Keating, Charles B. PhD; Morin, Mary MSN, RN
A primary challenge for nursing leaders in healthcare is responding effectively to complex turbulent environments, characterized by rapid and accelerating change. 1 Healthcare environments are distinguished by multiple concerns, including excessive regulation, advancing technology, changing stakeholder expectations, increasing competitiveness, political overtones, cultural limitations, and demands for efficiency. 2 Responding to these concerns requires operational structures capable of maintaining stability in the midst of accelerating change.
Inadequacies in operational structures may be evidenced through various symptoms. For example, typical operational problems that might have their basis in a poorly designed or executed structure are:
* Inability to meet demands for constant change;
* Ineffective communications between different operational departments;
* Inconsistency in activities that span multiple departments or functions;
* Weak closure, accountability, or follow-through on plans;
* Excessive meddling by upper level managers in day-to-day operations;
* Lack of accountability for achievement of required levels of performance;
* Large variability in performance across an operational system;
* Continual crises requiring immediate management attention.
Every operational issue is not symptomatic of an underlying structural issue. However, given the propensity for continued dramatic shifts in healthcare environments, it is imperative that healthcare leaders be proficient in the design and analysis of operational structures. Effective structures are characterized by their ability to respond to emergent issues while retaining flexibility and adaptability to rapidly changing environmental conditions. 3
At some point, every nursing leader will be confronted with the two central concerns of structure: (1) Determining if problematic conditions are being generated by inadequate structure and if so, (2) Understanding the precise nature of the structural issue(s). Therefore, proficiency in the analysis and design of operational structure should be considered an essential skill for nursing leaders.
A Systems Perspective of Operational Structure
Every healthcare operation, from an individual nursing unit to an entire healthcare system, has a structure, which is a key factor in system performance. The systems perspective concludes that “Every system and organization has an architecture, or structure broadly defined, which largely determines what the system can and can’t do.”4(p.v) Therefore, system structure is a critical concern when considering improving effectiveness of operations.
According to the systems view, structure is not the traditional organizational chart. Instead, it is “the set of arrangements by which the resources of an organization, human and others, are connected through relationships.”5(p20) These relationships occur through mechanisms of interaction. For example, a weekly staff meeting of a nursing department would be considered a structural mechanism. The meeting allows relationships between individuals and the entities they represent to occur. Thus, the systems view suggests that structure includes the physical entities (departments, units) and the relationships (formal and informal) that emerge through mechanisms (mediums of interface) that facilitate interaction. The arrangement of the set of formal and informal mechanisms that allow an operation to function constitutes the system structure. Therefore, understanding mechanisms that facilitate relationships is key to understanding operational system structure.
Two additional concepts, relevant environment and operational context, complete the systems view of structure. System environment includes the conditions, stakeholders, entities, and patterns external to the system that either have an influence on the system or are influenced by the system. The relationship of structure to the environment is one of mutual response and fit. If the environment shifts in ways that affect system performance, then the structure must compensate to maintain stability of the system. This permits the system to maintain performance in the midst of change.
Every structure must perform within an operational context. Operational context is the set of organizational circumstances and the resulting patterns within which the system structure must operate. Table 1 identifies several key elements contributing to operational context. In effect, context is what uniquely defines the organization. Every operational structure is embedded in a context that both constrains and supports the structure. A system structure cannot be understood independent of its environment or operational context.
The Viable System Model’s Theoretical Foundation for Structural Analysis
Systems science provides a robust theoretical foundation for understanding system structure. Probably the most well known systems science theory of structure is the VSM (Viable System Model). 6–8 The VSM offers a comprehensive systems perspective of structure and has been successfully applied to understand structure in various organizational settings that range from business to nonprofit enterprises. 9 The VSM provides a template for structuring new operational designs or diagnosing existing operational structures. The basis for the model is a set of functions that must be performed by any system to maintain viability (existence). Viability is maintained by a system if “it is capable of responding to environmental changes even if those changes could not have been foreseen at the time the system was designed.”10(p105) Effectiveness in performing the VSM viability functions determines the efficacy of the system structure and ultimately the level of system performance.
