Paul Levy, Man on a Missive

There’s a fancy academic explanation for why what Levy is doing works, a theory that they teach in business school. Before arriving at Beth Israel, Levy taught negotiation at MIT; during that time, he got to know James Sebenius, a professor at Harvard Business School whom he dubs “the world’s best teacher.” Sebenius preaches what he calls the “three-dimensional approach” to negotiation. That is, establish the rules of the game, and the possible outcomes, before you sit down at the table.

As Levy tackled Beth Israel’s recent cost-cutting, he used Running a Hospital to do just that. First he blogged about the hospital’s finances, in clear and painful detail, and what they would mean in terms of layoffs and also what management, himself included, would have to sacrifice. Then he solicited ideas on how to save money and jobs, right down to figuring out how many hospital staffers really needed subsidized BlackBerries. As a final touch, Levy put out a call to help “protect the lowest wage-earners”—a plea that would bring down the house at those March town hall meetings. Of course, he could stand up in front of his employees and ask everyone to share the pain because he knew his missives on Running a Hospital had them leaning in that direction.

With the success of his blog, Levy has seen his audience, and influence, grow. Marty Bonick, the CEO of Jewish Hospital in Louisville, Kentucky, first read about Running a Hospital in an airline magazine. He e-mailed Levy to tell him, “You’re like the mentor I’ve never met,” and in January launched his own blog (about which he admits, “It felt like plagiarism when we started doing it, because this is exactly what [Levy] did”). When his hospital, too, faced a budget crunch, Bonick followed Levy’s playbook, using his blog to circulate financial numbers, call town hall meetings, and gather staffers’ input on cost-cutting measures. “I don’t have the years of building up the base that Paul has,” Bonick says, “but everything is moving along as he saw it.”

To be sure, there will be more issues facing Levy and Beth Israel. With the economy still straining the hospital’s finances, further layoffs are possible. Partners continues to gobble market share, and Congress has the Employee Free Choice Act legislation, which could aid the cause of those looking to organize Beth Israel’s workers, penciled onto its summer agenda. And then there is this city’s habit of turning on its most successful, as Levy well knows. “First they throw the flowers,” he says, “then they throw the pot.” Of course, should that happen, he’ll only need to log on to get out his response.