Tuesday, March 14, 2017

I believe in miracles but in the proper context

We have all heard of miracles. Someone’s cancer miraculously regresses, a child is found alive in a collapsed building after 3 days with no food or water, or someone blind hits their head and can suddenly see. Merriam Webster dictionary defines a miracle as: An unusual or wonderful event that is believed to be caused by the power of God. A very amazing or unusual event, thing, or achievement.
A majority of Americans think miracles happen and according to several polls on the topic, a majority of physicians who are overall a skeptical and science oriented group, believe that miracles happen.  Given this wide-spread belief I think us “believers” would agree that the following are true about miracles: They are fairly rare, they almost always involves one person, they cannot be explained by science, and most are related to a person’s health or well-being.
Over the last 10 years the amount of Hospitals that say they utilize process improvement and/or have a process improvement staff have expanded rapidly, estimates vary but it’s likely that at least 45% - 60% of our 5,000 Hospitals are utilizing some process improvement methodology. In terms of my experience I see a majority of Hospitals practicing LEAN methodology or some similar variation. There is huge difference in the results of such programs, many Hospitals are practicing LEAN but only a small minority are truly embracing LEAN and in effect being LEAN.
This is where the miracle connection comes in. From my many interactions with Healthcare executives I suspect a good portion of them consciously or subconsciously believe in process improvement miracles.  Why do I say this? Because many believe that without much intervention and time from themselves, without sacrifice and hard work from staff, without generating any internal conflict, and without much program funding Process Improvement miracles will occur.  They believe that if they talk about LEAN, understand some of the lingo, hire or train some black belts or a Lean Sensei they will have created a LEAN acting and LEAN thinking operation.  That is not how it works. If the proper planning and attention is not applied to the Process Improvement program it will not be successful. Hoping, praying, and wishing that the organization will become LEAN does not work. 
I have been practicing Lean methodology for 25 years and I have never seen a LEAN organization transformation miracle. I have seen LEAN organizational transformations but they came about gradually over many years of focused dedication to the concepts and principals.  You can’t dip your toe into the LEAN process, you can’t do it sometimes, only in some areas, or only when it is focused on some financial or safety crises. It involves significant behavior changes that eventually lead you to the cultural change you need. 
For a LEAN program to be successful it needs to be well structured and thought out. This requires both significant strategic planning as well as a financial and emotional investment.  If JACO or some other certifying body came into a Hospital and found significant and reportable problems the Hospital administration and the Board would not hesitate to spend whatever money and time it took to fix the problem(s); we all know this happens practically every day.  The reason for the focus is obvious: The problem is real, it is very tangible and it has the potential to harm the hospital’s reputation and in turn, its viability.
The difficulty of investing properly in a LEAN or Process Improvement program is that the problems are usually not so tangible and often not “top on the radar screen”. Instead of one or two big problems LEAN is focused on all daily problems, separately these problems do not usually account for much in terms of patient safety or financial cost but together, they are significant, enough to take away at least 2-4% of margin and likely to eventually lead to patient safety issues or staffing issues that will be extremely costly. Many of the problems in daily work are hidden, they don’t show up as an item on the P&L, they don’t make headlines but like a small snowball travelling down a mountain, more and more snow will be added and eventually it can become a very large object or an avalanche that cannot be stopped and it will cause much destruction. It’s always the problems you don’t see or perceive that eventually cause the most damage.
Most CEO’s feel that developing a great work culture is very important.  There is no better vehicle to do this than by implementing a complete and fully supported LEAN program but it needs to be done correctly and that takes hard work, professional help, some up front financial cost, and super-intense executive focus. When done correctly the results are truly “miraculous” but don’t expect those results to occur via a miracle, it just will not happen.  

Your'e OR is bleeding ....No, not your patients, your OR!

