The Lean Management System: Unlocking the Vast and Untapped Innovative Potential of Your Workforce To Drive Value In Health Care

Transcription

1 The Lean Management System: Unlocking the Vast and Untapped Innovative Potential of Your Workforce To Drive Value In Health Care James Hereford President and CEO Fairview Health Services May 11,

2 Target condition for today: Share my learnings as a leader in three large organizational transformations Make the case that the management system is the key ingredient to successful lean Discuss the role of leadership in successful implementation Discuss the relationship between innovation and lean 2

3 I believe health care is the most complex operating environment there is. 1. We are capital intensive, with expensive buildings and equipment. 2. We are labor intensive. Unlike other industries that deploy a lot of capital, we don t use it to reduce down the size of our labor force. In fact, it often goes up with additional capital being deployed. 3. We are in the service business, delivering our product with our customer alongside us. And, if we are doing it right, they are highly involved in the care process. 4. We are in the knowledge management business, working in a network of information flow, with complex information development and communication as a key predictor of our ability to deliver high quality care. The people with the highest level of training and expertise are at the point of service, not in management. 5. Ours is a highly regulated and litigious environment at the local, state and federal level. 6. Our mistakes can have immediate life and death consequences. 3 3

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5 The Mindset Choice for Executives Regarding Their People Employees seen as economic assets valued for their productivity or Employees as people with complex needs and desire for meaning in their work 1. Hierarchy of Needs (Maslow) 2. Theory X vs Theory Y (McGregor) 3. Respect for People/Continuous Improvement (Principles at Toyota) 4. Humble Inquiry (Ed Schein) 5. Mindset (Carol Dweck - Fixed versus Growth mindset) What Decision is Conveyed Through Your System of Management? Do you have organizations filled with renters or owners? 5 5

6 Improvement System Lean is not a program, it is a total strategy. Taiichi Ohno Lean is an integrated socio-technical system whose main objective is to eliminate waste by concurrently reducing supplier, customer and internal variability through creating an environment and capability of problem solving in every member of the organization. -- Shah and Ward (2007) [Italicized statement is mine] Fairview Operating System Vertical Alignment Horizontal Optimization Value & Outcomes Patients and other Customers Management System Ownership Created At The Point of Value Principles Mission, Vision, Values 6 6

7 What s the Difference? Management by Objective Focus is on the outcome Retrospective view Individual focused for causes -> blame Top down decision making Leader is authority Focus on product/service produced Short term focused Looking for silver bullet Problems are problems Trying to cut and paste benchmarks Lean-Based Management Focus on the process and the outcome Retrospective and prospective view Process focused for cause Guided and distributed leadership Leader is teacher and facilitator of improvement Focus is on the engagement of the people producing the product or service Long term focus Winning through many small improvements No problems are a problem You are your own benchmark 7

8 Management: The systematic pursuit of desired conditions by using human capabilities in a concerted* way. Begins with the right mindset. The mindset is transferred through the management system which creates an environment where we systematically develop our people to be problem solvers. Management System People Development Mindset Performance *concerted planned or accomplished together 8

9 But What About Culture of Safety High reliability organization Clinical effectiveness Physician engagement 9

10 Respect for People & Continuous Improvement => Culture of Safety Lean Management principles are critical to establishing a Culture of Safety, for both patients and caregivers. A culture of safety requires: trust, report and improvement. The Management System should create an environment that emphasizes trust between all parties so that the focus can be on fixing the problem, not the blame. Visual management, standard work and management standard work enable and require making the abnormal known (processes, protocols, etc.). With clarity and trust, these abnormalities can be resolved and improved over time

11 Creating a High Reliability Organization Put forward by The Joint Commission, there are three attributes of a high reliability organization: 1. Leadership Commitment 2. Culture of Safety 3. Robust Process Improvement The systematic approach to solving complex problems and guiding organizations to implement effective solutions. 11

12 Clinical Effectiveness The methods of clinical effectiveness are absolutely critical to our ability to achieve clinical operational excellence and are integral to the Fairview Operating System. Reducing unwarranted variation is removing waste (Mura, not Muda) Mean 1 box = 100 cases in a year # of Cases # of Cases Poor Outcomes Excellent Outcomes Poor Outcomes Excellent Outcomes Process (Any process) is a function of its content, sequence and timing and are the only factors that we can manipulate in a process. The content of care, or the clinical decision making of the provider, is often the focus of clinical effectiveness. To improve clinical processes, the content of care, is critical to improvement. While necessary, it is often insufficient to achieve improvement of clinical processes

13 Physicians and Lean Management Physicians are scientists the scientific method is the basis for the lean improvement and management systems. The management system s focus is maximizing value, which is what clinicians produce when they are diagnosing, treating and caring for our patients. Therefore, the purpose of the management system is to maximize the amount of time that care givers have to spend on diagnosing, treating and caring for patients. The management system focuses on distributed leadership, not top down, and it supports increased discretion and decision making as close to the point of value as possible. 13

14 Bottom Line, Our Job as Leaders To create an environment that makes problems unavoidable by making them visible, and To support our people in becoming capable, active and engaged problems solvers. * Images used by permission of John Y. Shook 14 14

