Lean Leadership Practices to Achieve Business Results

Craig T. Albanese, M.D., M.B.A. Vice President, Quality and Performance Improvement

John A. and Cynthia Fry Gunn Director of Surgical Services Stanford Children’s Health

Professor of Surgery and Pediatrics

Stanford School of Medicine

Stanford, California

1

Learning Goals

• Understand that a lean leader’s primary job is align the

organization

• Understand the four lean leadership practices necessary

to achieve long term business results

• Be able to describe the “ascension paradox” of the lean

operating system

• Review a 3 year journey to decrease preventable harm

in one hospital

• Patient is customer • Patient is the product—complex mixed product lines • Secondary “products” are trainees • Emotional connection required • Medical/Nursing training teaches disease management not process

management • Deeper than usual silos in an academic hospital; disconnected

reporting structures • Unusually powerful position of MDs, outside of management

hierarchies • The mindset that MDs are the internal customers of many processes • Conservative, evidence-based nature of attitude to change • Truly 24/7 nature of a hospital

Healthcare “challenges”

Why Lean?

Clinical Outcomes

*Experience of Care

Cost

Value

Healthcare reform and consumers demanding: Cheaper, faster, better, safer, kinder for individuals and populations

*Patient and Staff Experience

QCDSE = Business Results or

Enterprise “True North” metrics

Q -- Quality

C -- Cost

D -- Delivery (Access)

S -- Safety

E -- Engagement/Experience (Patient & Staff)

A lean leader’s primary job is to garner alignment

• Quality • Cost • Delivery • Safety • Engagement/Experience

Outcomes

Processes

Lean Behaviors

Values

Culture

Activities

Goals

Strategy

Mission

Vision

Shared values

Level 2 (Stability)

Level 3 (match

capacity to demand)

Level 4 (takt

environment)

Level 5 (optimize)

Level 1 (Foundation)

• Innovation to improve access, cost, empathy

Extraordinary Patient Care

Highest Quality, Safety and Empathy; Easiest and Timely Access and Lowest Cost

No Waiting Quality First

• Establish flow • Initiate clinical std work

Success metrics

Visual management and problem solving

Detail patient flow & lead times

Understand cadence (takt)

• Set staff cycle times • Staff Standardized

Work • Clinical standardized

work

• Use andon for process stop to meet the standard

• Successive check

• Innovation to improve quality / safety

• Verify at the source

Leader engagement Customer = patient

Methods, Equipment, Staffing, Supplies (MESS) + 5S

Value stream thinking

• Workflow control • Control process variation

• Refine leadership’s & workforce’s PDCA skills

• Refine strategy deployment

Management System / People Development

• Manage to standardized work & level flow

• Immediate andon response

Quality & service stds.

Level loading

Staff to demand

Frontline feedback that can be addressed

with lean leadership practices

• “I don’t ever see the senior leadership team members”

• “Senior leadership doesn’t understand our issues”

• “We are being asked to change and we don’t know how”

• “I am overwhelmed by the number of problems we have”

• “We are overwhelmed by the number of “initiatives” to be

worked on”

• “I ask for help and I rarely get it in time”

• “The leadership team is always in meetings”

• “Leadership says they are supportive but I don’t see

evidence of it except they are supporting all of these high

priced consultants”

Leadership Practice One:

Goal Alignment/Deployment

Catchball

Top Down Themes:

• Process looks easy – hard to get true alignment

• Deprioritize work!

• Room for LODO activities

Catchball:

• Negotiation

• Takes time

• Better buy-in = better goals

Develop the enterprise vision and mission

Define Strategic Initiatives

Define the Core Goals for next year

Cascade goals to all levels and functions

Execute monthly process, review, and adjust

Execute yearly process reviews

Catch

ball

Goal Alignment for Stanford

Children’s Health

Core Goals – FY16 Category

Executive

Owners FY16 Core Goal

Quality Albanese Achieve 2 Quality Metrics in HAC (Healthcare Acquired Condition) aggregate and SSE’s

(Serious Safety Events)

SSE’s <=1 per month, HAC’s <= 8

Service McCune,

Roberts

Ambulatory Care: LTR across specialties to equal 92.3 or above or 80% of specialties

(with more than 25 responses) above 92.3

Inpatient Pediatrics, OB and Ambulatory Surgery achieve or exceed their FY 15

Likelihood to Recommend mean score.

