Implementing Lean Healthcare Projects on Target on Time on Budget

By Dutch Holland and Duke Rohe

Lean has come to healthcare, and it is really making waves. The potential of lean to find innovative, streamlined solution that enable improved organizational performance is undisputed. But Lean turns out to be very difficult to implement. This book can help you and your organization with the toughest challenge in Lean Healthcare full implementation of Lean projects to achieve concrete results. Top management will not spread Lean across their organizations based on Leans potential; the spread of Lean is dependent on the actural business value that management sees generated from Lean projects in their own organizations.

The healthcare managers who will be successful in the worlds of today and tomorrow will be the ones who can look at waves of change and see opportunity; who can design a vision and strategy for a more positive future for their organizations; who can implement their designs; who can use Lean to continuously improve the performance of their organizations.

You dont have to be afraid of change any longer! Dutchs work offers entertaining and simple solutions that will help you move swiftly and efficiently through the growing pains of organizational change, says Ken Blanchard, author of The Secret and The One Minute Manager.

• Language: English
• Publisher: Xlibris US
• Release date: Jan 23, 2013
• ISBN: 9781479777006

Dutch Holland

Dutch Holland, PhD & Jim Crompton, MS ENG are highly regarded as “thought leaders” and as consultants who will tell it like it is. The authors’ collaboration combines management consulting experience in upstream with oil & gas domain expertise into important insights about creation of business value from digital technology. Jim and Dutch are both convinced that the Digital Engineer concept must be made a reality or the Big Crew Change will likely result in both “outdated roles” and replacements that may “fit the roles but not the digital future of the upstream business.”

Book preview

IMPLEMENTING LEAN

HEALTHCARE PROJECTS

ON TARGET ON TIME ON BUDGET

Dutch Holland, PhD & Duke Rohe, BSIE

Copyright © 2013 by Dutch Holland, PhD & Duke Rohe, BSIE.

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the copyright owner.

To order additional copies of this book, contact:

Xlibris Corporation

1-888-795-4274

www.Xlibris.com

125738

TABLE OF CONTENTS

Preface

The Opportunity and the Challenges of Lean in Healthcare

Foreword

Implementing a Lean Solution

Chapter One

Introduction to Organizational Change Management

Introduction

To Chapters Two through Six

Chapter Two

Communicate the Vision

Chapter Three

Alter Work Processes and Procedures for a Lean Solution

Chapter Four

Alter Facilities, Equipment, and Technology (FET)

Chapter Five

Alter Performance Management

Chapter Six

Manage Change as a Project

Chapter Seven

And in Conclusion . . .

Appendix A

Task List for Implementation of a Lean Project

Contact Us

The Lean Services We Offer

praise for the Authors’ books

Change Is the rule: Practical Actions for Change

ON TARGET, ON TIME AND ON BUDGET &

RED ZONE MANAGEMENT: CHANGING THE RULES FOR PIVOTAL TIMES

Double Day Select Executive Program Book Club Alternate Selection

You don’t have to be afraid of change any longer! Change is the Rule offers entertaining and simple solutions that will help you move swiftly and efficiently through the growing pains of organizational change.

Ken Blanchard

Co-author, The One Minute Manager and Leadership by the Book

Just brilliant! In his book Change is the Rule Dr. Winford E. ‘Dutch’ Holland expands on the metaphor of the organization as a theatre company—and it is brilliant! It’s brilliant because it simplifies understanding—it reduces the complexities of organization change to common sense with a very clear ‘picture’ to relate to. It is a very powerful metaphor that is very easily understood and ‘got’ by almost anyone who has ever been to any type of theatre presentation.

Rick Sidorowicz

From Best of The CEO Refresher on Leading Change

What a great uncluttered roadmap for understanding, embracing, and leading change. We have trained over 10 million leaders worldwide, and change is their biggest challenge. This book should be next on their reading list!

Dr. Paul Hersey, Chairman

Center for Leadership Studies

Home of Situational Leadership

Organization change—on target, on time and on budget . . . what a concept! How easy it is to forget these fundamentals when we leap off the cliff of organizational change! The basics aren’t new—but they’re organized in a way that you want to slap yourself on the forehead and say why didn’t I think of that!

