The healthcare industry faced the brunt of the COVID-19 pandemic. That’s not hard to believe. But the pandemic also exposed a number of underlying problems that existed long before the virus broke out, which also made the need for effective leadership in the industry glaringly obvious.

What does “effective leadership” even mean? Well, the truth is it means different things to different people and different health organizations. There are a number of leadership styles common among physician leaders in the healthcare industry, each with its own advantages and disadvantages that make them appropriate (or not) for certain teams and situations.

We will break down everything you need to know about the main leadership styles in healthcare.

Challenges facing healthcare leadership

The healthcare industry has numerous pressing challenges, many of which existed long before the pandemic started (but were made substantially worse by the health crisis). Workforce shortages probably top the list for most healthcare facilities. One study conducted before the pandemic found that there could be a shortage of almost 122,000 physicians by 2032.

The surge in the number of patients caused by the pandemic coupled with concerns over the health effects of the virus only made this problem worse, and it’s likely to continue into the foreseeable future.

Healthcare professionals also have to contend with the rapidly rising costs of healthcare. As the U.S. population continues to age, Americans are paying increasingly higher amounts every year for their healthcare. Medical facilities need to find new ways to streamline their services, boost the productivity of their staff and make their entire care delivery systems more efficient.

The importance of good leadership

It will take strong, effective and decisive leadership to overcome these challenges and any others that could emerge in the coming years. Even in normal times, healthcare professionals are constantly making important decisions about the lives of their patients and their families. Effective leadership is required to make those decisions easier by boosting the quality of care delivery and ultimately improving patient outcomes.

But it doesn’t stop there, because the health and well-being of employees needs to be looked after, too. While improving patient outcomes, leaders need to ensure new processes and technologies aren’t having an adverse effect on their employees’ job satisfaction. They also need to create an environment that takes employee concerns seriously and invests in their long-term professional development.

The main leadership styles in healthcare

We’ve covered why leadership is important — now let’s take a look at the different leadership styles in healthcare.

Transactional leadership

Leaders of this style do exactly what it sounds like — they emphasize the basic give-and-take relationship between leadership teams and staff members. They create work environments that are rigid and rules-based, but which tend to be more straightforward and easier to understand.


  • Better sense of fairness: Transactional leaders don’t play favorites, because everything comes down to doing what is expected. The reward-and-punishment system they establish applies equally to everybody, so employees will know that they’re being assessed according to the same standards as everyone else.
  • More straightforward: Employees are never in the dark about what is expected of them or how their performance will be assessed. That straightforwardness can be especially helpful for employees who want to be told what to achieve and how to achieve it, as opposed to carving out their own space within the healthcare facility.


  • Less room for learning: Transactional leaders believe that rewards and punishments are what best motivate employees, but that can sometimes leave little room for learning and creativity. Some employees may feel that the threat of punishment hanging over them stifles opportunities to take risks and learn something they might not have done otherwise. That can feel inflexible and not conducive to innovation.
  • Not everyone is motivated by rewards: One of the main flaws of the transactional leadership style is that not everyone is motivated by rewards and punishments. Some people are motivated more by the satisfaction of a job well-done. Still others have different motivators. These people are less likely to be inspired by a transactional leader and may even come to resent the rigidity of the system.

Transformational leadership

At the heart of this style is the belief that leaders should transform their health organizations and those that work for them. To that end, a transformational leader always has their eyes on the future. They’re particularly good at developing a long-term vision and communicating how every member of the team fits into that vision. They have an uncanny ability to inspire energy and enthusiasm among their teams, and that’s a big part of what motivates them.


  • There’s a focus on the individual: The transformational leader knows that everyone is different, and they believe that transformation starts at the individual level. That means they take more time to build deep, personal bonds with team members, offering support whenever possible.
  • Better at managing change: Change is a part of life, and the word ‘transformation’ basically has change in the definition. Transformational leaders are usually very good at anticipating change, initiating it or simply managing it and that can be a boon for innovation. Their comfort with change ultimately helps drive their health organizations into the future.
  • Inspire passion among employees: When leaders sell their teams on the value of their vision, they’re creating a team that’s passionate about and united around the same broader cause. This can be hugely motivational, leading employees to make sacrifices and dig deeper within to put in that extra effort strictly to achieve the larger goal.


  • Loss of focus on the nitty gritty: As visionaries, transformational leaders are very good at creating big-picture plans for the future. The problem is that they can lose focus on the day-to-day items that are much less exciting but no less important.
  • Hard to keep enthusiasm high: Passion and enthusiasm are what hold the transformational leadership system together, so it’s vital for these types of leaders to maintain a high level of energy. But that’s easier said than done. It requires constant communication and feedback, which can be draining over time.
  • Live and die by the vision: Much of these leaders’ ability to lead is drawn from their own ability to generate widespread commitment to their vision. But if that vision isn’t enough to motivate team members (or they simply change their mind later on), that can cause leaders to lose a huge portion of their influence and power.

Servant leadership

Servant leaders act as a vital support system for their teams. They prefer to step back and put the team above themselves, always making sure everyone is properly equipped with the skills, tools and relationships they need to succeed at their job.


