Rouse on Transformation

A few months ago, a colleague asked me, “What if our big idea does not get approved by the powers at be?”  I said, “We will start an insurgency and just do it anyway.”  We are still waiting for approval, and may get it, but we are quickly progressing despite the lack of formal blessing.  Our idea may be too disruptive for the stewards of the status quo to fully support it, but we are determined to prove the benefits of this idea and create a tipping point of demand for these benefits.

These experiences, combined with my recent posts, caused me to ask whether there are limits to the benefits of disrupting the status quo.  Either extreme will, obviously, not work. If everything changed all the time, chaos would result.  If nothing ever changed, complete stasis would be the result.  So, is there some intermediate level of disruption that balances creativity and continuity?

The stakeholders seeking continuity usually far outnumber those pursuing creativity.  The political, business, social, and personal interests associated with the status quo are often strong and compelling.  The interests associated with creative change may be quite energetic, but typically involves far fewer stakeholders.  Thus, the default reaction is often watered down change or no change at all.

One way to pursue the question of the appropriate level of disruption is to consider the extent to which an enterprise is open to entertaining and pursuing change.  Two factors, at least, affect the openness of an enterprise to transformation.

First, to what extent is the enterprise facing crisis or opportunity?  Much fundamental change is driven by crisis.  The crisis in healthcare spending is widely acknowledged because the largest payer has balked.  Medicare and Medicaid have restricted what they will pay in order to limit spending growth.  Employers are also very unhappy.  The broadly defined healthcare enterprise is paying attention.

In contrast, the crisis in higher education is only seen by millions of individual payers who, in general, have little if any leverage.  For the higher education enterprise, the status quo is powerful and hunkered down.  Acknowledgement of the crisis will require a systemic jolt.  One possibility would be the federal government’s limiting of students loans.  The current loan program provides universities with a license to raise tuition and fees.

The flip side is opportunity.  In health delivery, medical knowledge and information infrastructure are enabling enormous possibilities for prevention and wellness, chronic disease management, and patient empowerment in general.  This is driving many ideas and inventions, some of which will surely become innovations — fundamental changes in the marketplace.

There is no lack of opportunities in higher education, many technologically enabled. However, institutional leaders are not pursuing these opportunities.  Instead, they tend to be framed as research projects, typically outside of the mainstream and funded, often marginally, by external sources.  Transforming these inventions into innovations is an uphill battle.

The second factor is the extent to which an enterprise’s dominant stakeholders feel threatened by change. In healthcare, the acknowledged crisis has resulted in the primacy of the physician being redefined, in part due to the opportunities noted above.  There are many ongoing attempts by institutional leaders to disrupt the status quo and it is quite likely that a few will succeed to transform the healthcare enterprise.

In higher education, the primacy of the professor is steadfastly maintained, and faculty governance models strongly limit the extent and pace of change.  With no acknowledged crisis, attempts to disrupt the status quo are not led by institutional leaders.  Instead, these leaders are usually recruited to be stewards of the status quo.

Change is most difficult when the role of the dominant stakeholder is threatened, whether they are physician or professor.  Institutional leaders, usually drawn from the dominant stakeholder group, are very hesitant to alienate their former peers.  Indeed, they may be oblivious to the reality of the threat.

I have encountered this phenomenon in domains beyond healthcare and higher education.  In my many years working with the U.S. Air Force, I was often amazed at how pilot-centric decision making was.  However, given that almost all the senior leadership came from the pilot ranks, it should not have been surprising that the solution of every problem was seen to be an airplane.  In fact, problems obviously not addressable by weapon systems often received little enthusiasm and attention, e.g., enterprise efficiency.

The history of change in politics and religion has also been heavily politician-centric and priest-centric, respectively. Attempts to disrupt the status quo in those domains have resulted in purges, inquisitions and many other bloody reactions.  People who have worked hard to gain knowledge, resources and status are, in general, very reluctant to relinquish power.

Returning to the question of how much disruption is enough, it is clear that the answer depends on the situation.  If the dominant stakeholders in a domain are open to change, perhaps motivated by a recognized crisis, then quite a bit of disruption may be welcomed and productive.  In contrast, if the dominant stakeholders have chosen stewards of the status quo as leaders, then investing energy and emotion in disruption is quite likely to be a very frustrating and unproductive experience.