The application of management principles to academic medicine
Paul M. Walker, MD, PhD
Clin Invest Med 1997;20(2):127-30.
Dr. Walker is Surgeon-in-Chief, The Toronto Hospital, and Vice-President,
Surgical Directorate, The Toronto Hospital, Toronto, Ont.
Presented at the 1996 annual meeting of the Canadian Society for Clinical
Investigation, held in conjunction with the 65th annual meeting of the
Royal College of Physicians and Surgeons of Canada, Halifax, NS, Sept.
28, 1996
Reprint requests to: Dr. Paul Walker, Bell Wing 1-635, General Division, The Toronto Hospital, 585 University Ave., Toronto ON M5G 2C4; fax 416 340-5054
For this year's presidential address, I have chosen to speak about areas
that may not immediately appear to be related to the Canadian Society for
Clinical Investigation (CSCI), academic medicine or even medicine in general.
As the first surgeon in 30 years to have the opportunity to speak to
this group as president, I felt that I should not be limited by any precedent.
Previous presidents such as Dr. Bob McKendry spoke of the new vision for
the CSCI, and last year, Dr. David Rosenblatt very clearly summarized the
historic perspectives of the society.
Over the last 5 years, while I have continued to practise surgery and
to be funded for my research, I have wandered into the area of resource
management. In fact, I find myself very heavily involved in the concept
of corporate activity, specifically, management of the interface between
academic medicine and the fiscal environment of our health care system.
Today I would like to make a few observations that I think are pertinent
to those who work in the wonderful field of medicine but whose lives are
now being directed by corporate and fiscal philosophies.
By tradition, doctors tend to be lone agents in the delivery of their
health care or conduct of their research. The road to being a successful
practitioner or researcher requires tremendous hard work, personal dedication
and family sacrifices and tends, in most cases, to lead to individual activity.
The support of these individual activities, both in research and in
the clinical arena, has been quite plentiful except for the last 10 years.
In Canada, the funding mechanism for health care delivery has rewarded
individual activity, supported individual autonomous decision-making with
respect to the delivery methods and styles of health care and supported
individuals doing curiosity-based research.
The current fiscal environment dictates accountability at all levels
of activity. We have to catch up in understanding how to survive in, let
alone manoeuvre, such an environment to our advantage. This current milieu
is more corporate in nature and requires collaborative activity.
When I first began speaking out about collaboration between physicians
and managers in the administration of the hospital, I looked up the definition
of collaboration. Webster's dictionary has defined it "as working
treacherously with the enemy."[1] I think, therefore, that
we need to choose other words or other methods of interaction. I would
like to quote from Northrop Frye in his book, Anatomy of Criticism.[2]
He states:
Characters tend to be either for or against the quest. If they idealize
the quest they are simply gallant or pure; if they obstruct it, they are
characterized as simply villainous or cowardly. Hence, every character
tends to have its moral opposite confronting him, like black and white
pieces in a chess game.
Unfortunately, in the minds of politicians and most of the public, doctors
are not viewed as assisting in the quest, but are often seen to be obstructive
and part of the problem. I believe this is because we are in the unusual
position of being responsible for the health of society in general and
of patients in particular. This is also true in research, where we are
responsible for the viability of our projects, keeping our research teams
intact through the acquisition of funds, and attempting to direct our research
to areas of immediate reward to society, but not necessarily doing that.
The need for us to change rapidly and understand the concept of such
a paradigm shift is not easy because our environment has been supportive
of individual effort. Skeletons of mice are often to be found in coconuts,
for it is easier to get in, slim and hungry, than it is to get out, appeased
and fat.
The answers to these dilemmas are complex and variable. Today I would
like to share a little of the understanding of corporate mentality and
corporate activity that I have gained over the last 6 years. I believe
a better understanding may lead to positive applications in our research
and clinical organizations and activities.
Tartikover, a grand master in chess, once said "Tactics is knowing
what to do when there is something to do. Strategy is knowing what to do
when there is nothing to do." To develop a strategy, I believe we
need to have better tools with respect to understanding the functioning
of corporation activity and what has been successful in industry.
At the Toronto Hospital, we have incorporated aspects of this corporate
mentality into the practice of academic medicine. Briefly, all clinical
activities in the area of medicine including general internal medicine,
all the different sub-specialties as well as emergency medicine and psychiatry
have been included in the Medical Directorate. All the activities and resources
in the departments of Surgery, Obstetrics/Gynecology, ENT, Ophthalmology,
Anesthesia and Dentistry have been combined into the Surgical Directorate.
The physician-in-chief is the vice-president of the Medical Directorate
and the surgeon-in-chief is the vice-president of the Surgical Directorate.
Both are members of the Senior Executive Committee of the hospital.
The current Surgical Directorate budget is approximately $100 million
and is divided up into 18 different business units, each of which has a
medical director responsible for it. We have carefully divided up the responsibilities.
Operational activities related to patient care are the responsibility of
the directorate; academic areas -- teaching and research -- remain the
responsibilities of individual departments.
We have linked these together by virtue of a document known as the Resource
Allocation Document. Briefly, this document states that the mission of
our institution is to provide excellence in patient care, teaching and
research.
In management, one of the major errors made is rewarding inappropriate
behaviour. If you want behaviour A, reward behaviour A. Often, research
and teaching have been strongly supported verbally, but frequently there
is little tangible support or reward for this desired activity. Ours is
an academic institution; we value contributions in research and teaching.
In essence, we allocate the operational resources to individuals, divisions
and business units based upon their academic activity. In our case, increasing
hospital beds or increasing individual resources is a direct result of
a growth in desired academic activity in the form of positive teaching
reviews, increased peer-reviewed publications and peer-reviewed grant capture.
