Part two picks up where the original list of 25 left off. Dr. Greg Jacobson and Mark Graban cover 21 more things leaders say and do that make Kaizen stick, or quietly kill it.
[DRAFT: key topics and cleaned-up transcript to come]
Presenters: Dr. Greg Jacobson, co-founder of KaiNexus, and Mark Graban. Recorded January 2015.
Part one: Leadership Behaviors That Create a Culture of Continuous Improvement
This transcript has been edited for readability.
Mark Graban: Welcome to our webinar, More Leadership Behaviors That Create a Culture of Continuous Improvement. Thanks for taking time out of your busy schedules to be here. I'm Mark Graban, VP of Customer Success for KaiNexus, author of Lean Hospitals, and co-author of Healthcare Kaizen. I'm joined here in San Antonio, Texas, by Dr. Greg Jacobson, co-founder and chief product officer of KaiNexus.
Greg Jacobson: Thanks, Mark. It was so much fun preparing for this webinar. KaiNexus is a technology company founded with the mission of promoting continuous improvement. We believe well-designed technology can help change the behavior of an organization and make that a much more attainable goal.
Greg Jacobson: We think of a culture of continuous improvement almost as a tripod. If you combine effective, coached leadership with a systematic methodology and enabling technology, it creates the spark and the environment for an organization to develop a culture of continuous improvement, which we know is one of the deciding factors in a company's success. You hear a lot about Kaizen from us, given the name of our company, but whether it's Lean, Six Sigma, or something more loosely defined, it doesn't really matter as long as it's disciplined and systematic. And some people use paper as their technology and really struggle to spread and count what they're doing. KaiNexus was created to make that easier. We have other webinars on methodology and technology, but today we're focusing on leadership.
Mark Graban: Greg and I are both big Apple product users, and it's inspiring to think back to Apple's old slogan, "Think Different." This is about the need to lead. What do frontline managers, middle managers, and senior executives need to do? A lot of times, we need to lead different. We can't keep doing the things that may have stifled participation in continuous improvement.
Mark Graban: Today builds on a webinar we did last year with our original list of 25 behaviors. The recording is on our website, and there's also an ebook version. For those who weren't on the first webinar, here's a quick rundown: state your belief in Kaizen. Explain why Kaizen is important. Empower, but be a servant leader. Participate in Kaizen yourself. Ask for Kaizen ideas and opportunities. Don't require everything to be an event or a project. Emphasize small ideas, and ask for more than just cost savings. Look at the process instead of blaming people. Keep asking for Kaizen. Don't hide ideas; be transparent. Quickly respond to every idea. Work to find something to implement. Turn bad ideas into better ideas. Coach, but don't nitpick. Help people see the bigger picture, and don't sub-optimize. Turn complaints into ideas. Help create time for people to take action. Help share and spread ideas. Don't forget the S and A in PDSA, and don't overdo the P. Be prepared to fail and learn from failure. Be careful with rewards and quotas. Give people recognition for ideas and effort, not just results. And compile the results and celebrate them.
Mark Graban: Now we'll slow down the pace. We have 21 more behaviors to talk about today.
Mark Graban: Behavior 26: it's important to set goals. Many organizations we work with set a goal like, "We'd like everyone to do one improvement this year." But it's important not to make that number a quota or target where people are afraid they'll get in trouble if they don't do their one. Instead of inspiring improvement, it gets dysfunctional, and at the end of the year people are running around saying, "I've got to do my Kaizen." That doesn't set the right tone for continuous improvement.
Greg Jacobson: There's a place for the carrot and a place for the stick. When we're talking about continuous improvement and developing a culture, that's the place for the carrot. It creates much better work and gets you what you're really after: engaged employees.
Mark Graban: And that's where recognition comes in, not just rewards. As a leader, help people implement things that create the excitement to participate more, without necessarily setting a goal.
Mark Graban: Next: be careful not to be inadvertently threatening when asking for ideas. In the last webinar, we mentioned the need to ask for ideas as an ongoing daily practice. About a year and a half ago, I shadowed and coached an emergency department director in a busy ED. We were walking around trying to engage people in improvement, asking whether they saw problems or had ideas, and people were sort of running away from him. I had a hunch about what was going on, but I asked him to step back and think about what question he was asking. He said, "I'm asking people, 'Are you busy?'" And then it hit him. People reacted reflexively: "Are you busy?" "Yes, of course I am."
