Tag Archives: business process analysis

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.

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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.

Spy: Small Business Process Improvements Based on Process Benchmarks

I have to admit to being a chronic process observer and critic. Every time I sit in a restaurant, go into a store, arrive at a hotel, go to the doctor or shop online I pay attention to what staff and managers are doing and I judge. Sometimes I am deeply fond of what I see and other times I am vicious in my critique. While I am a little obsessive about all this, there is some virtue in the exercise. As a consultant, it’s important to have had exposure to tactics and process that work especially well in order to make stronger recommendations for clients. It’s also important, working across sectors to develop a mental inventory of what doesn’t work, what can be emulated and what can be tweaked to serve cross-purposes. Frankly, I would hope that anyone aspiring to build a business, product or consultancy in this domain would be doing the same kinds of things.

Spy versus Spy: Lean Innovation

Welcome to the age of transparency, reverse engineering and piracy. Watching the equivalent of So You Think You Can Dance on Indian TV broadcast by satellite last night, my Indian friend quipped: “They copy everything we do”. Reading about the new film Duplicity in the latest issue of Fast Company I am reminded that the “leanest” forms of adaptation are mimicry and emulation. It’s called “evolution” folks.It’s the 100th Monkey Theory in blazing sound and technicolor. In some cases, it’s downright criminal so be careful where you draw the line.

I’m sure by now you’ve heard that the sum total information in the world is doubling every 3-6 months or something like that. Similarly, in an open information age, we have the capacity to observe, re-engineer, implement, measure and observe again at dizzying rates. Knowing that competitors are observing and mimicking us should serve as a catalyst for greater and faster innovation (and ever more patent filings).

How About A Small Business?

Small enterprises can’t afford teams of engineers and analysts that prowl the web and deconstruct rival products the way Toyota and Honda tore into the Saturn. There is no virtue in piracy so what’s a small business to do? Give observation and emulation a try. Watch what others do and then think in terms of business process. What process can you borrow and pilot in your own shop?

Process Benchmarking

A Benchmark is a standard and, for our purposes, the Gold Standard. The Best Practice. I want to advocate for an open process exchange that enables up-and-coming enterprises to learn from the best. This idea may never take root in the private sector but it might in government and non-profit sectors. For example, what can my library learn from the Pentagon? What can a Blood Drive learn from the Census? What can the EPA learn from Green peace?

As a small business owner, I can effectively identify the leader in my market, the highest quality product or the lowest priced competitor and I can start studying how they deliver their products and services. Similarly, I can go to the leader in a totally unrelated field and observe them in action.

Benchmarking

Rivals’ and leaders’ strengths my not be in their products (engineering, materials, quality and performance) alone. You can look for benchmarks in the following areas:

  • Suppliers – supply chain, quality, ethics
  • Human Resources – recruiting, hiring and retention
  • Customer Service – walk-in, online and telephone, service responsiveness policies, dress code, etc
  • Marketing and Sales – packaging, pricing, branding, placement, promotions, sales tactics and pitches
  • Finance – pricing, financing, terms

The point is, identify some leaders, grab a pad of paper and a pen and go observe what they do and HOW they do it. Imagine how you could mimic, emulate or adopt what they do.

Keep it Simple

A final word on simple. While their algorithms are crazy complex and probably cannot ever be emulated, Google stands as the single greatest example of simplicity in customer experience. That simple one-box web page with scarcely 50 words on it – as of today – owns 64.2% of the world wide web’s search activity. They are killing their rivals with simplicity. How can you do the same?

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!

Is Present Reality (Current State) a Prerequisite for Design of the Future State?

Once in awhile, a riddle so obscure and enigmatic comes along that it baffles and stumps most of our brightest thinkers and deepest philosophers, qualifying as a Zen koan. Like the sound of one hand clapping or the sight of your face before you were conceived, the answer cannot really be found in any conventional sense. Well, in my humble opinion good people, the tension between current state and future state and the need to document and analyze the “as-is” prior to taking on the “to-be” doesn’t qualify as a Zen Koan or a crossword puzzle for that matter. There is no question. You have to understand the present dynamics and process in order to sensibly develop something new.