The VSM focuses on two primary concerns regarding system structure. First, the VSM considers the arrangements of the structural entities that perform the essential functions of a viable system. Beer 6–8 identifies six primary system functions essential to viability of an operational system. These functions, identified as systems within the model, include: operations, coordination, control, monitoring, development, and policy. The second concern of the VSM is the flow of information (communication) that maintains the relationships necessary to perform viable system functions.
Based on the seminal work of Beer 6–8 and supplementary expositions by Espejo and Harnden, 9 Espejo, 5 Jackson, 10 and Flood, 11 an overview of the VSM functions follows. These functions are necessary to retain operational system viability. Extending the work by Beer, based on experience, we have added an additional system, System 4*, to address learning as a viable system function.
This system functions to produce the products and services that provide value beyond the system. The remaining functions of viability exist to facilitate System 1 production of products and services. For example, in a hospital, System 1 entities might include surgical services, emergency departments, or critical care nursing. Each System 1 has an internal management function responsible for the organization of System 1 to perform work. There can be multiple systems in a viable system.
This system provides system stability by synchronizing the different operational entities (System 1s). System 2 prevents unnecessary oscillation due the potentially uncoordinated activities of the different System 1 entities. For example, clinical procedures, crossfunctional planning groups, and standards committees are examples of structural mechanisms designed to accomplish System 2 functions.
System 3 functions to maintain operational performance on a day-to-day basis. Thus, this system provides for the execution of policy, distribution of resources, and accountability. The focus of System 3 is internal. Traditional day-to-day management of operations, including activities such as planning, operational decisions, and resource allocation would be considered System 3 activities. For example, making decisions concerning coverage of system staffing shortages would be a system 3 activity.
Within System 3 is a separate system to provide monitoring of operations for problems or deviations in performance. The primary function of System 3* (read System 3 Star) is auditing of operations. System 3* performs both routine and sporadic audits of problematic areas. For example, review of patient charts or a Joint Commission mock survey are both examples of performing a System 3* monitoring activity for the system.
System 4 captures and processes environmental information to determine operational impact and strategic implications. The focus for this system is directed externally and to the future, primarily concerned with gathering and processing environmental intelligence. Strategic planning, environmental scanning, recruitment and staffing patterns assessment, and new technology evaluations are examples of System 4 activities.
This system provides purposeful learning in a viable system. System 4* learning is concerned with errors that are rooted in an inadequate system design, as opposed to faulty execution of the design. Errors are produced when the expected results of system operation are incongruent with what actually happens. While System 3* is focused internally on deviations in operational performance, System 4* questions errors that may be a consequence of a faulty system design. The correction of System 4* type errors requires modification in the operational system. For example, a staffing and scheduling process that is being followed precisely but that is still producing less than desirable results would be a candidate for a System 4* inquiry.
This system assumes responsibility for the strategic decisions and direction that maintain the identity of the system. Additionally, this system monitors and maintains a balance between the long term external focus of System 4 and the short term internal focus of System 3. The opposite foci of Systems 3 and 4 create a natural and predicted tension. System 5 must monitor and direct appropriate balance between present operations and future development. Establishment of long term vision, mission clarification, strategic decisions, and corporate policy development are examples of System 5 activities.
The second critical aspect of the VSM is information flow (communications) within the viable system. Communication occurs through channels. These channels provide flow of information through mechanisms that permit relationships to be established in support of maintaining system viability. Based on Beer’s work with the VSM, 6–8 the primary communications channels, their function, and an example mechanism are provided in Table 2.
Based on experience in applications of the VSM we have added three additional communications channels for analysis:
* The dialog channel has the primary purpose of providing examination and interpretation of organizational decisions, actions, and events. This aligns perspectives and creates a shared understanding of organizational decisions and actions in light of system purpose and identity. An example of a mechanism that uses the dialog channel would be a staff workshop to examine the impacts and interpretations of a recent organizational decision to modify services.
