DailyKaizen

I spent some time today debated if I would write this posting, because I have lot of energy right now around the subject matter due to an experience my family is going through as I write to you today.  I started this posting a couple of times and then walked away from the computer for a while.  So I will start with a story to provide some context.  A family member of mine recently had surgery at a very well respected hospital on the East Coast.  A couple of weeks after the surgery he developed some complications and was rushed back the hospital.  He appeared in the emergency room on a very busy, and chaotic Friday night and after waiting for quite some time was finally admitted and treatment began.   After his initial treatment there was some additional complications and in the chaos of the situation there were several missed communications between clinicians.  Additionally, the proper treatment path was not followed even though it would be considered “evidence based.”  Luckily, the mistakes were realized when one of my other relatives that happens to be a physician intervened from afar and things seem to have stabilized.  Afterwards it was very clear that if the processes were standardized and the standards were followed it would have been simple to have avoided the mistakes.  But caught up in the chaotic environment with no clear processes to follow it was easy to make very preventable mistakes.  Throughout this experience my family was taken care of by incredible nurses, physicians and other care takers.   Great people that were trying to work in a broken system.

I often find myself debating with people within my industry whether standard work can be applied to patient care.  I often hear back that it does not apply because ”no two patients are the same” or “healthcare is far too complex for standard work” to work.  This argument is frustrating and we need to find ways to put to rest. I am sure that every industry has heard the same exact argument about why standard processes can not be applied in their field.  I was telling my neighbor about what happened and he confirmed that in his industry (aerospace) twenty years ago it was the same story.  “Airplanes are far to complex to be built by standard processes.”

The healthcare industry needs to start to pay attention to what other industries have already figured out.  That the same reasons that we give as excuses on why processes cannot be standardized is the exact reason why we need to make them standard.  The more complex a process the more important it is to standardize in order to bring it under control and then understand where it can be simplified.  This also applies to the variation argument.  If there a high degree of variation in inputs it is essential that you standardize to understand how much variation really exists and then have a strategy to respond to it.  This is the only way to effectivly minimize the variation of outputs. 

Like in Aerospace we work with a product (patients) where the stakes are very high and mistakes can be very painful.  This is why I work in healthcare. 

We are not just shy of six months into our first year of our enterprise wide Lean journey and I am working with a small team to prepare for our mid-year review.  The purpose of the mid-year review is to step back and do a check/adjust against the content of our strategy A3 (Plan vs. Actual) as well as to conduct a check/adjust on the effectiveness of the management system we are working hard to put in place.   As a payoff, we hope to make adjustments to our strategies and the management system that will lead to improved business results as well as to begin to lay the ground work for the next iteration of strategy deployment that begins in the fall. 

 This preparation work I have been doing has given me an interesting opportunity to reflect on what we have done, on where we are, and where we still need to go.  Looking back in many ways it feels like things are going so slowly.  There is just so much we need to do better, faster and with less resources.  Yet,  as I think about where we were just a year ago and where we are now it puts things in perspective.  Just a year ago there was only a small group of leaders that were living and breathing Lean, and most of them were in the Model Line.  Now, everywhere I go in the organization I talk with leaders that are excited, and deeply immersed in Lean transformational efforts.  We are beginning to speak the same language and have a common view of both where we need to go and the means by which we need to get there.  With this critical mass forming, so also has formed a deeper understanding of what problems need to be solved in the near term to allow us to successfully navigate the next steps on our Lean journey.  

So back to the Mid-year review.  Because of the progress we have made over the last six months I predict some very interesting discussions and decisions that will need to be made as we begin to look forward to this fall when we begin our second cycle of strategy deployment.  First, our senior leadership team will need to wrestle with how we will begin to define and transform the organization around value streams.  For many years we have talked about the need to break down our organizations silos and for the first time I believe we are ready to take bold steps in that direction.  Second, our senior leadership is starting to move toward viewing operational excellence as the overall strategy of the organization.  This should have huge implications for our current strategies as well as the next round of strategies for 2009.  Lastly, our senior leadership team needs to figure out how to adjust the management system away from its current over-emphasis on our budgeting system for control.  Currently, our budgeting system drives waste and the wrong incentives and until it is changed we will be keep looking in the rear view mirror as opposed to whats coming towards us in the future.   

