Andrew Miller's Business Checkup // Insights on Operational Effectiveness for Healthcare
Volume 29, August 2013
This monthly newsletter is designed specifically to help healthcare executives and business owners raise the bar within their organizations by providing insights on how to improve performance and maximize operational effectiveness and profitability.

Case Study

This case study was compiled from articles in various publications.

The Situation

A world-class hospital needed to improve its performance in many different areas. The hospital wanted to solicit improvement suggestions from employees but didn't know how to best go about it.

The Intervention

The hospital implemented an innovation acceleration program that allocated specific funding for initiatives and improvements that came from employees. The hospital hired a Chief Innovation Officer to implement the program and set up a committee to review and select the initiatives to be funded each year.

Employees were encouraged to submit new ideas for improvement and given a standard template to complete. The template contained all of the information required to help the committee assess and select the initiatives based on their impact and the ability to implement the ideas. The hospital then held monthly forums to present successfully implemented ideas to the rest of the hospital, thus encouraging even more ideas.

The Results
In the first two years of the program, more than 20 new initiatives were implemented, many in the clinical areas. These initiatives led to cost savings, reduced infection rates, decreased wait times and less invasive surgical procedures. The hospital is now trying to replicate those successes in non-clinical areas.
About Andrew Miller

Andrew Miller is a consultant, writer and speaker who has helped world-class organizations accelerate results and improve the speed, performance and efficiency of their organizations. His healthcare clients include renowned hospitals, global healthcare suppliers, shared service organizations, group purchasing organizations, private clinics and government institutions.

Andrew provides value to his clients by using his experience from both the private and public sectors to help maximize their strategic and operational effectiveness.

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What insights can you draw from this case study and how might they be applied elsewhere?

Innovation needs to be funded separately

To foster true innovation, it needs to be funded separately. Innovation cannot be properly assessed using standard metrics like costs savings. It needs to be reviewed based on longer term impact, likelihood of success, resources required, and other factors. Funding new ideas separately means that those ideas will be evaluated with a focus on those key factors.

Innovation needs to be formally managed

When people submit ideas for improvements and enhancements, they want to know what happens with those ideas. Are they forgotten about or are they each assessed against a common criteria? It has been shown that organizations that have a formal process for managing innovation (gathering and prioritizing ideas, selecting the best ideas and developing an implementation plan, and executing successfully), have a higher success rate in realizing value from those innovations. See this article for more details on managing innovation.

You need to share success stories

By having a monthly forum and sharing the success stories with the rest of the employees, the hospital in the case study above is encouraging others to come forward with new ideas. Once people see that the program is working, they become more inclined to come forward with their own ideas.


The Evolution of Healthcare Suppliers

Supplying goods and services to healthcare institutions can be a challenging business. These healthcare institutions are being asked to do more with less and legislation governing the industry is becoming more prevalent. Here are a few actual comments I have heard from clients and colleagues over the past few weeks:

  • "Our products are being commoditized"
  • "The RFP process wasn't fair"
  • "We can't get access to our users in the way we need to"
  • "Our customers won't return our calls"
  • "We get standard answers in debrief sessions"
  • "Our customers want to negotiate even after they have given us the business"
  • "Companies are taking too long to make decisions"
  • "Customers are trying to squeeze as much as they can out of us"

I'm sure that many of you have heard similar comments before and you are concerned about them. You should be concerned, but not for the reasons you think. What is not done often enough is putting yourself in your customers shoes and think about why they might say these things. There is a reason that these comments are so prevalent. Your customers are being asked to slash budgets and services, yet at the same time improve outcomes and performance. Public scrutinty over the use of tax dollars in the healtcare system has never been higher. You have sales quotas to meet, your customers have lives to save. You need to be part of the solution, not a part of the problem.

Here's three things you can do about it:

  1. Stop playing the victim. The industry is changing and you need to accept that. In fact, it is going to continue to change. Instead of focusing on how to change your customers' behaviour, you need to think about how you can leverage the opportunity of this changing environment. When industries change, some companies adapt early and thrive, and others lag behind and get lost. What company will you be?
  2. Align your agenda with that of your customers. Too often we approach customers and prospective customers with our own agenda and don't focus on theirs. We try to fit their needs into what we can offer instead of listening to what they need and then developing a solution that meets, or anticipates, those needs. We need to be less self-absorbed, which then frees us up to focus on what the customer is saying.
  3. Do business differently. Selling to healthcare institutions is no longer a one-way conversation where you are selling your features and benefits to clinicians in a pristine setting. The companies that will thrive are the ones that collaborate with customers to develop real solutions that provide real improvements and real outcomes.

Like a snake that needs to shed its dead skin, suppliers need to shed their dead weight and that dead weight is represented by many of the ways you do business. Those ways worked in the past, but they don't work now. You need to adapt to your surroundings. The industry is evolving and you need evolve with it. Like any evolution, there will be some that thrive, some that survive, and some that become extinct. Which one will you become?

It's no longer sufficient to just have great ideas, or great new innovation. You need to be able to show the value of that innovation and you need to be able to help customers adopt that innovation and those ideas. There is still a great deal of opportunity, but you need to change the way you operate if you want to thrive.

For more information, see my article on how to sell to a changing healthcare customer.

On Andrew MilleR


Recent news

Listen to my recent teleconference on how to increase the adoption of innovation in healthcare.

Read my latest article for the Ontario Hospital Association on how to achieve profitable growth in a changing healthcare industry.

Check out my blog, From Chaos to Order, where I post new articles, provocative ideas and other content regularly.

Upcoming Events
My forthcoming book, Redefining Operational Excellence: New Strategies for Maximizing Performance and Profits Across the Organization, is due out early next year.
Recent videos
Check out my video series on Operational Excellence. These are short videos filled with tips to help your business run more effectively.

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© Andrew Miller. All rights reserved. 2013.