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This paper aims to extend the consideration of distributed leadership in health-care settings. Leadership is typically studied from the classical notion of the place of single leaders and continues to examine distributed leadership within small teams or horizontally. The purpose is to develop a practical understanding of how distributed leadership may occur vertically, between different layers of the health-care leadership hierarchy, examining its influence on health-care outcomes across two hospitals.

Using semi-structured interviews, data were collected from 107 hospital employees (including executive leadership, clinical management and clinicians) from two hospitals in Australia and the USA. Using thematic content analysis, an iterative process was adopted characterized by alternating between social identity and distributed leadership literature and empirical themes to answer the question of how the practice of distributed leadership influences performance outcomes in hospitals?

The perceived social identities of leadership groups shaped communication and performance both positively and negatively. In one hospital a moderating structure emerged as a leadership dyad, where leadership was distributed vertically between hospital hierarchal layers, observed to overcome communication limitations. Findings suggest dyad creation is an effective mechanism to overcome hospital hierarchy-based communication issues and ameliorate health-care outcomes.

The study demonstrates how current leadership development practices that focus on leadership relational and social competencies can benefit from a structural approach to include leadership dyads that can foster these same competencies. This approach could help develop future hospital leaders and in doing so, improve hospital outcomes.