Productivity and Process Improvement

Sustained Performance Improvement Requires Culture of Excellence

May 22, 2018 11:46 am

By using a systematic approach to build a culture of continuous improvement and implement Lean principles, health systems can dramatically boost operational performance in quality, safety, and other domains.

Shortly after Don Shilton was named president of St. Mary’s General Hospital in Kitchener, Ontario, in 2010, the hospital’s board set a new vision for the organization: to be the safest and most effective hospital in Canada.

Its success would be measured by a risk-adjusted mortality ratio that is reported annually for all hospitals in Canada.

“Twice in the last five years we actually have had the lowest mortality ratio in the country,” Shilton (pictured at right) says. The mortality ratio measures expected deaths versus actual deaths in acute care hospitals, with a ratio lower than 100 indicating fewer than expected deaths. In the most recent year, St. Mary’s score was 71—third-best in the country—compared to a national average of 91.

Along the way, St. Mary’s has cut patient falls by more than 50 percent and hospital-acquired infections by more than 75 percent, while also reducing staff injuries and inpatient length-of-stay. Most importantly, the organization has created a culture in which all staff members are trained and expected to initiate improvements. That’s why Shilton believes St. Mary’s has come so far on its Lean-focused safety and quality journey—and is only getting started.

“Many organizations fail at a Lean implementation because it requires a transformation of the culture within your organization, and that’s a difficult thing to do,” Shilton says. “If you can stay at that, then five, six, seven years later, you have an organization that is extremely high-performing with extremely engaged staff who want to make it an even better place.”

What Excellence Looks Like

Healthcare leaders who wish to achieve operational excellence must exhibit a special kind of leadership, says John Toussaint, MD (pictured at right), CEO of Catalysis, a not-for-profit education institute in Appleton, Wis. His work is inspired by principles developed by former Toyota engineer Shigeo Shingo, whose ideas are applied to Lean and other systems-engineering approaches.

Toussaint headed the ThedaCare health system in northeastern Wisconsin more than 15 years ago, when Lean manufacturing principles were just beginning to be used in health care. As a teacher and student, he has visited more than 200 healthcare organizations in 19 countries, seeing firsthand the many ways that leaders’ aspirations for high performance get lost in implementation.

“I was at a hospital the other day that had 245 breakthrough strategic initiatives—that’s just ridiculous,” he says. “That kind of activity creates tremendous overburden on the organization, so it doesn’t focus and it can’t get any better at anything.”

The principles in the Shingo Model require leaders to keep a tight focus on what excellence means for their organizations, Toussaint says. That means identifying a very small number of strategic initiatives—maybe just three or four—that set the direction for the organization.

Similarly, leaders need to focus on a small number of metrics that are directly related to the strategic initiatives. “What are the things that will let us know that we’re either winning or losing on our organizational performance?” he says.

The leaders’ next job: Articulating the vision and the metrics to the entire organization. “That’s so everyone who works there understands, first of all, why they work there, and then whether the organization is achieving its goals,” Toussaint says.

  • Note: Toussaint will be presenting “Developing the Principles, Behaviors, and Systems to Build a Culture of Excellence” at HFMA’s 2018 Annual Conference, which takes place June 24-27 in Las Vegas. For more information or to register, go to

Embedding Excellence Thinking

At Salem Health Hospitals and Clinics in Oregon, organization-wide strategic initiatives have focused on improving compliance with hand-hygiene protocols and reducing healthcare-acquired infections. Meanwhile, individual work units use Lean principles to address issues specific to their work. For example, the 20-member finance department at Salem Health used the Lean problem-solving approach to complete more than 80 projects in the first 10 months of the current fiscal year. The department’s goal is for each staff member to complete at least four such projects a year, says Reid Sund (pictured at right), manager of the department and controller for the system.

“There are problems every day, so we use the Lean tools to do our work in a methodical way,” Sund says. “Our culture in finance is that that’s how we solve problems; there’s really no other method. It might not be structured—sitting down and writing it out—every time, but we use the methodology even in the way we discuss problems.”

Lean leaders at Salem Health learned from experience that excellence thinking must be embedded in the organization at all levels, says Debbie Goodwin (pictured at right), RN, BS, MSN, a Kaizen (Lean) learning and development consultant at the health system.

In its first foray into Lean management, Salem Health used an event approach, in which a group of employees gathered to tackle a specific problem using a protocol centered on rapid process improvement. That required a lot of time and effort and did not generate sustainable improvement, she says.

