Last year we created a video explaining the benefits of coming to the Annual Lean Healthcare Transformation Summit. The experiment went pretty well, so we are doing it again. Click on this image to watch the video.
I’ve been reading (and re-reading) books and articles about paradigm shifts and the laws of nature that actually govern this phenomenon. Here’s a short list:
The Structure of Scientific Revolutions, Thomas S. Kuhn (1962)
Chaos and the Evolving Ecological Universe, Sally Goerner (1994)
The Fourth Wave: Business in the 21st Century, Herman Bryant Maynard Jr. & Susan E. Mehrtens (1996)
Global Mind Change, Willis Harman (1998)
Design In Nature, Adrian Bejan and J. Peder Zane (2012)
So what? Most of what I’ve read in the last 20-30 years is related to what I’ve experienced in the work world (most of it in healthcare). What I have read and experienced seems to boil down to this:
We are living in an age which is undergoing a paradigm shift in thinking.
What we were taught, how we were taught and how we were treated (in school or at work) was based on the industrial view of the world. I use the word “was”, but I should say “is”. There is some evidence of change to a new way of thinking, but it is not (yet) a common view. It is actually quite rare.
In my last blog post, I explained the “S Curves” of paradigm shifts.
Here’s how I’ve been thinking about the paradigm shift in management and in healthcare:
I’m going to describe that little red box showing the paradigm shift from the industrial view to the knowledge age. The timeline below is the starting point. Current date (2015 as I write this) on the right, but where is the starting point?
I compare the timeline to something that most people would be familiar with – a football field.
Current state is the right-hand “goal line”. I will use the “hash marks” to put some history to what I am seeing in healthcare and management.
There is now much interest and activity about the use of lean thinking in healthcare. There are a few organizations (like ThedaCare, Virginia Mason, Denver Health and a few others) who turn their odometer to “zero” to the early 2000’s. That is roughly the “20 yard-line” using this time line.
These organizations learned from other industries and from consultants that introduced them to a model of management based on the Toyota Production System (TPS).
A new organization (ThedaCare Center For Healthcare Value) was formed in 2008 and a meeting was co-sponsored with the Lean Enterprise Institute where 50 healthcare organizations from around the world came together in Boston to discuss what would help them to continue to learn and apply this management method. That’s not even the 10 yard line.
I will put some context to this timeline by describing the other “goal line”. I will mark this as 1925. I could probably go back further, but this seems to be a useful starting point. Our timeline is at least 90 years long.
1925 is approximately the year that Walter Shewhart invented the control chart. What is the significance of that? Shewhart (a statistician) was working at Bell Laboratories on the problem of improving telephones and the telephone system. Efforts to improve telephones were actually making matters worse. People did not know how to react to the variation they saw. Shewhart discovered the difference between random variation and special cause variation. The control chart gave the user the guidance to know when the variation was from the system (random) and that action was needed to study and improve the system. The control chart also signaled special cause variation where it made sense to ask why those points were different.
W. Edwards Deming was a student of Shewhart’s who also worked at Bell Laboratories. Deming learned these methods and applied them to various industries including transportation, agriculture and the U.S. Census. These methods were also instrumental for the World War II production effort which allowed the United States and Allies to produce and distribute weapons and material with high reliability in an efficient manner.
Deming was a part of the post war recovery effort in Japan where he was helping with the census. His reputation for helping companies to improve their products and services had become known by the Japanese Union of Scientist and Engineers who invited him to teach them these methods beginning around 1950.
Deming brought new knowledge to the country of Japan. He taught them to see their company (and country) as a system, and how to react appropriately to variation. Their reputation for quality was poor prior to this time. They changed that reputation within 4 years. Japan has few natural resources and needs to import materials for production. The methods that Deming (and others) taught them helped them to make the best use of their resources. Their problem was quality and the ability to compete on the world market.
What did Japanese companies do with this new knowledge? They used it, experimented with it, and developed management systems over many, many, many years, and the improvement never stopped. A useful book that describes this time is The Birth of Lean.
What was happening in the West during this time? Our problem was not quality, it was quantity. There was pent-up demand from the Depression and then from World War II. The method of management in the US was focused on quantity.
