Michael McCallister, CEO of Humana, has faced many challenges with the new health care reform law. It is said that health insurance companies have been immoral all along, and this new health care reform law is suppose to help Americans. Obama even stated, “Americans are being held hostage by health insurance companies,” meaning that the health insurers are the bad people. McCallister hates that people feel this way because all his employees wake up every day trying to do good things for people such as getting them through illnesses, protecting them from financial disaster, and preventing them from being sick. McCallister explains in his interview that the reason for rising premiums is from the aging population, new technology, and new drugs, not them just charging a high premium for no reason.
Due to these issues, McCallister is trying to create stronger relationships with his consumers. McCallister loves the Medicare Advantage division of Humana, because it allows his employees to talk directly to the people. Humana loves the individual health insurance market because it allows them to talk to the people directly and receive feedback. Being able to talk to the customers and helping them is what drives the company to work hard. They are also trying to find ways to motivate behavior change with incentives and rewards such as fitness programs and other products.
When looking at this situation, it is clear that McCallister is using the Contingency Theory leadership style. When looking at the Contingency model, it is shown that McCallister has poor leader-member relations. McCallister and his employees are currently trying to repair these relationships with the customers to by developing relationships with them. The customers currently feel betrayed by health insurance companies include Humana.
McCallister’s situation also has low task structure. There are no clear cut requirements on how to create these relationships with the customers. There are also many different pathways McCallister can take to achieve the task of persuading the customers that his company is only there to help them, and not just to make a profit. They can make the customers happy through incentives, personalized conversations, friendly employees, and more. This task structure is also low because the completion of the task is unclear. Unless all the customers verbally state that they are happy and satisfied, McCallister will never know when he successfully completed his task. And lastly, McCallister has low task structure because there are many correct solutions to the task. Not all the same solutions will make every person happy, thus making individualized solutions for everyone.
The position power that McCallister has is strong. Since he is the CEO of Humana, he has the legitimate power of holding a top position in the organization. He has the amount of authority a leader needs to reward or punish employees. It will motivate his employees to work hard on fixing this situation because he is the one signing their paychecks.
After looking at these three situational factors, it is evident that McCallister’s preferred leadership style is at a 7. This means he is relationship motivated (high LPC), and is effective in moderately favorable situations. Based on the Contingency theory, McCallister is very concerned about relationships. Although many people believe that McCallister’s company is just trying to steal their money, he is taking the correct leadership style to help try and change their mindsets. I believe that this is the most effective leadership style for McCallister in this situation.
Do you guys believe that McCallister could be more effective if he used a different leadership approach to this situation?
Posted by: Genise Logston
I think you matched Michael McCallister's leadership style perfect with the contingency theory. With his recent efforts to bring change within the organizations relationship with their patients creates an internal goal for the organization as well. Path goal theory would allow him to create a clearly defined goal, create a path, remove obstacles, and provide support for his subordinates to follow. This is the only other approach I think would work. Overall you made great connections in your blog.
ReplyDelete-Posted by: Sean Gremillion
I also agree that the Path Goal Theory could work with McCallister's leadership style. He shows supportive leadership behavior for his subordinates (customers) who are unsatisfied with the health insurance industry, including his company, Humana. The only thing that I cannot connect to this leadership behavior is the task characteristics. I do not believe that the situation has repetitive, unchallenging, or mundane task characteristics. I believe that the task characteristics for McCallister are challenging and complex, especially since the customer’s already think every company in this industry is “sucking the money of out them.”
ReplyDeletePosted by: Genise Logston