Healthcare Needs to Adopt a Continuous Transformation Mindset

Executive Summary

Healthcare leaders face increasing pressure to lead their organizations to successful outcomes in a continuously transforming market. In the face of new regulations, staffing shortages, changing customer expectations, disruptive digital technologies, and industry consolidation via M&A transactions, leaders often embrace isolated initiatives that attempt to control or mitigate disruption. Responding via a traditional project approach to seemingly isolated challenges places organizations in a reactionary mode, however, a position that fails to prepare them to embrace continuous change. Leaders may quickly reshape their strategies in the face of industry disruption, but if they fail to shift their organization’s execution mindset to one of continuous transformation, they will fall behind.

Traditional Change Approaches Fall Short

Most large-scale change and transformational efforts that focus on responding to a specific driver or challenge fail to deliver desired outcomes. In fact, up to 70% of organizations fail to successfully implement transformative strategy, leaving leaders to pick up the pieces as strategies fail to achieve desired results. [1]

Our recent experiences with healthcare organizations across the care continuum provide insights into why these traditional attempts at transformation often fail.

• Teams avoid difficult discussions challenging assumptions. Too often, leaders and teams avoid having difficult conversations designed to challenge closely held assumptions and assertions. While leaders are often comfortable challenging delivery teams on milestones, teams do not always receive the opportunity to reciprocate by challenging leaders on their assumptions or assertions. Strong, assertive leadership can be a blessing and a curse, as noted by a senior director with one provider organization: “We had clarity of vision and direction up front that our customer journeys needed to be defined a specific way.” As conditions changed and the team researched further, however, they were not empowered to question the initial premises backing the initiative. Now, the team finds itself retrofitting investments in skillsets and technologies that are not fully aligned with their current understanding of what matters to their customers.
• Leaders do not take ownership of changing behaviors and actions. When asked why the organization is not seeing promised returns from a larger change investment, one healthcare operational vice president responded, “Because our people are still behaving and acting the same old way.” Communicating the change to impacted employees was a focal point for months, supported by a change communication plan. However, leaders in this organization had yet to resolve who was responsible for modeling new behaviors, changing rewards and incentives, updating competencies, and driving new discussions to help employees embrace the change. Communicating change is one thing, embodying and operationalizing the change at the leadership level is another.
• Leaders claim victory too early. Celebrating victory too soon can create a reactionary feedback loop for leaders. Recognizing short-term benefits is valuable. Overemphasis may mis-position organizations for long-term success, however. One North American healthcare provider witnessed substantial growth, driven in large part by an aggressive M&A strategy. Leaders regularly celebrated the accelerated short-term integration approach.Fast forward: the firm is now experiencing stagnant growth, coupled with rising costs, as market dynamics change. These same leaders are left to question the success of their short-term M&A efforts, recognizing the initial integrations did not propel business model innovation to elevate the longer-term value for patients. We should note that it is appropriate to celebrate short-term quick wins, especially when reinforcing change adoption and team morale. Quick wins can be habit forming, and leaders can incentivize teams to higher performance via short-term victories. Leaders must not lose sight of the long-term strategy and value drivers beyond the short-term successes, however.
• Teams execute using insufficient program management techniques. When managing transformative change, program efforts can focus too firmly on rapid delivery, without leveraging iterative checkpoints to align teams on the strategic “why” behind the work. One company identified the need for an effective data & analytics capability to help improve operational performance. Leaders introduced this capability by establishing a new initiative managed out of their program management office (PMO). This PMO, historically effective at driving tasks to completion, pushed teams to implement and introduce capabilities defined the previous year.

The team’s approach focused on how to effectively implement the program’s goals and plans. They were confident that the approach would improve performance. Unfortunately, this “agile” approach did not incorporate the important component of continuously revisiting and reviewing the evolving why behind the initiative. Now the organization finds itself with a capability tuned to solve yesterday’s problems as they reset their team and approach to take on yet another data & analytics initiative.

Read more about leveraging technology in healthcare to make an impact.

