Category Archives: business process re-engineering

Lean Healthcare and the Great Reform Debate

I have to apologize to anyone who may have expected greater consistency in my posts. This is by far the longest I’ve gone without posting something new. Frankly, I and my partners have been buried under the weight of healthcare clients and we’ve been busy closely monitoring the Healthcare Reform debate. As healthcare tips the scales at nearly 17% of US GDP (and climbing fast) it is easily one of the most important facets of our collective experience that can and will benefit from workflow and process improvement. Whether the object of analysis and re-engineering is the health plan and the manner in which they process claims or run their customer contact center/call center or your local hospital and the manner in which they handle lab specimens, patient scheduling or operating room supply management, there is tremendous room for improvement.

Health Care Improvement – What Are We Talking About?

I’ve been involved in health care for twenty years and can assure you that the conversation hasn’t evolved much. What we’re talking about is a dire need to improve the following:

  1. Access to Services. This can mean access to affordable care, access to insurance coverage, access to culturally-relevant care, gender-specific care, quality care, or access to professionals and facilities in remote areas.
  2. Quality of Care. Quality refers to assurances that providers of care are educated and properly trained and licensed, assurances that quality measures are taken, and continuous efforts to improve quality deficiencies exist. This is a big bucket. Clinical outcomes and patient satisfaction are measures of quality. Safety issues are addressed by quality assurance and quality improvement initiatives.  Errors (common in our healthcare system) are also addressed by quality measures.
  3. Cost Effectiveness and Efficiency. This third facet involves delivering effective care (that which produces the best possible outcome) at the lowest price.  Performance-based reimbursement or Pay-for-Performance initiatives are capitalizing on this notion. In order to drive prices down and create margins of value, providers and payers alike need to eliminate wasteful practices, leverage efficiencies and drive their costs down.

No matter your political affiliation, the US doesn’t fare as well as we’d like to think along those three dimensions. We have significant access issues (hence the cry for universal coverage), rather serious patient safety concerns (infant mortality, secondary hospital infection, and medication error scores are all poorer than we care to admit), and extremely troublesome cost and efficiency problems (our healthcare costs 5-6 times that delivered in other affluent, developed countries yet delivers outcomes and quality scores ranking us in 37th place).

Lean Healthcare Machine

If nothing else, the healthcare debate in congress and the media this year could benefit from the rational and reasonable application of Lean methodologies. Frankly, “Lean Sigma” which controls for variation, quality and waste is an ideal antidote to much of what plagues us. Fortunately, the EMR and health information exchange impetus is going to lead some in the healthcare delivery system to adopt techniques and strategies that will drive waste and variation out of their practices. They will be among the more sophisticated who know enough to improve processes before automating them. Nothing is more wasteful than automating a bad workflow. Sadly, there are some who will buy EMR and practice management software off-the-shelf and try to implement it without first analyzing and re-engineering their business and clinical processes. And that will prove to be our Achilles Heel as we move forward with HIT.

I propose a National Leaning of Healthcare Initiative prior to attempting to describe the Reform solution and prior to spending $20 Billion on electronic medical records systems. I propose we take some time and apply some much less expensive strategies that answer more compelling questions first.

It’s Time for Strategic Business Process Management

I am coming off several weeks’ having to reassure clients that they are doing well and that – so long as they stick to their knitting – they’ll be ok a year from now. I have others who have required some serious, adult discussions. They lack a cohesive strategic plan, therefore, they lack in the areas of discipline, direction, commitment and – frankly – workflow IQ. They struggle with change, flexibility and orientation (“where are we?!”)

The disconnect is rampant. Perhaps it’s in the name. Shall we refer to business process management (BPM) as Strategic Process Management (SPM) from now on? You heard it here first, folks.

Strategy+Goals+Objectives+Metrics

I’ve heard others call it Business Motivation Modeling and agree that we need a deeper understanding of critical business drivers. This field and the broader business interests and stakeholders it serves needs to reminded constantly of the “means”, the “ends”, and the “influences”.  By keeping a strict focus on strategic goals (building the business, becoming #1, being fastest, cleanest, safest, whatever) and tactical objectives, business analysts and process engineers ought to be able to produce the outcome they’re looking for and they ought to be measure whether they’ve achieved their goals or not.

Environmental Analysis

However, failing to manage strategy and failing to carefully and comprehensively assess what is happening economically, politically, socially, technologically, competitively and legislatively will absolutely result in painful surprises. I have seen people very proud to have hit sadly meaningless targets lately.