I have completed a lot of projects in the surgical area in the last 18 months and I am continually amazed regarding how much potential profit is being wasted in this area – I’m talking real money, well into six or seven figures. Given that fact, you would think that there would be much more of a profitability focus in the OR.  Maybe the focus is lacking because most of this margin loss is hidden because in spite of considerable inefficiencies most OR’s still show a profit but they could be so much more profitable! There is a reason why surgeons often become partners/owners in independent, for-profit ambulatory centers, they are incredibly efficient and make lots of money. Yes, I know,  a Hospital OR is not the same as an ambulatory center, they don’ have the super sick patients, the complex cases, the trauma cases, etc……but does that mean there is no room for more efficiency in a Hospital OR?
Why doesn’t the OR get the same attention regarding efficiency projects that other Hospital departments have received? Now don’t get me wrong, every department is “beat up” when they have excess OT or appear non-profitable but on the whole, surgery departments get a lot of efficiency lip service regarding the need to improve performance but little pressure to execute. Maybe it’s because the Hospital executives see that area as profitable so why rock the boat. Maybe it’s because surgical services is complex with lots of moving parts and let’s face it, most Hospitals have poor analytical abilities - If you can’t measure it you can’t fix it. I’m not sure of the reason but I suspect the issue will soon get a lot more attention.
My experience is that the average utilization (when properly computed) of most OR’s is around 55%-65%. When you are dealing with such a high fixed cost area you have to ask why such a low utilization is acceptable. Let’s use a restaurant analogy:
I have a 100 seat restaurant, in order to cover my fixed cost and keep my core staff from leaving I have a weekly expense of $10,000 and I usually make gross revenue of $300 per table each week that those tables are occupied. If they were occupied 100% of the time I would have gross revenue of $30,000 and thus a margin of $20,000. Of course 100% is not possible but 80% is possible so at 80% I would make margin of $14,000 a week versus $9,500 a week at 65%, over the course of a year that means I lost $234,000 in margin!  If I was running that restaurant I would do one of two things: Make sure I filled as many tables as possible or move to a 60-70 seat facility and cut my costs. Most community Hospitals are generating at least $1M (many make much more) in margin so using my restaurant example they would make an extra $420K or 42% more margin each year !!!

I tend to see the following inefficiencies:
>Underutilized OR suites. On the surface they don’t look underutilized because there is so much surgical shuffling and staff re-allocation that the under-utilization is pretty well hidden – the place looks busy.   
>High staffing and operational costs to accommodate the whims of surgeons who cannot or will not treat their elective cases like electives (pre-planned well in advance) and instead treat them like emergencies. Too many add-on cases, not efficient or necessary. On average I see about 40% of elective cases being scheduled 1-3 days ahead, it should be 20% or less.
>Poor case sequencing: Cases are scheduled helter-skelter with little thought to setup and breakdown efficiencies or creating consistent staffing patterns.
>Poor Timeouts: This creates greater liability and chance of Medical error or delays caused by poor staff awareness.  The 2 minutes utilized for an average TIMEOUT actually ends up savings time although many surgeons and staff perceive it as a waste of time.
>Late starts: My number one pet peeve. Mostly due to surgeons, anesthesia, or staff being late, there is no excuse and it is very correctable. 
>Inefficient setups and turnovers: Besides the obvious time for setup, breakdown, and cleaning, there are incomplete case carts, incorrect preference cards, and poor equipment readiness. All correctable yet most OR’s do not do a good job in this area, causing six to seven figure waste. 
Do OR’s ignore the above inefficiencies? Of course not, almost every OR has many improvement initiatives going on but few are successful and even when gains are made they quickly fall apart and are not sustained. OR Directors are in high demand because most get burned out after 3-4 years, they are caught between a rock and a hard place - Surgeons who want everything their way no matter what the cost or efficiency and Administrators who are after them to cut costs (without angering the surgeons). My hypothesis about the problem: Most OR Directors are hard-core nurses who are highly accomplished clinicians, they never asked for help doing their clinical duties and they sure as heck don’t need help to fix the business issues of an OR. The problem is that they are clinical experts and not process experts (even if they have taken some lean courses) and focusing on too many things dilutes the efforts in both areas. The truth is that bringing in process expert help is expensive and “technically” the initiatives can be done internally, but in reality these efficiency initiatives are not done well, often do not sustain, and the process takes too long (the OR staff does have a “day job”). Payback on this kind of project is often 3X or better but beyond the financial payback the change in practice and the building of team-work is worth much more than the hard financial gains. As bundled payments take hold, as in-patient length-of-stays shorten, and as more surgeries move to non-hospital surgery centers profits will be extremely squeezed. We know that all change takes time so Hospitals have to act now if they want to change behaviors and preserve one of the few profitable areas of Hospital operations.  