  • All decisions consider everyone: Servant leaders focus on making sure everyone on their team (or in their company) is well-looked after, so they rarely make decisions without first consulting their team members. They want the company to work for them, so they will only make decisions if they know everyone will benefit.
  • Greater level of respect: The servant leader’s focus on the cares and concerns of each employee helps them generate greater respect. Not only does that help to create a healthier and more positive work environment, it also boosts job satisfaction among employees, which can pay serious returns for healthcare facilities later.


  • Leadership can feel decentralized: Because servant leaders put the team first, it can sometimes feel like the role of the leader itself is not as vital to the functioning of the team. While this works well in many situations, in others (particularly in a crisis situation) strong, decisive leadership may be needed, which can be an unnatural role for the servant leader to slip into.
  • More deliberation: Servant leaders will consult many sections of the organization before making a decision, meaning decision-making can take much longer and slow everything else down. For some decisions that’s acceptable and even necessary. Others require quick thinking and instant action.
  • Training might be required: Most people don’t have the emotional intelligence to make them natural servant leaders. For those convinced that this is the leadership style they want guiding the philosophy of their healthcare organization, it may take a considerable amount of time and effort to train people to become effective servant leaders.

Charismatic leadership

Leaders of this style rely on their emotional appeal to develop tremendously strong personal bonds with their employees. Charismatic leaders can use those bonds to motivate and inspire team members to go above and beyond for their health organizations.


  • Strong loyalty bonds: Few leaders can inspire such deep devotion as the charismatic leader. Team members will stand behind them even when times are tough or mistakes are made, and that can be hugely beneficial to the cohesion of the entire organization.
  • Boost retention: Due to the strong bonds that exist between team members and the charismatic leader, retention tends to improve as employees are far less likely to want to work with and for someone else.
  • Make bold decisions: Charismatic leaders are able to move dozens, even hundreds or thousands of people along with them. That can be a major advantage when bold decisions need to be made or big risks taken, as sometimes they alone can inspire whole organizations to move.


  • Everything comes down to energy: Much of the charismatic leader’s emotional appeal comes down to energy — holding lots of meetings, talk shops, happy hours and the like — but that takes a lot of effort. If the leader begins to feel fatigue and their energy levels dip, that can cause those emotional bonds they’ve created to weaken.
  • Things can get too centralized: Much of the organization’s activity and identity will inevitably become intertwined with those of the charismatic leader. That can be a great thing, but it can also leave little room for individuality, innovation and creativity as employees increasingly adhere to the will of the leader.
  • Future might fall into doubt: The charismatic leader might fail to properly plan for a future in which they are no longer involved. That means succession plans, long-term strategy and risk management could fall by the wayside.

Innovative leadership

These leaders know instinctively that markets, technologies, people and processes are constantly changing. They don’t run from this change — they embrace it, understanding the need for constant innovation to power their healthcare facilities through today’s challenges.


  • Change is seen as an opportunity: Healthcare facilities are in a constant state of change, and that’s especially true today. Leaders that put innovation first on their priority list are more ready than others to ride the wave of change, look for ways to use it to their advantage and ultimately help their health organizations grow.
  • Better patient care delivery: Customer service matters at every organization, but that’s particularly the case for healthcare organizations, where life-or-death decisions are made on a daily basis. Innovation helps providers better serve the needs of their patients, improving the quality of their care delivery and driving more positive results.


  • Can cause breakdowns: Sometimes, too much of a good thing isn’t so good. That’s true for innovation. Innovative leaders tend to attract innovative hires, which can be great, but sometimes it’s better for everyone if employees focus simply on getting the job done without trying to change anything. Too much innovation can cause proven and perfectly functional processes to break down.
  • Innovation means risk: Forming and testing new ideas is often associated with additional risk. New ideas might power a health organization forward, but they also might not work and set everyone back. Testing out too many new ideas without exercising some caution could have an overall negative effect if they don’t pay off.

The benefits of good leadership in healthcare

Healthcare facilities stand to gain enormously by investing in top-quality leadership teams. Here are some of the ways they can benefit.

  • More qualified employees: Good physician leaders think of their personnel as vital components in their larger organization. That means they invest in their long-term development by training them on new skills and giving them plenty of opportunity to practice and develop them. The outcome of constant training and skill acquisition is more qualified, better skilled and ultimately much more dynamic employees.
  • Happier employees: This is especially pertinent for the healthcare industry because improved job satisfaction can help bring down those sky-high churn rates and fight the debilitating staff shortage crisis.
  • Better patient satisfaction: More efficient processes and more skilled employees ultimately mean a healthcare system is better able to devote the time necessary to address all patient concerns and develop appropriate treatment plans that meet their specific needs.
  • Embrace change: If the pandemic taught us anything, it’s that leaders can never fully account for every change that could occur. No industry was hit harder than healthcare, so having capable leaders at the helm helps to manage any uncertainty that could arise and see change as an opportunity for future growth.

Working with The Bailey Group to lead your facility into the future

There is no best or worst leadership style in healthcare. Instead, leadership styles should match the particular needs, circumstances and preferences of the healthcare organization. Some styles might sound good on paper but simply don’t work when one tries to apply them to an organization with an already-established culture, mission and values.

That’s where we come in. Our team of leadership coaches at The Bailey Group knows that every organization and leadership team is different, so we focus on each of our clients’ specific needs and objectives to give their leaders the best training to tackle the latest challenges they face. Contact us today to schedule a free consultation.

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