Thursday, August 22, 2013

Focus and Leverage Part 245

This will be my last posting on the wonderful book, The Nun and the Bureaucrat.  In this posting I'll be talking about empowering front line workers an then some on leadership.  I hope you've enjoyed reading about this book and I do encourage you to go buy it.....especially if you're in the healthcare field.
Before all of the improvement efforts experienced by these two healthcare organizations began, it was not uncommon to have an "expert" come in, study the problem and then make recommendations on how to improve the situation or solve the problem in question.  It was not uncommon for this process to take six months to a year to complete.  Today, both organizations use what is referred to as real-time problem solving.  This technique was developed by Toyota where workers would spot a problem on the assembly line and they were empowered to pull a cord to shut down the line to fix it....even if it was a minor problem.
At the PRHI hospitals, the front-line workers see a problem, analyze it and then propose a solution which is then tested as soon as possible.  If the solution works, it is implemented throughout the department and ultimately, the entire hospital.  If the solution doesn't work, then they try a different solution and keep doing so until the problem is resolved.  SSM developed a similar way of solving problems referred to as "Shared Accountability."  The key point is that front-line employees can solve problems because they have become systems thinkers.  Both organizations recognized the creative power and potential of front-line workers and empowered them to help heal their healthcare systems.  You can only imagine how these front-line workers now feel about coming to work nd knowing that their opinions matter.
But even though major improvements have been made in these two healthcare organizations, they still have a lingering problem which is a difficult one to solve.  It's the problem of built-in opposition between the Physicians and Surgeons and the Hospital Administrators.  Deming said it best in one of his Fourteen Points..."Break down barriers between staff areas."  Systems Thinking tells us that theoretically both sides should be trying to achieve the same goal.....improving patient care, but are they?  Not all doctors and administrators have embraced system thinking, so therein lies the problem.  But the good new is....things are getting better as both sides of the same equation are slowly accepting systems thinking.
Bob Sproull

Tuesday, August 20, 2013

Paris Seminar on TLS......

For all of my European friends (and my friends everywhere), here is a seminar that you should not miss.  Marris Consulting and Pinnacle Strategies are teaming up for one of those "don't miss" seminars on September 5th and 6th in Paris.  If there was one seminar that I could attend this year, it would be this one.  Here is a link to this seminar:
If any of my followers attends this seminar, please let me know how good it was.  This presentations are in English by the way.