Leaders Need A Continuous Transformation Mindset

Strong strategy, even supported by PMO and change communications capabilities, will not guarantee success. Strategy and execution capabilities are required table stakes to generate momentum, accountability, and execution. To ultimately drive long-term transformational value, leaders must help the organization shift its mindset from completing point-in-time programs to embracing continuous, long-term enterprise transformation.

With this in mind, the shift to a continuous transformation mindset entails the following:

1. Focus on increasing the organization’s transformation capacity. Leaders with a transformation mindset help the organization focus on long-term enterprise value instead of on completing PMO initiatives. With this mindset, leaders help teams and employees understand why overarching change is needed, linking the outcome of initiatives to help the organization better adapt to new insights, knowledge, and demands.
2. Demand change accountability and transparency. Focusing on longer-term value does not mean near term milestones and actions take a back seat. A transformation mindset doubles down on holding leaders, teams, and individuals accountable to make change happen and deliver the right results quickly. Leaders ensure the right actions are prioritized transparently. The transformation mindset demands transparency into both progress and value created. Doing so helps teams across the organization make the best decisions required for long-term transformation.
3. Ensure challenging discussions, upward and downward, take place. Some of the more challenging transformation conversations center on the cultural and behavioral side of change in order to realize desired long-term value. With a transformation mindset in place, leaders understand they will have discussions on what they themselves must do to act as change advocates and model desired behaviors. This mindset also empowers leaders and teams to continually answer the critical question: “is this still the best action we can take?” in the face of changing priorities and constrained resources.
4. Encourage design-based “test and learn” approaches. No one has all the answers when navigating transformational change. The transformation mindset embraces learning iteratively and, more importantly, places constructs in place to ensure assumptions and assertions are tested and validated. Once in place, leaders will begin asking constructive questions, such as: “how can we test that idea?” or “what can we do to confirm that assumption?”. Embracing this mindset helps establish an essential leadership behavior to model. Teams need to see that it is desirable to test and validate ideas before fully investing scarce resources.
5. Exercise focused prioritization. Leveraging a transformation mindset, leaders will place their bets and continually evaluate if the promised value will be delivered. As already described, the “test and learn” ideation model is critical for determining which priorities will generate the most value in both the short and long-term. Focused prioritization does not end when an initiative is first prioritized. Instead, prioritization continues throughout the initiative’s lifespan, as leaders regularly review progress and decide what to stop, continue, and start in the face of new information. Leaders will model valuable transformation mindset behaviors when they make the tough decision to stop initiatives that are not on track to deliver expected value.

Three Actions Leaders Can Take Today

Leaders can jumpstart the generation of an organization-wide transformation mindset by taking any one of the following three actions:

1. Teach leaders design-based “test and learn” approaches. This skillset helps more than design teams. Iterative “test and learn” thinking will teach leaders to examine problems and create solutions differently. Leaders can then shift to developing hypotheses to test in conjunction with their teams, embracing the possibility that foundational assumptions will evolve and shift over time.
2. Drive leadership alignment the value of transformation. Lack of leadership alignment on the “why” behind enterprise transformation efforts results in dysfunction and disjointed execution. When aligning on the “why”, ensure all leaders understand the expected short-term outcomes and long-term value. When initiatives inevitably evolve to meet internal or external disruption (and even when they fail), leaders will be aligned on the foundation value potential behind the effort and work to identify the next best solution.
3. Integrate change management into core program and project management practices. Change management is often deemphasized when budgets and timelines tighten. This is a mistake. Change management, integrated with effective program leadership, drives speed of transformation adoption and can generate a 6x factor in overall initiative effectiveness. [2] Leaders will drive the adoption of transformation in the short and long-term by developing an integrated change and program management approach as core to their strategic initiatives.

© Copyright 2019. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.

Special thanks to Kyle McNabb for his contributions to this piece.

[1] The Economist Intelligence Unit, “Why Good Strategies Fail: Lessons for the C-Suite,” March 2013. See also: Donald Sull, et al. “Why Strategy Execution Unravels – and What to Do About It,” Harvard Business Review, March 2015.
[2] Tim Creasy, et al., “Best Practices in Change Management – 2018 Edition,” Prosci Inc., 2018.