Mark McKenna Lecture in Health Sector Supply Chain: Quint Studer’s Top 10 Challenges in Execution
Quint Studer, CEO of the health care consulting firm the Studer Group was the inaugural speaker at the Mark McKenna Lecture in Health Sector Supply Chain at W. P. Carey School of Business at Arizona State University on May 4, 2011. Studer provided practical ideas to maximize individual and organizational potential before an audience of industry practitioners. The Studer Group, a recipient of the 2010 Malcolm Baldrige National Quality Award, has helped clients attain and sustain outstanding results in more than 700 hospitals and organizations across the U.S. by implementing evidence-based leadership systems.
Studer applied important concepts from his work in health care specifically to the health care supply chain. "If we're going to be patient-driven, we have to be supply driven, because labor and supply are our two biggest costs," he added. "I'd much rather execute better and have the right amount of supplies, than let go of people."
One of the major “take-aways” from the event was the failure of managers, as change agents, to thoroughly manage change and explain to employees why change in a process or product is so important. This is a very important lesson for supply chain managers because orchestrating change is a critical part of their repertoire of leadership skills. Adoption of a new product is much more likely if the change is announced as a decision for improvement of patient care rather than just a mandate to change products. The art of the “why” must be mastered!
Other major take-away concepts were lack of alignment of senior leadership with front-line managers, lack of accountability for supply costs in the clinical realm, the tendency for health care to be spoken of “with lots of differences from other industry”, holes in leadership skills to run a good organization, and challenges in execution. Studer emphasized the importance of strategy, structure and execution to obtain results and elaborated on his top 10 challenges in execution. Studer's Top 10 Challenges in Execution:
1. Leaders/others underperforming and still receiving a good evaluation (accountability)
- A good system of evaluation should be a priority, objective and state of art, or challenges will be faced
- Low performance should not be tolerated
- Poor performance should not be awarded a good evaluation
2. Change not connected to "why" (alignment)
- Communication of why processes are being implemented should be a priority
- Communication about dollars saved compared to FTEs. Managing supplies better may save hospital employees their jobs
3. Lack of necessary urgency (alignment)
- Good communication is very important between senior management and frontline managers
- Attention must be paid to the potential for miscommunication because senior management is more attuned to the external environment whereas frontline management is attuned to the internal environment
4. Leaders do not have the skills to assure a solid implementation (action)
- Studer quoted a sobering statistic: 98 percent of people in health care do not have formal training in leadership before they are promoted to their job. "The No. 1 thing that drives a person's promotion in their career in health care is that their boss quit," he said. "And once their boss quits, they're offered a management job."
- According to Studer, on average, a manager in the health care industry receives just 6.5 hours of leadership training. That's hardly enough to help a leader learn how to run a meeting, hire, develop and fire employees, explain the external environment, understand process improvement, and be a good financial steward and communicator.
- "If a health care leader does not have those abilities, they cannot execute, whether it's patient care or supply chain, because they're being eaten alive trying to do all these things they were never taught to do," Studer said. "If you have an inconsistent senior leadership team, you have an inconsistent organization of execution."
5. Too many changes too soon (action)
- Studer brought up that according to Franklin Covey research, if a company tries to make two behavioral changes at once, there is a 90 percent chance of success; attempt three and the success rate drops down to 50 percent; four drops it down to 25.
- "We have learned over the years that if we can get one or two changes [implemented consistently], we will be performing better," Studer added. "Most people are overwhelmed because we give them too much to do, because we want to move so quickly. What happens is we don't actually move quickly, we spin our tires."
6. Push back by leaders, staff and physicians (accountability)
- Management has to be accountable
7. Not familiar with what right looks like (action)
- "What we found in health care is that people need to see it done right," Studer said. "And if they don't see it done right, they don't know how to implement it. It needs to be the same thing whether it's leadership or supply chain."
8. Lack of frequency (action)
- Processes need to be done frequently and consistently in order for employees to execute successfully
- "The problem is we're not doing it frequently enough to get the skill set for the competency level we need," Studer said.
9. Inability to transfer best practices (action)
- "It's not that we don't know the best practice, it's that we don't know how to transfer the best practice," Studer said.
- Studer pointed out that hospitals are not accomplished learning organizations. Health care is an industry where non-disclosure agreements are rare. This would appear to facilitate sharing information and transferring practices about what works best, especially when employees move from one hospital to another. Ironically, that's not so, expressed Studer. Hospitals have very strong cultures and the idea that “if it wasn’t invented here” prevails.
10. Poor processes (action)
- The right processes are part of the three needed components to execute a new system. The other two are the right attitude and the right skill set.
As health reform moves forward demanding accountability, excellence in management is one of the keys to achieving value for money and best in class outcomes in the delivery of patient care. Mastering supply chain management has the potential to distinguish high performing organizations from their lower performing counterparts. Quint Studer’s thoughts on health care and the health care supply chain lecture provided the audience key take-home messages and much food for thought to take back to their respective organizations.
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