3 Things That Can Spark an Organisational Transformation
Most so-called “transformational change” efforts fail. It’s difficult, if not impossible, for an organisation to change everything at once.
Yet enterprises are challenged to adapt quicker than ever to compete and survive in today's customer-centric society. But where should they begin?
Every change needs to start with a compelling case. Healthcare provides a great example of an industry in need of radical change.
SEE ALSO: Forrester CMO on Leading the Change Needed to Compete and Win in a Customer-Led Market
The case for change here is clear: Healthcare costs are too high and quality can be too low. At the same time, insurers are paying hospitals and physicians less for care. The average profit for a hospital is already in the low single digits. Without change, many providers will just disappear.
And a more positive case for change: If healthcare providers can get costs down and quality up, care will become more affordable and accessible. The trifecta in healthcare has always been to get costs down, quality up, and increase accessibility – all at the same time.
One Step at a Time
An enterprise must focus on the parts of its operations that will yield dramatic improvements in performance. Take on just a few critical pieces of the operations at a time. I call these focus areas “leverage points”.
Discovering areas for meaningful improvement is actually easy. It just takes a hard and honest assessment.
For example, keeping patients from being unnecessarily readmitted to hospitals and emergency rooms can improve patient care while lowering costs. Emergency rooms are one of the most expensive places to go for care.
Learn From a Healthcare Journey
Did you know half the people over 57 years old take five prescribed pills per day, plus dietary supplements? This means older people are more likely to have an adverse drug event, or ADE, when meds collide.
Novant, a North Carolina-based hospital system, found that patients 65 and older were twice as likely to be treated in the emergency room for ADE and seven times more likely to be readmitted to the hospital.
Why? Older patients don’t listen carefully when discharged from a hospital. They just want to return home.
But when at home, drugs they had been taking prior to their hospital stay often adversely interact with new drugs. The result: a dash to the emergency room.
The answer to the problem was not “rocket science”, but what Novant now calls “The Pharmacy Home Project”. Nurses and pharmacists follow up with calls or visits to older patients.
They aim to answer: What’s in the patient’s medicine cabinet? What are the new meds? How do the old and new meds interact? And do any meds need to be adjusted?
Early results of the program were impressive: Nearly one in five emergency room visits used to be connected to adverse drug events among elderly patients. Now it’s less than one in 20. Everyone was healthier and costs were reduced.
Even This Change Was a Challenge
To make this change happen, Novant had to pay attention to three components: process, people, and technology.
Process: Process changes should be done with a focus on the customer, or in Novant’s case, the patient. I call this “inside-out thinking”.
Too many times, enterprises are internally focused. Drucker would always advise his students “to walk in the marketplace” and experience what customers are going through.
Set an aggressive goal in value delivered to the customer and improvement in the customer experience. Find a way to measure these metrics. An aggressive goal will help you see how much change in work process is required.
People: Every business or work change requires a change in skills and behaviour. Business and healthcare are still human enterprises. We are far from automating everything.
When Novant first launched “The Pharmacy Home Project”, it found its pharmacists needed new skills to engage with patients.
A typical hospital pharmacist hardly ever sees a patient. Hospital pharmacists aren’t like your friendly CVS pharmacist who are trained to answer your questions. Novant’s pharmacists had to develop more patient-friendly skills.
Novant also found that physicians, nurses, and pharmacists now had to work together to solve the ADE problem. But the physicians were initially not relaxed about nurses and pharmacists getting involved in these patient relationships.
Oftentimes these behavioural changes are the biggest obstacle to accomplishing business change.
Technology: Sometimes technology is, in itself, the new business model, as in the area known today as Fintech. A consumer can apply for a loan or a mortgage digitally, with no human intervention in a loan company’s decision process.
In most cases, however, technology is an enabler of process change. It is not an end in itself.
For Novant, electronic healthcare records enable physicians, nurses, and pharmacists to have shared visibility into what’s going on with a patient. Technology is a critical glue in the process.
Questions to Ask
I’m an optimist about what an enterprise can change and achieve with the right ambition, focus, and attention to execution. To be sure you are on the right track, ask yourself the following:
- Have I developed a compelling case for change?
- Have I set an ambitious enough objective?
- Have I focused on an operational change that will deliver significant results?
- Is the scope of the change effort manageable?
- Do I have the right focus on process, people, and technology?
This is only the beginning. Next comes an assessment of your organisation’s readiness for change. Without that, not much will happen.