When hot and cold collide: riding the spirals of emotion and logic. (Conflict and Cooperation).

IN THIS ARTICLE...

Understand how emotional reactions and logical reactions can lead to very different outcomes when considering a new business venture.

A Story of Two Surgery Centers

Surgery Center 1:

Dr. Jick had all he was going to take. Hospital administrators, from his perspective, were uncooperative and needed to be replaced.

As a senior physician leader in his community, Jick had approached his local hospital executives with a reasonable proposition from his group practice. Together they could build and benefit from a new ambulatory surgery center. Each would contribute and each would share equally in the profitable results.

After many meetings, long delays and time-consuming negotiations, the hospital executives finally got to the bottom line: being the business people, they would control the operations of the proposed ambulatory care center.

Given current problems in the surgery suites at the hospital, turning over control was totally unacceptable to Jick and his colleagues. As a result, they successfully sought outside investment capital, built the ambulatory surgery center themselves and began to profit from its successful operations.

In response, hospital leaders refused to grant privileges to any new members of their group and brought in two competitors as employees in their specialty area.

Currently, neither of those new competitors is doing well and Jick's group brought legal action against the hospital regarding the withholding of privileges. Emotions are running high.

Surgery Center 2:

Dr. Schwartz's situation is quite different. She is the senior leader of a successful practice that is aggressively building outpatient service capabilities.

When she approached her local hospital senior administrators with a proposal similar to that put forward by Jick in his community, hospital executives recognized the situation as an opportunity rather than a threat.

They logically knew that if they did not work together with Schwartz's group in making the ambulatory center a success, it would be built anyway, threatening their bottom line and restricting their ability to provide a range of services the community expected.

Knowing that Schwartz's group largely controlled where patients had health care delivered, hospital leaders knew that they could either have half of the business or none at all.

In fact, the new ambulatory surgery center became quite profitable given that it doesn't carry the large overhead expenses of the hospital and brings economic benefit to both venture partners. This success allowed hospital executives to engage in a new version of their game of medical Robin Hood, "robbing" from the well-reimbursed services at the ambulatory surgery center to fund other vital services that simply cannot be covered by the margins they provide.

Both venture partners are generally satisfied and are considering investing together again.

New business ventures

As costs continue to increase and revenues decline, new business venture models are clearly important to hospitals and physician practices.

Under today's conditions, the stories presented here are not unfamiliar. Yet the two stories have very different endings, suggesting that leaders can do much to influence outcomes.

In the first case, the hospital executives' understanding of who they are, their role in the community and what behaviors are appropriate to that role appears to have been seriously threatened, resulting in emotionally-heated reactions to defend their traditional territory.

Although Jick and his colleagues were coolly logical in their proposal at first, the push back from hospital leaders led to heated emotional reactions on their part, further fostering a downward spiral of economic outcomes, collaborative relationships and benefits for the community.

Superficial advice might suggest that it is important for leaders to remain coldly logical in assessing the opportunities before them and making choices that are in their best interests. However, evidence suggests that "hot interpretive processes" (1) and deep-seated drives for self-preservation (2) are likely to occur during times of radical change. And change is the order of the day in health care.

Rather than suggesting that leaders remain coldly logical, it may be far more valuable to understand what research uncovered about the source of these reactions and methods for managing them effectively.

Emotions as barriers to change

Taking advantage of new opportunities in health care often involves reaching agreements among people who do not have direct authority over each other.

People within groups have a way of understanding who they are (e.g., we are physicians who provide high-quality care), how we should behave (e.g., as physicians we must protect our relationships with our patients) and how others should behave when interacting with us (e.g., they should recognize that we are the people who know how to deliver quality care).

When these understandings are threatened, heated emotional reactions typically result that seriously constrain a group's willingness to change or even perceive the need for change. (3)

While those not involved in the health care community may well marvel at how physicians and administrators--who from their perspective have obvious mutual interests in improving health care--have difficulty cooperating together, such barriers are not uncommon within other communities.