What Innovative organizations understand

I hear a lot of chatter in the Hospital’s about pushing innovation. Many Hospitals have started “innovation” initiatives and/or brought in innovation consultants.  However while many make the talk few will make the walk. The reason? Innovation require disruption and Hospitals dislike disruption. Except for the education sector there is no other organization that so tightly clings to convention. Healthcare has changed how they deliver service but the changes have been forced by both government regulation and increasing patient demands. Most Hospitals are dragged into change versus leading change and in turn developing innovative delivery systems. Only a handful of healthcare organizations have voluntarily created and embraced disruption. One disruptor is definitely Geisinger Health who has guaranteed satisfaction about their services with their “warranty” program – If patients are not happy they can make a claim to get some or all of their money back. Radical? Disruptive? Yes and Yes and absolutely innovative (and highly successful), yet ......no one has the courage to follow. 
All organizations and people resist change but the reason that true innovators succeed is because the leadership at these organizations make their staff and organizations uncomfortable, not in a bad way but in a good way. They are willing to put up with a fairly high level of discomfort and risk and because of that their organizations have no choice but to innovate. There are literally hundreds of small healthcare startups trying to assist in the innovative process yet they struggle to penetrate the current Hospital mindset. Hospitals dabble in these new ventures, cautiously dipping their toes and slowly, ever so slowly, testing new concepts as the world and aggressive competitors pass them by. 
If there was ever a time for boldness in Healthcare we are there now. Regulations change daily, reimbursements are unstable, and patient populations are less healthy and you can’t control that but what you can do is design a flexible and responsive delivery system that can react to whatever challenges arise. So if you are serious about creating an innovative organization spend a little time reflecting on what that means. Start the mindset change with staff, set attainable but hard to reach goals with firm timelines and clear metrics and stop dabbling, start committing to some serious disruption. It’s unpleasant for the short term but the long term results are nothing less than uplifting and impactful for both your patients and your employees. 

Tuesday, October 18, 2011

ARE YOU LISTENING ? - How to judge if your organization is ready for Change

Health care reforms are here to stay and the pace of change is accelerating as State and Federal budget deficits continue to put pressure on government to reduce the cost of Medicare and Medicaid services. These “reforms” mean less and less revenue will be available to Hospitals and it’s going to force all Hospitals to squeeze out efficiency from their processes while simultaneously improving quality and service levels.  The challenge is substantial and it requires a clear and focused strategy as well as the ability to execute that strategy quickly and effectively. Unfortunately “strategy execution speed” is not the hallmark of health care.   
Can your organization successfully execute key strategic objectives with great speed? Can your organization react quickly to change? Here is a quick exercise that I suggest you try.  Consider the phrases outlined in this article and then take note of how often you hear them said in “hallway” and “water-cooler” conversations; take special note when you hear these phrases uttered at standing committee meetings and/or at meetings whose purpose is “solve problems” or manage new initiatives.
“We already tried that and it didn’t work”
This phrase is very typical and very troublesome. If this is an often uttered phrase by your key managers, you can be assured that you have serious barriers to organizational improvement.  It denotes a resistance to change and innovative thinking and it’s a clear sign that the organization has not encouraged the right behavior in managers.
A variation of this phrase is used in best practice organizations but the context and intent are completely different.  In those organizations you will hear the phrase said like this: “We tried that and had problems; what can we do differently this time?  What did we learn from that experience? “
Need I say more?
The “we already tried that” phrase is often accompanied by another related common phrase: “You don’t understand how this place works”
What exactly does that mean?  Well loosely translated it means “Listen idiot, we operate in silos and we like it that way, you worry about how your department operates and I’ll worry about how mine operates. I’m not about to change”.
Did that translation make sense?  By the way if you are an executive you probably don’t hear this phrase as much as your underlings but keep your ears perked as you walk by conference rooms and you will hear it enough.  It’s a clear reflection of behavior that you need to start changing, today! That change happens by setting an example. People don’t care what you say they see what you do and then they behave accordingly.
“I’m working on that issue and we should resolve it soon”
This phrase is somewhat related to the “We tried that before and it didn’t work” phrase.  Some organizations have learned that an outright resistance to change is not acceptable so they massage the message a bit; a more sophisticated and nuanced way to say “bug-off”. Translated it means “Listen buddy, I’m aware of the issues but they are overblown, my department does a great job. It’s not a big problem; we will work it out ourselves or you will realize that it’s a minor problem and quit bugging me.” 
This phrase is indicates your leaders are looking buy more time, after all if they keep promising that results are on the way and time keeps dragging on, sooner or later folks will lose interest and some other big issue will grab their attention – You buy some time and avoid accountability.
An easy foil to this delaying behavior is to ask that person to give you (in writing) the specific goals, related actions, and due dates for the resolution of that “issue”. It won’t be long before you see the issue resolved or that manager admitting that they need help to solve the problem.   
“We already have a policy and/or a procedure regarding that issue”
Using this phrase is another great way to differ action. Never mind the fact that no one follows the policy or procedure – the important fact is that we have one!   Why fix something that already “in theory”, is “fixable” via an existing policy or procedure?  
Once Again trouble is brewing. Your employees use procrastination and road-block techniques to avoid needed change. The organization needs to do a better job in setting clear expectations and holding people accountable for specific metrics, if that was occurring, they would not have time to delay action.
Let’s consider two phrases often spoken by leadership or to leadership that indicate executives have to make more effort towards understanding change management and then encourage the right behavior.
“I know we need to change but we need to make sure we don’t get people upset, they have to want to change
If you are a leader and you utter this phrase to your staff (especially if those staff are charged with making change happen) then you need to rethink how change management works and rephrase the message.  Change is hard and you will often upset people. It’s also likely that the people who are the most upset are the people who truly need to change their behavior in order for the organization to succeed.   A better conversation would go like this: “We have had plenty of input regarding this change and it’s clear that it is needed so we need to articulate the change very clearly, let’s make sure we all give the same message.  I want the message the same and I want clear time lines and accountability for action, we need to get feedback and while we might make slight course corrections this change needs to occur as planned. I will give you whatever support you need to get this done.”

