Effective organizational control: implications for academic medicine

This article provides a framework for understanding the nature, role, functioning, design, and effects of organizational oversight systems. Using a case study with elements recognizable to an academic audience, the authors explore how a dean of a fictitious School of Medicine might use organizational control structures to develop effective solutions to global disarray within the academic medical center. Organizational control systems are intended to help influence the behavior of people as members of a formal organization. They are necessary to motivate people toward organizational goals, to coordinate diverse efforts, and to provide feedback about problems. The authors present a model of control to make this process more visible within organizations. They explore the overlap among academic medical centers and large businesses-for instance, each is a billion-dollar enterprise with complex internal and external demands and multiple audiences. The authors identify and describe how to use the key components of an organization's control system: environment, culture, structure, and core control system. Elements of the core control system are identified, described, and explored. These closely articulating elements include planning, operations, measurement, evaluation, and feedback systems. Use of control portfolios is explored to achieve goal-outcome congruence. Additionally, the authors describe how the components of the control system can be used synergistically by academic leadership to create organizational change, congruent with larger organizational goals. The enterprise of medicine is quickly learning from the enterprise of business. Achieving goal-action congruence will better position academic medicine to meet its multiple missions.

Four strategies for the age of smart services

Most industrial manufacturers realize that the real money isn't in products but in services. Companies such as General Electric and IBM have famously made the transition: A large proportion of their revenues and margins come from providing value-added services to customers. But other companies attempting to do the same might miss the boat. It is not enough, the authors say, just to provide services. Businesses must now provide "smart services"--building intelligence (awareness and connectivity) into the products themselves. Citing examples such as Heidelberger Druckmaschinen's Internet-connected printing presses and Eaton Electrical's home-monitoring service, the authors demonstrate how a product that can report its status back to its maker represents an opportunity for the manufacturer to cultivate richer, longer-term relationships with customers. Four business models will emerge in this new, networked world. If you go it alone, it may be as an embedded innovator- that is, your networked product sends back information that can help you optimize service delivery, eliminate waste and inefficiency, and raise service margins. Or, you may pursue a more aggressive solutionist business model- that is, you position your networked product as a "complete solution provider," able to deliver a broader scope of high-value services than those provided by the embedded innovator's product. In the case of a system that aggregates and processes data from multiple products in a building or home, you may be either an aggregator or a synergist, partnering with others to pursue a smart-services opportunity. An aggregator's product is the hub, collecting and processing usage information- and creating a high-value body of data. A synergist's product is the spoke, contributing valuable data or functionality. Woe to the company that takes none of these paths; it'll soon find its former customers locked in--and happily--to other smart service providers.

What Price for General Surgery?

BACKGROUND

This study aims to determine the cost-benefit analysis of adding a full emergency general surgery (EGS) arm to a trauma/critical care (TCC) service with limited EGS activity in a Level I trauma center.

METHODS

Data on the composition, activity, and billings of a TCC were collected and compared before (January 1, 2002-June 30, 2003) and after (July 1, 2003-December 31, 2003) it assumed the care of all unassigned EGS patients. These included patient volume and demographics, service, procedures, on-call/service activity, and professional billings and collections. Data are means +/- SD or percentages. Intergroup comparisons were performed by using t test or chi2 as appropriate; significance was assumed for values of p < 0.05.

RESULTS

Deploying an EGS arm increased coverage weeks (+52 weeks) and necessitated additional staffing (pre-EGS, n = 5; post-EGS, n = 6). Trauma operative volume remained constant (8.2 vs. 10.3 per month), EGS and elective case load increased (28.7 vs. 60 per month; p < 0.01), and the EGS case/consult ratio decreased from 0.81 to 0.64 (p < 0.01). This expanded activity was associated with reduced on-call nonclinical hours, from 3.2 +/- 0.9 to 1.1 +/- 0.8 (p < 0.01), and increased outpatient visits (68.6 vs. 91.1 per month; p < 0.01) and off-service time used for elective operations (22.3 vs. 76%; p < 0.01). Billings significantly increased in each arm compared with the pre-EGS study period (operating room, +44.8; intensive care unit, +12.5; outpatient, +48.7%; p < 0.01).

CONCLUSION

Integrating a full EGS into a TCC service encumbers increased nontrauma unscheduled clinical activity in the operating room, clinic, and floors, which resulted in enhanced billings. These beneficial effects were accrued at the expense of individual time and investment in recruiting additional faculty.

