With Amazon’s healthcare move, disruption ‘vortex’ picking up speed

If America’s top health insurers weren’t thinking about the threat of disruption much before, they were after the stock market opened on Tuesday, Jan. 30.

Online retail juggernaut Amazon joined with Warren Buffett-owned conglomerate Berkshire Hathaway (owner of COE member NetJets) and banking giant JPMorgan Chase to announce they’re forming an independent health care company to serve their employees in the U.S., according to a report in the New York Times. The companies employ a combined million-plus globally, many of which are stateside.

Even though details on the plan were scant – the trio said the partnership will be focused on creating technological solutions that drive simplicity and lower costs – stock prices for companies like UnitedHealth Group, Aetna, Humana and Cigna took a hit. The Times aptly noted that the “lines that have separated traditionally distinct (healthcare) sectors … are increasingly blurred,” and companies with the scale – and cash – of the Amazon/Berkshire/Chase triumvirate are poised to blur them further.

This latest threat of disruption to the healthcare industry comes after years of similar shake-ups in the technology, entertainment, and retail sectors, among others. Those three, according to a 2015 Cisco report, Digital Vortex, are the most vulnerable through 2020 to the entry of disruptors who can fundamentally change business as usual. Near the bottom of that list in 2015, at least slightly safer: Healthcare and pharmaceuticals.

In just a few years, the game has changed.

Cardinal Health CEO Mike Kaufmann

Count longtime COE member Cardinal Health Inc. among those standing confident as the broader healthcare supply chain faces disruption. Newly named CEO Mike Kaufmann speaking at a conference just weeks ago said the company has the scale, supply chain sophistication and pricing that would make it a formidable incumbent to beat, even for the Amazons of the world.

Amid unprecedented change in the insurance space, companies such as COE member Nationwide are trying to keep a step ahead – and even get in at the investor level on growing disruptive forces. The company this past summer hired a chief innovation officer and announced plans to invest $100 million in startups, saying the move “lays the foundation for the company to lead on businesses and technologies that anticipate future and emerging changes.”

Companies going forward may be defined by their ability to anticipate and react to disruption. At the Center for Operational Excellence, we believe the foundation of that is a culture that values continuous learning, thinking about the best practices that become “next practices.”

At COE’s upcoming Leading Through Excellence summit, April 10-12, we’re driving a conversation about disruption that companies need to start having if they haven’t already done so. That same Cisco report found that 45% of respondents to a large-scale executive survey said digital disruption isn’t a board-level concern. Only 25% said then that they were actively responding by disrupting their own business.

Jeff Loucks, co-author, Digital Vortex

At the summit, we’re thrilled to host one of the authors of the Digital Vortex report and book: Jeff Loucks, now the executive director of Deloitte’s Center for Technology, Media & Telecommunications. Loucks in a featured breakout session on April 11 will be sharing insights from Digital Vortex, helping attendees better understand how and why disruption occurs – an what they can do about it.

Loucks’ presentation is just one of a number of opportunities to better understand disruption and see how some companies are managing to disrupt themselves …

  • On Tuesday, April 10, award-winning innovation researcher Aravind Chandrasekaran leads an interactive workshop designed to help companies manage disruptive innovation through changing market and customer conditions.
  • That afternoon, COE is taking a group of attendees off-site to The Ohio State University Center for Automotive Research. Part of that tour will include an up-close look at how autonomous vehicle technology is poised to change the entire automotive industry.
  • Building off the bird’s-eye view of disruption Loucks offers in his breakout, David Kalman from change consulting company Root Inc. in another session will guide attendees through a discussion about how they can create innovative disruption within their own organizations.
  • A team from Columbus-based insurer and COE member Nationwide will be hosting a presentation and panel discussion on how technology is transforming processes at the organization.
  • Kalyan Sakthivelayutham, VP of Information Technology for DHL Supply Chain, will be offering a look inside how the company is ahead of the curve in introducing technology such as Google Glass and robotics inside its own operations.

These workshops, tours and breakout sessions are a few among more than 40 learning opportunities spread across Leading Through Excellence 2018, which is nearly 80% booked more than two months from the event. Registration for members and non-members is automatically discounted by 5% through Feb. 12, with an additional 5% available for groups of five or more.

To learn more and register, check out our official summit site …

COE in 2017: The Year in Review

18 events. More than 60 presentations, workshops, tours and benchmarking opportunities. Countless “a-ha!” moments.

