Healthcare Marketing IMPACT Awards Visionary Award: Nancy Schlichting

At the height of the Great Recession, with Michigan's economy in shambles and the Big Three auto companies on the brink of bankruptcy, Henry Ford Health System opened a new hospital whose design exuded opulence.

No detail was spared in outfitting the $360 million, 300-bed facility in West Bloomfield, a Detroit suburb with a median household income twice that of the rest of the state. All rooms were private with a view of the surrounding pond and woodlands. They came equipped with wireless internet and flat-screen TVs with on-demand programming.

Family members could stay overnight in tastefully decorated patient rooms furnished with sleeper sofas and reclining chairs. Each floor had stay-over rooms with beds and kitchen facilities for any family member watching over a patient on an extended and possibly terminal stay in the hospital.

And in choosing who should run this beautiful new facility, CEO Nancy Schlichting turned to a European expat, Gerard van Grinsven, who had run luxury hotels for the Ritz-Carlton chain. It was the last in a string of unorthodox choices Schlichting made in launching a facility made possible by Henry Ford's return to financial health after a near-brush with bankruptcy in the early 2000s.

“We have formidable competitors in this market,” she recalled. “To build this hospital and have it be successful was pretty daunting. I knew it had to be different.”

And different it was. The hospital, billed as a health and wellness center, included a day spa, a greenhouse to produce organic vegetables, an indoor farmers market and a demonstration kitchen to teach people with dietary restrictions how to cook. Its atrium was filled with retail outlets, live plants and curved walkways. At a time when others in the region were pulling in their belts, Henry Ford was headed in the opposite direction. Some local physicians grumbled.

“A lot of physicians thought it was the most absurd thing they'd ever heard of,” recalled van Grinsven. “But with her support, I spent a lot of time with physicians and was able to cultivate them.”

After more than 100,000 applied for the new hospital's 1,200 job openings and its elegant design was warmly welcomed by the community, Schlichting gave speeches in which she proudly proclaimed she wanted her tombstone to read: “I was the one who hired the Ritz guy.”

The leadership Schlichting, 61, provided during the construction and opening of the system's first new hospital in nearly a century is recounted in her book, Unconventional Leadership: What Henry Ford and Detroit Taught Me about Reinvention and Diversity. It reflected the innovative management style she honed over a 30-plus-year career in hospital leadership.

A self-described child of the 1960s, she overcame barriers both personal and professional to gain prominence. She was a woman who made it in a field dominated by men. She quickly moved on to bigger and better positions after being outed as gay by a member of the board at the Ohio hospital system where she had been in line for the top job.

Throughout her career, she leaned on male mentors like Gail Warden, first at the American Hospital Association and later at Henry Ford, and Al Gilbert at Akron (Ohio) General Hospital and later Summa Health. And in return, she mentored others.

She succeeded in executing two major financial turnarounds over the course of her career, including at Henry Ford. And, more recently, she entered public service by chairing the congressionally mandated Commission on Care that this year created a reinvention plan for the Veterans Affairs Department that recognized both the strengths and weaknesses of that sprawling, government-run system, which needs modernization for a new generation of veterans.

She has been a pioneer on quality and safety, encouraging Henry Ford to be one of the first healthcare systems to pursue and win the Malcolm Baldrige National Quality Award. Her policy, she told me, is “zero defect, no excuses.” She made both innovation a priority within the four walls of an institution that she first took a job at in 1998 and has run since 2003.

For the enormous contributions she's made over the course of her long career, Modern Healthcare this year named her the winner of its third annual Healthcare Marketing Visionary IMPACT Award, which is given each year to an outstanding individual who has effectively and ethically built public understanding of healthcare issues and made lasting contributions to the industry.

The transition to a new leadership team after she retires at year-end is already in place. The appointment of Wright Lassiter III as CEO, the first African-American executive to run Henry Ford, reflects her and the organization's commitment to diversity as it pursues excellence. Lassiter successfully led the expansion and turnaround of the Alameda Health System in Oakland, Calif.

