See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/7907633

Improving Hospital Performance: Culture Change Is Not the Answer

Article  in  Healthcare quarterly (Toronto, Ont.) · February 2005

DOI: 10.12927/hcq..17096 · Source: PubMed

CITATIONS READS

27 929

2 authors:

Sandra G Leggat Judith Dwyer

La Trobe University Flinders University
120 PUBLICATIONS   1,368 CITATIONS    45 PUBLICATIONS   225 CITATIONS   

SEE PROFILE SEE PROFILE

Some of the authors of this publication are also working on these related projects:

What makes an effective quality system? View project

Clinical supervision View project

All content following this page was uploaded by Judith Dwyer on 28 May 2014.

The user has requested enhancement of the downloaded file.

 Ideas at Work

Improving Hospital Performance:

Culture Change
Is Not the Answer
Sandra G. Leggat and Judith Dwyer

Abstract important successes in reforming

An inappropriate culture is often presented as the reason why hospitals throughout the world care delivery processes, but
have been unable to achieve best practice. Many have concluded that the organizational overall there is evidence that as a
culture of hospitals limits the ability of these organizations to improve performance, partic- sector, healthcare has not
ularly in relation to improving quality and safety. Establishment of a “better” culture is often achieved acknowledged best
presented as the resolution to quality, safety, financial and productivity issues in hospitals. practice (Braithwaite and Hindle
Our research indicates that certain management conditions are required before culture 1999; Dwyer and Leggat 2002;
change can be contemplated. Ibrahim and Majoor 2002;
OECD 2004). Hospitals and
This paper suggests that we have underestimated the importance of people management other healthcare organizations
in improving practice within hospitals, with the three most important aspects being the vary in their capacity to imple-
development of teamwork, performance management and sophisticated training. We ment change designed to improve
present evidence of the potential contribution good people management can make to high performance (National Institute
performance, and argue that better people management is a cause, not an outcome, of for Clinical Studies 2003). In
cultural change. comparison to other industries,
healthcare systems are slow to
change and to adopt new
here is a rich yet developing literature that identi- methods, techniques and ideas (Adamson and Adamson 2001;

T fies factors important for organizational perfor- Zuckerman 2000). Hospitals, like universities, large accounting
mance. Empirical study of the performance of and law firms, are characterized by a culture that welcomes
organizations in a variety of industries has technical or program innovation, and at the same time can be
suggested complex interactive relationships among these factors, fiercely resistant to systemic change (Mintzberg 1991), with the
but with some clear prerequisites for success. Despite this result characterized as “2000s technologies embedded in 1940s
growing evidence, and the intense pressure for change, it seems structures” (Glouberman and Mintzberg 2001: 68).
that many public hospitals are not incorporating known factors In this paper, we review the performance of the hospital
for successful performance into their organizational strategies sector in relation to key factors for high performance identified
and change management processes. in the literature. While acknowledging the importance of
Throughout the world, public hospitals have had some culture, we critique an apparent tendency to focus on estab-

60 | H E A LT H C A R E Q U A R T E R LY V O L . 8 N O . 2 • 2 0 0 5
 Sandra G. Leggat and Judith Dwyer Improving Hospital Performance: Culture Change Is Not the Answer

