The Kaizen Methodology

with Mark Graban from MarkGraban.com

About the host

  • Jacob Shriar
  • Growth Manager
  • Officevibe
  • Montreal, Canada
  • Passionate about company culture. On a mission to make work better.

About the interviewee

Video Summary

Mark Graban, who is an author and speaker, talks to us about the Kaizen methodology, and how it can be used in your company as a lean methodology.

Related resources

Video Transcript

Jacob Shriar: Hello, everyone, I’m Jacob Shriar, Growth Manager at Officevibe. And today I’m with Mark Graban, who is an author and speaker and consultant. Mark thanks so much for being here with me.

Mark Graban: Yes, and thanks for talking with me today, Jacob.

Jacob Shriar: Awesome, so before we get started and we start diving deep and asking questions, maybe you can give us a bit of a background on who you are, how you became to be a consultant, some of the things you’ve done in your career; really any background will be helpful.

Mark Graban: Well, we’ll kind of start in the middle. I’ve worked the last nine years in healthcare doing process improvement, consulting, quality improvement consulting. This is really kind of built on work that I did earlier in my career in the manufacturing space. So my undergrad degree is in industrial engineering. I have master’s degrees in mechanical engineering and an MBA. My career path was going good in the manufacturing route, and so in those ten years in manufacturing, I was doing what people would call either lean manufacturing, or the Toyota production system, which is you have a fairly sophisticated management system and approach and tool set and philosophy about how to manage an enterprise effectively. And employee engagement is a really huge piece of that.

And then when I had the chance to start doing similar work in healthcare about nine years ago, I thought, you know, it’s a really interesting opportunity to see healthcare and hospitals have a lot of the same challenges, trying to improve employee engagement. Because in healthcare that leads to things that are really important; better quality for patients, better patient safety, better results for the hospital and so that’s a big reason why I really love being able to do this work in healthcare. I’ve had hospitals in the U.S. and Canada and a little bit in England who have been clients; and for different organizations I’ve consulted with in the last nine years.

The Kaizen Methodology

Jacob Shriar: Very cool, very interesting. Can you really explain it to us what this Kaizen methodology is exactly, really break it down for us. Pretend that we don’t know a thing, because actually I don’t. Really a beginner basic; break it down for us.

Mark Graban: Kaizen is a Japanese word; let’s break down that word. It has two parts Kai and Zen, and it means basically change and good. So Kaizen means improvement or a change for the better. Kaizen can also be described as, you know, I think this philosophy and methodology for how to engage employees in the workplace. And so Kaizen is considered really one of the two main pillars of Toyota’s management system. So it’s really kind of a core piece of lean; that lean manufacturing or lean healthcare really is built upon this foundation of working with staff members and leaders at all levels.

Kaizen is very different from a suggestion box system. You know, if anyone has been a workplace that has suggestion boxes, I think it was an attempt at engaging people. But we know what happens with the suggestion box; you put a slip of paper in a box and it sits in that box for months, or however long. And you might not get any answer back, you know, there’s some far off committee team of managers or a suggestion committee that reviews these without talking to the person that had the idea. And they just kind of vote yes or no on those ideas, so that ends up being very disengaging for employees who said, “Wait a minute, you said you want our suggestions. I put something in the box, and nothing happened.”

The Kaizen model if you look at Toyota or other manufacturers or if you look at what some really good health systems are doing today, Kaizen breaks down that suggestion box model; for one, we get rid of the suggestion box on the wall. And we facilitate ideas within the local team, within daily huddles. It becomes a much more collaborative process between an employee and their manager, an employee and their team mates. It’s really meant to be small, low cost, low risk ideas that can be owned and implemented within the team as opposed to being run up the chain to the C-suite to bless and approve.

So at a real high level, it’s a very interactive process. It comes from the philosophy that says the people who do the work are the experts in improving that work and that we need to engage them and work together with them to solve the challenges that our business or our hospital is facing.

Books About Kaizen

Jacob Shriar: That’s really, really interesting stuff. Hopefully we’ll dive a little bit deeper there. You’ve written two books on the subject. Do you want to tell us very quickly about some of the books you’ve written and what’s in them?

Mark Graban: Yes, so the first book I wrote was called Lean Hospitals, and this came out in 2008, so that book is an overview of the lean healthcare methodology. You’re talking about how lean manufacturing translates into health care, because people in healthcare I think rightfully so, will ask, “Wait a minute. What does something that has origins in Toyota and engineering have to do with health care?”

