Becker's Hospital Review

6 CEO / STRATEGY The 'strategic accelerator' healthcare CEOs need for transformation By Laura Dyrda A s hospitals across the country navigate financial pressure, workforce strain and rapid digital change, cultural transformation has moved from a so concept to a strategic necessity. For Rochester, Minn.-based Mayo Clinic Health System, culture is not a side initiative layered onto turnaround efforts. It is the foundation that enables sustainable transformation, said Prathibha Varkey, MD, president of Mayo Clinic Health System and professor of medicine and preventive medicine at Mayo Clinic College of Medicine and Science. "My firm belief is that people, not processes or technology, are the real engine and magic behind healthcare transformation and turnaround," Dr. Varkey said during an interview with the "Becker's Healthcare Podcast." Healthcare organizations have been under sustained stress since the COVID-19 pandemic, facing workforce shortages, financial pressure, rising patient complexity and widening digital gaps, particularly in rural communities. In that environment, leaders oen turn first to technical or operational fixes. Dr. Varkey cautioned that those approaches alone rarely hold. Process-driven change can backfire if it is not anchored in a strong, shared culture. "If the culture isn't strong and integrated into the work environment, these decisions around transformation can create fear and fragmentation instead of momentum," she said. Mayo Clinic anchors its culture in patient outcomes and experience. e organization's North Star is to consider the best interest of patients in every decision made. at clarity becomes especially important during periods of disruption; alignment around patients makes difficult decisions easier to communicate and sustain. "I truly believe that culture is a strategic accelerator and a key sustainability quotient in both bold transformation and turnarounds," she said. Recognize when culture needs attention Cultural erosion oen shows up before performance metrics deteriorate. Leaders who pay close attention to how teams interact can spot early warning signs. Healthy environments where teams celebrate each other, problem-solve together and challenge assumptions move the organization forward while settings where people retreat into silos, disengage or default to cynicism and blame hold the enterprise back. Silence is another red flag. "Silence is a symptom of culture breakdown. When staff or leaders stop speaking up or stop raising concerns or stop challenging ideas or stop creating ideas or offering creative ideas that could signal disengagement as well," she said. Over time, those cultural signals oen coincide with higher attrition, burnout and an excessive focus on task completion disconnected from strategy and mission. At the same time, Dr. Varkey emphasized that urgency and empathy are not mutually exclusive and that transparency can build momentum even in difficult moments. Leading people through change Sustainable change management requires as much attention to belonging and well-being as to timelines and deliverables. "At the end of the day, all change management and transformation is led by the people," she said. Ignoring the human side of change undermines long-term results. Health systems should invest in frontline supervisors, site leaders and physicians as critical to sustaining transformation, particularly during periods of rapid change. While leaders may need to move quickly, they cannot afford to disengage. ree leadership principles have guided Mayo Clinic Health System during major transitions: 1. Communication. "Communicate early and oen, and that includes when all the answers aren't necessarily clear," she said. "A clear strategy, for example, is a great way to begin sharing vision transparently with the staff." 2. Visibility. "Leadership presence matters most when decisions are hard," said Dr. Varkey. "I've personally found that small group listening sessions are particularly helpful to get unfiltered bi- directioinal conversation going." Top executives can conduct rounds, town halls and small-group listening sessions as tools to build trust and enable honest, two-way dialogue. 3. Purpose. "In a turnaround or transformation situation, remind teams of the why," she said, to keep people grounded when change feels constant and disruptive. Dr. Varkey also cautioned leaders to pace themselves and their organizations. "It's critical to realize that transformation is a marathon and not a sprint," she said. A systemwide example of cultural transformation Mayo Clinic's integrated practice model has long been a differentiator, aligning clinical practice, education and research under a single mission and strategy. at structure enables faster enterprisewide change than more fragmented operating models. Within Mayo Clinic Health System, leaders applied those same principles intentionally. About five years ago, the organization undertook a deliberate cultural shi to move from a network of hospitals and clinics toward a fully integrated health system with shared leadership, strategy and quality frameworks. "is deliberate cultural transformation that still continues in its journey has completely transformed the way we operate and think across Mayo Clinic Health System," Dr. Varkey said. e impact has been broad, touching quality, safety, digital and AI innovation, and financial performance. Workforce outcomes have improved as well, with stronger recruitment and retention year over year. "It has been really inspiring to see how our teams have come together to share resources and expertise, as well as make tough decisions and drive transformation," she said. But the road to true integration and transformation is never easy.

• Cover