Katherine M. Tamer

Vice President and Chief Information Officer

United Space Alliance

. . . a Red Zone loss could mean irrecoverable losses for your company. Among conditions that flag a Red Zone: major shifts in competitive strategy, mergers, culture changes, and implementation of new computer systems. Principles for success under Red Zone conditions include practical advice such as, Put the Best Players in the Game. Holland points out that if you select your organization’s best for the Red Zone and your key executives are not on that list, . . . you may want to do some re-staffing. Red Zone Management pulls few punches, and its perspective is likely missing from many a boardroom.

Harvard Business School

Working Knowledge

These days we are constantly inundated with new books on the topic of management. However, Red Zone Management rises above the rest. It should be required reading for all managers, both to familiarize junior managers with the red zone management concept as well as to fine tune the inherent red zone management skills of senior managers.

Mark A. Wallace,

President & CEO,

Texas Children’s Hospital

Multiple rapid changes, successfully executed, will be the key to the 21st century business. ‘Dutch’ lays it out—change must be managed. To expect transformation without good management is a dream. This is a book that must be ‘on the desk’ of a successful 21st century CEO.

Major General John S. Parker, M.D., Commanding General

USA Medical Research and Material Command

Fort Detrick, Md

"Red Zone Management is a new, creative and comprehensive treatment of a complex and seldom understood subject. I could not put the book down until I had finished reading it. The book is packed with case histories of business success and failures with comments for why the outcome was as it was. In the past while being involved in a major merger, my company successfully utilized the principles described by Dutch. The results were that the whole was greater than the sum of the parts—a resounding success for the shareholders.

M. P. Corky Frank,

President Marathon-Ashland Petroleum

Red zone Management reads like the game plan for a space mission. I worked in the Red Zone for over 35 years and from the moment of launch through crew recovery Failure in our work was not an option. I worked with Dutch Holland for several years; his new book, Red Zone Management provides the fundamental guidelines for survival in today’s fast moving and unforgiving world. I would recommend it as a basic textbook!

Gene Kranz, Author of Failure is Not an Option

Dedication by Dutch Holland

This book is dedicated to the kids in my life: the little kids, Hope, Win, David, Dean and Everett (E.J.) as well as the big kids, Eric, Wendy, and Bear. May they continue to flourish—and God Bless!

Dedication by Duke Rohe

This book is dedicated to my wonderful grandchildren: Molly, Mason, and Jenna. Just watching them change is a joy and a treasure.

A Note to the Reader

Each of us wants content served up in the way that best works for us. Deep down many of us wish to get the answers in a few clever and memorable sound bites (If the glove don’t fit, then you must acquit . . . ! or If they just don’t get it, keep yelling until they regret it!") Sorry, but the explanation of the weighty and important concepts of successful organizational change takes more than sound bites. We have, however, written the book to be as accommodating as possible with three options for gaining value from our content. Good luck!

Option One: I just want the meat, please!

If you are looking for a proven, easy-to-understand, easy-to-use model for successful organizational change, this is the right book. Just read the Foreword to get the idea that successful organizational change is all about breaking change into projects and then completing those projects . . . on target on time, and on budget. Then read Chapter One to get the key idea that changing an organization is like a theatre company stopping an old play and transitioning to a new one . . . on target, on time, and on budget. And that’s the meat? Yep, that’s all there is to it . . . except for a few million details we will cover in the following chapters. (Not really, we will only cover a couple of dozen important action steps.)

Option Two: I just want to know about the people-side of change, please!

That seems to be a reasonable request and we will try to help you out, although we will do so with some reluctance. As you read in Option One above, you should read the Foreword to get the change projects ideas, Read Chapter One to get the theater company transitioning to a new play idea, if after reading those two chapters, you still want to restrict your learning to the people side of change, if you just want to know how to transition actors to a new play without worrying about all the trivial and irrelevant stuff like the script, the roles, the sets, props, and the contracts (since none of the aforementioned items need not in any way affect the actors in a play or workers in an organization.), read Chapter Five: Transitioning the Performance Management System. (If you want to read one more relevant chapter, even though such a chapter will cover stuff that’s a little beyond the people side of change, read Chapter Six which is all about using project management for transition (e.g., people) projects.