Bob Sproull

Saturday, August 17, 2013

Focus and Leverage Part 244

The authors of The Nun and the Bureaucrat tell us that one of the biggest weaknesses of traditional linear thinking is the belief that every effect has an immediate cause, that is, that cause and effect are directly linked.  When a problem is discovered, people ask, "Why is this happening?" and they look for a solution.  They argue logically that every effect has a direct cause, so they tend to focus on finding an immediate cause.  What is actually happening is that what they are seeing are symptoms of a larger cause...the true root cause.  So when they attempt to solve the symptom they have observed, they are simply applying a band aide and not really solving the problem.  And when this happens, the same symptom will reappear later on.
What is really needed, in a systems thinking environment, is to link the chain of cause and effect until the true root cause is uncovered.  Toyota taught both of these two healthcare organizations to continue asking why because most problems are much deeper than a single why?  Both of these organizations learned to follow Toyota's "Five Whys" technique and as a result their problem solving was so much more effective.
In this wonderful book, the authors relate an example of how the PRHI group used the five whys to solve a problem with a medication cart.  It seems as though they had just implemented some mistake proofing so as to eliminate breakdowns on the cart.  They had found that the batteries on the computers that were supporting their bar code medication systems were very often going dead.  At first they suspected operator misuse, so they incorporated color-coding and labeling of buttons, and some instructions to make its operation easy and obvious.  In spite of all these precautions, they had a breakdown in the system, so the nurses applied the Five Whys technique to solve the problem.  What they discovered, reinforced for them that the Five Whys is an effective tool for problem solving.
They traced the problem back to the battery charger, which they found did not actually have any power.  And when they asked why it didn't have any power, they discovered that the electrical outlet was dead, so they asked why again.  They discovered that the outlet was located right next to a sink and that the outlet had been splashed with water which shorted out the outlet.  They didn't stop there...they asked why again and discovered that the water pressure in the sink was too high.  They called a plumber to adjust the water pressure and the problem disappeared forever.  Who would have thought that a battery going dead was linked to water pressure in the sink being too high?  But that's how the Five Whys works.
Both organizations have used the Five Whys to solve many problems just like the Medication cart.  They've used it to solve problems with drug and medication errors in the pharmacy. patient misidentification, and a host of other problems.  The authors tell us to remember several very important things including:
-  Cause and effect may be widely separated in time and space
-  To eliminate cause may not be what it first seems to be.
-  Ask "Why?" five times to find causes and make effective improvements and solve problems
-  Redesigning processes safeguards improvements and frees staff to meet the needs of the patients.
-  Computers can be helpful, but operators need systems knowledge, particularly in a complex hospital.
The key point in this posting is that solving problems requires that by using cause and effect logic and linkage you will be able to arrive at the true root cause of problems.  So many times I've witnessed organizations focusing on the symptoms of problems rather than on the root cause.  In fact, when you are able to identify that single core problem and solve it, most of the negative symptoms will typically disappear.  The Five Whys is an excellent tool for creating this cause and effect linkage and if you are committed to using it, like these two healthcare organizations have done, your organization will solve many more problems.  Remember, treating the symptoms of a disease is not the same as curing the disease.
Bob Sproull

Thursday, August 15, 2013

Focus and Leverage Part 243

For the last several postings I have been writing about two healthcare organizations (one based in St. Louis and one based in Pittsburgh) who have dramatically improved their quality of healthcare.  And as I have mentioned, the information presented here is from a book entitled The Nun and the Bureaucrat by Louis M. Savary and Clare Crawford-Mason.  In this posting I want to present what their leadership learned and something the authors term as going for the theoretical limit. 
Paul O'Neil, a former bureaucrat (Treasury Secretary) and CEO of Alcoa was the CEO of the Pittsburgh based organization, PRHI, and Sister Mary Jean Ryan, a nun, was the CEO of the St. Louis based organization, SSM when these improvements began.  As the authors tell us, "It's difficult to think of two people who came from more different backgrounds, yet they both reached exactly the same realization.  Each hospital is a system, not merely a collection of departments.  To heal a hospital requires three things.  First leadership; it is the role of the leader to establish goals that everyone can relate to.  Second, the aim of any healthcare system must be continually improving patient care.  PRHI called it "perfect patient care."  SSM called it "exceptional patient care" aiming for the 99th percentile.  Third, a leader - and as many others as possible - needs to be a systems thinker."
The authors go on the list important leadership points to remember that apply to no only healthcare organizations, but to organizations of all types:
-  Leaders create the vision.
-  Hierarchy in the traditional sense essentially disappear.
-  Leaders change from boss to mentor, facilitator and supporter.
-  Leaders work alongside other staff primarily as stakeholders and promoters of the corporate vision.
-  Leaders become continual learners and involve everyone in the transformation.
-  Leaders insure that everyone has the proper tools and training.
So what did they mean by the expression, going for the theoretical limit?  Both PRHI and SSM Healthcare chose to set their goals at zero deaths from hospital-acquired infections, zero medication errors, and zero medical mistakes.  They both realized that they might not ever reach such lofty goals, but they also concluded that they could not, morally or ethically, set their sights on anything less than perfection.  Their goals were dramatically different from the old "zero defects" slogan of manufacturing from the 80's and 90's because they viewed them are merely slogans without methods to achieve them.
While Paul O'Neill was the CEO of Alcoa he developed his theoretical limit for safety as zero accidents and zero safety incidents throughout Alcoa's hundreds of plants and offices around the world.  He didn't want to be the "best in the industry" because he felt that wasn't good enough.  All around him thought it would be impossible to make safety perfect, but he was undeterred.  O'Neill knew he wouldn't achieve perfection, but he never wavered.  O'Neill's commitment paid off as during his last year at Alcoa, out of the entire 140,000 Alcoa employees worldwide, there were fewer than 15 safety incidents,  To put this achievement into perspective, statistically speaking, on average, it would take 700 years before any incident would be subject to a lost workday because of an accident.
No, they haven't achieved perfection yet at either of the two healthcare organizations, but by the mere fact of striving for the seemingly impossible and having all of the employees focused on it is an absolute necessity if the new level of improvement is to come close to their goals.  Both of these healthcare organizations have made amazing progress and will continue to do so because leadership is fully supportive and passionately involved. 
The authors point out seven important things to remember on this part of the improvement equation:
-  The theoretical limit gives great momentum for improvement.
-  The theoretical limit brings the long term goal into focus.
-  The theoretical limit is possible only in theory - 100 percent perfection.
-  Because of continual change and possibilities for improvement, the vision must be ever-flexible in using new information at that moment.
-  Perfect patient care, if or when it can be achieved, will only last until new knowledge, new skills or new goals makes today or yesterday's perfection obsolete.
-  Reaching zero errors is an important and necessary step toward the theoretical limit of "safest organization to work for" or perfect patient care," but zero errors and the theoretical limit are not the same thing.  The theoretical limit is an idea e.g. "exceptional healthcare," that may change and develop with increasing knowledge and continual improvement.
I think the important lesson here is, set your goals high.....maybe even radically high.  Instead of trying to achieve 5 or 10 % improvement, why not shoot for 100 % improvement?
Bob Sproull

