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Modernizing health institutions in Latin America

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Modernizing health institutions in Latin America

Héctor Colindres

Cambridge, Massachusetts

Copyright © 2007 Management Sciences for HealthAll rights reserved.

Facilitators may photocopy the forms, tools, and instructions in this guide without prior permission, for noncommercial use only. Any translation, adaptation, or commercial use of any part of this book in any form or medium requires prior written permission from the publisher.

Management Sciences for Health Tel.: 617.250.9500 784 Memorial Drive Fax: 617.250.9090 Cambridge, MA 02139-4613 USA Web site: www.msh.org

ISBN 0-913723-19-7

Technical editor: Barbara K. Timmons Editor: Beverly H. Miller Proofreader: Fran PulverInterior design and composition: Jenna Dixon, Bookbuilder, jdbb.net

Partial funding for this publication was provided by the Office of Population and Reproductive Health, Bureau for Global Health, US Agency for International Development, under the Management & Leadership Program, award number HRN-A-00-00-00014-00, and the Leadership, Management & Sustainability Program, cooperative agreement number GPO-A-00-05-00024-00. The opinions expressed herein are those of the authors and do not necessarily reflect the views of USAID. The Boston Foundation provided additional support through the James M. and Cathleen D. Stone Foundation.

L�brary of Congress Catalog�ng-�n-Publ�cat�on Data

Colindres, Héctor. Modernizing health institutions in Latin America / Héctor Colindres. p. cm. Includes bibliographical references. ISBN 978-0-913723-19-7 (alk. paper) 1. Health services administration—Latin America. 2. Health facilities—Latin America. I. Title.

RA971C687 2007362.11098—dc22 2006061176

1 2 3 4 5 6 7 8 9 07 08 09 10 11

Uno No Escoge

Uno no escoge el país donde nacePero ama el país donde ha nacido

Uno no escoge el tiempo para venir al mundo,Pero debe dejar huella de su tiempo.

Nadie puede evadir su responsabilidad

Nadie puede taparse los ojos, los oídos,Enmudecer y cortarse las manos.

Todos tenemos un deber de amor que cumplir,Una historia que hacer,Una meta que alcanzar.

No escogimos el momento para venir al mundo:Ahora podemos hacer el mundoEn que nacerá y creceráLa semilla que trajimos con nosotros.

—Gioconda Belli

We Don’t Choose

One doesn’t get to choose the country where one is bornand yet one loves that country.One doesn’t get to choose the time to come into the world,Yet one must leave a mark of one’s passing No one is free of responsibility.No one should cover their eyes, their earsFall silent or hide their hands The duties of love are everyone’s dutyWe all have to make our historyreach our goal. Though we didn’t choose the moment to come into the world:We can make the worldwhere our seedwill be born and grow.

v��

Contents

acknowledgments v��� introduction 1 Chapter 1 Planning for positive change in health institutions 7

Creat�ng the prerequ�s�tes for change • Pol�t�cal comm�tment to the reorgan�zat�on process • Establ�sh�ng the techn�cal team and work cond�t�ons • Develop�ng a commun�cat�on strategy for the change process

Chapter 2 The systemic approach to organizational design: Phases 1–6 27The system�c approach of management-by-processes • Phase 1: Analyz�ng pol�c�es, laws, and the regulatory framework • Phase 2: Rev�ew�ng the organ�zat�on’s m�ss�on • Phase 3: Rev�ew�ng the organ�zat�on’s v�s�on • Phase 4: Defin�ng the organ�zat�on’s funct�onal areas • Phase 5: Defin�ng organ�zat�onal systems • Phase 6: Determ�n�ng the status of organ�zat�onal systems

Chapter 3 Designing organizational systems: Phases 7–13 51Phase 7: Develop�ng profiles of organ�zat�onal systems • Phase 8: Defin�ng the m�ss�on, v�s�on, and funct�ons of each system • Phase 9: Des�gn�ng processes, procedures, and act�v�t�es • Phase 10: Defin�ng pos�t�ons and funct�onal and organ�zat�onal structures • Phase 11: Rev�s�ng the des�gn of organ�zat�onal systems • Phase 12: Defin�ng performance standards by process and procedure • Phase 13: Creat�ng job descr�pt�ons

Chapter 4 Preparing to implement the reorganization 77Determ�n�ng the resources needed to �mplement the new systems • Develop�ng techn�cal tools • Ident�fy�ng staffing requ�rements • Develop�ng strateg�es for staff changes • Adjust�ng the des�gn to correspond w�th pol�t�cal, techn�cal, and financ�al real�t�es • Creat�ng the �mplementat�on plan and flowchart • Form�ng the �mplementat�on teams

Chapter 5 Implementing the reorganization 109F�eld test�ng the model • Develop�ng staff techn�cal and leadersh�p sk�lls • Scal�ng up and mon�tor�ng �mplementat�on • Evaluat�ng the �mplementat�on process and �ts results

Cases PROSALUD redefines its organizational model 123 APROFAM modernizes for sustainability 127

glossary 133 toolkit 135 references 185 about management sciences for health 188

v���

Acknowledgments

I would like to thank Barry Smith, Chief of Party in Nicaragua, for the Leadership, Management & Sustainability (LMS) Program, and Alba Luz Solorzano, Technical Coordinator for the Project for Support of Social Sector Reform in Nicaragua, for their support and important substantive contributions to this book. I am also grateful to several other staff members of Management Sciences for Health, who contributed to its content through their reviews and editing: Peter Cross, Elena Decima, Claritza Morales, Janice Miller, and Barbara Timmons. Peter Cross did a meticulous review, and his comments were invaluable in helping us revise the book. Barbara Timmons revised the text and wrote various examples. Byron Santos contributed to the preparation and organization of the book and to the design of illustrations.

Claire Bahamon wrote the case studies of PROSALUD and APROFAM. I would also like to acknowledge Victor M. Jaramillo, who reviewed early drafts of the book and made many helpful suggestions for its development and improvement. Maria Miralles and David Lee reviewed and contributed to several examples about pharmaceutical management.

Jan D. Gibboney translated the text from Spanish into English, and Barbara Timmons edited the translation. Byron Santos provided support in producing the manuscript and assistance with research and drawings.

We would like to acknowledge the generous support of the US Agency for International Development (USAID) under the Management & Leadership (M&L) and Leadership, Management & Sustainability programs. We would also like to thank the Boston Foundation, which provided crucial additional funding through the James M. and Cathleen D. Stone Foundation.

Introduction

In only a few decades, a profound transformation has taken place in many social-sector organizations. Today, changes occur at a faster pace and in a more complex fashion than ever before, with the result that orga-nizational change has become but one more fact of life. In the health sector, change is beginning to be viewed as essential for improving service quality and coverage. People are interested in abandoning traditional organizational structures and old paradigms in favor of alternatives that better respond to the needs of the public for health services.

