The business case for Lean

Does Lean pay?  CFOs always want to know!  Joshua Rapoza at the Lean Enterprise Institute, Inc.writes:

I want to invite you to our latest webinar, The Business Case for Lean, with Michael Ballé, taking place at 2:00 p.m. Eastern on October 10, 2012. This is a one hour, free webinar.

"Executives have been asking about the ROI of Lean programs forever. Lean practitioners answer that it's the wrong kind of question. They are absolutely right, but we must get better at showing the business benefits of Lean. That's where I can help." - Michael Ballé.

Ballé is the award winning author of The Lean Manager and The Gold Mine, as well as the writer of the very popular Gemba Coach Column on lean.org.

Click here to register for this free webinar, and don't forget to invite your colleagues as well.

While you are on lean.org, take a minute or two to learn about Ballé’s upcoming (one time only) workshop of the same name at LEI's Cambridge headquarters this November.

Bravo, Ipswich! (And I don't mean the Tractor Boys.)

John Watson, director of operations at Ipswich Hospital NHS Trust in the UK, included the following message in this week's staff newsletter.  Going to gemba is at the heart of Lean.  This is a great start!

Many hospital managers find their time tied to countless meetings, reviews of performance targets and other duties that take them away from the ‘front line’. We lose contact and understanding. However, what we know is once we spend more time out where the work is being done watching what is going on we will be surprised what we learn. We learn that the jobs we are asking our staff to do every day are often not do-able because there are not stable and reliable processes to support them. It helps managers to know what the problems are every day that are preventing our staff delivering waste-free care because we can then prioritise our work.

Therefore we have started a weekly process where a group of 20 senior Trust managers block every Tuesday morning to just go out to the front line and respectfully watch what’s happening. Each week we plan to place these managers, myself included, into 20 different areas. This is not checking up on colleagues. This is watching to learn and see where we can better help.

Last week I observed Sarah Willingham undertaking the receptioning of the Ophthalmology Outpatient clinic. I was struck by her calmness and professionalism despite the relentless pace of how her job needed to be done. I noticed small things that we simply haven’t designed properly to help such staff. Her phone was on another desk and she had to get up repeatedly to answer it or use it to chase notes. My hope is that gradually we find ways to learn from such observations and correct the countless little things that our dedicated staff have to find a way through.

If you have an area you would like us to come and watch or if you would like to be involved please let me know. If you have to deal with a work process that you think could be made better and have an idea please let me know or ask us to come along and observe how you try to work with it. This is a simple but small yet crucial step into how we think and act differently.

No hype on Lean

I sometimes hear skepticism from hospital CEOs who are presented with the idea of adopting the Lean philosophy for their institution.  "Why does this feel like a religious sect?"  "I have no interest in learning Japanese."

Putting aside the ethnocentric context for the latter statement, in that the philosophy was actually introduced to the Japanese by W. Edwards Deming, let's admit that Lean is not for everybody.  But let's also acknowledge that it can make a huge difference for hospital staff and patients when it is undertaken carefully and in good spirit, with commitment from senior leaders.

Here is a short and thoughtful summary of some experience to date, an article in Hospitals and Health Neworks by Steven Garfinkel based on research conducted for the Agency for Healthcare Research and Quality.  The bottom line:

At every institution, staff at all levels reported improved employee satisfaction. They cited opportunities for front-line involvement in problem solving, employee collaboration across ranks and units, efficiency improvements, opportunities to spend more time with patients, and improved patient experience. 

Not surprisingly, cost-benefit ratios and return on investment were never explicitly considered when the organizations we studied adopted Lean. Instead, senior executives were committed to improving quality and efficiency. They adopted Lean because it was tractable — particularly when reliable estimates of cost and benefit were difficult to make. Once leaders adopted Lean, none paid much attention to implementation costs. Top managers saw Lean as part of an array of available quality-improvement tools. All said they were pleased with Lean's results. They viewed Lean as yielding long-term process and quality improvements that enhanced their institution's efficiency and financial viability.

We cannot be sure that Lean is more effective than other process improvement techniques. But we did find that Lean can be successfully adapted from manufacturing to fit the complexities of health care.

Lean stories at Hadassah Mt. Scopus

Jim Womack and I changed venues in our Lean mission today, moving from the main campus of the Hadassah Medical Organization in Ein Kerem, Jerusalem, to the smaller (300-bed) community academic hospital at Mt. Scopus.  This was the original Hadassah hospital, abandoned in 1948 after several dozen staff members, including the director-general, were massacred on their way to work.  It re-opened in the 1960s, but after planning and construction for the new large hospital had occurred.  It serves a mixed Jewish and Arab clientele, and its staff also reflects that mixture.  The building is lovely -- old-fashioned and warm -- as are the people working in it.

We started with a quick gemba walk.  Here Jim is seen with emergency department chief Ruth Stalnikovitz and hospital director-general Osnat Levztion-Korach -- historical note, formerly known as just a regular doctor!)  Then it was off to a general assembly with staff about the nature of the Lean philosophy.  Jim pointed out that, properly executed, it can lead to better patient outcomes, a better patient experience, a better staff experience, and not coincidentally, lower costs.  The last is true because many activities that lead to bad outcomes, and poor patient and staff experience, add cost.

I then provided examples from BIDMC, including a dramatic improvement in the patient experience in the orthopaedic clinic and improved viability of blood samples from the emergency department.  I added some thoughts about the importance of transparency in an organization that wishes to hold itself accountable to the standard of care to which it aspires.

Jim and I both left with the feeling that the Mt. Scopus hospital has tremendous potential to benefit from the Lean philosophy and hoping that the leadership and staff of the hospital will choose to embrace it.

