As hospitals and health systems flatten their organizational structures to control costs, they risk weakening the pipeline that develops future leaders.
KEY TAKEAWAYS
Leadership development has become a recurring priority in conversations with hospital CEOs as workforce challenges evolve beyond staffing shortages.
Administrative restructurings are reducing middle management roles, creating fewer opportunities for emerging leaders to gain operational experience.
Hospitals need to treat leadership development as a workforce strategy and invest more intentionally in preparing the next generation of decision-makers.
One topic that has been part of nearly every conversation I’ve had with hospital and health system CEOs over the years has been the clinician workforce shortage. But as we’ve moved further into the post-COVID-19 era and workforces have somewhat stabilized, I’ve noticed another workforce challenge emerging that is eliciting real long-term concern among organizations: the lack of a leadership pipeline.
Hospitals are being forced to reckon with the next workforce question. After recruiting and retaining clinicians through a period of unprecedented disruption, who will prepare the next generation of leaders?
I’m not talking about leadership capacity at the highest levels, although elevated hospital CEO turnover and overall C-suite churn are major threats to organizational stability in their own regard. That’s a conversation for another day. The potential leadership gap that I’m referring to resides more in the middle of organizations, where positions are increasingly being hollowed out and deemphasized, lessening opportunities for future leaders while removing layers of on-the-ground contact with frontline workers.
During my interviews with hospital CEOs, leadership development has continuously surfaced as a priority. Organizations are thinking about how to develop managers, strengthen clinician leadership, and create pathways for emerging leaders to take on greater responsibility.
At the same time, hospitals are making tough calls around their administrative structures to mitigate financial pressures, with labor costs often the biggest driver of rising expenses. Over the past year or so, I’ve covered restructuring after restructuring. The details change, but the pattern that remains fairly consistent is that the positions being eliminated often sit between frontline caregivers and the executive suite.
It’s understood why those positions are the ones on the chopping block. Having leaner organizations where the talent is concentrated on the front lines and at topmost levels makes sense when resources are limited. But while the balance sheet may benefit in the short term, the consequences of “The Great Flattening” are likely to be felt when today’s emerging leaders have fewer opportunities to become tomorrow’s executives.
“On the people side, we’re such a labor-intensive business, the temptation is always if you have economic issues, you look at what levers you can pull,” Hereford said. “You start to say, ‘Okay, well people, that’s a huge expense.’ It is, but if you put people in a bad system and then you blame the people, that’s not an equation for success. So we concentrate a lot more on the system.”
“That’s the that’s the danger, right, is you make too many cuts on the people side and then you actually damage your ability to do the things you’re there to do. And we’re trying to be very careful about making sure that we don’t make those kinds of changes.”
The Need for Intentional Leadership Development
That tension—between hospitals pursuing restructurings and the downstream costs on leadership—is not exclusive to healthcare, of course. This is happening across corporate America.
I’ve also wondered if the flattening of workplace hierarchies accelerates leadership development by placing more power and responsibility on all employees, not just managers.
However, the stakes in healthcare differ wildly from other industries. There’s a fine line between honing the leadership skills of a working clinician and overburdening someone who is already prone to burnout. Without specific opportunities for clinicians to willingly take on leadership duties, development can become more fragmented and random.
If flatter organizations are here to stay, there has to be more intentionality with leadership development. Without those management layers, it’s incumbent on CEOs and C-suites to more directly invest in emerging leaders. Succession planning shouldn’t be limited to the top of the organizational chart.
It also means recognizing that leadership capacity is a workforce issue. A hospital can address staffing challenges and still be on the back foot if it doesn’t have enough leaders prepared to guide employees through change.
Healthcare has spent years focused on having enough people to provide care. Going forward, I’m convinced it requires equal attention on preparing the people who will lead those teams.
One of the most impactful leadership tools isn’t a new technology, consulting framework, or operational initiative. It’s being human.
Hospital and health system leaders spend countless hours reviewing financial dashboards, quality metrics, staffing ratios, and strategic plans. Yet one of the most impactful leadership tools is much more simple: lunch.
Yes, as in food and conversation. Specifically in this case, a simple practice called “Check-ins with Charles.”
At our June 2026 HealthLeaders CEO Exchange in Avon, Colorado, some of healthcare’s top executives gathered for an honest conversation about leadership, culture, financial performance, and the future of the industry.
