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Remembering Mike

December 21, 1954-
August 9, 2012


New Blog Post

Four Themes to Successfully Navigating the Supreme Court Decision

The decision by the U.S. Supreme Court to uphold the controversial Patient Protection and Affordable Care Act confirms the direction of healthcare reform that had already begun a few years ago.  Many payers and providers, responding to the slowly emerging regulatory architecture of the law, have embarked on large scale transformational initiatives which will fundamentally change their business models forever.

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New Article

Payers and Providers: The Pressure On Payers Is Relentless

No matter the outcome of the Affordable Care Act, the long-term picture for payers remains uncertain. Even if all the ACA provisions are enforced by the Supreme Court, there are still many issues to sort out. If some of the provisions are struck down, then other issues will be encountered. In an unpredictable business environment, Blue Cross Blue Shield Montana decided to give itself a physical and make process improvements to control what we could control.

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Borrowing from Industry's Playbook, Big Government Goes Lean

Source: Guidon Performance Solutions – July 11, 2008
By: Tom Morin & Geoff Williams

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Government and industry have always been like two siblings. They may squabble a bit, but in the end, they often share toys and tools that serve the greater good. Efficiency and productivity are two goals that both parties agree are helpful in both domains.

After road testing Toyota’s lean culture in a myriad of applications, business is today helping to make government better by sharing a proven methodology called LeanSigma, a unique fusion of Lean and Six Sigma. As a result of the adaptation of tools and techniques from “Lean” in the business sector, there is dramatic change underway in the effectiveness of government agencies at all levels.

Civil servants who have adapted the battle tested principles of LeanSigma are reporting dramatically reduced cost, huge elimination of waste and vastly improved service to their constituents.

LeanSigma debuted in government in 2004, when the Iowa state government introduced the business philosophy to two departments, and it was clear before the year was over that the venture was paying off.  The Department of Natural Resources (DNR) was one of the first two organizations within Iowa to integrate LeanSigma into its operations, and the results were remarkable.

Before LeanSigma, it had typically taken 28 months to process clean water construction project permits; after LeanSigma, the average time was 4.5 months. Landfill permits experienced a similar reduction in waiting periods, going from 187 days down to 30 days. The most significant change was in the time saved in devising corrective action for leaking underground storage tanks. It had normally taken an average of 1,124 days to develop a plan to stop hazardous materials from spreading into the soil and water. Now instead of three years, the waiting time has been reduced to only three months.

Not surprisingly, with results like that at the DNR and similar positive stories at the Department of Cultural Affairs, more Iowa government agencies embraced the LeanSigma methodology the following years.  In 2007, Iowa Governor Chester J. Culver declared October 2nd as “Lean Government Day” to raise public awareness of the benefits of “Lean” productivity improvement techniques for state government agencies and to recognize Iowa’s commitment to streamlining public services using the Lean culture.

In fact, on October 2 of that year, in Des Moines, a collection of government employees participated in what would be known as the first annual Lean Government Exchange, a summit that exposed the success of lean to a broader population of government. Participants included staff members from twelve state environmental agencies, not to mention federal, state, municipal and county government administrators, representing agencies from health care to human services. Eager to see how they could bring this new theory into their own departments, they were hoping to learn from counterparts who were already getting traction. For at this point, it wasn’t only Iowa using LeanSigma techniques - it had been successfully adopted more broadly by local and federal agencies in scattered pockets across the country.

That day in Des Moines, participants learned what many civil servants had already discovered.  While the LeanSigma culture is primarily about eliminating waste in the workplace, there is much more to it than that. It’s about freeing up people who were spending time doing things that didn’t add value and instead, allowing them the time and resources to focus on what really matters, making services run smoother, better and faster.