We have specifically identified personal accountability and responsibility
as our style. Job descriptions have been developed for all those in major
management positions, and performance evaluations are ongoing. We have
continued to decentralize decision-making, and through a number of initiatives
strive to improve managerial skills.
Fig. 1 shows the relation between prescribed results and desired behaviour.
Groups with neither should not be in place. Groups unable to produce appropriate
results are nice people but are not necessary. Good producers who inconsistently
demonstrate desired behaviour are culture disrupters, and only a very few
can be tolerated. The move into the quadrant of quality or exemplary performer
requires an increasing sophistication in the understanding and application
of management principles, with particular emphasis on ensuring that motivation
is congruent with the desired results. Leadership must be demonstrated
by everyone in the directorate on a daily basis -- doing the right thing.
To develop more fully the importance of the theme of motivation and
leadership, I would like to review briefly development of the understanding
of management throughout this century.
In 1911, Frederick Winslow Taylor published his Principles of Scientific
Management.[3] In this work, he suggested four underlying
principles of management that included the development of a true science
of work, scientific selection and progressive development of workers. He
emphasized the need to integrate the science of work with scientifically
selected and trained workers and declared that the constant and intimate
cooperation of management and workers was necessary.
Interestingly, an example of this science of work was the development
of the science of "shovelling." He declared that the scientific
analysis of shovelling required determination of the optimum load that
a first-class man can handle with each shovelful. For this, the correct
size of shovel to obtain this load for different materials must be established.
Workers must be given a range of shovels and told which one to use for
a particular task. Then, they must be placed in an incentive scheme that
permits first-class men to earn high wages in return for high productivity.
Taylor felt that incentive schemes with specific limits to potential earnings
would inhibit the mental revolution that can occur when both sides take
their eyes off the division of surplus and together turn their attention
to increasing the size of the surplus.
In 1929, Henri Fayol, a French industrialist, suggested that that 5
key elements for an effective management were planning, organization, commanding,
coordinating and controlling.[4]
In 1933, Elton Mayo described the results of the Hawthorne Experiments,
in which the productivity of workers was influenced by varying a number
of different factors in their environment, including light and heat, and
found that any change resulted in increased productivity.[5] He
concluded that improvements in productivity were due to social factors
such as morale, relationships between group members and a supportive style
of management. His results suggested that the industrial being is a social
being and business management is not simply a matter of matching machinery
and methods but also of integrating those with a social system to realize
a complete sociotechnical system.
Jumping ahead to more recent contributions, we see the McKinsey "7-S"
framework for management. This framework is based upon 3 influential books
on management: the Art of Japanese Management[6] by Richard
Pascale and Anthony Anthos, published in 1981; Managing on the Edge[7]
by Richard Pascale in 1990; and In Search of Excellence[8]
by Tom Peters and Bob Waterman, published in 1982.
The 7 Ss are:
- Strategy: Systematic action and allocation of resources to achieve
company goals.
- Structure: Organization structure and authority relationship.
- Systems: Procedures and processes such as information systems, manufacturing
processes and budget and control processes.
- Style: When management behaves and collectively spends its time to
achieve organizational goals.
- Staff: The socialization of people in the organization into the corporate
culture.
- Skills: The distinctive capabilities of the enterprise.
- Shared values: The values and philosophies shared by members of the
organization.
Peters and Waterman[8] researched 43 successful American companies
and presented 8 common characteristics or principles of these successfully
managed companies.
- Bias for action. Successful managers have a preference for doing something
rather than recycling a problem through analysis and committee reports.
- Simple form -- lean staff. Small plants are generally more productive
than large ones. Small organizations avoid excessive overhead and large
numbers of staff.
- Staying close to the customer. The importance of listening to the
customer's ideas and complaints.
- Productivity through people. The people who do the work must be involved
in decisions and exercise at least some control over the work.
- Autonomy and entrepreneurship. Managers must be encouraged to be entrepreneurs
and compete against each other.
- Value-driven aims. The company must not allow conflicting values to
weaken its primary emphasis. Managers must set one priority and try to
do that one thing well.
- "Sticking to the knitting." A successful company defines
its strength; for example, marketing new product innovation and low-cost
manufacturing, and builds on it. The rule is never acquire a business that
you don't how to run.
- Simultaneous loosetight properties. If a few variables are tightly
controlled, for example, cost and revenues, management may allow leeway
in day-to-day operations.
At the Toronto Hospital we have made significant gains in our management
abilities and have continued to increase our productivity along the direction
of the hospital's mission statement.
There is tremendous strength within the field of science. Our biggest
mistake is that we have failed to harness that strength and act in unison.
All too often we are competing with each other, rather than joining forces
to combat a common foe. Our ability to survive in the future in academic
and clinical activities may depend on how well we are able to join together
to work for the common good. We must learn how to function in a more corporate
environment and continue to provide wise leadership.
References
- Guralnik DB (editor).Webster's new world dictionary of the American
language. New York: Simon and Schuster; 1984:278.
- Frye N. Anatomy of criticism: four essays. Princeton (NJ):
Princeton University Press; 1957:43.
- Taylor FW. The principles of scientific management. New York:
Harper; 1911.
- Fayol H. Administration industrielle et générale.
Geneva: Institute of Management Publishing; 1929.
- Mayo E. The human problems of an industrial civilization.
New York: Macmillan; 1933.
- Pascale RT, Athos AG. The art of Japanese management. New
York: Warner Books; 1981.
- Pascale RT. Managing on the edge. New York: Simon and Schuster;
1990.
- Peters TJ, Waterman RH. In search of excellence. New York:
Harper & Row; 1982.
