HOW TO MANAGE THE INTERACTION BETWEEN GOVERNANCE AND CHANGE IN THE HEALTH CARE INDUSTRY Health care companies with an eye toward the future must undergo organizational change at some point if they are to remain competitive in their respective industries. But change is never easy to come by. As a corporate manager, how do you instigate changes that are needed to keep your company growing? And once your company moves toward a direction of change, how do you, as a manager and team leader, maintain a consistency of order while moving an entire culture in a new direction? While conducting a study relating to organizational change among profit and not-for-profit health maintenance organizations last year, it became clear to me that many corporate managers desire changes that will improve the state of their company, but, for a number of reasons, do not take the necessary steps to “start the ball rolling.” And once the change process has begun, the vast majority of managers struggle with the relationship between their company’s organizational shift and their own leadership roles. I offer the following outline as advice to forward-thinking health care industry professionals regarding how to manage the interaction between governance and change to improve a company’s overall effectiveness. Change viewed simplistically in any organization is comprised of a three-part process: 1) A defining vision that articulates the “future” company, known as the future state; 2) An assessment of the current, or present, state of the organization this includes many factors such as the state of the business, the nature of the company’s culture, and its history of change and innovation implementation; and, 3) The transition state. The transition state describes the requisite process with related action plans to move the organization from the current state to the future state. This is sometimes referred to as an “implementation architecture.” To be successfully integrated into a company, any strategic change or innovation initiative must be sponsored by an individual or group within the organization with the influence necessary to rally support for an initiative from inception to implementation. Some people think of this as “unfreezing” the behavior of the company in the present state to move it forward to the desired, new future state and then “refreezing.” If you, as an agent of change, and your change committee, are to successfully “unfreeze” your company, be sure to have a carefully outlined overview of goals for the company and a map or model of the proposed methodology to be used to achieve those goals. Clearly illustrating the desired future state is essential to recruiting supporters of the change implementation and, ultimately, a company-wide understanding and embracing of the process. Regardless of whether your company is for-profit or not-for-profit, ownership of the organization is exercised through the governance function, because governance is the locus of organizational authority and control. An important role and function of your company’s Board of Directors is to determine policy formulation and to envision the future of the company. Therefore, the Board acts as the highest level of change sponsorship, the initiating sponsor to the Chief Executive Officer and executive management team. For these reasons, it is crucial to have your Board’s full support of the change you are attempting to implement. Regular “change progress reports” to the Board are of critical importance and keep governance and change on the same page. When the CEO and executive management team act in concert with the Board to authorize and propel change, the organization is better aligned, and each step toward meeting the change goals that have been set can be celebrated. Your company’s human resources and communications departments can provide valuable tools in used to motivate each employee to participate in the process. Internal systems such as performance evaluations and reward and recognition programs motivate successful adoption or institutionalization of change initiatives. The desired outcome during change processes is to sustain enhanced organizational performance and to increase speed to market, while managing change stability during the transition state. A company is more operationally effective in implementing its change initiatives when there is organizational alignment across all functional and disciplinary areas, and between the Board of Directors and the Executive Management team. This enhances the organization’s capacity to deal with the uncertainty of change while it experiences it, and enables the company’s culture to shift more neatly during the transition between the present and future states. Cynthia Tucker, Ph.D. is Vice President of Medicare Risk at Inter Valley Health Plan in Southern California. She is an expert on the subject of governance, change and organizational effectiveness. Her doctorate dissertation was a study on the impact of governance on implementing change, compared the effectiveness of for-profit and not-for-profit organizations.
