enhancing continuous improvement, lean and six sigma ... continuous improvement, lean and six sigma...

Enhancing Continuous Improvement,

Lean and Six Sigma Efforts

with Employee Suggestion Programs

Presented by

Presentation Overview

• Continuous Improvement, Lean and Six Sigma efforts

increasingly common in healthcare today

• Those efforts can be enhanced through a well-designed

team-based employee suggestion program

• Results from healthcare institutions that have launched

such programs

Ron Bachman

– Former Ohio hospital CFO/CEO

– Leads Advisory Board for Performance Plus

– Twice earned Ohio Health President’s Award

for clinical quality, patient satisfaction,

employee engagement/satisfaction and

financial performance

Presenters

Bob Stergos

– 20 years experience in employee engagement

– Designed, sold and implemented team-based

engagement/suggestion programs for major

hospitals, airlines and manufacturing

companies

– Served as successful Team Leader in

6,000-employee program

– Active member of Ideas America (national

suggestion system association)

Presenters

Definitions and Perspectives

Current cost-cutting strategies

• Become part of a system rather than remain independent

• Downsize

• Join Group Purchasing Organization (GPO)

• Create small group of Continuous Improvement/Lean/Six Sigma

specialists to work on select, management-directed projects

• Continuous Improvement (CI)

– Gradual, never-ending change

• Lean

– Elimination of all non-value activities and waste

• Six Sigma

– Decrease in process variation

Definitions

• Typical suggestion program– Low-key, ongoing

– Under-promoted

– Individual idea submitters

– Nominal results

• Well-designed suggestion program– High-energy, short-term

– Highly-promoted

– Team-based

– Dramatic results

Definitions

Typical Suggestion Program

• Individual initiative

• Low management priority

• Long-term, low-key

promotion

• Undocumented ideas

Well-Designed Suggestion Program

• Voluntary cross-functional

employee teams

• Highest management priority

• 90 days, energized promotion

• Fully-developed ideas by

teams

What are the differences?


• No training for

participants or evaluators

• Evaluation perceived as

subjective and slow

• Negligible impact on P&L


• Extensive orientation and

training

• Timely and objective

evaluation process

• Significant impact on P&L



• Limited recognition of

employee efforts

• Cash awards lack trophy

value/proven not as

effective

• Does not address

implementation


• Broader recognition of

employee efforts

• Promotable merchandise

awards that produce

greater results

• Drives implementation


CI/Lean/Six Sigma

• Less than 10% of

employees involved

• Management-directed

projects

• Low-key management

support


• 15-75% of employees

involved

• Frontline-employee

initiated projects

• Highly-visible

management support


CI/Lean/Six Sigma

• Very small number of

employees trained

• Involves a small number

of lengthy projects

• Limited awards and

recognition


• Every team leader, team

coach and evaluator trained

• Motivates hundreds of ideas

in 3-month timeframe

• Positive, immediate and

certain awards and

recognition


CI/Lean/Six Sigma

• CI/Lean/Six Sigma specialists confined to limited number of projects per year

• No element of “gain-sharing” at frontline employee level


• CI/Lean/Six Sigma specialists

serve as team coaches,

helping dozens of employee

teams document their good

ideas

• High-degree of “gain-sharing”

instilled at frontline employee

level

Comparisons

Shortfalls of Current Strategies

• Healthcare systems lessen local control;

decisions are made from corporate perspective

• Downsizing obviously lessens employee morale

• GPO arrangements focused heavily on supply chain

• CI/Lean/Six Sigma projects directed by management and

involve small percentage of employee population

• Specialized process control and cost-containment training

confined to “the few” rather than “the many”

• Organizations still struggling to positively engage frontline

staff

Suggestion Program

Overview

Suggestion Program Structure

Cross-Functional Teams(1 Team Leader per 5-member Team)

Team Coaches(8-10 Teams each)

Program Manager(In larger organizations,

may need Assistant

Program Manager)

Evaluators

Implementer(s)