What have managers and their work teams been doing to address the new challenges in their environments? In health ministries, they are creating new organizational structures to strengthen the role of governance, implement models of integrated care, and decentralize essential functions. At the same time, private and nongovernmental organizations are seeking more efficient and more competitive organizational structures that will allow them to increase quality, improve cost recovery, and progress toward long-term sustainability.

identifying problems and setting objectives

In Nicaragua, for example, after analyzing that country’s Ministerio de Salud Pública y Asistencia Social (Ministry of Health, or MINSA), management teams identified the following major problems:

n Poor regulatory capacity;

n Lack of coordination between management and services;

n Duplication of functions;

n An internal vision that answers to the demands of labor unions, pro-grams, and diseases rather than aligning itself toward the provision of care to the population;

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2 m o d e r n i z i n g h e a l t h i n s t i t u t i o n s i n l a t i n a m e r i c a

n Management centralization and bureaucratization: an enormous, high-cost structure and rigid bureaucracy with little capacity to respond to change;

n Proliferation and fragmentation of units using vertical approaches that lead to:

❱ lack of coordination and ineffective communication, cooperation, and teamwork;

❱ parallel and overlapping efforts, resulting in increased usage and cost of resources;

❱ managerial chaos, with a multiplicity of management levels and priorities;

❱ fragmented approaches that reduce the impact on care;

❱ high degree of difficulty in governing and monitoring.

In this context, MINSA’S management staff perceived an urgent need for change. In March 2004, the minister and his support team made the decision to launch a far-reaching and comprehensive process of institutional reorga-nization. It was clear that this process would be complicated, difficult, and costly, but at the same time necessary and feasible.

The group established from the outset the following objectives to guide their efforts and lead them to the desired new model:

n Strengthen the sectoral governance function, that is, the normative, regulatory, monitoring, and control function;

n Direct and monitor the provision of health services using an inte-grated model of comprehensive care;

n Extend coverage and improve access to services, defining regulatory efforts as a function of the level of service;

n Improve health system efficiency by focusing on the distribution of resources, financing service delivery on the basis of results, and planning investments;

n Strengthen social monitoring of the health sector through the par-ticipation of civil society in the planning, organization, management, and monitoring of health investments.

Another good example comes from PROSALUD, a nonprofit organiza-tion founded in 1985, which provides access for low-income individuals to both primary and secondary health care in Bolivia. In 2002, the country had undergone significant changes, with PROSALUD beginning to feel the pres-sure of an increasingly competitive environment, increased demand from its

The more change is needed, the more leadership is required:

It takes skill to anticipate spontaneous changes and promote those that are necessary for an organization.

Moreover, it is essential to involve staff in the process of change.

Introduction 3

clients, a steady increase in operating costs, and increasingly limited poten-tial for obtaining support from external sources of financing. In this con-text, PROSALUD’s Directorate General, with support from the organization’s National Board of Directors, made the decision to launch an administrative and financial reorganization, with a view to transforming PROSALUD into a modern, self-sufficient organization. See pp. 123–26 for details about this transformation and its results.

In Guatemala, another nongovernmental organization, APROFAM, launched and carried out a modernization process throughout its family planning clin-ics in the late 1990s. By 2002, the organization had increased its financial sustainability and—by diversifying its services and marketing them better—increased its revenues. The clinics were able to recoup 122 percent of their costs (22 percent over their total costs), compared with 88 percent of costs before the reorganization. See pp. 127–31 to learn more about this successful effort and its results.

responding to the urgency for change

In the case of MINSA in Nicaragua, PROSALUD in Bolivia, and APROFAM in Guatemala, leaders and their work teams felt a sense of urgency for change, were aware of the reasons for change, and had a vision of how the restruc-tured organization would improve its performance and sustainability and better serve its clients. But the overarching question was: How should the people responsible for the reorganization carry it out?

Many health institutions find themselves in similar situations. This book is meant to guide policymakers and leaders of ministries and nongovernmental organizations, senior managers, planners, implementation teams, and facili-tators in planning and carrying out the restructuring of their organizations, in order to successfully address the challenges of an increasingly complex and challenging environment. Those working in international development or public health, from international agencies to donors to consulting organi-zations to universities, will also find this book useful.

how this book is organized

This guide is organized into five chapters, each presenting basic concepts, examples, the results of selected experiences, and techniques and tools that over the past decade have proven to be practical and effective in a range of public, private, and nongovernmental organizations in Latin America. Many of the examples are drawn from Nicaragua, where Management Sciences for Health has been working since 1994 to expand the delivery of health services in underserved areas and to contribute to improved social-sector governance and transparency.

4 m o d e r n i z i n g h e a l t h i n s t i t u t i o n s i n l a t i n a m e r i c a

The book offers a path for restructuring, with a detailed description of the phases and steps to be followed (see Table 1). It also uses a well-known approach, management-by-processes, that assumes that if an organization’s processes reflect clients’ needs and demands and have been designed to respond to the environment, and if the right processes are in place, appro-priately staffed, sequenced, and structured, the organization will succeed in achieving its goals.

Chapter 1 describes how to create the conditions for launching a process of organizational restructuring. Chapter 2 introduces the conceptual framework for the restructuring and describes its first six phases. Chapter 3 lays out the remaining seven phases and steps necessary to redesign organizational sys-tems, processes, and procedures. Chapter 4 describes how to create a change plan that includes resource and staffing requirements, while Chapter 5 pro-vides guidelines for implementing the institutional reorganization.

No restructuring process is easy. It requires a strong, visionary leadership that encourages and aligns not only the members of the organization but also those outside the organization toward a new form of service management and provision. It is a difficult and complex process because it is dynamic and discontinuous, and a wide range of political, personal, and social interests come together in the process. It involves grappling with powerful but tacit mental models and making profound and radical changes in the traditional but outmoded practices in organizations. It also requires applying new con-cepts, practices, and tools in an integrated and systematic way, to achieve concrete results that can be sustained.

Although such an effort is an enormous challenge, if we are dissatisfied with what we are doing in our organization, and especially with how we are doing it and with the results, these guidelines can be a valuable aid to seeking and achiev-ing better results. Let us not forget that although having a tool, instrument, or guide can be helpful, there is no substitute for human creativity.

Introduction 5

t a b l e 1 The process of modernization

Modernization steps, phases, and activities Primary responsibilityEstimated time needed to complete

Confirmation of the need for reorganization, its benefits, and top-level commitment

Establish prerequisites for change (political commitment, budget, steering group, technical team)

Decision-makers (leaders of organization), change team

3 months

Design and hold preliminary workshop Steering group

Develop communications strategy for reorganization Steering group

Conceptual framework and approach: Phases 1–6

Phase �: Analyzing policies, laws, and the regulatory framework

Technical team 2 months

Phase 2: Reviewing the organization’s mission Technical team

Phase 3: Reviewing the organization’s vision Technical team

Phase 4: Defining the organization’s functional areas Technical team

Phase 5: Defining organizational systems Technical team

Phase 6: Determining the current status of organizational systems

Technical team

Design of organizational systems: Phases 7–13

Phase 7: Developing profiles of organizational systems Technical team 7–�0 months

Phase 8: Defining the mission, vision, and functions of each system

Technical team

Phase 9: Designing processes, procedures, and activities Technical team

Phase �0: Defining positions and functional and organizational structures

Technical team

Phase ��: Revising the design of organizational systems Technical team

Phase �2: Defining performance standards by process and procedure

Technical team

Phase �3: Creating job descriptions Technical team

Preparation to implement the reorganization

Determining the resources needed, adjusting the design to correspond with realities, and creating the implementation plan

Technical team 2 months–2 years

Implementation of the reorganization

Field-testing the model, developing staff technical and leadership skills, expanding and monitoring the implementation plan, evaluating the implementation process and its results

Technical team 6 months–3 years

Note: The times estimated refer to the reorganization of large organizations, including Ministries of Health. The process will take less time in small organizations or single units of larger health institutions. The priority given to modernization and the level of funding and other support will also affect the time needed to carry out the process.