lishing a “better” culture as a management activity. We then will not occur overnight” (Eastman 1992: 220). Yet, in 2001
suggest a need to refocus the management of the public hospital and 2002 the call for culture change was still being made in
sector to better utilize the evidence for high performance. Australia: “ultimately, we need to change the culture in health
care” (Barraclough 2001: 616) and “the health sector contains
WORLDWIDE CONCERNS ABOUT HOSPITAL many problems that are widely recognized and ought to be easily
PERFORMANCE resolved. …We argue that this mainly reflects weaknesses in
The drivers of change in public hospitals over the last 20 years the organizational culture” (Hindle and Natsagdorj 2002: 171).
have been a powerful combination of improved technical Similarly, in the UK, the Bristol Inquiry condemned the “club
capacity (to diagnose, treat and provide care); ever-increasing culture,” which protected poor quality (Bristol Royal Infirmary
demand; the resultant need to contain costs to sustainable levels Inquiry 2001).
while ensuring quality and safety (Dwyer and Leggat 2002); and Organizational culture is an important concept, representing
a wave of global changes in public sector management that the shared values and behaviours that distinguish one organiza-
aimed to improve the efficiency and responsiveness of public tion from another, often summed up in the phrase “how we do
services (Pollitt 1995). In this context, hospital managers things around here” (Ferlie and Shortell 2001). We note a
struggle to safely address increasing demand within available tendency for culture change to be called for as a prerequisite for
resources. the implementation of many good ideas: “culture of safety”
While there have been strides toward improved performance, (Baker and Norton 2001; Clark 2002), “innovative culture”
there is evidence that public hospitals have not achieved (Martins and Terblanche 2003), “climate of open disclosure”
acknowledged best practice. Recent inquiries into healthcare (Smyth 2002) and so on. But organizational cultures, like
crises throughout the world have illustrated the lack of basic national cultures, are not easily changed. Researchers argue that
management systems and processes to assure safe and effective culture, while partly a creature of management, is difficult to
care delivery (Dyer 2001; Kennedy 2001; McLean and Walsh observe, characterize and understand (Robbins and Barnwell
2003; National Advisory Committee on SARS and Public 2002). This suggests that culture is perhaps changed indirectly,
Health 2003; Scally 2001; World Health Organization 2001). as the impacts of more concrete strategies work their way
There have been too many of these incidents, in too many through the members of the organization and, for good or ill,
locations, to continue to consider them as isolated events. become embedded in habits of thought and behaviour. We are
Since the 1999 Institute of Medicine report on medical concerned that culture change is being presented as the panacea
errors, there has been an increasing focus on ensuring healthcare for improving the performance of public hospitals, rather than
quality, safety and continuity. Yet, there is little evidence that as an outcome of successful, sustained change in methods of
hospitals have achieved clinical or administrative best practice. work and management practice.
In Australia, medication error has been estimated to result in Our research suggests that a focus on factors that have been
about 140,000 hospital admissions and costs of at least $380 shown to impact directly on organizational performance is more
million per year (Australian Council for Quality and Safety in likely to improve performance than a focus on changing the
Health Care 2003). American studies found that adverse events culture. The latter is in any case difficult given the intractability
occur in between 2.9 and 4.6% of hospitalizations, causing of culture (Schein 1992; Scott et al. 2003) and the particular
serious injury or death (Brennan et al. 1991; Leape et al. 1991; challenges of managing in the health system.
Thomas et al. 2000). In Canada, Britain and Australia, studies In an effort to establish which factors are most strongly
suggested that 7.5 to 17% of all hospital admissions were associ- associated with better performance, we completed a review of
ated with a potentially preventable adverse event (Australian the literature, focusing on organizational clinical performance
Council for Quality and Safety in Health Care 2003; Baker et (i.e., performance in care delivery), organizational change and
al. 2004; National Health Service 2000; World Health innovation, productivity, market share and financial perfor-
Organization 2001). mance, team and individual job performance (National Institute
for Clinical Studies 2003).
CULTURE CHANGE: THE PANACEA? The literature suggested complex interactive relationships
These and other problems with hospital performance have not among the factors that influence performance – relationships
gone unnoticed, and for over a decade experts have focused on that have not been empirically confirmed or clearly specified.
inappropriate organizational (and system) cultures as the root There appeared to be a large number of factors that operated at
cause of the problem. For example, in 1992 Eastman suggested different phases, at different levels in the organization and in
the need for “a fundamental paradigm shift in healthcare different combinations to influence performance. Yet, there were
management and thinking in Australia. Changing the way we consistent trends that enabled us to identify that the manage-
think about quality, and changing the culture of our hospitals, ment of people was the most important factor.

H E A LT H C A R E Q U A R T E R LY V O L . 8 N O . 2 • 2 0 0 5 | 61
Improving Hospital Performance: Culture Change Is Not the Answer Sandra G. Leggat and Judith Dwyer

HAVE WE UNDERESTIMATED THE IMPORTANCE OF been authoritarian in nature. It has been suggested that the
PEOPLE MANAGEMENT? impact is seen in practices like “not mixing with people who you
Cross-sectional studies in a range of industries have suggested do not think are at your level socially or intellectually” (Bate
an association between high-involvement, progressive human 2000: 496). In comparing medicine and aviation, Sexton and
resources management (HRM) and organizational performance colleagues (2000) found that significantly more doctors (as
(Barraclough 2001; Barraud-Didier and Guerrero 2002; compared with pilots) supported the hierarchical model of
Delaney and Huselid 1996; Guthrie 2001; Youndt et al. 1996). practice, believing that junior team members should not
In healthcare, recent studies in the National Health Service in question decisions made by senior doctors. Nursing teams
the UK found that effective teamwork, performance manage- operate under a hierarchical mechanistic structure with a strong
ment and sophisticated training policies were associated with focus on task that undermines participation (Cott 1997).This
lower patient mortality (West et al. 2002). hierarchy does not facilitate non-punitive leadership, participa-
Although the evidence continues to mount that progressive tion, trust and psychological safety. Instead of fostering effective
HRM has a strong relationship with improved performance participation and trust, hospitals consistently display poor
(Borrill et al. 2002; Delaney and Huselid 1996; West et al. communication among team members, which has been shown
2002), few hospitals have successfully incorporated the neces- to cause medical errors (Vincent et al. 1998; Wachter 2004). The
sary aspects of HRM (Radnor and McGuire 2004). In recogni- persistence of clinical and administrative “silos” across operating
tion of the lack of focus on best-practice HRM in the public units was identified as a factor that limited provision of quality
healthcare system, Stanton (2002) recently called for govern- patient care in New South Wales, Australia (Macarthur Expert
ments to work with local health organizations to identify and Clinical Review Team 2003).
promote HRM best practice throughout the health delivery
system. We suggest that instead of dismissing the system
problems as requiring a culture “fix,” public hospitals need to
We suggest that instead of dismissing the system problems
consider strategic investment in people management. People
as requiring a culture “fix,” public hospitals need to
management solutions need to be established now – the longer-
consider strategic investment in people management.
term health system “cultural change” that we have been told is
necessary will not happen without immediate action to ensure
appropriate human resources management. Three important
aspects are further addressed below. While progressive human resources management promotes
participation, training and teamwork, the traditional training
Effective Teamwork and socialization of the health professions tends to emphasize
Hospital care is a team process and organizational and team individual skills, accountability and achievement, underpinned
leadership needs to focus on ensuring team performance. by professional autonomy, with a reliance on hierarchy to
Although not unequivocally supported through controlled manage coordination needs and mediate conflict. Healthcare
experimental design, cross-sectional and case studies suggested staff are socialized through their training into specific profes-
that openness and participation in teams (in which members sional roles and are expected to learn interdisciplinary practice
have developed sufficient trust and psychological safety to on the job (Wake-Dyster 2001). The predominance of disci-
constructively question behaviours and discuss mistakes openly) pline-specific rewards, supervision and education continues to
were positively associated with clinical and organizational perfor- lead to difficulties with collaboration across professions. Failure
mance. This was found in different parts of the world in studies to establish effective interdisciplinary work results in service
of acute care (National Coalition on Health Care and Institute delivery that appears largely uncoordinated, requiring steps and
for Healthcare Improvement 2002), in implementation of new patient “hand-offs” that slow down care and decrease rather than
clinical procedures in an operating theatre (Edmondson et al. improve patient safety (OECD 2004: 28).
2001), in successful adoption of clinical guidelines (Merlani et Recent work on improving the quality of care has consistently
al. 2001) and within a nursing home (Yeatts and Seward 2000). identified this individual focus as a barrier to system improve-
In all cases, the team leadership was instrumental in either facil- ment (Berwick 2002; Reason 2000). Quality improvement is
itating or discouraging the necessary participation and psycho- seen to depend on a system focus, and the development of
logical safety. working styles that support the complex team-based care
There are several seemingly intractable barriers to the creation required in hospitals (Ferlie and Shortell 2001), rather than the
of effective participative teams in hospitals. The relationships existing “professional prerogatives and separate roles” of health
between doctors, nurses and other health professionals and professionals (Institute of Medicine 2001: 83). The healthcare
between the various levels of hospital hierarchy have typically industry’s approach has been compared unfavourably to that of

