Case analysis in this subject covers the following issues:1. Thinking of Change Foundation’s Business model, describe its customer segments, value proposition, key activities, and key resources, and...

Case analysis in this subject covers the following issues:







3I eBook: Strategy: An International Perspective 749 C A SE 7 I t was January 2007, and Cathy Fooks had just accepted her new position as chief executive officer (CEO) of The Change Foundation, an independent charitable foundation founded in 1996 by the Ontario Hospital Association (OHA) with a mandate to promote, support and improve health and the delivery of health care in Ontario. After 10 years, the board had undertaken a renewal process to evaluate the strategic directions of the foundation and measure the value-add of progress to date. After reviewing the new board-approved strategic plan, Fooks had some concerns about how The Change Foundation should refocus its activities and transform itself going forward. Before she could start to rebuild the foundation, she had to decide what its future direction should be. Origins of the change foundation: the Ontario Hospital Association The OHA was a member association representing over 150 Ontario public hospitals. It had the broad vision of “achiev[ing] a high-performing health system.”1 The OHA achieved this by providing its member hospitals with high-quality products and services, leading innovation and performance improvement and influencing Ontario health system policy. In 1996, the OHA received a one-time payout of approximately $50 million through the divestiture of Blue Cross Insurance. This opportunity provided a number of investment options; however, the OHA chose to set up an endowment fund and establish The Change Foundation to lead transformation in the Ontario health system. Sheila Jarvis, chair of the OHA board in 2005 and of The Change Foundation board from 2011 to 2013, explained that this money was designed to “enable the health care system in Ontario, through the lens of hospitals, to explore new and innovative ways of doing business.”2 The funds enabled the OHA to develop an opportunity to achieve a sustainable approach to health system innovation from which all organizations in the health system could benefit. The vision was to promote a high-achieving Ontario health care system for the future. In 2006, the OHA itself developed a new strategic plan to better achieve a high-performing health system in the future. It consisted of five key strategic directions: ■ Create strong and lasting partnerships that advance health system integration; ■ Improve knowledge transfer of leading practices to strengthen health system performance; ■ Strengthen governance throughout the health care sector; ■ Improve executive and management leadership capacity within the health sector through a new leadership institute; and ■ Provide thought leadership on health system issues based on facts, evidence and/or hospital expertise.3 Time for a change at The Change Foundation By Alexander Smith CASE 7 Alexander Smith wrote this case under the supervision of Professor Anne Snowdon solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) [email protected]; www.iveycases.com. Copyright © 2014, Richard Ivey School of Business Foundation Version: 2014-10-10 1OHA, “About Us,” 2013, www.oha.com/AboutUs/Pages/Default.aspx (accessed February 26, 2014). 2Sheila Jarvis interview with case authors January 17, 2014. 3 OHA, “OHA Strategic Directions 2007–2010: A Look Back,” 2013, http://www.oha.com/knowledgecentre/library/annualreportarchive/ annualreport2010/Pages/Default.aspx (accessed February 26, 2014). 65856_case07_ptg01_749-760.indd 749 07/02/20 9:37 PM Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. NO T F OR SA LE 750 SECTION V CASES History of the change foundation The Change Foundation began primarily as a granting agency offering small amounts of funding to a wide range of projects; its mandate was “promoting, supporting and improving health and the delivery of health care” (see Exhibits 1 and 2). Gail Donner, chair of The Change Foundation board from 2007 to 2009, explained: The organization would tell people, “get a good idea underway” with the idea that over time they would then be eligible for significant funding. That’s why we have the name, “Change Foundation” – it was a jumpstart for projects with less experience or with a good idea but not enough resources to work it through. The Change Foundation was a separate entity from the OHA. It had a separate board and CEO, who reported to the OHA on their progress every year to make sure that they were achieving the mandate that the OHA had given them. However, despite