Current Reviews Meeting the Challenge of Change Donald D. Davis, PhD Health-care organizations and the physicians who work in them today face unprecedented change. This change can be managed successfully through proper use of four organizational practices: strategy, organization design, organization culture, and human resource practices. A fifth practice, pursuit of continuous improvement and personal mastery, allows the physician to adapt personally to change. This article describes how physicians may use these practices to meet the challenge of change. Copyright 0 1996 by W.B. Saunders Company. Change is one of nature’s fundamental pro- cesses. Nothing is the same today as it was yesterday. This is true for all human endeav- ors, including our professions and the organi- zations in which we practice them. Organizations throughout America have been rocked during recent years by tumultu- ous change. Nowhere is this more true than in health-care organizations, whether they are private practices, hospitals, managed care com- panies, or academic medicine centers. Never in memory have physicians and the organiza- tions in which they work had to adjust to such transformation. New ideas such as teamwork, downsizing, and managed care have entered our vocabulary and are the subject of daily conversation. Yet physicians and their organi- zations are hardly prepared to deal with such change. Organizing is a potent means for managing change. There are multiple ways to organize work and workers, not all of which are effec- tive in meeting the challenge of change. This report describes how physicians may prepare themselves and their organizations to manage change successfully. To manage change suc- cessfully, physicians must pay attention to the From the Department of Psychology, Old Dominion University, Norfolk, VA. This article is based on the John J. Conley Lecture delivered to the meeting of the American Society of Neck and Neck Surgeons, Palm Desert, CA, May 1,1995. Address reprint reauests to Donald Davis, Deoart- ment of Psychology, did Dominion University, 43rd’ and Hampton, Bldg MGB-250, Norfolk, VA 23529. E-mail: dddlOOf@viper.mgb.odu.edu Copyright 0 1996 by W.B. Saunders Company 0196-0709/96/1706-0001$5.00/O following four organizational practices: (1) developing an appropriate strategy; (2) design- ing the organization to be flexible and innova- tive; (3) adopting the proper organization cul- ture; and (4) managing human resources.’ In addition, a fifth, more personal practice is important: one must learn to pursue continu- ous improvement and personal mastery. STRATEGY Strategy is the organization’s attempt to anticipate and respond to an uncertain future. Common organizational strategies emphasize the following: (1) speed and timeliness- hospitals provide helicopter transportation for accident victims; (2) quality and customer satisfaction-many private practices; (3) cus- tomization and flexibility-flexible schedul- ing of patient appointments; (4) cost-cutting and productivity-most managed care compa- nies attempt to deliver services at the lowest cost; and (5) innovation-academic medical centers strive to pioneer new practices. Some of these strategies may complement each other, whereas others may work at cross-purposes. For example, providing flexible scheduling and increasing the timeliness of service deliv- ery typically increase customer satisfaction. On the other hand, emphasis on cost-cutting and efficiency may decrease customer satisfac- tion, such as when understaffing leads to poor nursing care. In addition to these five strategic emphases, organizations must choose how aggressivethey wish to be in their competition with other organizations. One common means used to 364 American Journal of Otolaryngology, Vol17, No 6 (November-December), 1996: pp 364-367