Lean Management and Culture Change

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1 Lean Management and Culture Change Mike Halstead VP Operations Eastern Division Quorum Health Resources Starbucks Video 2

2 Why Adopt Process Improvement in Healthcare? Cost of Care Increasing $ Inpatient Volumes & Reimbursement Declining Source: Sg2 3 The First Law of Improvement Every system is perfectly designed to achieve exactly the results it gets. 4

3 It is not the strongest of species that survives, nor the most intelligent, but the one most responsive to change. Charles Darwin 5 Our Challenge Promote and sustain process improvement in our hospitals through the leadership of our teams Provide education on how to effect change to achieve a Process Improvement Culture Develop leadership skills Measure and monitor improvement Focus on improvement sustainability Maintain continuous leadership development 6

4 Objectives Identify the Leadership roles in change The foundations for successful change Steps and tools for successful culture change 7 Lean Management Principles Will Lay the Foundation for Culture Change Articulate the Vision of Lean as a Core Strategy Lead by Example Transform your People through Respect 8

5 9 Incorporate Lean as a Core Strategy Focus On Process, Not Results Better Value Adding = New Strategic Options Lean Supports a Time-Based Growth Strategy Improving your value-added process is the core of your strategy 10

6 Lead by Example Accept that people can be resistant to change Listen to their concerns Be responsive to their input Lead by example Commit to becoming a Lean Expert Learn by doing 11 The Leaders of Yesterday Won t Work for the Performance Improvement Environment of Today Autocratic Leadership versus Lean Leadership All Knowing In Charge Autocratic Buck Stops Here Impatient Blaming Controlling Patient Knowledgeable Facilitator Teacher Student Helper Communicator Guide 12

7 Change Management is a Process that Requires Leaders to Question Themselves Communication Utilization Improvement Officers Consensus Micro-centers for Change Leadership Timelines Accountability 13 Leaders Should Ask Themselves Four Major Questions To Determine How They Are Leading a Process Improvement Culture Do you know how good you are? Do you know where you stand relative to the best? Do you know where the variation exists? Do you know the rate of improvement over time? 14

8 Transform Your People through Respect The Only Asset that Appreciates People Respect Your People Best Ideas Create a Learning Environment Invert the Organizational Pyramid 15 Video on Taking Risk 16

9 CULTURE CHANGE AT THEHEART OF LEAN HEALTHCARE 17 The Culture of Your Organization is Multi Layered and Complex

10 Organizational Change is Difficult to Initiate and Challenging to Sustain An organization s culture comprises an interlocking set of goals, roles, processes, values, communications practices, attitudes and assumptions The elements fit together as a mutually reinforcing system and combine to prevent any attempt to change it Change may make progress at first, but the interlocking elements of the organization s culture tend to take over and draw the change back into the old culture The Leader s Guide to Radical Management: Reinventing the Workplace for the 21st Century Steve Denning. 19 Changing a Culture Takes Courage, Determination and Persistence Organization Tools for Changing Minds Vision Storytelling Leadership Tools Modus operandi Persuasion Tradition Role definition Control Systems Conversations Negotiation Strategic planning Decision-making Learning Management Tools Incentives Hiring Firing Role modeling Ritual Measurement systems Training Inspiration Information Coercion Power Tools Threats Fiat Punishments Intimidation The Leader s Guide to Radical Management: Reinventing the Workplace for the 21st Century Steve Denning.

11 Deploying All of Your Tools in Culture Change Should Start with Inspiration Leadership Tools Vision or story of the future Management tools Role definitions Measurement Control systems Power tools (Last resort) Coercion Punishment 21 Empowering Your People Should Be at the Core of Your Culture Change 22

12 Acceptance of Change Can Go in Two Directions Compliance I have to do it this new way. Reaction I will react to this change if I must. Testing I must absorb this change. Negative Perception I feel threatened by this change. Commitment I want to do it this new way. Action I will act to achieve this change. Testing I will put myself at stake for this change. Positive Perception I see the opportunity in this change. Engagement I see the implications for me/us. Understanding I know why and what will change. Awareness I am being told about something. 23 Effective Culture Change Requires Some Upfront Work Articulate your Lean Vision Identify Lean champions among physicians and staff to achieve acceptance of the vision Develop Lean knowledge and awareness throughout your staff Promote and communicate your Rapid Improvement /Kaizen events Consider hiring a Lean Consultant or identify a strong Lean training program Add some Lean expertise to your Board 24

