If you are looking for strategic talking points for your next executive team meeting, you could do worse than the shift to value-based contracts and the need for new competencies for your executive teams. But a productive discussion of these topics—and a successful plan to position your organization—ultimately means discussing change. This includes changes in executive and managerial skills, new technology, new reporting, new service delivery models, new supervisory practices, new compensation … this list could go on.
The challenge of culture in the shift to performance-based reimbursement was the topic of The 2018 OPEN MINDS Executive Leadership Retreat session, The New Leadership Challenge: Culture & Change Management In A Value-Based Market, featuring John F. Talbot, Ph.D., OPEN MINDS Advisory Board Member; Neil Massey, Deputy Director, Autism Treatment Center (ATC); and Babette Hankey, Chief Executive Officer, Aspire Health Partners. Dr. Talbot started the session by reviewing the eight-step change model (see The 8-Step Process for Leading Change) created by Harvard University Professor John Kotter. The model approaches change as a “campaign” that educates and empowers staff, creates a sense of urgency, builds a guiding coalition, enables action by removing barriers, and generates short-term wins (see Managing Change in Today’s Chaotic Health Care Market).
But even with that “campaign” model for change, organizational change is more likely to fail than to succeed. Only one in three are successful (see Three Reasons Why Culture Efforts Fail). To improve the likelihood of successful culture change, our panel discussed the four key challenges that executive team needs to address to make culture change a reality—the cognitive challenge, the political challenge, the strategic challenge, and the ideological challenge.
The cognitive challenge—Old cultures die hard. Unless executive teams make a concerted and ongoing effort to overcome the denial, nostalgia, and arrogance that keeps the old cultures entrenched, future visions of what the new culture should be will be limited. A new vision is needed. It’s key to stay constantly aware of what needs changed, what is changing, and how this will affect the organization (see Building A Culture Of Performance and Before Strategic Planning Comes Strategic Vision). Dr. Talbot explained, “Managing the internal politics that can create resistance to change is essential for and working with all the people involved is essential for any successful change initiative.”
The political challenge—The regulatory landscape is changing a lot, and often. The short list of these includes Medicaid work requirements; minimum benefit health plans and parity; managed care rules; and new rules for accountable care organizations. Executives of successful organizations need to not only be aware of these changes but must also understand their implications and be willing to make the hard decisions in resource allocation. (For keeping on top of the market developments, see our recent series on market intelligence—Why You Need (Or At Least Shouldn’t Ignore) Market Intelligence, The OPEN MINDS 2019 Market Intelligence Chart Book, The 2019 Health & Human Service Landscape: 2018 Legacy Sets Stage For Opportunities & Challenges, and What Market Intelligence Was Indispensable? The 10 Most Downloaded 2018 OPEN MINDS Market Intelligence Reports.)
The strategic challenge—Successful change and the resilience required to make that change “stick” means having an organizational strategy for sustainability and success that team members can embrace and work toward. Importantly, scenario-based planning helps to address a key strategic challenge: market change. Having the ability to shift when the market takes a turn is critical to keeping the team on board (see Considering Future Scenarios: The OPEN MINDS Guide To Scenario-Based Planning and The Path To Long-Term Sustainability).
The ideological challenge—For all types of provider organization clinical teams, there are fundamental challenges of perspective in the move to pay-for-value models. At its core, clinical professionals have not traditionally made decisions about “best practice” that incorporate “cost” into the equation. On top of that, the use of clinical protocols and algorithms, and decision support tools, are new concepts for many organizations (and not readily adopted). And, specific to non-profit provider organization management teams, there will be a growing challenge between how to balance traditional definitions of mission with sustainability and margin. These ideological challenges are likely to become more pronounced as payment and reimbursement system changes become more widespread and more mature (see Planning For Long-Term Mission Sustainability). Ms. Hankey noted:
Leading change can be invigorating and exciting, yet it can also be daunting for those involved. Executive management must approach value-based initiatives from a change management lens ensuring frequent communication and measures of success to positively impact movement and culture.
One overarching comment about making the cultural transition to value-based service delivery came from Mr. Massey, who described the evolution not as a task, but as a process. He noted:
Change management is more than checking boxes on your strategic plan and calling it a day. Change management requires a commitment from the board and executive team to constantly analyze the market place and communicate an intentional strategy to all your stakeholders. I don’t see change management as an “all or nothing” proposition but a never-ending process with regular check-points to mark progress.
Still not sure where your organization should start? Check out these resources from the OPEN MINDS Industry Library:
- What Do Today’s Leaders Think About Managing Change?
- Creating and Leading A Team in Times of Change
- Don’t Just Sit There: Change!
- Managing Change as a Leader’s Challenge
- Managing at the Speed of Change: What Does It Take to Be Nimble?
- Even ‘Change Management’ Is Changing
- Watch Out For Elephants
- The Perennial Challenge For The New Year: Strategic Execution
- The Three Trends That Are ‘Top Of Mind’ In 2019 For The OPEN MINDS Team
- The Strategic Insights That Matter-2018’s Top 20 Executive Briefings
And mark your calendar for The 2019 OPEN MINDS Strategy & Innovation Institute in New Orleans, Louisiana on June 4, and “How To Develop a Strategic Plan: An OPEN MINDS Executive Seminar On Best Practices in Strategy, Portfolio Management, & Scenario-Based Planning.”