Other methodologies had been introduced to the government in the past, only to fade away after change had limited impact and the hype died down.  What makes the LeanSigma transformation methodology so effective is that the process is designed in a way so that improvements are continuous. It works because the people who make the decisions on changes are the actual people doing the work, and not higher-ups far removed from the day-to-day operations. It’s an obvious concept that’s often ignored in both the corporate and government sector.

These changes are accomplished by holding a Kaizen event.  Kaizen events were popularized by Toyota in their march to dominance in the auto industry.  It is a focused, hands-on change experience typically five days in length, in which a team of 8 to 12 people are brought in to study how the day-to-day operations of an office or department can be improved.

At the three-day conference in Des Moines, participants heard from Lean converts such as John H. Rutherford, the sheriff of Jacksonville, Florida, who shared how Lean had turned their police precinct into a model of efficiency. The mayor of Prairie du Chien, Wisconsin was also invited to discuss how LeanSigma had streamlined their infrastructure. A dozen or so speakers included Teresa Hay McMahon, the Performance Results Director of the Iowa Department of Management. She explained how LeanSigma was transforming the entire state into the type of well-run operation that all governments could aspire to be.

If you think it all sounds too good to be true, you fall into a big camp, and McMahon empathizes. “The best way to ‘get it’ is to experience and participate in a Kaizen event.  In no instance is it truer than in Lean, where ‘doing and seeing are believing,’ says McMahon.  “Even individuals who have participated in a pre-event meeting, to determine the scope, goals and objects of an event, often have trouble imagining how it will work in their own domain.”

Once they participate in a Kaizen event, McMahon says that she can see the transformation on the doubters’ faces, “moving from skepticism to enthusiasm.”

Small wonder there is initially skepticism. The idea that government is a matrix of red tape has been around seemingly forever. For instance, in 1912, when Raymond B. Fosdick was hired as Commissioner of Accounts for New York City, he griped to the New York Times, “The problem of municipal government today is not a problem of graft elimination, but of waste elimination. Lack of standards and general inadequacy confront us rather than dishonesty. The city strong box isn’t being robbed, but it is leaking.”

While the legacies of inefficiencies are old, the common sense solution, the LeanSigma transformation approach, has been around for awhile - just not in government. The lean way of thinking “sprang from years of ‘total quality management’ taught to the Japanese in the 1950s by the Americas, says Matthew May, a Lean expert who worked with Toyota for years and author of The Elegant Solution: Toyota’s Formula for Mastering Innovation (Free Press, 2006). “They sprang from the post World War II era when Japan didn’t have slack resources. They had to figure out how to do more with less, and it took years to develop the capacities and tools to do that.”

Many years later, in the 1980s, the American company Motorola launched a program called Six Sigma, which was devised to practically eliminate defects in manufacturing operations. The quality control offered striking differences in the end result of a product and that created a ripple effect in the business community. Lean manufacturing was soon popularized by Toyota. Where Six Sigma focused on quality, lean manufacturing stressed speed. Throughout the 1990s, businesses were constantly choosing between Six Sigma and lean manufacturing, and tinkering with the business practices. Lean manufacturing then began Lean Sigma, when TBM fused the best facets of lean and the quantitative measurement tool called Six Sigma.  Today, the practice has migrated from manufacturing into administrative workspace and that application spawned the language and practices that are now benefiting the public service sector.

In Fort Wayne, Indiana, Mayor Richard Graham has become well known around the city for his success with Six Sigma and Lean Sigma. In his last two terms, as his city has sped up processes from pothole repair to reducing the number of missed trash pickups, Fort Wayne has saved an estimated $30 million.

During those early days, when Mayor Richard would give speeches about Lean and Six Sigma, audiences were receptive, “but I didn’t get many mayors or county executives as takers,” recalls Richard. “But that’s starting to change.”

