Benchmarking: A “Better Way” Probably Already Exists

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More Innovation - Yes Please!  In my last post, I talked about the resurgence of interest in innovation.  The Covid19 Pandemic, as well as some other factors, contributed to this interest as individuals and organizations who had never worked together before pooled their knowledge and skills to respond to some urgent needs.  This “next level” collaboration led to many new and innovative ways of doing things, and those involved are hoping to find ways to keep that collaboration, and the innovative solutions that came from it, going.

Learning from Others  One important aspect of this collaboration was the willingness to learn from others.  Everyone brought different perspectives, knowledge, and experience to the table.  Learning what others did, or would do, was inevitable.  Interestingly, there is an improvement methodology built around learning from others, one that often leads to real significant breakthroughs.  Benchmarking (the process of identifying and adapting best practices) has been around since the early 1980s, but I maintain that it is the most underutilized improvement method.  So, if learning from others is becoming comfortable, even attractive, for those seeking innovative solutions, perhaps Benchmarking may experience a similar rise in popularity.

Again, it’s About the Process  In Benchmarking, a team working to improve a process first learns all they can about that process.  Then they seek out best practice approaches to the same process elsewhere in the same organization, in similar organizations, or even different processes (that share some common key elements) in completely different organizations.  The group then prepares for a structured learning work session with one or more best practice organizations willing to share what they know and have learned.  Finally, the group uses what they learn to make changes to, or significantly redesign, the process they set out to improve.

Time…and Work…Saved  On the surface, Benchmarking seems simple.  However, like most improvement methods, the best results come when it is applied in a disciplined, carefully planned and executed manner.  And, it has a few characteristics that may seem counterintuitive to some.  Still, when done well, the results are often at breakthrough levels.  And, the time and work required almost always seem like very worthwhile investments compared to those results.

If you would like to learn more about benchmarking, I have a White Paper on the subject that I would be happy to send you.  I would also be happy to talk with you about facilitating a Benchmarking effort with you and your team.  Contact me at your convenience.

Jeff

Innovation: The Path to the Prize

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As a Strategic Planning Consultant, I am definitely a “trend watcher”, and one of the reasons is to make sure clients are considering any relevance of what I call the “Strategy du Jour” to their Mission, Vision, and Goals.  It seems that there is always at least one strategy (sometimes more than one) that is getting a lot of attention in leadership and management literature.  Back in the first half of the 2010s, one such strategy was innovation.  The idea of becoming “an innovative organization” and making “increased innovation” one of their Goals was becoming very popular.

The Innovation Learning Curve  So as a trend watcher, I was reading a lot about innovation during those years, and some of what I learned was surprising.  I found that there is a lot more involved than one might think with becoming an innovative organization.  Certainly, true innovation can have significant rewards, but the innovation rarely, if ever, comes without significant investment.  The subject of innovation had become so popular, that I assembled what I had learned from the literature and some clients into a presentation, “Innovation: From Start to Sustainability”, that I was honored to make at the Spring, 2017 Conference of the Michigan Society for Healthcare Planning & Marketing.

It’s about the Process  One of the most important things I've found out is that a successful innovation involves much more than the initial spark of an idea.  Moving from idea to a market ready change that will be readily adopted  is a process with four distinct stages (see diagram at right).  Each of these stages has to be consciously and actively managed, or the overall process will be less effective…producing fewer or no real innovations.

Once organizations understand all that is involved in the process of innovation, they also need to be prepared to support the process by meeting three other requirements, each with some important nuances.  These three requirements are:

  • The Right Motive
  • The Right Organization
  • The Right Resources

Back on Top?  I’ve been fascinated by how many people have talked with me about one silver lining in the Covid19 Pandemic.  They described how when they and others from different organizations came together to respond to the crisis, it led to a number of innovations.  Necessity is the mother of invention, as they used to say.   To a person, their hope was that this collaboration, often leading to innovation, might continue in some way.  Indeed, the topic of innovation seems to be very popular again.  Maybe it’s time for a refresh on how to create the best pathway for innovation.  Let me know if I can help with a quick discussion or a full presentation on the topic.

Jeff

Minimizing Risk in Strategy Implementation

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With Fall being such a popular time for developing a new Strategic Plan, it’s not surprising that after the holiday break, the focus begins to shift to implementation.  Most Strategic Plans include the development and deployment of new initiatives, expansion (or contraction) of services, or the execution of Tactics to help achieve one or more Goals.  Some of these inherent changes come with risk and uncertainty.  Problems may occur during implementation, jeopardizing the entire effort.  And these days, no one wants the added drain on time and resources needed to address unanticipated problems. Fortunately, there are a few tools that can minimize risk and ensure you have effective contingencies for any unwanted surprises that may emerge during implementation.

