Why culture disruption is vital for healthcare transformation

Robert Richman

Culture architect, keynote speaker, consultant

Why culture disruption is vital for healthcare transformation

19 October 2020 | 17min

Quick Takes

  • Transformation simply means; a) a current state that is not working, b) a new desired state that would solve the problems, and c) a mysterious middle transition through the unknown

  • As a first step to transformation, we must come face-to-face with the underlying truths that define the current culture of healthcare and the patient relationship with healthcare

  • Tried and tested hacks that can help disrupt healthcare culture (and thus healthcare) evolve around transparent and meaningful communication

The power of delivering value to drive change and culture disruption

It was a bet.

And a risky one at that. 

Do you bet on becoming the biggest shoe store in the world? 

Or do you bet on being the best customer service company in the world?

At the time, not all shoe companies would let Zappos actually send the shoes. They would do it on their own, and sometimes ship out very late, thus creating an awful customer experience. Drawing a line in the sand, the company insisted – Let us deliver the customer experience, or we will not sell your shoes. And on that day 25% of the brands were cut off. 

It was painful. A lot of revenue was suddenly gone. But by committing to service first, the brand was built, and Zappos became BOTH the #1 customer service brand (according to American Express customers) AND the biggest shoe store in the world… because all those brands eventually came back. That’s the power of committing to a value before a result. 

Zappos set the new standard for customer service (NOTE: Zappos.com is an online shoe and clothing retailer based in Las Vegas and was bought by Amazon.com in 2009). Most other retailers soon followed with free shipping, free return shipping, and a high-level of phone based (read: human) service. In other words, the company changed online retail as an industry. 

Zappos delivers a high service level (90% Net Promoter Score®, or NPS® in 20091,*). NPS is a management tool that can be used to gauge the loyalty of a firm’s customer relationships. It serves as an alternative to traditional customer satisfaction research because it tests for desire to promote the product or service, rather than personal satisfaction. Based on the global NPS standards, any score above 0 would be considered “good” (50 and above being excellent while 70 and above is considered “world class”).

The success of this high NPS score is based on two hypotheses (bets) that proved to be true:  

  1. People who love to be of service deliver great service
  2. When employees are treated well, they treat customers well 

Could this be the same for hospitals? 

To answer this, I turned to the person who originally connected me with Zappos: Dave Logan, coauthor of Tribal Leadership. He and I went to Georgetown Leadership Coaching school together, and we met Tony Hsieh (CEO of Zappos)..  

Dave Logan is a top-ranked global keynote speaker, and he left at the top of his game. He felt a calling to transform healthcare and became Chief Transformation Officer of P3 Health Partners and then CEO of California Medical Association (CMA)’s Wellness company. 

I went into the conversation expecting a few tips that could help translate my culture knowledge into relevant strategies for hospitals and healthcare clinicians. I didn’t realize there is an opportunity to transform the entire healthcare system. 

Rethinking healthcare culture

Why culture disruption is vital for healthcare transformation, in article image 01

Here’s what we’ll cover:

  1. The current reality
  2. What drives culture
  3. A new metaphor for the future of healthcare
  4. The riddle to solve
  5. How to hack the system immediately

1. The current reality

All change starts with telling the truth.

Dan Sullivan, founder of Strategic Coach

To really go into the culture of the patient relationship, let’s address the underlying truths of the situation currently defining healthcare culture:

A successful hospital means a high quantity of care, according to the old paradigm

Healthcare systems traditionally follow a fee-for-service model, which is rather dependent on the quantity of care. Therefore, the more tests and procedures performed, medication prescribed, and services delivered the higher the revenues. From a revenue prospective, it’s absolutely fantastic. But from a society perspective, it’s the opposite. 

This model is now being challenged and there is a shift towards value-based health care, which aims to incentivize payments based on the quality and outcomes of patient care.

No one wants to go to a hospital

There are times when people need to be in the hospital. And how many people have you heard, outside of delivering a child, that someone is happy about being admitted? There are known incidences of medical complications and experiencing a severe adverse event that can lead to serious disability, or death is a reality2 – which is certainly a topic that catches mainstream media attention. 

It is therefore not surprising that people generally avoid going to the hospital, unless they feel it is absolutely necessary. And now with COVID-19, hospitals are an even scarier place to be. 

