GO LEAN OR GO HOME
Updated: Feb 18
Lean six sigma principles are very distinct from “seasonal” cost-cutting measures typically adopted by some healthcare organizations. Unfortunately, seasonal cuts are the norm and really do hurt rather than help an organization. Many organizations typically reduce staff during slow periods as well as towards the end of the year only to re-hire right afterwards. It might seem like some cost savings were achieved but I actually consider this practice as “Penny Wise, Pound Foolish”, as the resulting long-term losses are far more reaching and tend to outweigh the short-term gains.
Organizations that focus on “making sure the numbers look good” are more likely to embrace seasonal cuts which appears to achieve immediate short-term gains, often negatively impacting service quality. Lean principles are typically implemented by organizations that are focused on long-term success and sustained growth as well as improving service quality. Lean principles help an organization to more accurately analyze their processes, anticipate needs and develop long-term solutions that help identify and eliminate or minimize waste.
Organizations that focus on “making sure the numbers look good” are more likely to embrace seasonal cuts which appears to achieve immediate short-term gains, often negatively impacting service quality.
There is a misguided opinion that portrays lean principles as a take-over and disruption of the status quo. This explains why there is almost always initial rejection or hesitation on the part of management to embrace it. Employees generally believe that the goal of lean principles is to eliminate jobs and so they often resist it's adoption. The fact is that lean principles help you eliminate waste, improve and optimize your processes, and ultimately reduce cost and increase revenue.
Using Lean six sigma principles, an organization can eliminate non value-adding activities, optimize value-adding activities, set up visual monitoring tools and continuously improve their processes over time. This approach ensures measurable progress, improved patient experience, increased staff engagement and ultimately increase in revenue. In order to be successful, Lean six sigma implementation requires an all-in commitment from all levels across an organization. It is not usually an easy task but is achievable if everyone is working towards the same goal. Remember that “Nothing good comes easy".
There are three types of activities in every organization.
Activities that cost money directly or indirectly, but add value.
Activities that cost money, don’t yield direct returns but are necessary to sustain those activities that add value.
Activities that cost money, do not add value and are not needed to sustain the value-adding activities.
Identifying these steps is the beginning of developing a strategy for eliminating waste, streamlining processes and optimizing the value-adding activities. Only one of these groups of activities needs to be eliminated in order to ensure that cuts are not made in the critical areas that reduce customer satisfaction or minimize customer experience. Hopefully your guess is that the last group of activities, i.e those that cost money, do not add value and are not needed to sustain the value-adding activities need to be eliminated. This makes way for the value-adding activities to be improved to a standard that meets your initial goal and then continuously improved over time.
Lean methodology helps organizations plan a long-term strategy for sustained growth and increased revenue.
Potential consequences of cutting costs in the wrong areas
Loss of quality employees
Higher turnover rate
Lack of loyalty from the surviving employees
Overall demoralization of remaining employees
Difficulty attracting quality talent
Increased cost to rehire and train after each cost-cutting staff reduction
Decrease in service quality
Longer service turn around times
Decreased patient satisfaction scores
Increased regulatory and compliance issues
These consequences can be avoided by working with a lean methodology specialist to develop a solid strategy that reduces cost in the right places and ensures continued growth and profitability. Lean six sigma will become more popular if key decision makers took the time to better understand what Lean is, what it is not and what their organizations stand to lose or have already lost by refusing to “Go Lean“.