How Healthcare Organizations Handle Transformation: Key Learnings from Recent Change Management Communications
The changing healthcare marketplace calls for new strategies. Healthcare companies including payers, providers, pharma and other businesses as well as associations across the field are pursuing new initiatives to adjust to emerging demands and take advantage of opportunities. Their role in the future of healthcare and their competitiveness depend on the success of these initiatives. This year, 31 percent of healthcare executives say they plan to launch new segments or business lines to drive growth, a 17 percent increase over last year according to Capital One’s annual study of M&A activity. These plans as reported by 450 healthcare executives will happen both through mergers and acquisitions as well as organic initiatives. Many healthcare companies have already successfully capitalized on the change. However, many struggle to implement and realize their change initiatives.
Slow Pace of Transformation Within Healthcare Organizations Requires Its Own Strategy
Coming at transformation initiatives from a communications discipline and having worked with both incumbents and innovators to advance, recover and announce them, I can point to a prevalent problem with healthcare change efforts right now: They are too slow and, as a result, compromised before they even start.
As much as I’d like to say this is due to external factors such as complexity, regulations and interdependencies in the healthcare system, many of the slow rolls I’ve witnessed result from internal causes. As obvious as it may sound, many healthcare companies seem ill-prepared for change. Take, for example, the healthcare company that hired a new chief marketing officer to create a go-to-market strategy integrating its multibusiness capabilities. This was announced internally with much fanfare but is still struggling to get launched 36 months later. Many reasons contributed to this. Data was not readily available. There was blowback from executives clinging to their past business models and solutions. Having had near exclusivity on the market and status as a leading expert in their field, the culture did not support marketing either philosophically or in staff capabilities. Meanwhile, line-of-business management who are directly experiencing competitive pressure are clamoring for new sales and marketing solutions. They question if the new go-to-market strategy will ever see the light of day.
Sluggish transformation, whatever the cause, creates a major secondary problem that companies must urgently address. When change is slow, disbelief and frustration seep into organizations and can rise to the highest levels of the company, inviting questions and eroding confidence as strategic initiatives have the attention of the most senior leadership, board and investors. A lack of progress can also allow senior management and employees to ignore change, resulting in failure to adopt and implement. When key strategies are not realized in a timely manner, this also opens the door to competitive vulnerability as others in the market position their success relative to a peer’s failure. The company mentioned earlier has given its faster competition a three-year lead on gaining market share.
Reactionary Responses to Slow Change Produce Poor Results
Organizations tend to respond to delays with a flurry of reactionary activities. Those directly responsible for the execution of the efforts try to push through and rush deliverables to demonstrate results. They bear down on team members, further punctuating the lack of momentum versus the path to success. They manage up to leadership, creating reports and PowerPoint presentations that attempt a positive spin on thin results. They hold endless meetings and 1:1s, trying to re-instill confidence and support. These remediation efforts usually cost time and money. And they distract and take energy away from the change effort itself.
The companies that are best at change put in place strategies from the very beginning specifically to manage the pace. Proactive, continuous and deliberate communications are usually a central part of these efforts.
Our work with healthcare organizations shows key practices that are pursued by those most successful in managing through change. These organizations are able to keep anticipation and confidence high while initiatives wind their course to completion. These success factors include:
Countering the Slow Rate of Change Management Within Healthcare Organizations
- They make sure managing the rate of change becomes as great a focus as the actual change plan itself.
- If they talk about change and announce it, they make sure they articulate a strong rationale for it and preface that announcement by determining a path to change and milestones that could be shared via updates to internal and external stakeholders throughout the process.
- They align reporting with budget, confirming that the budget can produce within the timeline.
- They set a schedule and let no one ignore it. They build in realistic and logically anticipated extensions to plan for disruptions and delays.
- They accept a number of change management truths:
- It’s going to take longer than they think
- There will be course corrections along the way
- There will be detractors
- Clear results are not always going to be available for reporting