrators) to engage in 10 days of offsite training in leadership competencies which fall outside the domain of traditional medical training. Core to the curriculum is emotional intelligence (with 360-degree feedback and executive coaching), team-building, conflict resolution, and situational leadership. The course culminates in a team-based innovation project presented to hospital leadership. 61 percent of the proposed innovation projects have had a positive institutional impact. Moreover, in ten years of follow-up after the initial course, 43 percent of the physician participants have been promoted to leadership positions at Cleveland Clinic.

Of course, many nonprofits have neither the funds nor the internal career ladders to do this individually, but we can make these kinds of efforts happen as networks, and the up-and-coming leaders among us deserve that investment. What kinds of management training resources do you make available to promising staff members? Are staff members thoughtfully mentored? Does your board understand that a growing body of research suggests that those CEOs who come out of the field may have an extra leg up in managing the specific job of leading your agency? These are good concerns to take up with your board well in advance of a transition.—Ruth McCambridge