Wednesday, August 14, 2013

Focus and Leverage Part 242

The more I read The Nun and the Bureaucrat by Louis Savary and Clare Crawford-Mason, the more I like it.  I've been writing a lot about Systems Thinking and how these two healthcare organization have embraced it, but I must tell you that it didn't come easy.  In fact, when they first started using it, there was a lot of resistance to it.  The problem they ran into was that it forced all of the employees to look at everything they and their co-workers did through a completely different set of eyes and most resisted it.  This posting will be about how these healthcare organizations became system thinkers.

The essence of what these two healthcare organizations learned in their Continuous Quality Improvement (CQI) training was a new mindset called systems thinking.  As I've written in the past two postings, systems thinking allows people to see the whole rather than just parts of it.  The whole is not the sum of its parts, like many people believe, but rather they have learned to see it as the product of the interaction of the various parts of the whole system.  In doing so, everyone learned to see things that they had never seen before.

One of the primary learnings for both organizations was that the quality of the whole system is created by how well the parts fit and work together.  They also learned that if all of the parts are to work together effectively, everyone must agree on a shared aim or purpose for the whole system.  In the case of these two healthcare organizations, the only purpose that can possibly unify the disparate parts of the healthcare system is perfect or continually improving patient care.

In most American organizations our culture has taught us to emphasize individual contributions in the short term rather than long term continuous improvement efforts by teams.  We Americans seem to love the solitary brave hero and being told what to do in isolation of the system.  System's thinkers believe that in order to do a god job, how what they do fits in with what everyone else is doing.  These two healthcare organizations believed that their "healing process" had to start by giving up the "command and control" management mentality and replace it with a systems mindset that focuses on cooperation and teamwork to achieve their shared purpose.

These two healthcare organizations discovered that the difficulty in transforming to systems thinking requires that you look at not only everything you do, but also everything others and to do so in a a very different way.  They also discovered that if small problems were left unresolved, they might grow into larger problems.  In their previous way of doing business, it was the people that solved these larger problems that seemed to receive most of the accolades.  What these organizations now understand is that they must start preventing small problems from growing into larger ones and to forget about who gets the accolades.  This change took time and considerable effort, but it was well worth the effort.