Mark Graban: In a super-busy department with a traditional environment, the only acceptable answer to that question was yes. So, trying to be a good Kaizen coach, I asked him how he could ask differently. He started asking, "Can you take a few minutes to talk about continuous improvement?" Seven out of 10 people said, "Sure." Three out of 10 said something like, "I'm taking this medication to a patient. I'll catch you later." Asking in a way that made it safer to speak up worked a lot better.
Greg Jacobson: Setting the tone -- "I'm here in the workplace, in the gemba, to try to make your job easier and make what you do better" -- is a really non-threatening way to engage someone.
Greg Jacobson: The next behavior is what we tell our KaiNexus customers: put it in the system, right away. If you're talking to someone in a hallway and they point out a problem, an opportunity, or an idea, stop and capture it, whether through our mobile app, the web, or a paper-based system. If you don't capture it immediately, it'll get lost in the busyness and fog of the workday.
Greg Jacobson: And it sends a signal. I've worked in a number of emergency departments over the last 12 years or so, and I have a vivid memory of a director showing up in the ED at 5 a.m., which was amazing, because the night folks were still there. They said, "We're here to figure out what we can do better." We said, "Great," and gave a few suggestions about things causing problems. It was never really written down or put into a system, or if it was, there was no visibility into it. In that sense, it probably did more harm than good to ask for opinions and then not put them in a system to manage, communicate, and track.
Mark Graban: I think, net, it hurts morale to say improvement is important and then not follow up when people speak up. When we ask organizations why they don't have a culture of continuous improvement, it's usually not a lack of ideas. They say, "We forget to follow up." How many times have we heard that, Greg?
Greg Jacobson: That's such a key thing. Putting it in the system creates follow-up and visibility, and it sends a very important message that continuous improvement matters.
Mark Graban: Another important behavior: if we're out talking to people, they're bringing ideas forward, and we're putting them in the system, it's important not to say, in some form, "That's not really a problem." We don't want to diminish or pooh-pooh what people bring up. As leaders, we're not the ones doing the work. It's easy to step back and downplay it: "You should just deal with that," or "We can't fix that," or "We can't afford to fix it." We need to respect people who take the time, and sometimes the risk, to speak up. It's something real and meaningful, and we have to work with them on it.
Greg Jacobson: Behavior 29 reminds me of a book I read recently, The Practice of Creativity by George Prince. I was turned on to it by Steve Krug, who wrote Don't Make Me Think, as we were trying to make our user interface better. It was written decades ago and has been revived. One thing it talks about is that if someone brings up an idea and you knock it down right away, that person closes themselves off from sharing their next idea, because they're focused on the one that got shot down. And when they hear someone else's idea, they're more likely to shoot that one down. So when someone brings something up and in the back of your mind you're thinking, "I don't really get this," ask another question. Figure out what's really going on. Discounting that effort doesn't just stop that person from engaging. It makes them more likely to shut down other people's engagement.
Mark Graban: Behavior 30 is to ask employees to think rather than just giving them answers. This is a hard habit to break, because leaders are usually the answer people. They get promoted because they have answers and get things done. In the Kaizen approach, it's really important to develop people's problem-solving skills.
Mark Graban: Recently, on site with a KaiNexus customer, a tech from an inpatient unit came in with an opportunity for improvement about remote controls for the bed and TV, the call button, and patients' phones, which easily fall on the floor or get misplaced. The supervisor asked exactly the right question: "Do you have any ideas about what we could do, or would you be willing to go research that?" Almost before she finished, he said, "I've been researching this, and I found a couple of things I think would work." You could see the energy and excitement. He was just waiting to be asked. If they hadn't asked, or had taken that away from him, it would have been a real lost opportunity. The enthusiasm was there to tap into instead of accidentally stepping on it.