An Update On Safety-Net Hospitals: Coping With The Late 1990s And Early 2000s

Recent forces have created new financial stress for hospitals but also some relief. This paper explores hospitals' changing involvement in the safety net between 1996 and 2002. We replicate approaches used in a study of 1990-1997 and thus provide a needed update on the U.S. hospital safety net. Overall, some groups of safety-net hospitals increased uncompensated care, but others did not. Non-safety-net hospitals trimmed certain services commonly used by the indigent; this may point to future reductions in access. We examine the implications of these findings for the future of the safety net.

Creating the living brand

It's easy to conclude from the literature and the lore that top-notch customer service is the province of a few luxury companies and that any retailer outside that rarefied atmosphere is condemned to offer mediocre service at best. But even companies that position themselves for the mass market can provide outstanding customer-employee interactions and profit from them, if they train employees to reflect the brand's core values. The authors studied the convenience store industry in depth and focused on two that have developed a devoted following: QuikTrip (QT) and Wawa. Turnover rates at QT and Wawa are 14% and 22% respectively, much lower than the typical rate in retail. The authors found six principles that both firms embrace to create a strong culture of customer service. Know what you're looking for: A focus on candidates' intrinsic traits allows the companies to hire people who will naturally bring the right qualities to the job. Make the most of talent: In mass-market retail, talent is generally viewed as a commodity, but that outlook becomes a self-fulfilling prophesy. Create pride in the brand: Service quality depends directly on employees' attachment to the brand. Build community: Wawa and QT have made concerted efforts to build customer loyalty through a sense of community. Share the business context: Employees need a clear understanding of how their company operates and how it defines success. Satisfy the soul: To win an employee's passionate engagement, a company must meet his or her needs for security, esteem, and justice.

The relative value of growth

Most executives would say that adding a point of growth and gaining a point of operating-profit margin contribute about equally to shareholder value. Margin improvements hit the bottom line immediately, while growth compounds value over time. But the reality is that the two are rarely equivalent. Growth often is far more valuable than managers think. For some companies, convincing the market that they can grow by just one additional percentage point can be worth six, seven, or even ten points of margin improvement. This article presents a new strategic metric, called the relative value of growth (RVG), which gives managers a clear picture of how growth projects and margin improvement initiatives affect shareholder value. Using basic balance sheet and income sheet data, managers can determine their companies' RVGs, as well as those of their competitors. Calculating RVGs gives managers insights into which corporate strategies are working to deliver value and whether their companies are pulling the most powerful value-creation levers. The author examines a number of well-known companies and explains what their RVG numbers say about their strategies. He reviews the unspoken assumption that growth and profits are incompatible over the long term and shows that a fair number of companies are effective at delivering both. Finally, he explains how managers can use the RVG framework to help them define strategies that balance growth and profitability at both the corporate and business unit levels.

The new health care paradigm: roles and competencies of leaders in the service line management approach

PURPOSE

The purpose of this paper is to discuss the need for the service line management approach in health care. Service line management is increasingly utilized by US health care organizations as an innovative method for providing the needed stimulus to increase viability and profitability for the ailing health care sector.

DESIGN/METHODOLOGY/APPROACH

Using current literature, this study describes a paradigm shift from traditional health care management approaches to focus on the importance of a service line management approach with its specific emphasis on competencies of leaders.

RESEARCH LIMITATIONS/IMPLICATIONS

Four essential competencies--conceptual, participation, interpersonal, and leadership--must be gained by leaders to bring about organizational growth.

PRACTICAL IMPLICATIONS

Health care managers must understand and practice these four key competencies to become effective health care leaders.

ORIGINALITY/VALUE

This paper provides useful information on the need for the service line management approach in health care.

We're in this together

When managers from Wendy's International and Tyson Foods got together in 2003 to craft a supply chain partnership, each side had misgivings. There were those in the Wendy's camp who remembered past disagreements with Tyson and those on the Tyson side who were wary of Wendy's. But the companies had a tool, called the "partnership model,'to help get things started on the right foot. Drawing on the experiences of member companies of the Global Supply Chain Forum at Ohio State University, the model offers a process for aligning expectations and determining the most productive level of partnering. It rapidly establishes the mutual understanding and commitment required for success and provides a structure for measuring outcomes. This article puts the tool in the reader's hands. Partnerships are justified only if they stand to yield substantially better results than the firms could achieve on their own. And even if they are warranted, they can fail if the partners enter them with mismatched expectations. Over the course of a day and a half, the partnership model elucidates the drivers behind each company's desire for partnership, allows managers to examine the conditions that facilitate or hamper cooperation, and specifies which activities managers must perform to implement the relationship. This tool has proved effective at Wendy's and elsewhere in determining what type of partnership is most appropriate. Colgate-Palmolive, for example, used it to help achieve stretch financial goals with suppliers of innovative products. But the model is just as effective in revealing that some companies' visions of partnership are not justified. In matters of the heart, it may be better to have loved and lost, but in business relationships, it's better to have headed off the resource sink and lingering resentments a failed partnership can cause.

