Shouldice Hospital Limited Presented by : Yudhi, Ajeng, Dear, Dewi and Nita

History of SHL Founded by Dr. Edward Earle Shouldice at Toronto, Southern part of Canada, in July 1945. The scarcity of hospitals bed and the importance of curing Hernia for the young men whose willing to enlist to the army was the main reason why Dr. Shouldice inspired to build his own hospital. Dr. Shouldice moved the hospital to the Thornhill, 15 miles north of downtown Toronto. He extend the facilities into 36-bed capacity and finally became 89-bed over the years. Under the leadership of Dr. Nicholas Obney, Shouldice longtime associate, as the hospital’s surgeon-in-chief and chairman of the board of the Shouldice Hospital Limited, SHL reach a total of 6,850 operations in the year of 1982.

SHL Unique Method of operation SHL only give treatment to the external type of abdominal hernias. In Shouldice Method, the three distinct layers of muscles of the abdominal wall were repaired per layer in turn from the opening, by overlapping its margins.

Appointment Procedure (For Long Distance Patient) Reject Contact Questionaire Accept. Sending Confirmation Card Exhibit 1 Examination Confirmed to be operated No need for Operation Before the operation Operation Day Fulfill Insurance Coverage Hemoglobin and Urine Check Directed to Bedroom Orientation

SHL Nurse SHL appoints 22 full-time and 18 part-time nurse which works for 24 hour period. They were divided into 4 group. (Exhibit 2) The hospital was staffed with 3 shift (7 AM, 3 PM and 11 PM). SHL has nurse-to-patient ratio less than the other hospital. SLH nurse spent most of their time in counseling activities.

SHL Doctor SHL employed 12-full-time surgeons, 7 part-time assistant surgeons and 1 anesthetist. Each operating team required a surgeon, an assistant surgeon, a scrub nurse and a circulating nurse. There was 30 to 36 operations per day. As a result, each surgeon typically performed three or four operations each day.

Facilities Imagine hospital with an image like a home... SLH comprised into 2 basic facilities, the hospital and the clinic, in one building. There were 3 level. The 1st level was for kitchen and dining room. The 2nd was for lounge area, admission office and patient rooms. And the 3rd was for additional patient rooms and recreational area. Patient and staff was served food prepared in the same kitchen. SLH encouraged its patient to walk up and down the hall to socializing with other patient and surgeons. To encourage them, SLH designed the steps between the floors with a smooth inclination. Imagine hospital with an image like a home...

Shouldice Hospital Exterior

Reception Desk and Waiting Room

Stairway, Bedroom and Recreation Room

Administration The hospital was operated as a non-profit basis, while the clinic was a for-profit basis. The executive committee met as needed, usually twice a month and in turn reported to the board (Exhibit 2). The board met three times per year, or when necessary. The 1983 budgets for the hospital and clinic were close to $ 2.8 billion and $2 billion respectively.

Market Hernia operations were among the most common performed on males. In 1979, for example, there was estimated that 600,000 such operations were performed in US alone. SLH relied entirely on word-of-mouth advertising, the importance which was suggested by the results of a poll carried out by students of De Paul University as a part of a project (Exhibit 3). SLH provide more reasonable rate than other typical hospital. In addition of providing free services to the clergy and to parents of hospitalized children, SLH also provided a free charge of annual checkups for its alumni, which many of them happened on the reunion. The annual reunion was scheduled to hold within mid-January, where an average of only 145 operations per week were performed.

CASE STUDY ANALYSIS Explain external vs. internal hernia, causes of hernia, treatment of hernia, and other educational information about hernia Here the differences between external and internal hernia. External Hernia Internal Hernia Protrude through to the outside of the body Protrude within the body Inguinal, Femoral, Umbilical, and Par umbilical Hiatus (Diaphragmatic) Usually patient already have some clue about the diseases Usually patient only feel the symptoms but don't have any idea about diseases Easy to diagnose, usually diagnosed through a physical examination Hard to diagnose, need barium X-ray or endoscopy to examine. Need less time to examine the diseases Take time to examine the diseases Simpler surgery process More complicated surgery process

External Hernia Internal Hernia Causes of Hernia Hernia usually caused by a combination between muscles weakness and strain There are common causes of muscle weakness that also can be the causes of hernia, such as failure of abdominal wall to close properly in the womb which is congenital defect, age factor, coughing or sneezing to hard, suddenly weight gaining and damage from surgery. Any other option that can be caused of hernia are classified by their origin. For example umbilical hernia occurs as a birth defects that have affected the abdominal wall of the new baby born.