For example, while people living in geographical proximity to each other may be seen as the community by outsiders, they often see those living next to them as distinctively different based on emotionally-charged issues such as race, religion, or national origin. (4)

Similar separation patterns often show up in organizations where issues such as educational or professional background differences foster "them vs. us" distinctions across departments.

Frictions between such deep-seated understandings of who we are and who they are must be managed effectively if physician leaders are to be successful in initiating changes such as building of profitable joint ventures with hospital senior executives.

Though the defensive reactions often serve as initial barriers to new possibilities, emotions can also provide the energy necessary to move past difficult times when implementing needed change.

Emotional energy is required to maintain change initiatives beyond their early phases. Expanding beyond initial logic-based support requires that positive emotions are engaged and built on in order for people to persist in producing large-scale, successful results. (5)

Without the excitement and energy flowing from emotional support, many potentially successful change initiatives are prematurely discontinued when their logic is called into question by the inevitable barriers that occur during change cycles. (6)

Since emotions can block change, and yet are essential to its continuation, managing them effectively is vital to long-term success.

Negotiating waves of emotion

Potential joint ventures, such as the ambulatory surgery center in the examples, are likely to pass through several phases along the path to success. To the degree that they become stuck by emotions in any of these phases, frustration and economic losses are likely.

Successfully negotiating the path from project ideas to sustainable success involves igniting a spark of possibilities, building energy based on initial success and sustaining positive outcomes by building new, enhanced understandings of who we are, who they are and what we can do together.

In each of the surgery center examples, physician leaders attempted to ignite a spark of possibilities by logically proposing joint venture opportunities to potential hospital partners. In the first case, emotionally based foot dragging and counter proposals met Jick's coldly logical interpretations of environmental possibilities for joint-venture success.

Such emotionally based reactions flow from perceived threats to who hospital executives understand themselves to be and the appropriate set of relationships between physicians and their hospital. When such understandings are violated, heated interpretations of the perceived negative intentions and threatening behaviors of the physician initiators are likely. Attempts by the health care executives to regain control also typically result.

Under these conditions, Jick has two alternatives. The first is to continue to pursue his apparently coldly logical joint-venture proposal. To Jick, it may seem completely unreasonable to back off from his logically conceived plan in the face of the emotional reactions of his potential partners.

In fact, people in his position frequently become emotionally heated themselves as their own sense of who they are (well-intentioned people proposing a viable venture) is threatened by the lack of acceptance. This latter and all too common reaction leads to decreasing trust and an intensifying downward spiral as shown in Figure 1.

In that process, hospital executives are likely to become even more confused and threatened by the increasingly intense, emotionally-charged pressures from physician leaders.

Making the distinctions necessary to break this downward spiral is typically quite difficult without the aid of outside interventions. Both parties in this process increasingly come to see each other as threats that must be carefully defended against. The result is emotional warfare with little possibility for achieving the proposed benefits.

Jick's second alternative is to recognize that pushing harder into the emotion-based reactions of the hospital executives will only sharpen their concerns and resistance, leading to the unfortunate results that occurred.

Sophisticated recognition of this pattern of threat-based emotional reactions might lead him to revise his proposal in order to minimize the negative reactions. Rather than demanding that the proposal he presented be accepted in full, his logical next step might be to look for smaller pilot projects in which the overlapping interests of his group and the hospital executives could produce mutually valued outcomes.

Such projects can provide the spark for initial forward movement in areas where there is joint willingness and capacity to act. They can produce a series of concrete outcomes of modest importance that attract allies and deter opponents. (7)

They also can build the positive emotional foundation and trust for taking on larger projects and pushing them to completion. Potential partners can sustain these positive outcomes by developing deeper understanding of who each of the partners are, what their needs are and how they can best work together to achieve mutually beneficial outcomes.

As depicted in the upward spiral in Figure 2, the result is emotional partnerships with great possibility for achieving the proposed benefits.

It may seem unreasonable to expect a person in Jick's position to back off his initially well-conceived plan for venture success. However, logic also dictates that he is unlikely to succeed if he continues to threaten the hospital leaders by pushing forward with this plan.