The Center for Operational Excellence’s 25-year milestone was its busiest ever, and plans are in the works for another exciting year of programming designed to connect our members to the latest best practices in process excellence. With the new year just days away, we’re offering a look back at some of our event highlights from 2017 …

hban benchmarking
Attendees of the January benchmarking session, which represent roughly a dozen COE member companies.

January 2017: COE started and ended its year with member Huntington National Bank opening its doors to share how it’s driven transformational change.  Huntington hosted the first of four “grassroots” benchmarking sessions, where leaders from more than a dozen COE member companies meet quarterly at a host company to share best practices on a specific topic. Interested in joining the group? Contact session moderator and COE Executive Director Peg Pennington at pennington.84@osu.edu.

April 2017: For its fifth-annual summit Leading Through Excellence summit, COE took hundreds of members to seven different tour sites across the state of Ohio. Here, leaders from member Engineered Profiles show tour attendees best practices in leader standard work, a tour being offered again during the 2018 summit.

April 2017: Buckeyes Football Coach Urban Meyer kicked off the third and final day of COE’s Leading Through Excellence summit, sharing insights from his personal journey and encouraging attendees to always keep a look out for the next great idea: “Always learn. There’s always someone out there doing a great job with something.”

June 2017: How can lean principles apply to a nationally renowned startup culture? And what can big companies learn from it? COE’s popular I.T. Leadership Network series returned with a presentation from Nate Lusher (pictured, left) and Rick Neighbarger from Columbus-based healthcare software company CoverMyMeds. COE is offering a tour of CoverMyMeds’ award-winning headquarters during its 2018 Leading Through Excellence summit.

June 2017: Paula Bennett, CEO of women’s apparel retailer J.Jill, spoke to an at-capacity crowd for COE’s Women’s Leadership Forum series. Bennett, a graduate of Fisher College of Business, recently took the company public, staking out rare territory in the IPO scene: Research has shown that only about 3% of IPOs in the past decade have been led by a female CEO.

talent war wide shot
COE’s collaborative session in July drew nearly 140 attendees seeking insights on “winning the talent war.”

July 2017: A pair of summer sessions COE presented in collaboration with three other centers at Fisher kicked off in July with a look at the “talent war,” featuring a presentation from the Brookings Institution on changing workforce dynamics and a wide-ranging panel discussion with human resources leaders from Cardinal Health, Marathon Petroleum, Nationwide and Wendy’s. COE’s collaborative summer sessions will return in 2018 on June 27 and Aug. 8. Stay tuned for programming details.

Cisco’s Jeremy Aston

August 2017: COE’s summer sessions continued with a look at the “Digital Vortex” and how disruptive competitors are shaking up the business landscape for even the most established companies. Cisco’s Jeremy Aston (pictured, above) kicked off the session with a keynote on the company’s research, which has found that, while executives are expecting digital disruption, too few are actively preparing for it.

 

brutus buckeye peg pennington
Brutus Buckeye stopped by COE’s 25 anniversary celebration to ring in the occasion with Executive Director Peg Pennington.

September 2017: COE formally celebrated its 25th anniversary on Sept. 15, ringing in a quarter century of driving a culture of continuous learning in the broader business community, complete with a visit from Brutus Buckeye.

September 2017: Goodyear Tire & Rubber Co. executive Billy Taylor (pictured, above) closed out COE’s anniversary celebration by sharing insights on how companies can drive change by engaging their people.

COE offers opportunities for students and members to connect at all of its events.

October 2017: COE’s semi-annual Supply Chain Symposium series held its second event of the year, connecting center member companies with Fisher MBA students pursuing careers in the field. Author and North Carolina State University Prof. Robert Handfield keynoted the session with insights from his latest, The Living Supply Chain.

Jeff Sturm, executive vice president and chief continuous improvement officer at Huntington National Bank, kicked off COE’s final event of the year with a keynote on how the organization is driving cultural change.

December 2017: How can we drive cultural change by changing the questions we ask our people? Opening up COE’s final event of 2017, Huntington National Bank EVP and Chief Continuous Improvement Officer Jeff Sturm showed how the organization has instilled leadership behaviors that are helping sustain a years-long cultural change effort. Sturm’s session, along with that of afternoon keynote Tim Judge, is available to stream in full-length and “ShortCut” versions on our members-only website.

Next year … COE already has a number of events listed on its website. Check out our roster – and grab your seat soon for Leading Through Excellence 2018, April 10-12!

