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.