62 | H E A LT H C A R E Q U A R T E R LY V O L . 8 N O . 2 • 2 0 0 5
 Sandra G. Leggat and Judith Dwyer Improving Hospital Performance: Culture Change Is Not the Answer

the aviation industry, which recognizes the importance of associated with improved performance, with many organizations
teamwork behavioural skills, and, for example, requires atten- further establishing positive performance links with perfor-
dance at Crew Resource Management simulation training (Gaba mance-contingent incentive compensation (Delaney and
2000). The Bristol Inquiry suggested that one of the most Huselid 1996).
important contributors to the failure to detect and address the Over and over our people management processes undermine
quality problems was a tendency toward confidentiality and even efforts to improve the quality of healthcare delivery. Professor
secrecy about audit and quality issues (Walshe and Offen 2001); Bruce Barraclough, Chair of the Australian Council for Safety
and other authors have commented on the “code of silence” that and Quality in Health Care, argued that hospital management
sabotages interdisciplinary work (Jones 2002). needed to change to ensure frontline clinicians and nurses had
We suggest that before contemplating culture change, public the opportunity to influence management decisions
hospital management should address the requirements for effec- (Barraclough 2001). Lloyd and colleagues described the current
tive teamwork. Leadership that rests at the top of an authority empowerment of Australian health sector employees as only
hierarchy needs to be refocused to develop leaders throughout rhetoric for top-down management (Lloyd et al. 1999). Long
the organization (Shortell 2002) – leaders who have the skills to before culture change is contemplated, hospital managers need
facilitate effective participation, ensuring psychological safety systems and structures that enable effective performance
among team members. management.

Performance Management Sophisticated Training

While simple in concept, performance management has been Despite advances in some HRM practices, education and
difficult for public hospitals. Relationships between clinicians training for health staff has not been suitably adapted to provide
and managers retain much of their traditional character, with the requisite skills for effective performance in the new environ-
jealous guarding of the contested border between clinical ment. Although focused training and development has been
autonomy and management prerogative (Mintzberg 2002; found to promote effective job performance of employees (West
Southon 2003), and downright hostility in some areas. While et al. 2002), within hospitals training and development
there are some promising signs that the concept of clinical gover- programs are typically not closely linked to organizational prior-
nance is providing a new way of thinking about this problem ities and strategy (Belling et al. 2004; Holton et al. 1997;
(Braithwaite et al. 2003), the development of effective shared Newstrom 1986). One of the outcomes is poor “transfer of
goals and decision-making between clinicians and managers is training,” that is, limitations on “the extent to which trainees
a major outstanding challenge to performance management. effectively apply the knowledge, skills and attitudes gained in a
Few organizations in any industry, public hospitals included, training context back to the job” (Tannenbaum and Yukl 1992:
have sophisticated performance appraisal processes that 240). One of the key factors found to reduce transfer of training
adequately recognize, measure and reward team rather than skills, knowledge and behaviours to the workplace was lack of
individual performance (MacBryde and Mendibil 2003). The support from the organization.
literature suggested that existing employee performance manage- Despite the finding that training was associated with lower
ment systems undermined the transition to participative and patient mortality, few hospitals provide sufficient support for
no-blame teamwork and had difficulty incorporating the training and development, with healthcare professionals
systems perspective required for quality and safety improve- expected to obtain their own continuing education, on their
ments (Soltani 2003). For example, a recent study of HRM own time at their own expense. In recent years, investment in
practices in the state of Victoria in Australia found that less than training and development has been curtailed, due to misplaced
half of the CEOs of the larger hospital networks and around emphasis on budget achievement ahead of individual or organi-
25% of the CEOs of smaller hospitals reported linking identi- zational performance (Jorgensen 2004). Anecdotal evidence
fied organizational performance measures with staff perfor- suggests that, in response to public health sector budget reduc-
mance management (Leggat et al. in press). These findings tions over recent years, resources for ongoing employee training
highlight the difficulties organizations in the health sector face have been reduced. An example is the decrease between 2001
in comparison with other industries, such as manufacturing, in and 2002 in the proportion of state public sector organizations
translating organizational goals to individual and team perfor- providing training and support for staff involved in performance
mance expectations. Although many public sector organizations management (Victorian Office of Public Employment 2002).
monitor organizational performance, few have been able to link This lack of focus on training is considered to be inappropriate
the performance indicators to the managers’ and staff perfor- in comparison with other high-hazard industries (Gaba 2000)
mance goals (Griffiths 2003). Yet, the evidence is strong, and and can severely limit the transfer of training to the work setting.
at a minimum, results-based performance appraisal has been We suggest that the lack of sophisticated training and devel-

