Eastman Kodak, a classic reengineering example portrayed by Hammer and Champy (1993), began with a push from the top but put much greater emphasis on customers and on empowering employees at multiple levels. Kodak traces its rich historic roots back to the late 1880s, when George Eastman began to manufacture wooden boxes capable of capturing one hundred personal images on film.
A century later, Kodak was a giant in trouble. Its name and film were known around the world, but the company had been rocked by intense competition, high costs, declining customer satisfaction, threats of a hostile takeover, and low employee morale. At a top management meeting in 1989, Kodak’s normally gentle, soft-spoken CEO, Colby Chandler, wielded a machete to hack a wooden lectern to pieces. The message was clear and dramatic: Kodak needed fundamental change, and its functional, “stovepipe” structure had to give way to an organization based on process—a seamless flow from raw materials to finished products (Hammer and Champy, 1993).
Kodak chose to reorganize into six flows, one of which was black-and-white film. Implementation was to begin immediately, and any laggard operations would be shut down. In the black-and-white division, a group of executives focused on creating three streams: graphics, health sciences, and solvent coatings. All other areas (financial services, human resources, and engineering support) would be “dedicated” to supporting these flows.
One of the first tasks was to create performance measures and standards for the flows (productivity, inventory, waste, quality, conformance to specifications). With the operating flow as the center of attention, managers and supervisors became coaches and cheerleaders. Frequent informal meetings were an opportunity to air concerns and identify problems. Employees were encouraged to develop local visions and determine priorities and improvement plans for everything from reducing inventory and cutting waste to establishing relationships with suppliers and speeding delivery time (Frangos, 1996).
The overall flow focused on satisfying external customers; each step in the process emphasized satisfying internal customers and building cooperation among employees. Cross-functional teams began to achieve breakthroughs in quality and cost reduction. Two years after the restructuring was launched, performance standards were being surpassed. The division was not only one of the company’s shining stars in terms of profitability but also was widely heralded as one of the company’s best places to work.
BETH ISRAEL HOSPITAL
Boston’s Beth Israel Hospital is a restructuring effort in health care that sought to move toward greater autonomy and teamwork. When Joyce Clifford became Beth Israel’s director of nursing, she found a top-down structure common in hospitals:
The nursing aides, who had the least preparation, had the most contact with the patients. But they had no authority of any kind. They had to go to their supervisor to ask if a patient could have an aspirin. The supervisor would then ask the head nurse, who would then ask a doctor. The doctor would ask how long the patient had been in pain. Of course the head nurse had absolutely no idea, so she’d have to track down the aide to ask her, and then relay that information back to the doctor. It was ridiculous, a ludicrous and dissatisfying situation, and one in which it was impossible for the nurse to feel any satisfaction at all. The system was hierarchical, fragmented, impersonal, and [overmanaged] [Helgesen, 1995, p. 134].
Within units, the responsibilities of nurses were highly specialized: some assigned to handling medications, others to monitoring vital signs, still others to taking blood pressure readings. Add to the list specialized housekeeping roles—bedpan, bed making, and food services—and a patient witnessed interruptions from a multitude of virtual strangers. No one really knew for sure what was going on with any individual patient.
With the support and cooperation of Mitchell Rabkin, Beth Israel’s progressive CEO, Clifford instituted a major structural change, from a pyramid with nurses at the bottom to an inclusive web with nurses at the center. The concept, called primary nursing, has each primary nurse monitor the care of a specific patient. The nurse takes information when the patient is admitted, develops a comprehensive plan, assembles a team to provide round-the-clock care, and lets the family know what to expect. A nurse manager sets goals for the unit, deals with budget and administrative matters, and makes sure that primary nurses have ample resources to provide quality care.
As the primary nurse assumed more responsibility, connections with physicians and other hospital workers had to be revised. Instead of simply carrying out physicians’ orders, the primary nurse became a professional partner, attending rounds and participating as an equal in treatment decisions. Housekeepers reported to primary nurses rather than to housekeeping supervisors. The same housekeeper was assigned to make a patient’s bed, attend to the patient’s hygiene, and deliver trays. Laundry workers brought in clean items on demand rather than making a once-a-day delivery. Beth Israel’s inclusive web was further strengthened by sophisticated technology that gave all network points easy access to patient information and administrative data.
Primary nurses learned from performing a variety of heretofore menial tasks. Bed making, for example, became an opportunity to evaluate a patient’s condition and assess how well a treatment plan was working. Joyce Clifford’s role also was transformed from top-down supervisor to a web-centered coordinator. Rather than telling people what to do, she focused on keeping everyone informed:
At the center of all patient care at Beth Israel, Joyce Clifford linked the various intersecting points of the inclusive web: “A big part of my job is to keep nurses informed on a regular basis of what’s going on out there—what the board is doing, what decisions are confronting the hospital as a whole, what the issues are in health care in this country. I also let them know that I’m trying to represent what the nurses here are doing—to our vice-presidents, to our board, and people in the outside world… to the nursing profession and the health care field as a whole” [Helgesen, 1995, p. 158].
Beth Israel’s primary nursing concept, initiated in the mid-1970s, produced significant improvement in both patient care and nursing morale. Nursing turnover declined dramatically (Springarn, 1982) and the model’s success made it highly influential and widely copied both in the United States and abroad. But even successful change won’t work forever. Over the years, changes in the health care system put Beth Israel’s model under increasing pressure. More patients with more problems but shorter hospital stays made nurses’ jobs much harder at the same time that cost pressures forced reductions in nursing staff. Beth Israel chose to update its approach by creating interdisciplinary “care teams.” Instead of assembling an ad hoc collection of care providers for each new patient, ongoing teams of nurses, physicians, and support staff were created to provide interdisciplinary support to primary nurses (Rundall, Starkweather, and Norrish, 1998).