7

c h a p t e r 1

Planning for positive change in health institutions

time needed: about three months

This chapter is about building a foundation for success: it focuses on the conditions needed to design the restructuring of a Ministry of Health or the reorganization of a nongovernmental organization that provides health services. These conditions include:

n creation of a presentation for decision-makers and a budget;

n political commitment to the reorganization;

n establishment of a steering group and technical team;

n development and implementation of a communication strategy for the change process.

Creating the prerequisites for change

When launching a reorganization process, it is important to remember that quantum changes are about to be made, whether in an entire institution or selected parts of that institution (departments, units, or sections) and that the process will generate a wide range of human reactions. According to Jaffe and Scott, human beings tend to associate change with both danger and opportu-nity.1 When change is imminent, the initial reaction is fear, and the tendency is to resist change. However, once we become aware of the opportunities offered by change, we can advance to a stage of exploration after which, fully convinced of the need for change and the benefits that can come from it, we arrive at a stage of commitment.

� m o d e r n i z i n g h e a l t h i n s t i t u t i o n s i n l a t i n a m e r i c a

Although many individuals advance quickly from the initial stage of per-ceiving a danger to the stages of exploration and commitment, this rapid progress is not typical of organizations. Most organizations—meaning not only the groups of people that comprise them but also entrenched systems and structures—are resistant to change. This should not surprise us, much less be a source of frustration. It simply means that for the restructuring pro-cess to be successful, it will be necessary from the outset to help both the organization’s leaders and one’s own coworkers to visualize the opportuni-ties that well-designed, needed changes will bring. Such opportunities are not usually as evident to people as the threats they perceive.

To help people see the benefits of change and commit to and support it, it is necessary to identify the reasons behind any resistance. According to John Kotter,2 the four most common reasons for resistance are:

n feeling that change makes no sense for the organization;

n having a low tolerance for change;

n failing to understand the nature and implications of change;

n not wishing to lose something of value.

The organization’s leaders must act as “sponsors” of the institutional restructuring process. If they and their colleagues feel that this process makes no sense, fail to understand it, and are unclear about its implications, benefits, and importance, the process will fail. Lack of political will is one of the prin-cipal causes of the failure of reorganization efforts.

It is therefore essential from the outset to create the conditions that will make it possible to design and implement the functional and structural changes that the organization requires. This chapter describes a process for creating such conditions. The desired result is the political will to implement a program of institutional reorganization or reform. This commitment will be reflected in the allocation of the resources necessary to launch the design phase.

The conditions that need to be created before an organization can launch a reorganization process are:

n political commitment to the reorganization process;

n the steering group, technical team, and work conditions;

n a communication strategy for the change process.

c h a p t e r 1 Planning for positive change in health institutions �

Political commitment to the reorganization process

Political commitment consists of a clear decision from leaders at the highest level to proceed with a process of reorganization based on a well-defined plan. This decision must be officially communicated in writing. The decision-maker should appoint one or more individuals to direct the reorganization and must allocate the resources necessary for designing the reorganization. If there are insufficient resources to undertake a full-scale institutional restructuring, it is possible to identify, plan, and carry out only the highest-priority changes.

Before decision-makers can express the urgent need for change, they must first recognize it themselves. This recognition occurs when they become aware that things cannot continue as they are. This decision must be a pro-found, conscious, and sincere recognition of the need for change.

When decision-makers recognize the need for organizational change, they are aware of both the problems in their institution and the realities in the external environment and concerned about the situation. They exhibit aware-ness of the need to seek and analyze alternatives to traditional ways of doing things, accompanied by increased receptiveness to new ideas. These individu-als are moved to bring about a change in mental models and paradigms, and at the same time they experience a rebirth of hope based on the proposed solutions. They become the patrons of change, they invest time and money in it, and they convey their own sense of urgency to all members of the organiza-tion and its stakeholders.3

Recognition by decision-makers of the need for institutional change is fre-quently associated with an increased sense of dissatisfaction with the current situation. This dissatisfaction must reach a critical level for decision-makers to justify their decision to break with the inertia of their organization’s status quo. This dissatisfaction can be generated by situations such as:

n critical incidents (such as lack of employee discipline, strikes, and crises reported in the media);

n fragmentation, disintegration, and duplication of activities in orga-nizational units;

n documents (such as demographic surveys) highlighting poor results.

Other drivers of change include:

n training or technical assistance that expands leaders’ vision toward new ways of doing things;

n demands made on the organization by external groups (donors, labor unions, clients, or customers);

n changes in the legal or policy framework (see Box 1 for an example).

10 m o d e r n i z i n g h e a l t h i n s t i t u t i o n s i n l a t i n a m e r i c a

b o x 1 Nicaragua’s Emergency Fund for Social Investment

From the time of its establishment in �990, the role of FISE (Nicaragua’s Emergency Fund for Social Investment) was to implement Nicaragua’s social investment programs and projects. In 2003, FISE’s role was changed to being the administrator of funds. As a result, its primary responsibility became developing mechanisms for allocating and distributing resources and promoting human development at the local level.

FISE’s Board of Directors and its Office of the Executive President recognized that this change would entail a profound reorganization of the institution. They exhibited a sense of urgency to seek out, and promote receptivity to, organizational alternatives and arrangements that would enable FISE to successfully address its new challenges. There was a clear recognition of the urgent need to reorganize their institution.

It is often necessary to help personnel understand the organization’s short-comings in performance by generating information on topics such as those in the preceding lists. At the decision-making level, dissatisfaction is usually linked to problems in one or more areas involving equity, quality, efficiency, coverage, access, effectiveness, or sustainability. Such dissatisfaction is often more felt than understood, so the collection and use of information will aid in rationalizing the need for change.

The first step in achieving the political commitment to develop a process of institutional reorganization is to �dent�fy and analyze the current set of problems. Problems must be well defined and understood before solutions are designed.

The members of the change team should gather, analyze, and prepare rel-evant information for presentation to decision-makers, with a proposal for possible solutions, so that it will lead to an effective decision to proceed with the reorganization process. Influential individuals often suggest the need for reorganization and begin to promote a variety of initiatives, such as meetings, information-gathering activities, and the identification of sources of external support. These individuals then become agents of change and help direct the process that will lead to a decision.

The information to be prepared to raise people’s awareness about a dysfunc-tional organizational structure can be obtained from a number of sources, such as:

n the organization’s legal framework;

n government plans (central, regional, or municipal);

n the organization’s own strategic or operating plans;

n essential public health functions;

c h a p t e r 1 Planning for positive change in health institutions 11

n the model of care for service provision;

n surveys, research studies, and technical documents referring to the organization;

n reports on the organization’s results;

n reports prepared by cooperating agencies (donor and bilateral orga-nizations).

Those preparing this information will have to analyze it and decide how to present the problems in such a way as to generate concern among decision-makers. Decision-making is emotional as well as rational (based on facts and evidence). To achieve the desired impact on decision-makers:

n identify their personal characteristics and attitudes, including their interests, needs, political vision, mental models, and personali-ties (dreamer, analytical or categorical thinker, or one who jumps quickly from one topic to another);

n put yourself in the position of the decision-makers and assume their characteristics and viewpoints, rather than taking a purely technical stance;

n select and prepare the information that most closely fits the charac-teristics of the decision-makers, taking care to organize it in terms of the amount, form, and style that most closely responds to those characteristics;

n describe the problems dramatically by contrasting the current situa-tion to the desired situation;

n present the information graphically, in a clear, simple, concrete, and concise form, so that it will generate empathy in these decision- makers. See Box 2 for an example.

