Operational Excellence Mixtape: April 12, 2019


Ryan and I are co-sponsoring a workshop that I'll be presenting on “Measures of Success” in Winnipeg on May 10. Learn more.

Healthcare – Creating Value for Patients

A hospital in India continues to develop world-class surgical practices at a fraction of the costs in North America, and with similar outcomes – and it is getting better and cheaper.  Bloomberg Businessweek with an interesting piece on The World's Cheapest Hospital Has to Get Even Cheaper.

Healthcare is different.  “We don't make widgets”.  As a lean practitioner in healthcare for 10 years, I believe healthcare IS different.  Simply importing industrial improvement tools and methods without adaptation or translation is ineffective.  This article in BMJ explains why. 

Measurement is a key enabler of improvement.  Healthcare collects reams of data, yet measurement is elusive. This article suggests that providing providers better data will help to drive improvement.  Necessary, but not sufficient.

Productivity continues to lag in healthcare.  The ratio of support staff to clinicians in the US has steadily increased since 2001, while utilization of hospital beds has remained flat, and innovation and advancements in pharmaceuticals and alternative care settings has reduced costs.  Clinical labor accounts for 60% of the workforce and is the greatest expense.  Productivity represents the largest opportunity to reduce healthcare costs – not reducing printing costs or staples. 

Firecehealthcare held a Final Four tournament of healthcare buzzwords.

Operational Excellence

Putting up a sign is not really visual management.  Pascal Dennis provides clarity on Level 1 and 2 of the 4 Levels of Visual Management (and leaves you wanting to know what Level 3 and 4 are).

Companies should focus their energies on generating hypotheses, not setting goals and “embracing failure” nonchalantly.  Excellent piece in MIT Sloan Review “Why Hypotheses Beat Goals”. 

Organizations are often guilty of “doing Lean” to check a box or because others are doing it.  This is, of course, meaningless, as it is not tied to strategy, purpose, or problem solving.  Similarly, 41% of senior leaders say their digital business transformation is a “waste of time”.  Those of us who have endured corporate bandwagonism for Lean and Six Sigma (or the dreaded Lean Six Sigma) will recognize these sentiments.  If it's not connected to strategy and creating value, it's a waste of time.

Redundancy is a common engineering strategy to improve reliability for high-risk processes.  Former Boeing engineers express surprise at the lack of redundancy in the sensors affecting the 737 Max issues.

Deming was hospitalized in 1987.  Unsurprisingly, he spent his time observing the systems and organizational behaviour.  Here's a summary from leanblog on what he had to say about it. 

Leading & Enabling Excellence

“We consider continuous improvement productive time” says Kevin Thompson, a CFO at Cambridge Engineering in Missouri.  I don't recall many CFOs who recognize the value of improvement time.  Quality starts in the boardroom.

Ask ‘how can management add value for employees?', rather than “how can employees add value to a company?”.  Dan Markovitz summarizes the principles and benefits of developing your employees.

What's the difference between manager and leader?  Does it matter?

A reminder of the tyranny of metrics without principles or methods.  Scandal-plagued Wells Fargo CEO steps down and stock price goes up immediately.  Hopefully an outsider can come in and purge what's remaining of the culture that led to fake account scandals, selling customers insurance products they didn't need, and other “widespread consumer abuses” – all in the pursuit of some ill-conceived metrics and targets.

This feature of DBS culture transformation includes connecting work to purpose, “co-creation” of KPIs, and defining behaviours.  Hopefully, this leads to superior, sustainable, and humanistic results as a contrast to Wells Fargo.

Tom Peters attempts to condense his primary concerns on one-page he calls “the everything page”. 

Coaching – Developing Self & Others

“Often our productivity struggles are caused not by a lack of efficiency, but a lack of motivation. Productivity isn't a virtue. It's a means to an end. It's only virtuous if the end is worthy”.  Adam Grant says to forget about “time management” and shift to “attention management” in this excellent New York Times article.

What if tenderness is leadership?

Don't ask for trust.  Take deliberate steps to create it. 

Books, Podcasts, Videos

I recently re-read The High Velocity Edge by Steven Spear.  So good.  Almost ten years old now, but increasingly relevant in an era of ‘agile' everywhere.  People often ask me for lists of Operational Excellence books when they are starting out learning about it.  This book is Top 5.

Creating Constancy of Purpose is a fundamental Opex principle. “Keep on existing” and “Maximizing Profits” are not compelling purposes in today's landscape (though I argue they never were).  Nicholas Pearce, a professor at Kellogg, agrees, and is teaching this principle in business school.  Check out this great HBR Ideacast: Why People – and Companies – Need Purpose.

How come a growing number of people don't trust scientific thinking?  Why doesn't confronting people with facts change their opinions?  I'm enjoying reading The Workshop and The World as it explores the rise and fall of scientific thinking in public consciousness through the lens of 10 thinkers from history. 

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Ryan McCormack
Ryan is an operational excellence professional with over 18 years experience practicing continuous improvement in healthcare, insurance, food manufacturing, and aerospace. He is an avid student of the application of Lean principles in work and life to create measurably better value.


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