Bob Sproull

Saturday, August 10, 2013

Focus and Leverage Part 241

As I told you in my last posting, I've been reading a fascinating book entitled The Nun and the Bureaucrat by Kouis M. Savary and Clare Crawford-Mason.  It's a book about two healthcare organizations, SSM Healthcare, headquartered in St. Louis, Missouri and the Pittsburgh Regional Healthcare Initiative (PRHI), who are using Systems Thinking and the Toyota Production System to heal themselves and they're both making significant progress.
To quote the authors, "Systems Thinking may sound complicated and technical, as if only scientists or mathematicians could grasp it.  However you don't need a college degree to understand systems thinking."  For regular followers of my blog, you know I've written extensively about the Theory of Constraints Thinking Processes and while it is a different concept than systems thinking, the basic message is still the same.  Systems thinking simply means focusing on the organization as a whole and transforming it as a whole rather than paying attention only to various parts or departments,
In this book, doctors, nurses, administrators, executives, aides, the regular people we find in hospitals, tell in their own words how they overcame doubts that they could provide "perfect patient care," identify errors, reorganize how they worked together, learn a new systems way of thinking, develop "new eyes" to design better and better methods, and get to the root causes of problems.  These same people talk about how they now view their workplace and how they question the old way of doing things that they all admit they had been using for years without questioning them.
The key to systems thinking is to have everyone working together toward the same aim or goal, so one of the first things that must happen is to clearly articulate and then communicate the goal of the organization to everyone.  For example, suppose that the leadership of your organization stated the goal to be perfect patient care.  When everyone understands what the overarching goal of the organization is and that success is dictated by working toward the goal and working together to achieve it, great things can happen.  Again, for those of you that have followed my blog on a regular basis, you have read about using the Goal Tree (a.k.a. Intermediate Objectives Map) method to develop the Goal, Critical Success Factors and Necessary Conditions.  However you develop the organization's goal, it is important to make sure it is communicated to everyone in your organization so that everyone is focused on it.
The other methodology these two organizations used was the Toyota Production System (TPS).  Waste is a huge problem for virtually all organizations, but within hospitals it is a pervasive problem.  It's probably because typical hospitals got such a late start in recognizing and understanding the basic premise of just what waste is.  As most of you know, waste is not just about money lost in hospitals, it's about duplication of work, rework, a lack of consistency, shortages of supplies and a host of other sources.  Many times in hospitals nurses and other hospital employees have had to come up with work-arounds just to get things done,  But finally, at least for these two healthcare organizations, they were introduced to TPS and everything it has to offer.  The employees fought it at first, because its roots were in manufacturing and after all, how could a manufacturing solution apply to healthcare.  These same employees had their own epiphanies and are now fully supportive of TPS.
According to the authors of this great little book, the key take-aways on waste at least for these two organizations were:
-  Waste is a problem for all organizations, because it is hidden in many seemingly reasonable and traditional disguises.
-  Waste is more and more difficult to identify as the organization becomes bigger and more complex.
-  Waste can range from misuse of the time, talents and commitment of healthcare employees to poor inventory supply systems or failure to follow-up with patients,
-  Waste is not just money.  The huge waste of effort and supplies in hospitals, if corrected, could reduce the cost of healthcare by as much as 50 percent.
-  One of the most useful powers of systems management is that it continually uncovers hidden waste and offers methods to reduce it.
One last lesson that healthcare organizations are learning is the importance of sharing what they've learned with each as they progress on this endless journey.  Yes, they are competing for the same patient base, but they also believe in putting the customer, the patient, first, so competition isn't a barrier for them.
Bob Sproull