Mark Graban: Behavior 31 is to prioritize learning over financial benefits. This might be controversial in Western business mindsets. Business schools teach you to think about ROI and cost-benefit analysis. But when you learn from Toyota, and especially when I was in Japan last year -- not just Toyota, but every hospital and company we visited -- they said their goals with continuous improvement, Lean, or TQM were learning and personal development first, and benefits, including but not limited to cost, second. Organizations that say, "We'll do an ROI analysis on everything," end up rejecting a lot of ideas that don't have a short-term ROI. Now you've demoralized the person, and they'll stop participating. The cost of that is a lot harder to add up.
Greg Jacobson: To give a different flavor to behavior 31: if you haven't read Daniel Pink's Drive, I highly recommend it. I like finding Lean ideas, or respect for people, in places that don't advertise themselves as Lean. His body of work looks at what motivates people to come to work and do good work. And we're seeing, across the whole workforce, not just young people, that people want to engage, learn, and get better at what they do. That's what gives them fulfillment. A user interface specialist we're working with told me at dinner the other night that when he started looking for other jobs, it was because he wasn't learning anymore where he was working. If you invest in your employees, they'll invest back in you.
Mark Graban: Putting time and effort into employees, creating challenges, and letting them grow isn't philanthropy. It's smart business, because they're more loyal. The definition of engagement is going above and beyond. Then you no longer have to drag people into continuous improvement. More often than not, they want to do it, and leaders need to let them.
Greg Jacobson: And they're not slaves to the system anymore, because they helped create the system. That increases their stickiness with your company.
Mark Graban: Behavior 32: don't try to escalate everything. By escalating, we mean taking ideas and shooting them up the management chain -- to the VPs, the board, or the C-suite. That's traditional suggestion box behavior. We want to keep decision-making, research, and implementation in local teams as much as we can.
Mark Graban: Behavior 33: don't accept "We'll send a reminder email" as a solution. We're chuckling because we see this a lot. Especially in healthcare, when there's a problem -- say staff aren't doing hourly rounding -- there's a gut reaction to remind everybody. We send an email or post a memo: "Don't forget, we're supposed to do hourly rounding." Following a PDSA cycle, we plan, we do -- we send the email -- and then we have to study. Two weeks later, is hourly rounding actually happening more? If not, we've just proven that a reminder email isn't a good countermeasure. We need to dig deeper, adjust, and figure out why hourly rounding isn't happening. There are probably a number of things we need to do to improve the system so it's more likely to happen.
Greg Jacobson: This happens almost daily in every healthcare organization I've worked in, and I'm finding more and more that what goes on in healthcare goes on in every industry. If your reaction is, "We'll send an email to remind everyone," use that as a red flag. Am I missing an opportunity to look at a process problem?
Mark Graban: A very common variation in healthcare is more training or retraining: "We'll retrain everyone on hourly rounding." It could be that the initial training was insufficient. If so, figure out why and improve it, not just repeat the same ineffective training. These are cases where we need to dig in and find a root cause.
Mark Graban: Behavior 34: have a bias for action when you can click undo. I love this one. I hit Command-Z, or Control-Z on Windows, a lot. In the real world, many improvement opportunities can be easily undone. If someone at a nurses' station suggests moving a printer, we shouldn't analyze it for weeks and talk it to death. Just do it. If it's not better, move the printer back. But if someone is talking about knocking down a wall, you probably need to talk it through more carefully and do more analysis. The last thing you want is to knock down the wall and come back a week later saying, "PDSA -- we tried it and it didn't work." There's a balance, but more often than not, we can have more of a bias for action instead of a bias for more analysis.
Greg Jacobson: This is where we get into "We're doing a Lean program" versus "We're practitioners of Lean." When you think about practicing medicine, practicing law, or practicing Lean, you recognize the rules aren't always black and white. You need to understand and internalize the principles and then apply them. Sometimes the right answer is to just do it. Other times, the right answer is to get some data before you make the change. If you're thinking it through and applying principles, you're practicing Lean rather than doing it programmatically.
Mark Graban: That's the thinking and judgment. There are no hard-set rules, like "Always delegate, unless you shouldn't." Sometimes we learn by trying and realizing, "I really should have delegated that one instead of taking ownership as a leader."