Outsiders are often in a far better position than emotionally threatened insiders to logically examine the alternatives and suggest possibilities for igniting the change process described above. Though it would be wonderful if the emotionally threatened recipients of the proposal came to recognize their role in the downward cycle of resistance, this recognition is unlikely to occur for those who are already feeling their world to be threatened.

The best chance of moving into the positive upward emotional spiral typically rests with those who are initially more logical and less emotionally threatened.

Your ventures

We have described distinctly different approaches to venture creation. Continuing to push cold logic about the benefits of the proposed venture in the face of threatened emotional reactions is likely to create a negative downward spiral that blocks needed change.

By contrast, breaking the logical proposal (that is resisted) into small acceptable projects is likely to create the foundation for small wins, increasing trust and eventual partnership.

Which approach looks more familiar to you and your venture partners?

Is the leadership in your organization sophisticated in its recognition of the negative power of emotional resistance I and the positive power of emotional partnership?

Is the leadership capable of diffusing early resistance and then building the positive emotional cycle depicted in Figure 2?

Are you personally doing what it takes to manage the emotional reactions of potential partners and to build the emotional foundation necessary for venture success?

The questions in Figure 3 allow you to assess the degree to which these winning practices exist in your organization.

Characteristics of Successful Venture Spirals

Please describe the extent to which upward-spiraling trust-building behaviors characterize your organization. Respond to each statement by indicating how frequently each item is true on a scale ranging from Never (1) to Always (5).

Leaders in our organization:

a. Propose logical project ideas to potential partners

b. Demonstrate sensitivity to emotional reactions of potential partners

C. Avoid pushing against the emotional reactions of potential partners

d. Identify and propose small pilot projects to build required trust and support

e. Identify pilot projects that potential partners recognize as having mutually beneficial outcomes

f. Guide pilot projects to successful completion to build the positive emotional foundation for later, larger ventures

g. Work hard to understand the needs of potential partners and how they can best be met together

h. Avoid attempting to dominate or control venture activities with potential partners

How does your leadership look with regard to this list of winning practices? Any score below 3 demands serious consideration, if not action. Have you effectively undertaken the trust building activities needed to support enduring, emotion-based collaboration? What changes might be helpful as you strive to move forward together? How will you build the solid foundation required to make these needed transitions?

ACPE Resources

Bring Ed O'Connor to your organization for on OnSite Educational Program. Call 800/562-8088 or visit www.acpe.org/onsite for more information.

References:

(1.) Cantor, N, Kihlstrom, JF. Personality and Social Intelligence. Prentice-Hall, Englewood Cliffs, N.J., 1987.

(2.) Swann, WB, Jr. Self-traps: The Elusive Quest for Higher Self-esteem. Freeman and Company, New York, 1996.

(3.) Huy, QN. "Emotional Capability, Emotional Intelligence, and Radical Change." Academy of Management Review. 1999, 24(2) 325-345.

(4.) Calhoun, C. "The Problem of Identity in Collective Action." J. Huber, ed. Macro-micro Linkages in Sociology, sage Publications, London, 1987.

(5.) Staw, BM, Sutton, RI, Pelled, LH. "Employee Positive Emotion and Favorable Outcomes at the Workplace." Organizational Science. 1994, 5(1) 51-71.

(6.) O'Connor, EJ and Fiol, CM. "Creating a Roadmap for Leading Change" In J. Lowery (Ed.), Culture Shift: A Leader's Guide to Managing Change In Healthcare. Chicago, American Hospital Publishing, Inc., 1997, 39-60.

(7.) Weick, KE. "Small Wins: Redefining the Scale of Social Problems." American Psychologist. 1984, 39, 40-49.

Edward J. O'Connor, PhD, is a principal with the implementation Institute, a professor of management at the University of Colorado at Denver and a member of the faculties of the American College of Physician Executives and the Kaiser Consulting Network. He can be reached by calling 303/573-1273 or by e-mail at [e-mail].

C. Marlene Fiol, PhD, is an associate professor at the University of Colorado-Denver. She can be reached by phone at 303/556-5812 or by e-mail at [e-mail].