Workplace Reengineering, Reorganization, and Redesign From Nursing Management: Principles and Practice

Patricia Stanfill Edens, RN, MS, MBA, FACHE

September 13, 2005

In This Article

Strategic Planning, Visioning, and Reengineering

Change in the organization may flow from the strategic planning process or from the vision of the leadership. It may be incremental as annual goals are achieved. It differs from reengineering in that it assumes a baseline level of performance that is not detrimental and determines the strategy needed to move the enterprise forward. If an organization is operating well in its environment, strategic planning may be all that is indicated to guide the enterprise. However, strategic planning may be an annual event that consumes time and effort with minimal outcome effect in an organization. An understanding of the strategic planning process can serve as the foundation for a reengineering or redesign effort. An in-depth review of strategic planning and marketing is covered in Chapter 22 of this book.

Successful managers write a concise plan of action that evolves from the mission statement of the facility, internalize the plan so that it guides the process of work for the stated time period, and accept ongoing evaluation and revision as integral parts of the stated strategy. Managing the work process based on a carefully developed strategy is far superior to reacting to repeated episodic events. Reaction rather than planned action will create stress in the organization. Strategy development must consider flow of work and end-point outcomes rather than measuring task completion. The ability to visualize and model the future is the essence of leadership. Strategic planning is interdependent, collective, and multiplicative in the organization as departments and service lines define their individual strategies, which ultimately must roll up to accomplish the overriding strategy of the organization. It generally has a defined beginning and end that equate to the fiscal year of the facility.

For strategic planning to be successful, senior management must have a clear vision of what the organization should be in order to accomplish its obligations to the consumer of provided services. This vision must clearly state, for example, that the facility must meet the healthcare needs of the community in which it resides. Being able to describe the vision of management guides the development of the plan and encourages the buy in of the employees. Hospital Corporation of America (HCA), a for-profit healthcare provider with 197 hospitals and 80 ambulatory surgery centers in 23 states, places much emphasis on its vision, mission, and values statement. Employees are educated annually to its content and are expected to incorporate it into their daily actions, and managers are expected to incorporate its elements into their management of their business enterprise, including the strategic planning process. The corporate leadership of HCA defined strategic initiative for the company, but then each facility and its managers adapt that strategy to the local market in order to meet both local and corporate goals. Strategic plans for all facilities are based on the 12-month fiscal year of the parent company, and incentive compensation is partially based on successful implementation of the plan measured against expected outcomes.

Once a clear understanding of the overriding vision and mission is shared, the manager must begin to conceptualize the actions needed to achieve the goals of the organization. Strategic plans generally begin at the senior management level, and then departments or service lines are expected to expand on their specific contribution to the overall completion of the plan. Following this premise will allow an analysis of the situation that prevents an inappropriate strategic plan that can have long-term negative consequences. As noted by Clancy (2003), "the results of poor decisions often do not appear until years later" (p. 343).

A strategic plan should be dynamic and ever changing, evolving as it is implemented. Just as a plan of care for a patient is revised as the patient's condition improves, the strategic plan should be monitored and adjusted as the plan is implemented. Flexibility in implementation is the key to successful strategic accomplishment. A plan is written with a strong foundation of evidence, but often the constraints of the real-life situation require adaptation and change in order to accomplish the goal. Using a SWOT (strength, weakness, opportunity, threat) analysis or an analysis of the service life cycle will provide a comprehensive foundation for the strategic plan (Ginter, Swayne, & Duncan, 2002). The ability to adapt and reorient the direction of the strategy is the key to organizational survival. Often though, the strategic plan is not sufficient to reorient the direction of the organization, and a more sweeping change is indicated.

The need for a more aggressive reengineering of the organization may originate from a variety of sources. As data are gathered for the strategic planning process, management may realize that the organization is no longer working efficiently and effectively. Planning a strategy to reorient the existing situation and perhaps move forward a bit will not suffice. A major overhaul is indicated at times. The rationale for this may be new competition, lack of systematic planning in past years leading to stagnation, or mismanagement. Regardless of the cause, reengineering may be indicated. Timing of reengineering is situational or opportunity dependent. It may occur midyear and cross into the next fiscal year.

Wolper (1999) believed that health care would continue to face the external pressures of mergers, consolidations, changes in patient volume and type, and reimbursement, leading to the need for a more sophisticated delivery system. Hospitals that find themselves with a negative net income may come to the realization that the status quo is not working. A department may not be delivering sufficient work for its cost. All are examples where reengineering may be indicated. Reengineering evolved primarily in the manufacturing sector, and to reinvent the existing healthcare model, managers looked for assistance from industrial engineers. Forward thinking managers believed that industrial engineering could benefit hospitals, so they brought in industrial engineers, called them management engineers, and tasked them to assist in process redesign. Management engineering in health care employs engineering principles to work flow processes, patient needs, cost per unit of service, and staffing in an attempt to achieve cost efficiencies and effectiveness. Reengineering begins with a blank sheet of paper, with the only known fact being what the outcome should be when the process is implemented.

Applying quantifiable principles in health care is not a new concept, but incorporating clinical staff participation increases the likelihood of success. For example, management engineers in one facility developed a productivity measurement system for radiation therapy without clinical staff input, resulting in all procedures carrying the numeric value of one. This value of one for a procedure was the same regardless of the time or effort involved. As reimbursements declined, productivity measures were tightened, resulting in major difficulty in attainment for the department. The problem was that a 15-minute daily treatment was given the same productivity value as a two-hour radiosurgery procedure, which consumed much more staff time. Staff reductions without rationale also can create chaos. If housekeeping staff is eliminated, patient rooms become less clean, nurse workloads increase, and both nurse and patient satisfaction decrease. Unfortunately, in many instances, nursing has become the position to which eliminated tasks from other departments are given. Management engineers in conjunction with clinical staff can collaboratively define the skill mix to deliver an optimal outcome. Alone, neither group has the skill set to deliver success. If one only knows that the outcome is to decrease labor costs without regard for the work that still must be done, failure is a given. If a manager does not have access to management engineering support, the following reengineering measures will provide initial direction to a reengineering approach to a task.

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