Option Three: I want everything, big picture down and the details!!

If that is your goal, just read the book straight through. Take in all the logical steps for what to do, what not to do, and how to do each step for successful organizational change. Readers will get all the goodies they need to be able to nail the many transition projects that must be completed for successful organizational change.

Special Bonus Option: I just want to read three pages, no more, and no less!!

We understand your pain . . . so we wrote the table of contents as the checklist for successful projects! Just read/study Chapters Two through Six in the Table of Contents.

Preface

The Opportunity and the Challenges of Lean in Healthcare

• Lean, the techniques and culture of removing waste, has been described as The Next Big Thing for improvement of performance in healthcare organizations.

• However, Lean has a poor record of implementation and a very patchy history of organization-wide adoption in healthcare.

The Lean Opportunity

Healthcare organizations are looking for ways to improve performance. Of late, the focus for many organizations has been on process improvement with Lean as the popular strategy for making gains. Lean is a powerful organization and manufacturing model that most experts agree could be the dominant process improvement paradigm worldwide in the next five to 10 years

Lean in Healthcare is an adoption and adaptation of Lean in manufacturing in general and the Toyota Production System (TPS) in particular. Healthcare services around the world have adopted process improvement methodologies from the manufacturing sector, such as Lean Production.

Lean thinking is not a manufacturing tactic or a cost-reduction program, but a management strategy that is applicable to all organizations because it has to do with improving processes. Lean strategies in healthcare aim to improve patient

throughput, reduce medication errors, redesign work flow, improve patient safety,

and reduce cycle time . . . using lean thinking to streamline processes, reduce cost, and improve quality and timely delivery of products and services.

When applied rigorously and throughout an entire organization, Lean principles can have a dramatic effect on productivity, cost, and quality. Agreement is growing among health care leaders that lean principles can reduce the waste that is pervasive in the US health care system. The Institute for Healthcare Improvement believes that adoption of lean management strategies—while not a simple task—can help health care organizations improve processes and outcomes, reduce cost, and increase satisfaction among patients, providers and staff.¹

In our experience providing consulting services to hospitals and healthcare organizations, however, we have frequently found conversations about Lean opportunities quickly turning to challenges. Most of the challenge discussions turn to Lean projects that have not come to fruition because of implementation failures.

The Challenges of Lean

Despite a substantial and growing history, Lean still seems new and exotic to many if not most in healthcare. Two huge challenges continue to face those

50376.jpg who would implement the results of a single Lean project focused on one work process and those

50378.jpg who would attempt to integrate Lean thinking, concepts, and techniques organization-wide in a healthcare enterprise.

In both cases the challenges are more organizational and managerial than professional or technical. That is, the Lean concepts and tools work; but managers continue to be stymied by implementation difficulties.

• Implementing a Lean Project Solution

One challenge is the implementation of what we call a narrow Lean initiative: implementing a Lean solution to improve the performance of a single unit, department or work process.

Example:

The Manager of the Sterile Processing Department of a large metro hospital decides to improve the performance of the Department (i.e., decreased delivery times, improved completeness of order fulfillment, etc.) through the use of Lean concepts and principles. Lean tools are used to redesign several core processes that improve performance. The question is, how does this Department move Lean from a pilot project to integration into day-to-day operations?

The challenge with such narrowly-focused Lean projects is not difficulty in using Lean tools and techniques in analyzing processes or in developing Lean solutions. As the comments from Lean team members below show, the challenge is in implementation, i.e., getting developed Lean solutions into day-to-day use across the organization.

1. "After we piloted our Lean project solutions, the project went nowhere

2. "We briefed our manager on our project, but he did not give the ‘go ahead’ to press on to implementation

3. "We started using Lean processes but they only stuck locally. The

use of Lean did not advance anywhere else. Very frustrating!

