There is no question the U.S. healthcare industry is facing major change. As systems condense and integrate, the push for value-based care continues and the industry faces a growing primary care shortage, healthcare leaders are tasked with guiding the transformation.
Nearly a decade ago, retired Harvard Business School professor John P. Kotter, PhD, outlined eight steps for leading change in his book, aptly titled "Leading Change," which was previewed by Harvard Business Review in 1995.
Dr. Kotter's work may be even more salient to healthcare leaders today. Here are his eight steps to leading transformation:
- Create a sense of urgency. Leaders should examine and share their company's, or healthcare facility's, market position and financial performance. Identify challenges and opportunities. "This first step is essential because just getting a transformation program started requires the aggressive cooperation of many individuals," Dr. Kotter wrote. Driving people out of their comfort zones will drive change. At least three quarters of management must believe change is absolutely necessary for the transformation to work, according to Dr. Kotter.
- Establish a specific group to lead change. This group should be committed to improvement through transformation. It may start small, with just three to five members, but will need to grow to include 20 to 50 members to be effective at larger organizations. The group may include senior managers, board members or influential physicians or nurses. "Because the guiding coalition includes members who are not part of senior management, it tends to operate outside of the normal hierarchy by definition. This can be awkward, but it is clearly necessary. If the existing hierarchy were working well, there would be no need for a major transformation," wrote Dr. Kotter.
- Define the end goal. Create a clear vision of what the future of the company should look like and be able to communicate to other employees, staff and stakeholders. Programs and initiatives are hard to support if staff do not understand the end goal. "A useful rule of thumb: If you can't communicate the vision to someone in five minutes or less and get a reaction that signifies both understanding and interest, you are not yet done with this phase of the transformation process," according to Dr. Kotter.
- Share the end goal. Communicate the future vision and communicate it often. This will be difficult if part of the transformation includes layoffs, according to Dr. Kotter. Be sure to treat laid off employees fairly and provide possibilities for growth, he advises. Advertise change on all channels of communication and be sure leaders exemplify change.
- Encourage participation. Remove obstacles and any programs undermining the vision so employees are free to take on new initiatives and develop new ideas. "In the first half of a transformation, no organization has the momentum, power or time to get rid of all obstacles. But the big ones must be confronted and removed."
- Set short-term goals. "Most people won't go on the long march unless they see compelling evidence in 12 to 24 months that the journey is producing expected results," wrote Dr. Kotter. Plan to hit short-term benchmarks that demonstrate visible improvement and reward employees.
- Persist in driving change. "Weary troops allow themselves to be convinced that they won. Once home, the foot soldiers are reluctant to climb back on the ships. Soon thereafter, change comes to a halt, and tradition creeps back in." Use the smaller victories from short-term goals to motivate bigger changes, Dr. Kotter advises. Total transformation can take five to 10 years.
- Connect change to company culture. Consciously linking the transformation to success and company culture, then developing future leaders who exemplify the transformation are both critical steps to making changes permanent. "If the requirements for promotion don't change, renewal rarely lasts. One bad succession decision at the top of an organization can undermine a decade of hard work," according to Dr. Kotter.