EHR Best Practices And Challenges

16 LORENZI, RILEY, Managing Change

Review Paper n

Managing Change: An Overview

NANCY M. LORENZI, PHD, ROBERT T. RILEY, PHD

A b s t r a c t As increasingly powerful informatics systems are designed, developed, and implemented, they inevitably affect larger, more heterogeneous groups of people and more organizational areas. In turn, the major challenges to system success are often more behavioral than technical. Successfully introducing such systems into complex health care organizations requires an effective blend of good technical and good organizational skills. People who have low psychological ownership in a system and who vigorously resist its implementation can bring a ‘‘technically best’’ system to its knees. However, effective leadership can sharply reduce the behavioral resistance to change—including to new technologies—to achieve a more rapid and productive introduction of informatics technology. This paper looks at four major areas—why information system failures occur, the core theories supporting change management, the practical applications of change management, and the change management efforts in informatics.

n JAMIA. 2000;7:116–124.

It’s not the progress I mind, it’s the change I don’t like. —MARK TWAIN

Along with the inevitable failures, medical informat- ics has had many successes—probably more than should have been expected, given the challenges of the hardware, software, and infrastructure that faced us in the past. However, many of the successful sys- tems were implemented as stand-alone systems that involved a modest number of people. Furthermore, the systems were often implemented in specific, lim- ited areas that could see potential direct benefits from

Affiliations of the authors: University of Cincinnati, Cincinnati, Ohio (NML); Riley Associates, Cincinnati (RTR).

This paper was the basis of a presentation by Dr. Lorenzi that was part of the Cornerstone on Managing Change, one of four Cornerstone sessions included in the program of the AMIA An- nual Fall Symposium, Washington, DC, November 6–10, 1999.

Correspondence and reprints: Nancy M. Lorenzi, PhD, Univer- sity of Cincinnati Medical Center, P.O. Box 0663, 250 Health Professions Building, Cincinnati, OH 45267-0663. e-mail ^lorenzi@uc.edu&.

Received for publication: 11/1/99; accepted for publication: 11/18/99.

the systems. Typically, there were local champions, who made major and personal commitments to the success of the systems, and the enthusiasm of these champions was readily transmitted to the people with whom they worked directly. In turn, most of the peo- ple working on these systems felt like pioneers, and the literature of medical informatics is filled with their accomplishments.

When we embark today on designing, developing, and implementing more complex systems that have wider impact, a new set of challenges looms even larger. Certainly, technical challenges still exist; they always will. However, as our new systems affect larger, more heterogeneous groups of people and more organizational areas, the major challenges to systems success often become more behavioral than technical.

It has become apparent in recent years that success- fully introducing major information systems into complex health care organizations requires an effec- tive blend of good technical and good organizational skills. A ‘‘technically best’’ system can be brought to its knees by people who have low psychological own-

Journal of the American Medical Informatics Association Volume 7 Number 2 Mar / Apr 2000 117

ership in the system and who vigorously resist its im- plementation. The leader who knows how to manage the organizational impact of information systems can sharply reduce the behavioral resistance to change, in- cluding to new technology, to achieve a more rapid and productive introduction of information technol- ogy.

Knowledge of the significance of people and organi- zational issues is not new. One of our informatics pi- oneers, Octo Barnett, identified political and organi- zational factors as being important 30 years ago.1

However, given the realities of that era, they were ‘‘well down the list.’’ By 1998, Reed Gardner, another definite pioneer, stated in his Davies Lecture2:

In my opinion, the success of a project is perhaps 80 percent dependent on the development of the social and political interaction skills of the devel- oper and 20 percent or less on the implementation of the hardware and software technology!

We are seeing a shift in the balance of the people and organizational issues as opposed to the technical is- sues. An effective medical informatics change strategy can help convert what health care organizations are experiencing today—technology-centered tension— into welcomed opportunities that will lead to im- provement in all phases of the health care process.

