INTRODUCTION

This statement resonates with the experience of many staff in health care organisations, who have become accustomed to frequent and sometimes deep change and innovation. Leaders and managers in these organisations continue to experience real problems in designing and implementing change successfully. Staff are often confronted with proposals to restructure their organisations, or introduce a new method of managing, reporting on or doing their work. These proposals are usually justified in terms of improving efficiency or effectiveness but they are often met with resigned scepticism. On the other hand, there is sometimes a sense that underlying problems are not addressed, and that attempts to solve them through the implementation of new models of care, new work practices or new management methods repeatedly fail.

Contemporary approaches to managing organisational change are founded largely on the work of Lewin (1951) who suggested that an effective change process consists of unfreezing the present reality, altering it and then consolidating or freezing the new. This model is useful for managing the transition process. However, it erroneously suggests movement from and to a steady (if different) state via periods of equilibrium or of chaos and that the desirable organisational state is always equilibrium (Dooley & Van de Ven 1999). Equilibrium is an unlikely outcome in the current turbulent environment (Zastocki 1999), where organisations ‘are constantly on the edge between order and chaos’ (More 1998, p 26) and ‘change is the steady state’ (Dunphy & Stace 2001, p ix).

In such an environment there can be no template or blueprint that guarantees successful change. This chapter, therefore, does not offer a prescription for effectively implementing organisational change. Rather, commencing with an exploration of the concept and nature of change, it sheds light on two primary goals in leading and managing change in health care organisations: first, designing change strategies that will work given the type, scope, and scale of change required; and second, effectively managing the transition process to a sustainable outcome.

THE CONCEPT AND NATURE OF CHANGE

At its simplest, the concept of change means a movement from one state of being or understanding to another. Thus change can be positive or negative and can be a shift in perception or shared meaning (Whiteley 1995) as well as in circumstances or function. McKenna (1999, p 340) defines organisational change as arising either in response to environmental pressures (acting on technology, structure or people), or initiated by people in the organisation to solve a problem or take advantage of an opportunity. Nadler and Tushman (1995), on the other hand, argue that all significant change in organisations originates in the environment, and the difference is rather in the readiness of the organisation to anticipate the impact of emerging forces or opportunities for change, and move earlier or later in response.

Because change is complex, organisational theorists have developed many ways of classifying it to help confront and manage its many forms and to interpret people’s responses to it. The literature on organisational change focuses on five aspects, namely:

There is a huge literature on change, offering many different ways of categorising and labelling the types and levels of change that the authors observe and analyse, using terms such as fundamental, incremental, and evolutionary change, discontinuous and continuous change, transformational, visionary, strategic, or emergent change, change in identity, coordination or mechanisms for control (Kanter et al 1992) and corporate renewal (Taylor 2001, Rogers 2004). Many of these categorisations were developed in an era when organisations were more stable, and it may be more important now simply to recognise that the success of change will depend partly on achieving a good match between the goals and scope of change and the way it is managed and resourced.

For example, change can involve slow shifts over prolonged periods (months or years) at a more or less steady rate. It can also happen suddenly, through upheavals or dramatic events (like a change of ownership or a new government). It can involve many people or just a few. In a professional lifetime, managers and clinicians will be confronted by hundreds of small-scale, gradual changes; for example, the introduction of new treatment modalities or new information systems, and probably a few dramatic turnarounds as well. Even small scale-change (like introducing a new staff roster, or theatre schedule) can be both technically difficult and strongly resisted by those affected.

One useful model for thinking about types of change was developed by David Nadler and Michael Tushman (see Nadler & Tushman 1995), and involves two dimensions:

Combining these two dimensions results in four types of change:

Incremental changes are made in selected parts of the current organisational systems and processes to enhance effectiveness (e.g. setting up hospital-in-the-home, or implementing a new approach to occupational health and safety). Discontinuous change affects the whole organisation and fundamentally redefines its nature or alters its basic framework (such as mergers, privatisation, radical downsizing or major shifts in the organisation’s role).

In the second dimension, anticipatory change is made when the organisation sees the need for a response to changes in the industry or environment and moves before its competitors do or before it is forced to. Reactive change is made under the pressure of necessity, or when the organisation ‘has its back to the wall’ (Nadler & Nadler 1998, p 52). Anticipatory change can be difficult because staff fail to see the need for change when things are going well. Reactive change encounters different problems: people see the need, but the time and resources for achieving successful outcomes may be reduced.

In reality, organisational change rarely fits neatly into one of Nadler and Tushman’s (1995) four types, but this does not diminish the value of their model as an analytical tool. Commonly, real change has a combination of reactive and anticipatory elements. For example, an urgent and radical response might be made to unexpected budgetary overruns, shifts in government policies, or a groundswell of community sentiment about the organisation’s practices, possibly confounded by aggressive media attention or the emergence of a competitor. Forced into change mode, the organisation becomes anticipatory when it looks more broadly at environmental influences and makes changes aimed at ensuring its future survival and growth. Similarly, the definition of a particular change as incremental or discontinuous depends partly on your point of view. Consider, for example, staff of a mental health team who are confronted by a management decision to move their service from the centre of the city to a suburb ten kilometres away and from a focus on inpatient to outpatient care. The staff may see the change as extremely discontinuous, particularly if they are required to develop new skills and know-how, or their take-home pay will change. For the organisation as a whole, this change may be incremental, a step in a long-term agreed process of redeveloping services. Senior managers need to recognise the discontinuity for staff and manage this incremental change accordingly.