Mark Graban: Behavior 35: emphasize and try small tests of change. I love the question I've been coached with: what's the smallest possible test of change you could try? Back to the tech with the idea for managing remotes, call buttons, and phones: his idea was a bag or holder that attaches to the bedside rail. Many organizations would research the best one and buy 300 for all 300 hospital beds. That's risky. If they try them and find something not ideal about the design -- say it's too hard to clean -- organizations can be stubborn and not want to admit they wasted 300 times the cost.
Mark Graban: So we talked it through. Should we test it first on one unit, or just a couple of rooms? Or maybe just buy one and let one patient test it and give us feedback? If we buy one and it's not ideal, that's not a huge loss. When the test of change is really small, we're more likely to adjust as part of the PDSA cycle.
Greg Jacobson: You're more nimble. And that ties to the earlier behavior of putting it in the system, because you don't want to try the remote holder on one bed and then forget about it. Make sure your system prompts that follow-up: it worked on one bed, so let's roll it out to a small unit. That worked, so let's roll it out further. Building that follow-up and review cycle into your system is really important.
Mark Graban: Behavior 36: senior leaders need to go and see. KaiNexus has dashboards and executive reports, and you can get a lot of information at your desk, but that's not enough. You need to go and see firsthand -- rounding, gemba walks, whatever you call it -- and interact with people. That's the leadership and methodology that go hand in hand with the enabling technology. It's good general Lean management advice: get out of your office and conference room, go see, relate to people and the problems they face, and ask for their ideas while you're out there.
Greg Jacobson: It shows how important this really is. We hear all the time, "We learned more in the 15 minutes we spent out of the meeting room, where the problem actually was, than in a year's worth of meetings." You'll surprise yourself by walking to where the work is happening.
Mark Graban: And it sends an important message. People see what their leaders pay attention to. It's one thing to give a speech at an all-hands meeting about continuous improvement and innovation and then be completely absent. People see what you devote time to and what you ask about. Leaders don't have to give answers or be directive. Just go out and ask, "Show me one of the opportunities for improvement you've identified or implemented." That goes a long way.
Mark Graban: That ties into the next behavior: senior leaders need to celebrate and encourage. Especially if you're a VP or above, you have to be careful because of your formal position. You'd be surprised how many frontline staff couldn't tell you the name of their organization's CEO, which might be humbling for the CEO. When senior leaders are out there, they need to celebrate and encourage, because even benign questions can come across as critical or threatening. A senior leader might think, "We're supposed to ask questions on a gemba walk," and ask, "Why didn't you consider doing such and such?" That stings. It might be an honest, friendly question, but the staff member hears, "They think we did the wrong thing." The higher up you are, the more careful you have to be to keep the balance toward pats on the back and "way to go." If you see something that's a real problem, like a violation of a standard, address it privately with the manager rather than in a way that embarrasses team members.
Greg Jacobson: There's a balance. If you're erring, err on the side of encouragement. But if you see people walking around a problem over and over, I think that's a better place to be critical than when someone tried to fix a problem. If someone tried to fix it, encourage them, even if you don't think it was the best way, because that's the behavior you want to promote. We don't want to promote workarounds and walking around problems.
Mark Graban: Behavior 38: eliminate barriers rather than accepting excuses. This starts to veer dangerously into self-help territory. When someone says, "We don't have time," there's the self-defeating mindset of barriers and excuses, or the more positive, "Let's figure out how to make it happen." If a manager says, "I don't have enough time to do rounding," rather than saying, "You're right, that's not important," we challenge them: "How can you free up 30 minutes a day?" Maybe there's a meeting where you could just read the minutes instead of sitting in it. Figure out how to eliminate real or perceived barriers. It's an important Kaizen mindset to be positive and figure out how, instead of standing behind all the reasons we can't.
Greg Jacobson: You told me a story the other day about someone who raised a problem with the height of a dumpster. The initial thought was, "We don't have any control over the height of the dumpster." That's accepting an excuse. But they dug a little deeper: who does have control over that, and how do we remove that barrier so we can order the right dumpster? With that mindset, a better dumpster was put in. That's the difference between accepting excuses and saying, "That's a barrier I can eliminate as a leader."
Mark Graban: In that scenario, one of the hospital's process improvement leaders challenged the department manager, who was too quick to say they couldn't solve it, to reopen the opportunity for improvement in the system and dig deeper. The problem was real. If it hadn't been solved, I think it would have demoralized the staff: "You told me to bring things up, and then you pooh-poohed it, so I'm not participating again."
