In the second department meeting, what verbal and nonverbal communication occurred? Even though Peter’s voice was calm, what message was sent by his nonverbal communication?

St. John’s Hospital is in the middle of major changes to reposition the organization in their market. Its operating margin has steadily deteriorated over the last few years; last year the hospital experienced a 4.5 percent loss. The previous CEO retired two years ago and Peter, the new CEO, has decided that drastic action is needed. After reading about a new style of change management focused on rapid process improvement, he decided to organize and implement major changes to put the hospital back in the black.

Peter created four nine-person committees, one to redesign each of the hospital’s primary processes—financial, ancillary, nursing, and support.

He hired a consulting firm to work with the committees and set the goal of a 20 percent cost reduction in all areas. Because Peter wanted novel ideas, he refused to allow area leaders and supervisors to participate in the committees and the redesign discussions. Each team was given 60 days to develop their recommendations.

About 40 days into the committee process, draft recommendations began circulating in the hospital. Many of the department managers became very concerned that the proposals they were seeing were not feasible. For instance, one committee was proposing that materials purchasing be decentralized and each major department take responsibility for their own purchases.

When the director of purchasing, Fred, first raised his concerns about this in a department meeting, Peter told him not to worry, everything would work out.