H E A LT H C A R E Q U A R T E R LY V O L . 8 N O . 2 • 2 0 0 5 | 63
Improving Hospital Performance: Culture Change Is Not the Answer Sandra G. Leggat and Judith Dwyer

opment opportunities for hospital staff has limited the effec- This study was supported by a grant from the National
tiveness of attempts to change hospital culture. Institute of Clinical Studies, Australia.

IMPLICATIONS FOR THE PUBLIC HOSPITAL SECTOR References

Despite recognition of the problems and knowledge of poten- Adamson, G. J. and L. U. Adamson. 2001. “The Chief (Experience)
Officer: A New Light in Health Care.” Health Forum Journal 79:
tial solutions, the public hospital sector has not yet been 429–57.
successful in implementing needed changes. For more than a
Australian Council for Quality and Safety in Health Care. 2003.
decade culture change has been suggested as the solution to poor Patient Safety: Toward Sustainable Improvement. Fourth report to the
performance (Barraclough 2001; Coiera 1999; Eastman 1992; Australian Health Ministers’ Conference. Canberra.
Zajac 2003), but the results have not been encouraging. We Baker, G.R, Peter G. Norton, V. Flintoft, V et al. 2004. “The Canadian
should not be surprised, as culture change has had limited Adverse Events Study: The Incidence of Adverse Events among
success in most industries. Studies typically identify success in Hospital Patients in Canada.” Canadian Medical Association Journal
changing organizational culture at 10 to 32%, with a median 170: 1678–86.
success rate of 19% (Smith 2003). Baker, G.R. and P. Norton. 2001. “Making Patients Safer! Reducing
Error in Canadian Healthcare.” HealthcarePapers 2: 10–31.
In Australia and elsewhere, hospital leadership still relies too
much on hierarchical authority as the preferred method of Barraclough, B. 2001. “Safety and Quality in Australian Healthcare:
Making Progress.” Medical Journal of Australia 174: 616–17.
managerial and clinical accountability. There is little evidence
that the existing leadership divide between managers and clini- Barraud-Didier, V. and S. Guerrero. 2002. “Impact of Social
Innovations on French Companies’ Performance.” Measuring Business
cians has been bridged, and effective multidisciplinary teamwork Excellence 6: 42–48.
is still the exception rather than the rule. The continued focus Bate, P. 2000. “Changing the Culture of a Hospital: From Hierarchy
on training health professionals (and sometimes managers) in to Networked Community.” Public Administration Review 78:
isolation, with the traditional emphasis on hierarchy, and 485–512.
individual skills, autonomy, accountability and achievement, is Belling, R., K. James and D. Ladkin. 2004. “Back to the Workplace. How
not helpful to the goal of high performance in the changing Organizations Can Improve Their Support for Management Learning
world of hospitals. Existing employee performance management and Development.” Journal of Management Development 23: 234–55.
systems undermine the transition to participative teamwork and Berwick, D.M. 2002. “A User’s Manual for the IOM’s ‘Quality Chasm’
have difficulty incorporating the systems perspective required Report.” Health Affairs 21.
for quality and safety improvements (Soltani 2003). Borrill, C., J. Carletta, A.J. Carter, J.F. Dawson, S. Garrod, A. Rees,
A. Richards, D. Shapiro and M. West. 2002. The Effectiveness of Health
Although the rate of success of organizational culture change Care Teams in the National Health Service. Aston University University
is low, the few factors that correlate with success relate to of Glasgow, University of Leeds, London.
progressive HRM. In a study of 59 culture change initiatives, Braithwaite, J., D. Black and W.J.I. 2003, “The Impact of Changing
Smith found that the strongest indicators of success for cultural Health Care.” Clinical Governance Bulletin 3: 11–12.
change were the inclusion of the change in the business strategy, Braithwaite, J. and D. Hindle. 1999. “Research and the Acute Care
performance management and management guidance (training Hospital of the Future.” Medical Journal of Australia 170: 292–93.
and development) (Smith 2003). In reviewing the failure of Brennan, T.L., L.L. Leape et al. 1991. “Incidence of Adverse Events
culture change to deliver, recent studies have stressed that “the and Negligence in Hospitalised Patients.” New England Journal of
only way to change the culture is to change the way individuals Medicine 324: 370–84.
perform on a daily basis” (Pennington 2003: 251). Bristol Royal Infirmary Inquiry. 2001. Learning from Bristol: The Report
It is time to recognize the paradox of culture change in hospi- of the Public Inquiry into Children’s Heart Surgery at the Bristol Royal
Infirmary 1984–1995 (ed., B.R.I. Inquiry). London.
tals – it is the result, not the cause, of good people manage-
ment practice (inter alia). Without this, culture change will not Clark, G. 2002. “Organizational Culture and Safety: An
Interdependent Relationship.” Australian Health Review 25: 181–89.
really happen, and won’t be effective in sustaining the behaviours
and practices managers seek. We conclude that refocusing on Coiera, E. 1999. “The Impact of Culture on Technology: How Do
We Create a Clinical Culture of Innovation?” Medical Journal of
effective people management in our public hospitals is the most Australia 171: 508–09.
direct route to improved performance. We believe the perceived Cott, C. 1997. “We Decide, You Carry It Out: A Social Network
need for change in our public hospital culture has resulted in Analysis of Multidisciplinary Long-Term Care Teams.” Social Science
some “paralysis of action,” as public sector managers grapple & Medicine 45: 1411–21.
with the complexities of the culture (and subcultures) of their Delaney, J.T. and M. A. Huselid. 1996. “The Impact of Human
organizations. Safe passage to a new, improved culture can be Resource Management Practices on Perceptions of Organizational
best enabled by a strong focus on the people management Performance.” Academy of Management Journal 39: 949–69.
practices that support high performance.