 “We have way too many initiatives”
Take this one to heart as it probably your biggest hurdle in achieving a best-practice culture.  Almost every health care organization has far too many initiatives. This tendency to create an unachievable list of initiatives and workload creates “martyr leaders”, leaders who feel that they carry the weight of the world on their shoulders and have so much to do that they have no time to think but only time to keep the great wheels of the organization churning.  It becomes a culture that rewards actions for actions sake; there is no better example of this than the tendency of health care organizations to use only one metric when installing very expensive software – Did it get installed when we said it would be installed? Better to have the software installation hit the due date then to worry about if it added any business or patient value; let’s face it “We don’t have time to think about those complexities”.   
Best practice organizations have few annual initiatives (objectives) because they realize the organization needs strategic clarity and focus.  Better to get a few things done very well than to work on 50 objectives and accomplish very little. With dozens of annual objectives it is common practice for deadlines to slip, objectives to be watered down, and burn-out to occur across the management ranks.  When the organization create focus and clarity of purpose  by concentrating on a few key annual objectives it can hold people accountable for executing them as promised.  The whining stops, the seriousness of hitting objectives sinks in, and the organization achieves a “can do” attitude.
There are many more phrases I could list but by now I think you get the message.  Put on your listening caps and you just might discover some organizational “attitude” that needs correcting.

