The Glue

A Brief Primer on Lean Six Sigma and Its Benefits

Before I discuss Lean Six Sigma, I'll quickly cover the fundamentals of the two contributing approaches, Six Sigma and Lean.

Six Sigma is typically defined as a disciplined, statistical approach aimed at increasing profitability by reducing defects. There is a large Six Sigma "tool box" of analytical, data-driven approaches that help companies improve quality in this way.

I tend to think about Six Sigma more holistically than many of its current adherents. I also take to heart a comment made by Bill Smith, the Motorola engineer who invented Six Sigma: “If you want to improve something, involve the people who are doing the job.”

So I see the power of Six Sigma as greatest when it is thought of more broadly, as an organizational shift wherein employees use a disciplined approach to improve overall business performance, using data and focusing on controlling process variation. This is even more powerful when built into a Strategy Execution approach, so that improvement efforts are focused on the most strategically important problems for the business.

Your Top 2 Strategy Execution Challenges for 2008

Thanks to those of you who voted in our first poll, which asked "What is the single biggest challenge that impacts your organization's ability to execute strategy effectively?"

The results (shown below), indicate that the 2 biggest problems are:

1. A lack of focus (too many competing objectives, initiatives, projects)
2. Too much "fire fighting” to rise above the chaos

In my opinion, these two issues are different sides of the same problem, which is the lack of a disciplined management framework that prioritizes and focuses on the critical few objectives and initiatives in order to make progress toward your long term vision (which, in turn reduces inefficiencies, chaos, and stress.)

Book Review of "Executing Your Strategy"

As anyone who works on strategy execution knows, there are a host of books (some scholarly and some not so much) on the topic of Strategy Execution. Just this past month, Harvard Business School Press released a new book entitled, “Executing Your Strategy” co-written by Mark Morgan, Raymond Elliot Levitt, and William Malek (who has been a guest contributor to The Glue).

With all of the titles focused on better strategy execution, it’s easy to wonder if there is anything new left to be written that is worthy of close study. In this case, I found it to contain some true insights in its focus and message.

What Hospital Executives Should Know About HLQAT

I'll start with the definition. HLQAT stands for Hospital Leadership & Quality Assessment Tool and the core team is pronouncing this either "Hel-Cat" or "Hospital L-Cat."

HLQAT is being created in a public-private partnership between QIOs (chiefly led by the Oklahoma Foundation for Medical Quality), CMS, the University of Iowa College of Public Health, and Premier/CareScience. AHA, IHI, and many other organizations (now including ActiveStrategy) are advising and contributing to the tool and its testing and implementation. This broad level of participation tells me that the HLQAT will gain quick acceptance.

So what will it do? HLQAT will be an assessment tool to help hospitals identify and adopt quality-oriented leadership systems and ultimately improve clinical care processes and outcomes. As part of the HLQAT testing and implementation phases, responses to the survey are being correlated to quality data from the CMS data warehouse, as well as other data sources. This correlation phase will allow HLQAT to provide significant insights into the linkages between quality outcomes and a hospital's leadership structures, processes, and activities.

How to Measure the Hard to Measure: Part 1 - Project-based Objectives

If you are a frequent reader of The Glue, you know that we constantly espouse the importance of linking and monitoring strategic projects to the business objectives they support.  So, to "Improve Claims Resolution" we might link the "Implement Automatic Claims Adjudication System" project and include a review of its status in our business reviews.  Straightforward, makes sense, and gets results.

Typically in this situation one would have the accountable owner of the project make frequent, brief, and to-the-point status reports. Ideally, their reports would consist of:

• the timing, budget, and quality status of the project (red=late, over budget, below quality, etc.)
• Highlights of milestones completed on time
• What is late, why, and what we are doing about it
• Potential upcoming problems

There are times, however, when completing the project is really viewed as a business objective in and of itself.  One example of a project as a business objective is when a project is so big and strategic to an organization across so many different levels, that its completion is viewed as a top level strategic objective.  A huge, transformational, IT project that touches many parts of operations might be an example.  Completion of a integration plan after a merger might be another.

How to Measure the Hard to Measure: Introduction

A basic tenant of Strategy Execution is the old saw: "if you can't measure it, you can't improve it."  I'd generally agree that if you can't put real numbers behind something and don't review accountability and performance on a regular basis, you probably won't get optimal performance improvement.

It is pretty straightforward to measure things like revenue, savings, turnover, and the like. It's also not rocket science to find and measure leading or driving indicators of these high-level lagging indicators.

But in complex organizations, there are many important business objectives with measures that are not immediately apparent. In this series of posts, I'll take a look at some best practices for some difficult-to-measure scenarios. 

I'm also looking for feedback on any specific instances that you readers might have that we could discuss, so please add a comment below to pose a question or idea of your own.

Here is what is on tap for this series:

• project based objectives
• indices composed of many measures
• daily measurements
• influence within an organization
• internal customer satisfaction
• the "best" vs. "everyone is very good"

Let me know if you have other topics you think we should cover.

When Executing Strategy Avoid the Extremes?

Tom Davenport posted an interesting question on his blog last month.  Basically he argued that the two poles of the Strategy Execution world are:

• Strategic Engineering -  the top down articulation of objectives and measures by management, cascading to lower levels and ensuring systems and processes are in place to get the results you want
• Strategic Anarchy - get management out of the way and let people do what they know the business needs.  Encourage loose organization, social networks, decentralization of control, etc.

The question posed in his post is, is there a midpoint that gets the best results? In our work with clients, we have seen these two approaches employed to some degree in tandem in many companies. 

The top-down strategy execution approach from management uses traditional Strategy Maps, Balanced Scorecards, Briefing Books, and Structured Business Reviews. Its success depends on how well (not how thoroughly) it is engineered and implemented.

Share Your Strategy Execution Challenges for 2008

It seems to be a universal truth -- the start of a new year gets us thinking about what we can do differently to make this coming year a better one. We get fired up about getting moving on strategic plans and budgets we finally got approved. We get energized from those few extra days off we had around the holidays.

But after a mere few weeks, it seems, we slip back into our old routines and business as usual.

Strategy Execution is all about managing differently -- and sustaining those changes indefinitely.

And since The Glue is dedicated to helping you succeed with your strategy execution plans (to drive alignment, accountability, improved performance, and results), we're starting out 2008 by asking what help you need most.

What are the biggest challenges that keep you from executing strategy and driving toward performance excellence? Pick one option in the poll below. Or, if something else is hindering you, please tell us by submitting a comment.