* The system learning channel supports the System 4* function. This channel provides detection and correction of system errors, testing of assumptions, and identification of system design deficiencies. This ensures that the system continually questions the adequacy of its design. The examination of the continued relevance of an existing process for staffing and scheduling is an example of using the system learning channel.
* The informing channel is designed to provide routine transmission of information throughout the system. Thus, information that is not appropriate for other channels is made accessible across the entire system through this channel. An example of the informing channel is creation of an intranet site to allow staff access to hospital expansion plans for facilities and services.
Structural Analysis and Implementation of Systems Science
Drawing from the VSM framework, a systems based approach was developed with the purpose of facilitating rapid examination of operational system structure. The approach is accomplished in four phases. Although the phases are presented sequentially, they are not independent and should not be viewed as static. Therefore, throughout the analysis, prior phases should be revisited as new understanding, knowledge, and information change the circumstances of the analysis.
Phase 1—Structural Context
The primary objective of this phase is to identify the environmental and organizational circumstances that have an impact on system design and performance. The relevant environment for a system is the set of entities and patterns external to the system that either have an influence on the system or are influenced by the system. A map of the environment is constructed and should include elements such as competitors, trends, stakeholders, and patterns external to the system. The following questions can be used to stimulate thinking about the system environment:
What entities (eg, groups, organizations, regulatory bodies) are external to the system and have a significant influence on operations?
What trends in the environment are important to the system (eg, technology, insurance, regulation, economic, healthcare, personnel, social, profession)?
What are the external threats/concerns to the system and where do they come from?
Who are the important stakeholders who influence or are influenced by the system? What is their particular interest in the system?
To complete the contextual phase, organizational constraints and enablers that influence the design, operation, and performance of the system structure are identified. Table 1 provided various contextual elements that should be considered in assessment of structure. The listing should not be taken as absolute. Based on particular circumstances there may be other constraints/enablers.
The representation of the relevant environment and operational context must be continually modified based on changing conditions, additional knowledge, or shifts in the environment itself. In addition, care must be taken to avoid speculation and unsupported conclusions regarding the environment and operational context. The product of this phase is a representation of the environment and the important contextual constraints/enablers for the system structure.
Phase 2—Structural Mechanism Identification
This phase focuses on identifying the mechanisms used by the operation to perform system functions and communications that support viability. Recall that mechanisms are the forms (formal and informal) that facilitate interaction among people and entities within the operational system. Mechanisms permit decision, action, and interpretation within the system. Each system function and communications channel should be examined with the following question in mind:What are the mechanisms that provide for achievement of this system function or communications channel?
At the conclusion of this phase of the analysis, implementing mechanisms for viability have been identified. The same mechanism may support multiple functions or communications channels.
Phase 3—Structural Performance Assessment
The structural performance assessment phase is designed to determine the performance level being generated by the structure. Two structural issues must be examined in this phase. First, the set of mechanisms that support each of the functions and communications channels are assessed. This assessment determines if the set is adequate in quantity and quality necessary to perform system functions. This is a qualitative judgment based on the unique environment and context of the operational structure. For example, there may be only three mechanisms identified to support the System 4 function of learning. Adequacy of this set of mechanisms to perform System 4 functions cannot be determined independent of the particular environment and operational context. Thus, a set of mechanisms might be adequate for one organization and deemed totally inadequate for a different organization. Adequacy is found in the context, not in the set of mechanisms.
The second assessment concerns the effectiveness of the various mechanisms. There may be a plethora of mechanisms that are intended to perform a particular viable system function. However, even though there may be a sufficient quality and quantity of mechanisms, if the mechanisms are ineffectively used the structure is not likely to deliver desired levels of performance. Viability only assures system existence, not high levels of system performance.
At the conclusion of this phase structural performance has been determined. Products from this phase include evaluation of the adequacy (number and quality) of mechanisms that support the viable system functions and communications channels. In addition, this phase produces the accounting for the effectiveness of the individual mechanisms identified.
Phase 4—Structural Analysis and Interpretation
The structural analysis and interpretation phase critically examines results of previous phases for conclusions and implications. The question this phase must answer is:Given the operational context and system environment, to what degree is the architecture (mechanisms, relationships, patterns) of the system structure appropriate for the operation? This is an interpretative activity with a purpose of making sense of the results.