Friday, August 9, 2013

Fcous and Leverage Part 240

For the past week I have been reading a book entitled, The Nun and the Bureaucrat - How They Found an Unlikely Cure for America's Sick Hospitals by Louis M. Savary and Clare Crawford-Mason and I have to tell you that it's quite a good book.  The primary themes of this book are systems thinking and the Toyota Production System and how both were applied to two separate healthcare organizations.  The book's format is sort of unique in that it is full of quotes about what they did to improve their organizations by employees of both these two organizations.
I haven't finished the book yet, but I wanted to share one of the lessons both of these organizations learned during their transformation to systems thinking.  In Chapter 5, The Most Disabling Challenge We Faced:  Removing Blame.  Kevin Kast, President, SSM St. Joseph's Health Center said, "Before we shifted to systems thinking, we were always looking for the bad apple.  We believed that somewhere among the employees was a bad apple.  If we could just get those employees out of here that weren't good employees this would be a great place.  So, when we identified anybody likely to mke a mistake or close to making a mistake, that was the person that we should fire.  Often we did fire them, believing that by getting rid of them everything would get better.  But what happened was that everything didn't get better."
If you're a fan of W. Edwards Deming and his 14 Points of Quality Management like I am, you will remember that he advocated removing fear from the workplace.  Most workers fear being blamed when something goes wrong and this is especially true in many healthcare environments.  Blaming others for mistakes that happen on the job is a major symptom of a fear-based working environment.  But what these two healthcare organizations learned was that blaming generates feelings of opposition, secrecy, mistrust and resentment and that fear stifles creativity.  They learned that fear curtails the improvement of processes and procedures which is a key to successful systems management.  The staffs at both organizations discovered that it was the system or process within the system that allowed errors to occur and that it was paramount to stop blaming people if they wanted true and lasting improvements to happen.
They also learned that as long as people fear that they will be blamed and held personally responsible for medical mistakes or pharmaceutical errors, they will simply stop reporting them.  As long as errors go unreported, faulty processes cannot be changed or improved.  Knowing this, the staffs at both organizations knew they had to create a blame-free environment and it had to start with the belief that it's ok to make mistakes as long as they were reported.  In addition, these same staffs recognized that near misses must be brought out into the open as well.  Both organizations realized that each mistake and/or near miss is an opportunity for real improvement.
The key points from this chapter are:
1.  Blaming an individual is the direct opposite of systems thinking, it is unproductive and raises fear.
2.  Blame says the outcome is due to the individual rather than the result of the system.
3.  In systems thinking there are no bad people, only bad processes that need to be improved.
4.  Blame, a radical form of waste, creates fear, stops creativity and causes people to hide mistakes.
5.  A culture of blame will ruin any attempt at healing the organization.
As I continue reading this book, if I think something might be of interest to my readers, I'll pass it along.  And for the record, I highly recommend this book.
Bob Sproull

Sunday, August 4, 2013

Focus and Leverage Part 239

I’ve had several email requests to write more about the Theory of Constraints solution to supply chain problems.  More specifically, how can TOC dramatically lower your company’s inventory while at the same time virtually eliminate parts shortages.  In this posting I will attempt to explain how this works.

If you’re like most businesses today, your business is part of a supply chain that requires you to purchase raw materials or parts from someone else in order to make your and then pass them on to the next customer in line.  Eventually, after it is passed along far enough, it will reach the end consumer who buys it.  For many organizations the only system they know and have used seemingly forever is an inventory control system known as the Minimum/Maximum system (a.k.a. Min/Max).  In this type of system inventory is counted, shipped and replenished based upon some forecasted need, the actual usage and then a minimum and maximum stock level for each item in inventory is calculated.  So how does this Min/Max system work?

There are three simple rules that are followed when using this system:

-  Rule 1:  Calculate and set the maximum and minimum stock levels for each item you have in inventory.  The minimum is called the reorder point.