Once the information about existing problems has been organized and summarized, the next step is to �dent�fy several solut�ons. Solutions are the results expected from the process of change. Alternatives for change can include decentralization; a decrease in the number of levels of management; consolidation, separation, or creation of new institutional units; implemen-tation of a quality improvement program; increase in coverage; increase in efficiency; and narrowing of the equity gap.

To implement these changes, which is the purpose of the institutional reor-ganization effort, a systemic approach of management-by-processes, described in Chapter 2, is used. (The glossary on pp. 133–34 defines the terms used in this guide.) Once the change team understands the management-by-processes approach and has investigated the views of the key actors concerned with the problems identified (see the section of this chapter on developing a communi-

Remember that decision-makers tend to be interested in results rather than the activities recommended to realize them; and in how problems can be solved—how long it will take, how much it will cost, and what the consequences are likely to be.

12 m o d e r n i z i n g h e a l t h i n s t i t u t i o n s i n l a t i n a m e r i c a

cations strategy for details), they should conduct a review of similar national or foreign experiences.

In Latin America, there have been successful experiences in organizational restructuring in Bolivia (PROSALUD) and Guatemala (APROFAM), which

b o x 2 The case of Nicaragua’s Ministry of Health

In 2004, a high-level team from Nicaragua’s Ministry of Health (MINSA), dissatisfied with the status quo, decided to promote a series of profound changes in their organization. They gathered and organized information and created a slide presentation to demonstrate to the minister, vice minister, secretary general, and members of the staff of the Directorates General the need for a structural reorganization of the Ministry.

Taking into account the characteristics and attitudes of their audience, the group promoting the need for change successfully caught the attention of the minister and his executive staff from the outset by presenting the principal challenges that those leaders had pointed out on other occasions. The message was clear, concrete, and forceful, as shown in their outline below.

What problems do we propose to solve?

n the bloated administrative bureaucracy and the centralization of management;

n governance by fiefdoms;

n barriers to social participation in solving health problems.

Institutional reorganization is needed to:

n streamline the bureaucracy and decentralize its management: Having more than 60 administrative divisions has negatively affected communications with service-providing units (SILAIS,4 hospitals, health centers, and health posts) and generated inefficiency, ineffectiveness, and high costs.

n reduce overlapping institutional development efforts and coordinate processes: As Figure � illustrates, institutional efforts are fragmented and go in numerous different directions because they lack a common vision consistent with the Ministry’s new roles and challenges. Interventions are slow, and the lack of results highlights the inefficiency and ineffectiveness of institutional development efforts. Some processes, such as the definition of the role to be played by the SILAIS and the formulation of the decentralization policy, have taken more than three years and remain incomplete.

n institutionalize the new policies and systems: These include new legal mandates, the National Development Plan, Comprehensive Health Care Model, essential functions, and requirements of new public health scenarios.

c h a p t e r 1 Planning for positive change in health institutions 13

are detailed in the cases at the end of this book. Chapter 3 presents new mis-sion and vision statements that now guide these organizations and other agencies in El Salvador and Honduras. Nicaragua offers the cases of FISE (see Box 1), NicaSalud, PROFAMILIA, and other initiatives (see Box 15 in Chapter 5). Finally, although their implementation is ongoing, designs for the reorga-nization of several ministries have also been created in Nicaragua (Ministry of Health, Box 2; Ministry of the Family, Chapter 2, Table 6).

f i g u r e 1 Processes of the Ministry of Health (MINSA) before reorganization

National Health Plan

reform of the health sector

MINSAleadership

decentralization policy

institutionalreorganization

national healthpolicy

role of theSILAIS

reorganization ofthe service delivery

network

basic packageof services

model of care

Next, the approach to change has to be adapted to the local context, and the change team will need to create a simple and feasible proposal that con-tains concrete outcomes and time frames to facilitate a rapid response to the problems identified. Figure 2 and Table 2, which refer to the reorganization experience of Nicaragua’s MINSA, illustrate such an adaptation.

Figure 2 presents the solutions that the change team proposed to MINSA authorities. The team proposed the separation of the functions involv-ing governance from those involving management and service delivery. In accordance with the systemic approach, the team visualized the Ministry as a macro system for producing health services and products, consisting of a number of organizational systems grouped into five organizational structures having responsibility for governance functions and one having responsibil-ity for service delivery and management functions—which would enable the

14 m o d e r n i z i n g h e a l t h i n s t i t u t i o n s i n l a t i n a m e r i c a

Ministry as a whole to carry out its new roles, as well as to fulfill Nicaragua’s legal and political mandates within the new public health context.

Table 2 shows how the change team outlined the benefits and implications of the proposed new organizational approach.

To foster political commitment to the reorganization effort, it is not suf-ficient to understand the key actors and prepare information on the problems identified and potential solutions; it is equally important to define a strategy for “sell�ng” these solut�ons. This strategy requires adapting the presentation of the information to the interests of the decision-makers. They are the indi-viduals who have the greatest likelihood of successfully selling the concept of change, together with how, when, and where the change will take place. To develop and carry out this strategy successfully:

n identify and involve as “sales agents” the individuals who enjoy the greatest degree of trust with the decision-makers. These may be advisors, subordinates, or former coworkers. Trust in the advocates of any proposal for change is essential from both the personal and technical standpoints, because it endows the process with credibility, making it possible for people to advance and focus attention on the core aspects of the problems identified and on the proposed solu-tions;

n take into account the political and technical interests of the decision-makers and others in the audience. If political interests predomi-nate, the presentation should clearly establish how the proposal will help them leave their mark as sponsors of a process of institutional impact. If technical interests predominate, the technical quality and relevance of the proposal will be paramount. Be prepared to address

f i g u r e 2 Proposed structure for Nicaragua’s Ministry of Health

community• beneficiaries of services

SILAIS• system of service providers• system for management of service delivery

Leadership• system of governance

Regulation• regulatory system

Financial management• financial system• supply system

Planning• planning system• information system

Human resources• human resource system

Quality assurance• quality assurance system• social communication system

governing body

management andservice delivery body

c h a p t e r 1 Planning for positive change in health institutions 15

people’s concerns and incorporate any contributions that will pro-vide a sense of ownership;

n train the “sales agents” by having them practice until they perfect the presentation of the proposal;

n choose the best moment and setting for presenting the proposal. The setting should be comfortable and free from interruptions, and it should inspire confidence. The proposal can be presented all at once to decision-makers and others involved, or it might use a process that lines up the support required little by little. This process might include donors, advisors, and program or division directors.

The goal of the sales strategy and the presentation of the proposal is to ensure that the appropriate authorities will make the decision to proceed with the reorganization processes. This decision-making process must be both formal and official, and provide an opening for immediately appointing the steering group.

The change team should propose a steer�ng group for the reorganization, composed of two or three people who:

n enjoy the trust of the organization’s authorities;

n are leaders in the management areas involved in the proposed restructuring process;

n are proactive, committed, and completely open to innovation and change.

Subsequently, the decision-makers should be asked to officially appoint the steering group.

The commitment to reorganization has been achieved when the organi-zation’s leaders have made the decision to proceed with the reorganization

t a b l e 2 New approach to health service management

Change from . . . . . . to:

A program-based approach➤

An approach based on functions and processes and oriented toward results

Many levels of management➤

Few levels: A single executive office, staffed by only a few people, can direct the institution

Individual participation and isolated fiefdoms lacking coordination

➤Coordinated efforts carried out by multidisciplinary work teams

A lack of process integration➤

Preventive arrangements focusing on doing things on time and well the first time

An oversight approach that seeks to assign blame ➤

A facilitative approach that supports improvements and quality assurance

16 m o d e r n i z i n g h e a l t h i n s t i t u t i o n s i n l a t i n a m e r i c a

process; clearly understand its technical, financial, and political implications; and are willing to identify and allocate resources for carrying it out. In addi-tion, they will have appointed the steering group.