This week I had the chance to conduct a process walk in one of our large, transactional, administrative work areas.  A year ago I spent some time in the area, before they had begun to redesign their processes applying Lean.  Back then it was a really tough environment to work in.  Basically, it was row after row of high walled cubicles, hardly any light an almost invisible work flow.  As you would expect the associates working in this area worked fairly independently and most were very specialized to maximize individual productivity.  It was not a very easy place to work. 

Returning this week I was blown away by how different not only the work environment had become, but also how much more engaged the associates seemed.  While many process changes had been made the largest difference was in the work environment itself.  All of the tall cubicles had been taken down and teams were organized in eight to ten person workcells.  Each workcell had an open area in the middle and various visual systems tracking on the teams work flow.  Sitting in one corner I could watch the teams work as teams as opposed to sets of individuals.  Associates with problems would raise their hands and supervisors would go to them to help with problems.  Small groups were working together on solving problems.  All of this was completely impossible in the old work environment.

After the walk I spent some time reflecting with my boss who was on the walk with me.  Both of us had read many times in different Lean sources about how important it was to change the work environment during a Lean transformation.  We both had also seen before the positive impact a small change in a work environment can have for a team, but neither of us had seen this dramatic of a difference.  It was incredible to see just how much improvement can take place by removing the physical barriers that prevent people to work together toward common goals and problem solving.  I walked away thinking about just how much more their is to learn about Lean and the improvement that is possible. 

This last Friday we had the great opportunity to host Orry Fiume for a full day workshop focused on “Management Accounting for a Lean Business.”  For those of you that don’t know Orry, he is the former CFO of the Wiremold company, and one of the best known authorities on Lean Accounting.  Orry was part of a team that transformed the Wiremold company during the 1990s, which has been written about extensively in several books including Lean Thinking and Better Thinking, Better Results.  We asked Orry to come out and visit us after his new book Real Numbers was discovered and widely distributed within our organization and is being used especially by our Finance and Measurement teams to challenge how they think about their work. 

During the session we learned a lot about how to transform the purpose as well as processes of the Finance and Accounting functions to support an organization’s Lean strategy.  Orry did a great job of translating stories from the manufacturing industry into healthcare examples.  Overall, the timing could not have been better.  The CFO and the Finance teams are engaged and looking to take a leadership position in the transformational efforts and the tools and the thinking they learned should be put to good use.

While it was valuable to learn about the tools and methods of Lean accounting I found even greater value in the messages about leadership that Orry brought to the workshop. The primary message that Orry reinforced throughout the day was that in order to transform a company you must first transform the people working in the company, one person at a time.  This is not a challenge that can be overcome with a new method or tool.  It is a challenge that can only be overcome by leadership.   At the end of the day I wrote out in my notebook the key leadership messages that I took away from the day and are shared below: 

• Leadership from all functions and most importantly at the highest levels must “plunge” into the Lean strategy and learn by doing.   
• Lean improvement cannot be delegated, it takes active leadership, starting with the top.
• Leaders must create tangible change.  They need to actively participate in kaizen that physically changes the work environment, the value streams and the work of associates. 
• Associates will watch your feet more then your mouth, leadership behavior is worth more then a million words.
• There will be lots of leaps of faith that each leader will need to overcome and staff will be watching them closely to understand how committed they really are. 
• There will always be some that will actively seek to block the Lean strategy and they need to be asked to find work somewhere else.  It is business and not a democracy.  People should be given many opportunities to learn and change, but at some point supporting the strategy in not optional.
• Leaders must understand the difference between mistakes and failure.  A mistake is something someone knows how to do and does incorrectly.  A failure is when someone tries something new and is unsuccessful.  There should be no excuse for mistakes and lots of forgiveness for failure.