The products from this analysis include a set of structural inadequacies, identification of pathologies being forced by the higher level organization (operational context), and specific weaknesses in the structural architecture. Based on the analysis, more informed decisions can be made regarding structural change. Possible decisions include: (1) addition of mechanisms to enhance performance of weak functions and communications channels; (2) modification of existing mechanisms found to be lacking in performance; (3) elimination of mechanisms found not to add sufficient value to the system structure to justify their continued existence; or (4) move to increase effectiveness of existing mechanisms by ensuring compliance to their requirements.
At the conclusion of this phase the analysis has identified structural mechanisms and patterns that should be created, continued, modified, or discontinued. Hence, structural modification can proceed based on sound exploration and holistic analysis as opposed to speculation or intuition.
Applying the Approach
The approach for structural systems analysis was applied to understand structural adequacy of a nursing operation in a hospital setting in the United States. The operational system of interest was a patient care services group that provided all levels of nursing care for a 600-bed facility. There were approximately 800 employees in the operational structure being analyzed. The operation had a history of success but was interested in self-examination of structural adequacy and development of systems analysis skills. Consistent with the U.S. healthcare industry, the operation experienced environmental turbulence from declining reimbursement, skilled staff shortages, localized competitive pressures, rapidly advancing and costly technological innovations, increasing regulatory interference, and high patient census. Systems analysis of structure was viewed as an approach that would offer new insight into dealing with the complex turbulent environment faced by the organization. Senior managers responsible for patient care services at the facility conducted the analysis during 4 months. Data were gathered from interviews of senior staff, historical document reviews (procedures, policies, systems, performance data), and observations of the operations. Several of the insights gained from the analysis are discussed below to demonstrate the range of insights from the approach. For ease of presentation the discoveries and operational implications are discussed regarding the operational environment, context, and system structure.
As expected, the operational environment was found to be complex and highly turbulent. However, several important insights were gained from the environmental assessment. First, the environment had never been mapped by the organization to show the multiple entities in the environment and the logical groupings that included regulations, administration, customers, and patients. This allowed multiple perspectives to surface and be explicitly examined. Second, examination of the environment led to dialogue and alignment of perspectives concerning the nature of the environment from different viewpoints within the operation. For example, the number of regulatory bodies that examined the operation was not fully known or appreciated by participants. Although each participant was familiar with those specific regulatory bodies that had a direct impact on their departments, their knowledge of other regulatory bodies was minimal. This discovery opened a dialog concerning implications for consistent monitoring of regulatory bodies, sharing of effective approaches to external audits, and appreciation of the number and scope of external regulations impacting the operation. The organization discovered that it was not managing the environment systemically but was developing fragmented responses to turbulent conditions. This was evidenced by difficulties in dealing with rapid shifts in environmental conditions. The operation had become very effective at surviving environmental crises by constantly shifting attention, resources, and energies to the demand of the moment invoked by environmental shifts. In summary, the response to environmental turbulence was best characterized as reactive.
Based on the environmental analysis there were several conclusions and structural implications identified. Two primary operational implications were:
* Environmental Scanning. The need existed to develop more robust methods for scanning the environment, making the results accessible, and interpreting the results for implications. This would provide for decision and action in advance of predicted environmental shifts.
* Environmental Model. A model of the environment is essential to provide a shared understanding of external influences on the operation. In this case the absence of a model of the environment was recognized as limiting wider perspectives and understanding of the system. It was also recognized that once an explicit model of the environment was developed it could be maintained as a source of continuous assessment and monitoring for shifts, trends, and emergent issues.
Contextual analysis identifies organizational patterns that can constrain or facilitate effective function of the operational structure. The contextual elements of Table 1 provided a guide for development of contextual patterns. There were multiple contextual constraints and enablers identified during the analysis. For example, three major contextual constraints are examined.