The “mythology of management” (Deming’s term) grew from the industrial paradigm. We experienced an expanding market where success was nearly guaranteed regardless of the style of management. The command and control view of the organization (hierarchy) became predominant, along with management by objectives, management by results, ranking and rating and focus on the individual (the performance evaluation). This continues to be the prevailing style of management in the U.S. to this day. It is embedded into our culture. It informs our education system (the factory view, pouring information into the students grade by grade) and our government.
By the 1970s it became apparent that US auto-makers could not compete on the global market. The same was true for the electronics industry. On June 24, 1980 a program “If Japan can… Why can’t we?“ was broadcast by NBC News as part of the television show “NBC White Paper” and is credited with beginning the Quality Revolution and introducing the methods of W. Edwards Deming to American managers. Here’s a short excerpt from that program:
Bill Conway (manager at Nashua Paper Company): Many of these programs on statistics have died in American companies because they didn’t get the top management support. Now, why top management does not believe that this is the way the Japanese have improved their industry over the last 30 years I don’t know.
Dr Deming: I think that people here expect miracles. American management thinks that they can just copy from Japan—but they don’t know what to copy!
Demand for Dr. Deming to come to American companies exploded over night. In response to the questions from desperate American managers, he wrote and published his 14 Principles for Western Management (14 Points). He also described the 7 deadly diseases of Western Management and the obstacles that prevent Western management from learning and adopting the theory and methods that were embraced by Japanese companies after WW II.
Here is one version of the 14 Points (from Out of the Crisis):
1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.
2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.
3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.
5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.
6. Institute training on the job.
7. Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.
8. Drive out fear, so that everyone may work effectively for the company.
9. Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.
10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
11a. Eliminate work standards (quotas) on the factory floor. Substitute leadership.
b. Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.
12a. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.
b. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective.
13. Institute a vigorous program of education and self-improvement.
14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.
These are principles for this new economic age, for the “knowledge paradigm”.
Deming also described the diseases which afflict Western management (the “mythology of management” as he described it):
1. Lack of constancy of purpose to plan product and service that will have a market and keep the company in business, and provide jobs. Deming called this “the crippling disease”.
2. Emphasis on short-term profits: short-term thinking (just the opposite from constancy of purpose to stay in business), fed by fear of unfriendly takeover, and by push from bankers and owners for dividends.
3. Evaluation of performance, merit rating, or annual review.
4. Mobility of management; job hopping.
5. Management by use only of visible figures, with little or no consideration of figures that are unknown or unknowable.
Deming described two additional diseases that are unique to the United States:
6. Excessive medical costs.
7. Excessive costs of liability, swelled by lawyers that work on contingency fees.
In addition to the diseases, there are (in Deming’s words) “a whole parade of obstacles. Some obstacles are in fact candidates for front rank in effectiveness, along with the deadly diseases, though most of them are easier to cure than the deadly diseases.”
– Hope for instant pudding.
– The supposition that solving problems, automation, gadgets, and new machinery will transform industry.
– Search for examples.
– “Our problems are different.”
– Obsolescence in schools.
– Poor teaching of statistical methods in industry.
– Use of Military Standard 105D and other tables for acceptance.
– “Our quality control department takes care of all our problems of quality.”
– “Our troubles lie entirely in the work force.”
– False starts.
– “We installed quality control.”
– The unmanned computer.
– The supposition that it is only necessary to meet specifications.
– The fallacy of zero defects.
– Inadequate testing of prototypes.
– “Anyone that comes to try to help us must understand all about our business.”
Another important date on this timeline is 1987.
This was when the word “lean” was used to describe the phenomenon that was being seen in the automotive industry. Womack and Jones wrote about it in The Machine That Changed the World, describing what was becoming known as the Toyota Production System.
In 1993, Deming published his description of the knowledge behind the 14 Points – the system of profound knowledge. The layout of profound knowledge appears here in four parts, all related to each other:
• Appreciation for a system
• Knowledge about variation
• Theory of knowledge
This is the knowledge that we need to understand and use for this new paradigm – the knowledge paradigm.
Healthcare in the U.S. has been raised on an expanding market, but those days are coming to an end. More hospitals, more beds, more doctors, more nurses, is not the answer.
Healthcare seems to be trying to copy from other industries (and from each other), but (in the words of W. Edwards Deming) “they don’t know what to copy!”
Perhaps healthcare needs a bridge to get from the prevailing style of management to the new paradigm? That’s the topic of next week’s blog.