Capital Project Solutions – March 2011
Enhancing Your Internal Organizational Structure & Processes By: Josh McVeigh, SSGB, Consultant Andrew Elmore, Associate Consultant As discussed in our January edition of Capital Project Solutions, the healthcare industry has changed dramatically over the past few years. We have seen a significant increase in the number of mergers, acquisitions and affiliations. Along with this, there has been a shift in the nature and structure of program management. We have found that more organizations are outsourcing fewer of their capital projects and alternatively are managing them with internal teams. As a healthcare owner involved in a capital project, you will be required to perform, maintain, and manage many processes involving an array of internal and external users. In today’s fast-paced market, it is critical that all processes and resources are performing at their optimal operating level with minimal variation in duration and quality. Ironically, we have recently received several requests from clients asking for assistance in evaluating and enhancing their internal team structure and organization. To foster an environment for continuous improvement, one must adopt both a methodology and a mindset focused on maximizing performance. While many strategies have been developed to address this challenge, one that has had great success in manufacturing, business, and now even in healthcare, and one that KLMK has applied with clients, is Six Sigma. Motorola defines Six Sigma as a business improvement methodology that focuses an organization on: understanding and managing customer requirements aligning key business processes to achieve those requirements utilizing rigorous data analysis to minimize variation in those processes driving rapid and sustainable improvement to business processes
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Capital Project Solutions – March 2011
At the heart of the methodology is the DMAIC model for process improvement. DMAIC is commonly used by Six Sigma project teams and is an acronym for Define opportunity, Measure performance, Analyze opportunity, Improve performance, Control performance.1 By harnessing the logic of the Six Sigma methodology, KLMK has been able to assist healthcare owners in successfully navigating through process improvement exercises within their organizations. At one such engagement, a healthcare owner contacted KLMK to request assistance in assessing their internal team. The hospital had approved an extensive capital budget that would allow for the construction of facilities that were much larger in scope than the team had previously managed. There was some concern that they may not be prepared to handle the increased volume and complexity of the upcoming capital projects.
Utilizing our
Rapid Response services that apply Six Sigma DMAIC methodology, we were able to assist the owner through the process outlined below to restructure the internal organization for success.
Define The initial phase of our Process Enhancement requires the owner to thoroughly define and identify issues and requirements in the current state of their process. To ensure that the project’s goal, scope, and background are collected and defined appropriately, a Process Enhancement Team should be assembled to lead the improvement effort. Team members should include representation from staff working in the existing system, as well as management members with knowledge of the greater goal in order to ensure that the project design is reasonable and executable. Tools such as fishbone diagrams, root-cause analysis, the 5 Whys and other exploratory tools are effective in making progress during this stage.
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Motorola University, Six Sigma Management System
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Capital Project Solutions – March 2011
During this engagement, the most significant issues that we identified were: Lack of understanding of the overall team strategy and structure Confusion in regard to roles and responsibilities Lack of best practices Limited knowledge of internal tools and resources Measure After defining the real issues, team members needed to be educated about the findings and the plan for improvement. Once all team members were aware of the process and there was collective buy-in, the team began to focus on collecting quantitative data to determine how the process was currently performing. The measurement phase plays an important role in the process improvement initiative as the quality and accuracy of data collected will determine the level of success the team will be able to achieve. This phase typically involves fairly indepth information reporting; however, it is important to consider the data that is being collected and confirm that it is both relevant and usable in the analysis phase. For instance, in evaluating the tools that team members used in the course of a project, we determined whether they actually had value; if not, did they need to be tweaked or discarded. We also identified the tools that did not exist but would need to be created. Analyze With the collection of qualitative and quantitative data completed, KLMK began to work with the team to analyze the current state and help the team to articulate the ideal future state. This was done through a mix of data review, focus groups, surveys, peer review and detailed statistical analysis. Statistical techniques, such as chi-square tests, were used to determine dependence within the data and control charts to determine if the data was stable. If you should choose to conduct an assessment utilizing internal resources, KLMK highly recommends that, at a minimum, a qualified professional conduct the analysis, confirm the validity of the data and evaluate the conclusions. Once we completed the process, all stakeholders were informed of the results and the implications of the data analysis. During this phase, be sure to involve the appropriate management personnel to ensure continued executive buy-in.
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Capital Project Solutions – March 2011
Improve Once the analysis was completed and we had a clear understaning of the current state, the team could then create solutions, develop an implementation plan, and gain executive approval to roll out the new plan to staff members.
For many of the project
stakeholders, the work completed in the previous steps will not be known. This makes the Improvement Phase critical in educating the staff on the new process, obtaining buy in, and engaging them in the initiative. One of the greatest challenges that we faced at this stage was to break old habits built over years of repetition. One of the main team goals should be for all team members fully understand the intent, procedure, and final deliverable of the process improvement engagement. Team leaders should consider incorporating as many of the staff as possible into the above steps to instill a sense of vested personal interest in the overall success of the engagement. The decision was made to develop a Process Enhancement Manual that would act as the team’s road map. It would provide direction and guidance,
assist
in
on-boarding
new
team
members,
aid
in
communicating the goals of the program with other internal staff members and ensure a consistent process was used on all facility projects. Control Just because a new process is rolled out and the staff has begun working within the new system, does not mean that the process will maintain the efficiency and gains. Staff enthusiasm and interest is key to the success of the engagement but true success cannot be realized until the process controls are put in place and tested. To prevent the process from returning to the initial state, KLMK recommend that an internal Standards Committee be created to continually monitor the process, review feedback received by staff members, and roll out any additional changes to help tweak the new process. This Committee should identify key metrics that are indicative of the success of the process and track these metrics regularly and consistently. At this stage, the project team was already beginning to identify additional areas of improvement that can be addressed through another initiative. 4
Capital Project Solutions – March 2011
While an Owner will encounter many different processes in a capital project such as invoicing, staff hiring, contractor selections, and much more, the DMAIC methodology makes it possible to successfully streamline and control any process.
KLMK utilizes Six Sigma
methodologies, industry expertise, and proven best practices to help guide
healthcare
owners
through
any capital project
process
improvement. The Rapid Response Service line described has assisted many forward-thinking healthcare owners to prepare their internal teams to ensure that their organizations operate efficiently and their capital projects are completed successfully.
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