Establishing the technical team and work conditions

The structural and functional reorganization of an institution is a difficult and complex process requiring not only political commitment but also strong leaders. Leadership is required to motivate and align the members of the orga-nization with the vision of the changes to be carried out, take advantage of opportunities, and adapt actions to changing situations, all the while main-taining its focus on the objectives of the institutional reorganization process.

The steering group’s first task is to prepare a t�mel�ne of act�v�t�es to be car-ried out. This schedule should be based on the steps outlined in Chapters 2 and 3. In determining periods of time for the schedule, consider:

n the experience and expertise of the steering group and the leading candidates for the technical team;

n prevailing conditions and the availability of support for the changes;

n the scope of the changes (the number of management systems to be reorganized);

n the status of the inputs required for carrying out the process (avail-ability of resources);

n the pressure of institutional commitments and the political context.

Table 3 presents an example from the team working at Nicaragua’s MINSA.

After developing the work plan, the steering group should determ�ne the number of members and prepare a profile of the techn�cal team. They should take into account the time required for the activities specified in the timeline, as well as the number and type of systems to be reorganized. As a rule, two or three experts in the operation of a system to be reorganized will be needed for about three months. Accordingly, the reorganization of five systems over three months will require a multidisciplinary team of between 10 and 20 individuals (depending on the size of the organization), all with expertise in specific systems.

The criteria for selecting team members should include:

n expertise and experience in the relevant area of specialization;

c h a p t e r 1 Planning for positive change in health institutions 17

n the recognition and respect of decision-makers and the rest of the technical staff;

n communication skills;

n initiative, commitment, motivation, and willingness to learn;

n full-time availability.

The steering group should choose and screen cand�dates that meet these criteria. It is recommended that twice the number of personnel required be selected, to take into account the possibility of dropouts. Because these

t a b l e 3 Illustrative work plan for the technical team

Period Results Activities

April–July 2004(4 months)

Design and testing of �3 institutional systems (defining the mission, vision, roles and functions, processes, procedures, and activities of each system)

n Appointment of a coordinator from the steering group for the restructuring process

n Training of MINSA officials and technicians in redesigning systems and processes using the systemic approach to management-by-processes

n Selection and appointment of the technical team

n Establishment of an operations center so that this high-performing team could devote itself to the design of the reorganization

n Bibliographic review of all systems and processes identified, along with research on the experiences of other countries

n Analysis of the sector regulatory framework

n Document review and redesign of the processes and procedures involved in MINSA’s organizational systems

n Testing of the redesign of organizational systems, including consultation and validation of each process and procedure with the organization’s internal clients

n Dissemination of the process and methodology to all MINSA central-level directors general and all SILAIS directors

Aug.–Oct. 2004(3 months)

Organizational and functional manuals; processes, procedures, and job descriptions

n Development of administrative manuals for the redesigned organizational systems

n Review of, and modifications to, manuals

Nov.–Dec. 2004(2 months)

Implementation plan for reorganization

n Development and discussion of the organizational restructuring

n Presentation of the organizational restructuring implementation plan

1� m o d e r n i z i n g h e a l t h i n s t i t u t i o n s i n l a t i n a m e r i c a

individuals are highly qualified and play valuable roles in the institution, the steering group should negotiate with their supervisors to make sure that the staff selected will be available for a sufficient time.

Because the design and implementation of restructuring pose an enor-mous challenge, technical team members must be made fully aware of the magnitude and complexity of the process and its implications. They also need an opportunity to acquire practical experience with the tools and techniques to be used. A two-day workshop for the candidates for the technical team can meet these needs. The instruction should include a discussion of the benefits for technical team members, in terms of personal and professional growth, as a result of their participation in the reorganization process, as well as discus-sion of the level of effort and dedication expected.

The steering group should:

n prepare the workshop program and materials, based on the manage-ment-by-processes approach and the specific set of problems identi-fied for the change process (see Box 3 for the purpose, results, and performance objectives for the instructional program);

n encourage participation by the individuals selected (through direct contact);

n extend a formal invitation to the individuals selected, preferably signed by the political sponsor (decision-maker);

n evaluate the participation of the individuals preselected for the tech-nical team to determine which are the best suited for, most inter-ested in, and most committed to the reorganization process.

Tables 4 and 5 present sample agendas for the two days of the workshop.Based on the results of the workshop and agreements reached with par-

ticipants, the steering group selects the final members of the technical team and presents this selection to senior management (the decision-maker) for approval. When this list has been approved, the steering group coordinator sends an official notification to all staff members who have been selected and their supervisors.

Now that a technical team has been appointed and organized, the steering group convenes a working session for technical team members to define the�r roles and respons�b�l�t�es. Following are suggested steps:

n Prioritize the management systems with which the design effort is to begin.

n Create multidisciplinary work groups for each management system to be designed.

n Initiate, and systematically and continuously carry out during the entire process, training for team members—through the use of par-

c h a p t e r 1 Planning for positive change in health institutions 1�

ticipatory techniques involving learning-by-doing and critical reflec-tion—in the methodology of the systemic management-by-processes approach.

n Define work rules (products by consensus, channels of communica-tion, and participation).

n Develop ongoing team-building activities.

In parallel with the creation of the technical team, establish conditions that will enable the team to perform its work. These conditions include:

b o x 3 Example of a program of instruction in the reorganization process

Purpose

For the technical team’s members to understand the process of institutional restructuring, together with its scope and implications, and to assume ownership of and strengthen their skills in managing the design methodology to be used, by means of practical, participatory exercises that will contribute to achieving the desired result, that is, more effective organizational management.

Expected results

n The technical team understands and clearly communicates both the challenge and the expected results, together with their dimensions and scope.

n The team is able to successfully apply the conceptual and methodological approach to be used to achieve the expected results.

n Commitments and an intervention plan have been established for addressing and achieving the expected results within the established time frame.

Performance objectives

At the conclusion of the workshop, participants will be able to:

n describe the desired process of institutional restructuring, as well as its expected results and implications;

n apply the methodological approach to be used in the process of institutional restructuring;

n describe the principal interventions for achieving the expected results.