WHY CHANGE IS NEEDED

The forces for change in health care are many, and have been well documented (see Chapter 4). They can be recognised at four levels — the individual, the work group or team, the organisation, and the system or environment — with most operating at more than one level. For example, one significant, visible force for change in health care in recent years arises from the shifting goals and expectations of nurses, who are making different individual choices as the profession makes an historic and fundamental shift, shaped in large part by changing gender roles (a social factor), increasing professionalisation (a system issue), and the increasing complexity of health care (a technological factor).

At the work group and organisational levels, the rapid and discontinuous social, economic and technological change experienced throughout the late 1980s and 1990s have caused a fundamental shift in the structure and operation of organisations in all areas of commercial and public service work. According to Dunphy and Stace (2001, pp 4–5) successful organisations have experienced removal of old-style hierarchies and predictable career paths; development of new networks of suppliers, subcontractors and consultants which confound the once-simple concept of employee; and the rise of e-commerce which challenges ‘core notions of what an organisation is’. More (1998, p 26) notes that ‘complexity, turbulence, instability, increasing risk, unpredictability, and paradox replace simplicity and stability’.

Staff working in the health sector may recognise such forces for change in their environments, while the transformations they are supposed to have brought about may be less obvious. While the forces for change in health care organisations (in both the public and private sectors) are broad and deep, they operate in environments that are still highly regulated, with perhaps a narrower scope for innovation than the broader business world, and a slightly less turbulent environment. As well as the need for innovation, health care organisations are subject to a strong countervailing pressure for greater accountability and predictability from both government and insurance funds.

However, substantial reforms and unparalleled organisational changes are occurring in health care internationally, along with requirements for ever-greater efficiency, effectiveness and quality in times of financial constraint. Evidence of such system change can be seen in all of the following:

the replacement of stand-alone institutions by geographically networked services;

increased consumerism and greater recognition of consumers’ rights;

the flattening of hierarchical structures, leading to changed career pathways;

new accountability requirements and new ways of assessing service and staff performance;

the incorporation of evidence-based practices and lifelong learning into professional activities;

clinical accountability and clinical governance emerging as a challenge to professional autonomy, along with the codification of practice standards; and

the impact of the internet and information technology generally on techniques of clinical care, the methods of supplying support services, and the relationship between consumers and providers.

In this climate of system change and heightened consumerism, expectations about the professionalism of health care workers are at an all-time high. They are being asked to work harder, and to engage in reflective practice; to adopt new care models, and to engage in interdisciplinary teamwork; to accept closer scrutiny of what they do, and to participate in lifelong learning, all the while retaining their professional and ethical standards. The challenge then, for health care managers, is to create a working environment for their staff that takes advantage of the positive aspects of the fundamental changes that have occurred since the 1980s, while reinforcing the positive values of the traditional health system culture.

WHY AND HOW CHANGE IS RESISTED

It is not surprising that resistance to change, by individuals, or coalitions of individuals, or whole organisations, is widespread. But central to most resistance to change are varying preferences or aversions to risk-taking and a desire to maintain the benefits of the status quo. As Machiavelli pointed out, those who resist change have something real to lose, whereas the strength of support from the potential winners will depend on their answers to two questions: ‘What’s in it for me?’ and ‘Will it really happen?’ (Machiavelli, cited in Skinner & Price 1990).

When organisational restructuring threatens to change career pathways, individuals sensing uncertainty about their future job prospects and potential loss of security, familiarity, status or relationships, will respond in ways designed to minimise their vulnerability. Resistance to change, then, can be a natural behavioural response to a perceived threat of personal loss (More 1998). Resistance can also be politically motivated from within or outside the organisation, to block change that is perceived as problematic (Bolman & Deal 1997) or likely to change the power balances between stakeholders. This is particularly relevant to professional organisations, where much expert knowledge is located and jealously protected. Such resistance can also be altruistic, in support of the perceived interests of patients, younger members of the profession, or to protect the capacity to generate new knowledge.

For example, allied health staff might resist a proposed change from working in a professional structure (i.e. physiotherapy, social work, occupational therapy, etc) to an integrated allied health division for several reasons. The sources of their resistance may be professional (in this case, the fear that their autonomy and standing as professionals may be lost), cultural (a preference for the traditional way of the organisation), political (fear that the change would diminish their power and influence), social (preference to keep working with their current co-workers) or psychological (seeing only the problems and not the benefits) (Leigh 1988). All of these sources can apply to both individuals and coalitions of individuals within or outside the organisation (i.e. stakeholders) (Bowditch & Buono 2005, Buchanan & Badham 1999).

Resistance might not be to the envisaged outcomes of change, but to the way the change is being enacted and/or to those leading the change. Strategies aimed at preventing or managing resistance need to take these factors into account, along with the source, intensity, and focus of resistance (More 1998, p 39). At the same time, some resistance to change can be positive, and through challenging prevailing assumptions, plans and rationales lead to more satisfactory results. Managers need to be conscious of the many reasons people might resist change and the forms this resistance can take (Nadler & Tushman 1997); they need to have the wisdom to differentiate between dysfunctional and functional resistance and the skills to harness the latter.

CHANGE MANAGEMENT THEORIES AND MODELS

The literature on the leadership of organisational change includes many theoretical models. The management of every organisational change requires its own strategy and mix of methods and styles, tailored to the organisational context and the nature of the change — tuning, adaptation, reorientation or re-creation (Nadler & Tushman 1995).

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