Retrospective look at 33 years of culture change experience, during which I witnessed, practiced, and studied culture change. I will share what I believe to be some enduring lessons I’ve learned.
My culture change journey began in 1981: New job with LHS in North Dakota (turnaround); doing everything that made me successful up to that time; yet having major job frustrations. At the same time, I was serving as a Kellogg National Fellow 1980-83. Prep for Colombia trip; Importance of honoring Colombia’s culture; Proverbial light went on; I was not paying much attention to LHS culture, and when I did, it was to try to overpower it: led to lifelong fascination and study (My intellectual space in HC)
Stages of interest in corporate culture (My journey): Roughly 5 year blocks
(81-85) Irrelevant—Psycho-babble; province of academics
(86-90) Relevant—Act of God; do nothing
(91-95) Relevant—Act of God; manage around the culture
(96-00) Relevant—Key change variable, heroic leader; need for principles, tactics, stories
(01- today) Relevant—Leadership community; attention to obstacles; enhancing learning capacity
Latest Revision: Thursday May 29, 2014
“The Way We Do Things Around Here” (Deal and Kennedy, 1982)
Theme for this presentation?
L=OT and OT=L
You need a model or conceptual framework to guide your activities. Here are the basics of mine:
Preparation, Principles, Interventions, Managing Barriers, Managing the Middle
Utility of model for:
1. Initiating Cultural Change
2. Auditing Cultural Change Initiatives
White water: The most useful analogy I’ve encountered-”training guides for the ride”
History Read past literature, reports, minutes, etc. Talk to “corporate historians.” Listen to words, emotional overlay, what is NOT said.
How was change managed in the past? Success culture? Culture of pride? Implications? Cycle of cynicism culture? Implications?
“The main thing we learn from history is that we do not learn from history” Greenleaf essay 1987
Identify baseline culture:
1.Values and Beliefs: U of Virginia--K mention of Jefferson; Mayo Clinic--The Mayo Spirit, St Josephs; Orange, CA—faith, foresight, flexibility; Medtronics-- alleviate pain, restore health and extend life
2. Heroines and Heroes-Individuals who embody core values and beliefs
3. Rituals-Performed daily; often physical expressions. Nursing Rituals: Occupational/Change of shift report, Therapeutic/bathing patients, post mortem care, medication administration (Wolf ’88 PHD Thesis); TMH Nurses singing Ain’t No Mountain High Enough at shift change
4.Ceremonies: Periodic occurrence; Occasions when culture is on display; Examples include Annual meeting, Employee awards, Company picnic, Medtronic’s annual holiday party—people whose bodies function thanks to Medtronic devices come to give testimonials (Fortune 1/8/2001)
5. Stories and Story Tellers:
Neuhauser ’93 Storytelling is the single most powerful form of human communication. It is the primary vehicle that humans use to preserve their cultures. Can: inspire, comfort, teach and entertain. Can also: destroy, stir up hate, demoralize.
Kushner ’90 Examine how people use, and react to humor; Humor exposes shared values and beliefs; You need to know hidden assumptions to “get” the joke
Stories: Prison--#’s and new inmate; ND--Ole and Lena stories; Norwegian charisma; Is she depressed or is she Swedish? Uffda!
“Pain” associated with status quo—not a tolerable situation—the Burning Platform scenario
Current pain (Losing money, MD’s in revolt, drop in bond rating, low employee morale, etc)
Anticipated pain (Arguably, the more difficult to sell: P4P, HIT rollout, major HC reform, etc)
A N D
Intellectual and emotional aspects of case
Guidelines for choosing a song? “When the melody touches your heart emotionally and the words hit your brain intellectually, more than likely you’ll find you have an excellent song to sing.” Tony Bennett NYT 2.17.02
Kotter ’96 Vision=A sensible and appealing picture of the future
Characteristics of an effective vision: Imaginable; Desirable; Feasible; Focused; Flexible; and Communicable (can be successfully explained in 5 minutes)
Idealizing “great leaders” and “heroic figures” is a surefire way to create and maintain change-averse organizations! (Peter Senge)
Multiple year undertaking: 3 to 7 years! Distinction between physical and psychological merger! No shortcuts or quick fixes!