Invaluable Preparation  One of these tools is particularly well suited for larger scope initiatives.  It’s even a great tool to use in the final stages of Strategic Plan Development. "The Process Decision Program Chart (PDPC) systematically identifies what might go wrong in a plan under development. In a PDPC, each potential problem is linked to one or more undesirable effects, and in turn, each effect is associated with a specific countermeasure. Countermeasures are developed to prevent or offset those problems. By using PDPC, you can either revise the plan to avoid the problems or be ready with the best response when a problem occurs.1" The PDPC helps you anticipate where problems could occur during implementation, and then design effective countermeasures, or in some cases, even reverse-engineer a better plan that avoids the problems all together.

Solve Problems Before They Occur!  If you are implementing at a more detailed, operational level another tool can help: Failure Modes and Effects Analysis (FMEA).  This structured analysis takes a small team sequentially through three major phases:

1. Identification of possible failure modes (ways the implementation can fail)

2. Comparative ranking of the failures based on the severity, frequency, and detectability of each failure

3. Prioritization of the highest ranking (worst) failures and the determination of the most effective way(s) to prevent them from occurring.

FMEA can be used as part of any new product or service design as well as current product / service improvement efforts, regardless of whether it is part of your Strategic Plan.

It’s About Managing Risk  We often associate Risk Management with daily operations and the prepared response to situations that we hope will never occur.  However, there is always some level of risk and uncertainty associated with implementing strategy; after all, Strategy is about change...and improvement.  Fortunately, there are some great tools to make the implementation of improvement at any level easier and more successful.

If you would like help with using the PDPC or FMEA, or with other aspects of Plan implementation, including Business Plans or Feasibility Studies, contact me at your convenience.

Jeff

 

1 American Society for Quality Web Site (www.asq.org)

2 For more information on FMEA, I recommend a great little book on the topic, The Basics of FMEA, 2nd Edition, by R. Mikulak, R. McDermott, and M. Beauregard (ISBN-13: 978-1563273773).

Mission Matters

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In a recent Strategic Planning work session with a client, a Board member asked if the organization was running the risk of “Mission Creep”, which they felt should be avoided.  Also called “Mission Drift”, this is when organizations begin to diversify into services or products that are increasingly different from their original purpose and offerings.  In the US and some other economies, when taken to the extreme in pursuit of more earnings, this sometimes resulted in a conglomerate, a holding corporation with many subsidiaries that are unrelated, or at least seem to be.

Stick to Your Knitting  Critics of Mission Creep warn organizations not to stray too far from their core purpose, and to stick to what they know and do best.  Moving into areas where the organization had no experience or fundamental capabilities, either of it own or though partnership, is certainly a high risk and could have severe consequences.  And there is much to be said about knowing what you do best…and continuing to improve it.

We’re in the Railroad Business  But taken to the extreme, a complete lack of any evolution in purpose and portfolio is also dangerous.  This Mission Obsolescence ignores the reality of a constantly changing world, society, and customer.  It’s true that with customers, some of what they need and want from your organization rarely (or never) changes (e.g. safety, respect).  However some of your customers’ key quality characteristics - the attributes they use to evaluate how good your services or products are – do change over time.  This is inevitable in a world of constant innovation.  History has many examples of organizations and even entire industries that failed, or almost failed, due to mission obsolescence.  Remember learning about how railroads almost completely disappeared because they thought they were in the railroad business, all the while choosing to ignore the rapidly expanding world of transportation (cars, trucks, planes)?

Timing…and Information   So how does your organization find the prosperous “middle ground” between Mission Creep and Mission Obsolescence?  By keeping an ear on what your customers need and want and what’s happening with organizations like yours.  I refer to these as Market and Industry Assessments, respectively, and they are a critical early-stage component of Strategic Planning.  If like many organizations, you develop a new Strategic Plan every three years (or maybe less), make sure the process starts with thorough Market and Industry Assessments.

But don’t stop there.  The beginning of a new calendar year is one of several perfect times to refresh your understanding of what’s going on in your industry.  Why?  Because it is often when associations publish updated “Environmental Assessments” or other annual publications where they report on the latest trends, issues, and emerging best practices of interest to members. It’s also a good time, after the holiday rush starts to subside, to reach out to customers for their latest feedback and perceptions.  Staying tuned to your customers and your industry on an ongoing basis is the best way to avoid Mission Obsolescence and build the rationale for well-timed and well-planned Mission Evolution.

Let me know if I can help with an Assessment refresh, or anything else.

All the best in 2024,

Jeff

Need help with some “Fall Clean-up?”

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My Township Office hosts several “Clean-Up” events a year, one usually in the Fall.  It’s a great opportunity to dispose of some items, gain some “space” back, and feel a bit more organized. This past weekend, I was there!

The event reminded me that Fall is also a great time to “clean-up” some unfinished business in your work world, so you can relax and enjoy the upcoming holidays more.  If you need help with any of the following, or want to talk about something else you need help with, contact me at your convenience.