15 Part 2 WHAT 15 15

16 The Management System is designed to support organizations that want to drive systematic and continuous improvement at scale and believe they can achieve strategic differentiation through superior operational performance. Support small continuous daily improvements by everyone Sustain gains from improvement work everywhere Improve the ability and rapidity of learning across the organization 16 16

17 The Power of Strategic Deployment 1. It requires senior leaders to adopt the mindset and participate in the management system in a meaningful way. 2. It engages the people who are doing the work in solving for how they can contribute to achieving the goals that are set by senior leadership. The usual practice is that senior leaders are launching work, not goals, and the rest of the organization is reacting to absorb the work 3. It creates ownership through out the organization by playing catch ball between and across levels of the organization. The Challenge of Strategic Deployment 1. Iterations are slow. 2. Distribution of activities is dispersed across many leaders at many levels. 3. Catch ball is a sophisticated conversation that is both supportive and challenging and not natural to many leaders

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19 Value Stream Improvement 1. Key to driving transformational improvement, and it seems to be often underutilized and leveraged. 2. Critical to maintaining focus on the patient, and to break down our own silos and our focus on ourselves. 3. Provides context to improve work and to drive active daily management. Value stream improvements are intensive deep dives, almost always cross functional, into the operational design of a specific and critical part of the organization. A value stream improvement effort also should integrate Active Daily Management into the effort to ensure sustainability. They also often include the concept of an owner, who looks across the multiple functions involved to achieve optimal outcomes

20 Value Stream Mapping A pattern for driving larger scale improvements 1. Start with understanding of the current state. 2. Develop a desired target state (this gap is a problem chosen ). 3. Create an improvement plan to systematically close the gap between the current and future state. 4. Systematically execute to the improvement plan

21 Active Daily Management/Daily Engagement System This is the heart of the management system and where engagement through improvement comes alive. There are five foundational concepts: 1. Setting standards 2. Standard work 3. Leader standard work 4. Visual systems to detect abnormal conditions 5. A3 thinking to solve for abnormal conditions and to improve standard work 21 21

22 Active Daily Management is Not Just a Front Line Tool Linked Checking Strategic Work: Target, Actual, Gap? Please Explain Standard Linked Checking Calendar Are Do we know ready if to we start are the ready to day? serve patients? Are Can we making escalate time problems to go to the to right gemba? level? Tier 1 Front Line Team & Leaders Tier 2 Manager/Assist. Manager Med. Director/Div. Chiefs Tier 3 Admin. Dir./Dir. Med. Director/Div. Chiefs Tier 4 VP/Exec. Dir Chairs 8:00am Huddle 8:30am Huddle 9:00am Huddle 9:30am Huddle Tier 5 C Suite 22 22

23 What s The Target? To achieve sustainable organizational transformation by creating a culture in which 32,000 problem solvers (Fairview) consistently make incremental improvements in a directed way achieving performance levels that deliver exceptional value to our customers (patients) and the markets we serve. What works? Similar patterns have emerged: 1. Motivate and set expectations with leaders and the organization 2. Create a model of the new way 3. Having a strategy for spread 4. Start early with strategic deployment 5. Build the active daily management system into all your improvement activities 6. A healthy dose of constancy of purpose 23 23

24 My experience is that it is essential to start early with the strategic deployment process to deploy goals. Why? 1. It requires executives to play a meaningful role in the management system. "It is easier to act your way into a new way of thinking, than think yourself into a new way of action. 2. Senior executives need to develop A3s, conduct catch ball conversations with their next level leaders, and check to make sure these conversations are happening at subsequent levels of the organization. 3. This also means they have a reason to develop and use leader standard work and visual systems. 4. It is the mechanism to connect and align the work of the organization to the work of the front line 24 24

25 The Relationship of Lean to Innovation Our misperception regarding innovation is that it is the result of the individual. Thomas Richard Sheridan, Edison, maybe CEO at the Menlo most Innovations iconic inventor (named of all after time, the should Edison s be best famed known R&D for lab) and his author real of innovation, Joy, Inc., has which demonstrated was the establishment how creating of the Menlo right Park, kind the of environment first research leads to and innovation. development His system laboratory. creates an environment that supports: The Meaningful seminal inventions conversations of the (daily nineteenth huddles, century, anthropologists including with Edison s customers) electric light, were Deep seen relationships as the work (paired of lone programming, geniuses drawing openness on innate physical Yankee environment ingenuity. In fact, rather Reinforcement than being the of values enterprise (approaches of lone individuals, to recruiting nineteenth-century and hiring) invention involved communities of skilled operatives who drew on practical experience to design, build, and refine new technology. Gilder Lehrman Institute The result is 6 Inc. magazine revenue awards and nine Alfred P. Sloan Awards for Business Excellence in Workplace Flexibilitty

26 Continuous Improvement = Continuous Innovation IDEO, the d.school at Stanford, Menlo Innovations and others describe conditions necessary for innovation: A community that shares a common language, to facilitate frequent and open communication, and clear and well defined problems to solve, with a shared methodology for solving problems, that provides clear connection and involvement of customers, and has specific feedback on the result of attempted solutions (fast iteration, protyping, etc.) This is exactly the lean environment that we seek to establish through the management system

27 Summary Lean is not the tools and methods. Lean is the management system. The management system demands the right mindset from leaders Leaders must develop a belief that adopting this approach is of strategic value The goal of the management system, and the source of the strategic advantage, is unleashing the innovative potential of the members of the organization