How global brands compete

It's time to rethink global branding. More than two decades ago, Harvard Business School professor Theodore Levitt argued that corporations should grow by selling standardized products all over the world. But consumers in most countries had trouble relating to generic products, so executives instead strove for global scale on backstage activities such as production while customizing product features and selling techniques to local tastes. Such "glocal" strategies now rule marketing. Global branding has lost more luster recently because transnational companies have been under siege, with brands like Coca-Cola and Nike becoming lightning rods for antiglobalization protests. The instinctive reaction of most transnational companies has been to try to fly below the radar. But global brands can't escape notice. In fact, most transnational corporations don't realize that because of their power and pervasiveness, people view them differently than they do other firms. In a research project involving 3,300 consumers in 41 countries, the authors found that most people choose one global brand over another because of differences in the brands'global qualities. Ratherthan ignore the global characteristics of their brands, firms must learn to manage those characteristics. That's critical, because future growth for most companies will likely come from foreign markets. Consumers base preferences on three dimensions of global brands--quality (signaled by a company's global stature); the cultural myths that brands author; and firms' efforts to address social problems. The authors also found that it didn't matter to consumers whether the brands they bought were American--a remarkable finding considering that the study was conducted when anti-American sentiment in many nations was on the rise.

Improving operating room performance in a center of excellence

The financial success of centers of excellence typically depends on effective utilization of the OR. Therefore, it's important to align the strategy, structure, information and reporting systems, culture, and behavior of both entities. Moving from management based on anecdote to a data-driven process can enhance the quality of decision-making.

Darwin and the demon: innovating within established enterprises

As commercial processes commoditize in a developed economy, they are outsourced or transferred offshore, leaving onshore companies with unrelenting, Darwinian pressure to come up with the next wave of innovation. But innovation is a broad term. There are many types, from the ballyhooed disruptive innovation to more mundane forms such as process and experiential, which might involve, respectively, doing such things as streamlining the supply chain and delighting customers with small modifications of products. Many executives find it hard to decide which kind to focus on. The best way to choose is to consider the phases of a market's life span. In a market's earliest phase, a new technology attracts enthusiasts and visionaries. Eventually, the market reaches the Main Street section of its life, when growth slows, flattens, and finally subsides. Different types of innovation produce more bang for the buck at different points in the life cycle. Disruptive innovation, for example, is rewarded most during the earliest phase. Once the life cycle advances to Main Street, however, the marketplace is no longer willing to yield the revenue or margin gains necessary to fund that type of innovation, so other forms, including process and experiential, yield better returns. But attempts to change the company's direction are often thwarted by the inertia that success creates. To overcome the inertia demon, managers must introduce new types of innovation while aggressively extracting resources from legacy processes and organizations. By running the two efforts in parallel, they can defeat the demon and renew the company.

Branding an anatomic pathology practice to build revenue

Innovative Pathology Services (IPS) is an Associate Practice of Pathology Service Associates (PSA). PSA is an organization known as the "Business Solution for Pathology." IPS provides pathology services to nine hospitals, including two large tertiary-care medical centers, a progressive and renowned children's hospital, a cancer survival center, five surgery centers, and numerous physician's offices and clinics throughout east Tennessee. We accept specimen referrals from other pathology practices and providers from across the country. The center of operations is in Knoxville, a mid-sized metropolitan district. Until January 1, 2003, we were known as Knoxville Pathology Group (KPG). We renamed our practice because KPG did not reflect our service area, was limiting by perception, barely distinguished us from other groups, and did not describe our culture and philosophy. IPS is a new name for a well-established pathology group with a solid foundation and a long history of providing services at the point-of-care. As such, we offer all services that we offered through our foundation practice, and, in addition, these services were enhanced and new services were added. Our entire "team" and, in particular, the pathologists, were involved in the successful "branding" of IPS. Whether you are an independent anatomic pathology or clinical laboratory or you are hospital based, you may benefit from our experiences detailed in this article.

Novel approaches to innovation in medical device manufacture

Innovation is an imperative for the industry. This article explores new ways for companies to fill deficiencies in their innovation capabilities and to overcome the problems posed by globalisation.

