Rallying the Forces


Jennifer Chatman studies how Kaiser drives change

Prof. Jennifer ChatmanSuccessful senior leadership and strategy heavily depend on the collective effectiveness of other leaders throughout the organizational hierarchy, according to a study co-authored earlier this year by Professor Jennifer Chatman.

 

“Effective change in organizations is elusive—most organizations fail to achieve the performance outcomes to which they aspired within an anticipated time frame, if ever,” says Chatman. “Our research shows that effective change is less about the mechanics of the change—what new technology should be put in place, what procedures should be followed—and more about how committed leaders across all levels are to the change.”

 

“This suggests that CEOs would be wise to spend time ensuring that their leaders down the ranks are fully informed and committed before embarking on major change efforts,” adds Chatman, who outlined these findings in an article titled “How leadership matters: The effects of leaders’ alignment on strategy implementation.”

 

The article, published in the February issue of The Leadership Quarterly, was co-authored by Haas PhD candidate William Self; Charles O’Reilly of Stanford University; David Caldwell of Santa Clara University; and Margaret Lapiz, vice-president of strategy and implementation at The Permanente Medical Group.

 

The researchers studied strategy implementation at Kaiser Permanente, one of the country’s largest nonprofit health care organizations. Faced with increased competition, Kaiser established a new strategy focused on quality and service, rather than cost. The plan offered tangible new resources such as a new scheduling system and redesigned call centers as well as improvements in staffing and appointment services to enable physicians to be more responsive to patient needs. A second phase sought to improve the physician-patient relationship and communication. The overall measurement of success: improved patient satisfaction. The study used data from physician and patient satisfaction surveys to measure how well the new strategy worked.

 

The study also measured the strategy’s effectiveness by the leaders’ ability to communicate to employees why patient satisfaction was critical to the organization’s success—because it had not been a top priority in the past.

 

The results indicated that the more effective both the CEO and head of a department were perceived to be, the more physicians supported the strategy.

 

Moreover, the data showed that leaders are more likely to be effective in getting employees to achieve organizational objectives—such as patient satisfaction—when the employees are shown that their leaders are united in supporting the strategy. Supporting the strategy means reinforcing it by allocating resources, addressing any opposition or resistance, and convincing employees that the new initiative is important and in their best interest to support. The paper explains, “When there was disagreement about the strategy or leaders were seen as ineffective, performance was lower.”