Notes from Paul O’Neill Speaking at the Lean Healthcare Transformation Summit


photoIt was a real thrill to be able to meet Paul O'Neill in person yesterday at the Summit  (he was my guest for Podcast #124). His powerful message about leadership and patient safety was well received by the audience.

Below are my raw notes as I typed live in this Google Doc. I hope the notes do his talk justice…


  • How many of you work in an org. where you can, 24×7, see the real-time OSHA recordable injury rate, etc. for your org?

    • Are “people your most important asset?”

      • “Show me the evidence” and what has been demonstrated?

  • Organizations are either habitually excellent, or they're not

    • One way to demonstrate you ARE (or on a journey)… is your goal to be the best in the world in everything you do?

    • Wouldn't REALLY caring about the people who work you be a good start? (safety)

    • The goal is nobody being hurt

    • Working in healthcare/medical is the most dangerous industry in the US

      • 5 in 100 have an OSHA recordable each year

      • Lost workday cases (this is a report that's hard to fudge unlike other measures) — 3 out of 100 have an injury (often serious) that causes them to miss a day of work or more

      • He was able to pull up CURRENT Alcoa data on his iPad today

        • “The culture owns workplace safety” (O'Neill has been gone 13 years now). Employees own each others' welfare

  • Why do I care about workplace safety, beyond being morally important?

    • Part of habitual excellence

    • I'm not going to believe we are serious about lean or perfect patient care until every organization here (and all care giving orgs) can say we have REAL-TIME information about workplace injuries for the “people we say we care about.” — for improvement, not for blaming and shaming

    • “I'd trade in all my awards for a country that demonstrates it truly cares about the safety of its workers.”

  • When he joined Alcoa, set a goal that nobody there get hurt at work

    • National average lost workday rate was 5 out of 100, across all workplaces (in 1987)

    • Alcoa, it was 1.86, they were really proud of this, given it could be a really dangrous industry and environment

      • “Now, our goal is zero”  – people were taken aback because they didn't think it was possible.

      • Behind his back, people said O'Neill doesn't know about our industry and about making aluminum

      • The excuses are all the same… it would cost too much to improve safety

      • People think God wants us to get hurt?

      • Wanted to use the term “incident” not “accident” (a term that makes people think they are inevitable)

      • People don't like to set goals they think they can't achieve

      • A non-zero goal is not OK… who wants to volunteer to get hurt?

      • Improved 30-50% a year for 13 years

      • 0.065 is the number today

  • None of this can happen without “real leadership”

  • Our education system doesn't spark people to think deeply about what leadership means

  • “Do the people who clean the rooms get the same level of respect as the surgeons?”

    • I don't know many organizations where that is literally true. It cannot be true unless the leader is completely dedicated to the idea and starts a continuous process that eliminates abusive behaviors and things that are disrespectful.

  • You can't get to zero safety incidents with cheerleading or writing it on the wall and believing, as a leader, you've accomplished the purpose.

  • “Show me organization with a Vice President of equal opportunity & I'll show you an organization without equal opportunity”

  • It's the duty of a real leader to articulate aspirational goals that are meaningful (the goals aren't from on high, but from a discussion about what the aspirational goals SHOULD be).

  • “Alcoa will never again budget for safety.” If there is a need, I'll find a way to pay for it. People couldn't believe the CEO was saying we'll spend whatever it takes for safety. If somebody identifies anything, just fix it. That's the supervisors' responsibility.

    • O'Neill gave his home number to the workers… and told them to call if the supervisors weren't doing that. He got a call 3 weeks later… employee reporting a broken roller conveyor that had been broken for 3 days and people are having to lift 600 lb ingots to walk them around the broken conveyor and somebody will get hurt. “This isn't exactly what we thought you meant.”

    • O'Neill called the plant manager immediately, got him out of bed. Told him the story. I want you to go down to the plant and get that fixed and call me when it's fixed… and I don't want to ever get another call. 4 AM, it got fixed, and he got another call.

    • The story of that spread through the informal network… that he was serious and there could be no barriers to safety improvement. That was the beginning of a culture of safety.

  • He told Wall Street analysts that safety numbers would be a “leading indicator” of how we are improving, in general. There was buzz that a CEO was talking to analysts about safety.

