Catalysis CEO, Kim Barnas, spoke with a writer for a healthcare magazine in Germany about what Operational Excellence means. The following is the transcript of that discussion.
Many people would claim they have a general understanding of the terms quality improvement and operational excellence in healthcare, but when it comes to specifying the exact meaning, the differences, and the overlaps, the matter becomes increasingly difficult. How would you define quality and OE in healthcare and how do the terms intertwine?
That’s a very interesting question and I have giving it quite a bit of thought because I think that in our industry we use those terms interchangeably. I would like to talk about how we at Catalysis use these terms so they become a little more specific. When we are talking about quality improvement, we usually have true north measures that include safety and quality, customer satisfaction, employer satisfaction and financial stewardship. Quality is one of those five true north measures. When I think about quality improvement I think about a ‘what’. What we are trying to do? We are trying to improve quality. And most quality improvement teams use various methodologies to implement quality improvement. When we talk about OE, we are talking about in our framework the improvement of all five of those True North aspects in any giving project. So even though we are looking at improving quality, we are also looking at improving safety, making sure that we are not harming our people or making sure our customer is going to be satisfied. We understand our financial implications. In OE, we attend to use the lean methodology as our primary problem-solving methodology. So, in my mind, OE becomes the ‘how’ we deliver the ‘what’. Which is the quality improvement.
When thinking about lean management, OE and healthcare, many people may be tempted to think of cost-cutting, intensified workload and increasing pressure from above. Have you come across this preconception yourself and what would you reply to clarify the benefits of OE for all stakeholders involved?
I think you kind of hit the nail on the head. In the beginning, when we brought lean management to organizations and healthcare it was a box of tools. And it felt like it was a top down mechanism. Today when we talk about using OE, we are using a much broader approach where again we talk about those true north measures – quality, safety, customers, people and financial stewardship. Financial stewardship is one aspect, but it is one-fifth of the aspect. It is not the intention to increase intensified workload or pressure from above. It is meant to have targets and improvements coming from the frontline and it is meant to remove waste rather than intensify the workload. It is really intended to improve our experiences for our workers and our employees by removing waste so that the workload is more manageable. So, I think lean management got a bad reputation in the beginning because it was just used as a hammer, a box of tools where everything looked like a nail and so we were using the tool for cost-cutting and it was coming from above. But if you really look at lean management as a philosophy and as a management system, it is not the case. The tools are only a piece of it and they should be used to eliminate ways so that the experiences for our patients as well as for our employees are improved – while removing costs.
OE certainly doesn’t come by chance – but what separates a buzz word from truly impactful organizational change? Based on your experience, what part do skills, mindset, commitment, and personnel play and what other key drivers for the successful implementation of OE exist?
We found that it is extremely important that your OE is rooted in your mission, vision, values and what we call principles. How do you take the principles of OE? We use the “Shingo” principles: Leading with humility, creating constantly a purpose, respecting every individual, using the operational improvement tools to implement organizational change. The mindset needs to change from the CEO to the frontline. If the senior team doesn’t have a mindset change and a commitment to that change it often limits the ability for a full implementation. Once we have that mindset and commitment, we can train the skills. Skills are important and if the leaders demonstrate a change in behavior, personal activities and expectation fall to place. Then we have the behaviors that we expect the leaders to translate to the managers and to the front line. It really requires a full cultural transformation to have those key drivers be successful. Otherwise you’ll go back to question number two where people feel like ‘it is being done to them’. And it will feel like it is a financial mechanism rather than an improvement mechanism. It is very important that we change the mindset, build commitment, bring the skills and move drivers for the successful implementation of OE.
If OE is so desirable for healthcare organizations, why isn’t everybody doing it? What are the main hurdles preventing long-term, sustainable turnaround? In this light, what did you mean by saying ‘the ultimate arrogance is to change the way people work but not change the way we manage’?
Most of us as leaders become CEOs and executives by top down management. We make the decisions, we tell everybody what to do – they implement them. In healthcare we are so complex that this approach doesn’t always work anymore. Research is beginning to demonstrate better improvement where lean methodologies are in place. This data starting to come out of the CLEAR research at the University of California, Berkley. People who use lean methodologies and OE are having statistical significant improvements beyond those organizations that are not using this methodology. Now that we are beginning to see the positive outcomes, we believe the concept will begin to spread – hopefully at a faster pace. The key element here is, we must be aware that mindset and commitment come first. Mindset and commitment of your leaders is what truly drives the change. If they are unwilling to change their behavior, a full transformation is virtually impossible. The reason why it is slowly spreading is that the early adopters are now demonstrating: that they’re getting better results than everyone else and as this word gets out, more people will reflect on how they lead, and be more open and willing to change their management style.
The statement ‘the ultimate arrogance is to change the way people work but not change the way we manage’ came from my own experience. When I was a CEO at Appleton Medical Center and Theda Clark Medical Center, we had implemented lean management. We didn’t have a management system in place. The managers felt that we changed their work using lean tools, but we did not change how we managed. That gap emerged as a problem that jeopardized the sustainment of the lean improvement system. That’s how the management system evolved to close that gap. The need to change the way we work as leaders-aligning to the needs of the frontline, allowed our organization to change producing and sustaining better results.
