Building Healthcare Teams with Values-Driven Leadership

Introduction: Why Values-Driven Leadership is the Imperative for Healthcare’s Next Chapter

Healthcare in the U.S. is confronting a gauntlet: relentless change, financial uncertainty, staff shortages, and the persistent pressures of patient and provider expectations. For executive leaders, one question is at the forefront: How do you build resilient, high-performing healthcare teams in a system that seems engineered for disarray?

In this episode of the American Journal of Healthcare Strategy podcast, we sat down with Eric McNulty, a Harvard-affiliated Crisis and Change Leadership Educator, keynote speaker, and Mentor—to dissect what truly effective leadership looks like in healthcare right now. McNulty’s thesis is refreshingly clear: “Leadership is creating the conditions under which people can give their best.” In a sector where technical expertise has always been king, it’s time to champion something deeper—values-driven, system-focused leadership that turns individuals into a true team, no matter how complex the crisis.

What Makes Healthcare Leadership Uniquely Challenging?

Healthcare leadership is uniquely complex because it requires balancing individual excellence with team cohesion and system-level outcomes. As McNulty notes, healthcare is “a system that is put together by lots of components where the incentives aren’t necessarily aligned, nor are there necessarily smooth handoffs from one part of the system to the other.”

Key challenges include:

• Rapidly evolving business models and clinical technologies.
• Misaligned incentives between departments and professionals.
• Chronic staffing shortages and gaps in leadership readiness.
• A culture of individual achievement that often overshadows collaborative care.

McNulty brings a rare, dual perspective—both as a patient advocate and an insider at the Harvard T.H. Chan School of Public Health and National Preparedness Leadership Initiative (NPLI)—reminding us: “There is no business more complex.” For executives, the challenge is not just financial viability but “creating an environment where people want to work and patients want to show up.”

Why Technical Expertise Alone Falls Short in Healthcare Leadership

Being the best clinician or administrator does not automatically make someone a good leader—especially in healthcare. McNulty is unequivocal: “You can’t just put people in leadership positions because they are the best surgeon or the most senior nurse.” The qualities that make someone excel technically are rarely the same ones that help them:

• Manage and motivate diverse teams.
• Navigate constant change and conflict.
• Sustain morale through adversity.

He underscores a revealing statistic: “Managers spend up to 25% of their time resolving conflict.” In healthcare, this friction is amplified by high stakes and relentless pace. The solution, he says, lies in broadening our view: “Look beyond your silo, look more broadly at the entire system, at the entire patient experience.”

Explicit takeaway: To lead effectively, executives must recognize and reward people leadership as much as technical brilliance.

How Can Health Systems Identify and Develop True People Leaders?

Identifying and developing effective leaders means screening for people skills, not just technical acumen, and investing in leadership development early and often. McNulty argues for a radical shift: “We have always prized technical expertise. ... You’re always competing as individuals and you’re really seeing yourself now as part of a care team. We do it in name more than we do it in practice.”

Key recommendations include:

1. Screen for people skills when hiring and promoting.
2. Cultivate leadership as a culture, not a one-off event.
3. Don’t be afraid to coach or move people when needed.
4. Promote cross-boundary collaboration.

In practice: Think Southwest Airlines—where even the interview process measured for interpersonal warmth. What matters is not just what a person can do, but how they help the team gel and succeed.

Why Do So Many Leadership Development Initiatives Fail—or Fizzle?

Leadership initiatives often fail because they’re siloed, reactionary, or perceived as distractions from “real work.” McNulty flips the script: “If your staff is so busy that they can’t be doing some self-development or peer-to-peer development, they’re probably degrading in their skills, commitment, and morale.”

Barriers to effective development include:

• Overloaded schedules (“I don’t have five minutes to discuss a podcast”)
• Skepticism that leadership training is a “nice to have,” not a necessity.
• Managers feeling threatened by ambitious direct reports.

How to break through:

• Integrate development into daily work: Use micro-learning, on-the-job coaching, and peer mentoring—don’t wait for the next leadership retreat.
• Empower staff to redesign their own processes: “If the people who are doing the work, they know where the problems are.” Involving frontline staff in process improvement builds engagement and uncovers hidden inefficiencies.
• Normalize continuous improvement: As McNulty puts it, “We do a lot of things that are micro efficient, but macro inefficient … If we involve the people doing the work, they will figure it out.”

Pro tip: Ask staff for three things—one thing to start, one thing to stop, one thing to never change. You’ll uncover more insight than any formal survey.

Where Should Leadership Development Rank on the C-Suite Agenda?

For healthcare systems aiming to thrive—not just survive—leadership development must be a top priority, not a luxury. McNulty is explicit: “It should be a number one priority because it underlies your ability to achieve so much else.” The best-run executive teams, he notes, aim for resilience:

• “Every one of his C-suite counterparts needs to have 50 to 60 percent of their direct reports who could credibly take their jobs. That’s the only way we’re a resilient management team.”

Why does this matter?

• Strong leadership pipelines safeguard against crises, turnover, and burnout.
• Employees who feel invested in are more likely to stay, grow, and contribute discretionary effort.
• Organizations known as “net exporters of talent” attract top performers and foster a culture of advancement.

How Can Executives Lead Through Continuous Change Without Causing Burnout?

The secret to leading through change is to anchor every decision and communication in values and purpose—the organization’s “true north.” Change is inevitable, McNulty observes, but uncertainty is manageable if staff trust their leaders’ intentions:

• “If they know you’re going to be true to your values and your core principles, that gives them some certainty to hold on to.”
• Be explicit about the rationale behind change: patient care, staff wellbeing, and financial viability—in that order.

Communicate change thoughtfully:

• Frame change as a constant, not an exception—“If we’re not changing, we’re becoming less relevant.”
• Acknowledge stress and invite input. Simple exercises—asking what to start, stop, and never change—help teams feel heard and valued.
• Avoid top-down mandates. Co-create solutions with those who do the work.

Direct quote: “It’s not just done for pure efficiency or not just done for the bottom line all the time … we’re going to take care of you, and together we’re going to figure out a way to do this that keeps us financially viable.”

Takeaway: True North Leadership Starts With Values—And It’s Everyone’s Job

Building a resilient, high-performing healthcare team isn’t about finding a new “hero” leader or importing the latest management fad. It’s about values-driven leadership at every level, from the C-suite to the front lines. As Eric McNulty reminds us, “If you really actually live into those values and principles and people see this is where we’re going, you’re not arguing about those things. You’re just arguing about how to do a better job of getting there.”

For executive leaders, the actionable insight is this: Make leadership development—and values-driven culture—your organization’s true north. Invest in people early, celebrate collaboration over individual brilliance, and involve staff in continual improvement. That’s how you build not just a better team, but a stronger, more sustainable health system.

For more insights from Eric McNulty and to explore our leadership content, subscribe to the American Journal of Healthcare Strategy newsletter or connect with us on LinkedIn.