THE HEALTHCARE SYSTEM is in a dynamic tension between models of the past and the need to evolve. This is reflected in healthcare organizations operating within a volume-based structure while transforming to drive value-based outcomes. Compounding this business model issue is the introduction of technology advances, education reform, payment shifts, and workforce dynamics that require healthcare leaders at all levels to develop competency for adapting, adopting, and leading innovation.

Innovation leadership has been wrongly associated with brainstorming, sticky notes, technology adoption, and entrepreneurial activities. From a complex systems viewpoint, true innovation leadership skills are about adaptive problem solving, building a culture of improvement, facilitating a growth mindset, supporting proactive thinking not reaction, and preparing organizations to stay relevant in the face of changing market factors. But what makes a leader or an organization innovative?

Innovation continuum

Innovation occurs on a continuum but not in any defined order. According to Kahan, the continuum exits from subtle to disruptive. Subtle innovation includes small but powerful changes to the current product, system, or process (doing things better). Trying new things falls in the middle of the continuum. At the far end of the continuum is disruptive innovation (making old ways obsolete). With subtle innovation, little effort or risk is involved. At the disruptive end, innovation can be difficult, risky, and take significant time and resources.

The innovation continuum also contains the often-forgotten process of exnovation that must occur after any innovation. Exnovation is the process of consciously pausing after an innovation cycle to ensure the old way of doing things is removed after the new process is put into place. If they don’t exnovate, organizations can create legacy systems, which can lead to inefficiency, duplication of work, and even slowing or sabotaging innovation.

How to lead a culture of innovation

In an innovation culture, every member of the team is actively involved in adapting to work changes, looking for signs that the status quo should be challenged, and participating in the change process. In a stagnated culture, on the other hand, teams rely on leadership for answers, information is sparsely shared, and teams compete against each other instead of supporting the system.

Evidence suggests that in noninnovative cultures, burnout, turnover, workarounds, and failed change initiatives increase. These are obviously not norms that suggest high performance or the ability to adapt to change. Leaders must be skilled in recognizing cultures that stifle innovation.

As a leader, you can support innovation cultures in three ways.

1. Champion information sharing. When you provide the right information at the right time, you increase the likelihood that the team will process that information and make informed decisions. In the absence of information or if the team receives faulty information (rumors, lies, assumptions), they’ll create storylines to fill in the gaps. If your team is using faulty information, their decisions won’t meet the  desired outcomes. Instead, make information sharing a priority through huddles, electronic updates, and regular check ins. This sets the cultural norm that decisions based on evidence and information are desired and facilitated.

2. Build a formal and informal team network. With “boundary spanning,” you can help the team create meaningful connections and relationships with other teams inside and outside the organization. Building the team network (connections and relationships) increases information sharing. Isolated teams don’t have the relevant information, relationships, and resources they need to understand or drive innovation.

3. Create a shared, rather than individual, vision. One misconception of leadership is that the individual leader must create a vision and sell it to the team. This approach has failed in many companies, including Blockbuster, DeLorean Motor Company, and Kodak. Creating a vision with team members and their network increases the likelihood for buy-in and a trajectory that’s relevant to an organization’s complex factors. Individual visions frequently fail because the leader can’t see the system’s complexities and unintentionally forces a personal agenda.

Culture plays a big role in creating high-performing systems and successful innovation. Leaders are critical to creating that culture and supporting the norms. The leadership practices you adopt have a direct impact on your team’s ability to adapt, change, and perform.

Systemness vs. innovation

A constant struggle for healthcare leaders is the balance between system optimization/standardization and creating/ adopting innovation. High-performing organizations have integrated the role of performance improvement and innovation. Organizations that focus solely on performance improvement will only optimize what’s currently known and won’t adapt to new challenges. And organizations that focus solely on innovation will create many novel solutions but fail to optimize them for organizational  efficiency. Only organizations that combine both can become efficient at adaptation and systemness.

The same is true for leaders. Those who focus on transaction may be good at creating systemness at the expense of adaptation, and those who focus on transformation may guide lots of inefficient change over time. Leaders who see the complexity of the system, however, can balance both and leverage different tools at different times depending on the needs of the team or organization. (See Leadership’s impact on innovation.)

Innovation through the lens of the leader

Individual leaders frequently are expected to be the problem solver. This may work for simple management-related problems, but for complex change and adaptive problem solving, like innovation, the leader’s role changes. To facilitate innovation and system change, you must create the initial conditions for change to occur and then keep the team moving toward the solution.

You have specific roles to play at each phase of the innovation cycle—inspire, ideate, and impact. (See Innovation cycle.)

Inspire

During the inspire phase, you have two roles. First, you must help the team understand—through information sharing or meaning making—the environmental factors that have created the need for change. For example, if an innovation is needed in operational work, you can frame the competition pressures, the financial needs, and the evidence that an innovation is needed. You also can supply resources and documents and facilitate conversations to help the team better understand the need.

Second, you must create opportunities for solutions. In this role, you help the team focus its efforts on innovation that aligns with the organization’s needs, strategy,  and capabilities. Be careful not to restrict idea generation; instead, help align ideas to focus on areas that the organization can support. Innovation without support will frustrate everyone.

Ideate

During the ideate phase you want to remove your formal leader hat and participate. Share ideas, contribute during brainstorming, and interact with the team. Your leadership lens adds value to this process but avoid dominating or influencing the process. If that happens, innovation will skew toward what you think is best rather than letting the ideal solution emerge.

Impact

Your role during the impact phase is to gather resources and facilitate. Find, allocate, and leverage resources to support piloting solutions and measuring their impact. You also should help remove organizational and political barriers that might slow the innovation process. You can do this by guiding conflict resolution, embracing crucial conversations, and building the business case for the change in collaboration with the team and other organizational stakeholders.

Dual transformation

The current healthcare environment’s complexity can make leaders hesitant or unsure of how to begin the transformation process. Thinking about putting today’s revenue and stability at risk for an uncertain and unpredictable new model can be daunting. Anthony and colleagues offer the perspective that two transformation models can co-exist. Much can be learned by operating within the existing model (transformation A) to continue the organization’s existence, while also investing in a new model (transformation B) with identified, separate, distinct resources and different metrics of success and key performance indicators. The tension between the two models is dynamic and can create anxiety, but when organizations invest in and actively use the dual transformation model, it can be seen as “self-disruption” (disrupting your own operating model from within).

Take the journey

Leadership and innovation exist synergistically when you create environments that embrace risk, innovation, and creativity. You must reimagine the current healthcare business, clinical, and care models and be daring enough to support and create a discovery journey with innovation paths and expertise built in your organization. However, you must first take the journey yourself, consider your innovation leadership style, model the behaviors, and help others go places they haven’t yet imagined.

Cole Edmonson is the chief clinical officer at AMN Healthcare in Dallas, Texas. Dan Weberg is the senior director of innovation and leadership at Kaiser Permanente in Oakland, California, and coauthor of the book Leadership for Evidence-Based Innovation in Nursing and Health Professions.

Selected references

Anthony SD, Clark GG, Johnson MW. Dual Transformation: How to Reposition Today’s Business While Creating the Future. Cambridge, MA: Harvard Business Review Press; 2017.

Kahan S. The innovation continuum. Seth Kahan’s Visionary Leadership. visionaryleadership.com/the-innovation-continuum-incrementalimprovement-to-total-transformation

Kimberly JR. The exnovation conundrum. Penn LDI. April 29, 2014. ldi.upenn.edu/voices/2014/04/29/the-exnovation-conundrum