The content that supports both the intellectual content and strategy for this cornerstone comes from multiple disciplines, e.g. psychology, sociology, management, and anthropology. This paper discusses four major topics—why information system failures occur, the core theories supporting change management, the practical applications of change management, and the change management efforts in informatics.

Why Do Information System Failures Occur?

If only it weren’t for the people, those awful people, al- ways getting tangled up with the systems. If it weren’t for them, the health care area would be an informati- cian’s paradise.*

Complex problems rarely have simple solutions. Dur- ing the many stages of the solution process, there are numerous opportunities to go wrong, whether the so- lution tends to be a technical one or not. As we delve

*Paraphrased from Kurt Vonnegut, Jr., in Slaughterhouse-five: ‘‘ ‘If only it weren’t for the people, the goddamned people,’ said Finnerty, ‘always getting tangled up with the machinery. If it weren’t for them, earth would be an engineer’s paradise.’ ’’3

into increasingly complex medical informatics prob- lems, we will increasingly face this challenge. In reviewing information system failures cited in the lit- erature as well as drawing on our personal observa- tions and experiences, we have seen the rising impor- tance of the human issues that are often referred to as people and organizational issues.

Table 1 presents a categorized overview of the reasons for contemporary failures in implementing major in- formation systems. There is typically no one single cause in a given case. In fact, a snowball effect is often seen, with a shortcoming in one area leading to sub- sequent shortcomings in other areas. No precise sta- tistics exist for the relative importance of the causes; however, personal observation tells us that the two most important are communications deficiencies and the failure to develop user ownership.

Change and Change Management

Technology has indeed taken a place next to war, death, divorce, and taxes as a prime cause of bone-shuddering anxiety.—JOHN SEYMOUR

Change is a constant in both our professional and our private lives. Our children grow up taking for granted such things as powerful personal computers that we could not envision at their ages. The idea that human beings naturally resist change is deeply embedded in our thinking about change. Our language (e.g., ‘‘re- sistance to change’’), our assumptions, and our mental models about change all seem to imply that some- thing in our natures leads us to resist change. How- ever, it is easy to find examples of human beings, from childhood on through old age, actively seeking out change of all sorts. Human beings do not necessarily resist change automatically; however, many people do resist being changed, i.e., having changes imposed on them.

Organizational change normally involves some threat, real or perceived, of personal loss for those involved. This threat may vary from job security to simply the disruption of an established routine. Furthermore, there may be tradeoffs between the long and short run. As an individual, I may clearly perceive that a particular proposed change is, in the long run, in my own best interests, and I may be very interested in seeing it happen, yet I may have short-run concerns that lead me to oppose particular aspects of the change or even the entire change project.

The rate of change is escalating in virtually all organ- izations. The pressure is intense on anybody con-

118 LORENZI, RILEY, Managing Change

Table 1 n

Reasons for Contemporary System Failures Category Examples

Communication Ineffective outgoing communication Ineffective listening Failure to effectively prepare the staff for the new system

Culture Hostile culture within the information systems organization Hostile culture toward the information systems area No strategies to nurture or grow a new culture

Underestimation of complexity Missed deadlines and cost overruns Lost credibility

Scope creep Failure to define and maintain original success criteria Failure to renegotiate deadlines and resources if criteria do change

Organizational No clear vision for the change Unintended consequences Ineffective reporting structure Staff turnover Staff competency Provision of a technical ‘‘fix’’ to a management problem Lack of full support of ‘‘boss(es)’’ Roles and responsibilities not clearly defined or understood by everyone Several people vying to be ‘‘in charge’’ Adequate resources not available from the beginning Failure to benchmark existing practices Inability to measure success

Technology System too technology oriented Poor procurement Lure of the leading (bleeding) edge Inadequate testing

Training Inadequate or poor-quality training Poor timing of training—too early or too late

Leadership issues Leader too emotionally committed Leader’s time over committed Too much delegation without control Failure to get ownership in the effort Leader’s political skills weak ‘‘Lying’’ to get initial approval

nected with the health-related world to focus time and attention on understanding the forces driving the changing environment and develop or implement the information systems needed to support the altered en- vironment.