Getting past "kacha zeh" at Hadassah

Jim Womack and I continued our Lean mission today at the main campus of the Hadassah Medical Organization in Ein Kerem, Jerusalem.  We started with a gemba walk through the emergency department and then up to the internal medicine wards.  I had seen these areas a couple of days ago, but Jim has just arrived.  As always, he asked great questions and had thoughtful observations, particularly about the problem of patient boarding in the ED.

Later, we both participated in a hospital-wide session organized by CEO Ehud Kokia.  His purpose was to provide the staff with an overview of the purpose of the Lean journey and also to offer progress reports on some of the process improvement work that has been occurring to date.  Jim and I were then asked to provide our view of the Lean philosophy and its chance for success at Hadassah.  Jim was characteristically blunt, noting that he had reached a diagnosis -- a hospital characterized by a traditional management system -- a prescription -- a hospital in which both horizontal management and vertical management would exist to support cross-functional process improvement.  But he demurred on the prognosis, saying it was too soon to tell.  Quoting Henry Ford (an irony in light of that person's creation of the dehumanized assembly line model), he said, "It depends on you.  "Whether you think you can or you think you can't -- you're right.'"

My talk followed with some stories from our Lean experience at BIDMC, with (no surprise to this group of readers) analogies to soccer.  Picking up on Jim's conclusion, I suggested that a sign of success at Hadassah would be the elimination from conversations of two words that suggest defeatism and acceptance of the status quo, kacha zeh, "It is what it is."

How do you say "Lean" in Hebrew? "Lean."

Boaz Tamir of Israel Lean Enterprise has created a "Lean Club" comprising a small group of Israeli corporations and institutions who get together four times a year to share experiences, problems and success as they undergo their Lean journeys.  The group includes senior level executives from banking, insurance, food processing, high-tech, and health care.  Because the firms are all at different stages of Lean adoption, the diversity of viewpoints is stimulating and valuable to all.

Boaz started today's session with a reminder about the differences between traditional managerial approaches and that envisioned in a Lean organization.  The slide shown here presents a quick summary.  Boaz stressed that changes in the world economy would be filtering through to these businesses in Israel and suggested that Lean principles could help companies survive and thrive in the face of an avalanche of difficult events.

Today's special guests included Jim Womack, acknowledged world expert in the field.  Jim has a way with words, spinning out stories and theories about Lean and non-Lean organizations.  Both entertaining and informative, he makes it easy to learn.  He reminded the group that a firm needs to be clear about its purpose, but that this needs to be thought about from the customer's point of view.  He noted the schizophrenia we all exhibit -- being providers and producers in our corporate roles, but immediately flipping over to consumers when we go home from work.

Jim drew some comparisons between the desires of the two groups.  For examples, customers want transparency about the cost and quality of goods and services.  Businesses have often relied on opacity in selling their products and services.

He reminded those in the room, "All of you are mature businesses," and so your assets are threatened by changes in the marketplace.  "You think of how you can protect your undepreciated assets, but your consumers want something new."  Thus, "there is a disconnect between customers' and companies' valuation of assets."

Jim said, "This is part of life."  Firms need to adjust to the fact that the frequency of the need to re-evaluate customers' needs is accelerating.

But, he noted, "It is not just assets that are threatened.  It is your processes."  He pointed out that traditional corporate folks who conduct process evaluation often do not think about customers.  They often pursue enhancement to processes that don't bring value to customers.

He reminded us that "all processes involve people."  Therefore it can be threatening and frightening to people in a firm when process design is coming.  The irony, though, "is that you can't develop new processes without people."  Hearkening back to Boaz's points, he said that it takes a different kind of management to work in a Lean way.  Unfortunately, he noted, "management thinking is often impoverished."

These were sobering thoughts, even for this group of executives who are committed to Lean, but the group had an upbeat attitude and took Jim's comments in stride as they engaged in collaborative learning during the session, sharing stories and challenges from their own experiences.

First Lean steps in Jerusalem

I spent the day at the main campus of the Hadassah Medical Organization today in Ein Kerem, Jerusalem, with staff members engaged in learning about and experimenting with Lean process improvement.  I think the hardest thing for people to accept about Lean is that it is a philosophy based on incremental steps rather than major revamping of complex systems.  The idea is that small advances lead to great gains over time.  Your front-line staff encounter a problem in the workplace and then you design an experiment to try to solve the problem.  Then you evaluate the effectiveness of the experiment and, if necessary, redesign it.  If it works, the new "current state" becomes the basis on which you then try to move to yet another improved "future state."  The process never ends.

Every hospital I have ever visited has a problem discharging patients in a timely manner, and Hadassah is no exception.  This is an important problem to fix for obvious reasons, but there is a not-so-obvious reason as well:  When patients do not leave the wards, it creates a back-up in the emergency department.  Patients find themselves spending hours awaiting a room upstairs.

On one internal medicine ward, Murielle Cohen, the chief nurse, and Professor Dror Mevorah, the chief attending physician, are testing out a simple experiment, whether a white board listing all patients possibly eligible for discharge, along with each step required in the discharge process, might facilitate communication between the nursing staff and the doctors and others to move things along.  During my tour today, they were joined by Chana Tsurel, manager of the internal medicine department, and Pnina Sharon, head nurse of the ER, both of whom have been working to improve communication between the two departments.

In the eye clinic, another approach was taken by head nurse Sigalit Cohen and her physician and technician colleagues.  They faced a problem of long waiting times because a certain injection procedure was batched once per day.  By adding a second session, they were able to improve the flow of patients through the clinic.

Both of these examples are small steps forward in a big hospital that has not yet become fully engaged with Lean.  But they offer the possibility of confidence building measures that will help persuade doctors and nurses that there is potential for broader improvement if people make the commitment to Lean principles.