Daily Kaizen

As I engage with clients, I often find myself saying in words, actions, or body language:

For your own sake and the customers, you need to improve the processes you oversee using lean principles. Here’s how…

What if I could resist that temptation, and instead ask question such as:

To first engage the heart:

• Why do you get out of bed every morning, and dedicate the majority of your waking life to this job?
• On your best days, what factors contribute to that feeling?
• What would need to change to increase the percentage of days that felt like your best?
• How would your life as a whole (family, friends, health, etc) be different if every day was like your best?
• Why is that possible for you and your team?

To engage the head:

• Whose life is your organization/business trying to make better through what they do?
• Why do they patronize your organization/business? What adds value to their lives?
• Why do the processes of your work team matter to the customer – what value do your processes produce in relation to the customers’ ultimate desire from your organization/business?
• Currently, what does a successful day look like for you and your team? How do you know if you’ve had one?
• Is your current definition of success connected to the customer? Should it be?
• How are your processes doing in relation to that customer need? What is the gap between the customer’s desired state and the current state? 
• Why is there a gap? What factors explain it?
• What experiments have been tried to close this gap? 
• What have you learned from those experiments?
• From what you’ve learned, what experiments will you try next?

When I give a solution, there are options for the client, but they’re limited, allowing me advanced preparation and maintaining a sense of control over the situation. When I ask a question, I lose some control, as all the potential answers can never be known. However, it’s only when I let go of controlling the client seeing the world exactly as I do, or learning in the exact sequence I think they should, and instead ask questions to help them begin to see their own world differently, that transformation can occur. I hope one day to be vastly more afraid of giving solutions, knowing they ultimately aren’t serving the client or customer, than of where the client may go with the questions I ask.

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If you read back through the archive of content from this blog you will see that there are dozens of postings and comments related to Strategy Deployment and improvement planning.  We certainly have made an enormous investment in trying to improve our planning process and while we have made some improvements I don’t think anyone feels content with the current state. 

Often I have assessed our capabilities and tried to think of where I can help or what interventions are necessary.  These reflections often put me in an anxious mood since there are so many things we could do better at the enterprise level.  This last week I was trying to think through the challenges with a different lens.  I asked myself, in my experience where have we been successful with Strategy Deployment and what have we learned?   What I quickly realized was that several support and operating divisions/departments in the organization have made great strides over the last couple of years.  We have great centers of excellence right in the organization that we can learn from at the enterprise level.  So what are some of the learning’s?

• First, we need to think about Strategy Deployment like any process.  It must be stable before we try and improve or change it.  Areas that are successful have stuck with the process through several cycles and only improved it once they have had experience.  They are not constantly changing the tools and process.
• Second, these areas take the time to have the dialog.  Lots of people are involved in the planning conversations.  The dialog is as important as the plan that gets developed!   Understanding the “what” and “why” is as important as the “how.”
• Third, each of these areas have figured out that Strategy Deployment must be a two way process.  In other words, it’s not just about handing improvement expectations down through the layers of the organization.  For example, one of the leadership teams I worked with set a standard that no frontline manager should have more than two improvements deployed at any given time.  The figured that on top of daily problem solving a frontline manager cannot be expected to manage more then two improvements at a time.  Once the team set this standard they realized that they had about three years worth of improvement work currently in the “design phase” stacking up waiting for operations leaders to get freed up to begin the improvement.  This was wasting enormous amount of resources and leadership time managing work in process.  Setting this standard allowed the leadership team to shift resources to support operations and help them move faster! 
• Fourth, setting priorities and “de-selecting” work will never happen without an understanding of capacity and expected outcomes.  All of these areas know at the detailed level what is happening in their operations as well as what resources it will take to execute an improvement.  This allows them to make informed decisions that stick.  While tracking capacity and developing work plans is hard work without the discipline to do it you will not make progress.

Most of the learning’s above seem obvious, but they have been tough to emulate.  There is no easy way for a complex organization to plan and deploy strategy; it takes a lot of hard work and even more discipline.

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I believe that a company cannot be lean for too long before they are forced to confront the issue of incentives. All of our good work, if not supported by the right incentives will ultimately be for naught. And by “right incentives” I mean money.

Do not think that by narrowing the scope of my post to money I believe non-monetary incentives are not valuable. They can be important to morale and employee recognition. Things like parties, VIP parking places, gym memberships or even protected time to do improvement work all have their place. They simply are not enough to counterbalance or stay the tide of misaligned or inadequate monetary incentives.

Over time misaligned and inadequate incentives will work against your improvement efforts. They will make it harder to implement and sustain improvement. They will eat away at your gains and drain your momentum. In the worst situations they may make it impossible to implement improvements in the first place.