CHICAGO, March 31, 2008— During 2007, the hospital CEO turnover rate was 15%. Over the past seven years the rate has remained relatively stable, fluctuating between 14% and 16%. (Same finding as in 2006)
Flexible Execution: Why?
Non Linear: 2 steps forward, one step back
Unanticipated Consequences: Decline in volunteer support at LHS for annual 10K post layoff
Events Out of Control: price of oil and wheat; Federal legislation; Political re-alignment
Keys to Applying Interventions:
Do Your Homework!
Use Existing Management Structure
No Task Forces
No delegation to HR
CEO as LEADER of change effort!
Situation Dependent Game Plan
Economist (13 Oct 07) Special Report on Innovation “The one natural resource that the world has left in infinite quantity is human ingenuity.”
Your number 1 customer? Your employees, not patients. Nurtured employees nurture patients. Taking care of people who take care of people.
Every company in the world says, "Don't ask permission, ask forgiveness." Every company in the world says, "It's OK to fail." And for 99% of them, it's probably not true. (WSJ 9/24/07)
Profoundly different values, skills and experiences required for paper culture than for a digital culture
Not a bad idea to assume at the outset that 25-30% of the people are NO, even though they may not claim so.
Early articulation of vision and values by Leader (Employee Orientation)
My first orientation experience? Navy boot camp.
Florida Football: Freshman wear a stripe until Coach Meyer removes it-You are a Gator now!
You are not going to teach me anything if I don’t trust you; Importance of psychological safety in a classroom
Gardner ’81 “There is no learning without difficulty and fumbling. If you want to keep learning, you must keep on risking failure—all your life.”
Commit to Life Long Learning
DEFICIT: The two most meaningful dialogues most people have with anyone at their work are their initial interview and their exit interview. (Leider and Shapiro ’02)
Performance appraisal—difficult to do and do well (Akin to a trip to the dentist)
Performance Appraisal an Essential Tool of Transformational Leader
Psychic Income to me: Doing work that matters and makes a difference in peoples lives, and doing it with people that I care about and that care about me
I worry that the growing compensation GAP between CEO and direct caregivers may compromise change initiatives.
Gerald Grinstein @ Delta Airlines-broke down barriers between workers and management. Made sure workers shared in the financial benefits of the airlines’ emergence from bankruptcy proceedings, while forgoing any special compensation himself. (WSJ 10/4/07)
Discussion: Should CEO’s pay be set at a multiple of direct care giver?
Drucker 20:1 (Herman Miller office furniture)
CEO-to-worker pay ratio 400:1 All time high! (Atlantic Monthly Jan/Feb 2004)
Typical Japanese company 10:1 (Pascale)
Ben & Jerry’s 7:1
Service Master “No one earns more than 12 times the salary paid to the lowest-level worker” Fortune 7.9.01
Health care standard? What do you think it should be?
“When your outgo exceeds your income, your upkeep will be your downfall.” U of M 1970
Straight Talk beats Happy Talk
People track behavior, not words
MHA-Speak can get in the way, creating confusion, suspicion, and alienation
Never underestimate the power of a good story to get your message across (The Costco Connection, October 2007)
Innovation = Fresh thinking that creates value (Richard Lyons, CLO, Goldman Sachs) 13 Oct 07 Economist
Different world views: Health providers tend to focus on technology and medicines, whereas patients are concerned with service and information.
1% Improvement in 1000 Things, not 1000% improvement in one thing
9/24/07 WSJ Innovation Piece: Corporations inherently have antibodies that come out and try to envelop and kill any innovation. I think all of us would agree that cultures kill what's not like them.
LHHS Experience: 6 years; 3 groups of Regional Vice Presidents; Recruit outside LHS, recruit young LHS (Eric and Craig)
Learn early on the job—when you “break” the unwritten rules
Powerful influence on behavior
Stories: Our men wear hats and sportcoat (TNT); new CMO’s visit to MD Lounge
Definition of Organizational Values:
The understandings and expectations that describe how the organization's people behave and upon which all business relationships are based (e.g. trust, support and truth).
