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     Duke University’s Children hospital was operating on a strategy to reduce loses through saving on costs. This strategy was a cost cutting approach. It had, on that matter, reduced its staff and the other resources. This had led to deterioration of service and customer dissatisfaction because the patients were not being served well. The hospital was loosing its credentials of offering services to the community, in addition to making losses. Meliones discovered that the real problem was that the staff and departments were focusing on meeting their own ‘personal’ goals other than working as a group and he saw the need to turn things around. Also, the hospital in general, had a working framework of thinking as a non profit-making organization which made things worse still. He saw the need to have the whole view becoming to acting as profit making organization, to begin accomplishing their role of satisfying the community with their care and help. As the Chief Medical Director, he began initiating on a project aimed at having the things change, first by outlining a strategy around by first focusing on the hospital’s mission to fulfill the health needs of the community, and he knew that for clinicians, their role was to restore health and administrators to mind the costs.

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To begin with, they focused on the hospitals situation in reality and discussed it with the clinics on having the patients receive good care, about their stressing financial position, and showing them the raw data. The clinicians got the sense why it was important to improve on the issues for their own benefits, patients and the whole program. A no margin-no mission mantra was adopted. They developed a practical management approach to get the administrators on board. A score card was developed based on four pillars; financial improvement, satisfying their customers, internal business procedures and satisfying the employees. Clinicians were explained to their and need to balance all these spheres. This was important so that they could not lose focus on some areas while emphasizing on others. Most of the implementation or ideas were developed by consensus. A pilot project was required reorganization of the hospital, development of an information system, redesigning of work and most of the difficult work entailed convincing the employees to working in a different way and some including the administrators resisted it at first. Managers and doctors saw the need to work as a team as a threat to their power previously held and the system as not workable and one cardiologist used to storm out of meetings due to dissatisfaction at first.


      The hospital developed a balanced score card that would help them focus on covering the major issues in the hospital in order to fulfill its missions of providing health, satisfy their customer and improve on performance of staff. The score card focused on improvement in financial performance, satisfaction of the employees and customers and internal business procedures. The internal operations included the clinicians working as a team so as to cut on the per patient’s cost, solution brainstorming on patient cases, coordination and they benefited by sharing experiences and knowledge. They also reduced some unnecessary time, tests, steps and procedures involved in the operation of patients by careful analysis of the patient information and comparison of them. They did also cut on the need to have more workers by reducing on procedures.

The team developed clinical paths for treatment of various diseases. They trained parents of the children patients on care after operations e.g. on proper feeding. They introduced required intermediary units and changed on using the data for useful purposes like analysis of customer satisfaction, knowledge on amount of savings and established performance measurement system for each item on the score card. Software was used to improve management, track performance and accomplish performance feedback. Surveys done on customer satisfaction also were necessary to help improve on the performance. The hospital was able to achieve a turn around from making losses to profit making, and customer satisfaction.


     As can be seen from the case, changes are necessary in order to transform organizations. Changes are decisions but these decisions have to be turned to plans and action. A complete transformation is possible if changes are viable. As can be seen, one of the greatest challenges facing changing an organization is letting people changed in their minds and convincing them that it is possible. For example, the managers could have viewed the plan as not important and a threat to their culture of holding on to leadership, even on loss-making scenario. A change is not by means easy and one can learn that small thing matter a lot. In cases where the employees are not satisfied with the proposed changes, one can initiate a pilot project so as to implement the changes and the rest will follow suit. In the above scenario, for example, since there was reluctant to the idea, they chose to begin the project in the pediatric intensive care unit and hoped to spread it to the rest. Some even viewed it as a ‘copybook’ initiative and would ignore it, but like the cardiologist who was used to walking out of the meetings finally saw the use of such a need. It is true that sometimes some do not react this because they don’t see the need of it but that they may think that whoever is trying to initiate it want to get their heads too high. Meliones gives us an idea that he realized on how to communicate with those people who have knowledge more than you have, in their particular area of specialization or field. One should be willing to put him or herself in their heads and feel what they experience other than commanding them.    A good approach to people while initiating change is very necessary and one must learn to communicate well with the staff and employees.


     An organization should identify on the areas it must excel in to bring satisfaction to its stakeholders and clients. New strategies may require to be brought in for purposes of boosting performance in these two and bringing higher capital returns. The hospital was first concentrating on it need to cut-cost by having it understaffed. This would lead to paralyzed operations since customers would run away and transfer patients. The community, on the other hand, would not benefit from the hospital as much as when the changes were introduced. A good change is that which meets its target. Meliones saw the reason why the hospital didn’t satisfy the needs of its customers, and knew what needed to be done. Implementing changes, the hospital is transformed from that of running in losses to that which makes profits. The basic need of having the hospital in the first place in meeting the health needs of the community is accomplished without a further need to having it unnecessarily understaffed. Customer satisfaction, easier and quicker processes are achieved by introducing the changes. Besides, the staff is benefiting by sharing ideas and coordinating while working together. Thus the score card approach achieved its intended duty and was successful. Establishment of ways to measure performance is one big success to improving it. The hospital has even ways to evaluate customer satisfaction. The implementation of the balance score card measures achieved its purpose although it did not mean being free of challenges, and came out with lessons for Meliones to learn. The strategy can befit any organization in any sphere of operation.


Meliones, J. (2000). Saving money, saving lives. Harvard Business Review, 78(6), 57-67.

Internal business process. Retrieved from the web
http://www.wdc-econdev.com/internal-business-process.html on 18 September 2008.

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