That’s a really understandable question, so to help translate these methods in the management system into healthcare terms is really the purpose of that book. Share examples of how it helps patients, how it helps hospital staff, and how it helps the bottom line of the hospital. Instead of people are concerned and say, “Well, don’t turn our hospital into some sort of factory.” But that’s not what this is about.

If we look at the lean startup, that’s not turning a software company into a factory either, but we’re taking proven management mindsets and approaches and just putting them in and adapting them to a different industry. So that was the first book.

The second book is called Healthcare Kaizen, and I co-authored that book with a friend of mine from Indianapolis, Joe Swartz, and he works for a health system there called The Franciscan St. Francis Health System. And so we partnered up on this book because he had this really deep experience changing the culture at Franciscan St. Francis to a culture of continuous improvement using these Kaizen methods. I had the benefit of working with lots of different organizations around the world helping them get started. So we kind of combined depth and breadth to write that book, to show people the mechanics and the leadership behaviors and mindsets that are required to shift from a suggestion box style or from no improvement at all to shifting into this Kaizen model.

And then we do have a secondary book called The Executive Guide to Healthcare Kaizen, which in a way maybe is a form of Kaizen. You know, the original book is still on the market, but we had people and readers tell us they liked the book, but it weighs 4.5 pounds, because it has full color pictures and it’s 400 some pages. They said they wanted their executives to learn about Kaizen, then saying they’re not going to carry it on a plane. “Can you please give us a smaller more introductory book?” And so that’s what the Executive Guide to Healthcare Kaizen is all about.

Tracking Success Of Programs

Jacob Shriar: Nice, very cool. I’d love to ask you, you mentioned at the beginning when you were talking about your first book, about measuring the results and talking about how single improvements, so I’d love to understand how much data is involved and how much metrics, how you tracked these results. Can you talk to me a little bit about that process of tracking the success of these programs?

Mark Graban: Yes, and that’s a really great question and an important point; because the goal of doing all of this is not to go ‘implement lean’ or to ‘become lean.’  The point is improving the organization. I’ve seen some hospitals that as they embrace lean they focus more on the measures around patient safety and quality, instead of being as focused only on the bottom line.

We have to have a balanced set of measures and if you look at lean in manufacturing or healthcare we generally look at safety, which would apply to both patients and hospital staff, because hospitals can unfortunately be fairly dangerous places for people to work; quality, measuring healthcare quality in different ways, looking at access to care, so reducing waiting times; improving patient flow. Reducing costs is important, but we think of costs as being an end result of doing all of those other things well.

One way lean is not ‘cost cutting’ but if we focus on safety and quality and patient flow we tend to get lower costs.

And then the fifth dimension generally is employee engagement, or employee morale. And again, these all go hand in hand. So we see hospitals applying lean or engaging people in daily Kaizen. You see results like reducing patient falls by 30% to 70%. There are some hospitals out there that have reduced certain types of infections, hospital acquired infections, by 90% to 95% by engaging people in process improvement, by managing that process in a different way. We see a lot of cases where hospitals are reducing waiting times in the Emergency Department from four hours down to two hours.

So it’s not incremental improvements; we tend to see fairly high percentages. Hospitals are boosting their bottom line, which strengthens them for the future. And in this area right now, in healthcare, there are lots of hospitals that are trying to cut costs by laying off employees. That’s going to kill any sense of employee engagement that you might have been building. And you know, lean provides an alternative where there are a lot of hospitals that through lean and Kaizen are establishing some form of a no layoff philosophy. So instead of just firing people and hoping for the best we can actually improve quality and improve processes and get better results all around. That’s what we see with lean in healthcare.

Jacob Shriar: Interesting, really. You mentioned before for example that Kaizen sort of gets rid of the traditional idea submission or suggestion box type of approach.

Mark Graban: Right.

Employee Engagement Surveys

Jacob Shriar: I’m wondering how it affects employee engagement surveys. I’m assuming that it gets rid of those sorts of traditional surveys, and then it goes for I’ll say leaner type of approach. Can you talk a little bit about that?

Mark Graban: Yes, what I’ve seen in hospitals is generally they are still going to do those surveys. But those surveys might be done annually or once every two years. Those are very slow feedback cycles. If morale is really improving you’re not going to detect that other than very informally. If morale was getting worse you don’t want to wait until a survey is done and finally comes in to learn about this. So what I see happening is organizations finding more real time measures of employee engagement by counting the number of improvement ideas that are being brought forward and the number that are being implemented. So that becomes now a daily, weekly, monthly basis.