What people think is right and wrong, good and bad, desirable and undesirable.
Shared judgment on what is important.
Remember the centrality of values and beliefs in describing/defining a corporate culture
My critique of HC provider values?
Too many values—5 should be max—I like 3.
Minimal distinction between HC organization’s list of values.
Often leaders behavior doesn’t model or support value statements mixed messages
NEVER Underestimate The Forces That Reinforce Complacency or Maintain The Status Quo
Expect barriers and be prepared to take measures to manage or remove them
Burnout? The deeper the change and the greater the amount of new learning required, the more resistance there will be, and thus, the greater the danger to those who lead. Read Heifetz and Linsky’s Leadership on the Line (2002)
Reluctant CEO: Educate, replace, or prepare to fail (Daryl O’Conner)
An insulated culture systematically excludes any information that could contradict its reigning picture of reality (Finkelstein ’03)
Symptoms? 1. We’re better than you are. Period. 2. Trust us. We know what we are doing. 3. We don’t need customers telling us how to run our business. 4. We have a positive attitude here.
Antidotes? Counter complacency. (Home Depot: Number one, we are not that smart. Number two; we know we are not that smart.)
Cycle of cynicism-Learn to pay scant attention to latest management initiative; keep head down; this too shall pass
Major Change=a very significant LOSS; liken it to a “Death” Task of leadership community to design mourning rituals (Lake Havasu City; Delta and Western Airlines; Formation of Baystate Medical Center; Change to word processors in newspaper setting)
Best text for understanding organizational change? Kubler-Ross’s Death and Dying
Five stages: Denial; Anger; Bargaining; Depression; Acceptance
Bridges’ Transitions: Three overlapping stages
An ending, during which one disengages from and breaks the old identity with “the way things were”
A neutral zone when one is between two ways of doing and being, having lost the old way, and not having found a way to live with the new
A new beginning, after which one again feels at home and productive in the “way things are” with a new identity based on new conditions
Race for Marathoner, Not a Sprinter: What do you do when you hit the wall at the 20 mile mark?
Other Tool Kit Ideas:
Going outside the organization: Healthcare and non-healthcare companies
Engage new consultants
Teaching
Different Mentor for Different Career Stage
“Run scared”
Senator Pastore story
Andy Grove’s “competitive paranoia”
Engage Peer or support groups (HPIG)
Take a sabbatical (Gary Strack)
Evidence based management (EBMgt)
Study avoidable errors in change process John Kotter, “Leading Change” (1996)
Underestimating the power of vision
Under communicating the vision by a factor of 10 (or 100 or even 1000)
Setting: New CEO in turnaround setting. History of failed leaders and organizational meltdowns. He gave “permission to fail” but few understood or responded affirmatively.
Process: literature review( employee handbook, hospital publications, recruitment packages, local press; website, etc); “tri-level”
structured interviews for top brass, middle management, and direct and indirect care givers; feedback and recommendations
Interventions? HR philosophy (Replace CHRO) and Innovation Enhancement
Changing culture is more than a full time job. It’s an obsession!
I’ve been the Acquirer, and I’ve been acquired. The former condition is a lot more fun.
Health System Leader June 1997 “Merger of Equals” Outcomes in order of likelihood:
A + B = A A being the dominant culture. Most common.
A + B = A and B Some merged functions. Two separate cultures continue to exist. Next most frequent.
A + B = AB. Or the best of both. Blend. Rare.
A + B = C Realization of new culture. Rarer still.
Leadership requires disturbing people, but at a rate they can absorb. Adaptive change stimulates resistance because it challenges people’s beliefs, habits, and values. It asks them to take a loss, experience uncertainty, and even express disloyalty to people and cultures
Remember the centrality of values and beliefs in describing/defining a corporate culture
Remember too that Leaders Promote & Protect Values
No beats uncertainty
Straight talk beats happy talk
There is no end game. The reality is permanent, continuous transformation.