Change Management

The phrase change management is very common in management articles as well as newspapers.4,5 More- over, managerial interest in the topic has been stim- ulated by the comments of Peter Drucker6 as to whether one can manage change at all or merely lead or facilitate its occurrence within an organization. Nevertheless, using the traditional terminology, what

is meant by change management, how did it evolve, and why has this concept become so important?

Change management is the process by which an or- ganization gets to its future state, its vision. While tra- ditional planning processes delineate the steps on the journey, change management attempts to facilitate that journey. Therefore, creating change starts with creating a vision for change and then empowering in- dividuals to act as change agents to attain that vision. The empowered change management agents need plans that provide a total systems approach, are re- alistic, and are future oriented. Change management encompasses the effective strategies and programs to enable those change agents to achieve the new vision.

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Today’s change management strategies and tech- niques derive from the theoretic work of a number of early researchers.

Examples of Core Theories from Other Disciplines

In 1974, Watzlawick, Weakland, and Fisch published their now classic book, Change: Principles of Problem Formation and Problem Resolution.7 Theories about change had long existed. However, Watzlawick et al. found that most of the theories of change were phil- osophical and had been derived from mathematics and physics. Watzlawick et al. selected two theories from the field of mathematical logic on which to base their beliefs about change. They selected the theory of groups and the theory of logical types. Their goal of reviewing the theories of change was to explain the accelerated phenomenon of change that they were witnessing.

Watzlawick et al. concluded that the earlier theories explained first-order and second-order changes:

n First-order change is a variation in the way processes and procedures have been done in a given system, leaving the system itself relatively unchanged. Some examples are creating new reports, creating new ways to collect the same data, and refining ex- isting processes and procedures.

n Second-order change occurs when the system itself is changed. This type of change usually occurs as the result of a strategic change or a major crisis such as a threat against system survival. Second-order change involves a redefinition or reconceptualiza- tion of the business of the organization and the way it is to be conducted. In the medical area, changing from a paper medical record to an electronic med- ical record represents a second-order change, just as automated teller machines redefined the way that many banking functions are conducted world- wide.

These two orders of change represent extremes. First- order change involves doing better what we already do, while second-order change alters the core ways we conduct business or even the basic business itself.

Golembiewski, Billingsley, and Yeager8 subsequently added another level of change, defining middle-order change as lying somewhere between the extremes of first- and second-order change. Middle-order change ‘‘represents a compromise; the magnitude of change is greater than first-order change, yet it neither affects the critical success factors nor is strategic in nature.’’

Kurt Lewin is credited with combining theories from psychology and sociology into the field theory in so- cial psychology.9 Lewin focused on motivation and the motivational concepts that underlie an individ- ual’s behavior. Lewin believed that there is tension in a person whenever a psychological need or an inten- tion exists, and the tension is released only when the need or intention is fulfilled. The tension may be pos- itive or negative. These positive and negative tension concepts were translated into a more refined under- standing of conflict situations and, in turn, what Lewin called ‘‘force fields.’’

Lewin indicated that there are three fundamental types of conflict:

n Individuals stand midway between two positive goals of approximately equal strength. A classic metaphor is the donkey starving between two stacks of hay because of the inability to choose. In information technology, if there are two ‘‘good’’ systems to purchase or options to pursue, then we must be willing to choose.

n Individuals find themselves between two approxi- mately equal negative goals. This certainly has been a conflict in many organizations that wish to pur- chase or build a health informatics system. A com- bination of the economics, the available technolo- gies, the organizational issues, among other factors, may well mean that the organization’s informatics needs cannot be satisfied with any available prod- ucts, whether purchased or developed in-house. Thus, the decision makers must make a choice of an information system that they know will not com- pletely meet their needs. Their choice will probably be the lesser of two evils.

n Individuals are exposed to opposing positive and negative forces. This conflict is very common in health care organizations today, especially regard- ing health informatics. This conflict usually occurs between the system users and the information tech- nology or financial people.