A major contextual constraint was the informal nature of the operation. Although every structure has both formal and informal aspects, this particular operation had been skewed toward informal structure. The impact was operation in a tightly regulated environment with informal structures. The observed result was limited agility and a sacrifice of consistency, integration, and operational alignment. An example was a staffing and scheduling system that maintained viability but that varied widely across the system. The result was the emergence of multiple informal approaches, varying substantially unit by unit, each designed to achieve the same staffing and scheduling objectives. Despite a desire to respect the autonomy of local units, the informality resulted in decreased efficiency and inconsistencies between units.
A second major contextual constraint was the dominating focus on near term activities. The operation had been extremely successful in managing the day-to-day patient care of the facility. However, the day-to-day focus sacrificed strategic thinking and activities. The management team was skilled at effectively handling emergent operational crises. However, few resources and scant energy were expended in development of strategic initiatives or perspectives. The result was an operation and management team that suffered from an imbalance between current operational activities and future development activities.
A final contextual constraint identified was the physical layout of the hospital itself. The structure was built in the mid-1960s. Although there had been numerous upgrades to the structure and incorporation of new technologies, the physical structure of the buildings still constrained the system structure. For example, the physical structure of the facility had affected processes such as patient movement, housekeeping, and staffing. The limitations imposed by the physical structure constrained development of structural mechanisms and had a negative impact on their effectiveness.
The consideration of contextual constraints provided insight and limitations to be considered before any structural modification. A system structure cannot be fully understood without an appreciation of the operational context in which it is embedded. The same structural design deployed in a different operational context will produce different consequences. Therefore, the consideration of operational context is an essential aspect of the structural analysis.
Through the course of the structural analysis, many structural inadequacies and pathologies were identified. Every structure has inconsistencies. However, it is a leadership responsibility to identify and improve operational structure. Table 3 is a summary of several of the structural issues identified for the System 1–5 functions. The structural analysis identified many systemic issues that are characteristic of successfully performing organizations. The results of the analysis were used for improvement planning and action on three levels: individual manager, management staff development, and integration of operations.
Individual managers who participated in the analysis benefited from examination of the structure of their individual areas of responsibility. The analysis introduced participants to a different language and a new way to question effectiveness of familiar operational structures. Therefore, on the individual manager level, the structured analysis provided increased sophistication in a systemic approach for identification of structural issues. The participants undertook a different role and responsibilities for design of system structure. Before the analysis, no systemic efforts were used to examine the structure of unit operations. As a result of the analysis, individual managers enhanced knowledge and skills associated with structured systems analysis.
The analysis resulted in the alignment of the management staff in identification and appreciation of common structural issues. Therefore, the management group focused clearly on structural issues in need of change. The group undertook initiatives in response to structural deficiencies identified. For example, an audit was undertaken to examine the variance across different units in performing staffing and scheduling of critical staff resources. Structural analysis provided an important starting point for focusing efforts for improving structure based issues. In addition, the staff came to a greater understanding concerning their role and responsibilities for design of the entire operation and not just their individual departments and units.
A final area of impact for the analysis was in the area of operational integration. Similar to many healthcare operations, the organization was characterized by isolated departments that operated autonomously. Although the individual departments were successful, the gains to be achieved through effective integration across multiple units were not being realized. The analysis provided an essential step in moving toward greater integration across the different units. Specific areas of potential integration were identified as well as those areas that needed to remain autonomous.
The system-based approach to structural analysis provides nursing leaders with an effective method to analyze operational structures and to suggest modifications. Structural issues may manifest themselves through multiple operational symptoms. The primary advantage of using a system-based approach to structural analysis rests in a holistic perspective. This fosters discovery of deep structural issues and limits the squandering of scarce resources on correction of superficial symptomatic conditions. Also, because the approach is drawn from systems science, it applies across a range of operational structures. Therefore, the approach can be used to diagnose structures that range from isolated nursing units to entire operations. Structure can be optimized for the environment and context unique to a particular operation. In conclusion, the systems-based approach offers valuable insight and understanding of structural inadequacies. It provides nursing leaders with a tool that facilitates an important first step in understanding current structure, effective restructuring, or establishing initial operational structure.
© 2001 Lippincott Williams & Wilkins, Inc.