20 m o d e r n i z i n g h e a l t h i n s t i t u t i o n s i n l a t i n a m e r i c a

t a b l e 4 Agenda for the first day of the workshop

Time ActivityPerson or group In charge

8:30–8:45 am Welcome and opening of the event Steering group

8:45–9:00 Inauguration Sponsor

9:00–9:�5 Discussion of workshop objectives and agenda

9:�5–�0:30 Institutional restructuring proposal and implications

Steering group

�0:30–�0:45 Break

�0:45–�2:�5 pm Products and results expected by the teams from their efforts

Steering group

�2:�5–�:30 Lunch

�:30–2:45 Conceptual and methodological framework to be used in the institutional restructuring process

Steering group

2:45–3:�5 Concepts and tools for designing the mission Steering group

3:�5–3:30 Break

3:30–4:�5 Designing the mission of an organizational system: Group work

Technical team

4:�5–5:�5 Plenary session Steering group

t a b l e 5 Agenda for the second day of the workshop

Time ActivityPerson or group in charge

8:�5–8:30 am Summary of the preceding day Steering group

8:30–9:00 Concepts and techniques for designing the vision

Steering group

9:00–9:45 Designing the vision for an organizational system: Work groups

Technical team

9:45–�0:00 Break

�0:00–�0:45 Plenary session

�0:45–�2:30 pm Functional areas, general functions, and processes: Demonstration

Steering group

�2:30–�:45 Lunch

�:45–3:�5 Techniques and tools for designing procedures and activities, by process

Steering group

3:�5–3:30 Break

3:30–4:00 Inventory and structures of positions, and organizational structure

Steering group

4:00–4:45 Plan for major interventions: Group work Technical team

4:45–5:00 Evaluation and closing of the workshop Steering group coordinator

c h a p t e r 1 Planning for positive change in health institutions 21

n space appropriate for the size of the technical team and sufficiently isolated from the regular work site in order to avoid frequent inter-ruptions;

n computer and projection equipment, including a printer, for each work group;

n a communications system, including telephone, fax, and Internet access;

n office furniture and supplies, including paper, pencils, markers, flip charts, and CD-ROMs.

When this stage is complete, there will be a technical team that has been selected, trained, appointed, and organized and is capable of carrying out the work schedule defined (in Table 3). Box 4 presents three examples of how this process has been carried out in different organizations in Latin America.

Developing a communication strategy for the change process

Once decision-makers have been convinced of the need for change and have made the decision to proceed with the reorganization process, and once the technical team has been appointed and begun working on the conditions necessary to comply with the work schedule, the process of transitioning from the current organization to the new organization yet to be designed can begin.

This transition stage is a sensitive period, characterized by a wide range of staff reactions to the recently launched process of change. It is typically characterized by low levels of stability and high levels of emotional stress and energy, frequently without direction, as a result of which previous patterns of behavior begin to be highly valued, and conflict, informal communication, and inferences begin to emerge and proliferate. This stage requires careful management from the outset by the steering group and the technical team. Failure to devote the required attention or properly manage the situation may harm the restructuring process.

From the beginning and throughout the entire restructuring process, staff need to be kept informed about the process of change; they need to under-stand it and to share both the sense of urgency and the vision. Moreover, their support for a guiding coalition (the decision-makers, steering group, and technical team) that is sufficiently strong to promote and bring to fruition the desired organizational change is essential.

In such processes, the important thing is to add and multiply (by way of involving and including people), never to subtract and divide. To launch the

22 m o d e r n i z i n g h e a l t h i n s t i t u t i o n s i n l a t i n a m e r i c a

restructuring process, the steering group must develop a strategy for com-municating the changes to be made. The purpose of this communication strategy is to involve, from the beginning and throughout the development of the design, and foster the commitment of the organization’s staff and other key players in the change process. The communication strategy should iden-tify all audiences or actors involved in the reorganization process, including not only their interests but also the approach to be used with each group, to engage them in, and commit them to, the process.

An effective communication strategy should be creative, comprehensive (involving all groups of audiences), and appropriate in relation to the avail-able resources, the current context, and the restructuring process. The mes-sages used must be clear, simple, and consistent with the characteristics of each audience, and be able to spark their individual interests. The objective is to contribute to the creation and maintenance of a favorable environment for all of the audiences involved in the change. In designing a communication

b o x 4 Experiences with the establishment of technical teams for institutional restructuring

The establishment of the multidisciplinary group described on pp. �6–�9 refers to the institutional restructuring of Nicaragua’s MINSA. This technical team carried out the entire process, subsequently incorporating all proposed improvements and modifications by means of a broad process of consultation and testing that included the participation of officers and technical experts from all levels, units, management areas, and regions of Nicaragua.

In the case of the institutional reorganization of El Salvador’s Ministry of Public Health and Social Welfare, the steering group used a participatory process to prepare the design for the restructuring. The steering group convened a number of intensive working sessions with officers and technical staff from all the Ministry’s administrative and service provision levels. Sessions included directors and technical staff from central-level offices, hospital directors and staff, and managers and technical staff from the Basic Health Care Systems (known by the Spanish acronym SIBASI), plus professional and technical staff from the health units. The technical staff invited to participate in these sessions varied in accordance with the specific organizational system to be redesigned during the session.

In the case of private, nongovernmental organizations such as Bolivia’s PROSALUD, Guatemala’s Asociación Pro Bienestar de la Familia (APROFAM), and Honduras’ Asociación Hondureña de Planificación Familiar (ASHONPLAFA), the restructuring process was carried out with the participation of the executive team, with support from technical staff with expertise in the systems to be restructured, taking into account the criteria for selecting technical team members.

c h a p t e r 1 Planning for positive change in health institutions 23

strategy, begin by �dent�fy�ng the actors �nvolved, whether internal or external to the organization.

Using brainstorming, lobbying of institutional personnel, institutional documents, and other sources of information, the technical team identifies the internal and external actors that will be involved in the reorganization process, either now or at some future time. These stakeholders can be identi-fied individually or collectively, depending on the degree of influence they exercise on the institution’s decision-makers and on the factors that will sig-nificantly affect the reorganization process. Some of these stakeholders will be in the denial and resistance stage (see the sample from Form 1), while oth-ers will be in the exploration or commitment stage; some will have interests in common, while others will be opposed to the restructuring process. For this reason, at the same time that these actors are being identified, it will be necessary to determine the stage in which they find themselves with regard to the change and whether their interests are aligned with or opposed to the reorganization.

It is possible that the restructuring process will not require the support of all audiences; for some, all that will be required is their approval or that they be familiar with and not hamper the process. Before carrying out the restruc-turing process, therefore, it is important to identify what is required of each audience, to facilitate identification of the specific strategies and objectives for each. It is recommended that the examples in the sample from Form 1 be used to design specific strategies for different audiences, whether they are individuals or groups, internal or external to the organization.

The next step is to develop and negot�ate the commun�cat�on plan, a task that involves:

n selecting the media and communication techniques to be used for each of the strategies defined, developing key messages, and pre-paring the schedule of activities for carrying out each strategy. The sample from Form 2 provides examples, and Form 2 can be used as a tool for developing the communication plan;

n establishing priorities by initially focusing on the technical team itself and on the decision-makers;

n presenting the work plan and corresponding budget to the appropri-ate authorities;

n seeking and securing funding;

n requesting approval of the plan by the funders.

24 m o d e r n i z i n g h e a l t h i n s t i t u t i o n s i n l a t i n a m e r i c a

implementing the communication plan

As progress is made in each phase of the design, the communication plan must be implemented to create acceptance of and support for the reorganization on the part of the people affected by the change that reorganization entails. The reorganization process requires that many individuals understand and sup-port changes; this situation creates difficulties due to differences in people’s perceptions and interpretations of reality and in their interests and reactions. The communication strategy must be sustained by understanding and accep-tance of the differences of the different people involved and affected by the changes.

The communication plan should use messages, means, and techniques that improve the communications and interactions of the organization’s staff and external stakeholders. Although change is intermittent and often unpredict-able, the activities in the communication plan must be carried out regularly and continuously. Information about the decisions made in each phase of the design must be truthful and relevant to the various audiences and reach them in a timely manner.

Before carrying out the communication plan, the steering group should ensure the availability of funding and of flexible mechanisms for accessing the funds. The steering group should also appoint a multidisciplinary team to carry out the communication plan. At a minimum, this team should have a coordinator and a communication and social marketing specialist (more than one if the organization is large).

