Erik Van Slyke

It’s been fascinating to watch the attempts at U.S. healthcare reform over the last year and beyond.  The change management requirements for this monumental effort make multi-process, enterprise outsourcing implementations look like a piece of cake!

Ross Douthat’s column in Sunday’s New York Times presents an insightful summary of the challenge, highlighting the complex web of special interests—“stakeholders” to a change manager.  He refers to the analysis of Jonathan Rauch, author of “Government’s End:  Why Washington Stopped Working,” and nails the heart of the problem:

“. . . sweeping reforms are difficult because we’re all special interests, in one sense or another.  We all benefit from something (or many things) the government does, and so we all have an incentive to resist dramatic changes to the way Washington spends money.”

Big Pharma, Big Insurance, senior citizens who receive Medicare, hospitals, patients and doctors in states with big healthcare expenditures, upper income taxpayers, and unions.  No matter what our political views, chances are that we all fall into at least one of these stakeholder groups.

And just like in any large scale change, when you have that many factions invested in the status quo, guess what?  You get lots of resistance, conflict, and ultimately, project failure.

It’s not that rapid, large-scale change is impossible.  It just requires a massive sense of urgency to align multiple factions around a common objective.  That’s why the fear of bankruptcy and job loss are such great motivators for quick, radical change.

Without a high sense of urgency, however, experienced change leaders know that it takes vision, discipline and patience to gradually align stakeholder groups around a common objective and a process for achieving it.  That’s a tall order for any leader who has to shepherd change in a 2, 4 or 6 year time frame and balance those demands with getting reelected.

What’s the answer?

It’s a well-known lesson learned by those who have implemented complex change:  Practice lowercase “t” transformation, not upper case “T” transformation.

In other words, make big change to small things and small changes to big things.

Massive Transformation (upper case “T”) initiatives are difficult to pull off.  That’s why in BPO, for example, the name of the game is increasingly single-process outsourcing instead of massive functional outsourcing.

A smaller, more measured approach helps manage the stakeholder issues that can derail a change effort.  It’s easier to align a few stakeholder groups around a single change than an entire organization around multiple changes.  The approach doesn’t transform in one big swoop, but you make forward progress.  And with vision, discipline and patience, broader change can be made over the longer term.

Let’s keep our fingers crossed that healthcare reform really happens sometime soon.  I think we all agree that it is needed.  No matter whether the current imperfect plan passes or fails, however, let’s be prepared to come back to the table and keep tackling this issue small step by small step.