Mid Term Assignment

Leader Journey of ​
Leonard D. Schaeffer

The Course: ​MSTC201 - Seminar: Authentic Leadership

Professor: ​Oliver Naray
Done by: ​Violeta Kotvitska

2021
 1. Introduction

"If your actions inspire you to dream more, do more, learn more and become more,
you are a leader." - the words of the sixth President of the United States of America,
John Quincy, as for me, precisely define the traits of a real leader. However, there is
a thin line that distinguishes a manager from a mere leader. According to Verma
(2020), the manager is the copy, the leader is the original. The manager supports,
the leader develops. The manager focuses on systems and structure; the leader
focuses on people. The manager relies on control; the leader inspires confidence. In
other words, an effective leader not only delegates tasks to the team, but is also
responsible with his head for the result. It is important to give your people the
freedom of CHOICE after the goal is defined, set and ready to be fulfilled.
This is the tactic that Leonard D. Schaeffer has pursued over the years, and it was
on this that his path as a leader was built.

2. Leonard D. Schaeffer & Blue Cross

In 1986, Shaeffer took over as Chief Executive Officer of the California Blue Cross
and took over all of the company's attendant problems, of which there were many. At
that time, this nonprofit organization was on the brink of bankruptcy with income of
two billion dollars and an annual loss of more than one hundred and fifty million
dollars.
During his leadership path, he used various methods and management tactics,
adjusting to a particular problem and looking for suitable solutions to each of them.
So, for example, during the withdrawal of the Blue Cres from the crisis mentioned
earlier, he changed three leadership tactics, such as an autocratic model of
government, later changed his role to a participatory leader, and at the final stage
became a reformer. However, his managerial manner was still considered
aggressive in the opinion of stakeholders.
(Schaeffer, 2002)

2.1 The Autocrat

Autocratic leaders make life-changing decisions and are committed to setting strict
rules, controlling and maintaining professional relationships with employees.
According to Sauer (2011), this method of management is often assessed
negatively, but it is precisely it that is designed to achieve goals in a short time,
especially at critical moments. That was the first step of Schaeffer when he took over
the Blue Cross of California.
So, first of all, the elimination of unnecessary bureaucratic posts was made, thereby
reducing the staff from 6,000 to 3,100. By such a radical decision to minimise
"unnecessary" expenses, by 1991 the organization showed a profit of $ 13 million
per month. As the company began to stabilize and stand confidently on its feet, a
different approach to leadership decisions was required.

2.2 The Participative Leader

According to Somech (2006) and Sauer (2011), participatory leadership is a
management style that rewards the initiative of subordinates for taking on some
responsibility in the workplace for some of the assigned tasks. This includes aligning
and engaging in decisions that are critical to success.
The main principle is that the development of goals, strategies and a budget will be
subject to strict control from the top, while personnel are given complete freedom of
action to achieve these goals, as long as they remain within the set budget.
Participatory leadership also lies in the ability to let go and build trust with your team,
otherwise success is impossible. This is a lot about the wisdom and discernment of a
team of subordinates.

2.3 The Reformer

Reformed management is one of the most common styles according to Kaleem
(2016). Such a leader inspires the team, encourages, motivates and supports.
Likewise, the reformer demonstrates what is possible and challenges convention in
trying to make the world a better place.
Following this management style, Schaeffer made an out-of-the-box decision on
three antihistamines, making them available over the counter, giving people a
chance to get those drugs at the pharmacy at a lower, more affordable price. Thus,
he did not pursue the goal of harming the pharmaceutical industry, he removed
unnecessary costs from the system.
Additionally, being a reformer is spending the most of your time talking with
presenters and potential clients, thereby answering their most difficult questions. It is
important to be ready to give yourself completely to the cause for which you stand
and what you believe in.

3. Conclusion
From the example above, you can see that leadership is a holistic approach and not
always easy or enjoyable. At each stage of the leadership path of Leonard
Schaeffer, he set himself one specific goal - to fight for the survival of the company,
to lead it to success, and, if possible, to change the healthcare system for the better.
The success was that he had the skill and ability to change management styles as
new tasks and goals came in. Old approaches rarely work in new and difficult
situations, so for leaders who cannot change their management style, this is a
failure. Ultimately, a quote from Schaeffer himself will be relevant: “I realized that by
paying attention to processes and aligning teams so that they are as committed to
achieving goals as I am, you can create something that will last much longer than
anything- or carved out of ice. "

References
Kaleem, Y., 2016. ​Leadership Styles & Using Appropriate Styles in Different Circumstances.​ [online]
Available at:
<https://www.researchgate.net/publication/323797001_Leadership_Styles_Using_Appropriate_Styles
_in_Different_Circumstances> [Accessed 13 March 2021].

Sauer, S.J. 2011. Taking the reins: the effects of new leader status and leadership style​​on team
performance. J. Appl. Psychol. 96, 3 (May 2011), 574-587. DOI= 10.1037/a0022741.

Schaeffer, L., 2002. The Leadership Journey. ​Harvard Business Review Home,​ [online] Available at:
<https://hbr.org/2002/10/the-leadership-journey> [Accessed 13 March 2021].

Verma, S., 2020. ​What Does It Take To Be a Leader?​. [online] Entrepreneur. Available at:
<https://www.entrepreneur.com/article/347133#:~:text=A%20leader%20inspires%20to%20innovate,fo
llow%20you%20as%20an%20ideal.> [Accessed 12 March 2021].