Thursday, September 22, 2011

Turning the Aircraft Carrier - Using 5S to improve Strategic Planning

Many of you may be familiar with a Lean process called 5S and when most Lean practitioners think of applying the technique they are likely to consider an inventory or assembly scenario; maybe a messy supply room or a disorganized sterile processing department but if you are an executive or in a position to advise your CEO/COO maybe you should consider how 5S can work to help your organization develop a better Strategic Plan. 
When executives are asked “Why did you start a process improvement programs?” most cite the need to create a more responsive and “change embracing” culture. Easier said than done! As you know there are libraries full of books about culture change and how to motivate work teams and while there is no doubt that deploying a process improvement methodology such as Lean-Six-Sigma is a good start it will, by itself, fail to deliver what you desire unless you understand the larger picture of culture change. Changing culture is a complex process but let’s start by explaining a critical concept: You don’t really change culture but instead you change behavior. The culture change comes via the constant reinforcement of desired behaviors   
The analogy often used in describing a culture change involves turning an aircraft carrier. How do you change the course of an aircraft carrier? You had better plan well and be methodical and careful or you may create a disaster.  Executives should view attempts to change or modify an organizations culture in the same way that a Navy Captain considers changing course of a massive aircraft carrier.  First understand your ship. The aircraft carrier’s bridge crew understands the carrier’s capabilities, the turning radius, speed ability, and listing tendencies.  Other factors must also be considered such as the way the craft is loaded, the crews experience level, the surrounding condition of sea and subsea terrain.  In essence an aircraft carriers Captain and crew have dozens of variables they must consider in a course change.  An executive team maneuvering an organization through significant culture change has no less of a daunting task; especially if time is of the essence, 
So where does the 5S concept come into play?  Well the first task in 5S is sort. Sort involves removing the clutter.  You need to understand what is and is not important to the organization in terms of accomplishing the Strategy.  Too many organizations try to do everything - When explaining why the organization needs 50 strategic initiatives executives will say:   “All this stuff is important!” Really?  Let’s talk reality.  When everyone’s plate is overflowing most initiatives get half-done and some initiatives never even get started. Having 30, 40, or 50 strategic initiatives and lofty goals creates a lot of “buzz’ and hyper activity but it is not long before the organization starts to confuse the activity revolving around initiatives as an important success factor VERSUS the RESULTS that those activities produce.  That is why you often see annual strategic initiatives occurring over 2 or 3 years and yielding poor or unsustainable results. If an organization uses careful and logical analysis most will find that most of their 30+ “strategic initiatives” have little or no impact on customer value and even fewer deliver critical financial benefit.
So before you finalize your next Strategic plan put the draft of that plan through the first S – SORT; you need to remove the clutter. The first task of an executive team is to develop Strategic Clarity and Focus.  This can be done in a variety of ways however the best technique is to use a very tough and selective prioritization methodology that is ruthless and unemotional in eliminating initiatives that don’t meet strategic criteria and/or can’t be adequately resourced to ensure success.  For example you may think that increasing surgical revenue by 5% is a great strategy but if you can’t find the resources to FULLY and PROPERLY staff and fund capital equipment, bring on new surgeons, and market the program then why would you proceed?  You can use a decision matrix to list out all your initiatives and then rank them by your importance factors, for example how does each proposed initiative rank on Strategic Fit, Financial Benefit, Community/Mission Benefit, Patient Satisfaction, and Future Growth criteria? After the first pass you can then take the top scorers and then consider resource issues, cost to implement, and probability of success to further reduce the initiatives to no more than 3-5 “initiatives that are critical to your strategic plan.  These “true north” initiatives must have the full support of the entire organization. Seems a little scary doesn’t it?  Focusing on only 3-5 initiatives scares the hell out of most Hospital executives.  What about all those other things that must get done?  They are still on the list and they still can be part of your overall performance metrics but they are not referred to as “strategic” and they must take a back-seat to the 3-5 Key Strategic Initiatives (Goals). Here is the reality check that I have seen over and over that backs up my comments in this article - Even when an organization has only 3-5 Key Strategic Initiatives they struggle mightily to get those few initiatives done. It begs the obvious question – If it takes incredible focus to get 3-5 initiatives done well, what happened in the past when the focus was spread across dozens of strategic initiatives?  Not as much as most organizations would like to believe.
Stay tuned for the next 5S application of straighten and shine regarding your Strategic Execution Plan.

Monday, June 27, 2011

TRUST is more than a buzzword - Learn from The 5 Dysfunctions of a Team

I wanted to give a brief overview of one of my favorite management books.  Although I have read hundreds of these types of books there are only about 10 that truly stand out as “Must reads” and “Must keep for reference”; one of these is The 5 Dysfunctions of a Team by Patrick Lencioni.  While Lencioni has written many books none are as good as this one. Why do I consider this book one of the best?  Because the author has kept it short and to the point and has made the reading interesting by explaining some rather complex team building concepts in an interesting story format (similar to The Goal, another one of my top 10). 

The story is about a new CEO who refuses to get bogged down as a referee in the many battles between her staff and instead, chooses to spend a great deal of her time building a team.  Even though the organization she leads is faced with some serious financial issues she realizes that without an engaged and cohesive executive team everything she does to “fix” problems will just be a stop-gap measure and fall apart at some point.  Just as in true life, her executive staff can’t believe that she is wasting so much precious decision making time on team building – “Why can’t we just get to work and fix our problems” is the common lament. 

In the story we follow the actions of CEO Kathryn Petersen as she makes the courageous decision to deal with the root cause of the organizations problems – a completely dysfunctional executive team.  We learn that there are 5 team dysfunctions that must be addressed before a TEAM can be created.  The 5 dysfunctions in order of hierarchy are: Absence of Trust (Invulnerability), Fear of conflict (Artificial Harmony), Lack of Commitment (Ambiguity), Avoidance of Accountability (Low Standards), and Inattention to Detail (My Status and Ego take precedence over team needs). 