64 | H E A LT H C A R E Q U A R T E R LY V O L . 8 N O . 2 • 2 0 0 5
 Sandra G. Leggat and Judith Dwyer Improving Hospital Performance: Culture Change Is Not the Answer

Dwyer, J. and S.G. Leggat. 2002. “Innovation in Hospital Care.” Hindle, D. and T. Natsagdorj. 2002. “Treating Organizational Illness:
Australian Health Review 25: 19–31. A Practical Approach to Facilitating Improvements in Health Care.”
Dyer, C. 2001. “Bristol Inquiry Condemns Hospital’s ‘Club Culture.’” Australian Health Review 25: 171–80.
British Medical Journal 323: 181. Holton, E.F., R. Bates, D. Seyler and M. Carvalho. 1997. “Toward
Eastman, C. J. 1992. “Total Quality Management: The Challenge for Construct Validation of a Transfer Climate Instrument.” Human
Hospitals in the 1990s.” Medical Journal of Australia 157: 219–20. Resource Development Quarterly 8: 95–113.

Edmondson, A.C., R. Bohmer and G.P. Pisano. 2001. “Disrupted Ibrahim, J. and J. Majoor. 2002. “Corruption in the Health Care System:
Routines: Team Learning and New Technology Implementation in The Circumstantial Evidence.” Australian Health Review 25: 20–26.
Hospitals.” Administrative Science Quarterly 46: 685–716. Institute of Medicine. 2001. Crossing the Quality Chasm. A New Health
Ferlie, E.B. and S.M. Shortell. 2001. “Improving the Quality of Health System for the 21st Century. Washington: National Academy Press.
Care in the United Kingdom and the United States: A Framework for Jones, B. 2002. Nursing and the Code of Silence (pp. 84–100) (eds., M.
Change.” The Milbank Quarterly 79: 281–315. Rosenthal and K. Sutcliffe). San Francisco: Jossey Bass.
Gaba, D. M. 2000. “Structural and Organizational Issues in Patient Jorgensen, B. 2004, “Individual and Organizational Learning: A Model
Safety: A Comparison of Health Care to Other High-Hazard for Reform for Public Organizations.” Foresight 6: 91–103.
Industries.” California Management Review 43: 83. Kennedy, I. 2001. Learning from Bristol. London: The Stationery Office
Glouberman, S. and H. Mintzberg. 2001. “Managing the Care of Leape, L. L., T. L. Brennan and N. M. Laird. 1991. “Incidence of
Health and the Cure of Disease – Part 1: Differentiation.” Health Care Adverse Events and Negligence in Hospitalised Patients: Results of the
Management Review (26)1: 56–69. Harvard Medical Practice Study 11.” New England Journal of Medicine
Griffiths, J. 2003. “Balanced Scorecard Use in New Zealand 324: 377–84.
Government Departments and Crown Entities.” Australian Journal of Leggat, S.G., T. Bartram and P. Stanton. in press. “Performance
Public Administration 62: 70–79. Monitoring in the Victorian Health Care System: An Exploratory
Guthrie, J.P. 2001. “High-Involvement Work Practices, Turnover, and Study.” Australian Health Review.
Productivity: Evidence from New Zealand.” Academy of Management
Journal 44: 180–90.

Are you a physician leader?

Increasingly physicians are seen as instrumental participants in the management of Canada’s health care system.
The Canadian Society of Physician Executives (CSPE) can offer physicians the opportunity to develop the
necessary skills and gain knowledge to excel as leaders in these management positions.
Who should join
All physician managers, physician executives and any other physician interested in enhancing their effectiveness and
involvement in system, institutional, organization or group management.

