How to Obtain Operational Effectiveness in the Health Care Arena
Would it help the health care manager to eliminate the frustration of disorderly operations? To focus and fuel up the well meaning, yet disarrayed team? Would it not, to put it simply, be nice to know how to develop, organize and implement operations that propel the organization, rather than anchor it? Indeed. Let’s see how.
What is Operational Effectiveness?
Any established set of business practices that enable an organization to optimize how it functions – how quickly and successfully it does what it intends to do – especially in comparison to competitors, is known as Operational Effectiveness (OE), a term originated by Michael E. Porter at Harvard School of Business.
An organization that enjoys OE is one that finds ways and means to perform its business faster and better at a lower cost than other similar organizations. Another way to state this is that OE will optimize the customer satisfaction at the lowest possible cost to the organization.
Pillars of OE will include infrastructure (how resources are organized and allocated), processes, performance and care delivery standards, regulatory compliance safeguards, performance trackers and metrics, change management, and performance improvement systems. The question, then, is how to organize these components (and others) systematically so that they serve as a firm foundation and a compass? We stand on firm ground; we know where we’re going; we know how to get there.
Porter has described a four-part OE cycle:
1. Lead and control functional performance
2. Measure and improve processes
3. Leverage and automate processes
4. Continuously improve functional performance
In practice in the health care setting, these translate to: (see table below)
1. Manage, control and evolve individual and departmental performance: develop and instill repeatable processes
2. Measure, track and improve processes
3. Optimize use of technology (and other resources) to enhance effectiveness and efficiency of people and processes
4. Continuous improvement
How the Cycle Works
There are established performance processes, standards and expectations, and metrics for departments, as well as for the individuals contributing to each department. Individuals are held accountable to those standards.
Operational processes are in play that support and facilitate human performance and reduce risk of error. These processes have associated metrics that indicate how successful a given process is, how successful the human using that process is, and where there are opportunities for improvement.
Trackers are available that accumulate the success vs. failure data, and are used to communicate information through designated channels to the appropriate agent of change.
Technology is leveraged to enable the user to be efficient and effective, i.e. EMR, inventory management, payroll system. In practice, leveraging of resources also includes effective reliance on resources such as consulting services, vendors, legal and HR advisors, and real estate facilitators.
Data is gleaned from the above three pieces, and is gathered, communicated, and analyzed, i.e. turned into information or knowledge. Knowledge is then used to initiate change in process, performance standards, or technology that will result in improved performance and results. This organizational knowledge empowers us to know precisely whom or what to fix and why.
The cycle repeats again, and continues indefinitely – hence continuous improvement. This piece, the continuous improvement, is essential not only to effective business operations but also to quality of care. Without continuous improvement, quality of care stagnates.
Key Factors in Developing OE
- Well considered, valid and actionable Mission, Vision, Values statement (MVVs)
- Strategies, Policies and Procedures, Processes, Performance Standards, and Required Behaviors are aligned with the MVVs
- Strategic Communication — information is gathered and shared effectively and with the intent of changing employee’s behaviors. Communication must not end with the sharing of information; rather, that is only the beginning of strategic communication.
- Role Clarity: employees know and understand their role and its responsibilities, and the behaviors and competencies required to successfully play the role
- Metrics to measure how well behaviors and processes translate to results
- Corrective Action Plan process: the plan must translate to a changed process and/or behavior, subsequent to which a metric will indicate an improved result.
- Learning: Training and Development program; Performance Management program; Coaching
- Employee Engagement program: an engaged colleague is one whose intents and behaviors are aligned with the company’s MVVs, and who is eager to change skills and behaviors as the organization evolves.
Impact of OE
Strong operational systems that empower team performance set the stage for people, technology and processes to collaborate and deliver ever more finely tuned behaviors, that propel effectiveness and efficiency, desirable service delivery and care quality… at decreased costs. This success scenario fuels colleague and customer engagement, teamwork, customer satisfaction, and profitability.
With that, current company strategy can be attained, and the birth of new strategies and objectives begins.