In conclusion, Lean Accounting provides us with a set of tools and methods that when applied will support an organizations Lean Strategy.  Yet, like all tools they are only effective when they are guided by the right leadership. 

Hi everyone, I’m still around, admiring the great work of Lee and colleagues at Group Health, and also applying my knowledge at a different level, working with the California Healthcare Foundation, based in Oakland, California. What I’m experiencing in this work is a very different view of health and health care - a societal one, as opposed to one that is based at the level of a health plan / delivery system.

The specific medical issue we’re looking at is the control of blood pressure, which has been really interesting to look at from a societal perspective. Why? Because the health system sees a slice of the impact - expenditures on drugs, office visits, and eventually the devastating outcomes of cardiovascular disease. It does not see the other impacts, on patients’ time, their costs, or the time and costs of their employers and families, which frames how a society might look at managing this condition (which right now is done poorly, with only 35 % of Americans with adequate control, and a third unaware that they are at risk).

This is very tied into LEAN for me, because it’s taught me to look at every problem as one impacting society, whether I am seeing it in an exam room or a board room. I am also using everything I’ve learned to date to help make an impact with this organization and its partners. This includes visibility - I asked if it would be okay for me to publish the plan “in the making” on the public Internet, and the answer was “yes.” I have never done that before.

With that in mind, feel free, if you’re curious, to take a look on my other blog and offer myself, and Californians, some advice on improving a plan that will make a difference for patients managing chronic conditions.

Also feel free to answer this question - why doesn’t every health care organization post its A3’s in progress for community comment? Should patients and their families be part of the nemawashi process? Should we create a forum where that happens?

(I’ve been spending a lot of time studying patient and family involvement in the care system, also thanks to LEAN..)

Finally, something to energize us about all that we have left to do:

A guest in my home who is from Germany told me today, “Ted, I saw that book (“Overtreated,” by Shannon Brownlee) on your table, and it brought a smile to my face that you were reading it. Why is health care here all about money? When I compare health care to Europe to health care in America, it’s like first class compared to tenth class.” I told her I was doing my best along with others to make a difference, but I felt as disappointed as I ever have at what we’re accomplishing with the $2 trillion we spend each year.

What is our Value Stream?  I hear this question over and over again as I talk with different leaders in different parts of the organization.  As we have deepend and broadened our Lean knowledge base over the last six months people have begun to conceptualize the organization in new and exciting ways.  We are taking our first baby steps away from the only view that matters is the vertical view of the organization to we must begin to think and manage horizontally like our customers experience us in order to bring about breakthrough improvement.   We are beginning to think about cause and effect and through a process view.  And most importantly, their is plenty of evidence that our silos are starting to break apart.

Now back to the question.  We are a fully integrated system that includes both the insurance/financing of healthcare as well as the delivery of care itself.  This is rare in healthcare where most organizations either sell insurance or provide healthcare services.  We do both.  So does that mean that we have two enterprise value streams?  The first being the insurance product we sell?  The second being the delivery system where we see patients?  Many would argue yes.  Other organizations in healthcare have identified their value streams at the service line level like Cardiology, Orthopedics, and Primary Care.  We could do the same?  Does it make sense?

I believe the right answer rest with our customers.  When they choose to do business with us I believe they want the highest quality care, that is affordable and has a minimum cost/headache to consume.  That is why I believe we need to think about our Enterprise Value Stream as being a single stream that weaves together the services provided by both our insurance and delivery systems and operations.  A powerful combination that creates the right incentives if realized.  By conceptualizing and then organizing our organization around this value stream we could do things no others in healthcare can.   The value of truly integrated care where the best patient is the one that never happened, because the disease was prevented in the first place.  The founders of our organization had this vision, but we have never been able to fully realize it.  I believe Lean provides us a path to get there.