Affordability Haering Achieve FY 16 Operating Expense & Capital Budget (where applicable) in each Division

Innovation &

Education Sandborg

Improve manager, physician, and employee effectiveness by developing leaders as

coaches.

In FY 16, 200 people managers (including managers, directors, VPs, executives, medical

directors and service chiefs) will attend Coaches’ Academy and lead, co-lead or

otherwise participate in Quality, Affordability and/or Service improvements in their

respective areas of responsibility throughout the enterprise.

Respect for People Souza

• Increase Grand Mean Engagement score by 0.1 point.

• Reduce the Rate of Injury for all employees to 5.3 per 100 FTE’s

• Implement 3000 staff/provider generated improvements (STP’s)

Situation Target Proposal

Strategic Initiatives – FY16

FY 16 Strategic Initiatives Executive

Owners Initiative Statement

Hospital Expansion, Transition and

Activation McCune

To deliver a facility that optimizes the hospital’s services and infrastructure, supports innovation, enhances the patient and family experience and enables extraordinary care as a top-tier children’s hospital.

Strategic Partnerships – current,

expanded and new

Roberts,

Lund

Be the indispensable pediatric (specialty) partner for leading healthcare systems.

Physician network/practices - includes

Enterprise Wide Scheduling, Epic

Optimization, Telehealth

Roberts,

Lund

Be the ‘must have’ pediatric and obstetric physician practice [or network].

Vision 2025 clinical program initiatives

– Centers Of Excellence, others McCune

Develop programs and services, leveraging our preeminent faculty and staff, to advance our capability to provide care, create leading research and innovation, and to achieve unparalleled quality, outcomes, service and access.

Accountable Care – Infrastructure and

capability development for population

health, complex care management

Brown,

Sandborg

Prepare Stanford Children’s Health to participate successfully in current and future accountable care and population health management contracts with commercial payers, large employers, and state agencies.

Operational Initiatives – FY16

FY 16 Strategic Initiatives Executive

Owners Initiative Statement

Better Patient Flow Albanese Better patient flow for patients, staff and the organization; today and for the future.

PCARES Plus McCune

PCARES Plus is an enterprise-wide learning platform that governs respectful, empathic, nurturing and meaningful interactions across the entire human experience spectrum to include all staff and physicians, their interactions with each other and with families and patients.

Enterprise Strategic Initiatives

Visibility Wall

Cross-functional communication

Cross-functional accountability

Biweekly 30 minute huddle run by CEO, COO or

delegate

Invited attendance by C-level, VPs, applicable Directors

Initiative owner provides brief status update (≤5 minutes)

Focus on reds, with appropriate countermeasures

Annual planning process starts & ends with the wall

contents

Leadership Practice Two:

Promote Continuous

Improvement

Value stream flow = Patient flow

Home Home

Transport Admission Treatment Discharge Transport

Focus on the X’s not the Y

Y

Q

D

C

S

E

X1

Method

X2

Equip.

X3

Supply

X4

Staffing

Y is the outcome we want

X’s are the processes/drivers that need to be controlled to get the Y

Standardized Work

Daily Management

Std work and DMS are how to control the X’s

Using standards as problem

solving tools Make issues (abnormalities) visible by implementing

standards and measuring the actual output against the

expected output

Then do PDCA to solve the issues at their root (in

contrast to quick countermeasures) so that they don’t

continue to reduce efficiency

This approach requires leaders to be very tenacious

about continuously applying the PDCA cycle

A Daily Management System

Sustains the Improvements

Components of Daily Management DMS Principle Definition

Reliable Method/

Standardized Work

A documented procedure (i.e. how to) with sequence, supplies and quality toll gates,

owned by a named individual, used by everyone. When the element of time is added, it

is deemed Standardized Work.

Reliable Method or Standard

Work Audit/Check

A structured check of the process to ensure Reliable Method is followed

Abnormality & Andon A system to immediately notify appropriate management, maintenance, providers and

other team members of a safety, quality, process or problem requiring a

countermeasure. May involve abruptly stopping a process.

Problem Solving:

Improvement Ideas (STPs)

Continuous improvement process generated and implemented by the frontline, with

assistance and coaching from leadership. STP = Situation, Target, Proposal.

Visual Management A strategy for creating, supporting, and sustaining process stability through the use of

visual cues.

Tiered Huddles Brief, structured, stand-up meetings used to review area readiness and identify

problems.