Leadership principles in Huntington transformation focus of December keynote

“How much will this save?”

“When will this get done?”

Jeff Sturm knows leaders need the answers these questions get. He also knows there’s a better way to ask.

“’When will this get done’ is a legitimate question,” said Sturm, Huntington’s Chief Continuous Improvement Officer, “but if you ask it over and over – and at the wrong time – you’re going to drive the wrong behavior.”

jeff sturm
Jeff Sturm

Changing leadership behaviors – starting with how they ask questions of their people – is a key component of a wide-ranging operational excellence transformation rounding out its fourth year at the Columbus-based bank, a stalwart among Midwestern financial institutions with more than $100 billion in assets. Sturm stepped in to lead the bank’s formal effort to build a culture of continuous improvement as it launched in 2014, and he’s appearing as a keynote on Dec. 8 for a seminar hosted by The Ohio State Center for Operational Excellence, where the bank has been a member since 2011. Registration for the event, open exclusively to employees of COE member companies, is open now.

Looking back at the early days of the initiative, Sturm said part of the foundational work was in communicating what the culture change wouldn’t be.

“Most people’s perception of continuous improvement was two things: this very rigorous Six Sigma orientation, and that everything was about expense reduction,” Sturm said. “Really, we wanted to help better equip our employees to have more formality around their problem solving to help in the day-to-day.”

The road map driving Huntington’s continuous improvement efforts is a three-pronged strategy that aligns employees on establishing cultural behaviors, creating capable colleagues and delivering results. That’s operationalized, Sturm said, as “making great, customer-centric, process-focused, data-driven decisions.”

Four years in, Sturm said a key focus is sustaining momentum. Huntington closed a $3.4 billion merger deal with Akron’s FirstMerit Corp. last year, and CEO Steve Steinour told Crain’s Cleveland Business this fall that Huntington is “investing in growing.”

A sustained continuous improvement capability, Sturm said, is critical to what the bank has achieved – and what’s in store.

“Our team has really focused on making sure we’re helping creating a culture where our people are able to identify and take advantage of opportunities because of that growth,” Sturm said.

Learn more about Huntington’s operational excellence journey on Friday, Dec. 8, when Sturm’s 10:30 a.m. keynote will be followed by a presentation on keys to visionary leadership from Tim Judge, the executive director of the Leadership Initiative at Fisher College of Business and a top-ranked researcher in the field.

Goodyear’s Billy Taylor: ‘Engaged, empowered people are your greatest asset’

Billy Taylor wrapped up a three-year stint running Goodyear’s manufacturing plant in Lawton, Oklahoma, with more than a few reasons to be proud.

Under his leadership, safety improved, processes streamlined, and projects racked up millions of dollars in savings. The turnaround job was enough to win the coveted Shingo Prize Silver Medallion for Operational Excellence, what’s been dubbed the “Nobel Prize for operations.”

It was, Taylor thought, his ticket to world headquarters.

The powers that be had other things in mind, dispatching him from one challenge to his next: A plant in Fayetteville, N.C., where demand for tires was outstripping the production pace by nearly 20 percent. In Taylor’s first two weeks walking the floor as plant director, he made it his mission to “seek to understand before I sought to change.”

The diagnosis: “I had great people but they didn’t understand what winning was,” Taylor said.

‘Most leaders struggle with letting go’

The story of the successful Fayetteville turnaround was just the next step in a journey that eventually led Taylor to where he is today, overseeing all North America manufacturing for the iconic, $15 billion-a-year brand and Center for Operational Excellence member. Taylor shared insights from his decades driving transformational change during his keynote address at COE’s 25th anniversary celebration in September, where nearly 200 industry leaders gathered to ring in the center’s quarter-century milestone.

Taylor’s insights on leadership are rooted in a passion for engaging people, a core element of transformational change that’s become the centerpiece of his frequent speaking engagements.

“Great leaders respect their people,” he said. “If you make people visible, they will make you valuable.”

Reflecting on the Oklahoma and North Carolina plant turnarounds, Taylor said the crucial next step after defining winning was in giving his front-line employees a sense of ownership in executing on the plant’s broader strategy. Though essential, it’s not always easy for managers, he said.

“Most leaders struggle with letting go,” Taylor said. “People are not your greatest asset. Engaged, empowered people who own your strategy are your greatest asset.”

