Next Level Leader Blog

Make Lean in healthcare more powerful by giving it a place to go.

A Powerful Formula

(Dialog with Jamie Flinchbaugh)

Bingo Jamie.

Healthcare has a big "me too" factor. Too often healthcare CEO's are looking to "install Lean" rather than looking for Lean to help them bring their organization to the next level. Articulating that next level is critical for focusing their Lean efforts.

That next level may be defined in a number of ways by the CEO:

• Becoming an ACO, Accountable Care Organization
• Accelerating product approval pipeline
• Dominating the X market by being THE physician practice "growth tool"
• Growing internationally in X markets
• Integrating primary care, specialty medicine, and hospital services
• Becoming dominant in-company health provider
• State-wide expansion for health policy influence
• Membership growth and service diversification

Lean needs a destination to maximize its contribution and your return on investment in building a Lean organization.

Lean is not a destination. It's a path to a destination. A powerful one.

One well known CEO MD announced to a large audience that "Lean" was his strategy, it being a comprehensive philosophy for guiding" his organization. He announced his first commitment: to train everyone in his organization in Lean. This is great for the consulting and training companies, but is it great for this CEO's healthcare organization?

 
I value continuous improvement in its various incarnations, Lean, Six Sigma, Six Sigma/Lean, TQM and the like, as powerful disciplines for managing work and organizational performance. Healthcare has picked up Continuous Improvement a number of times, only to discard it when the going got rough.  
 
Many leaders implemented the philosophy, methodology, and its tools poorly, never fully integrating them into how work was done at all levels, often leaving out the senior level's strategic work.

So when cost reduction and price competition hit the industry, executive teams relied on the old "fly by the seat of your pants" approach, or the old "roll up your sleeves and do the tough work of senior management" approach, rather than employing what they had learned from CI to tackle the pressing market challenges facing them.  
 
I observed this wholesale abandonment of this valuable CI system up close. I asked myself, "why would a previously committed senior management team abandon an approach that they had touted as the solution to their competitive advantage a decade earlier?
 
They abandoned Continuous Improvement in the past because:

• They saw it as a "good to have" not a "must have" approach to the business and senior level processes.  
• Those implementing it created a non-intuitive, cumbersome process that actually slowed organizational and team progress. 
• They put the CI expert over line management in running the business, creating resentment and control battles rather than employing CI experts as consultants to line management. 
• Many healthcare organizations created expensive CI infrastructures and internal consulting groups that were viewed as baggage when the cost cutting began. 
• CI was never employed as a strategy development and execution methodology so when the time came it was viewed as the wrong tool.
• Boards of Directors didn't have commitment to a CI approach as a selection criteria in recruiting new leadership when the time came.
• New leadership entering with a mandate to bring the organization through the next dire market challenge, saw Lean as a vestige of the old failed leadership and got rid of it first.

So, what should CEO's do to ensure that Lean is a powerful driver of competitive advantage, as Michael Porter speaks of this objective?

• Lean should be kept lean, first of all, so it doesn't become a major overhead burden in and of itself.
• It should be integrated into the core running of the business, not a special activity.
• It should be incorporated with strategic planning and execution
• It should be employed in the work of the executive team and board of directors.

When it is part of the strategic work and not treated as a program to observe, review, and "support" from above, it stands a chance of being a valuable lasting advancement in healthcare. Otherwise, it will be relegated to the dustbin of history where all the other CI approaches lie. It would be a tragedy to invest all over again in CI only to let it languish and fade away as it has before.

 
Jamie, I'm sure you and I agree on these issues. The work you and others are doing with Lean is vital for healthcare's success.

For my part, I will continue to work with CEO's and senior leaders to incorporate it as a powerful approach to helping healthcare organizations get to the next level, however they define that next level with their strategic vision.