While I could detail all five dysfunctions let me briefly talk about the first dysfunction referred to as Absence of Trust because it is the foundational base of a great team. I doubt that you will find many executive teams who are willing to admit that the organization lacks trust however you would be lucky to find more than 20% of all organizations that have made a serious commitment to build trust and even fewer that have declared such a competency a core organizational need (beyond lip service) and in-turn have dedicated the time and resources to achieve a high level of Trust.  Saying you have “Trust”  is not the same as having it and when you are a process improvement expert you can spot whether an organization has a culture of “Trust” within the first few days of executive and staff interviews. While there are many organizations that have good margins and “succeed in spite of themselves” there are only a few that consistently stay at the top of their game in terms of financial and quality results. It is a guarantee that those firms at the top of their game admit there is work to be done regarding the 5 dysfunctions and they work at improving core team-work capabilities every single day. 

My experience is that the most difficult barriers to overcome are the first two; Absence of Trust and Fear of Conflict.  Both require a significant and committed effort by the CEO because without his/her involvement politics will win out. I’m sure many of you have heard the phrase “Culture trumps Strategy” and it is very true. An organization with “Team Trust” and the ability to handle “Constructive Conflict” requires certain behaviors (which in turn become culture) that the CEO needs to make a priority.  If you have an organization that wants to become “world class” I suggest you find a way to make this book required executive reading.            

Wednesday, June 15, 2011

Preventing self-deception is about playing hard ball versus soft ball

In various studies scientist have found that all of us practice self-deception.  When asked to rank how well we do our job versus how others do their job, most of the time, we rank our performance as superior to our peers. This known bias is what gave birth to the 360 degree performance feedback system that is used by many organizations.  By using 360 degree feedback (subordinates assessing the positive or negative characteristics of their bosses) the theory is that bosses will often get feedback that tempers their assessment of their own performance and gives them a realistic assessment of their own performance. 

In practice, getting honest feedback and assessing our performance is tricky business.  Even though we have an awareness of our own self-deception, over time it can act as a drug that we are addicted to. We know this drug is bad for us but “it feels so good” it becomes easier and easier feed the beast within; this is especially true as you rise in position and influence. We convince ourselves that everything is great; our department is great, we are great, we control all problems, and we never need help.  We discourage any thoughts or discussions to the contrary and it is not long before our staff learns to suppress bad, and/or controversial news, not offer new ideas, and overall, be less than honest regarding feedback.  “Trouble-free” days become the norm.  This type of management behavior is more common than we would like to believe and it often leads to hiding or ignoring problems. The constant congressional and celebrity indiscretions and subsequent incessant denials and lies that follow are great examples of self-deception.

I wish I had a dollar for every time when I discussed a potential improvement project with a department-head I heard these comments: “The problem was already fixed”, “Our new process will soon take care of that”, and “This issue is a problem caused by another department, not us” Of course, I started the conversation because everyone else in the organization agreed that there was a problem (except those closest to it). 

How do we avoid such self-deception?  Ask the hard questions, not only to your staff but to your peers.  For example: When was the last time you went out of your way to ask the departments you support: “What can I do to help you?”  “What does my department do well and what can we do better – be 100% honest with me”   How about asking your employees a direct question like “What do I do well and not so well?” Do you encourage or stifle employee push-back. I’m talking about constructive push-back versus whining.  For example when an employee indicates that your idea needs more resources or more refinement and they are making thoughtful and valid points that’s constructive push-back versus whining at random with s comment like: “We tried that before and we could not get it to work”.  Don’t make this a “soft-ball” exercise. For example, asking such questions in a by-the-way manner as you pass someone in the hallway – That is rarely the forum to get an honest or thoughtful answer. You need to set some time up and discuss specific metrics and expectations. 

I have worked or consulted in many organizations and I have noticed a strong negative correlation between the practice self-deception and organizational excellence; the greater the self-deception the lower the performance and the greater the hidden cost of inefficiency.  If your organization is going to get to the next performance level maybe it’s time to ask some hard questions.      

Tuesday, May 24, 2011

Do you dig wells or channels?