Society wants empty hospitals

Hospitals are absolutely vital, especially for natural disasters, pandemics and emergencies. So the ideal is to have a lot of healthy people who don’t need to go there, but still have a lot of empty hospitals, should we need them. But imagine being a hospital CEO with lots of empty beds. It’s important to note that a lot of progress has been made here already. For example, Kaiser Permanente (KP) is several organizations in one, including a health plan, the medical group (where the doctors work), and the facilities. 

KP is generally paid an amount of money to care for a person, not extra if they receive more treatment, so it’s not in their financial interest to hospitalize someone unless they really need it. That’s a rare example of the interests being aligned but is the future. Until the future gets to everyone, we’re in a weird spot where, for many of us, hospitals make money if we are there, whether we need it or not.

Healthcare plans reward the sick care model

Healthcare plans often do not pay based on keeping people healthy and out of the hands of doctors and hospitals.  There are competing interests between hospitals, doctors and health plans. (Unless a patient is an integrated system like Kaiser Permanente. KP, the largest nonprofit health plan in the United States, is renowned for the tight integration of its clinical services. KP closely coordinates primary, secondary, and hospital care; places a strong emphasis on prevention; and extensively uses care pathways and electronic medical records.) 

People are frustrated with their insurance plans because they spend a significant part of their income on health care. In the US, healthcare spending grew 4.6 percent in 2018 reaching $3.6 trillion or $11,172 per person, which accounts for 17.7% of the nation’s Gross Domestic Product.3 What’s more, in these uncertain pandemic  times, they don’t even get to use it. “People are angry, and there’s a reckoning coming,” Dave Logan says.

The patient experience is extremely frustrating

Healthcare is confusing to the patient. On one side there is the experience itself, with a lot of waiting and bureaucracy. On the other side is financial confusion. Dave Logan himself needed to hire an accountant to figure out his bills when his wife was admitted for cancer surgery.  “I got 14 different bills: Labs, doctors, the hospital, the anesthesiologist, insurance co-pays… It all came out to $30,000 even though I was insured. I had to spend a lot of time until I finally got it down to $200. But most people don’t have the knowledge, time and money to do this.” 

If Dave Logan was at Kaiser Permanente, he would have gotten one bill rather than 14.  This kind of frustration means the industry is ripe for disruption by integrated providers or from tech companies that figure out a new model. 

So the question becomes is it truly possible for:

  • A business model that rewards keeping people healthy and out of hospitals?
  • A patient experience that people love?
  • A culture for clinicians where they love to work?

All at the same time?

Can CEO’s, doctors, nurses, patients and health plan providers all be… happy?

All at a moment when 50% of clinicians have been furloughed, and the population is extremely frightened?

If this frustrates you, then good. 

If this confuses you, excellent. 

Teaching 1000’s of people about culture, I’ve realized that these are the motivating emotions that lead to change.  

We’ll start with the high-level approach to shifting this culture, and get down to very specific techniques and hacks that CEO’s and their teams  can use, no matter what level of authority. 

2. What drives culture

First is this basic level understanding, from my book The Culture Blueprint: The Step-by-Step Guide to the High Performance Workplace.

Culture exists in language. 

Culture is people, and what connects people is language. All requests, promises, invitations, commitments and expectations happen in language. So any culture disruption happens at the level of communication. 

Values drive behaviors

These are not the values on the wall, these are whatever the organization actually rewards. For example, an organization can say they value work/life balance, but if the people rewarded are those who come in every weekend, then another value is driving that behavior.  To determine actual values (versus stated values), simply look at where money, time, resources, and conversations are going. 

Agreements hold culture in place 

This can be very simple or very complex. For example, it’s basically an agreement that a worker does a set of tasks and gets paid a certain amount. Some agreements are very overt, such as contracts. Some are implicit and unstated (and some know the rules and others do not).  

The strongest cultures are those that are clear on agreements and everyone is bound to the same ones. For example, at Zappos employees literally sign a contract and state an oath to uphold the values. When agreements are explicit, there is no misunderstanding of commitments. 

3. A new metaphor

Dave Logan’s extensive conversations with hospitals, doctors and healthcare plan executives have led him to create a transformational metaphor. And transformation simply means:

a) A current state that is not working

b) A new desired state that would solve the problems

c) A mysterious middle transition through the unknown

The metaphor Dave Logan uses is the Exodus out of Egypt (using the Bible as a historical metaphor, not as a religious statement of any kind). 


