Managing an organizational transformation is a risky and difficult endeavor. This article examines the lessons learned from the transformation of the Veterans Health Administration (VHA), one of the largest agencies in the federal government. The transformation, which has proven to be highly successful, has focused on changing the agency from a health care delivery system emphasizing inpatient-oriented tertiary care to a health care delivery system that can meet the growing needs of veterans for outpatient-oriented primary care. The VHA's experience reveals the importance of selecting leaders whose qualifications match the needs of the transformation, developing a coherent transformation plan, maintaining a focus on key transformation goals, and managing external changes to complement internals one. In addition, the VHAs experience reminds us that a transformation often raises significant issues concerning employee training and education, communication with frontline employees, and the balance between centralized control and operating unit flexibility.
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