Kurt Lewin’s field theory allows the types of conflict situations commonly found in health care to be dia- grammed and analyzed.

Small-group theory is another tool that is highly ap- plicable to health informatics because of the way that health care environments and activities are organized. Caring for patients and educating students typically involves many small groups of people. Small-group theory can help us understand why there are such wide ranges of effectiveness among these groups.

120 LORENZI, RILEY, Managing Change

These are just a few examples of the social science theories that can help the change management leader understand some of the underlying behavioral issues that need to be faced as health informatics technology is brought into today’s complex health systems.

Practical Applications of Change Management

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.—NICCOLO MACHIAVELLI

One of the most difficult problems organizations face is dealing with change. In today’s rapidly changing, highly competitive environment, the ability to change rapidly, efficiently, and almost continually will distin- guish the winners from the losers. Many health-re- lated organizations will disappear because they find themselves unable to adapt. Furthermore, many of the pressures for change in health care organizations are independent of technologic change. This means that informaticians working for change are doing so in or- ganizations that are already highly stressed by other pressures.

Major organizational changes typically involve many different types and levels of personal loss for the peo- ple in the organization. For example, change always requires the effort to learn the new, which is a loss in terms of time and energy that could have been used elsewhere. Although some may welcome the learning opportunity, many of us don’t want to invest that time and energy unless we are dissatisfied with the current arrangements or see powerful advantages to the pro- posed change. Upgrading to new software is a com- mon example, in which the future benefits may not be seen as sufficient to outweigh the short-term in- vestment required to learn the new programs.

Second, people want to feel good about themselves. Ideally, people are able to take pride in their work, feel responsible for a job well done, feel they are part of a high-quality enterprise, and feel that their time has some significance. In many work situations, the work itself and the organizational culture make it dif- ficult for people to feel good about themselves. In these poorer situations, people usually invent strate- gies to help them feel better about themselves, and these strategies involve getting some sense of control, belongingness, and significance out of their work. Sometimes this involves opposition to management, on the assumption that management is always up to no good. More commonly, the worker–management relationships are not completely alienated. Still, the

workers’ strategies for achieving ‘‘good’’ feelings are unknown to or quite misunderstood by management. Therefore, change initiatives, unknowingly and un- intentionally, threaten to cause the workers serious personal loss. Not surprisingly, the workers resist and do all they can to sabotage such change initiatives.

Third, change initiatives often require large losses for middle managers. Generally, people perceive that in- formation systems increase the ability of top execu- tives to know more about what is going on and to exert more direct control. This means a serious loss of personal and organizational significance for the mid- dle manager. Sometimes middle managers fight this loss. Any significant organizational change involves changing habits, that is, changing the way we ac- tually do our work. This usually involves changes in the way we interact, both with people and our tools. New systems require us to learn a new set of behav- iors.

Types of Change

Changes in an organization can often be identified as one of four types, with the definite possibility of over- lap among them:

n Operational changes affect the way the ongoing op- erations of the business are conducted, such as the automation of a particular area.

n Strategic changes occur in the strategic business di- rection, e.g., moving from an inpatient to an out- patient focus.

n Cultural changes affect the basic organizational phi- losophies by which the business is conducted, e.g., implementing a continuous quality improvement (CQI) system.

n Political changes in staffing occur primarily for po- litical reasons of various types, such as those that occur at top patronage job levels in government agencies.

These four different types of change typically have their greatest impacts at different levels of the orga- nization. For example, operational changes tend to have their greatest impacts at the lower levels of the organization, right on the firing line. People working at the upper levels may never notice changes that cause significant stress and turmoil to those attempt- ing to implement the changes. On the other hand, the impact of political changes is typically felt most at the higher organizational levels. As the name implies, these changes are typically made not for results-ori- ented reasons but for reasons such as partisan politics

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or internal power struggles. When these changes oc- cur in a relatively bureaucratic organization, as they often do, those working at the bottom often hardly notice the changes at the top. Patients are seen and the floors are cleaned exactly as they were before. The key point is that performance was not the basis of the change; therefore, the performers are not much af- fected.

