Can you recognize the winds of change?

On February 3, 1960, in Cape Town, South Africa, British Prime Minister Harold Macmillan addressed the South African Parliament at the end of a month-long tour of the African continent.

"The wind of change is blowing through this continent, and whether we like it or not, this growth of national consciousness is a political fact. We must all accept it as a fact ...," he said.

South African Prime Minister Henrik Verwoerd, architect of the apartheid system, stood firm and replied: "The tendency in Africa for nations to become independent, and at the same time to do justice to all, does not only mean being just to the black man of Africa, but also to be just to the white man of Africa. We call ourselves European, but actually we represent the white men of Africa ... who brought civilization here."

This exchange, and Harold Macmillan's "wind of change" speech, became a watershed event in the modern history of Africa. It marked the end of colonial rule and ushered in the movement of African independence, albeit fraught with war and bloodshed for the next 30 years until apartheid was officially dismantled.

Macmillan's speech is also popularly (and inaccurately) known as the "winds of change" speech. Macmillan himself seems to have given in to this popular misquotation, naming the first volume of his memoirs Winds of Change. Whether referred to as "wind of change" or "winds of change," the phrase describes the awakening of the collective conscience of a nation that has come to believe that change begins with each individual.

Prime Minister Macmillan foreshadowed a time when people throughout the world--not only in Africa--would receive help to achieve independence.

For example, "Wind of Change" is also the title of a powerful ballad written in 1990 by Klaus Meine, vocalist of Scorpions. The lyrics celebrate the political changes in Eastern Europe at that time, such as the fall of the Berlin Wall, the increasing freedom in the communist bloc (which would soon lead to the fall of the USSR), and the clearly imminent end of the Cold War.

Winds of change at work

In the broadest sense, "wind of change" represents any pervasive influence that brings about change. Many physician executives face winds of change at work; it is virtually unavoidable in large organizations because social and economic forces often collide to result in change or destruction.

Too often, however, physician executives fail to recognize the winds of change. Worse yet, some physicians do not heed the warning signs of change even when those signs are obvious. Their resistance is reminiscent of Prime Minister Verwoerd's refusal to yield to the winds of change in Africa.

In the song "Subterranean Homesick Blues," Bob Dylan notes, "You don't need a weather man to know which way the wind blows." I once resigned a position simply because I was miserable, and so was everyone else who worked there. Later I discovered that the physician who formerly held my position had left because he was clinically depressed.

During my exit interview, an individual from human resources told me the company would conduct a "climate assessment." It was a case of too little too late, yet it was humbling to know my instincts were correct.

Consider which way the wind is blowing in the following scenarios, and what actions, if any, you would take:

* You are the medical director of a utilization review organization. Your boss, the CEO of the company, calls an urgent meeting to announce his resignation coincident with the company's acquisition by its chief competitor. The acquiring organization has a reputation for managing costs, not care. Your counterpart in the rival company announces that, effectively immediately, medical reviewers in both organizations will make decisions based on the acquiring company's stringent utilization review criteria. He tells you to put your company's criteria "in the trash."

* You are the chief medical officer of a 146-bed specialty hospital. The CEO calls you into his office to inform you the hospital is about to default on its mortgage payment and it can barely make payroll. The CEO and CFO are planning to discuss their financial problems with the bank in five minutes. The CEO invites you to listen to the conversation on speakerphone. His strategy is set, and as he dials the bank's phone number, the CEO remarks, "You're about to hear something they don't teach you in business school."

* You work in research and development (R & D) for a large inernational pharmaceutical company. The company reports strong year-end earnings and at the same time announces a layoff of nearly five percent of its workforce over the next several months. The CEO describes the reasons for layoffs in terms of "overcapacity of the supply chain," "pricing pressures," and "a strong headwind of patent expirations." The CEO does not cite any specific departments or geographic locations slated for downsizing, but the head of R & D says that all positions in his area will be "scrutinized."

Course of action

These scenarios offer several options, ranging from staying the course and hoping for the best, to leaving the company immediately, to not doing anything in the short-term, but begin exploring opportunites outside the company.

The action you pursue will depend largely on your assessment of the severity of the winds of change and the degree to which you tolerate job uncertainty. As a general rule, the stronger the gale force, the riskier the situation, signaling you to begin networking and updating your resume.

It is obvious in the first scenario that you will not be happy working for the new (combined) company. Your work may not be appreciated and your track record may not count. Indeed, you may be tainted by having worked for the "enemy."

If you are outspoken, you will probably clash with the new medical director over operational and ethical issues. On the other hand, remaining silent may tear you up inside. In either case, the merger will probably not be a good fit for you.

Ethical issues also surface in the second senario, but the more pressing issue is how long can the hospital remain viable? Can the CEO and CFO renegotiate the terms of the mortage? If not, can they arrange a bank loan, or are they too leveraged to handle any more debt?

How much longer can you work for a company whose financial future is so uncertain that your own paycheck is in jeapordy? Even your job may be eliminated in the event of a workforce reduction and you carry a high salary.

The third scenario is more difficult to assess. It appears that the pharmaceutical layoffs will be mainly in manufacturing given that the company will have to reduce its production of several brand drugs as they go generic.

The research ranks, however, may also be thinned. Regardless, there will probably be greater pressure on researchers to strengthen the pipeline. All pharmaceutical companies go through ups and downs.

Can you make an informed decision about your future based on actions taken by your company when they faced a similar situation in the past? Can you learn from the actions taken by other drug companies under similar circumstances?

Outcome

Would you be surprised if I was personaly connected to all three scenarios? I left the utilization review organization a year after the merger (I was the medical director of the acquired company.)

My position as the medical director of the hospital was eliminated, but I fought to get it back, only to leave on my own terms six months later when it was apparent the hospital was going to be sold.

I am presently employed by the pharmaceutical company that is undergoing cutbacks.

I feel as though I have become a better predictor of the "weather," including forecasting the direction of the winds. I don't use computer models, but my experience leads me to believe I can predict winds of change that may affect job security. Chart 1 lists some important factors to consider.

Imagine how different the outcome might have been in Africa had not Prime Minister Verwoerd resisted the wind of change in 1960!

Arthur Lazarus, MD, MBA, CPE, FACPE, is senior director of clinical research for AstraZeneca Pharmaceuticals in Wilmington, Delaware. He is a frequent contributor to The Physician Executive and author of MD/MBA: Physicians on the New Frontier of Medical Management (American College of Physician Executives, 1998). He can be reached by phone at 302-885-4542 or by email at [e-mail]. His opinions are not necessarily those of AstraZeneca, its management, agents, or employees.

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By Arthur Lazarus, MD, MBA, CPE, FACPE

Chart 1 Wind of Change in the Workforce

Mergers/acquisitions/ownership changes

Financial crises
Changes in leadership/governance
Unresolved conflict
A new boss
Insurmountable litigation
OIG/Corporate integrity agreement
Major operational changes
Downsizing