“Diversity seems fundamental to me,” she said. “It defines us and who we serve. Diversity enhances our understanding of our patients and each other. For me, it's not a complex idea.” When asked to put that in the context of the ugly tenor of this year's presidential campaign, she replied: “We certainly have a long way to go in this country.”

Schlichting has traveled a long way from some unwanted exposure to hospitals she experienced early in life. At age 5, she was admitted to a children's hospital in her hometown of Akron because she stopped eating after her grandmother died. In the fifth grade, her mother became very ill and spent a month in the hospital away from her four children, who weren't allowed to visit. “Hospitals were scary places for kids,” she recalled. “I said, wow, can't these be better? They need to embrace families and patients in different ways.”

In high school and college, she took science and math courses, hoping to become a doctor. Realizing she didn't have the knack for caring for the emotional needs of patients, she gravitated to Duke University's hospital administration program with the hope that might be a path to realizing her childhood dream of transforming healthcare. She later got her master's degree in the field from Cornell University.

Her breakthrough came in the late 1970s when she was selected to become a fellow in a Chicago-based program jointly sponsored by the American Hospital Association and the Blue Cross and Blue Shield Association. The AHA's Gail Warden, who was helping to run the program and would later go on to become CEO of Henry Ford Health System, recognized her talents immediately.

“She was clearly someone who was going to be a leader,” he said. “She had a great understanding of not only health policy, but also healthcare operations. She was also the individual who got the AHA and Blue Cross to understand the importance of quality and safety performance.”

When Schlichting completed the program, Warden reached out to a former classmate from his University of Michigan days. Al Gilbert, then head of Akron General Hospital, hired Schlichting to run the planning department. “The best way to mentor and groom someone in leadership is to start them in planning so they have a good understanding of what goes on in the whole organization,” Warden said.

When an opportunity to become chief operating officer at Riverside Methodist Hospital in Columbus, Ohio, opened up, she jumped at the chance. But, as she recounts in her memoir, the chairman of the board, Jack Chester, a former White House counsel to President Richard Nixon, received a letter congratulating him on hiring a lesbian.

“Is it true?” he asked. Yes, she replied. “What do you want me to do?” he asked. “Whatever you think you should do,” she said.

She got the job. But every member of the board had gotten the letter, too. And one, a prominent contributor, objected. He objected again when she was appointed hospital CEO. And when she became the leading candidate for the system CEO position, he threatened to withdraw all future contributions if she got the job.

Her mother was dying of cancer. Her career was on the line. She stepped aside, unemployed for the first time in her life. “I hit the lowest point I had in my career. It was my worst nightmare,” she recalled. “But when you confront your fears, it makes you stronger. Ultimately, it allowed me to be free. I was no longer living in hiding. I was no longer living a dual life.”

Within a few months, she resumed her climb into the top ranks of hospital administration, moving from overseeing the East Coast operations of Catholic Health Initiatives to Summa Health and finally to Henry Ford. “For Al Gilbert or myself, it didn't mean anything because we're both strong supporters of women and also of diversity,” Warden said. “It was (an issue) when she came to Henry Ford for a handful of people. I basically said, 'Get over it.' ”

The courage to be who she is reinforced her lifelong ability to say what she thinks even as she encourages others to speak out and take leadership roles within an organization. Those skills were taxed as never before over the past two years as she chaired the 12-member VA commission, which eventually recommended a “new direction, new investment, and profound re-engineering” of the system's governance structure, even while noting it delivered care equal to or better than the private sector.

Schlichting's next moves include serving on more corporate boards (she's currently on the boards of the Walgreens Boots Alliance and Kresge Foundation) and teaching as an adjunct professor at the University of Michigan School of Public Health. “I'm not going into retirement mode,” she said. She wants to “do things of interest, working with really interesting people.”