-  Rule 2:  When you reorder, you should never exceed the maximum level for any part

-  Rule 3:  Don’t reorder until the stock level for a part goes below the minimum level (i.e. the reorder point)

The assumptions behind these three rules are based on saving money. That is, if you want to save money, do so by minimizing your expenditures for inventory.  Companies who use the Min/Max system believe that the purchase price per unit of product could be driven to the lowest possible level by buying in bulk, thereby saving the maximum amount of money on their purchase.  The problem is that, even though there is lots of inventory in the system, there are still stock-outs situations and when there are stock-outs, production stops until they are received.
The actual top-level rules for managing this Min/Max System are as follows:

-  The system reorder amount is such that it takes the current inventory level back up to the calculated maximum amount no matter how many items are currently at the point-of-use.

-  Many of the supply systems I’ve seen only allow for one order at a time to be present for a specific part number.

-  Orders for specific items are triggered only after the inventory level goes to or below the calculated reorder amount.

-  Total item inventory is usually held at the lowest possible levels of the distribution supply chain which is typically the point-of-use storage location.

-  Items are inventoried periodically (e.g. once or twice a month) and then orders are placed as required.

Graphically, the Min/Max system looks like the following figure.  A minimum and maximum level is set for each item based upon historical usage and vendor lead time.  The items are used until this reorder point is reached or surpassed, at which point the item is reordered back up to the Max level.  This type of system can create two very substantial problems.

First, as demonstrated in the above figure, even though significant amounts of inventory appear to exist for the required items, it is not uncommon to experience stock-outs of items when they are needed and sometimes the stock-out period can be for an extended time.  Because the re-order amounts drive the inventory level for each item back to its maximum level, it is not uncommon to have the total inventory of parts at 40-50% more than is actually required.  Think about that for a minute. Even though the inventory levels appear to be enough for your needs, many times the parts that are needed are just not available.  This stock-out pattern repeats itself over time as is seen in the graph below. So if the Min/Max system is not the answer, then what would work better?
The Theory of Constraints has its own system for distribution and replenishment of parts.  This distribution and replenishment model is a very robust parts replenishment system that is proactive in managing the supply-chain system.  It’s a system triggered by usage rather than some calculated minimum amount.  TOC’s replenishment system maintains that the majority of the inventory should be held at a higher level in the distribution system rather than the point of use and that the use of minimum and maximum amounts should not be used.  Instead of triggering a reorder based on a reorder point, reorders are triggered based upon daily or weekly usage and the vendor lead time to replenish.  In other words, what you use is what you reorder.
In TOC’s replenishment model, inventory stock is not positioned at the point of use, but rather at the highest level in the distribution system such as a parts warehouse.  It is done like this so inventory can be used to satisfy demand at multiple points of use.  That is, rather than distributing it early to multiple points of use based upon a reorder point, it is held until multiple orders have been received.  Because of the more frequent ordering method which is based upon daily or weekly usage, the central warehouse sums the demand usage of the various consumption points and then distributes the orders.  In doing so, larger order quantities can then be consolidated at the central warehouse and distributed sooner than doing so at each separate location.  Stock buffers are positioned at points of potential high demand variation and stocked and restocked at levels determined by stock on hand, demand rate and replenishment lead time.  Finally, order frequency is increased and order quantity is decreased to maintain buffers at their optimum levels and usually always avoid stock out conditions.  In other words, you use a buffer and  re-order what you have used on a more frequent basis.  So what does this look like graphically?
The figure below demonstrates the positive effect on both inventory levels and the elimination of stock-outs.  Typically a 40-50% inventory reduction is achieved with much more stable inventory levels. So instead of the repeating stock-out conditions and the excessive amounts of inventory we saw with the Min/Max system, we see a very stable replenishment system.
Stop and think about it for a minute.  Wouldn’t you prefer a parts replenishment system that virtually guarantees no stock-outs and does so with much less inventory than you currently have on site.  Implementing this system translates into a much improved level of customer satisfaction (virtually no stock-outs) while cash flow is improving proportionally (40-50 % less inventory).