“In Egypt the Pharaoh is driving people to make more bricks in less time with fewer resources. That’s what’s happening for doctors and nurses. We have fewer clinicians who need to see more people, and all at the same salary level.”  

And, like the slaves in ancient Egypt, clinicians are feeling burnt out.

“Physician suicide is one of the highest of any industry.4,5 You have doctors who are tired, burnt out, abusing substances, have issues at home… and these are the people we are supposed to trust with our lives?” 

Dave Logan believes that the leverage point in the system is the wellness of our physicians, nurses and other clinicians. “There’s a sacred relationship between the doctors and their patients.  When physicians are not at the top of their game, and fully able to connect, that’s when patients notice something is wrong. They might be a little less eager to go to a referral or fill a prescription.” 

FUTURE STATE – The promised land – After the Exodus from Egypt. 

The desired state is a system that works well for everyone:  Hospitals, clinicians, health plans, patients, and all of society.  All are rewarded for keeping patients healthy. Clinicians are working at the “top of their licenses.”   This means using the full extent of their education, training, and experience, versus some clinical settings estimating  upwards of 80 percent of medical professional time may be spent performing activities such as clerical tasks that do not require a physician’s level of training. 

Dave Logan paints the picture like this:

“The experience patients are used to is spending a lot of time waiting, then more waiting in another room, then explaining everything to an assistant. Then explaining everything again to the doctor. That doctor often focuses on the current problem rather than the totality of the patient’s well being. Then the patient is supposed to talk to the overworked receptionist for the next appointment, but gets frustrated. I’ve heard many receptionists say that as many as 50% of patients just walk away. Some don’t realize they need to stop. Others are just fed up.

“In a new model, the patient comes in and the doctor is waiting for them. The doctor knows their history, and keeps up with their health progress. Perhaps they use technology like an Apple Watch to see how they are doing. And before leaving, the doctor schedules the next appointment right there, often sync’d directly to the patient’s calendar. In the new model, healthy patients would need very little time, or perhaps do their visits over telehealth. The sick patients would get more time because they need it.

Barry Bittman MD is the CEO of the Institute of Innovative Healthcare. He works on initiatives in comprehensive care (vs episodic care). He says in the current model, hospitals are paid by the service, regardless of the quality of care. 

Barry Bittman said that, “When the model is based more on subscriptions (being paid a set fee per member per month), that means steady income. It eliminates the need for back office billing collections, and hospitals can dedicate dollars to keeping people healthy.”

Bittman added that the immediate opportunity is to look at readmission penalties. 

“That money could be spent on communities. For example, pre-med students can be hired inexpensively as health coaches who can drive seniors to appointments and educate them about correctly taking their medications. 

In this scenario, physicians can focus on preventative care such as colonoscopies, diabetic screenings, and mammograms.


“Everyone in the healthcare system is in bondage, and they’re looking for Moses to guide them to the Promised Land,” said Dave Logan

Logan also says that the only way that will happen is by bringing people together to discuss it.  All parties, including patients, in order to have a conversation about what’s best for the patient, and how we keep clinicians well. 

“Everyone is essentially asking – How do we enter the Promised Land together? Because the current system is about to break. We have to do this well, or everyone loses.” 

Dave Logan says it starts as simply as having lunch. Because it has to start somewhere. 

4. The riddle to solve

I’ve found the most disruptive breakthroughs have a theme.  They start with removing something everyone believed was essential. The iPhone started by eliminating the keyboard. And that was thought of as outrageous at the time. Uber created the biggest transportation company by eliminating the need to own cars. Netflix was all about DVD’s, until they disrupted themselves by taking out the DVD’s.  And this goes back to the 90’s but Zappos is a shoe store… that eliminated the store. 

Whether it’s the entire business model, or simply a feature in the system, ask…. 

“What if we removed _________?”

The answer won’t come immediately but allow yourself to hold the paradox:

How can Hospitals be paid to create capacity rather than filling rooms? 

It’s very tempting to get lost in the day-to-day problems without facing these larger issues because they’re too overwhelming. But sometimes a simple focus like this can be revolutionary.  

Take the story of Alcoa Steel and CEO Paul O’Neill.  He was brought in to turn around a company that was heading down, and shareholders expected him to slash staff and plants, but he had one plan:  Focus entirely on worker safety.  They didn’t have a bad record, but to O’Neill, one death or serious injury was too many. 