By putting that into action, Taylor said, he ultimately oversaw a transformation in Fayetteville that resulted in a 14 percent bump in tire production with a 4 percent drop in hours worked – “no investment, no additional equipment, just ownership.”

Sustaining this culture of continuous improvement, Taylor said, means building a regular cadence around recognizing people as they execute on strategy and “celebrating the process” that’s driving gains. And it’s something he says he still does as one of the highest-ranking leaders in the company.

“Now that I run North America, it’s still simple. I still show up to celebrate the process, and I never miss the opportunity to share best practices.”

Billy Taylor was a featured keynote at COE’s fall seminar along with LeanCor Supply Chain Group CEO Robert Martichenko, who stressed the importance of connecting different parts of the business to create a lean culture.

A 15-minute recap and full-length recording for each session are available in the Digital Content Archive on COE’s members-only website (authenticated account required for access).

COE ringing in 25th anniversary at September seminar

The Center for Operational Excellence is ringing in a momentous anniversary with a celebration in September featuring two standout keynotes.

COE’s fall kickoff seminar – a formal celebration of its 25th anniversary – is set for Friday, Sept. 15, where Robert Martichenko, CEO of LeanCor Supply Chain Group, and Billy Taylor, head of North America Manufacturing for Goodyear Tire & Rubber Co., are set to present. The sessions will bookend a tailgate-themed networking lunch … with some to-be-announced special guests.

LeanCor CEO Robert Martichenko

Both keynote speakers are renowned storytellers who bring a blend of personal and professional experiences to their respective stories of spending decades driving transformational change. Martichenko, set to keynote at 10:30 a.m. on Sept. 15, founded LeanCor with a mission to advance the world’s supply chains through training, consulting and third-party logistics. He’s emerged as a globally recognized thought leader in lean thinking and end-to-end supply chain management, as well as an award-winning non-fiction and fiction author.

Martichenko’s keynote, “Lessons in Lean: Lessons in Leadership,” focuses on what he’s learned while building organizational cultures focused on lean thinking and relentless business improvement.

Billy Taylor, Goodyear

Taylor of Goodyear, set to speak after lunch at 1 p.m., is a sought-after speaker and self-described “evangelist” for people-inclusion processes in operational excellence. In his keynote, “People-Driven Operational Excellence,” he charts his journey from fledgling plant manager to top leader at an iconic brand, offering insights on keys to building a high-performance, self-sustaining culture that’s the foundation for company-wide success.

Both sessions also will be offered to employees of COE member companies via live webcast, hosted and run by Mills James. Registration for webcast and in-person attendance – expected to reach capacity – will open the week of Aug. 7. Read more about both speakers on our website.

The event comes a full quarter-century after the founding of COE, which started in 1992 at the Center for Excellence in Manufacturing Management. Once narrowly focused on the application of lean in the manufacturing sector – and touting only four members – the center has grown along with the field of operational excellence to encompass the notion that process improvement principles are intrinsic to competitive edge for any industry.

Today, COE has a roster of nearly 40 member companies and engages with thousands of operations leaders across the country in the shared pursuit of building better processes in a culture of continuous learning.

Fisher centers’ collaborative series shines spotlight on ‘talent war’

Fisher College of Business’ research and business partnership centers might be individually focused on an eclectic range of themes, but finding common ground is easy when it comes to today’s toughest business challenges.

A group of four Fisher centers teamed up this summer to tackle two of the biggest challenges companies face today: growing and developing talent, and unlocking the power of data and digital disruption. Nearly 150 members and guests of the Center for Innovation and Entrepreneurship, Center for Operational Excellence, National Center for the Middle Market and The Risk Institute gathered in July for a deep dive into winning the “talent war,” with the disruption-focused follow-up set for Wednesday, August 16.

The big picture

Keynote speaker Marek Gootman of the Brookings Institution

The July “Winning the Talent War” session turned a spotlight on some of the key issues employers are facing as they match the supply in the talent pool with their hiring needs. A region’s talent pool, keynote and Brookings Institution Fellow Marek Gootman told the crowd, is nothing short of the key to its vitality.

“One of the things that connects everyone is where we’re pooling our talent from,” he said, “and talent is a key driver of economic competitiveness.”

Harnessing the potential of the labor pool today, however, means facing serious headwinds, Gootman said. For one, employers are demanding more workers with a college education despite the fact that many out-of-work members of the labor pool don’t have more than a high school education. A recent Brookings analysis of 130 population centers by county – among them Columbus’ Franklin County – found that 55 percent of those out of work have, at most, a high school degree, while only 20 percent have a bachelor’s degree. In Franklin County, that gap is even wider.