Yet one of the most compelling ideas shared that afternoon (and that had all the other CEOs rapidly engaging) had nothing to do with technology, reimbursement models, or operational restructuring. It was Williams’ leadership initiative “Check-ins with Charles.”
The concept is remarkably simple. On a regular basis, Williams invites a randomly selected group of employees—from nurses and environmental services staff to finance professionals and administrative team members—to an informal Chick-fil-A lunch. There is no PowerPoint presentation. There are no scripted talking points. There is no formal agenda. The purpose is simply to listen.
As Williams explained during the discussion, the impact has gone far beyond an hour spent sharing a meal.
“When that email goes out,” he told the group, “it’s not that guy, it’s Charles.”
That distinction may sound small, but in today’s healthcare environment, it represents something much larger: trust.
Healthcare executives spend enormous amounts of time analyzing financial statements, reviewing quality metrics, discussing workforce shortages, and developing strategic plans. Those activities are essential. But as the CEO Exchange conversation repeatedly demonstrated, strategy only succeeds when people believe in the leaders asking them to execute it.
Trust Before Strategy
Healthcare leaders often focus on execution. We talk about operating margins, revenue cycle performance, patient experience scores, physician productivity, employee retention, and quality outcomes.
Those metrics matter, but execution doesn’t begin with dashboards. It begins with trust.
One of the recurring themes throughout the CEO Exchange was that organizations often fail to communicate proactively because leaders and employees simply don’t know one another well enough. Everyone is busy. Calendars are full. Meetings dominate the day. Yet when leaders become disconnected from the frontline, small problems stay hidden until they become expensive crises.
Williams described how “Check-ins with Charles” has become one way to eliminate that disconnect.
The informal lunches allow employees to speak openly in a setting where titles disappear. Clinical and non-clinical staff have an opportunity to ask questions, offer suggestions, and discuss concerns directly with the CEO.
He complements those lunches with another simple communication strategy: a monthly three-minute video message. Sometimes the videos are intentionally lighthearted—wearing a Valentine’s shirt covered in hearts or joking with employees—to demonstrate vulnerability and approachability.
The objective isn’t entertainment, it’s accessibility, and employees stop seeing “the president” and begin seeing a person.
That shift has produced measurable results.
Williams shared that following these consistent communication efforts, his organization achieved the highest employee engagement survey participation rate in its history.
Participation itself isn’t the end goal, but it is an important indicator. Employees generally do not take time to provide honest feedback unless they believe leadership is genuinely listening and prepared to act on what they hear.
Communication Is Operational Strategy
Several executives around the table reinforced the same lesson with their own experiences.
One CEO of a health system in Connecticut described taking over responsibility for revenue cycle despite coming from a nursing background. Rather than pretending to understand every technical aspect of billing and coding, she gathered everyone into one room and admitted what she didn’t know.
Many of those employees had worked in the same building for years but had never truly collaborated.
Together, they established shared expectations, defined key performance indicators, and began meeting regularly.
The results were dramatic.
Claim denials declined significantly. Departments that previously blamed one another started solving problems together. Frontline registration staff, physicians, coding teams, and revenue cycle leaders finally understood how each person’s work affected the others.
The improvement didn’t begin with a new software platform. It began with communication.
Another executive discussed regularly spending half a day shadowing frontline employees. Dressed in scrubs, he works alongside environmental services, nurses, and other team members—not as a symbolic exercise, but as a learning opportunity.
Those interactions consistently reveal operational problems that never surface in executive conference rooms.
Employees become comfortable sharing frustrations, identifying inefficiencies, and suggesting improvements because the hierarchy has temporarily disappeared.
Another participant emphasized that finance leaders should spend time in clinical environments, while clinicians should gain greater appreciation for financial decision-making. When each group understands the other’s daily challenges, collaboration replaces conflict.
As one executive noted, communication is often the bridge between operational excellence and financial performance.
The Hidden ROI of Listening
Communication is frequently categorized as a ‘soft skill,’ and honestly my boss always told me to stay away from these soft stories, but the executives at the CEO Exchange argued exactly the opposite.
Strong communication produces measurable business outcomes.
Stronger patient experiences driven by more engaged caregivers
These observations align with broader workforce research. The firm Gallup has consistently foundthat highly engaged business units outperform less engaged teams across profitability, productivity, turnover, safety, absenteeism, and customer satisfaction. While healthcare has its own unique challenges, the underlying principle remains the same: Engaged employees produce stronger organizational performance.