the separation, the OHA remained in a position of control over The Change Foundation and had the ability to remove the board and change its bylaws if it was unhappy with the progress that was being achieved. The Change Foundation worked to achieve its mandate through two key core functions: knowledge creation and knowledge transfer. Knowledge creation Knowledge creation was achieved at The Change Foundation through two key programs: the Change Initiatives Grants Program and the Research Program. The Change Initiatives Grants Program was a joint program between The Change Foundation and the Ontario Ministry of Health and Long-Term Care (MOHLTC). It was designed to broadly support innovations that improved health care in Ontario. Each year, The Change Foundation established priorities for health system innovation that were then released to the research community, and grant applications ExhIbIT 1 ThE ChANgE FOuNdATION bAlANCE ShEET March 31, 2006 2005 Assets Cash 12,379 872,638 Investments 57,981,932 54,881,106 Accounts Receivable 27,456 30,522 58,021,767 55,784,266 Capital Assets 5883 4951 58,027,650 55,789,217 Liabilities Accounts Payable 665,139 353,363 Deferred Revenue 1,398,342 1,533,847 Employee Future Benefits 110,300 110,300 2,173,781 1,997,510 Fund Balances Invested in Capital Assets 5883 4951 Externally Restricted 44,625,008 44,020,082 Unrestricted 11,522,978 9,766,674 55,853,869 53,791,707 58,027,650 55,789,217 Source: The Change Foundation, “Annual Report 2005/2006,” www.changefoundation.ca/about-us/annual-reports/ (accessed on February 26, 2014). 65856_case07_ptg01_749-760.indd 750 07/02/20 9:37 PM Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. NO T F OR SA LE CASE 7 TimE for A ChAngE AT ThE ChAngE foundATion 751 were reviewed for strengths in achieving these priority targets. In 2005, for example, this goal was to “support Ontario Health System Transformation by enhancing organizational integration through LHINs [Local Health Integration Networks] and supporting disease management.”4 Ten research projects received funding totaling $822,000 in 2005 (see Exhibit 3). This funding was supported through additional matched funding from the MOHLTC. Between 1997 and 2005, 75 projects were funded at a total of $5.9 million. The Research Program consisted of a series of research project publications by The Change Foundation. These projects varied greatly, from establishing the Provincial Disease Management Network to collecting best practices in hospital and community integration in mental health. Through partnering with external individuals and organizations, The Change Foundation completed research projects and produced policy papers consistent with its mandate. Since 2004, the Research Program had focused on “promoting system transformation through integration.”5 Knowledge transfer In addition to producing research both in-house and through grants, The Change Foundation promoted the transfer of health research into clinical practice. Specifically, it focused on the roles of social marketing, electronic media and complexity theory on research knowledge transfer. The Knowledge Transfer Program partnered with the OHA through participation in and co-sponsorship of OHA events and conferences. The majority of projects within this stream focused on education and leadership development. The Change Foundation offered international study tours for health executives to provide senior health leaders the opportunity to learn new health policy and practices from the United Kingdom, Australia, Sweden and Norway.6 In 2003, the mandate of the Knowledge Transfer Program was expanded to focus on developing leadership capacity among health executives and emerging health leaders. The Change Foundation 4The Change Foundation, “Annual Report 2005/2006,” www.changefoundation.ca/about-us/annual-reports/ (accessed February 26, 2014). 5Company records. 6The Change Foundation, Annual Report 2005/2006, op. cit.. ExhIbIT 2 ThE ChANgE FOuNdATION STATEMENT OF OPERATIONS Source: The Change Foundation, “Annual Report 2005/2006,” www.changefoundation.ca/about-us/annual-reports/ (accessed February 26). Year ended March 31, 2006 Revenues Investment Income 2,515,918 Amortization of Deferred Revenue 735,005 Other 212,281 Realized Gain on Investments 2,015,267 Total Revenues 5,478,471 Expenditures Investment Expenses Investment Management Fees 34,465 Operating Expenses Grants 1,482,150 Research and Analysis 623,567 Education 220,196 Development Projects 844,458 Administrative 516,399 Total Expenses 3,721,235 Net Operating Income 1,757,236 65856_case07_ptg01_749-760.indd 751 07/02/20 9:37 PM Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to