Value System Improvement
and
Value System Design

www.ThreeWins.com

Just under 100 years ago Henry Ford transformed automobile production from a low-volume-high-cost skilled craft activity to a high-volume-low-cost mechanised process. The winner was the customer who could now afford to buy the cheap mass produced cars that, by previous standards, were reliable and could be easily maintained and repaired. The horses could not compete!

The winners were the customers who could now buy the "low price" automobiles which gave them a massive benefit by reducing travelling time. The ultimate losers in the highly mechanised automobile production process were the production-line workers. This was partly because of the protectionist attitude of traditional craft-workers to the new "Scientific Management"; partly because of the development of the new discipline of Cost Accounting; and partly because of Henry Ford's highly autocratic style of leadership. The result was that production-line workers became expendable as efforts were increasingly focused keeping the expensive machines running at high utilisation, high efficiency and high profit. Despite the warnings raised by people like Peter Drucker and W Edwards Deming, manufacturing in the West became a sluggish boom-bust industry that was unable to respond to changing customer demand, new technology or competition from elsewhere.

Toyota

In contrast the approach adopted by Toyota in Japan was to put the customers and the employees at the centre of the manufacturing process. In return for job security all Toyota asked for was a commitment from every employee to strive for perfection by systematically reducing errors and waste in all processes in the company; from production-line to sales force.

In contrast to the rest of USA, Japan listened to the message that Deming and Drucker were broadcasting and the improvements in quality, performance and staff motivation in Japan were dramatic. Unfortunately, the unfamiliar language of the Toyota Production System (TPS) was not heard in the West and it was not until Toyota started to threaten the market with higher quality and lower cost products that others took notice. By then it was too late and Toyota is now the largest car manufacturer in the world!

Lean - Sigma - ToC

The term Lean Thinking was coined in the 1980's by Womak and Jones; automobile engineers from the West who went to investigate the Toyota phenomenon. Two other complementary schools developed in parallel; in the semiconductor industry it evolved into what we now know as Six Sigma; and following the insight of Eli Goldratt we now have the Theory of Constraints. All three schools derive from the same root: Improvement Science, and it is this that is now diffusing out of manufacturing and into both service industries and government.

A good example is healthcare. There has been a dramatic increase in spending on the NHS over the last decade but with no comparable increase in performance or quality. This unhappy state of affairs is not sustainable. The inevitable outcome will be increased taxes; job losses; and reduced quality and volume of services; a remarkably similar pattern to the boom-bust history of the car industry! Perhaps the principle lessons of lean thinking might be applied to healthcare?

Value Stream

The concept that underpins Improvement Science is the Value Stream; and there are just three core principles that create the value stream improvement approach:

    1. Only add value that the customer wants.
    2. Design the value stream to flow.
    3. Continuously strive for perfection.

This simple message is now being heard in healthcare and it is interesting to note that organisations are actively looking at this common-sense approach as a way to address some of the chronic problems in healthcare: poor staff morale; unacceptable problems with service quality; an inappropriate focus on management by efficiency targets; and no improvement despite massive investment and continuous re-organisation.

To seethe NHS Confederation's June 2006 Report click here

The value stream improvement philosophy is about maximising quality for the customer through inspiring staff to strive for perfection by minimising waste in the processes - the same three principles that underpin Three Wins ... Quality, Motivation and Performance (QMP).

The Three Wins
The First Win (Quality) represents the added-value for the customer or the expectation they have; to deliver quality you must meet or exceed your customers expectations.

The Second Win (Motivation) represents the pursuit of perfection through continuous improvement by the staff that add value for your customers; and to motivate staff you need to make work rewarding and fun.

The Third Win (Performance) represents creating processes that your staff can use to convert your resources into value that your customers want to pay for. Creating the perfect process means eliminating work that doesn't add value; eliminating bottlenecks that limit the value stream flow; eliminating the sources of mistakes; and being able to react quickly and effectively to resolve unforeseen problems.

Variation
However, there is a problem when this "perfect industrial production line" approach is applied to healthcare. That problem is variation; and in healthcare there is a lot of inherent variation! Every patient is unique. Every member of staff is unique. Every healthcare provider is unique. And what's more they all keep changing all of the time and often without warning!! Compared with a precise and tidy production line healthcare is fuzzy and messy. It is the nature of the problem.

Better by Design
Three Wins is not a quick fix that you can buy, install and get instant results - it is a change of mindset - a change in the way of working and ultimately a change of culture. If left to chance, culture takes a long time to change - with the Three Wins method it is possible to accelerate this culture shift in two ways. Firstly by demonstrating the potential benefits to everyone of a value stream improvement approach; and secondly through achieving Quick Wins by designing the value-adding processes to deliver improved value-for-money - straight of of the box .

Design is a mixture of art and science. Design combines intuition, creativity, attitudes, skills and knowledge into a rigorous process of converting ideas into action. Process design has a well defined structure and tried and tested methods and tools but to be applied to "people" processes the methods and tools need to be able to handle the fuzziness, the messiness, and the inherent complexity of people.

Three Wins ... is the combination of the QMP principles; the practice of process design, and the tools and training needed to handle the fuzzy stuff. Three Wins is the first step to becoming a Value System Architect.

To read more about Improvement Science please click here

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