How to develop a hospital transformation strategy: Advice from a physician executive turned Baldrige judge

As hospitals work to redesign care delivery, continuously improve quality and do it at a lower cost, having a master plan for management has never been more important. But how can hospital leaders create broad, comprehensive change strategies when they face very immediate challenges? By taking a tip or two from organizations who have done exactly that before them.

Since 1987, the president of the U.S. has annually awarded the top businesses in outstanding management excellence with the Malcolm Baldrige National Quality Award. The winners are judged by a panel on leadership; strategic planning; customer and market focus; measurement, analysis and knowledge management; human resources; process management; and business performance. The result is a handpicked community of organizations with proven leadership strategies for long-term success.

We caught up with a former Baldrige judge, Kate Goonan, MD, to discuss how this experience and others informed her current practice at Navigant, where she serves as a managing director. She is a general internist by training, but has experience on every step of the healthcare food chain, from primary care practice to hospitals to health plans.

Here Dr. Goonan discusses how a healthcare organization can devise a strategy that addresses current needs, but also sets it up for future success — even when the definition of success is changing.

Editor's note: Responses have been edited lightly for length and style.

Question: The Baldrige Program informs much of your work. What first drew you to this program?

Dr. Kate Goonan: Being a general internist, my approach to patients is to think of them as systems that all work together. I take a holistic view of a person. Executives see organizations in the same way: a whole lot of different functions, people, processes and things that need to work together.

I first got involved with Baldrige in 1999 when applications for healthcare organizations opened. I served on a panel of judges appointed by the secretary of commerce, made up of nine people from all industries charged with evaluating if organizations should be named national role models. This is how I first got involved, but then I fell in love with the program and its systems view of organizations, and how all the different pieces work together to create results. It is agnostic to choices you make. In other words, it is non-prescriptive to which types of business approaches you take, be it Lean Six Sigma or other project management methodologies.  

Q: You have a proprietary method to help guide healthcare organizations in making decisions that address both long- and short-term challenges. How did the Baldrige framework — and/or other methodologies, such as Lean Six Sigma — inform your proprietary method?

KG: There are just so many important tactics organizations have to decide when to use, how to use and when to train people. Lean and Six Sigma are great examples. There are many others, like servant leadership, for example. We have to make sure all of these tools and tactics line up together to help people do their jobs, rather than add to the complexity.

Making sense of all that and making it work for people across a complex organization, like a hospital, was what I wanted to make a contribution to — how you integrate and align all those decisions and tactics for long- and short-term challenges.

I had to figure out a methodology to help leaders make choices that would allow them to succeed no matter the tactic they choose. Understanding Baldrige is a senior executive task. It's not a common language deployed throughout the organization. People working in the organization to deliver higher quality care don't need to know the arcane language of the Baldrige criteria, but it can give senior leadership a framework to hang tactics off of and compare how they work together.

For example, a senior executive might consider how listening to patients and providing a warm and welcoming environment integrates with how they hire and develop their people — how they motivate, reward and pay them. They might look at how that relates to performance and feedback and how all those things work together to make their hospital an easy place to be successful in.

My proprietary method provides a roadmap and methodology to apply and improve an organization's capabilities. It provides a way to make it easy to work in a complex environment and be successful.

Q: Based on your experience, what are some of the most common strategic challenges healthcare leaders face? When do they realize it's time for organizational transformation?

KG: I rarely meet a healthcare leader today that doesn't think they need to change. The question they generally face is, "How do we do this?"

They say, "We don't have a high-performance leadership system." By that, I mean a clear, systematic approach to which groups of people do what, who is accountable for what and how they manage setting goals for improvement. Healthcare organizations are not good at doing that. In my experience, the common early challenge that leaders face is they don't have well-developed roles around leading transformation. They try to do transformation and it's messy and they don't get good results.

Q: How would you define sustainable change, and why is it so important to healthcare organizations in particular?

KG: The moving from volume to value and from episodes of care to population health — that train is moving rapidly now and it's only going to accelerate. We have to be able to clearly define what aspects are the most important to make progress in the transition. We also have to be able to measure it. If we are focused on reducing harm and infections and healthcare-associated infections — all of which we have to eliminate — but we aren't looking at population health measures, our changes will not be sustainable, and will not position us for the future. Not only do we have to get measureable improvement over time in relevant key measures and make these transparent to the public in our current business models, but we also have to look to what the public expects us to be measuring in the future. So not only are we looking at what the results say now, but we are looking at what results we have to achieve tomorrow and be clear and transparent about what those are.

Q: If you could leave our readers with one key piece of advice on developing change strategies, what would it be? 

KG: Every leader needs to look at their organization and create a current change strategy for the enterprise based on a systems approach that integrates performance today compared to competitors and projects competitor performance into the future. This will identify where the organization needs to change.

One caveat is it is not all just in the numbers. The subtext is leaders absolutely need to be methodical and focused on the culture of the organization and take a very thoughtful and personal approach to change. It is essential to success. Change is a contact sport. It's not something you can delegate to employees or consultants. You have to be engaged yourself to get long-term results.

My advice to leaders is have a strategy, own it, be engaged yourself and be ready to stay the course because it doesn't happen overnight.


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