    • “Most organizations are just riding a log down a river.”

  • Working to do things perfectly leads to better financial results than any sort of financial engineering.

  • O'Neill told his finance people, “If you ever calculate the cost savings from improving safety, you'll destroy my moral authority on this…”

    • Internal politics, back biting, etc. is a waste of human energy that could be used to create value for customers.

  • Who doesn't want to work at a hospital that's working toward zero infections?

  • O'Neill had “Management Training” changed (the term) to “Leadership Training”

    • Root of management is manipulation in Latin.

  • He credits early education in computer programming as a way to think more systemically.

  • Back in the late 1960's, the VA was autoclaving hypodermic needles because it was deemed cheaper than reusable needles… instead of looking at the total experience of a system where patient was exposed to an infection they shouldn't have had.

    • “Accounting got confused with economics”

  • Replaced Lawrence Summers as Sec. of Treasury (his staff assistant was Sheryl Sandberg, now COO of Facebook)

    • Transition meeting on a Saturday morning. Summers didn't know the lost workday rate in Treasury (didn't know the idea of the rate even meant)

    • “Floating on top of the organization versus really caring as a leader.”

    • Sandberg said she would get the data. Rate was about the national average.

    • Quickly reduced it 50%… what is the occupational risk of IRS workers?  O'Neill says people generally don't understand how there is safety workplace risk for hospital workers…

  • It is possible, with empowered people who are doing the work, to achieve what we want – to have a perfectly safe medical enterprise.

  • On theoretical limits, “If God doesn't stop you from doing it, you can do it!”

    • Compare everything you do to what perfect looks like. It's like draining the swamp.

  • Alcoa market value increased 800% in 13 years by paying attention to the NON-financial measures… the finances took care of themselves

Below is a photo taken by Bobby Gladd. See his blog post about the Summit here.

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Mark Graban
Mark Graban is an internationally-recognized consultant, author, and professional speaker, and podcaster with experience in healthcare, manufacturing, and startups. Mark's new book is The Mistakes That Make Us: Cultivating a Culture of Learning and Innovation. He is also the author of Measures of Success: React Less, Lead Better, Improve More, the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, and the anthology Practicing Lean. Mark is also a Senior Advisor to the technology company KaiNexus.


  1. O’Neill told his finance people, “If you ever calculate the cost savings from improving safety, you’ll destroy my moral authority on this…”

    Do we lose moral authority when we calculate the cost savings for:
    reducing infections?
    reducing falls?
    reducing sentinel events?

    • I think that’s what he is saying… he didn’t say so directly, but that’s a reasonable extension of what he’s saying.

      It seems if O’Neill were a new hospital CEO, his approach would be to focus exclusively patient safety and worker safety as “the right thing to do” AND a way of demonstrating operational excellence.

  2. Let me throw this down:

    In manufacturing if you focus (almost) exclusively on flow you will inevitably make all kinds of operational improvement and eliminate all sorts of waste.

    I have seen some healthcare organizations, Seattle Children’s for example, that have patient safety as the top priority and they have eliminated all kinds of waste. Patient safety isn’t an exclusive focus but nonetheless it is much more inspirational than reducing labor hours per unit of service and patient safety keeps the organization grounded.

    • What Paul is saying is start with worker safety and it’s inevitable that you’ll be excellent at other things.

      I think starting with patient safety (AND worker safety) is the right approach in healthcare. Improve safety and other results (like efficiency and cost) will follow.

  3. I spoke to many people about what they liked about the 4th Annual Lean Healthcare Transformation Summit. Paul O’Neill’s presentation came up often. At the end of the Summit, everyone in the audience was asked to spend a few minutes to write down and talk about an experiment they will try on monday based on what they learned at the Summit. One CEO shared his experiment with me – he’s going to make the employee injury rate transparent on his company’s website – updated every day. Watch for this story at the 5th Annual Lean Healthcare Transformation Summit . PS Paul O’Neill will return. He told everyone in the audience of 600 he would invite himself back. Stay tuned for continued examples of great leadership

  4. Mark– you did an impressive job of capturing Paul’s talk. Thank you! One of my favorite points: A leader must (1) “articulate unarguable aspirational goals”, and (2) “take away excuses”.


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