Leading Change in Large Organizations

One question I've been obsessed with is how to innovate in legacy organizations such as the ones that dominate healthcare. Too many good ideas die on the vine. Low hanging fruit is often not picked. What's going on? Why are systems optimized for the wrong outcomes in our field and others? As someone who seeks to make big changes in the world and empower others to do the same, the inertia of healthcare was fundamentally corrosive to my spirit.

What I didn't realize when I started pursuing the answers to these questions was that I was asking, in essence, how to achieve organizational change. How do we lead when our work is embedded in larger monolithic corporate and governmental entities. Too many physicians are ignorant of this reality. We think that we provide orders and deliver care and the "rest of that business stuff" should follow orders, get out of the way, and get it done. Sadly, that is not the case.

But what is true is that leading change in organizations is hard work - as hard as starting a company. We cannot avoid that challenge, even if you run your own clinic. Organizational change and management can affect any and all areas of a company including:

• Recruitment systems
• Employee Training
• Performance Appraisal Criteria
• Compensation Schemes
• Participation and Empowerment
• Motivating Employees
• Job and work designing
• Teams v Individual Work
• Quality and Cost
• Trust and Commitment
• Team of Teams
• Promotion Systems

So it is clear changing management is both essential to leadership, inevitable for physicians to face and necessary for business and career success.

To learn the principles of change, let's first discuss why change in large entities is so hard in the first place.

Why Change Fails

In my experience, change fails because of communication challenges or lack of stakeholder support. Communication includes the process of influence, of activating the hearts and minds of people to believe in the need for change, act now as opposed to later, and to be willing to sacrifice for it.

Stakeholder support is crucial because by definition innovation in a large organization requires significant amount of team support. Disparate stakeholders in healthcare need to come together around a complex and evolving supply chain with a fluctuating and unstable regulatory and reimbursement environment. This is no easy task.

Most healthcare administrators also know something physicians are only learning now: they are replaceable. Especially in a period of transition for our economy and laborers. Too many people have mortgages, private school tuition and lifestyles to pay for and can't afford being seen as a trouble-maker. So the incentive is to play in the sandbox and not cause too much trouble. Healthcare CEO's and top administrators cultivate this sensibility in order to minimize disruption. This is good for congeniality but not for innovation.

Kotter expands on this list with the following points of failure:

• Not sufficient urgency for the goal of the change (<75% of the team is ready for change)
• A powerful coalition is not created
• Little vision underpinning the change agenda
• Vision is not repeatedly and compellingly communicated
• Anticipated obstacles to the change are not removed
• Too few short term wins to create momentum
• Declaring victory prematurely
• Failing to anchor change agenda more broadly in company culture

Path to Lasting Change

From there here identifies his 8 point system for change (From John P Kotter and Dan S Cohen, The Heart of Change).

1. Establish a mindset of urgency, a burning platform
2. Create a leadership team to drive the change
3. Articulate a vision for a better world and strategy for getting there
4. Build buy-in throughout the ranks
5. Empower action by change agents
6. Identify short term goals for reinforcing the long term agenda
7. Foster a culture of persistence and determination
8. Reinforce and institutionalize the new world

There is a large dis-incentive for incumbents to go after new markets. In other words, the things that garnered your current success can prevent you from achieving future ones. Fighting this trend is the burden of a leader - the fight against sameness, stasis, and the status quo.

It is for this reason that hospitals and other large healthcare organizations often swing in the dipole of crisis and complacency. It takes a dramatic turn of events for leadership to truly feel the need for reform. Once the crisis is abated, a return to baseline is quickly established. Very few of them achieve the key traits of highly reliable organizations, the upcoming buzzword of healthcare delivery reform.

Organizations then find themselves on a matrix of reliability v accountability. Interestingly, power in most hospitals exists in leadership (typically non-clinicians) and so we find they exist on the right side of the matrix. However, accountability is largely directed at physicians. This troubling dichotomy is one of the reasons physicians become burnt-out: increasing risk and accountability but no organizational power to affect meaningful change. C

Here's a case example of how this 8 step process might work in a healthcare setting

Step 1: Create a Sense of Urgency

• Case Example: Imagine a hospital where patient satisfaction scores are consistently low. Physicians should be made aware of the urgent need to improve patient experiences, as this can affect the hospital's reputation and financial stability.
• Strategy: Share data on patient satisfaction scores, gather patient feedback, and communicate the potential consequences of low scores. Encourage physicians to discuss these issues in team meetings.