Brookings, a research partner with Fisher’s middle market center, is an advocate for workforce programs – apprenticeships and social enterprise initiatives, to name a few – that can help solve this supply-demand imbalance. And with technology’s reach extending these days to traditionally “non-digital” jobs, building workforce skill in this area is quickly taking on critical importance, Gootman said.

“This is something that everyone, large and small, is going to be grappling with,” he said.

While these challenges might prove formidable to larger companies, they can be downright crippling to the middle market sector, whose companies create 60 percent of the country’s new jobs but can lack the capacity or perspective to reach outside their four walls for workforce help. New survey data Brookings compiled with the Fisher middle-market center and released at the session showed the sector’s firms struggling to hire for needed skills, underinvesting in talent planning and facing intense competition from larger companies.

By moving from an adversarial relationship to one that’s focused on building a better region, middle-market firms and larger companies can join forces and better leverage support from the public sector, Gootman said.

“You’re reliant on these mid-sized firms for the economic vitality of the region,” he told the crowd. “Large firms can find their own value in working with the middle market.”

The ground war

talent war panel
The discussion panel, moderated by Fisher Prof. Marc Ankerman, featured HR leaders from Cardinal Health, Marathon Petroleum, Nationwide and Wendy’s.

Shifting demographics and an explosion of digital technology are very much on the minds of top talent leaders at some of Ohio’s biggest brands, who joined Fisher Prof. Marc Ankerman for a panel discussion following Gootman’s keynote. In a wide-ranging question-and-answer session, human resources leaders from Cardinal Health, Marathon Petroleum, Nationwide and Wendy’s Co. grappled with the challenges ahead.

At Nationwide, a top Columbus-area employer, process automation and the rise of driverless cars are two technology-centered trends likely to disrupt not only the company’s base of 10,000 call-center associates – but the insurance models at the heart of its business, said Kathy Smith, the insurer’s VP of talent development. The oldest business represented on the panel – 125-year-old Marathon Petroleum – is similarly bracing for technological upheaval, but also investing in readying its existing workforce for it.

“We’re really focusing on repurposing our workers’ skills and preparing them to learn automated technology,” said Tony Moore, head of talent acquisition.

Technology is even transforming the hiring processes at the heart of human resources, said Will Shepherd, Wendy’s director of enterprise learning and development.

“We’re having to meet applicants where they are from a technological standpoint, and recruiters are stepping that up,” he said.

No matter what technological leaps are around the corner, panelists told the crowd they still have an eye on the kinds of capabilities that won’t show up on a resume, Smith of Nationwide highlighting collaboration and “emotional intelligence” as critical.

“We need to continue to build skills in the hard stuff,” said Kelly Wilson, VP of talent management at Cardinal Health, “but the soft skills are so important.”

Coming up

The collaborative summer sessions continue with a look at data and digital disruption on Wednesday, Aug. 16, featuring speakers from Cisco, Safelite Group, Columbus-based data analytics startup FactGem and the Ohio State University Moritz College of Law’s Program on Data Governance.

Seats allotted for COE are currently full but employees of member companies may join the waitlist for the seats by e-mailing Jackie McClure at mcclure.92@osu.edu. More spaces are expected to be released to the center the week of July 31, and those will first be extended to waitlisted attendees.

CoverMyMeds: Experiment, innovate, grow – hold the jargon

The routine “Best Places to Work” features that offer a snapshot of what it’s like to be a part of Columbus-based CoverMyMeds often focus on what stands out at first glance: The pool tables, the beer tap, the jeans-day-every-day vibe.

nate lusher covermymeds
Nate Lusher of CoverMyMeds presenting at the June 6 COE event.

Nate Lusher, an agile coach at the health-care software startup, says the key to understanding the company’s culture is to look closer.

“Those are great, but they’re not what’s going to keep you there for the long haul,” Lusher told attendees at a Center for Operational Excellence event Tuesday. “They’re an expression of our deeper culture.”

Lusher and colleague Rick Neighbarger, director of quality and risk management at CoverMyMeds, offered a peek inside the Columbus company’s culture at the latest meeting of COE’s IT Leadership Network series. They also detailed their own efforts to make tools and behaviors key to continuous improvement a part of it, a challenge that’s intrinsic to process improvement efforts at companies of any size.