Greg Jacobson: That's the opening slide: think different, lead different. These aren't things that make people feel comfortable. It's a new way of doing things, and it will push people outside their comfort zone at times. That's okay.
Mark Graban: If frontline managers are uncomfortable, their directors and VPs should support them. If someone makes a so-called mistake, we don't want to make them feel bad. We want to coach them to do better next time. If they're saying no to too many things, we help them through that.
Mark Graban: Behavior 39: make a little time for improvement each day. This ties into the previous behavior. Instead of making the excuse that we don't have time, figure out how to free up time, and not once a month or once a week. If we level-load our participation, a little time every day goes a long way toward making it a habit. Don't let ideas accumulate on sticky notes and then put them into the formal system once a week, and don't follow up with employees on an irregular basis. It has to happen frequently and regularly.
Greg Jacobson: Practicing Lean is a lifestyle decision. You can't work out really hard for four hours once a month and expect it to improve your body. You'll probably injure yourself. Walking 10 minutes a day is better for you -- 30 is probably best.
Mark Graban: A lot of us start New Year's resolution exercise programs. Nobody works out once and says, "I implemented exercise." It's the same with continuous improvement. It's not really something you implement. It's a mindset and a practice you either adopt or don't.
Mark Graban: I love the example set by Dr. Marwan Abouljoud at Henry Ford, a world-renowned transplant surgeon and the chief of his department. As we started working on Kaizen, the concern came up: we don't have time. This was an area where nurses and staff assess and interview patients to see if they're candidates for the transplant list. There was effectively a waiting list to get on the waiting list, and people were working really hard. Dr. Abouljoud said nobody would be criticized or punished for taking time to work on Kaizen, and he picked a number: 20 minutes a day.
Mark Graban: His logic was really solid. There's so much demand for their services, and they want to help everybody. They could work 24 hours a day, but they all choose to go home at some point to see their families, have dinner, rest, and have a life, and that choice is okay. But if they don't choose to spend 20 minutes on Kaizen, they'll never get off the hamster wheel. Improving processes and systems so they can see more patients per week is the only fighting chance they have to work down that backlog and reduce waiting times. A little time today frees up a lot of time in the future.
Greg Jacobson: If you keep doing what you're doing, you'll keep getting what you're getting. If you keep fighting fires, all you'll ever do is fight fires. Eventually you have to step back and do some preventive work. I picture the hamster in the wheel. You have to do something different.
Mark Graban: Behavior 40: get physicians involved. There's an asterisk here, because we have customers outside healthcare. But let me have Greg talk first, as a physician, about getting doctors involved.
Greg Jacobson: This is where I began: a doctor in an emergency department with no idea there was a body of knowledge about process improvement. Once I was exposed to it, I immediately gravitated to it: we could do this better and more efficiently, and there's a systematic way to do it. Physicians love to be efficient. That's often how they got where they are. They want to take care of more patients, and they're typically type A people. If you start the conversation by saying, "We want to make you more efficient and make your life easier, and it's simple to start -- just tell us your observations. Did a patient not get a lab that should have been ordered? Was there a delay that shouldn't have happened? What are the problems?" then they realize they can engage without spending a week in a Kaizen event. They can engage in 30 or 90 seconds. That was the idea this all started with: take a minute out of your day and write down the problem. Once you bring them into the fold, you can empower them: "What do you think the solution should be?" And sometimes they'll be able to implement that solution.
Mark Graban: Greg's a doctor. My background is engineering, and I have an MBA, so as a non-clinician I think more like hospital leaders. What I hear from hospital leaders is a self-defeating prophecy: "We're struggling to get the doctors involved," or "They won't want to participate." I ask, "What are you doing to engage them?" and sometimes the answer is nothing, because they've been self-defeating about it instead of getting physician leaders like Greg and others to get people involved. Everyone wants to solve the problems that frustrate them and get in the way of providing the best care.