I know that I will offend some of the business process management wizards and high priests by saying as much but my position is one of firmly believing in the value of documenting and analyzing the current state to ensure a high quality future. Frankly, jumping into the design of the future state without regard for a rather precise current state is irresponsible. Not unlike asking someone how they’d like to perform in graduate school without first ascertaining whether they can read or not. Or promising someone full health without first diagnosing their diabetes. The present state in business tells a vast and deep story that shapes the possible and potential future.

Dangerous “Experts”

I attended a conference recently (devoted to the adoption of EMR in physician practices) whereupon I was able to listen to a discussion at our lunch table between a woefully ignorant doctor who wondered aloud what it would take to implement such a thing as an electronic medical record and an “expert” across the table who piped up and assured him that he needn’t worry about how things are done in in his practice today. He would only be required to imagine what life would be like with his new system. What a  load!

Notwithstanding that particular “consultant” and his advice to the good doctor, it got me wondering, “How many of my colleagues would suggest the same?” I wish I could survey all of my BPM brothers and sisters out there. Do you honestly think you can account for all of the business rules, decision-making, forms, customer preferences, suppliers, and key metrics involved in a process without concerning yourselves with the current state. Do you really think you can skip that step and begin modeling the future state without compromising quality or any other vital business attribute? I think not.

Change without consideration for the present is invention

Don’t get me wrong. I love to invent stuff and get wickedly creative when given a chance to roam free. However, invention cannot capture all of the good reasons why my system dynamics are what they are and cannot account for the benefits and value inherent in my current state without first elucidating them. Failing to harvest and capture the good, the rules, the data, the preferences, and the logic and simply launching into invention risks losing a lot including compliance with standards of all kinds. The risks involved can cause an invented business process to become fatally flawed in short order, grinding business to a halt.

Take your time and carefully document what you do today and how you do it. Inventing the wrong thing, failing and trying weeks or months later to return to an undocumented state is fools work.

Business Process Improvement Involves Tremendous Risk Management

PMBOK (the project management book of knowledge) gives us a wonderful (and comprehensive) outline for managing risk in any project. Now more than ever, you and I have a lot of risk to manage and mitigate – especially if we are managing a portfolio of business processes and/or are expected to treat our process improvement initiatives as though they are full-fledged projects (which I believe they are).

Here’s the basic outline and a few tools (credit goes to PMBOK). As you read, notice how much emphasis there is on access to information, data and analysis. Risk management is a series of actions and exercises. It is very much a verb! Those of us who are tasked with improving workflow and business processes need to be mindful of the risks involved in our work and bright ideas as much as we need to be aware of the broader environment we are working in. Be vigilant for risks inherent in your inputs, process, outputs (deliverables) as well as your assumptions.  Nobody wants to make a mess of something they were asked to improve.

Risk Management Outline

1. Risk Management Planning – approach to and plan for risk management as well as the approach an organization takes to execution of plans

2. Risk Identification – determining risks and identifying the characteristics of those risks

3. Qualitative Risk Analysis – prioritizing risks responses based on probability of occurrence and impact

4. Quantitative Risk Analysis – analyzing effect of risks should they come to fruition

5. Risk Response Planning – developing options and actions to minimize risks and their effects

6. Risk Monitoring & Control – tracking risks, monitoring residual risks, identifying new risks, executing risk response plans and evaluating effects of those plans

Note: PMBOK states some risks are positive and refers to them as Opportunities. Some risks are negative and are commonly  referred to as Threats. I think it is a stretch to call a risk an “opportunity.”  I prefer that you conduct a SWOT analysis.

I  am including a couple of simple tools (since its Thanksgiving!)