CoverMyMeds, which automates the once-cumbersome prior-approval process for prescriptions, has been a part of the Columbus business community for not even a decade but has drawn attention for its rapid growth and status as a sought-after place of employment. The last time CoverMyMeds disclosed its annual revenue – about two years ago – it was nearing the $100 million mark, and the company just this year closed a deal to be acquired by health-care giant McKesson Corp. for more than $1 billion. Columbus Business First called the acquisition the biggest tech startup exit in the city’s history.

Beneath that surface layer of culture, which the company notably pledged to keep following the sale, is one that values and trusts its people. And the people themselves, Neighbarger and Lusher said, are primed to experiment and take action.

“We’re not afraid to try something out,” Lusher said. “We’d much rather dive in and do it and learn from something.”

The effort of turning that experimentation into lessons learned and, eventually, better processes has included the introduction of a number of lean and agile tools at CoverMyMeds: Kanbans and story cards, metrics on cycle time and work in process (WIP), and an articulated vision of product ownership, just to name a few.

What’s crucial, Neighbarger said, is not what the tools are but how they’re deployed.

“You can’t just pick up techniques that a large multi-national bank uses and drop them into a small health-care IT company,” he said. “You have to tailor your techniques to principles.”

That principle-first approach ultimately has helped gain traction at CoverMyMeds as the company works to deploy a broader quality strategy that continues to manage risks amid continued growth. In short, the jargon matters much less than the results.

“Our goal is not to become ‘agile,’” Lusher said. “Our goal is to become great.”

CoverMyMeds to share ‘stealth lean’ journey at June COE event

Columbus-based healthcare software maker CoverMyMeds made headlines earlier this year when McKesson Corp. announced a $1.1 billion deal to acquire the company, but it’s been a dynamic player in central Ohio’s tech startup scene for nearly a decade.

Fast-growing and routinely honored as one of the region’s best places to work, CoverMyMeds also has been working to ingrain a culture of continuous improvement into everything from its day-to-day software development to its big-picture strategy. But how does a structured approach to lean and agile thrive in a casual, jeans-day-every-day culture?

The Center for Operational Excellence is thrilled to host for its next IT Leadership Network forum on Tuesday, June 6, two leaders at CoverMyMeds at the forefront of its efforts to drive lean practices: Director of Quality and Risk Management Rick Neighbarger (pictured, right) and Agile Coach Nate Lusher. Neighbarger and Lusher in this wide-ranging discussion will offer insights on:

  • Operational excellence in a startup culture: Driving change in a consensus-building, not top-down, environment;
  • “Stealth lean:” Teaching the tools and behaviors without getting lost in the lingo;
  • Garnering buy-in: Selling change up and down the ladder; and
  • Moving forward in the face of change: Continuing a lean journey after the McKesson deal.

This session not only offers an inside look at the nationally recognized culture at CoverMyMeds but offers insights on leading and sustaining change that leaders can apply no matter the industry or company.

Click here to register for the morning event.

Do we really understand lean deployment in health care?

by guest author Aravind Chandrasekaran, associate professor of management sciences, Fisher College of Business

Anyone who has taught lean principles grounded in the famous Toyota Production System (TPS) to organizations outside the manufacturing industry has – at least once – heard this common refrain: “(Insert industry here) isn’t cars on an assembly line. This doesn’t apply to my work.”

A. Chandrasekaran
A. Chandrasekaran

Leading lean thinkers, of course, have learned how to work with individuals and teams to move past this roadblock and garner buy-in – that’s why the practices and tools intrinsic to TPS have made their way into countless industries. Lean still can be a target for criticism, though, and one need look no further for proof than an article published earlier this year in the New England Journal of Medicine – and the debate it ignited.

The January issue of NEJM featured an article called “Medical Taylorism” where authors and physicians Pamela Hartzband and Jerome Groopman assert that lean principles “cannot be applied to many vital aspects of medicine. If patients were cars, we would all be used cars of different years and models …” This tipped off a flurry of rebuttals, including one from Lean Enterprise Institute CEO John Shook boldly titled “Malpractice in the New England Journal of Medicine.” In his piece, which itself attracted widespread attention, Shook writes that the foundational lean principles of continuous improvement and respect for people are critically important in the health-care system.

Shook is right, but I’d like to approach this discussion from a different angle, namely that this line of criticism has emerged elsewhere – and it’s rooted in a lack of understanding of lean deployment.