13 LESSONS LEARNED 25 Take Advantage of Lessons Learned from Other Lean Healthcare Systems Managers and staff must be trained, don t expect them to just get it Use data, be transparent, do your homework, then go to Gemba - be humble but challenge the status quo Communicate 1000 x more than you think you need to Standard work for all management is critical and must be in place for improvement to occur Learn the leadership tools such as Strategy Deployment early in the journey Develop Physician Champions early 26

14 Mistakes Often Occur as You Try to Change a Culture Overuse of the power tools of coercion and underuse of leadership tools Beginning with a vision or story, but failing to use the management tools to cement the behavioral changes in place Beginning with the power tools before a clear vision or story of the future is in place 27 Successful Change Managers Will Lead with Vision and Consistency Change managers should: Have a clear vision of where they want the organization to go and communicate that vision through leadership storytelling Identify the core customers and drive the organization to be continuously and systematically responsive to them Define the role of managers as enablers of self-organizing teams and draw on the full capabilities of talented staff Quickly develop and put in place the new systems and processes that support the vision of the future Introduce and reinforce the values of transparency and continuous improvement Communicate horizontally in conversations and stories 28

15 Change Managers Should Not Put Form Before Function Change managers should not: Start by reorganizing o Instead put in place the management roles and systems that will reinforce the vision Start by bringing in a new team o Instead work with the existing managers and draw on people who share your vision 29 Success Factors for Culture Change in Hospitals Agree to a long-term time commitment Define organizational culture Stress buy-in from leadership Make change an inclusive effort within the organization Promote a set of core competencies Integrate employee assessments into the change process 30

16 STANDARD WORK 31 Use the Four R s to Transform Your Culture Reason Clearly articulate vision Identify purpose for change Result Create a picture of the future organization for employees Clarify expected results Route Explain the path throughout the organization that the change will take Role Help employees understand how the change will affect them 32

17 Promoting Change Takes Time and Commitment Kotter s Eight Steps for Successful Change Increase urgency Build the guiding team Get the vision right Communicate for buy-in Empower action Don t let Create up short-term wins Make change stick Increase Urgency Show others the need for change with a compelling object that they can actually see, touch and feel Show valid and dramatic evidence from outside the organization that demonstrates change is required 34

18 2. Build the Guiding Team Get the right people in place who have the influence, credibility, trust, emotional commitment, and teamwork to guide difficult change Show enthusiasm and commitment to help draw the right people into the group Get the Vision Right Try to see literally possible futures Make the vision so clear that it can be articulated in one minute or written on one page Have a vision that is moving such as a commitment to serving people 36

19 4. Communicate for Buy In Get as many people as possible acting to make the vision a reality Keep communication simple and heartfelt, not complex and technocratic Speak to anxieties, confusion, anger, and distrust Rid communication channels of junk so that important message can go through Empower Action Remove barriers Deal effectively with obstacles that block action, especially: Disempowering bosses Lack of information The wrong performance measurement and reward systems Lack of self-confidence 38

20 6. Create Short Term Wins Produce sufficient short-term wins, sufficiently fast, to energize the change helpers, enlighten the pessimists, defuse the cynics, and build momentum for the effort Create short-term wins that are visible, timely, unambiguous, and meaningful to others Don t Let Up Continue with wave after wave of change, not stopping until the vision is a reality Aggressively rid yourself of work that wears you down Look constantly for ways to keep urgency up 40

21 8. Make Change Stick Embed the changes in the very culture of the enterprise so that new and winning behavior continues despite the pull of tradition and turnover of change leaders Use new employee orientations and promotions to show what the organization cares about Tell vivid stories about the new organization, what it does and why it succeeds 41 Promoting Change Lays the Groundwork for Process Improvement To improve is to change; to be perfect is to change often. Winston Churchill if you think of the standard as the best you can do, it s all over. The standard is only a baseline for doing further kaizen.it is kaizen if things get better now. Standards are set arbitrarily by humans, so how can they not change? Taiichi Ohno 42

22 Your Action Plan Identify the priority areas for improvement Create a Lean Leader Find change agents Map your value streams Engage leaders in strategy deployment Acquire and disperse knowledge Lead through mentorship Gain supplier involvement 43 Summary of Key Points Lean management requires culture change which happens over time. Kotter s eight steps describe a process for implementing successful culture change. Assess your organization s progress on a regular basis look for positive examples.

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