I think a really good indicator of employee, if people are highly engaged, if they feel they trust their leadership, if they feel like hey, we are all in this together and we’re going to succeed and win together, they are going to bring their ideas forward.

If they are afraid of layoffs, if they don’t trust their leadership, if they are in other ways disengaged or scared they won’t bring ideas forward. So I’ve seen organizations that will now make that their real time measure of employee engagement. I’ve seen organizations that after implementing lean, six or twelve months into it, see pretty dramatic increases in their employee engagement scores. So I think that’s good validation to have and people sort of expect those surveys anymore. But I think having those real time measures is valuable. The hospital pharmacy, for example, had been implementing 30 ideas a month and now they are only doing two. Something has probably happened; there is something for leadership to go investigate and see why people are getting disengaged. We can detect that far sooner than if we were just waiting for that survey.

Case Studies With Kaizen

Jacob Shriar: Cool. That makes sense; great answer. I want to ask you about, and you’ve kind of referenced a few examples in your answers, but you’ve worked with a number of clients for sure and I’d love if you can to maybe break down the best case study that you have; and if you can really say something like, you know, I worked with this client, and here’s what they implemented, here are the results that they saw, a massive improvement. Give us like one really all-star case study if you can.

Mark Graban: Yes. I’ve had a lot of great clients. One that comes to mind that has done a lot of great work over the last six, going on seven years, especially with Kaizen and continuous improvement as a part of broader lean practices is Children’s Medical Center in Dallas. I worked with their hospital laboratory starting back in 2007. And we used a lot of lean practices. We took a look at their processes; we physically rearranged the hospital lab. We reduced batching and of the specimens so that they got tested sooner rather than later. We had people working on redefining roles and responsibilities, changing the way they did their work.

And part of that was implementing what you might call a lean management system. So, on a daily basis we had this big project, but they also started managing using this lean or Toyota style of management. They did daily huddles; they had daily performance measures where before they relied on monthly averages that often lagged a month or two behind. And so if their laboratory turnaround times were getting slower, they wouldn’t really see the data about that until a month or two down the road. And if you have a monthly average it’s hard to figure out how to improve that. So they did these daily huddles with daily metrics and this daily discussion about what can we do to improve. That’s the Kaizen piece.

And so within about a year they saw 30% to 40% reductions in their laboratory test turnaround time. So they are getting test results to the doctors more quickly, and it has an impact on patient care. You know, if a patient’s waiting in the Emergency Department, they are waiting for test results to help rule something out so they can go home, it’s not faster for the sake of faster.  It really has a big impact on patient care, the quality of care. The employee engagement scores went up on a one to five scale with five being most highly engaged and satisfied. Their average scores went up from right about three to right about four in a relatively short period of time, in 12 months. And people said, “Yes, my ideas are listened to. Yes I have what I need to do my job, and that stress is manageable.” And so those are great results from the employee’s standpoint.

And then longer term, financially, we see this in a lot of cases in healthcare. They have increased their productivity by about 50% where they are doing more work without having to add 50% more people. And I think I think this is important to point out; without people working and running 50% faster. Lean is not about making people work faster; it’s about eliminating waste and creating capacity where it didn’t exist before. So people can spend more of their time doing laboratory work that benefits children. I mean, that’s why they are there, that’s what they’re passion is about, serving those kids. And then that’s kind of part of that morale boost, so it kind of goes hand in hand. You are doing things to engage people, morale goes up, they are participating in improvement, the department’s performing better, they see the metrics and the feedback, “Hey, you’re performing better.” That makes them feel even more excited about fulfilling that mission that increases engagement.

That creates a very positive cycle and I’m glad to say seven years later they still follow that daily process. They are always driving to figure out how they can get better, how they can serve those kids better. And I think it’s just a great success story. It wasn’t a flash in the pan; it wasn’t a project. It had all of the results go away once the project was done. They embraced this new way of managing, and that led to a pretty significant culture change. As I’ve visited with them over time, because I used to live there in the Dallas area, it’s just really great to see when an organization really just embraces a new way of doing things and gets great results.

Jacob Shriar: Very cool, a very interesting case study. I like that a lot. I think we’ll end it here, but honestly, Mark, I just want to thank you for taking some time to chat with me. This was really very cool and a lot of fun. And hopefully we can do this again sometime soon.

Mark Graban: Okay, thanks for talking, Jacob.

Jacob Shriar: All right, great, take care.

Mark Graban: Okay, thanks.

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