The Tips to Prevent Hernia. Healthy lifestyle Do exercise Treatment of Hernia Usually surgerical procedure like Herniorafi or Laparoscopy are suggested to patient diagnosed with hernia. Lifestyle changes also suggested by doctor to patient diagnosed with hiatal hernia. Lifestyle changes like avoid large or heavy meals, do exercise, and keep body weight in a healthy range could improve the symptoms. Presciption medication also can be taken to the hiatal hernia patient in order to relieve the discomfort and improve symptoms. The Tips to Prevent Hernia. Healthy lifestyle Do exercise Don’t straining during bowel movements or urination Go to the doctor when you’re sick to avoid any harm diseases

B. Decision Tree for Shouldice Hospital Limited Problem

Use the VRIO framework. Should Shouldice offer new surgeries Use the VRIO framework. Should Shouldice offer new surgeries? Should Shouldice enter new markets? Justify your answer. VRIO ANALYSIS TABLE   Is it Valuable? Is it Rare? Hard to Imitate? Is it organized well? Implication Appointment Method Yes Sustained Competitive Advantage Kind of Service No Competitive Disadvantage Availability of Service Way of Marketing Hospital Design Sustained Competitive Advantage Hospital Culture Temporary Service for Alumni Method of operation Unexploited Competitive Advantage Reasonable Rate

Appointment Method Based on the analysis on the table, we could conclude that Shouldice appointment method was become a sustained competitive advantage for them.  Kind of Service Shouldice service of operation was limited only to the external type of abdominal hernias. It will become a competitive disadvantage for them. Availability of Service There are no operation that scheduled in Saturday and Sunday. It will become a competitive disadvantage for them. Ways of Marketing Shouldice relied entirely on word-of-mouth advertising. It will become a competitive disadvantage for them. Hospital Design Shouldice design its hospital in such a homey environment. Based on the analysis on the table, we could conclude that Shouldice hospital’s design was become a sustained competitive advantage for them.

Hospital Culture Shouldice encourage their patient to socialize with others. This is uique and variable. But, it will only be a temporary competitive advantage for them. Service for the alumni Shouldice held a reunion for its alumni, which was scheduled to hold within mid-January. Based on the analysis on the table, we could conclude that Shouldice’s service for the alumni was become a sustained competitive advantage for them.  Method of Operation Shouldice had unique method of operation. It will be an Unexploited Competitive Advantage for them. Reasonable Rate Shouldice provide more reasonable rate than other typical hospital. But, it will only be a temporary competitive advantage for them

MCKINSEY ISSUE TREE ON SHOULDICE HOSPITAL Create a McKinsey Issue Tree for Shouldice. Refer to page 677 of your textbook. Main issue: How to create a sustainable profit. After creating the issue tree, explain the tree at least in one paragraph. MCKINSEY ISSUE TREE ON SHOULDICE HOSPITAL Create sustainable profit? Increasing hospital capacity More floors, rooms, and beds More surgeon Sophisticated medical technology Extensive Computerization Expand to other country Do market research Build new hospital Add other speciality Eye surgery Varicose veins Hemorrhoids

There are 3 options that are available for create a sustainable profit. Increasing hospital capacity. Increasing hospital capacity can be done with add more floors, rooms, and beds, provide more experinced surgeons, adopt sophisticated technology, and improve computerized system. Expand the hospital. With expand hospital to the new country, Shouldice could serve more patients that will able to create a sustainable profit. Add another speciality in Toronto to gained more patients. Speciality such as eye surgery, vericose veins, and hemorrhoids could be considered as opportunities to create a sustainable profit.

1. How do you deal with the succession at Shouldice. Dr 1. How do you deal with the succession at Shouldice? Dr. Obney will retire. First thing to do, Shouldice should select another person within the company who knew and well-aware of Shouldice’s vision and mission, because this person would determine the performance and the ability of Shouldice to sustain. The next things to do, Shouldice should decide whether they want to spend their fund and resources in Toronto or other place. The management with the board of director has to decide whether they want to make the hospital in Toronto bigger than before or used their fund to open new branch in different area or country. 2. Pick a company from your team. How do you plan succession in your company? One of our team members, owns a company in culinary business. The company was established in 2012. At the beginning of the years, the company has struggled whether they want to open new restaurant in different area or not. The problem they have almost similar with Shouldice Hospital. However, after the 1st anniversary of the company, the founder and management decided to expand their business. In 2016, they already have 13 branches of their restaurant in different cities.

What should you do if you would like to open a hospital in Indonesia similar to Shouldice? Copying Shouldice 100%? Any modification? Should you offer other surgeries? Based on our opinion, we should to open a hospital with some modification of Shouldice. According to the previous VRIO analysis, it’s obvious, that we should carry on the advantages and expand the possibilities of diminishing the disadvantage. The fast pace of development in medical technology also become a real challenge for medical facilities. Therefore, we should explore all kind of possibilities which could make our hospital have competitive advantage than others. Hernia operation were only limited only to men. Therefore, we should offer another type of surgeries as another opportunity. For example, plastic surgeries or another kind of surgeries. If we could do that, our market could expanded and we could gain more profit from them.

What are the 5 main lessons from this case study? Some of the main lessons from this Study Case are: Well-maintained and inspiring service of Shouldice. Healing process of Hernia are depends on the work of the patient. Operation procedure of Shouldice can’t be done carelessly. Shouldice has a well-structured organizational chart. The unique design concept of Shouldice hospital.

The Shouldice case study is one of the best-selling case studies from Harvard Business School. What are the reason? SHL is not just a hernia hospital. But they provide more-than-normal service. They also relying on a well-qualified customer service, how to save money that are spent by the patient and make a cozier atmosphere by designing their hospital as if it were home. Moreover, with the participation of patients in their own recovery could provide Shouldice to cut costs for things like room service and one-on-one physiotherapy. Eventhough, Shouldice should make several change on their service.