Microchanges and Megachanges

When communicating about change, the models of Watzlawick and Golembiewski tend to be too abstract or difficult to explain. A more practical model that we frequently use divides changes into microchanges and megachanges, with no great attempt at elaborate defi- nitions. As a first approximation, the following scheme can be used to differentiate between the two:

n Microchanges—differences in degree

n Megachanges—differences in kind

Using an information system as an example, modifi- cations, enhancements, improvements, and upgrades would typically be microchanges, while a new system or a very major revision of an existing one would be a megachange. This scheme works surprisingly well for communication within organizations as long as we remember that one person’s microchange is often an- other person’s megachange. So while the system de- signers think they are making a minor change to en- hance the total system, an individual end user may see the change as a megachange and resist it vehe- mently. When designing the total ‘‘people’’ strategy for any system, it is important to involve a variety of people from the very beginning, to clearly understand how groups function in the organization and how the work is really done.

The Cast of Characters

For any given change, people can occupy a wide range of roles that will strongly influence their per- ceptions of the change and their reactions to it. These are roles such as champion, end user, developer/ builder, watchful observer, obstructionist, and such. As on the stage, some people may occasionally play more than one role. In other cases, the roles are unique. Unless we clearly identify both the players and their roles in any change situation, we risk mak- ing decisions and taking action based on generaliza- tions that are not true for some of the key players.

An overview term often applied to the various roles is stakeholders. The stakeholders have some interest

or stake in the quality of both the change and the change implementation process. The roles of the stakeholders are subject to change, especially during a change process that extends over some time.

For those implementing change, the following steps are critical:

n To identify what roles they themselves are occu- pying in the process

n To identify what roles the others involved in the process are playing, being careful to recognize mul- tiple roles

n To identify carefully which role is speaking when one is communicating with those playing multiple roles

n To monitor throughout the process whether any roles are changing

Resistance to Change

It is easy to change the things that nobody cares about. It becomes difficult when you start to change the things that people do care about—or when they start to care about the things that you are changing.—LORENZI AND RILEY

Resistance to change is an ongoing problem. At both the individual and the organizational levels, resis- tance to change impairs concerted efforts to improve performance. Many corporate change efforts have been initiated at tremendous cost only to be halted by resistance among the organization’s employees. Or- ganizations as a whole also manifest behavior similar to that of individuals when faced with the need to change.

The relationship between individual and organiza- tional resistance to change is important. An organi- zation is a complex system of relationships between people, leaders, technologies, and work processes. From this interaction emerges organizational behav- ior, culture, and performance.

These emergent properties and behaviors are tightly linked in two directions to the lower-level interac- tions. Organizational resistance to change is an emer- gent property, and individual resistance to change can give rise to organizational resistance. A self-reinforc- ing loop of increasing resistance can develop as indi- viduals create a environment in which resistance to change is the norm. That environment in turn en- courages increased resistance to change among indi- vidual employees. The self-reinforcing nature of this loop can be tremendously powerful, defeating re- peated attempts to break out of it.

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Studies of system dynamics frequently reveal that ma- jor problems that everyone thought were external are actually the unintended consequences of internal pol- icies. The basic dynamic behind this phenomenon is that the organization is made up of a network of cir- cular causal processes: A influences B, which then in- fluences C, which in turn influences A, i.e., the snake bites its own tail. Understanding these internal orga- nizational dynamics is a prerequisite for leading ef- fective change processes.

Rituals of Transition

All change involves loss. In many cases, change re- quires at the minimum that individuals give up fa- miliar routines. In some cases, the loss is substantial, affecting position, power, networks of friends and col- leagues, and such. In all these situations, rituals of transition can be crucial in assisting people to grieve and let go of the old and move on to the new.