One of my initial research areas sought to understand how standardization and “smart application” of Six Sigma principles can aid R&D and innovation efforts. I pursued this as a number of business press publications and industry practitioner blogs lamented the damage Six Sigma does to creativity and praised the need for variation for innovation. Several years of research with my colleagues in Fortune 500 companies made us realize such sentiments don’t hold much water. We found, in fact, that principles of Six Sigma – when applied to the innovation process correctly (hence the “smart” in “smart application’) – can help reduce unnecessary variation and stop worthless innovation activities that consume R&D funding.

Credit: bostonmagazine.com
Credit: bostonmagazine.com

I’ve more recently collaborated with researchers and physicians to tackle similar questions in health care. Once again, the findings – published in several academic and practitioner outlets – are very similar: The smart application of lean and continuous improvement principles can help develop a safe and patient-centered health-care system.

In arguing that patients aren’t cars, the NEJM’s authors are absolutely right – but they’re dead-wrong in concluding there’s no place for lean in “many vital aspects of medicine.” As with our R&D research, we’ve found that lean deployment in hospital settings minimizes unnecessary variation that comes from care providers, not patients. In fact, it frees up time and effort to cater to the necessary variability in a population diverse in its illnesses, economic backgrounds, languages and more.

As an example, I spent years with other researchers – including some physicians – looking at Ohio State University’s Wexner Medical Center, specifically a lean deployment effort in its kidney transplant discharge process. Medical research has found that transplant recipients after discharge must drink at least three liters of fluid a day – failure to do so can spike creatine levels, elevating blood pressure and increasing the likelihood of readmission. In our study, we found variations in how nurses delivered these instructions to patients: One nurse, for example, recommended drinking “a lot of fluids” while another suggested 100 ounces. Interestingly, nurses varied their wording across patients, while one patient would receive different instructions from more than one nurse. This wasn’t a matter of intentional deception, but the inconsistencies confused patients as they took in a tremendous overload of instructions.

Overhauled through the lean deployment via standard work design, nurses in our medical center now clearly explain the specific volume of fluid, use a jug to visually illustrate, and discuss the consequences of not following the instructions. Preliminary findings show this approach soothes patients’ anxiety levels and has reduced the chances of readmissions in the first month after transplant.

This isn’t just a lean approach to a problem – it’s a smart lean approach. And in an environment that, yes, isn’t cars on an assembly line, that matters more than ever.

COE members make ranks of ‘Best Places to Work’

Culture matters – and the companies that do it right know it pays dividends inside and outside their four walls.

This month, four Center for Operational Excellence members made the cut in an annual ranking by Columbus Business First of the Best Places to Work in the Columbus area. These companies scale the heights of the list by creating an environment where employees are engaged, inspired and driven to deliver.

The rankings – which came from a record 235 nominations – were made after employees at each nominated company completed a workplace satisfaction survey run by a third-party firm. Found among the 50 winning slots in five company-size categories are members:

Best places 2015Mills James – The Columbus-based, employee-owned creative media company ranked No. 8 in the “Large” category, for businesses with 100 to 249 employees – Mills James has 103 Columbus-area staffers and 160 company-wide. Summing up its secret to success, the Mills James team wrote: “We don’t hire employees; we hire principled, passionate, creative owners.”

Fuse by Cardinal Health – It didn’t take long for this scion of member Cardinal Health to make a mark as a top place of employment in the Columbus area. Cardinal Health opened this 122-employee innovation lab that develops commercial technologies for health-care customers little more than a year before it landed the No. 3 “Best Places” spot among large companies. Fuse, which is hosting a tour for next year’s Leading Through Excellence summit, said the company is “making it happen in health care” by having “killer talent” and being “big and visible.”

Safelite AutoGlass – The Columbus-based vehicle glass and claims management organization notched the No. 8 spot among extra-large companies in the “Best Places” ranking, for those employing 250 or more. Safelite, which has more than 1,200 employees in the Columbus area, said it works to create a “people-powered, customer-driven culture.”

bmw financial best places
The BMW Financial Services team accepts its Best Places To Work award.

BMW Financial Services NA LLC – The automotive financing arm of the iconic manufacturer landed at No. 6 in the extra-large company ranking. BMW Financial, which employees 570 in Columbus and more than 700 company-wide, wrote that “our associates are the key to our success.”

Read more about the “Best Places” winners at Columbus Business First.