The communication team carries out the plan according to the priorities of the institutional reorganization process, which means the plan must be flexible and evolve with the process. The team should establish mechanisms to monitor the development, implementation, and results of the plan. It is essential to monitor the reactions of those affected to anticipate problems, resistance, or adverse reactions to the changes in order to effectively direct communication.

Communication should be continuous and in all directions:5 top, bottom, and horizontal (in the same levels of the organization). Lateral communi-cation facilitates a smooth flow of information and emotions in groups and should use a common language to be most effective. The steering group and technical team play a big role as agents and promoters of the change, and they require knowledge and communication skills to play this role well.6

Once you have in hand an action plan for the communication strategy, with funding calculated and secured, and have begun implementing the communication plan, you are ready to begin designing the restructuring of your organization.

Knowing and applying the essential elements of communication is important for the leaders of any institutional reorganization process.

c h a p t e r 1 Planning for positive change in health institutions 25

notes

1. Dennis T. Jaffe and Cynthia D. Scott, Gett�ng Your Organ�zat�on to Change: A Gu�de for Putt�ng Your Strateg�es �nto Act�on (San Francisco: Crisp Publications, 1999).

2. John P. Kotter, John P. Kotter on What Leaders Really Do (Boston: Harvard Busi-ness School Press, 1999).

3. George S. Day, The Market-Dr�ven Organ�zat�on: Understand�ng, Attract�ng, and Keep�ng Valuable Customers (New York: Simon & Schuster, 1999).

4. The SILAIS network (Sistema Local de Atención Integral en Salud, or Local System of Integrated Health Care) comprises the Ministry of Health’s provincial offices.

5. Alberto Martínez de Velasco and Abraham Nosnik, Comun�cac�ón organ�zac�onal práct�ca: Manual gerenc�al (Mexico City: Editorial Trillas, 1988), pp. 22–68.

6. The steering group and technical and communication teams can use exercises from the toolkit in Management Sciences for Health, Managers Who Lead: A Handbook for Improv�ng Health Serv�ces (Cambridge, MA: Management Sciences for Health, 2005), for example, pp. 228–30.

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27

c h a p t e r 2

The systemic approach to organizational design: Phases 1–6

time needed: about two months

Chapter 1 dealt with establishing the who, what, where, when, why, and how of institutional reform: why organizational change is needed, who will be responsible for it, when it will happen (the timeline), what resources are available to carry it out, and where and how the technical team will work. The chapter also covered developing and implementing a commu-nication strategy and plan for the change initiative.

This chapter provides:

n the conceptual framework for the systemic approach to the reorgani-zation of health institutions;

n details about the first six phases of the process for the reorganization design, with their purposes, characteristics, and steps;

n illustrations for each phase: experiences, examples, instruments, and technical tools useful to its development and criteria for confirming its success.

Institutional reorganization is a challenge that cannot be met with good management alone. Restructuring involves major changes in the way things are done, so it requires approaches, techniques, and tools that make it pos-sible to design more effective organizational systems. Excellent leadership skills are essential to lead the people involved through this process.

Because institutional reorganization involves profound and comprehen-sive changes, every reorganization, like every other process of change, will be unique. Hence, there is no definitive list of steps. Depending on the situ-ation, the technical team must experiment with and adopt specific measures, and all team members will be discoverers and inventors in their use. Using a

The members of the steering group and the technical team must be leaders of the change that they wish to create.

2� m o d e r n i z i n g h e a l t h i n s t i t u t i o n s i n l a t i n a m e r i c a

specialized approach, however, will help the team face these complexities and guarantee that the results are positive. John Kotter’s eight-step model is one way to introduce processes of change.1 Intense and continuous training of the teams in the use of this model is of fundamental importance.

Once the organization’s leaders formally express their commitment and announce their decision to carry out the reorganization process, the steering group and the technical team must be sure they have an in-depth understand-ing of the conceptual framework of the systemic management-by-processes approach and the methodology for its application in the design of the phases of the reorganization. This framework will make it possible for them to see both the whole organization and the interrelationships of its parts and to come to grips with both functional and structural organizational issues. In addition, the framework will help the team prioritize the critical processes and procedures that require prompt attention and those that do not need substantial changes—structural, procedural, or legal—as well as those that must be improved first to create the conditions necessary for the progressive implementation of the organizational changes.

The management-by-processes approach to designing institutional reorga-nization proceeds through 13 phases:

1. Analyzing policies, laws, and the regulatory framework

2. Reviewing the organization’s mission

3. Reviewing the organization’s vision

4. Defining the organization’s functional areas

5. Developing a preliminary definition of organizational systems

6. Determining the current status of organizational systems

7. Establishing profiles of organizational systems

8. Defining the mission, vision, and functions of each system to be reorganized

9. Designing processes, procedures, and activities

10. Defining positions and functional and organizational structures

11. Reviewing the design of organizational systems

12. Defining performance standards by process and procedure

13. Developing job descriptions and profiles

This chapter details phases 1 to 6, and Chapter 3 deals with phases 7 to 13, which concern the design of specific systems.

c h a p t e r 2 The systemic approach to organizational design 2�

The systemic approach of management-by-processes

The modern organization consists of four fundamental elements, or p�llars. They can be represented schematically as shown in Figure 3. The restructur-ing of an organization is geared toward producing significant improvements in each of these basic components, addressing them gradually and sequen-tially.

In the systemic approach, the organization is seen as a macro system made up of a set of organ�zat�onal systems that produce goods or services, or both. The number and type of organizational systems that comprise an organiza-tion depend on its nature and purposes.

In any organization, each organizational system is composed of a set of processes with varying levels of efficiency, opportunity, cost, and quality. They are the daily tasks or work itself; therefore, they are the first pillar of the orga-nization.

The second pillar consists of the people responsible for carrying out the work processes of the institution, organized into different management areas, according to the organization’s structure, the third pillar of the organiza-tion. This structural configuration makes it possible to carry out the work processes, which are intended to fulfill the purpose of the organization. In some cases, the organizational structure limits the desired development of the organization.

Finally, any organized human group has characteristics that make it unique and distinguish it from all others. These characteristics are the values, princi-ples, and standards that define and govern it. They are the organization’s cul-ture, the fourth pillar of the organization. The fourth pillar must be aligned with and geared toward fulfilling the mission of the organization.

f i g u r e 3 The pillars of an organization

Mission and Visionroles and functional areas

pro

ces

ses

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stru

ctu

re

peo

ple

technology

30 m o d e r n i z i n g h e a l t h i n s t i t u t i o n s i n l a t i n a m e r i c a

All four pillars enable the organization to achieve its vision of the future, develop its roles, and perform its general functions effectively, making the most of modern technological advances, which must solidly support its functions. Institutions are only as efficient as these basic components, and institutions whose leaders know this have reacted to inefficiency by using the systemic approach of management-by-processes. This way of managing an organization focuses on work processes and systems, which facilitate the functional identification and compartmentalization of the components, sys-tems, and processes that comprise it, thus converting their complexity into something simpler to redesign.

The systemic approach permits going beyond analysis of the parts and sys-tems that comprise the organization. It makes it possible to see how these parts are integrated. All parts of the organization and its systems are depen-dent on and interact with each other. These interrelationships mean that every part of the organization influences and determines changes in other parts and throughout the entire organization. The pillars and systems of the orga-nization resist change because they are interconnected. They can be changed rapidly and dramatically, however, if the technical team is familiar with the processes of the systems and their connections and thus knows where to intervene to obtain the greatest results with the least effort.