The strategies for overcoming the barriers to change are quite diverse and touch on every aspect of the organization. No organization can begin using all the strategies at the same time or even in a short period of time. A better approach is to focus on one or two until they become part of the normal way of operat- ing, i.e., until they become engrained in people’s hab- its. Only then is it time to introduce another strategy. In this way, over time, the organization gradually im- proves its abilities to learn rapidly, to adapt to new conditions, and to embrace change.

Change Management Efforts in Medical Informatics

If you design something that works with an already ex- isting model and doesn’t require people to change their religion, the idea has a better chance of working.—TED SELKER, IBM

The current formal focus on change management in the medical informatics area is relatively new. Two early pioneers in analyzing the impact of information systems were Diana Forsythe and Henry Lunds- gaarde. Diana Forsythe worked at the boundaries of cultural anthropology, medicine, and computer sci- ence. She was among the first anthropologists or so- ciologists to collaborate with computer scientists to study the work practices of computing. Her ethno- graphic work on software development in medical in- formatics revealed that cultural and disciplinary as- sumptions are routinely (but often unintentionally) designed into such software, potentially reducing the system’s benefits to clinicians or patients. Her field

research in various medical disciplines suggested ways in which software and other technology might better meet those needs.11–13 Henry Lundsgaarde14,15

evaluated the PROMIS system. This study produced in- sights into people and organizational issues and is an excellent example of how to combine qualitative and ethnographic methods with quantitative ones.

A concerted effort to introduce the people and orga- nizational aspects more formally and broadly into medical informatics began in 1993 with a working conference in Cincinnati, Ohio, held under the aus- pices of the International Medical Informatics Asso- ciation (IMIA). The years since have shown that this working conference was a seminal event, in that it brought together for the first time isolated individuals interested in the topical area. A number of today’s leaders in the area were present at that conference, representing different academic backgrounds, differ- ent types of organizations, and different countries.

Following that working conference, IMIA approved a working group to study further the organizational impact of computers in medicine. Other related working groups were approved by AMIA, the European Federation for Medical Informatics, and the Health Informatics Society of Australia. These working groups accepted as their charge some variation of the following theme—applying knowledge of human behaviors to the implementation of informatics in a health care environment.

The IMIA and AMIA working groups, under the ini- tial leadership of Nancy Lorenzi, accepted a four- phase driving-wedge diffusion strategy to spread their messages across the profession. The first phase of this strategy was designed to build awareness of the importance of the topic of people and organiza- tional issues in the area of health informatics. One dif- fusion product was the book Organizational Aspects of Health Informatics: Managing Technological Change, pub- lished in 1994.10 This was followed by a case studies book, Transforming Health Care through Information: Case Studies, published in 1995.16

The second phase of the diffusion process was de- signed to educate people about the research from other disciplines, e.g. psychology, sociology, anthro- pology, and cognitive sciences, that is directly relevant to medical informatics. Products that support this dif- fusion strategy include the working group newsletter, Organized Aspects of Medical Informatics, edited by Bon- nie Kaplan, PhD, and co-edited by Marilynne Herbert, PhD. Presentations at national and multinational con- ferences and publications in recognized informatics journals are other examples of this phase of the dif- fusion strategy.17–20

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The third phase of the diffusion process is to apply established methods and models from other disci- plines (e.g., psychology and sociology) to the medical informatics area. The working groups actively en- courage current practitioners and students to model their medical informatics research efforts using doc- umented and accepted concepts from other disci- plines.

The fourth phase assumes that our ongoing research will reveal the need for some concepts and methods that are unique to medical informatics. This phase is designed to develop new, discipline-specific research methods and models. The working group encourages students in master’s and doctoral programs as well as active researchers to consider innovative research de- signed specifically for the area of medical informatics.

The Road Ahead

I’m very interested in the future because I plan to spend the rest of my life there.—ROBERT WOOD JOHNSON

As medical informatics becomes involved in ever larger and more complex systems, both the overall or- ganizational leaders and the informatics leaders must adapt to the following realities.