10 yards wide and 200 feet deep versus a mile-wide and 20 feet deep

What’s better?  A hole as described in the title that is 10 yards wide and 200 feet deep or the channel that is a mile-wide and 20 foot deep?   Well that depends on what you’re after, if all you want is some water then the former is a good choice but if you want to build a channel that can transmit water, people, or goods then the latter is more appropriate. 

I believe that in the area of health care too many organizations are digging wells versus channels.  What I mean is that they engage in process improvement efforts within a few key departments or within the Hospital setting yet our patients only spend a short time in either setting.  If you think about the entirety of the health care continuum, it is more like the mile-wide analogy.  Our patients utilize a wide variety of services beyond the hospital walls: Home Health Care, Visiting Nurse, Rehab Facilities, Pharmacies, Social Services, and Long Term Care Facilities to name a few.  If we truly want to make a positive impact on patients we must take our Operational Excellence efforts to the next level and engage all the health care partners.

Let’s face it, you have to start somewhere regarding Operational Excellence so digging a well is not a bad idea, as a start.  People hit water, they drink, and they are quenched but at some point we need to move beyond our own easily visible needs and problems and move with the patient through all the “healthcare” places they visit or live in.  We need to form true working collaboratives with key community providers in our area and we need to collect the voice of the patient all along the health care continuum. 

If your organization has been digging wells for the last 2-4 years it might be time to rethink your OE strategy.  It’s great to have plenty of water but sooner or later you need travel beyond your small world and for that, you need to build a channel.

Monday, May 16, 2011

Traits of Great Leaders

With my apologies to Jason Jennings (Best Selling author - http://www.jason-jennings.com) for paraphrasing his work. Here is a summary of Jennings take on the traits of GREAT LEADERS.

Great Leaders stand their ground on core values regarding how their organizations must operate; they do not waver and they turn their values into causes.  These causes provide Big and Bold direction that gives the organization purpose. They are not focused directly on financial results but instead, are focused on giving purpose to the work done, fueling passion, and driving momentum.

Great Leaders let go of yesterday’s success, ego, and conventional wisdom because it allows the organization to deal with change, promote innovation, and outdistance rivals.

Great Leaders make sure that everyone knows the Strategy and that all are held accountable.  They never play “favorites”, allow corners to be cut, or allow managers to engage in improper behaviors.

Great Leaders reward performance based on value created.

Great Leaders share information, are accessible, don’t adhere to superficial symbols of power, are coaches and mentors, and believe in Servant Leadership.

Wednesday, May 11, 2011

The 4 top reasons that Operational Excellence programs fail

#4) The CEO and executive staff thinks that the road to Operational Excellence involves a “silver bullet” tool or concept.  
  Organizations with a silver bullet mentality often get very excited when an improvement programs start but lose interest quickly because they have not taken a comprehensive approach to operational excellence.  They think that one or two process improvement tools (i.e. Lean) are they key to success instead of realizing that they must develop a comprehensive Strategy Deployment process that utilizes many OE tools in order to become a top performing organization.

#3) The Operational Excellence Department does not have a seat at the “strategy table”, does not have adequate resources, and does not have support from other critical departments such as Finance and HR. 
The OE department needs to work closely with the CEO and executive staff to integrate operational excellence thinking into everyday tasks; this involves making sure that projects flow from the strategy and are not just “one-off” cost reduction exercises.  It also means that other departments support the OE implementation. Ffor example, HR must ensure that the performance evaluation process creates the proper alignment and incentives that encourage OE behaviors.

#2) The organization has a “strategy” but it lacks strategic focus and there is no structure and strategy deployment methodology in place to ensure execution.
Many organizations have strategies that are nothing more than “wish lists”. There are too many initiatives, they are poorly resourced, and there is little buy-in from the organization.   Because most initiatives do not have firm metrics and are not tightly aligned with driving actions there is poor strategy execution and little accountability. The organization needs to understand and deploy a strategy deployment methodology (ie Hoshin Kanri).

#1) The CEO and Board of Directors are involved with the Process Improvement effort but are not committed to success of the effort. 
“Committed” means that executives must spend a substantial amount of time and effort on promoting the Operational Excellence Program and supporting the efforts behind building an operational excellence culture. There efforts must go well beyond maintenance of the program and instead constantly work to expand the program so that it is embedded in the organizational culture.  CEO’s who are committed realize that their direct staff and all other employees don’t listen to what they say but rather, watch what they do.