In 2012, Salem Health moved to an “all-in” commitment, with a focus on training Lean leaders in all departments and embedding Lean fundamentals into the way that frontline staff conduct their work. “We really needed more of a cultural transformation with our Lean work,” Goodwin says. “Everyone needs to be involved.”

In Sund’s finance department, that means all supervisors complete Lean leader orientation, a 12-week program in which participants learn Lean concepts—team huddles, visual management boards, and four-step problem solving, among others—and demonstrate mastery of them.

That training is reinforced by a coaching matrix. “I’m constantly being coached not only by my supervisor, but we also have a Lean sensei who rounds on me,” Sund says. “She is very helpful in providing feedback on various things we are working on.”

Meanwhile, Sund uses a “coach, coach, tell” approach to managing his staff. That means he first coaches them to use Lean fundamentals to solve problems and only instructs them on what to do if the coaching is not effective.

Exhibit: Guiding Principles of Operational Excellence

Employment Engagement ‘Through the Roof’

St. Mary’s General also takes the “all-in” approach to cultural transformation through Lean principles. Three years ago, Shilton challenged the 1,300-member staff to implement one improvement per employee during the year. The staff exceeded that goal—and the next year’s goal of two per employee. “Then last year, we hit three improvements per employee,” he says.

Such a performance shows that the hospital’s employees want St. Mary’s to strive to improve, while other statistics show they like working at a place that is focused on improvement. In the most recent employee engagement survey, 91 percent of staff said St. Mary’s is a good place to work at—compared to a Canada-wide healthcare average of 58 percent. Similarly, St. Mary’s staff, on average, said they look forward to going to work 91 percent of the time, compared with 74 percent for their colleagues around the country.

“Engagement is through the roof,” Shilton says. “So, we have people regularly coming up with ideas and implementing improvements to the organization.”

That engagement translates to improvements not only in quality and safety but also in financial performance. As St. Mary’s General has increased market share, Shilton says, the number of inpatient days has increased by 7.3 percent in the past three years, and total salaries have increased by 7.1 percent. But the overall cost per inpatient day has decreased by 0.9 percent.

Likewise, emergency department (ED) visits increased by 8.1 percent during that period, but the hospital’s cost per ED visit fell by 4.9 percent. “A whole systemic culture change has really led us to become a high-performing organization,” Shilton says.

That culture change has been supported by structural changes in the way St. Mary’s General operates. For example, the manager of every unit meets daily with the charge nurse or unit lead to go through a standardized set of questions to prepare for predictable challenges.

“If we have a sick call this afternoon, how are we going to handle that? Or where are we going to put the next two admissions that come from the emergency department?” Shilton says.  

Likewise, each manager meets with his or her department director every week; each director meets with a vice president once every two weeks; and each vice president meets with Shilton once a month. At each of the meetings, the conversation is driven by a set of questions that are designed to proactively address predictable problems.

Advice From The Front Lines

As with any cultural transformation, creating enterprise excellence through Lean fundamentals will happen only if the organization’s top leaders embrace it for themselves. That means not only learning Lean concepts but using them consistently, Goodwin says.

“This is challenging for people who have previously been recognized and rewarded for a different leadership style because this is very much a coaching style that says leaders don’t have all the answers,” Goodwin says. “If senior leaders tell the mid-level folks in the Lean office to do Lean but don’t do it themselves, those [implementations] don’t work so well.”

Other lessons:

Change requires adequate support. Training department heads and supervisors in Lean methodology is not sufficient to achieve significant and lasting improvement, Goodwin says. Salem Health, with a staff of about 4,800, employs about 10 staff members who are dedicated to coaching leaders and supporting initiatives throughout the organization or to managing the health system’s Lean strategy. “Building an infrastructure of resources was definitely needed to implement the Lean system here,” she says.

Focus on quality and safety. Although Lean principles, by definition, seek to improve efficiency by eliminating waste, healthcare organizations that focus primarily on financial performance will not succeed in a Lean transformation, Shilton says.

“Make it all about improving quality and safety; do not make it about saving money,” he says. “The only way you are going to be successful with this is by engaging the frontline staff in the journey and in wanting to make your organization better—and people don’t become nurses or doctors or social workers because they want to save money.”

Lola Butcher writes about healthcare business and policy topics for several HFMA publications.

Interviewed for this article:

Debbie Goodwin, RN, MSN, kaizen (lean) learning and development consultant, Salem Health, Salem, Ore.; Don Shilton, president, St. Mary’s General Hospital, Kitchener, Ontario; Reid Sund, controller, Salem Health, Salem, Ore.; John Toussaint, MD, CEO, Catalysis, Appleton Wis.


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