The roundtable offered numerous examples.
Finance leaders make better decisions after seeing clinical operations firsthand.
Clinicians become more thoughtful stewards of organizational resources when they understand how financial performance affects future investments.
CEO Turnover Comes at a Cost
The conversation eventually shifted to another challenge facing healthcare organizations: executive turnover.
The executives argued that frequent leadership turnover carries enormous organizational costs.
Every leadership transition requires employees to learn a new leadership style, interpret new priorities, and adapt to another strategic vision.
One executive described the experience as traumatic for organizations.
Instead of concentrating on executing strategy, employees spend valuable time trying to understand the expectations of the incoming CEO.
Another participant observed that boards are often searching for a “silver bullet” during difficult financial periods, replacing leaders before long-term strategies have time to mature.
The result can be an endless cycle of organizational resets.
Several executives pointed to health systems where senior leaders have remained in place for more than a decade as examples of how leadership stability creates a competitive advantage.
Williams discussed Baylor Scott & White’s intentional focus on developing internal leadership pipelines. Potential future presidents and chief operating officers are paired with experienced mentors well before succession becomes necessary, ensuring continuity and preserving organizational culture rather than forcing each new leader to reinvent it.
Culture Isn’t Built in the Boardroom
Perhaps the most memorable story shared during the discussion came from another longtime hospital CEO.
While ordering lunch in the cafeteria, he asked for a very small salad.
The cafeteria employee smiled, placed a single piece of lettuce into the bowl, and asked, “Is that small enough for you?”
Rather than feeling disrespected, he viewed it as one of the proudest moments of his career.
The interaction demonstrated that an employee felt comfortable enough to joke with the CEO.
There was no fear, there was trust.
That, the group agreed, is what culture looks like.
Not mission statements.
Not values posters hanging in hallways.
Not speeches from the executive suite.
Culture is built through everyday interactions that convince employees they are seen, heard, respected, and safe enough to speak honestly.
Leadership That Listens
Healthcare continues to face unprecedented pressure—from workforce shortages and financial uncertainty to AI, rising consumer expectations, and increasing regulatory complexity.
No CEO can personally solve every challenge facing a modern health system.
Every CEO, however, can create an environment where employees feel comfortable identifying problems early, collaborating across departments, and contributing ideas before issues become crises.
That is the real lesson behind “Check-ins with Charles.”
It isn’t really about Chick-fil-A or even about lunch. It is about replacing hierarchy with humanity.
The conversations in Avon made one thing abundantly clear: Organizations that invest time in authentic communication build trust. Trust strengthens culture. Strong cultures execute strategy more effectively. And better execution ultimately produces stronger financial performance.
For healthcare leaders searching for a competitive advantage in an increasingly complex industry, one of the highest-return investments may not be found in the next technology platform or consulting engagement.
It may simply be sitting down at a table, sharing a meal, and asking one question:
“What ultimately constrains the performance of your organization is not its business model, nor its operating model, but its management model.” (The Future of Management, Gary Hamel)
Factors of organizational success:
Jim Collins says the key factors for success include:
Getting the right people on the bus
Getting the right people in the right seats.
Getting the wrong people off the bus.
Level 5 leadership – Humble leaders with indomitable will. (Good to Great)
Managers:
“Gallup finds that the quality of managers and team leaders is the single biggest factor in your organization’s long-term success.” (It’s the Manager)
Organizations ask, “How do managers get more out of people?”
“Ironically, the management model encapsulated in this question virtually guarantees that a company will never get the best out of its people. Vassals and conscripts may work hard, but they don’t work willingly.” Gary Hamel
Boss to coach:
The BEST managers are coaches, not bosses.Jim Clifton and Jim Harter say there are three requirements of coaching.
Establish expectations.
Continually coach.
Create accountability.
3 tips for shifting from boss to coach:
#1. Understand the dance between freedom and intervention.
Give high performers freedom. Intervene when performance lags.
Intervention isn’t oppression or punishment. It might mean weekly one-on-ones, instead of monthly.
#2. Overcome the most difficult shift.
Solving problems for talented people devalues their talent. Over-helpfulness sucks the life out of talented people. Stop giving quick answers.
Coaches help people find their own answers. The old style of management, when people were tools, is to give them answers and expect conformity.
#3. Practice accountability that energizes people.
Accountability that energizes is self-imposed. We need to rise above the false notion that we can force people into high performance.
