Helping to uncover Organizational

Intelligence: Understanding the

Structure that drives the Dynamics
of Best Practices.

A theoretical and empirical Approach:

Multiple Cases
October, 2001

Ignacio J. Martinez
Decision and Policy Sciences
Modeling and Simulation Track
System Dynamics Group
University at Albany
Model Sectors of Best Practices
Model (Knowledge1)
Human Resources People with Projects
different levels
of expertise to
 Novices  Projects
work in projects
 Intermediates  Networks
 Experts  Insight
 Promotion generation
 Training  Insights
 Mentoring transfer
 Culture  Methods
 Values  Knowledge
utilization

Knowledge
accessibility
to be used in Knowledge
transfer within Insight generation
training and Knowledge
mentoring networks
transfer
activities among
networks
Knowledge
Knowledge Management
 Learning
 Identification  Forgetting
 Elicitation  Knowledge
 Dissemination Technical accumulation
 Repositories Knowledge  Knowledge
 Technology to be stored obsolescence
and used
 <Junior moving to
<Intermediate moving
other fields>
to other fields>
Productivity initial
Junior Intermediate
productivity loses productivity loses

Junior Intermediate
Advanced
Productivity Productivity
Junior Intermediate Advanced Productivity
productivity rate Advanced
Productivity rate productivity rate
productivity loses

Average Junior Average Advanced

Average intermediate productivity
productivity Productivity
Junior moving to Intermediate moving Average
other fields to other fields retirement time

Junior Intermediate Advanced

New Advanced
Junior Intermediate
practitioners promotion retirement
promotion Normal migration
Growing fraction Intermediate
Junior proportion fraction
proportion Advanced Advanced moving to
Total people in proportioin other fields
<Junior <Average Junior the field
proportion> productivity> Effect of conflict
<Operational over migration
ECOM f
<Average intermediate Knowledge>
Productivity> Probability of
Junior conflicting approaches
Contribution <Core
Knowledge> Core to total
SD projects per Total projects knowledge ratio Weight on Core to
<Intermediate Intermediate
Contribution people Normalized total ratio
proportion> perceived change

Advanced EOIO f
Total insights
<Average Advanced Contribution Perceived
productivity> change of the
Time to perceive Avg time to become
field Time to become
Effect over insight obsolete
Insights per obsolescence obsolete

<Advanced project
proportioin> Effect of people living
Insight normal Operational over obsolescence time
Learning Knowledge
Obsolescence
EPLOKL f <Intermediate moving
Human resource
Fraction of operational to other fields>
rotation index
Effect of Knowledge on knowledge transferred
insight generation
Normalized <Junior moving to <Advanced moving
EKIG f to other fields>
Knowledge other fields>
Core Knowledge <Total people in
the field>

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
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)]
Model Use,
Implementation, and
Dissemination

Understandings of the
problem and the system

Understandings of
the Model Problem Identification
and Definition

Design of Learning
Model Testing and
Strategy / Infrastructure
Evaluation

Model System
Formulation Conceptualization
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.
 Operations Community
• Administrative
and operational • Patients
standards • Families, relatives,
• Capacity and friends

• Quality of • Referring Doctors

Service • Insurance Companies
• Resource Load
Balance
Knowledge-Based • Professional Assoc.

Innovation Projects • Reputation and

trust
• Brand recognition
• Change Programs
• Administrative improvement
Human Factor • Doctors involvement
• Intensity of projects
• Administrative staff
• Intelligence generation Financial
• Doctors
• Skills & Knowledge • Cash flow
• Stress & • Investments
Motivation
• Profitability
• Training
• Sustainability
• Performance
Measurement System
• Culture
 Model Cash In
Cash at hand
Cash out
+
Actual Investment
Potential Investment
in Capacity Income Variable operating Fixed operating
+
costs costs
Total Number of
Procedures/quarter

Capacity Unsatisfied
Patients
Unhappy patients

Patients Total Number of

Patients Served word of mouth
incoming patients
Satisfied bad word of
Patients mouth
Completion of
Patients
Refering Reputation
Net Increase in Doctors and Trust
Net Reputation and
Patients per unit of Referal Base Trust Change
capacity Reputation and Trust
Normalized

Effect of Reputation
and Trust
Expectations for the future
 Visually and  Express their
emotionally perceptions of how
understand the their work affects to
interconnectedness the whole.
of the system.
 Generate a shared
vision of the
structure and
purpose of the
practice.
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)