A theoretical and empirical Approach: Multiple CasesOctober, 2001

Ignacio J. MartinezDecision and Policy Sciences

Modeling and Simulation TrackSystem Dynamics Group

University at Albany

Helping to uncover Organizational Intelligence: Understanding the Structure that drives the Dynamics of Best Practices.

Interesting Questions Who gets to say what practices are the

“best” practices, when, and how. How do these practices “make it” to

become in-practice best practices and eventually “standard” practice.

If a certain practices “evolves” into a best practice and then into standard practice who gets to govern it(them) and how? (and perhaps enforce them if necessary?)

Projects Best Practices: A

constructivist approach

A Professional Organization case. (System Dynamics Society)

Best Practices: An implementation approach

A small private health service case. (Adirondack Oral & Maxillofacial Surgery)

Best Practices: A structural approach

Theory building Best Practices: A

standard making approach

The establishments of international standards in the regulation of financial markets

General View

Governing Structure

Regulatory Committee

Regulatory Area in Org

Operational Area in Org

Legislative

Regulatory Agency

Regulatory Area in Financial Institution

Traders

Model Sectors of Best Practices Model (Knowledge1)

Human Resources

Novices Intermediates Experts Promotion Training Mentoring Culture Values

Projects

Projects Networks Insight

generation Insights

transfer Methods Knowledge

utilization

Knowledge Management

Identification Elicitation Dissemination Repositories Technology

Knowledge

Learning Forgetting Knowledge

accumulation Knowledge

obsolescence

Insight generation Knowledge transfer within networks

Knowledge transfer among networks

Technical Knowledge to be stored and used

People with different levels of expertise to work in projects

Knowledge accessibility to be used in training and mentoring activities

OperationalKnowledgeLearning Obsolescence

Junior Intermediate AdvancedNew

practitionersJunior

promotionIntermediatepromotion

Advancedretirement

Advanced moving toother fields

Intermediate movingto other fields

Junior moving toother fields

Averageretirement time

Total people inthe field

Growing fraction

SD projects perpeople

Total projects

Fraction of operationalknowledge transferred

Insights perproject

Total insightsPerceived

change of thefield

Effect over insightobsolescence

EOIO f

Time to perceiveTime to become

obsolete

Junior proportion Intermediateproportion Advanced

proportioin

Effect of conflictover migration

ECOM f

Normal migrationfraction

<Advanced movingto other fields>

<Intermediate movingto other fields>

Human resourcerotation index

<Total people inthe field>

Effect of people livingover obsolescence time

EPLOKL f

Avg time to becomeobsolete

<Junior moving toother fields>

JuniorProductivity

IntermediateProductivity

AdvancedProductivityJunior

Productivity rateIntermediate

productivity rateAdvanced

productivity rate

Intermediateproductivity loses

Juniorproductivity loses

Average Juniorproductivity

Average intermediateProductivity

Average Advancedproductivity

Advancedproductivity loses

Productivity initial

<Junior moving toother fields>

<Intermediate movingto other fields>

JuniorContribution

IntermediateContribution

AdvancedContribution<Average Advanced

productivity>

<Average Juniorproductivity>

<Average intermediateProductivity>

<Juniorproportion>

<Intermediateproportion>

<Advancedproportioin>

Effect of Knowledge oninsight generation

Insight normal

EKIG f

Core Knowledge

NormalizedKnowledge

Normalizedperceived change

<CoreKnowledge>

<OperationalKnowledge>

Core to totalknowledge ratio

Probability ofconflicting approaches

Weight on Core tototal ratio

Best Practices Model

Importance Best Practices

How are they generated Who gets to pick them Why do they pick them and how How are they implemented How are they transferred across

organizations and sectors. (public, private, professional, industrial, services, etc)

A Small Health Care Practice Case: Adirondack Oral & Maxillofacial Surgery

Modeling the Impact of Knowledge-Based Innovations (Best practices implementation) in the Health Care Sector

Behavior…

Stress

Motivation

t

PerceptionOfQuality

ReputationAndTrust

Workload

Purpose… This study is set up to generate an

endogenous dynamic theory of the behavior of a small health care practice centered in innovations implementation, customer value, service quality, and community relationships.