When the impact of technologic change is being man- aged, people’s needs come first: Without people, we don’t have an organization. We must implement the new technologies to do what they do best—struc- tured, repetitive work—and let the people do what they do best—think, be creative, and solve problems. People are far better at reviewing boring work than doing it. It is because of these concepts that workflow technology is rapidly changing the role of today’s in- formation worker from an information transcriber and mover to a true knowledge worker—an infor- mation user.

The knowledge workers are the foundation. Accord- ing to Peter Drucker in ‘‘The New Society of Organi- zations,’’21 the world economy is in the midst of trans- formation to the ‘‘knowledge society.’’ Increasingly, knowledge is not just one resource among many; it is ‘‘the primary resource for individuals and for the economy overall.’’ The essential purpose of manage- ment in the knowledge society is to encourage sys- tematic organizational innovation. Drucker makes the important point that in a knowledge economy, the true source of competitive advantage is not so much technology, research and development, or even knowledge itself. It is the people, the knowledge workers whose skills and expertise are the foundation for all innovation.

We need to develop a new way of looking at how we currently function in our organizations. Management and workers will have to come together to build bet- ter, more productive work environments by under- standing the long-term issues affecting their future and by creating a new way of thinking about how these current enabling technologies can best be used.

Technology Is Not Enough

Because technology investments are largely made up of things (i.e., hardware and software), it is easy to make the mistake of believing that a technology is implemented once it has been bought and installed. In fact, nothing works without people. These human issues become magnified in the process of redesigning work processes. Many work-process redesign projects focus exclusively on technology and fail to address the human and organizational aspects of work. In these instances, organizations fail to explore non- technical solutions to improving organization pro- cesses, such as training or changes in structures, pro- cedures, and management practices. Most often, technology strategy drives organizational change. While the business strategy may be clear, it is often not reflected in a defined organizational change strat- egy.

Too many technically good applications have failed because of sabotage by users who like the old ways in which things were done. Managing the natural re- sistance to change and helping convert that resistance into commitment and enthusiasm must be a planned process. New systems should enhance the quality of work life and increase responsibility, empowerment, and motivation.

The Role of Customers

We must rethink our customers’ needs, using the con- cept of customer in the broad sense in the complex health care world. Any time our customers see us do- ing something better, we win. The message is that we need to identify correctly those parts of our processes that are visible to our customers and consider reen- gineering them first. The real key is to ensure that we are getting the right process right. For example, Mu- tual Benefit in the United States transformed their in- surance policy issuing and payment process. They were ecstatic with the results of redesigning what had previously been a 24-day process of paying insurance claims, after the redesign payments could be made, in less than a day, generally within three hours. Within 90 days after implementing the new processes, they filed for protection from their creditors. Why? They

124 LORENZI, RILEY, Managing Change

did not pay equal attention to re-engineering the pro- cesses that brought in the money.

However, the concept of customer needs is also im- portant in the internal sense. In these times of increas- ing change, it will be even more critical that our peo- ple do not perceive that changes are being made just for the sake of change. When the culture is focused on constantly improving the meeting of customer needs, the rationale for rapid and frequent changes becomes much clearer to those in the organization. This point is constantly stressed by Oren Harari in his books22 and monthly columns in Management Review.

The Road to Success

Common wisdom suggests that technology drives change in the organizational environment, but com- mon wisdom is wrong. Instead, information technol- ogy is a powerful enabling force that creates new op- tions and opportunities in the environment for what organizations produce—whether goods or services— and how they produce it. The early response by in- novative players drives change. Each of the enabling technologies has the potential to transform one or more dimensions of the workplace. Taken together they act as a powerful set of technologies that orga- nizations will have to harness to be successful in the 21st century. There are no quick fixes. Solving these problems requires a response targeted to the needs of our organization, but we need to know how our or- ganization’s strategy will play out in the environment as a whole.

The road ahead will not be an easy one. However, the medical informatics area is poised to create outcomes that many of us could only dream of a few years ago. Our challenge will be to implement our concepts and systems as smoothly as possible, not wasting our pre- cious opportunities and resources because we ignored the pitfalls of managing change.

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