Greg Jacobson: That's subtly different from what most medical centers do. I didn't say go to the physician and say, "We're going to work on door-to-doctor time, and you need to do a door-to-doctor time project." That's telling them what to fix. We'll get to door-to-doctor time. But the first step in engaging a physician is to ask, "What can we do to make your life easier and make you more efficient?" Once they're engaged and see that the system can actually get better -- and that doesn't have to take years; it can be fixing one problem, their lowest-hanging fruit -- they say, "This is great. What else can we fix? There are never exam gloves in that room, and I'm always running out to chase them down." Fix that, make life easier and less frustrating for doctors, and they'll engage. Then you can start talking about the organization's strategic goals and getting them aligned. It's amazing to watch.
Mark Graban: We see this in other industries too. People ask how to get sales and marketing, or engineers, or designers involved in Kaizen. It's a very similar process: ask them what they want to fix and what matters to them, and get them involved.
Mark Graban: Behavior 41: spread out the improvement workload. One trap people fall into is leaders feeling they need to do everything themselves. Even if they're not coming up with all the answers, they feel they need to do all the work, and they become a bottleneck. Asking people to research things and bring ideas forward eliminates that bottleneck and eases the "we don't have time" concern.
Mark Graban: Behavior 42: embrace innovation and creation, not just small tweaks to what we already have. KaiNexus customers see people come up with very creative ideas for brand-new things. I love this example from my Healthcare Kaizen co-author Joe Swartz's organization, Franciscan St. Francis Health in Indiana. Kelly, a nurse in the neonatal ICU, saw a need to more consistently use special gel mattresses that help protect babies from pressure ulcers. But they're really heavy and hard to work with, and the old mattress covers were basically pillowcases. Imagine changing the pillowcase on a 40- or 50-pound pillow.
Mark Graban: Rather than sending a reminder email telling everybody to use the mattresses and covers, Kelly invented a new type of cover that's split down the length of the bottom, with little straps that come around and help hold the baby in place. The hospital is going to help her apply for a patent. Identifying a problem led to something I'd call very innovative, not just a small Kaizen improvement.
Greg Jacobson: What we're seeing in the data we've accumulated is that innovation comes out of improvement, and big improvements come from small improvements. It's a fascinating emerging trend. We have about 8,000 opportunities for improvement processed through the system, and we'll talk more about that.
Mark Graban: And this was by no means the first Kaizen Kelly was involved in. You start small and develop the skills, capabilities, and confidence to bring forward an idea like that, instead of just living with the problems and frustrations we see.
Mark Graban: Behavior 43: practice Kaizen at home, because you choose to. One thing I love about Kaizen, which I heard at organizations in Japan, is that it's voluntary. It's encouraged, but it's not mandatory. The same is true at Joe's health system and other great Kaizen organizations in the U.S. When people really embrace Kaizen, the place where they have the ultimate choice is at home, where they control what they do. At Joe's organization, they encourage people to write up and document Kaizens they did at home. We have a whole chapter in our book about home Kaizen. In one example, a parent's daughter's hair bow drawer was a mess, so they did a Kaizen to organize it -- I'm sure working with her daughter rather than forcing it on her. Identify the problem and the impact: we're late for school, or stressed out searching for things at the last minute. To me, that's a sign a continuous improvement culture is really taking root. It becomes the way you think, and you can't turn it off. You're making life better at home, and at work for you, your colleagues, and your patients.
Mark Graban: Number 44: have fun with Kaizen. That can include the language we use and the rewards and recognition we give. It's an important part of what Pascal Dennis, who was at Toyota in Canada for a long time, calls the Kaizen spirit -- a cheerful, playful tone. It's serious work and serious improvement, but having fun is a good way to engage people.
Mark Graban: Number 45: get started before you're perfectly ready. What we don't want to see is an organization planning for two years how to kick off its continuous improvement approach. At some point, the best way to start is to start. Do a little planning, then do, and accept that we won't be perfect. We'll stumble and make mistakes. But if we learn, study, and adjust, we'll make far more progress than if we plan and research and discuss and try to launch with a perfect approach. I don't think that's practical.
Greg Jacobson: To add to that, this is what we do with customers who look at a large, complex organization and say, "We want this whole organization to have this type of culture." It's not black and white. We typically start with a department or two where we think it will work well, and you iterate on your system the whole time, instead of never getting started because you're trying to design the perfect system for 10,000 people.
Mark Graban: We need to continuously improve our continuous improvement process. And that means at some point you have to start and take action.
