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.

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.

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.

Having an "employee of the month" does not Maximize Human Capital

There are a lot of organizations that tout the “value of their employees” and how their employees are the organizations “most valuable resource”. But when you dive into the way many health organizations operate it becomes pretty obvious that these claims are nothing more than lip service. Sure, it’s true that many Hospitals are very hesitant to engage in mass layoffs and they tend have the walls littered with nurse of the month or employee of the year posters but is that an indicator of success in maximizing your most important, and most costly asset?

For sure, treating people fairly and not resorting to “knee-jerk” cost cutting solutions like mass layoffs do show a sign respect for employees but it’s only one small piece of maximizing your human capital. Consider one of the most important drivers of organizational success- retention rates.  If you are not significantly beating your peers on voluntary retention rates than you can be sure that your best employees are heading to your competitors.  It’s a critical driver in efforts to maximize human capital yet it rarely gets focused attention at executive meetings and board of director meetings.   

Does the organization have a robust and comprehensive employee development plan that includes 360 degree feedback?  Data shows that 80% of employees leave their positions because of conflicts with their supervisor.  Some of these conflicts are unavoidable but the vast majority can be addressed so that the conflict is managed and no attrition results.  Why doesn’t’ every organization employee such systems?

When a good and talented employee leaves an organization you can figure that the cost of finding a replacement plus the cost of lost productivity amounts to at least one times that person’s salary. So every time you lose a talented nurse or administrator making, say $75K per year, you really just incurred $75K of added cost to run the organization.  You won’t see that cost show up anywhere on an income statement line but you will see it eventually wind its way to the bottom line.  And worse than that, when your retention numbers start an upward trend it becomes difficult to stop the trend quickly because it’s really an accumulation of many past practices that are now bearing sour fruit and any corrective actions will take many months if not years to have an impact.