Don't bother me, I'm transforming

Talk of transformation seems everywhere in business today. But, what are we even transforming? The term itself resonates with everyone that is dissatisfied with where his or her company sits on the food chain of industry.  But without a clear definition of what transformation is, and what it looks like when successful, organizations will continue to operate in a state of ambiguity; some will sub-optimize their efforts at transformation, while others will miss it altogether.

We owe our employees a clear vision of what kind of transformation we are seeking: strategic, operational, or an entirely new business model. Scott Anthony provides a nice overview on the differences between each. Check that out, then return here for a roadmap.

In healthcare, transformation from cost to value puts context to the challenge of transformation that provides organizations a clear goal, but how to get there is less obvious. Lewis Carroll immortalized the phrase, “if you don’t know where you’re going, any road will get you there.” That offers little encouragement when you recognize how frustrated staff will become when talk of transformation is not coupled with clear tactics and strategies necessary to satisfy the need. This is where leadership comes in. More on that later.          

We believe we have developed a framework for initiating a business transformation that is adaptable to any organization. It begins with measuring baseline perceptions toward organizational capacity, borrowed from the well-respected CAP (Change Acceleration Process) methodology pioneered by GE.

CAP asks some key questions:

(1)         How capable are we to articulate a vision of industry leadership for our staff?

(2)         How competent are we to mobilize resources toward that vision?

(3)         How capable are we to sustain the good changes we have made?

(there are more questions to CAP and those provided here are simply to frame the discussion)

Charleston Area Medical Center, Charleston WV, utilized CAP by creating a survey of management attitudes, on a 5-point Likert Scale, when they first initiated their business transformation by implementing Lean Six Sigma across the organization (consolidated scores in graph below with 5 being “strongly agree"). In contrast to the Lewis Carroll quote, CAMC embraced the logic that the shortest distance between two points is a straight line. CAMC’s transformation hit a high mark when the organization was awarded the Malcolm Baldrige National Quality Award in 2015.

Results of annual survey of management from Charleston Area Medical Center, Charleston WV. In 2015, CAMC earned the prestigious Malcolm Baldrige National Quality Award. According to CEO David Ramsey, that journey began in 2000 with a transformation effort driven by the demands of the Six Sigma methodologies. The CAP survey provided an effective mechanism to prove the strategy was working.

Perceptions via tools like CAP must be married with the specific tactics and strategies necessary to initiate transformation. But how?

A Study by McKinsey & Co. suggested that efforts at business transformation were 79% more likely to succeed when employees were offered ownership over the effort, and encouraged to make change happen. Building on that finding, Oracle and Forbes argued that project portfolio management (PPM) systems are critical to operational transformation because they provide the vehicle for staff to direct improvement where it will be the most profitable. Most of us use these systems already to manage our personal finances, expecting greater returns from our investments – so applying a similar approach to resource allocation in the companies we run makes perfect sense. Forrester Research suggests a PPM system offers returns in excess of 250%.  

The CFO from Panasonic describes the benefits of a PPM this way:

“Now we look at the data, and we prioritize – will this project increase revenue? Will it decrease costs? Is there a new regulation coming that makes this a top priority? Then we look at resources, operations and our business units and we align them.”

It has been speculated that the best ideas come from the front-line workers and that management is largely unaware of the vast majority of problems well known to staff.  When the PPM is opened up to staff, ideas come in and are automatically prioritized. Perception meets reality as staff rate each other’s ideas, while the system uses impact and risk criteria to create a more objective view of the merits of each idea. Very quickly, the picture of what transformation looks like becomes tangible. The next step is to execute.

Anybody who has read my writing before knows that I am a strong proponent of the Lean and Six Sigma methodologies (see my earlier posts as well as the link provided here).  These approaches to transformation of processes have provided returns in excess of 7:1 for CAMC, and just about every organization we’ve partnered with over the past 20 years. Commitment to methods like these, and a commitment to getting better at it every day, will lay the groundwork for execution.  Emotionally intelligent leadership creates the environment (the "grease") for it to move forward. When a reliable method, emotionally intelligent leadership and PPM are leveraged together, you will achieve the holy grail of transformation: sustainable improvement capability that allows you to control and direct your efforts at transformation like you are the pilot of a well-oiled, finely tuned, perfectly calibrated machine.

Please visit my many other posts and articles for more on Lean, Six Sigma, and Emotionally Intelligent Leadership.

If you were ever looking for a way to put business transformation on auto-pilot, then the approaches offered here provide the vehicle, and the Baldrige trophy may be your reward. This is truly transformation you can touch.

Yours in Improvement,

Ian R. Lazarus

President & CEO

Creato Performance Solutions

Ian is President & CEO of Creato Performance Solutions (www.creato.com). Creato offers Emotional Intelligence Training, Lean and Six Sigma Deployment and the COMPASS? Quality Management System, a PPM system for all types of organizations dedicated to improvement. Find more PPM resources here.