Investors thought he was crazy and that he would run the company into the ground. But by focusing on worker safety (which all workers care about), all workers had to be excellent at their jobs. That excellence drove efficiency, and that efficiency saved the company.  Not only did he return 5x returns for investors, the employees created a mural of him for saving their lives. 

What would be possible if hospitals created environments for clinicians to be at their best? They would be empowered to take the time needed to truly care for their patients, and work at the top of their license.

5. How to hack the system immediately

Why culture disruption is vital for healthcare transformation_in article image 02

Now we go from a high level 50,000 feet view, down to boots on the ground. These are tried and tested hacks that can help transform healthcare culture (and thus healthcare) immediately. 

Team-based operations

Ashleigh Rodriguez, Director of Health Education at Heritage Provider Network (and works with Dave Logan) says that team huddles (regular discussion in which attendees address key performance indicators and areas of improvement) are key but many groups simply don’t do it. Also, learning how to listen to each other. “In faculty meetings, experts talk over each other, rather than really listening,” said Rodriguez.   And bringing in patients for the meetings can bring a new dimension of understanding. 

Implicit to explicit agreements

When Dave Logan and I were at Georgetown Leadership Coaching together, we learned about the power of expectations. The instructors asked us to think about a time we were disappointed in another person (you could do this right now as you read this). Without the class even answering, the instructor said, “I bet it’s only one of two things: 1) Someone didn’t do what they said they would. 2) It wasn’t clearly said, but you expected someone to do something and they didn’t. 

Almost all of the culture work I do is taking the implicit (which is where politics and favoritism lie), and making it explicit (known to all, and clear). The most important of these are the agreements. If there is clear, explicit agreement (and this is to a role, a task, a project, anything) then expectations are easily managed. If not, there are hurt feelings and misunderstandings. This goes for the big things – For example, when I was at Zappos we signed a contract to uphold the core values – To the small things – Are we agreeing to say “Please” and “Thank you”, or are we agreeing to remove the pleasantries for speed? 

The (internal) feedback hack

Most feedback systems do not work because the data isn’t revisited, or people don’t feel safe enough to share what they really feel. Here is how to hack that, in language.  Have people ask this question,“Would you please tell me what you think I don’t want to hear?”  But not through a survey or email.  Instead have a direct eye-to-eye connection so that it becomes an authentic and vulnerable experience for both parties.  This specific line authorizes people to tell the truth. And since it’s face to face, the receiver is now accountable to the giver to either respond or do something with the information.  When I introduced this hack to Westin Hotel’s International Leaders, the COO did it right there with his staff.  And years later hotel managers still talk about that moment. 

The Feedback hack builds relationships by tapping into what’s not being said.

All change starts with telling the truth. 

Deep systemic change to redefine healthcare culture

You may not know the answers about how to go through the desert to the Promised Land, but here is some good news — you don’t have to! 

The answers are there in the minds of your people, if you can harness their best ideas and surface the issues to be resolved. After working with many Fortune 500 companies, I’ve found that this is the most efficient way to drive change. Leadership picks the direction and conversations are crowdsourced, as well as the work. It can be done in-person or virtually. One example of an open-source format that I find successful to work with is called Open Space Technology.

Empowering each individual is important because true culture disruption or change is never the result of one person. We are all part of a network. And in a computer network, the most powerful person is not the IT person, not the CTO, not even the system designer herself. It’s the hacker…

The hacker is not only a position without authority. The hacker is not even authorized to be in the building. But what hackers do is find the vulnerabilities within a system and then exploit them. Traditionally, hackers are associated with malicious intent. But hacking principles can change a system for the better. 

It’s tempting to resign ourselves to inaction when we believe we can’t change the entire system. But we each have our own unique levels of access, influence, and resources to make a change, or at least open up a civil dialogue. If each node in the system acts with this hacker mindset, the entire system will change. 

*Net Promoter®, NPS®, NPS Prism®, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld. Net Promoter Score℠ and Net Promoter System℠ are service marks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.

Robert Richman is a culture strategist and was the cocreator of Zappos Insights, an innovative program focused on educating companies on the secrets behind Zappos’ amazing employee culture. As one of the world’s authorities on employee culture, Robert is a sought after keynote speaker at conferences around the world and has been hired to teach culture in person at companies like Google, Toyota, and Eli Lilly. He has pioneered a number of innovative techniques to build culture, such as bringing improv comedy to the workplace. Robert graduated from Northwestern University with a degree in film, as well as from Georgetown University’s Leadership Coaching Program.


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