In fact, even the U.S. Marines has embraced the lean culture. David R. Clifton, SES, a civil servant with 35 years in the military, expressed the Department of Defense’s strong interest in lean. Clifton says the Marines want to be a continuously improving organization integrating “lean” in our DNA at all levels, and we want everyone, from the sergeant corporal to the maintenance guy at the facility, asking the question:  ‘How can we continuously improve?’ Kaizen, the Japanese word for continuous improvement, is an introspective approach to problem-solving that involves bringing everyone involved into the process. Once gathered, everyone analyzes how the process works from start to finish and eventually agrees on solutions that streamline the series of events that take place. When Kaizen events have been held in the past and have only specified one approach for tackling a problem - like only Six Sigma - an organization always risks sacrificing something important - perhaps you get wonderful quality but at the speed of molasses, or lightning-quick operations that produce a temporary or faux conclusion. There’s an old saying that goes, it’s hard to see the picture when you’re inside the frame. LeanSigma allows everyone to step out of the frame and see the big picture.

Lean experts say that during a typical government or service Kaizen event, at some point a white board will be filled with Post-It® notes, detailing all of the steps that it takes to, say, process a requisition order or get a pothole repaired. And because someone from every department, even the peripheral ones, is involved in achieving a singular goal - like hiring an employee or improving water quality standards - eventually you can start to see why the process falls down and why things get stuck.  At numerous Kaizen events, employees will often have an epiphany how something can work faster, and other co-workers will typically look relieved and say, “I’ve been trying to tell you this for five years.”

But Kaizen events are not a blame game.  San Diego County started by streamlining and managing its street database for the county fire stations. In one room, they had the fire chiefs, the water people, city and county planners: and everyone who had a stake in how the database would operate. At first, they thought they didn’t agree on much, but actually they agreed on all of the common goals and objectives that they wanted to achieve.

LeanSigma is in its infancy as far as transforming government, but the early adopters are enthusiastic. The LeanSigma transformation is being used to achieve world class government in Iowa more than in any other state in the union. McMahon recalls how impressed she was early on when the Department of Corrections wanted to work on their offender re-entry process. There were too many steps between offenders being notified by the parole board that they would be released, to the moment that they were released to the community. When you have an overcrowding population, and you’re trying to send off an incarcerated individual into the world with a positive frame of mind, a slow re-entry process can be a problem for both the penitentiary and the prisoner.

“Once the event was underway, the team realized that the process of preparing an offender to re-enter the community must begin as soon as the offender enters the correctional system, for example, while they were undergoing initial classification,” says McMahon. “This was a significant change of mind-set for both the correctional workers and the offenders.”

In the Pacific Northwest, Larisa Benson saw similar dramatic changes as director of Washington State Government Management Accountability & Performance.

“We worked with Child Protection Services and King County courts to reduce the amount of time social workers spend waiting in court,” says Benson. “Within 90 days, their wait times were cut by 25%. Why is this important? Every hour not waiting in court means another hour a social worker is out working to keep Washington’s kids safe from abuse and neglect.”

Benson cites off another example of what’s to like about LeanSigma:  “Does a water quality engineer want to spend time pushing around paperwork? No. They would much rather be working with people out in the field making sure drinking water is safe and clean.” And now that’s what the water quality engineers are doing, after participating in a LeanSigma Kaizen event.

Suddenly, in Washington state, at-risk children are safer and the water supply is better - and presumably indefinitely because one of the hallmarks of LeanSigma is that meetings are continually held to make sure that the gains made, are sustained and improved upon. It’s a trend that has government employees happier in their jobs and hopefully sleeping better because they’re able to do the jobs with the speed and efficiency they believed they were going to be doing them in the first place. Meanwhile, the public is reaping the benefits every time LeanSigma is internalized.

For years, when there have been complaints about government service and too much bureaucracy, members of the public have wondered why the government can’t be run more like a business. But thanks to LeanSigma, in many parts of the country people are now turning that age-old question over on its head - by asking:  “Why can’t businesses run more like the government?”

All contents © 2009 Guidon Performance Solutions, LLC. All Rights Reserved.

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