Strategic and Technical Advisory Groups (STAGs)

I am calling for the formation of STAGs in every organization with 25+ employees. This committee will review and evaluate business process and other organizational change from both a technical standpoint and a strategic standpoint. Strict adherence to strategy (bearing in mind that strategy – not values – can and ought to change to reflect the environment) will be their direct responsibility. There will be an executive on each STAG until and unless every organization recruits a Chief Process Officer. Perhaps then, the brilliance of BPM will have been fully activated.

Business Process Re-Engineering: The Enemy of Inertia, Waste and Consensus Complacency

Working with several governmental and non-profit agencies recently, I noticed a pattern emerging that is at once counter-productive and based entirely in fear. What I used to think of as intellectual sloth is giving way to wasteful complacency and what I choose to call a “consensus trance” resulting from fear of losing one’s job and identity. Who would have ever thought the BPM field would awaken so many strange psycho-social bedfellows?

Snap out of it!

I find that the best response to this trance is a tactic long employed by carnival hypnotists: snap people out of it. As an outside consultant, I have a responsibility to identify waste and recommend alternatives and solutions. In order to pull that off in an atmosphere of fear and economic uncertainty, I am resorting to a heightened assertiveness, directness and tough love. I have to point out that it is not simply a matter of process but a matter of organizational dynamics causing my clients pain. Morale is taking a direct hit as it often does when people aren’t performing in ways they know they could (given the opportunity) however, coddling people and enabling even sicker patterns to take root is not the answer.

“Will” the change you want to see in your organization

I am encouraging (if not demanding) that mid-level people and directors seek out more definitive executive sponsorship and greater political will power to enforce change initiatives. Slowly, it’s working. I am documenting decisions like never before so that I can hold people accountable. I am measuring project status at every turn. I am amending contracts wherever possible. None of this is fun but it is all so necessary. If you haven’t already done so, push hard on your Project Charter and Executive Sponsor. Then push even harder on Project Management and then hold people accountable with actual consequences.

Failure is not the end of the world

If your project fails, your process re-engineering efforts produce the wrong outcome, or people on your team fail to meet expectations, act accordingly and appropriately and move on. Dwelling on the fall-out right now will not help anyone. What we need is will, speed, and efficacy.

Let me know what works!

Lean Markets Pulling For Rapid Process Improvements (RPI)

The economic news this morning is not so good. The Institute of Supply Management (ISM) manufacturing report sent the market into another free-fall today (down 425 points at the moment, following last week’s massive rally). The ISM index stands at 36.2% which may not mean much to the lay-person. The important indicator here is that anything below 50% is bad news and 36.2% is as low as it’s been in more than a quarter century. This is a report that measures factory output based on orders for manufactured goods. Only two sectors performed well: apparel and paper. European and Chinese factories are reporting similar output and demand for their goods. We all know how this is playing itself out for Ford, GM and Chrysler. They have a shot at financial support that will bode well for thousands of suppliers and – frankly – millions of employed people. For the remainder of the manufacturing community, there may not be a bail-out. What are small businesses and manufacturers to do?

Time is of the Essence

MarketWatch reports that economists now admit the recession began at least a year ago. Could have fooled me. Experts tell us we can rest assured that it will endure at least another year – maybe two. That said, small business and small manufacturers are faced with the need to get lean very quickly. There is no time for hemming and hawing and this is not the time to simply lay people off. Your path forward is as complex as the path that got you here. No silver bullet. Your costs are a reflection of (among other things) executive pay, labor, benefits, space, utilities, supplies, suppliers, marketing, hardware and – to a great extent – your business processes.

Those of you who are familiar with Lean Methodology or who might be familiar with a consultant who specializes in Lean may now be thinking: “This is the time for it.” I commend you. I agree that Lean can and will deliver the elimination of costs associated with waste in your processes. However, bear in mind that Lean can involve between 6 and 12 weeks’ time for execution.

Lean Liposuction?

Lean is a bit like a diet. You have new habits to learn and you glean life-changing insights from an examination of how you did things in the past. Lean is a lifestyle and it creates a certain culture. I want to suggest that you consider the Lean equivalent of liposuction or getting your stomach stapled. It’s quick, it’s dirty, but it works. It’s commonly referred to as Rapid Process Improvement or RPI.

RPI Works and Works Fast

An RPI event requires: 2-3 days; a core business process suspected of carrying waste (extra fat) and whose repair would make a big cost difference; a team of subject matter experts and decision-makers; the willingness to be brutally honest and trim the waste. In that brief 2-3 days time, the process can be articulated and modeled and business rules can be captured. Basic performance measures can be identified and the team can brainstorm ways that waste can be eliminated from the value stream without any adverse impacts. New, future-state process models can be developed and basic simulations can be conducted to assure you and your customers that quality concerns haven’t been introduced or exacerbated. You want the results to be faster and better.  Once you’ve nailed the future state, a solid RPI process involves mapping your implementation and measuring results over the next 3 to 12 months. Hint: measuring cost savings from the get-go is a must. Remember your baseline!