Tobacco industry research on smoking cessation. Recapturing young adults and other recent quitters

BACKGROUND

Smoking rates are declining in the United States, except for young adults (age 18 to 24). Few organized programs target smoking cessation specifically for young adults, except programs for pregnant women. In contrast, the tobacco industry has invested much time and money studying young adult smoking patterns. Some of these data are now available in documents released through litigation.

OBJECTIVE

Review tobacco industry marketing research on smoking cessation to guide new interventions and improve clinical practice, particularly to address young adult smokers' needs.

METHODS

Analysis of previously secret tobacco industry documents.

RESULTS

Compared to their share of the smoking population, young adult smokers have the highest spontaneous quitting rates. About 10% to 30% of smokers want to quit; light smokers and brand switchers are more likely to try. Tobacco companies attempted to deter quitting by developing products that appeared to be less addictive or more socially acceptable. Contrary to consumer expectations, "ultra low tar" cigarette smokers were actually less likely to quit.

CONCLUSIONS

Tobacco industry views of young adult quitting behavior contrast with clinical practice. Tobacco marketers concentrate on recapturing young quitters, while organized smoking cessation programs are primarily used by older smokers. As young people have both the greatest propensity to quit and the greatest potential benefits from smoking cessation, targeted programs for young adults are needed. Tobacco marketing data suggest that aspirational messages that decrease the social acceptability of smoking and support smoke-free environments resonate best with young adult smokers' motivations.

Accomplishing technology transfer: case-based lessons of what works and what does not

This paper presents lessons drawn from technology transfer case studies that address the persistent question: "What works, what does not, and why?" Each lesson highlights critical factors determining success or failure and is substantiated by case studies that exemplify the lesson. The case examples involve either the commercialization of prototype inventions (supply-push technology transfer) or the acquisition of desired technologies from other fields of application (demand-pull technology transfer). The cases present the chronology of events as they actually occurred, including supporting information from the other participants. Applying the lessons should help avoid common mistakes while increasing the likelihood of accomplishing the desired outcomes.

Strategy as ecology

Microsoft's and Wal-Mart's preeminence in modern business has been attributed to any number of factors--from the vision and drive of their founders to the companies' aggressive competitive practices. But the authors maintain that the success realized by these two very different companies is due only partly to the organizations themselves; a bigger factor is the success of the networks of companies with which Microsoft and Wal-Mart do business. Most companies today inhabit ecosystems--loose networks of suppliers, distributors, and outsourcers; makers of related products or services; providers of relevant technology; and other organizations that affect, and are affected by, the creation and delivery of a company's own offering. Despite being increasingly central to modern business, ecosystems are still poorly understood and even more poorly managed. The analogy between business networks and biological ecosystems can aid this understanding by vividly highlighting certain pivotal concepts. The moves that a company makes will, to varying degrees, affect the health of its business network, which in turn will ultimately affect the organization's performance--for ill as well as for good. Because a company, like an individual species in a biological ecosystem, ultimately shares its fate with the network as a whole, smart firms pursue strategies that will benefit everyone. So how can you promote the health and the stability of your own ecosystem, determine your place in it, and develop a strategy to match your role, thereby helping to ensure your company's well-being? It depends on your role--current and potential--within the network. Is your company a niche player, a keystone, or a dominator? The answer to this question may be different for different parts of your business. It may also change as your ecosystem changes. Knowing what to do requires understanding the ecosystem and your organization's role in it.

The new rules for bringing innovations to market

It's tough to get consumers to adopt innovations--and it's getting tougher all the time. That's because more and more markets are taking on the characteristics of networks. The interconnections among today's companies are so plentiful that often a new product's adoption by one player depends on its systematic adoption by other players. Consider the disparate companies involved with the popularization of digital photography: software vendors, camera manufacturers, broadband communications companies, printer manufacturers, and so on. By contrast, Kodak was pretty much the sole player involved with popularizing film photography. The traditional levers executives use to launch products--such as targeting unique customer segments or developing compelling value propositions--don't work as well in this new environment. Instead, innovators must orchestrate a change of behaviors across the market, unraveling the status quo so that a large number of players adopt their offerings and believe they are better off for having done so. In this article, Monitor Group's Bhaskar Chakravorti outlines a four-part framework for doing just that. The innovator must reason back from a target endgame, implementing only those strategies that maximize its chances of getting to its goal. It must complement power players, positioning its innovation as an enhancement to their products or services. The innovator must offer coordinated switching incentives to three core groups: the players that add to the innovation's benefits, the players that act as channels to adopters, and the adopters themselves. And it must preserve flexibility in case its initial strategy fails. Chakravorti uses Adobe's introduction of its Acrobat software as an example of an innovator that took into account other players in the network--and succeeded because of it.