Mark Graban: Our final behavior, number 46, is to look for cost savings as an end result of all the other things we do that matter. When I visited Franciscan last year, Joe and I shot a number of videos with their staff, which are on my blog. In one, the nurses from an endoscopy unit said, in effect, "None of us look at the improvement process as, 'How are we trying to save money or increase throughput?' That's what we're doing, but that's not how we think of it." There's nothing wrong with saving money for the organization or being able to care for more patients in a day, but that's not their primary goal.
Mark Graban: Managers there are asked to engage people in the improvement process, which I think is the right thing to do and a noble goal. What does that lead to? Engagement correlates with and leads to patient satisfaction, which can bring more patient volume, and all of that directly and indirectly leads to better financial results. Engagement also leads to better quality and safety, which flows through to all of those other areas. We're not doing this just to be nice. It's smart long-term business for a health system or any other organization. When we increase engagement and employee satisfaction, people are happier, more likely to go above and beyond to improve quality, and fewer of them quit, which is a huge expense when you have to recruit, hire, and train replacements. So yes, we want to measure and look at cost, but it's not what we're asking for, and it's not the primary goal.
Greg Jacobson: And you can swap "customer" for "patient" on this slide. It applies to any industry. What we're getting at is which behaviors lead to sustainable change, and how you actually get better financial results, which isn't directly obvious. To get the best financial results over the long haul -- month after month, year after year, decade after decade -- you shift the focus, and the byproduct is a better result in the area that may have motivated you to start. It's not intuitive until you step back and see how the pieces fit together.
Mark Graban: We've crunched the data across all KaiNexus customers to see how many improvements have a cost impact. In general, about 10 percent have any measurable impact on cost. About 2.5 percent have an impact greater than $10,000, and 1.4 percent have an impact greater than $100,000. That's part of the magic of Kaizen. When we focus less on cost and more on improvement, and we get more and more ideas implemented, we end up with more cost savings, even though they aren't all focused on cost, than if we said, "Everyone, come up with ideas to save money." That might work in the short term, but it's not sustainable, and it's not inspiring for people, especially in healthcare.
Greg Jacobson: Let this sink in, because this data kind of blew us away. Mark and I have worked together for almost four years, and we intuited this. It was a gut feeling. Now we're getting empirical data. Over the long haul, those are really impressive numbers. Roughly one out of every 75 opportunities for improvement implemented in an organization adds more than $100,000 to the bottom line, and 2.5 percent add more than $10,000. And that's not counting customer or patient satisfaction, employee satisfaction and retention, or safety -- the primary reason you do what you do, Mark, is to get the number of preventable errors down. So this is the "oh, by the way": if you really want to save money, this is the best way to do it.
Mark Graban: Cost savings is gravy. It's important, but it can't be the only thing.
Mark Graban: To wrap up, as leaders we all have to build the culture. That means defining the right behaviors, modeling them, observing what others are doing or not doing, coaching, and celebrating. Improvement doesn't happen magically. It requires leadership, and that requires everyone to step back, think, and lead different.
Greg Jacobson: The first leadership webinar was our most-viewed webinar of 2014, which is why we expanded on the topic. We tried to make this one stand on its own, but if you liked this content, the first one is worth your time.
Mark Graban: We've got a bunch of questions. Brandt asks, "What are some of your home Kaizen examples?" I've been guilty of practicing Kaizen at home. Eight or nine years ago, my wife and I moved into a house. When you move in, you just want to get everything put away; it's stressful and tiring. I love to cook, and I'm embarrassed that for about the first two years, I kept cutting boards in one cabinet and the knives in a drawer behind me and across the kitchen. I'd pull out a cutting board, put it on the counter, turn around, take four steps, grab a chef's knife, and walk back. I didn't notice the waste. One day it finally clicked: what are you doing? I have an appreciation for how people feel bad when they identify workplace problems, because I had this blind spot. I moved the knives to the drawer directly above where I put the cutting board. Two years of wasted movement. You might think I'm not very good at Lean, but at least I caught it, and I did it because it made cooking easier.