RPI Now

Rapid Process Improvement should be near or at the top of your list of things to do in the next 4-8 weeks. The small business owner and small manufacturer have got to make the time and prioritize events like this until all of the low-hanging fruit has been harvested. This is not business process management or improvement for the sake of developing software. This is crisis management and RPI may save jobs. Every job saved has an immediate impact on your entire community. A job saved is a person saved and that person may very well be your star player when the economy turns upward in 6 months. Don’t lose them when you could easily trim the fat and waste in your processes.

HR Dimensions of BPM (business process management) Are Mission-Critical

Business Process Management (BPM) promises to bring the disciplines of IT and HR together. That’s the promise, anyway.  BPM draws the map and establishes goals while HR provides the framework to hold people accountable for those goals. Sadly, I rarely see the integration of HR in BPM projects led by IT folks and yet I believe it’s absolutely essential. Bridging the divide between HR and IT is not so difficult if you follow some simple guidelines.

  • Understand HR’s Role. This is fundamental to your success. You must understand that significant changes in business process cause changes in job description and performance expectations. HR can help you decide which changes are significant enough to have a material impact on job descriptions and can identify those performance measures that make a difference to performance appraisal. Similarly, significant changes in processes may mean change in employee recruiting (you may, in fact, be seeking a different skill-set than previously thought) and it will likely mean considerable change in supervision.
  • Integrate From The Beginning. Include HR in the BPM discussion from the start. Invite HR to the table and seek their input and advice. If you don’t have an HR professional on your staff, invite a consultant from the community. Trust me, the lawsuits that can result from botching this aspect of your BPM initiative will outstrip the cost of hiring an HR consultant by a factor of 100.
  • Include HR in Human-Centric BPR (re-engineering). BPM and BPR are not simply mapping exercises. Eliminating waste, finding efficiencies and improving quality in the way things are done is about modifying human behavior. All of our models and talk of “suppliers, triggers, resources, outputs and metrics” must bear in mind that real people are involved at every juncture.
  • Conduct HR/BPM Gap Analysis. Involve HR in assessment of the changes you’re making to the current state. Review your future state designs together and determine:
  1. What rules need to be properly documented and how will people be held accountable for following those rules?
  2. How will employees navigate the decision-making processes and who do they seek permissions from?
  3. What training will employees require to implement the new state of your business processes?
  4. Who will provide that training and how will you know when your people are competent in the new way of doing things?
  5. Are there any risks associated with your new business processes? Exposure to dangerous conditions? Risk of accident or injury? Violations of workplace safety laws? Your HR professional can answer these questions for you.
  • Establish New Performance Metrics Together.  Assume the new key performance indicators (KPIs) will have a direct impact on the way employees are appraised and rewarded. There may be some exceptions and your HR professional can help you decide.
  • Enlist HR to Communicate your BPM Initiative. Establishing buy-in and overcoming resistance to change (your biggest barriers to success) are dealt with by executing a comprehensive communication plan. You must create and maintain momentum by including all of your stakeholders in the conversation. Your greatest asset in communications is your HR professional. IT people in particular should not attempt to communicate without the help of HR.
  • Implementation & Training. You want to implement changes in process and HR professionals want to properly train people. Implementation is the intersection where HR and IT usually collide. If you’ve followed these guidelines reasonably well till now, implementation will be a success because it will have been a collaborative effort.
  • Assess Compliance. Compliance is a creature with many heads. While IT may have ERP, XML and integration standards they are trying to comply with and the CFO has Sarbanes-Oxley compliance issues with the new process, HR will have a full slate of compliance issues to assess. There are safety and occupational hazrds to assess, discrimination and disability conditions to review and the full array of hiring/training/supervising processes to evaluate in light of a modified workflow. It’s not impossible, for instance, to engineer or design a business process that suddenly creates a disadvantage for people with a disability who had been properly hired to do things the “old way”.

The most often-cited reason BPM projects stumble and fall is that organizational dynamics and human behaviors weren’t properly assessed and accounted for. There is a lot of psychology at work here. HR people are a different breed and IT people – most often asked to lead BPM – need to accept and include HR. I think the creation of HR/IT teams for the purpose of BPM ought to be your first BPM initiative. It’ll create the conditions for everything else you’re hoping to accomplish.