Andon Response A tiered system to immediately respond to an andon. Involves team leads and a variety

of managers. Quick countermeasure and root cause problem solving required

Leader Standardized Work:

Responsibilities for Leaders

A working document (checklist) for leaders specifying the actions to be taken each day

to focus on the processes in that leader’s area of responsibility.

Leader Gemba Walk Each level leader above the work unit routinely observes the workplace with the

department leader/student for the purpose of supporting the work processes

Leadership Practice Three:

Develop Self

Servant Leadership Practices • Communicate vision: what is ideal future state, create

dissatisfaction with current state

Appeal to head (intellect) and heart (emotions)

• Walk the Talk—go see reality at least once a week

• Humble inquiry

• Listen more than talk

• Engage the frontline workers: What is getting in your way

of doing your job?

• Review metrics with area management

• Foster value stream thinking: build span of support

versus span of control (authority v responsibility)

• Celebrate the wins

Leader Standardized Work

• Calendar gemba time: used for time with direct reports

and observing the real work in the hospital/clinic. No

cross-functional meetings

• Debrief gemba walks at team meetings

• Attend weekly improvement report outs

• Attend daily Ops huddle

• Sponsor improvement event

• Participate improvement event

• Construct and own an A3

• Complete STPs (Situation, Target, Proposal)

Traditional Management Lean Management

Focus on outcome (“get results”) Focus on standardized processes that get the desired

outcome

Attaining goals trumps all else Developing people has equal weight to goal attainment

Manage to industry benchmarks Manage to customer requirements

Metrics visible to few Metrics visible to all

Batch and retrospectively review results Real time and prospective view of data/results

Management tells staff what to do

Management questions, challenges, coaches and offers

help to staff

Manage from office Manage in gemba

Problems are bad Problems are treasures

Who produced the error?

What suboptimal work process(es) or system produced

error

Autocratic, top-down problem solving

Guided, distributed, participative problem solving

Autocratic, top-down goal creation Guided, distributed, participative goal creation

Organizational success attained by time-intensive

analysis and design of “perfect fix”

Success through continuous, rapid, small, incremental

improvements

Leadership Practice Four:

Develop Others

Creating a strong air campaign

1. Pit the vision of where you want to be against the reality

of the current state to the organization

2. Educate and engage the workforce through:

1. Point improvements

2. Lean pedagogy

3. End of week improvement report outs

4. Plethora of varied communication methods

5. Lean learning trips and networking

Create a strong ground

campaign 1. 3 Actuals Walk

2. Make good practices easier to do

-Calendar gemba time, improvement time

3. Make bad practices harder to do

-Decrease meeting times, emails, outside interferences,

etc…

4. Reduce the choices of what to work on

“A” items, “B” items, “C” items

5. Make losers whole

6. Emphasize succession planning and leader development

Gemba Coaching Kata

Questions (Mike Rother, Toyota Kata)

1. What is the target condition?

2. What is the current condition?

3. What obstacles are preventing you from reaching

the target condition?

4. Which one are you working on now?

5. What is your next step?

6. When can we go and see what we have learned

from taking that step?

Key concept: Coaching = asking, not telling

Ascension Paradox of the

Lean Operating System • Want to get to Level 5 as quickly as possible (biggest

cost down and quality increases)

• Latent problem: real work is at foundational level 1

(alignment/understanding)

• Level 1, if done correctly, takes time, patience, learning

to “walk” again, and is difficult

• No real QCDSE gain at during level 1 work

Level 1

Level 2

Level 3

Level 4

Level 5

Lean Levels

Quality / Safety

Cost Reduction

Leadership Effort

Consistent Patient Experience

0%

5%

10%

30%

45% Mistake

proof

Self-inspect

Unit inspects

Inspect @ discharge

Patient inspects

Shared values

Level 2

(Stability)

Level 3 (match

capacity to

demand)

Level 4 (takt

environment)

Level 5 (optimize)

Level 1

(Foundation)

• Innovation to

improve access,

cost, empathy

Extraordinary

Patient Care Highest Quality, Safety and Empathy;

Easiest and Timely Access and Lowest

Cost

No Waiting Quality First

• Establish flow

• Initiate clinical std

work

Success

metrics

Visual management

and problem solving

Detail patient

flow & lead times

Understand

cadence (takt)

• Set staff cycle times

• Staff Standardized

Work

• Clinical standardized

work

• Use andon for

process stop to

meet the standard

• Successive check

• Innovation to

improve quality /

safety

• Verify at the source

Leader engagement Customer = patient

Methods, Equipment,

Staffing, Supplies (MESS) +

5S

Value stream thinking

• Workflow control

• Control process

variation

• Refine leadership’s

& workforce’s

PDCA skills

• Refine strategy

deployment

Management System /

People Development

• Manage to

standardized work

& level flow

• Immediate andon

response

Quality &

service

stds.

