Whether the battlefield is risky is immaterial, for the battle is joined. Some individual hospitals may decide to remain solo or stay in modest-sized systems where problems are more manageable, at least until some future time when some of the cloud over the battlefield has dissipated. But for most, the name of the game is "go system" (Daugherty 649). The second understanding is the need to get under control the elements of change management that can reduce risk and maximize chances for success. Like surgeons dealing with high-risk surgery, we need to control as many factors as possible surrounding this operation if we are to increase chances for success. Current experience suggests that hospital chains are putting their first standardization efforts into clinical protocols where potentially huge gains can be made in both quality and cost), finance get common financial reports for apples-to-apples measurement and consolidated reporting, information systems a common basis for communications and a key foundational element for future standardization work, and purchasing initially for substantial cost reduction, with future cost reductions coming from reducing the number of suppliers and supply variations (Green et. al 155).
These are commonsense approaches that should produce substantial benefits. However, this primarily economic and data-driven thrust is a flawed strategy that may prove inadequate for long-term results. The risk is that while standardizing these limited areas, the rest of the organization's functioning will remain widely variant (Cohen 560). Unless clinical care protocols are really driven home, and unless support services procedures, human resource practices, and the culture itself become more standardized, the economic initiatives will provide only short-term balance-sheet improvement (Sachdeva 190). Systems in their current state of evolution face a number of other risks:
Failure to build a business. Already we have seen the Illusory System, in which managers construct an organization rather than building a business (562). The assemblage of ill-fitting units makes it appear that there is a cohesive regional or national organization, rather than the uncomfortable grouping that is more often the case. Consolidation is insufficient and represents failure if there is no subsequent evolution into excellence (Daugherty 650).
Too much autonomy. Some chains, in their discomfort over the control issue that is part of standardization, will fail to address it. The...
In some instances, wise managements are allowing each operating unit to pursue its own course. Local control definitely has some value when a best practice approach has not been determined (Wellington 38). However, once it is shown that one approach or another has proven itself, can top executives continue to allow lower performance results in approaches that have not produced? To some degree local control may be a luxury, particularly after better approaches are known, for it multiplies work and prolongs the time until all units are functioning at better levels. Local control assumes the specious argument that talent levels are the same in all units that each has the ability and time to do the work, and that each can achieve better performance.
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