A misaligned incentive is one where the money drives an employee to do something different than what you want or need them to do. You can have visual management, linked checking, and manager’s standard work in place but if what you are asking of your employees is different that what they are being paid to do, you will eventually have a real problem. I will not pick on what incentives or behaviors are right or wrong. This is also not a discussion about fee-for-service versus pay-for-performance. There is plenty of debate about that in healthcare right now so I will leave that to other discussions. This post is about alignment. Let’s take an overly-simple example. Does patient access to care matter to your business goals? If your physicians are paid a salary that is not linked to productivity standards then you may actually not achieve the access goals your customers require. Why? Well, if I’m the physician and I make the same amount of money whether I see 10 patients or 20, why would I see 20?

I am not being a cynic and I do believe that people still “do the right thing” even in environments that make it difficult. However, if we truly practice respect for people then we must address the areas where our misaligned incentives become disincentives for our employees. Our incentives should align to help our employees do the right thing—not produce a situation where they have to choose between their interests and that of the customer or the organization.

Inadequate incentives are also an issue. I am not actually referring to the amount of the incentive being too small (although this happens), but to the incentive that does not link from the front-line processes all the way up to the overall business goals of the company. The connection should be clear at every level. For instance, if I know that I get an annual performance bonus if my company hits their major goals for the year but I have no idea what I need to do on a regular basis to contribute to successful attainment of these goals the incentive is inadequate. It is too far removed or too vague to “incite to action”. This also speaks to timeframe. In more mature lean companies that I have visited, such as Autoliv, aligned monetary incentives are awarded quarterly. Each employee understands exactly what they or their work cell need to contribute on a daily, weekly and monthly basis to help hit company targets which are tied directly to their compensation. The incentives are adequate not because they hit a certain dollar amount, but because they are shared and understood by everyone in the company and are awarded in a meaningful and more-actionable timeframe. An employee or team can’t do much about the bonus they missed for last years’ performance, but can certainly do something about the bonus they hope to get next month.

Another example of this is when monetary awards are given to executives, but not to the lower-level managers or front line staff who work for them. What a confusing message we send when our highest-level leaders earn large paychecks through ‘bonuses’ and our people are told that the company did not hit target so there will be no bonuses for them. In these situations the incentives are not aligned or shared. What did the executive do “right”? What did the front line employee do “wrong”? What should they do differently? This is a confusing and sometimes disheartening situation for employees. It undermines respect for people, deflates momentum and defies lean thinking.

We have an opportunity in lean healthcare companies to set the tune that others can play along with by ensuring that monetary incentives are shared, understood, aligned, linked and visible. If we do this we will be able to move farther, faster because our people will take us there. If not, we might end up scratching our heads and wondering why all our great lean improvements didn’t stick.

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For the past several years the senior leaders of our organization have effectively used the annual Leadership Conference (for the roughly 1000 people managers in our organization) as a catalyst to introduce that year’s focus in our evolving lean journey.

This year, Barry-WehMiller gave a keynote that outlined our focus for 2011 – creating a people based culture that gives our employees the same focus as our customers. The vision that Barry-WehMiller and our CEO laid out was invigorating for all, as it articulated a goal in which people feel rewarded and maximized in dimensions many have never thought could come from work. Far from the culture in which a job is simply a means to an end that one need not apply their heart, mind, and soul to, Barry-WehMiller strives to care for and nurture all aspects of the fully functioning humans that comprise their staff. Further, this focus to maximize the lives of their employees is their primary strategy to achieve business results.

For Group Health, already considered a great place to work within Washington, this vision created a positive tension with where we currently are. As with many organizations, from the two core elements of lean (continuous improvement and respect for people), the continuous improvement component was the most tangible, and therefore became our initial focus. However, as we continue to learn, we’re becoming more and more aware that the two principles are one in the same, and that you can’t continuously improve at the rate needed unless you show focused and consistent respect for people. Our next step toward this vision is to begin defining the “how” in a way that demonstrates respect and ensures that this focus on people isn’t just an additional task along side the others, but instead is the fabric of all that we do.

The vision and the positive tension from the gap it creates are exciting. However, there are some risks, which include:

• Our people managers have difficulty teasing apart what a) respect for people means in a lean environment and b) staff acknowledgement. In dealing with these two components as one, the risk is to interpret the vision as a license to encourage staff in any direction the staff are interested in, instead of the more complex goal of increasing our staff acknowledgement as a complimentary piece of better understanding and applying respect for people in pursuit of customer requirements.
• Our people managers and their teams don’t come to understand how this focus on people is simply a deepening of our knowledge of lean. Instead, it’s seen as a parallel staff acknowledgement program to combat the ‘added work and stress caused by lean and improvement’.

To mitigate these risks our consulting team has already begun to think about what we can do within our span of control. This includes:

• Working toward a shared understanding and practice of Respect for People across all lean consultants within our organization
• Once this common understanding is gained, define the gap between the vision for respect for people and our current reality
• Identify actions we can take (through coaching, teaching, designing of events, communications, etc) to combat the root causes explaining the gap.

As we take our first step, deepen and align our understanding of, and behaviors toward respect for people, we would appreciate your wisdom – what are you doing to make this vision a reality in your team or organization? Further, if you have articles, quotes or other forms of communication that resonate respect for people, and how to bring it and keep it alive in an organization, please share.

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