A new way of managing requires a new way of thinking about and dealing with the organization; it does not mean improving each of the parts in order to then simply unite them. It requires effective leadership to expand one’s perspective, explore beyond the obvious and traditional limits, and view the organization’s dynamics and the interconnectedness of its components from a comprehensive perspective.2 Leaders must have the ability to survey this whole, knowing that many of the causes of problems to be modified in this reorganization process lie far away, in other pillars, components, or systems of the organization. Leaders must also align staff to focus them on where radical and innovative changes have to be made in order to improve the orga-nization’s results, beyond what traditional schemes of managing and provid-ing health services can achieve.

Phase 1: Analyzing policies, laws, and the regulatory framework

The organization develops in an environment determined by multiple and varied factors, which have a positive or negative impact on its development. Policies, laws, and regulations significantly affect an organization’s perfor-mance. Hence, the organizational restructuring process begins with an anal-ysis of the implications of the policy, legal, and regulatory framework for the changes desired. The purpose of this phase is to determine the level of legal

To improve the performance of an organization, it is necessary to know how its parts are integrated and especially how they interact.

The architects of organizational change must not simply improve the “stairways” in the organization: they must also attach the stairs to the correct wall.

c h a p t e r 2 The systemic approach to organizational design 31

and political support for the reorganization process in order to plan changes that have the greatest chance of success.

In this first phase, the technical team identifies and makes a detailed analysis of the challenges that policies, laws, statutes, regulations, and plans (national, state or provincial, and organizational) pose for the institution and its reorganization process. This analysis is part of an investigation of oppor-tunities for and challenges to the desired changes. The analysis should cover all the policy and legal documents related to the organization.

The first step in this phase is obtaining the documents to be analyzed. An inventory of relevant documents must be compiled, including the title, issu-ing body or unit, and date. Next, the technical team reviews each document and identifies its implications for the desired reorganization, using the fol-lowing questions as a guide:

n What does it control in our organization?

n What effects does it have on our organization?

Conduct a meticulous and thorough analysis in cooperation with experts in the legal or technical area corresponding to the implications identified, to determine whether those effects are favorable or unfavorable for the reorga-nization desired. This analysis should be complete and objective, avoiding personal or partial interpretations, and result in a precise and concise report.

Form 3 presents an example from Nicaragua, using an instrument for ana-lyzing the documentation and supporting the planning of activities.

On completing Phase 1, the steering group and the technical team will have an ordered set of the political and legal factors to consider and their cor-responding beneficial or detrimental effects in the institutional reorganiza-tion process.

Phase 2: Reviewing the organization’s mission

The mission of an organization defines its purpose, in broad terms, and what it strives to achieve. The mission is a statement that clearly and concisely describes the reasons for the existence of the organization3 and that motivates its members. The mission guides the orientation, consistency, and meaning of decisions and actions on all levels of the organization and is the central point around which the members of the staff must concentrate their attention and efforts to advance in a common direction. Updating or defining a mission is the departure point for orienting the activities and resources of any institu-tional reorganization process.

To be valid and effective, a mission must be:

32 m o d e r n i z i n g h e a l t h i n s t i t u t i o n s i n l a t i n a m e r i c a

f o r m 3 Analysis of the policy, legal, and regulatory framework of the Nicaragua Ministry of Health

Name of the policy, law, or regulation

Issuing body Date What it controls or affects Implications for the organization

n a t i o n a l

Law No. 290a National Assembly

1 998 Reinforcing the capacity of the Ministry of Health (MINSA) for standardization, regulation, oversight, and control

Functional and structural restructuring of MINSA to develop its role as a governing body for regulation, oversight, and control

National Development Plan

National Government

2003 Reducing the number of departmentsReducing the number of authoritiesReducing debt (expenditures)Increasing efficiencyConcentrating physical resourcesReducing recurrent expenses to increase

investmentsDeconcentrating operating responsibilitiesSeparating and balancing functions

Reduce levels and dependencies in MINSA’s organizational structure to realize savings in resources and greater efficiencies

Develop teamwork models oriented toward results that increase the efficiency of the management and delivery of services

Replace the funding model focused on expenses with one focused on investment and results

Concentrate and maximize the results of work areasCentralize MINSA’s role in governance and standard-

setting and decentralize operationsSeparate governance, standards, oversight, funding, and

control functions from management and service delivery functions

General Health Law and Its Regulations, Law No. 423

National Assembly

2002 and 2003

Focusing the allocation of resources, emphasizing the groups with greatest needs

Funding service delivery based on resultsUsing new forms of resource allocationConducting social auditsPlanning investments in health

Apply geographic focus strategies and focus on vulnerable groups

Develop budgeting and financing models oriented toward results that increase the efficiency and effectiveness of the management and delivery of services

Apply new budget resource allocation schemes, and establish payment mechanisms based on results and quality

Introduce mechanisms for social auditsDevelop, implement, and monitor master investment plans

for the development of the health system

h e a l t h s e c t o rNational Health Policy Ministry

of Health2004–15 Consolidation and reorganization of the

National Health System:Strengthening the SILAIS (provincial

offices) in monitoring, advising, and evaluating local health services

Develop models of health care service provider networksStrengthen MINSA’s role as a governing body carrying out

regulation, funding, and oversightCarry out functional and structural restructuring of the

SILAIS to fulfill their new functions

o r g a n i z a t i o n

Comprehensive Health Care Model

Ministry of Health

2005 Defining benefits and beneficiariesDeveloping comprehensive processes to

care for individuals, families, and communities

Emphasizing health protection and prevention and prompt care for injuries

Integrating the services networkDeveloping the quality assurance systemIncreasing social participation:

intersectoral, interinstitutional, and community

Deconcentrating and decentralizing resources

Reorganizing the functions and powers of the management levels

Developing alternative sources of financingDeveloping new ways of allocating fundsImplementing payment mechanisms

Strengthen MINSA’s governance, sectoral planning, standardization, funding, oversight, and control functions

Strengthen the control and facilitation of the SILAIS at the local level

Transfer the management and service delivery roles to the local level

Define a benefits packageFocus on groups with the greatest needsDesign comprehensive care processesDevelop standards and mechanisms for control

and continuous quality improvementDefine responsibilities by levelOrganize service provider networksDevelop decentralized management models with

institutionalization of social participation and oversightChange allocation and payment mechanismsExplore and identify opportunities for fundingDevelop technological capacity for administrative

financial controlStrengthen management and leadership skills

aLaw No. 290 is the law of executive power that dictates what ministries must do.

c h a p t e r 2 The systemic approach to organizational design 33

n worthy: All members of the organization can see their interests and aspirations reflected in it;

n resistant to change: It endures over time;

n qualitative: It corresponds to the philosophy and raison d’être of the organization, and not to a single objective or quantifiable goal that is easy to reach;

n congruent: It should correspond to the commitments and interests of the members of the organization;

n shared: All members of the organization should share and support the mission;

n attractive: The mission statement should be attractive in form and content.

The purpose of reviewing the organization’s mission and refining it if nec-essary (or developing a mission if the organization does not have one) is to provide direction for the reorganization. To update or define the mission, it is important to answer the following questions:4

n What is or will the organization be dedicated to?

n Whom will the organization serve? What is the user population?

n How will the mission be carried out?

n Why is the organization dedicated to what it does?

The first question to be answered is What �s or w�ll the organ�zat�on be ded�-cated to? To answer this question, identify the needs of the population groups that the organization aims to meet. Avoid answering this question in terms of goods or services to be provided. We can