Impact

Very Low

Moderately Low

Neutral

Moderately High

Very High

Cost

Time

Scope

Quality

Measuring Probability

Probability

Threats

Opportunities

Very High

Moderately High

Neutral

Moderately Low

Very Low

Risk Assessment Tool

Dimension

Risk

Technical

· Requirements

· Technology

· Complexity & interfaces

· Performance & reliability

· Quality

External

· Subcontractors & suppliers

· Regulatory

· Market

· Customer

· Weather

Organizational

· Project dependencies

· Resources

· Funding

· Prioritization

Project Mgmt

· Estimating

· Planning

· Controlling

· Communication

Addressing Fear and Confabulation In Business Process Management When Times Are Tough

Happy Halloween. I am writing this post in the wake of some pretty harsh economic indicators. This week has not been good for BPM. For the most part, the news has been about consumer confidence and consumption being at all-time lows and news of lay-offs and job losses peaking at nearly 750,000 in this calendar year. BPM initiatives in this climate are deeply challenged to keep people engaged, productive and cooperative. This is especially true if what you’re doing has even the slightest appearance of cutting costs. Executives are thrilled with the idea of cutting costs but you can expect all of your stakeholders will identify themselves as a cost in the process. And what do people do when they’re afraid for their jobs? They modify their behavior.

Fear and BPM?

Fear evokes instinctual reactions in everyone. The very fabric of our being is primed to fight or flee. So much is at stake right now that it is only natural for people to struggle with objectivity and complete honesty. They become protective and defensive. Some people become angry, some blame others, some withdraw and lose their confidence and will to compete, and some lie like there’s no tomorrow. Either way, if fear is running amok in your shop, your BPM hopes for lasting improvement are being compromised.

I met with a public health client this week who is beginning to show signs of wear and tear. It’s more difficult than ever to get subject matter experts in one room with all of the competing agendas they now have. Budgets lack certainty so it’s harder to commit to plans and strategies. Heavy questions like State financing hang over projects like brooding storm clouds. People doubt and that doubt is a mind-killer. Process improvement and doubt are nearly mutually-exclusive phenomena.

Confabulations!

To confabulate is to tell people what you think they want to hear about the way things are and the way things ought to turn out. You’ve heard of people doing this in psychotherapy. Well, it happens in BPM projects even in the best of times and circumstances. People – particularly managers – tell process analysts and consultants what they want based in large part on what they think the rules of the game demand. Basically, if I think you want to model a current state that has certain features, I will make it up as we go along so the model comes out looking like I think you want it to. It’s because people do this that I invite as many experts to process documentation meetings as possible (within reasonable constraints). I want to hear what everybody has to say about the process. It’s also why I don’t include the boss in the first session. They fear for their lives so I bring them in toward the end to validate what their staff have told me. Staff are so much more candid when their boss is out of the room! If this sounds like an intervention on an alcoholic it’s because the approach is similar. Only the problem is not the manager. It’s a less-than-ideal process that some managers believe reflect poorly on them and their performance.

What To Do About Fear and Process Confabulation?

  • Make some strategic decisions at the executive level about the viability of your initiative. If it’s best to hold off for a few months, then wait.
  • Go easy on terminology like “eliminating waste” and even “automation” for that matter (unless you’re clear that is what you’re after and you’re prepared to deal with the fall-out)
  • Communicate, market and promote your BPM initiative in positive terms. Share the benefits, value-add and goals for organization. Have your executive sponsor write a short, persuasive and motivating letter and make sure everybody reads it or hears it.
  • Observe workflow and process by means of direct observation first
  • Document process with the help of non-management experts. Be inclusive and cross-functional in who it is you invite.
  • Validate processes with managers and directors
  • Identify process-related data and metrics and validate your model and assumptions by reviewing the data. The data rarely lies. If you have 100 customer complaint letters and a manager telling you people complain “once in a while” then you can deal with that discrepancy. If a manager tells you their staff processes 10 invoices per hour each and there are 5 staff working 7 hours per day, then somewhere there should be data supporting 350 invoices per day. Close the loop and don’t get snookered into believing without evidence of performance.
  • Be objective, firm and confident.
  • Lead by example and engage others in the same productive, positive behaviors.
  • Believe that BPM projects and initiatives that overlook human behavior and organizational dynamics like these are guaranteed to flop. This is not an IT project.