Hospitals and health systems are clinging tenaciously to the belief that their economic survival depends on their embracing continuous quality improvement and Lean methods. After all, in a time of ratcheted-down reimbursement, the need for a little belt-tightening and quality improvement seems obvious.
However, as authors Tyson Browning and Nada Sanders remind us in their book Can Innovation Be Lean?, “Lean practices were pioneered in repetitive production systems characterized by relative stability and certainty.” Though hospitals strive for minimization in variation to create repetitive production systems, there are few things more diverse than a patient’s presentation of illness, just as there are few things less stable or certain than health care.
There is little question that CQI and Lean initiatives have been a boon for numerous consulting firms. What’s less clear is the ultimate benefit to hospitals and health systems.
Engagements designed to trim the fat of a bloated regional health system can cost millions; they also require managers to have a singularity of focus while operating in a highly dynamic market. Short-term gains in operating efficiency may occur at the expense of developing the long-term vision needed to disruptively transform the organization into a sustainable provider of care. Innovation becomes the casualty of process improvement, and the hospital or health system takes one step closer to obsolescence.
Hard to imagine? That’s what the leaders of innumerable disrupted organizations thought when transformational change forever morphed the very face of their industry. There are boundless illustrations, including how major corporations, such as DEC and IBM, adjusted to the emergence of the microcomputer. IBM transformed its business model while DEC closed shop.
Harvard professor Clay Christensen derived the term disruptive innovation to refer to a process that creates new markets for products or services based on radically new business models, enhanced technology and other changes that forever alter the status quo. Christensen believes that many of the same conditions existing within health care today catalyzed disruptive innovation in other industries. More than a decade ago, writing in the Harvard Business Review, Christensen and colleagues observed:
“The massive financial losses that hospitals and managed care institutions are suffering today mirror exactly what happened to the dominant players in other disrupted industries. And they are responding in the same way — by tightening controls on their existing business models. They are merging, closing facilities, laying off workers, forming buying groups, delaying payments, adding layers of control-oriented overhead workers, and hiring consultants — while going about their work in a fundamental unchanged way.”
Barriers to Innovation
No sane person would refute the fact that process improvement, with a focus on improving efficiency and efficacy, should be a core tenet of all institutions. It has been and continues to be desperately needed in health care. What it cannot be, however, is an impediment or substitute for the disruptive innovation that needs to catalyze metamorphic change in an industry characterized by a grossly outdated model of care delivery and reimbursement.
What stands in the way of pursuing dual paths toward process improvement over the short term and transformational change over the long term? In a word, resistance — resistance to change due to the perceived threats associated with abandoning familiar ways of doing business. As Christensen and others have stated: “Powerful institutional forces fight simpler alternatives to expensive care because those alternatives threaten their livelihoods. And those opponents to low-cost change are usually lined up three to four deep.”
Health care leaders have long sought to bask in the halo of protecting the community’s health. Yet, under their watchful eyes, too many provider organizations have devolved into inordinately complex systems with a seemingly insatiable appetite for resources, all the while failing to meet their core function of optimizing the health of a defined population.
So, where do you go from here? Don’t go out tomorrow and fire your legions of Six Sigma black belts. If properly used, they can be wielded to great advantage over the short term in improving performance. Instead, create an equally powerful counterbalancing force to linear process improvement — creative, disruptive innovation — within your organization.
Hallmarks of Innovation
Step 1 is to establish a culture of innovation — a difficult process that must be embraced both from the top down and the bottom up. Innovative cultures share a number of key tenets, including the following:
Encouragement for the open expression of ideas — no idea, regardless of how seemingly outrageous on the surface, is summarily dismissed. After all, flashes of brilliance are difficult to detect when one is wearing blinders. Learning to take off the blinders takes time and a high level of awareness.
Recognition that great ideas are not the exclusive province of senior managers and that they can surface at any level within the organization. All internal stakeholders should be welcome at the table of innovation. Innovative strategic planning processes, such as appreciative inquiry, developed by Professor David Cooperrider at Case Western University's Weatherhead School of Management, can harness the broad power of the organization to innovate.
An appreciation for the fact that great ideas may emanate from outside the organization — from patients, vendors and other parties who feel a tie or loyalty to the hospital or health system. As a starting point, consider establishing a patient innovation council charged with developing unique improvements yet to be envisioned by management.
Cultivation of an appetite for research into how disruptive innovation has changed other industries, and the degree to which some innovations have applicability in health care.
Recognition that change is both difficult and threatening, in various degrees, to people throughout the organization. Rather than being chastised, these people need to be understood and encouraged to understand the virtues of embracing innovation.
Traits of Innovators
Finally, leaders of innovative cultures should consider establishing the position of chief innovation officer. The importance of selecting the right person for this position cannot be overstated. The executive team needs to work closely with human resources to define the characteristics they are seeking in a chief innovation officer, as well as the precise job description and scope of authority. Here are a few thoughts, however, to guide you:
· Innovators have difficulty following standards pathways or protocols. Rather, they prefer to intuitively seek out more efficient or effective ways of managing challenges. Their solutions are often far outside the box.
· Innovators are relatively intolerant of organizational resistance to change. They neither understand nor appreciate the value of an organization’s muscle memory. Innovators are the employees who will poke managers with a sharp stick if they fail to get the response they seek.
· Innovators are relatively fearless when it comes to change, for change is as natural a part of their lives as is breathing. Their worth and identity is not tied to the current job. It is based on where they are in their existential search for meaning.
· They may disregard corporate protocol as being superfluous and annoying — including such things as chain of command.
· They may not filter what they say or how they say it. After all, it is the truth, from their perspective, and as such, it need not be framed or apologized for.
· Such individuals need to have a culture that can embrace and adapt to their idiosyncratic nature. Many of these traits are immutable, though good innovators can be coached on how to get their ideas across in a politically astute manner.
If you can create the right conditions for such an innovator, you should expect:
· radical, out-of-the-box thinking that will outstrip any linear planning processes currently in place in your organization;
· vision that seeks possibilities previously completely oblique to your organization and leadership team;
· synergies that were not previously identified;
· the ability to challenge and catalyze positive change in your corporate culture;
· the ability to attract great talent to your team.
Remember, change of this magnitude is extremely hard work. However, with the right culture coupled with innovative leadership, your organization can become a leading force among the next generation of health care providers in the United States.
John Leifer is the author of The Myths of Modern Medicine: The Alarming Truth About American Health Care, and the CEO of the Leifer Group, a health care strategy firm in Leawood, Kansas.