Interposed question: So, if I understand you correctly: the main hurdle is that you change your management system while implementing operational excellence?
Yes, if you undergo a full transformation. We started differently. We started with tools and value streams, we changed what we expected our frontline to work, but we didn’t change the way we manage them. What we learned is that we must change the way we manage. After we changed how we manage, we recognized that it had to be rooted in principles and beliefs. We kind of went backwards and it took longer because we went backwards. As we teach it now, we’re starting with the executives at the same time when starting with the front line. So, the front line may be using value stream mapping, rapid improvements and Kaizen. At the same time, we are working with the senior team about ‘What does your behavior need to look like? How do you go and see what they are doing? How do you remove barriers? What is your role?’ The management system comes together in the middle, to pull it all together.
Interposed question: Would you also say that the financial aspect is a hurdle in this context? Or is it not really a topic when you decide to do OE?
It is always a topic, but it is not the first topic. So, every time we do some sort of improvement of event, there is a measure of how it is affecting our people, there is a measure of how it is affecting on quality and safety, there is a measure of how it is affecting a financial stewardship. It is always a part of the conversation, always present, but not the primary topic of the conversation.
From an outside perspective, it may seem that management and doctors do not always see eye to eye when it comes to organizational change. What role do healthcare professionals play in the OE process? Are they supposed assume an active part in the process and how important is an open and trustful environment of critique and feedback?
This is a very complex question, but it is absolutely the right question. In terms of developing and opening a trustful environment, we need to include our medical directors and our medical staff from the very beginning. One of the things that I’ve learned is that if you practice A3-problem solving, lean thinking, you are using the scientific methods. Clinicians are all trained in Scientific thinking and use it every day. We need to draw from their experience with this methodology and align it with their role. If we take the time to do this, and ask them for their involvement from the very beginning then you are much more likely to get a positive result. We think that healthcare professionals play a critical role in the OE process. It helps when we stop using the lean language that sometimes goes along with OE and use language that they understand. We show them how PDSA-thinking is using the scientific method and we usually can get them involved from the very beginning. The conflict becomes that we need their time to be working at the front line with our patients. How could we create an opportunity for them to have influence and not always be present in every event or process? So, you must be structured and you must create the capacity for them to be pulled in where they are needed, having no secrets. This is an open book and if they want to understand what is going on, we talk to them openly about it.
OE doesn’t come over night. Would you be able to elaborate on a typical improvement journey?
This is hard question because it depends on where the organization stands when they start. Usually we start with solving a problem. When we started our journey, we started with the tools of Lean, which was value stream mapping, Kaizen and rapid improvements projects. It is probably best to start here as the power of the method will show results most quickly using the tools. But within a very abbreviated time. These result often become apparent in the first six months in local areas. It takes much longer to see them spread everywhere, and you need a method to spread. You need to start it in defined areas where you can demonstrate the results. And then you expand it from there with leadership development, with tools of OE, with human development tools. Usually the initial journey takes between 2-5 years. The first two years are the most difficult as you are changing your mindset and using new tools at every level in the organization. This becomes a lifelong learning journey because improvement targets change as you get deeper into problems and the tools needed for different projects also improve and change. I think most of the time people can get a pretty well-established program in 3-5 years if they are starting with nothing. If they have a culture that embraces changes, they might be able to escalate that from 2-4 years, but nevertheless it becomes a lifelong improvement process. As new tools emerge you use them for the right reasons.
You mentioned the term ‘boots on the ground’ approach when talking about the implementation of an OE program. What do you mean by that and what purpose does it serve?
As you get started in this kind of a transformation you need someone helping you from the external world. ‘Boots on the ground’ to us means having a team at the front line that can help you. Often that requires that you have an external consulting office or a team of experienced people that are helping you use the tools. Hopefully, the boots on the ground will become your internal team once they are developed.
The need for ‘boots on the ground’ is extremely important to teach and support the front line. Ultimately for the transformation to take root you must build capability in the organization. So, the translation of of the Operational Excellence to the internal team is essential for long term sustainment. In the beginning, the heavy lifting is done by the consulting team doing the work (boots on the ground), while teaching the internal team. It can be a long process but should be time-limited as you don’t need or want a consultant team living in your health system forever. I feel it is important to consider the external help needed in the first two-three years when you may need a lot of education and support. This is when the expectations of the external team (consultant) should be clear. The goal is for them to help you to develop your internal capacity. You should develop your own OE program, which becomes a reflection of the culture of your organization. But to get started, you’ll need external help.
An organization also needs principle-based coaching for the executive team to change their behavior to a model which supports OE principles, operational change and reduces fear. This is best done by an external expert as well. Longer term, it is also helpful to maintain a relationship with external support to periodically evaluate your progress and offer course correction when needed.