Questions to be answered 1.What systemic structure is

conditioning the behavior of the system?

2.Does the structure that we have right now can deliver what we want in the future?

3.What future can we expect if we do nothing but the same?

Methodological Approach The health care model will be

approached using SD (System Dynamics) as the base approach to generate a dynamic hypothesis of the behavior and the University at Albany’s Group Modeling Techniques will be used.

Overview of the System Dynamics

Modeling Approach [Adapted from (Richardson and

Pugh 1981)]

ModelFormulation

Problem Identificationand Definition

SystemConceptualization

Model Testing andEvaluation

Model Use,Implementation, and

Dissemination

Design of LearningStrategy / Infrastructure

Understandings of theproblem and the system

Understandings ofthe Model

Products to generate 1. Structural Understanding of the

elements that causes the behavior of the practice.

2. Dynamic Understanding of the practice. 3. A transitional learning object to connect

efforts across the organization and to enhance the practice’s strategic planning capabilities through policy testing.

Human Factor

• Administrative staff

• Doctors

• Skills & Knowledge

• Stress & Motivation

• Training

• Performance Measurement System

• Culture

Financial

• Cash flow

• Investments

• Profitability

• Sustainability

Operations

• Administrative and operational standards

• Capacity

• Quality of Service

• Resource Load Balance

Community

• Patients

• Families, relatives, and friends

• Referring Doctors

• Insurance Companies

• Professional Assoc.

• Reputation and trust

• Brand recognition

Knowledge-BasedInnovation Projects

• Change Programs

• Administrative improvement

• Doctors involvement

• Intensity of projects

• Intelligence generation

Model Cash at handCash In Cash out

Income

+

Total Number ofProcedures/quarter

+

Patientsincoming patients

Fixed operatingcosts

Completion ofPatients

SatisfiedPatients

Reputationand Trust

Effect of Reputationand Trust

Variable operatingcosts

Unhappy patients

word of mouth

ReferingDoctorsNet Increase in

Referal Base

UnsatisfiedPatients

Total Number ofPatients Served

Potential Investmentin Capacity

Capacity

Net Reputation andTrust ChangePatients per unit of

capacity

bad word ofmouth

Reputation and TrustNormalized

Actual Investment

Expectations for the future Visually and

emotionally understand the interconnectedness of the system.

Generate a shared vision of the structure and purpose of the practice.

Express their perceptions of how their work affects to the whole.

Accomplishments Employee awareness of their

individual impact has increased. General impact captured in the

first model. Behavior generated useful to

identify the important sectors up to now.

Future Directions What to explore further? (In group)

Dynamics (Behavior) Structure

Grow the scope Grow the detail

Data Soft. Qualitative assessment Hard. Quantitative measurements

Projects Best Practices: A

constructivist approach

A Professional Organization case. (System Dynamics Society)

Best Practices: A standard making approach

The establishments of international standards in the regulation of financial markets

Best Practices: A structural approach

Theory building Best Practices: An

implementation approach

A small private health service case. (Adirondack Oral & Maxillofacial Surgery)

Pieces… International

Professional Organization

International Services Organization

Theoretical Model Empirical Model

of Implementation

A possible new approach? How to uncover Organizational Intelligence: Understanding the Structure that drives the transformation of Best Practices into Standards of Practice. (??)

Assumption: Assuring (through standards) that the organization practices (doing) the “best” practices (knowledge) closes the knowing-doing gap and leads to intelligent behavior influencing successful outcomes.

Another new approach?

Uncovering Organizational Intelligence: Understanding the evolutionary nature of Standards of Practice.