Level

loading

Staff to

demand

How do we go faster?

The role of leaders • Alignment, alignment, alignment

• Link to strategic/ops plan: “What do we have to do?”

• Decommission work!

• Develop improvement capability in ops (not just PI team)

• Management system: tenacity

• Value stream management: adjudicate responsibility v

authority tensions

• Make the big decisions

Example of Faster:

Periop Work Group On July 31st 2015, the 3:15 Periop Scheduling Meeting ran for over 1 hour, due to

sorting and accommodating bed requests for following day of surgery. Consensus was

that another meeting needed to be scheduled earlier to confirm, organize, and

accommodate all OR bed requests. Following the initiation of this daily huddle, a

Periop Work Group formed to create a solution to manage the OR schedule further in

advance in order to decreasing delays and cancellations, overburdening staff, and

going through extraordinary measures to accommodate our scheduled cases.

Initiation of Scheduling

Meeting

Surgical Cap Implementation

Meeting

Future State Cap Implementation & Rescheduled Cases Meeting

>T-1 Level Loading Meeting: Trial

Process

>T-1 Level Loading Meeting: Finalized

Process

GO LIVE 1. Level

Loading Daily Timeline

2. Surgery Scheduler Daily

Bulletin

Aug 17th Aug 20th Aug 26th Aug 31st

Aug 3rd Sept 8th

A Business Problem • We averaged over 3 serious safety events per month

• Most are preventable

Leaders’ Actions to Decrease SSEs

• Align organization around the problem: “Do we agree?”

• Deploy as an annual goal for all work areas

• Deprioritize work

• Support roll out of standardized processes, waste

elimination, blend into our management system, PDCA

• Develop self: humble inquiry, review process metrics

• Develop others: coaching kata, tenacity

Escalating Safety Problems Tier 1a: 0700/1900 Charge RN and staff

Tier 1b: ~0800 Charge nurse(s) and managers

Tier 2: 10:15 Managers and Directors

Tier 3: 10:30 Directors and VPs

Culture of Safety Survey (AHRQ)

Question Description 2013 2014 Change P-Value

My supervisor/manager says a good word when he/she

sees a job done according to established patient safety

procedures 62% 73% 11% 0

The actions of hospital management show that patient

safety is a top priority 67% 73% 6% 0.0051

We are actively doing things to improve patient safety 79% 84% 5% 0.0058

My supervisor/manager seriously considers staff

suggestions for improving patient safety 73% 78% 5% 0.0064

In this unit, we discuss ways to prevent errors from

happening again 65% 70% 5% 0.0135

When a mistake is made, but has no potential to harm the

patient, how often is this reported? 47% 53% 6% 0.0176

After we make changes to improve patient safety, we

evaluate its effectiveness 60% 65% 5% 0.019

Mistakes have led to positive changes here 60% 65% 5% 0.0259

When a mistake is made that could harm the patient, but

does not, how often is this reported? 64% 69% 5% 0.0347

Hospital management provides a work climate that

promotes patient safety 72% 76% 4% 0.0474

Staff feel free to question the decisions or actions of those

with more authority 43% 47% 4% 0.0479

Organization Wide Effort

3.00

1.67 1.38

0

1

2

3

4

5

6

7

8

9

SSE

Co

un

t

Year-Month

Serious Safety Event Counts By Month

SSE Count UCL +2 Sigma +1 Sigma Average -1 Sigma -2 Sigma LCL

Pre-Intervention

Intervention

Post-Intervention

54% Decrease!

Role of Leaders

Promote Alignment

CEO

VPs

Directors

Managers

Clinicians/Staff/Patients

Servant Leadership

Support Continuous Improvement

“Go See” Remove Barriers Communicate

• Quality • Cost • Delivery • Safety • Engagement/Experience

Outcomes (Business Results)

Processes

Lean Behaviors

Values

Culture

Activities

Goals

Strategy

Mission

Vision

Role of Lean Leaders

Thank You!

Please complete the session survey at:

www.ame.org/survey

Session: TP/06

Achieving Business Results

Craig Albanese

Stanford Children’s Health

calbanese@stanfordchildrens.org