Step 2: Build a Guiding Coalition

• Case Example: In a hospital, a coalition of influential physicians, department heads, and administrators can lead change efforts.
• Strategy: Identify respected physician leaders who support the change and engage them in leading the effort. Form a multidisciplinary team with representatives from various specialties.

Step 3: Form a Strategic Vision and Initiatives

• Case Example: A vision might be to improve patient outcomes by implementing evidence-based practices.
• Strategy: Develop a clear vision statement, outlining the benefits for both patients and physicians. Identify specific initiatives, such as training programs or process improvements, to achieve the vision.

Step 4: Enlist a Volunteer Army

• Case Example: Encourage physicians to volunteer for change teams or task forces.
• Strategy: Hold town hall meetings to promote the vision and invite volunteers to participate in shaping and implementing the initiatives. Recognize and reward their contributions.

Step 5: Enable Action by Removing Barriers

• Case Example: Physicians may face resistance from colleagues or bureaucratic obstacles.
• Strategy: Identify and address barriers to change. This could involve revising policies, providing resources, or offering conflict resolution support.

Step 6: Generate Short-Term Wins

• Case Example: Celebrate small successes, like improved patient satisfaction scores on specific units.
• Strategy: Recognize and reward teams and individuals who contribute to early successes. Highlight these achievements to maintain momentum.

Step 7: Sustain Acceleration

• Case Example: Ensure that improvements in patient care are not short-lived but become ingrained in the hospital's culture.
• Strategy: Integrate the changes into standard practices, update training and onboarding processes, and assign responsibility for ongoing monitoring and improvement.

Step 8: Institute Change as the New Culture

• Case Example: The new way of delivering care should become the norm.
• Strategy: Continually reinforce the importance of the changes in all aspects of healthcare delivery, from education and training to performance evaluations.

So How do we Actually Implement this Strategy?

Wharton professors have identified the key competencies for managing human capital and effective decision making in organizations:

• Consult with trusted associated, decide when 70% confidentWaiting for 100% confidence is a recipe for failure. One, you'll never 100% confidence, Two, if you ever got to that level, you would lose out on the opportunity. Unlike in medicine, in business decision making favors speed.
• Convey Strategic Intent, avoid micro managingToo many doctors have a lone hero mentality or have been trained through years of being able to do everything ourselves. Delegation is not a skill we are good at. Most of us can recall being micro-managed by our senior residents during training. But that creates a chokehold on your business because it makes it impossible to scale. As long as your team must have you around for the core operations of the clinic/hospital or business, you are a burden to them.
• Prepare self and team for good and timely decisions Many organizations can make good decisions. Many can make fast ones. Very few can do both. This takes a culture of rigorous self-analysis and constant re-iteration.
• Bring teams, compensation, promotion pulling in the same directionPerformance appraisal is an essential part of employee management. How you reward, provide feedback and promote individuals is sending a signal to every employee of what is valued in your company. Team play? Performance? Strategic Perspective? Following orders? Whatever the metric, make sure it is consistent and in alignment with the mission statement of your business.
• Reduce inequality in pay, promotion and other organizational featuresThere is both radical transparency and incredible opaqueness around how people get paid and promoted. We live in a modern workplace culture that has also put a tremendous spotlight (long overdue) on diversity, equity and inclusion (DEI) issues- although how to implement these values practically and effectively is under constant scrutiny. Regardless, your company will quickly be judged by its performance in these areas, especially with the possibly of disaffected employees using the internet as leverage. We've discussed in this course how there is new social and economic contract being established right now between labor and management as technological and post COVID changes shift the concepts of work, fair play, income and status. Get clarity on these issues and be consistent.
• Manage organizational change with head, heart, and gutsBusinesses are ruled by a predominant paradigm that correlates with the human body. Google is represented by a brain metaphor. It literally collects data on everyone and its business model is data analytics and monetization. Amazon is symbolized by guts. It is the everyday store. Nothing super fancy but it wants to sell you everything you need to get through your day to day routine. And if there's a delay? As with your bowels, then things get ugly really quick. Apple is a heart company. People love their products with a fashion and they have become a market and trend leader for innovation and the intersection of tech x beauty. In that regard, they are more of a luxury goods company ala Louis Vuitton or Chanel than a pure tech (brain) company. You eed to determine which metaphorical body part (or chakra to use an eastern term) best fits the core essence of your company or clinic. If you don't , you risk being bugg

This was a good high level discussion of what actual leadership looks like inside companies. All too often we think of the outside disruptor who comes charging into a market. However, this is not an applicable metaphor for most physicians, increasingly who are employed in large health systems in a managed care setting.

Ignite your leadership,

Rusha Modi