Benefits of joining
• quarterly CSPE Newsletter — a highly valued information source for Canadian physician executives
• CSPE annual meeting — your opportunity to meet face-to-face with colleagues and learn from one another
• physician management education — developed in collaboration with the Canadian Medical Association’s Physician
Manager Institute (PMI) to provide you with the latest management skills and information
• online Q&A program — colleagues from around the country can provide answers to your most challenging
management questions.
For more information contact
Canadian Society of Physician Executives, 1559 Alta Vista Drive, PO Box 59005, Ottawa ON K1G 5T7
613 731-8610 x2254 • fax 613 731-1779 • [email protected]

Visit our web site at www.cspexecs.com

Canadian Society of Physician Executives

Société canadienne des médecins gestionnaires
Providing leadership and growth for physician managers in Canada
G
CS

E SC
P

H E A LT H C A R E Q U A R T E R LY V O L . 8 N O . 2 • 2 0 0 5 | 65
Improving Hospital Performance: Culture Change Is Not the Answer Sandra G. Leggat and Judith Dwyer

Lloyd, P., J. Braithwaite and G. Southon. 1999. “Empowerment and Shortell, S. M. 2002. “Developing Individual Leaders Is Not Enough.”
the Performance of Health Services.” Journal of Management in Journal of Health Services Research and Policy 7: 193–94.
Medicine 13: 83–94. Smith, M.E. 2003. “Changing an Organisation’s Culture: Correlates
MacBryde, J. and K. Mendibil. 2003. “Designing Performance of Success and Failure.” Leadership & Organization Development Journal
Measurement Systems for Teams: Theory and Practice.” Management 24: 249–61.
Decision 41: 722–33. Smyth, T. 2002. “Safety and Quality.” Australian Health Review 25:
Martins, E.C. and F. Terblanche. 2003. “Building Organizational 78–87.
Culture That Stimulates Creativity and Innovation.” European Journal Soltani, E. 2003. “Towards a TQM-Driven HR Performance
of Innovation Management 6: 64–74. Evaluation: An Empirical Study.” Employee Relations 25: 347–70.
McLean, J. and M. Walsh. 2003. “Lessons into the Inquiry into Southon, G. 2003. “Conflict between Clinicians and Managers: A
Obstetrics and Gynaecology Services at King Edward Memorial Structural Problem.” Health Manager 2003: 6–8.
Hospital 1990–2000.” Australian Health Review 26: 12–23.
Stanton, P. 2002. “Managing the Healthcare Workforce: Cost
Merlani, P., P. Garnerin, M. Diby, M. Ferring and B. Ricou. 2001. Reduction or Innovation.” Australian Health Review 25: 92–97.
“Linking Guideline to Regular Feedback to Increase Appropriate
Requests for Clinical Tests: Blood Gas Analysis in Intensive Care.” Tannenbaum, S. and G. Yukl. 1992. “Training and Development in
British Medical Journal 323: 620–24. Work Organizations.” Annual Review of Psychology 43: 399–441.
Mintzberg, H. 2002. “Managing Care and Cure – Up and Down, In Thomas, E.J., D.M. Studdert, H.R. Burstin, E. J. Orav, T. Zeena, E.
and Out.” Health Services Management Research 15: 193–206. J. Williams, K. M. Howard, P. C. Weiler and T. A. Brennan. 2000.
“Incidence and Types of Adverse Events and Negligent Care in Utah
Mintzberg, H.P. 1991. The Professional Organization. New Jersey: and Colorado.” Medical Care 38: 261–71.
Prentice Hall.
Victorian Office of Public Employment. 2002. Organisation Self
National Advisory Committee on SARS and Public Health. 2003. Assessment (OSA) 2001/02, Vol. 8.
Learning from SARS – Renewal of Public Health. Health Canada,
Ottawa. Vincent, C., S. Taylor-Adams and N. Stanhope. 1998. “Framework for
Analysing Risk and Safety in Clinical Medicine.” British Medical
National Coalition on Health Care and Institute for Healthcare Journal 316: 1154–57.
Improvement. 2002. Accelerating Change Today A.C.T. for America’s
Health.Robert Wood Johnson Foundation: 1–40. Wachter, R. 2004. “Encourage Case-Based Discussions of Medical
Errors.” AHA News February: 14.
National Health Service. 2000. An Organisation with a Memory.
London: The Stationery Office. Wake-Dyster, W. 2001. “Designing Teams That Work.” Australia
Health Review 24: 34.
National Institute for Clinical Studies. 2003. Factors Supporting High
Performance in Health Care Organizations. Prepared by the Health Walshe, K. and N. Offen. 2001. “A Very Public Failure: Lessons for
Management Group at La Trobe University. NICS, Melbourne. Quality Improvement in Healthcare Organizations from the Bristol
Royal Infirmary.” Quality in Health Care 10: 250–56.
Newstrom, J.W. 1986. “Leveraging Management Development
through the Management of Transfer.” Journal of Management West, M.A., C. Borrill, J.F. Dawson, J. Scully, M. Carter, S. Anelay, M.
Development 55: 33–45. G. Patterson and J. Waring. 2002. “The Link between the Management
of Employees and Patient Mortality in Acute Hospitals.” International
OECD. 2004. Towards High-Performing Health Systems. OECD, Paris. Journal of Human Resource Management 13: 1299–1310.
Pennington, R.G. 2003. “Change Performance to Change Culture.” World Health Organization. 2001. Quality of Care: Patient Safety.
Industrial and Commercial Training 35: 251–55. Report by the Secretariat World Health Organization: 1–6.
Pollitt, C. 1995. “Justification by Works or by Faith? Evaluating the Yeatts, D.E. and R.R. Seward. 2000. “Reducing Turnover and
New Public Management.” Evaluation 1: 133–54. Improving Health Care in Nursing Homes: The Potential Effects of
Radnor, Z. and M. McGuire. 2004. “Performance Management in the Self-Managed Work Teams.” The Gerontologist 40: 358–63.
Public Sector: Fact or Fiction?” International Journal of Productivity and Youndt, M.A., S.A. Snell, J.W. Dean and D.P. Lepak. 1996. “Human
Performance Management 53: 245–60. Resources Management, Manufacturing Strategy, and Firm
Reason, J. 2000. “Human Error: Models and Management.” British Performance.” Academy of Management Journal 39: 836–66.
Medical Journal 320: 768–70. Zajac, J.D. 2003. “The Public Hospital of the Future.” Medical Journal
Robbins, S.P. and N. Barnwell. 2002. Organisation Theory. Concepts of Australia 179: 250–52.
and Cases. Pearson Education, Australia, Frenchs Forest, NSW Zuckerman, A.M. 2000. “Creating a Vision for the Twenty-First
Scally, G. 2001. “Deaths in Bristol Have Changed the Face of British Century Healthcare Organization.” Journal of Healthcare Management
Medicine.” Canadian Medical Association Journal 165: 628. 45: 294–305.
Schein, E. H. 1992. Organizational Culture and Leadership. San
Francisco: Jossey Bass.
Scott, T., R. Mannion, H.T.O. Davies and M.N. Marshall. 2003. About the Authors
“Implementing Culture Change in Health Care: Theory and Practice.” Sandra G. Leggat and Judith Dwyer, La Trobe University, Melbourne,
International Journal for Quality in Health Care 15: 111–18. Australia. Corresponding author: Sandra Leggat [email protected].
Sexton, J.B., E.J. Thomas et al. 2000. “Error, Stress, and Teamwork in
Medicine and Aviation: Cross Sectional Surveys.” British Medical
Journal 320: 745–49.