Noticing is healthy accountability. Walk around noticing performance as it relates to expectation.
Work that isn’t noticed goes down in value.
What factors enhance long-term organizational success?
I am intentionally breaking into my series on Body Language to write about my core material on trust because a new Podcast Interview has just been released that contains some vital information about trust. The interview is with Andrew Brady, CEO of the XLR8 Team and author of an upcoming book, “For the ƎVO⅃ution of Business.”
In my leadership classes, I often like to pose 3 challenging questions about the nature of trust.
As people grapple with the questions, it helps them sort out for themselves a deeper meaning of the words and how they might be applied in their own world. The three questions are:
• What is the relationship between trust and vulnerability? • Can you trust someone you fear? • Can you respect someone you do not trust, and can you trust someone you do not respect?
I have spent a lot of time bouncing these questions around in my head. I am not convinced that I have found the correct answers (or even that correct answers exist). I have had to clarify in my own mind the exact meanings of the words trust, vulnerability, fear, and respect.
Before you read this article further, stop here and ponder the three questions for yourself. See if you can come to some answers that might be operational for you.
Thinking about these concepts, makes them become more powerful for us. I urge you to pose the three questions (without giving your own answers) to people in your work group. Then have a quality discussion about the possible answers. You will find it is a refreshing and deep conversation to have.
Here are my answers (subject to change in the future as I grow in understanding):
1. What is the relationship between trust and vulnerability?
Trust implies vulnerability. When you trust another person, there is always a chance that the person will disappoint you. Ironically, it is the extension of your trust that drives a reciprocal enhancement of the other person’s trust in you. If you are a leader and you want people in your organization to trust you more, one way to achieve that is to show more trust in them.
That is a very challenging concept for many managers and leaders. They sincerely want to gain more trust, but find it hard to extend higher trust to others. As Abraham Lincoln once said, “It is better to trust and be disappointed every once in a while than to not trust and be miserable all the time.”
2. Can you trust someone you fear?
Fear and trust are nearly opposites. I believe trust cannot kindle in an organization when there is fear, so one way to gain more trust is to create an environment with less fear. In the vast majority of cases, trust and lack of fear go together.
The question I posed is whether trust and fear can ever exist at the same time. I think it is possible to trust someone you fear. That thought is derived from how I define trust.
My favorite definition is that if I trust you, I believe you will always do what you believe is in my best interest – even if I don’t appreciate it at the time. Based on that logic, I can trust someone even if I am afraid of what she might do as long as I believe she is acting in my best interest.
For example, I may be afraid of my boss because I believe she is going to give me a demotion and suggest I get some training on how to get along with people better. I am afraid of her because of the action she will take, while on some level I am trusting her to do what she believes is right for me.
Let’s look at another example. Suppose your supervisor is a bully who yells at people when they do not do things to his standards. You do not appreciate the abuse and are fearful every time you interact with him. You do trust him because he has kept the company afloat during some difficult times and has never missed a payroll, but you do not like his tactics.
3. Can you respect someone you do not trust & can you trust someone you do not respect?
This one gets pretty complicated. In most situations trust and respect go hand in hand. That is easy to explain and understand. But is it possible to conjure up a situation where you can respect someone you do not yet trust? Sure, we do this all the time.
We respect people for the things they have achieved or the position they have reached. We respect many people we have not even met. For example, I respect Nelson Mandela, but I have no basis yet to trust him, even though I have a predisposition to trust him based on his reputation.
Another example is a new boss. I respect her for the position and the ability to hold a job that has the power to offer me employment. I probably do not trust her immediately. I will wait to see if my respect forms the foundation on which trust grows based on her actions over time.
If someone has let me down in the past, and I have lost respect for that person, then there is no basis for trust at all. This goes to the second part of the question: Can you trust someone you do not respect?
I find it difficult to think of a single example where I can trust someone that I do not respect. That is because respect is the basis on which trust is built. If I do not respect an individual, I believe it is impossible for me to trust her. Therefore, respect becomes an enabler of trust, and trust is the higher order phenomenon. You first have to respect a person, then go to work on building trust.
People use the words trust, fear, respect, and vulnerability freely every day. It is rare that they stop and think about the relationships between the concepts. Thinking about and discussing these ideas ensures that communication has a common ground for understanding, so take some time in your work group to wrestle with these questions.
HENRY KOTULA 