How organizational escalation prevention potential affects success of implementation of innovations: electronic medical records in hospitals

BACKGROUND Escalation of commitment is the tendency that (innovation) projects continue, even if it is clear that they will not be successful and/or become extremely costly. Escalation prevention potential (EPP), the capability of an organization to stop or steer implementation processes that do not meet their expectations, may prevent an organization of losing time and money on unsuccessful projects. EPP consists of a set of checks and balances incorporated in managerial practices that safeguard management against irrational (but very human) decisions and may limit the escalation of implementation projects. We study whether successful implementation of electronic medical records (EMRs) relates to EPP and investigate the organizational factors accounting for this relationship. METHODS Structural equation modelling (SEM), using questionnaire data of 427 doctors and 631 nurses who had experience with implementation and use of EMRs in hospitals, was applied to study whether formal governance and organizational culture mediate the relationship between EPP and the perceived added value of EMRs. RESULTS Doctors and nurses in hospitals with more EPP report more successful implementation of EMR (in terms of perceived added value of the EMR). Formal governance mediates the relation between EPP and implementation success. We found no evidence that open or innovative culture explains the relationship between EPP and implementation success. CONCLUSIONS There is a positive relationship between the level of EPP and perceived added value of EMRs. This relationship is explained by formal governance mechanisms of organizations. This means that management has a set of tangible tools to positively affect the success of innovation processes. However, it also means that management needs to be able to critically reflect on its (previous) actions and decisions and is willing to change plans if elements of EPP signal that the implementation process is hampered.