By Linda Galindo, Galindo Consulting, Inc.

The number of business entities and their ownership structure is changing in the healthcare industry. Hospital consolidation is increasing in response to major systemic issues. Thousands of separate healthcare organizations that interdepend are trying to manage and pay for their business model as healthcare delivery grows more complex by the day. Hospital boards are likely to face decisions related to consolidation, merger activity, “right sizing,” and the deferral of projects—all of which require change. These changes—whether forced or anticipated to sustain access, improve quality of care, and lower costs—present a challenge for the board. An agreed-upon approach to delve into uncomfortable territory and face the “change challenge” now can go a long way to ensure board effectiveness.

Sound the Alarm!

Facing the change challenge will require the board to modify its culture in order to be prepared and open for new, difficult decisions, as well as stakeholders’ reactions. While sounding the alarm is one thing, determining how to proceed is quite another. The skill of anticipating resistance to change and executing on a new plan is essential for the board chair and CEO.

Consider this example: inpatient and outpatient volumes and service line revenue projections alerted a hospital board that a capital project that was approved two years earlier was no longer needed. A report on declining high-margin service line revenues, combined with an accelerated need for more long-term and hospice care in the community had the board’s attention. A change in direction was needed, but how quickly and to what extent was up for debate. Some board members believed that the three-year projection they were given did not take into account the possibility of economic improvement. Others felt that long-term and hospice care could be provided by partnering or collaborating rather than expanding those service lines internally. The board immediately began discussing how to fix the problem before agreeing on what the problem even was.

Avoid Ready, Fire, Aim

To effectively facilitate a needed change, take a step back before jumping in. The model below provides a starting point:

Surface Beliefs and Attitudes → Identify Behavior → Measure Outcomes

“We believe this is a needed change. We behave in concert with making it happen. The change is made in a timely and effective manner and according to plan.”

Being able to make the statements above is not easy in most cases when making any change, big or small. In the above example, the board chair and the CEO need to agree that a change must be made related to the approved plans to build. Once they communicate this to the executive committee, they can skillfully facilitate the change, heading everyone in the same direction using the following steps to anticipate the change challenge.

1. Surface Counterproductive Beliefs and Attitudes

Have the board brainstorm all the beliefs and attitudes that may be harbored (not stated) when news of the impending change is announced. During the brainstorming exercise, ask board members to put themselves in the position of the listeners who have a stake in what is changing.

The following is a sample list of beliefs and attitudes about scaling down the capital project and changing service line:

• The numbers are wrong.
• You can make numbers say whatever you want them to.
• The board has a hidden agenda.
• There will be winners and losers in this change.
• The decision makers can’t be trusted.
• This is the result of mismanagement when we were in the black.
• They knew about this before signing my physician contract.
• The economy will improve; this is an overreaction.

The list from the brainstorming exercise demonstrates sensitivity to, and awareness of, stakeholder’s fears and probable concerns.

2. Identify Corresponding Behaviors That Would Follow from the Beliefs and Attitudes

If the beliefs and attitudes on this list do exist once the change is announced, what behaviors are likely to follow in resistance to the change? Here is an example of what the behavior list might look like:

• Constantly challenge the numbers.
• Request additional study from an outside source.
• Hold meetings after the meeting to disagree with the consensus decision to pursue the change.
• Build a case to protect any personal territory the change might impact.
• Challenge how the decision was made.
• Request forensic audits.
• Become victimized by the change; finger-point and blame.
• Collect and disseminate positive opinions on the future of the economy.

3. State the Outcome

Then ask: what would the outcome of our attempt to execute the change over time be if these beliefs, attitudes, and behaviors were left unchecked? (Answer: The outcome would be slow or no change.)

4. Strategize to Minimize or Eliminate Counterproductive Behavior

The essence of effectively leading change is being able to anticipate and address the concerns of stakeholders. Delving into beliefs and attitudes is a sensitive endeavor and often skipped over entirely. Anticipating counterproductive beliefs and attitudes is an eye-opening exercise. Once done, the board can bring its considerable experience to bear to anticipate barriers to making needed changes quickly. Boards that strategize to eliminate or minimize the impact of counterproductive beliefs, attitudes, and behaviors demonstrate how much they value their constituents through sensitivity and awareness of their deepest fears and concerns. Which, as it so happens, are usually (and actually) the same as the board’s fears and concerns.

A high-performing board understands that counterproductive beliefs and attitudes about an impending change are not easily dismissed. It is generally fruitless to tell someone their attitude is the problem or that they have a faulty belief. Instead, addressing beliefs such as “The numbers are wrong,” or “They knew about this before they signed my physician contract,” heads off the resistance and promotes maximum levels of buy-in. As the communication is made to the various stakeholders, their concerns (at the level of beliefs and attitudes) and answers to those concerns are baked into the presentation.

Consider the following examples of statements that the board chair (or appropriate person) can make to alleviate beliefs and attitudes that are resistant to change:

• You may think the numbers are wrong so we checked and rechecked them in the following ways….
• We realize that some believe you can make numbers say whatever you want them to, to bolster a case for change, so we scoured the data for an opposite point of view and we are providing that for your consideration.
• Lest you think that the board has a hidden agenda, or that some faction of the board harbors special interest in having this change happen to their benefit, we offer the full transparent documentation of our discussion, decision, and vote.
• It’s hard not to believe that there will be winners and losers in this change, so we offer the following win–win way to frame the upcoming change….
• In the past, some individuals may have experienced situations that led them to believe that the decision makers can’t be trusted. As a board, we hold each other accountable and to the highest standard. Our request is that you speak directly to us where there has been a breech in trust so that we might work on its repair with full knowledge of your issue and a commitment to resolve it.
• It may be difficult to understand that we are choosing not to go forward with the building when in fact this is not the result of mismanagement when we were in the black. We do have the funds and access to capital but have concluded, based on the data, that as hard as it is, we must be proactive at this time in response to what that data and our outside consultant is telling us.
• Some of you may believe that the economy will improve, and that this is an overreaction. We would very much like to stay in the comfort zone of the current plan too, but we have come to the conclusion that to do so will risk our ability to serve the emerging needs of our community and put the patient first.

Change Management Is Mindset Management

It is important to understand, this is not just a wordsmithing exercise to address beliefs and attitudes that serve as submerged barriers to effective change. It is the culmination of taking the beliefs and attitudes and charging the board with treating them as a real barrier to be minimized or eliminated. One of the most powerful examples of this occurred when a hospital board was facilitated through a mandate to change its makeup to be more diverse and better reflect the community it served. After three years of attempting to attract more diversity onto the board, this model (Surface Beliefs and Attitudes → Identify Behavior → Measure Outcomes) and the steps outlined above revealed why no progress was made.

There will always be some faction that, no matter how thoroughly you anticipate and address concerns, will attempt to stir things up to slow or stop change. But a board with a united front and skills to address beliefs and attitudes with sensitivity and awareness is difficult to resist.

Change can be disruptive and insensitive; however, when a board works to demonstrate sensitivity to and awareness of the fears and concerns of its stakeholders and communicates its message of change with one voice, esprit de corps, and competence, they are demonstrating service of the highest order.

The Governance Institute thanks Linda Galindo, president of Galindo Consulting, Inc., for contributing this article. She can be reached at linda@lindagalindo.com.