66 | H E A LT H C A R E Q U A R T E R LY V O L . 8 N O . 2 • 2 0 0 5
 Culture Is the Outcome of How People Intereact Robert Smith

COMMENTARY
for best practices, whereas focusing on better people management
will. The authors are correct in shifting the focus, and, for many
Culture Is the Outcome of in Canadian healthcare, focusing on management signals a
change in reality. While few leaders would dispute that the
How People Interact culture in our organizations needs to change, it is how we go
about creating that change most effectively that is the real
Robert Smith challenge.
Fraser Health was formed almost three years ago, from the
eggat and Dwyer’s conclusions suggest that some merger of three large and integrated health regions. Each region

L
interesting challenges confront the healthcare had its own form of emerging identity as a result of earlier refor-
system across Canada. Their argument, that the mations, and many of the agencies and facilities within these
evidence suggests better management is the key for regions also had (and still have) their own unique culture. A
organizational success in hospitals rather than a reliance on traditional approach to organizational change would have been
changing the culture, should not be surprising, but given what to try to drive a high performance culture through a top-down
we have experienced, it is a decided call for action. process. Instead, our approach to fostering the development of
I am often reminded of the observation that it takes about 15 a different culture has been consistent with the approach recom-
years to create a culture and only a day to destroy it. As we look mended by Leggat and Dwyer, namely to focus on our people
at an industry that has been in the midst of major transforma- management practices. One of the key “pillars” of Fraser Health’s
tion over the past decade, we cannot help but observe that the strategic plan is “people development,” an area in which we have
cultural mosaic is in somewhat of a shambles. A renewed cultural consistently committed new investment despite quite difficult
environment will definitely take considerable time to evolve. financial challenges.
At the same time, the emergence, not only in Canada, but Fraser Health’s vision is: Better Health; Best in Health Care.
also in many other western countries, of increasing standards of To achieve this vision, we are working on developing a culture
accountability and performance reporting demonstrates that over the long term that reflects our values (respect, caring, trust)
governments also believe better management, not restoring the and supports open communication, collaborative planning and
culture, is the key to an effective and efficient healthcare system. priority-setting, continuous development and learning. A
The genesis of this thinking is not new: the plethora of provin- hallmark of achieving this kind of organizational transforma-
cial royal commissions that swept Canada in the late 1980s and tion is the development of leaders who are resilient and are able
early 1990s had a common theme: there was enough money in to motivate effective teams of engaged employees. This kind of
healthcare; it just needed to be managed better. leadership requires a shift from traditional management to a focus
As governments have created new structures in the health- on organizational effectiveness, personal resilience, team and
care system across Canada, they have done so at the same time department effectiveness and the creation of leadership capacity
as adjusting the availability of resources, particularly operating in all parts of the organization. In addition, we are moving to
funding, human resources supply and capital dollars. As Ken greater accountability and better measures of performance, in
Fyke points out in his review of the Saskatchewan system keeping with the requirements of our overall strategic plan.
(Caring for Medicare: Sustaining a Quality System 2001), a But the constant reorganization of the healthcare system that
change to one of the elements of structure, resources or culture flowed from “better management” has not been without its ill
results in a realignment of the remaining two elements. effects. In striving for the mastery of management, evidence-
Significant change has occurred over the past decade – in some based decision making and increasingly rigid performance agree-
provinces no less than three times. Together with the systemic ments with governments, we have left a legacy of increased stress
stress of limited resources, we now face a shortage of manage- that has resulted in some shortages of leaders. We are now feeling
ment leaders at a time when the industry needs greater manage- the effects of this and a renewed focus on people is clearly
ment expertise and accountability. This is truly a difficult needed. Equally important, however, is how we merge our focus
challenge for all of us, when the culture of trusting, caring and on people in building a new performance-based culture.
compassion supports a very traditional, process-oriented form Culture is “how we do things around here” (Ferlie and
of organization. Shortell 2001). Thus, it is an outcome of our daily practices and
Nevertheless, we continue to refer to changing the “organi- interactions. To change culture we must change the way we do
zational culture” as an objective or goal in the short term, as if things and, in this case, how we manage people. Peter Senge, in
this alone is the panacea to all the ills that confront us every day. an interview with Fast Company, remarked: “I have never seen a
The central theme put forward by Leggat and Dwyer is that successful organizational learning program rolled out from the
focusing on changing culture as a starting point will not allow top. Conversely, every change process that I’ve seen sustained