Greg Jacobson: I have two really simple ones. The first is a blatant steal from an example you gave in part one, where someone put a little rubber ring around a key they used often instead of cycling through their keys. I did that with my house key, a 10-cent fix, so I'm not fumbling through three keys to find the right one.
Mark Graban: That's a great example of why it's okay to steal and borrow someone else's idea. That's why we want to share, celebrate, and spread ideas.
Greg Jacobson: The second one: when I was visiting your house a year or two ago, I noticed you had a laser sensor in the garage that shows where to park your car. I thought I really needed one, but that's not the least expensive solution. Creativity over capital: I didn't need technology to solve the problem. I hung a racquetball from the ceiling on a string and got the same result for about 50 cents. So beyond asking for the smallest test of change, challenge yourself to find the least expensive, simplest, or most elegant way to solve a problem.
Mark Graban: I think that laser thing was given to me as a gift. That's my excuse.
Mark Graban: Another question: what does the 2.5 percent refer to? That's the share of identified, completed, and implemented improvements tracked in KaiNexus. When you complete an opportunity for improvement in KaiNexus, we ask a simple question: did it result in a change? If it did, we coach people to think about what impact it had on the organization, and one option is a financial impact. So of the completed opportunities, our customers identified 1.4 percent as having a financial impact of more than $100,000 to their bottom line.
Mark Graban: Here's a great question from Tom: "We're launching a suggestion system that will reward only one idea creator per month. In the future we want to phase the rewards out. How do we do that without creating a backlash?" My very strong advice is not to start with a program that rewards only one person per month, because that will create a backlash. When you have one winner, everybody else feels like a loser. The most successful reward approaches I've seen give everybody a relatively small token. It's more recognition than reward, and you want everyone to feel good about their contribution. If someone saves a million dollars a year, you can do a spot bonus or some financial recognition, but don't make it a percentage of savings. That gets dysfunctional. If you need rewards, keep them even-keeled and spread out.
Greg Jacobson: A slight twist: if you've already gone down the reward path, make the reward small. Don't give out an iPad every month, because you'll get dysfunctional behaviors; everyone will want one. Make it something like a cafeteria gift card for a cup of coffee. In Masaaki Imai's book Kaizen, he talks about reward, but in the form of recognition. He tells the story of a person who came up with an improvement involving the teapots on the tables, and the so-called reward was a pen given at a ceremony recognizing that person for a pure Kaizen idea.
Mark Graban: I think back to my friends at Franciscan. A team there talked about an improvement that saved the hospital $30,000 a year, and this is a department that implements hundreds of Kaizens a year. I asked the question I hear a lot: "Don't people think it's fair that they get a percentage of the savings?" They said no. They don't need a reward. They do it because it makes things better for patients and makes their own work easier. That's the power of intrinsic motivation. It almost seemed like they'd have been insulted if someone handed them money.
Greg Jacobson: That comes back to Dan Pink's Drive: extrinsic rewards squash intrinsic motivation. If you're thinking Greg and Mark don't know what they're talking about, I was in your shoes until I read the book and the data on what really motivates people.
Mark Graban: And W. Edwards Deming said the same thing in his writing.
Mark Graban: One more question, from an attendee in Poland -- thank you for joining us: "When we implement a Kaizen idea, do you do it only when success will be 100 percent, or at 50 to 70 percent?" I'm assuming this means the likelihood of success. Back to the behavior about clicking undo: if it can be easily undone and there's no risk of harm or side effects, it's okay to implement something you're maybe 70 or 80 percent sure will work. If it's knocking down a wall, you probably want to be 99 percent certain it's not a mistake.
Greg Jacobson: And if the question means implementing a Kaizen that fixes 70 percent of the problem instead of 100 percent, then go ahead and implement it. Perfect is the enemy of good. When you move the ball forward, you're at a different vantage point, and you'll often see a different solution from there. Don't be paralyzed because you haven't found the 100 percent solution.
Mark Graban: People often try to solve a problem 100 percent. With Kaizen, if we can lessen the problem a little -- make it 30 percent better -- and then implement something else, that incremental approach is really powerful. To whoever asked, if we didn't answer your question, please email us and we'll follow up. We've reached our time. Thank you all for attending and for the great questions.
Greg Jacobson: Thanks so much. I can't believe the hour went by. Hopefully you had as much fun as we did.
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