4. "Our team solution was just put on the shelf; we did get a nice trip to present our work at a convention.

5. "The physicians kept complaining about our services, and we told them we had the solution but could not get the permission, dollars, or time to implement it.

6. We worked very hard on that project and received zero recognition or thanks, much less any pay for all the extra work we did.

The bottom line on implementation of narrow initiatives like the one described above in the Sterile Processing Department is that more than 70% of such projects fail to meet management expectations.

• Organization-wide implementation of Lean

A second and much more formidable challenge is the organization-wide implementation of Lean philosophy, thinking, concepts, tools and techniques across an entire healthcare organization:

Example:

The executive team of a large healthcare organization decides to require that their entire organization (including divisions, departments, sections, and individual members of the work force) use the Lean philosophy, concepts and principles in their daily business in the organization. After an initial burst of energy and excitement as well as wide-spread training in Lean, the organization-wide implementation seems to slow down to periodic pilot projects with uncertain results.

Again the challenge with this implementation of Lean is not difficulty in using Lean tools and techniques for analyzing processes or in developing Lean solutions. As the comments from Lean team members below show, the challenge is in getting Lean into day-to-day use across the organization.

1. The reasons for our failure fell into these categories: didn’t meet expectations; too long to do; too expensive; risks or costs started to exceed benefits; or too resource-intensive.

2. Pilot projects did not succeed at making real changes in how the trial locations (department, sections, etc.) operated. That is, no long term gains in performance were realized in the target organizations.

3. Management expectations and support diminished when other business challenges came along. Lean implementation went to back burner quickly and did not return to the once-high level of priority.

4. Lean only advanced in a very few places in the organization; departments and managers who got behind in implementation were not encouraged or directed to catch up.

5. Top management did not understand the scope and power of Lean and had little concept of the amount of time, resources, and personal energy it took to move implementation forward. The more they understood implementation issues, the slower they moved.

6. Lean implementation became so long, so complex, and so confusing that it was easy to rationalize putting Lean on the back burner while executives tackled other important problems.

The bottom line on organization-wide implementations of Lean like the one described above in the large healthcare organization is that more than 70% of such projects also fail to meet management expectations.

The Solutions

While there are no clear-cut solutions to either of the two challenges we have just discussed, there are some approaches that have potential to be key parts of the implementation solution. In fact, there seems to be a missing element in attempts to implement Lean, whether narrow or organization wide.

The missing piece, the common denominator, if you will, seems to be the lack of understanding that both kinds of implementations require full-blown organizational changes. That is, instead of concentrating almost solely on the Lean concept, tools, and techniques, attention must be paid to the fact that for Lean implementations, organizations must be changed from one way of doing business (without Lean) to a different way of doing business (with Lean).

When the Lean implementation issue is framed as a needed organizational change, an additional body of knowledge from Management, Organizational Science and Diffusion of Innovation can be brought to bear on the problem. In the section that immediately follows, we will briefly explore a change model that might apply to the organization-wide implementation issue mentioned earlier. After the next section, the remainder of this book will be focused on a change model that directly applies to the narrow Lean application, and will present a road map for implementing individual Lean projects.

An Overview of Organization-wide Lean Implementation

Let’s take a closer look at the second challenge mentioned above: an Organization-Wide Lean Implementation. Our observation is that company-wide Lean implementations can be seen to go through three logical phases (See the Phase-Gate Model Figure 1.1):

Figure_P_1.jpg

Figure P.1: Three Phases of Organization-wide Lean Implementation

• Implementation Phases and Gates

Implementing Lean organization-wide is the kind of initiative that fits a general phase-gate model that identifies an Action Phase followed by a Decision Gate with criteria that should be met before the next Action Phase.

Phase One: Lean Awareness and Education

Phase one takes on the task of communication, public relations, as well as some training to make sure over time that organization member have a basic understanding of what Lean is, how it can be used, how it can be implemented, and how to spread it. The last step in the awareness phase is how operating an organization with the benefits of Lean can make things better not only for the company but for the work force as well.

Gate One:

Phase One completed as needed, the potential of the Lean idea is still attractive from a business and economic point of view,