Keys to leadership success in getting people to act their way to a new way of thinking

April 1,2010

With the passage of new national laws pertaining to health care, and the ever changing pressures within the existing health care environment, there appears to be the need for another look at the role of leadership. With total credit to the author, John Kenagy, M.D., I want to share with my current and past students, his refreshing and successful approach to health care leadership.


Acting Your Way to a New Way of Thinking
By John Kenagy, M.D.
Understanding human behavior opens new doors for health care management.

Scientific discoveries and new technologies promise much improved patient care. But delivering on that promise means that people must think and act differently. The history of innovation shows that it is a lot harder than most people realize.

It's just like the adage "A tiger doesn't change its stripes." Throughout my career as a physician, health care executive, academic scholar, advisor, author and patient, I have seen how changing behavior can be very difficult.

For 30 years, the basic behavior change tools in health care management have been gathering data and aligning incentives. One of the constant refrains of the current health care reform effort is "We must realign incentives."

Are data and aligned incentives the key to delivering on the promise? Let's examine the evidence.

Leading Companies Often Fail to Innovate

The health system I helped manage in the mid-1990s was an industry leader in the managed care revolution. We had integrated physicians with aligned incentives, our own health plan, an electronic medical record system, lots of data and a multitude of quality improvement initiatives. But the managed care revolution failed and eventually petered out.

Puzzled by why lots of data and aligned incentives failed, I became a visiting scholar at Harvard Business School studying industry transformation. There I discovered the topsy-turvy world of disruptive innovation.

Disruptive innovation teaches us that when the world changes, many leading companies fail to innovate. Lotus could not compete with Microsoft, General Motors could not compete with Toyota and now Toyota is challenged. American and United Airlines cannot compete with Southwest, and now Microsoft can't compete with Google. Why? Changing behaviors is a lot harder than most realize, even if it means lost business, bankruptcy or the demise of a company.

That's a depressing discovery, but fortunately there is a solution. My research at Harvard focused on the few companies that were able to adapt and change when others failed—companies like Intel and Southwest Airlines. I found these adaptive companies shared a common characteristic: an organizational DNA that was "designed to adapt."

Thinking Is Part of the Problem

For the last 12 years of working with many people around the country, I have tested, validated and improved these characteristics in the complex, dynamic, unpredictable world of health care. One discovery was that data and aligned incentives are helpful but not sufficient to deliver on their promise because it is very difficult to get people to think their way into a new way of acting. Instead, people must act their way into a new way of thinking. It's action innovation, not thinking innovation, that makes the difference.

I believe most of us understand the difference. Recent research on the neurobiology of human decision-making offers the scientific explanation. The surprising first discovery is that humans are often not rational.

We do not analyze all options when we decide to do something. Instead our past experiences create predetermined pathways for behavior that we repeat, even when those actions may not be in our best interests.We have all seen it—very intelligent people making the wrong choice over and over again.

For example, in doing consulting work with Microsoft, I spoke with many brilliant people who had worked in failed IT companies before coming to Microsoft. I remember an executive explaining how it felt to be a senior manager at Digital Equipment, one of the world's greatest technology companies until it crashed and burned in the mid-1980s.

He said, "We would sit around the management team table, analyze all the data and come to a decision, but all of us had, in the back of our minds, the thought, 'Here we go again, this isn't going to work either.'"

The Science Behind the Experience

If you want to change behavior, you need more than data and aligned incentives. Behaviors are driven by beliefs. To change behavior, you must first change beliefs. This is where the neurophysiology of decision-making comes into play.

Our beliefs do not reside in some anatomic filing cabinet in our brains. Rather, f-MRI studies show beliefs are generated by complex recurrent firing of patterns of neurons accompanied by subtle but very specific changes in hormones and neurotransmitters. This brain activity is developed by experience and linked to the feelings that experience engenders.

In other words, we are not rational but we are sentient. Our brains are hardwired by experience and feelings. The stronger the positive feeling and the more frequent the experience, the more we become hardwired to respond in the same way.

To change behavior you must first use experience to change beliefs; you have to act, not think. Experience generates feelings that inform future experiences. The more positive the feelings and the more direct the link to experience, the more likely beliefs are to change. When beliefs change, behavior changes.

So, you can't think your way into a new way of acting; you have to act your way into a new way of thinking.

We have all experienced this phenomenon. I saw it in action when I worked in a Harvard Business School research project to better understand the Toyota Production System. The "thinking" approach says we will change peoples' behaviors by implementing "lean" process improvement tools. I worked with Toyota experts for two years, but I was never taught a lean process tool.

Instead, I was constantly told to go the workplace, understand the work through observation, then engage in small experiments to change the work in concert with front-line staff. This experience, experience, experience close to the work—not thinking, thinking, thinking in meetings—made the difference at Toyota. I wonder now if thinking about how to become the world's largest automaker has become part of Toyota's current problems.

Prove That Action Works by Acting

I have rigorously tested experiential change management in health care for the last 12 years in many different environments. It works. Here are the keys to leadership success in getting people to act their way to a new way of thinking:

1. Set a clear, simple and meaningful direction.
2. Develop and empower people; it's people, not technology, that make the difference.
3. Build trust and optimism through positive results in problem solving the needs of patients.
4. Solve those problems as real-time experience, close to the work, not in meetings.
5. Grow by repeating your success and relentlessly challenging the status quo.

The results are always positive. For example, in one year, staff on a Midwestern hospital medical-surgical nursing unit changed their behavior to generate the greatest increase in patient satisfaction in a 17-hospital system, while simultaneously increasing productivity 14 percent, decreasing length of stay 8 percent, and generating $1.7 million in new revenue and savings.

Action Innovation Opens New Doors for Leadership

New technologies offer the promise of wonderful improvement in patient care. But we will never achieve that promise without changing people's behavior. That means more than gathering data and aligning incentives.

Fujio Cho, Toyota's chairman, said it well: "No mere process can turn a poor performer into a star. Rather you have to address employees' fundamental way of thinking." The recent evidence that Toyota management ignored brake problems in a "culture of secrecy" for years suggests that they forgot that this lesson also applies to leadership.

Behaviors are driven by beliefs. Beliefs are formed by experience and feelings. Instead of thinking your way into a new way of acting, you act your way to a new way of thinking.

Our brains say it's so. Leading people to act their way into a new way of thinking opens new doors for health care management.

John Kenagy, M.D., is a physician, patient, former visiting scholar at Harvard Business School and author of Designed to Adapt: Leading Healthcare in Challenging Times (Second River Healthcare Press, 2009).

This article 1st appeared on March 22, 2010 in HHN Magazine online site.