H E A LT H C A R E Q U A R T E R LY V O L . 8 N O . 2 • 2 0 0 5 | 67
Culture Is the Outcome of How People Intereact Robert Smith

and that spread started small” (Senge, Learning for a Change, About the Author
May, 1999). Robert Smith is President and CEO of the Fraser Health Authority.
Leggat and Dwyer identify what they found to be the three
key components in better people management practices: References
teamwork, performance management and sophisticated training. Ferlie, E.B. and S.M. Shortell. 2001. “Improving the Quality of Health
Care in the United Kingdom and the United States: A Framework for
The strategies we have recently implemented at Fraser Health Change.” The Milbank Quarterly 79 (2): 281–315.
have provided for substantial investment in all of these areas.
Fyke, Kenneth J. 2001. Caring for Medicare: Sustaining a Quality
To overcome the barrier of hierarchical relationships within System. Saskatchewan Commission on Medicare.
hospital settings, we have taken teamwork to another level and
Webber, Alan M. 1999. “Learning for a Change” (interview with Peter
developed an organizational engagement strategy at Fraser Senge). Fast Company 24(5): 178.
Health. When a significant change is taking place that impacts
practice, a large group conference brings together the full range
of people from frontline staff, physicians, nurses, executive and
consumers of the service. This process of bringing people
together in the organization who “may not normally talk to each Consumers Demand Best
other” influences our management process and contributes to
changing the culture by the very nature of the conversations that
Practice Guidelines
In a US telephone survey of almost 1,350 respondents,
take place. We experienced this recently within Fraser Health
80% of healthcare consumers want their physicians to
as we implemented significant change in our Acquired Brain
use “established best practice guidelines for treatment
Injury program and Whalley Community Health program. and diagnosis.” In other findings:
At Fraser Health, we are just in the process of implementing
an on-line performance management system (Performancelink) • 68% of respondents favoured health plans rewarding
that will link individual leaders’ performance goals to the organi- physicians with a track record of using best practice
zation’s strategic goals and KPIs. guidelines;
Simultaneously, we are phasing in our on-line 360 degree • 68% also reported that they’d choose a physician
(multi-rater) review process (Insight). The purpose of this is based on how well he or she applied the guidelines in
developmental and not performance appraisal. The focus is his or her practice; and
strictly on leadership development, using our five leadership • 74% of respondents would be likely or fairly likely to
competencies as the framework for the online tool. Individual choose a hospital based on whether it uses guide-
leaders can expect to gain feedback on their demonstration of lines.
the five Fraser Health leadership competencies and set leader-
ship development targets to improve their skills while improving The survey was conducted during November 2004 by
our organizational results. Peter D. Hart Research Associates on behalf of the
The constant forming and reforming of the healthcare system, Blue Cross Blue Shield Association.
along with the need to find financial savings, has left us with a Source: Modern Physician STAT, December 14, 2004
significant need to invest in leadership talent. Investing in the
development of our people and the future leaders of tomorrow is
a necessary prerequisite for better management and the emergence Healthcare Consumers by
of a new supportive culture for the Canadian health industry. the Number
In the final analysis, organizations are made up of people and • 23% of the uninsured US residents are actively
our organizational culture is the outcome of how our people researching or applying for health coverage.
interact with each other. If we hope for a different culture we • 19% of US consumers think that the cost of prescrip-
will need to change those interactions through bringing people tion medications are the primary reason for rising
together to engage with each other and organizational challenges healthcare costs.
in new ways. This will happen through performance manage- • 11% of digital video recorder (DVR) users report
ment systems that reinforce the behaviours we really want to see watching any prescription drug ads when viewing a
and through transformative training and development oppor- recorded program.
tunities that help people see themselves, their colleagues and • 12% of US consumers have researched health
their work in new ways. providers’ cost or quality in the past year.

Source: Forrester Research, November 16, 2004

68 | H E A LT H C A R E Q U A R T E R LY V O L . 8 N O . 2 • 2 0 0 5
View publication stats