• Select, research and develop

ideas

• Document and submit ideas

• Assist teams in program

mechanics and idea valuation

• CI/Lean/Six Sigma specialists

Resource

Personnel

• Administers program

• Manages program results

• Evaluate ideas

• Assign/initiate implementation

of approved ideas

• Provide costing info to teams

• Close the loop; implement ideas

Motivation: Award Opportunities

Team Members

• Share equally in awards for approved

ideas based on projected net value

Team Coaches

• Earnings based on performance of their

teams

Evaluation Committee Members

• Typically VP level and above

Motivation: Award Opportunities

Program Manager

• Earnings based on execution of

assigned duties and performance

against program goal

Resource Personnel

• Earnings based on supplying timely

information

Top Performers

• Earn pre-determined top awards

The Role of Team Coaches

• Coach teams to success

• Facilitate idea generation and

concept development

• Provide initial screening of ideas

• Act as intermediary for required information

• Assist teams in idea valuation, utilizing

Continuous Improvement, Lean/Six Sigma

training

• Maintain program enthusiasm

The Role of Leadership

• Actively supporting and

encouraging participation

• Challenging employees to find

solutions

• Making exchange of information

and data easy and transparent

• Reviewing ideas and giving

feedback on a timely basis

• Celebrating success

Suggestion Program

Results and ROI

History

• First team-based programs began in 1982

• Typically high-energy, short-term programs

• Operated 200+ programs over 20 years

INDUSTRY PROGRAMS IN SAMPLE

EMPLOYEES IN SAMPLE

ANNUALIZED SAVINGS

$/APPROVED IDEA

MANUFACTURING 48 122,109 $448,618,714 $18,440 PUBLISHING 11 13,957 $31,527,763 $18,351

AIRLINES 13 314,193 $574,036.000 $55,331 HEALTHCARE 83 170,855 $186,498,806 $13,674 INSURANCE 15 43,301 $107,142,000 $19,048

BANKING 16 33,363 $79,011,000 $16,626 TELECOM 5 34.750 $103,027,900 $17,059

Sample Healthcare Results

(80+ total healthcare programs)

CLIENT ELIGIBLE EMPLOYEES

# OF IDEAS IMPLEMENTED

ANNUALIZED SAVINGS

$/APPROVED IDEA

Baylor Hospital 5,452 524 $8,452,380 $16,033 Good Samaritan 4,217 347 $5,490,257 $18,288 Marion General 800 163 $1,170,558 $ 6,969

Pennsylvania Hosp. 3,500 358 $2,366,000 $17,385 St. Thomas Hospital 2,975 355 $5,533,850 $16,025

Tulsa Regional 1,581 161 $3,248,735 $19,673 Mercy Hosp. (FL) 1,372 173 $2,305,908 $13,329

Scott & White Hosp. 2,980 207 $3,217,110 $15,542 Mt. Sinai Hosp. (NY) 7,165 221 $5,335,923 $24,144 Fort Sanders Hosp. 2,378 573 $3,162,825 $5,520

Baptist Med Ctr. 2,100 402 $6,956,055 $17,304

Current Case Studies

CLIENT ELIGIBLE EMPLOYEES

# OF IDEAS APPROVED

ANNUALIZED SAVINGS

$/APPROVED IDEA

Methodist LeBonheur

11,000 15 $1,015,240 $63,452

Children’s Health Campaign 1

6,000 79 $4,387,772 $55,541

Children’s Health Campaign 2

6,000 66 $1,974,911 $ 20,572

OSF HealthCare 2 hospitals of 8

1,400 63 $615,466 $8,431

• Kim Besse, CHRO

“I was impressed by the creativity and engagement of team members to suggest improvements and to work together to identify ways to improve our organization. Many ideas required cross-functional teamwork and exploration…and all involved were willing to learn from each other to achieve a positive outcome.”

Children’s Health

• Joe Don Cavendar, Associate CNO

“I was impressed with the number of ideas submitted. Many were: ‘Wow. Why didn’t I think of that? Ideas.’ I was particularly impressed by the thought and thoroughness behind many of the ideas. Many were final and ready for implementation the moment they were submitted. I really appreciate all the hard work on behalf of the staff.”

Forecasting Your 1st Year Return

Eligible Employees 10,000

X Participation Rate x 25%

Employee Participating 2,500

÷ Members per Team ÷ 5

Number of Teams 500

x Ideas per Team x 2.5

Ideas Generated 1,250

x Approval Rate x 35%

Ideas Approved 438

x Savings per Idea x $25,000

1st Year Gross Savings $10,950,000

1st Year ROI—

Based on 10,000 employees

3-Year ROI—

Based on 10,000 employees

• ROI Calculator to forecast savings:

http://bit.ly/1Rxtn5G

Forecasting Your Savings

http://bit.ly/1Rxtn5G

Conclusion

Suggestion Program Benefits

• Disseminates continuous improvement principles to frontline

staff by utilizing PI/Lean/Six Sigma specialists as

team coaches

• Improves business literacy and transparency at all levels

• Engages greater number of employees in

cost-reduction efforts

• Improves interdepartmental teamwork

and communications

Suggestion Program Benefits-2

• Impacts financial, organizational and employee needs

• Drives auditable financial results and significant ROI

• Program investment largely contingent upon results

• Provides WIIFM (“What’s In It For Me”) to frontline staff

• Reinforces “gain-sharing” culture via visible, tangible rewards

and recognition

Q & A

• Q & A

Performance Plus Contacts

Bob Stergos

Vice President, Engagement Practice

[email protected]

M: 636.795.5192

Ron Bachman

Advisory Board Member

[email protected]

M: 614.361.4308

www.ideasatwrk.com

mailto:[email protected]

mailto:[email protected]

http://www.ideasatwrk.com/

enhancing continuous improvement, lean and six sigma ... continuous improvement, lean and six sigma...

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