> Feasibility Study or Business Plan

> Implementation Plan

> Organizational Assessment or Dashboard Development

> Strategic Planning

> Great Governance / Board Development

> Employee or Client Surveys or Focus Groups

> Community Needs Assessments and Improvement Plans

> Location Analysis

> Innovation and Process Improvement, including Benchmarking

> Market Assessment, including Four Growth Strategies Evaluation

> Portfolio Analysis

> Scenario Sensitivity Analysis

> Customer Service Improvement / Excellence

I have experience in a wide range of Analysis, Planning, Improvement work, and more!  And, if I can’t help, I may know someone who can.  An initial conversation costs you nothing.  I may even be able to give you a short-cut or two.

Enjoy the Autumn!

Jeffrey Schilling

Collaboration Revisited

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Back in the summer of 2015, I suggested that people should start building their “Collaboration Skill Set.”  The inspiration for this came from data I was seeing on the rise of collaboration, in particular formal collaborations such as mergers and acquisitions. They had been increasing steadily since 2009 with a noticeably sharper upturn in 2014, the year before I wrote my column.  Mergers and Collaborations have always interested the “Strategic Planner” in me as they are often the means to one or more strategic ends.

Different Time, Same Recommendation  Its now 8 years later, and Covid19 definitely had an impact on Mergers and Acquisitions, like most other things.  But like some of those other things, the impact seems to have been mixed.  After a dip in 2020, followed by a record high year in 2021, things look to have eased off again in 2022 and perhaps 2023 as well according to the most recent data.  Still, I think it may be time once again to sharpen your collaboration skills, even if formal Mergers and Acquisitions are slowing down.  That’s because I believe we are on verge of a period of unprecedented collaboration in general, and in this case, Covid19 was definitely a significant factor.  As I wrote in 2015, “Mergers may garner the headlines, but I think they are just one form of collaboration.  For every full, formal merger, how many work group consolidations, shared-service arrangements, or joint ventures do you think occur?”

Crisis > Collaboration > Innovation  Covid19 was a significant Crisis in just about every way and presented major challenges to customer interaction, supply chain management, cash-flow, capital investment, and workforce recruitment and retention, just to name a few things.  The urgency and human impact of the pandemic forced organizations to work together on a new scale and to a much greater degree.  In efforts to respond, they needed to collaborate and often develop new and innovative ways to deliver essential services and meet even basic needs.  This was nowhere more evident than in the health and human services sector.

Realizing the many upsides of these collaborative efforts, I think the organizations involved will be looking to continue them in some way, having seen like never before how collaboration can be a tremendous catalyst for innovation.  Indeed, I have been struck by how many stakeholders I’ve interviewed recently as part of Strategic Planning engagements expressing a desire to keep the impactful collaboration started during Covid19 going.  But that’s only one of two major drivers of collaboration I see emerging.

Right Tool Set for The Job  Not long before Covid19, many health and human services were beginning to understand the critical importance of Social Determinants.  Poverty fighting organizations like Community Action Agencies were learning about and trying to address Social Determinants of Poverty (SDoP) earlier in the past decade.  Not far behind them were health care organizations, realizing that Social Determinants of Health (SDoH) were at the heart of the “Complex Patient” – the 5% of the US Population that utilizes 50% of all health care resources (1).  Other types of human services organizations are realizing the same thing, and all these organizations are finding a lot of overlap among their social determinant lists.  But ask any of them how they plan to address social determinants and you will find that they are still looking for solutions.  I think the magnitude and complexity of addressing social determinants is another perfect storm for increased collaboration.  It will require the innovation that comes from collaboration among different organizations with different resources, perspectives, context, and ways of thinking to begin solving the challenge of social determinants.  So, this path might be Complex Problem > Collaboration > Innovation.

Growing the List  Back in 2015, I listed four great reasons for why organizations might consider collaboration at some level.  In 2023, I think we need to add a fifth and sixth to that list:

  1. Greater economy of scale
  2. Improved competitive ability and/or position
  3. Increased access to needed resources and/or capacity
  4. Expansion into new markets (geographic or product/service mix)
  5. Responding to a Crisis
  6. Solving Newly Realized Complex Problems   

If I’ve convinced you that the time is ripe for more collaboration, what about that skill set I mentioned back in 2015? I’ve listed some of the key ones here (see sidebar).  In some cases, you may find it helpful to engage an outside facilitator who can bring objectivity and additional expertise.  I also have a short simple guide to thinking about the different levels of collaboration, from the most informal, small scale of efforts to major, formal ones such as mergers and acquisitions.  It also describes the critical success factors to all levels of collaboration. If interested, just e-mail me and I’ll send it along.

In closing, I think the last words I wrote in that 2015 column still fit:

“Signs point to more and more collaboration in most industries.  Bigger isn’t always better, but working together toward common goals usually has the potential for better results.  Are you ready to thrive in an era of collaboration?  If you would like help with a specific collaboration effort or with building your collaboration skill set, contact me.”

Jeff

(1) Mitchell, E.M. Concentration of Healthcare Expenditures and Selected Characteristics of High Spenders, U.S. Civilian Noninstitutionalized Population, 2017. Statistical Brief #528. February 2020. Agency for Healthcare Research and Quality, Rockville, MD. https://meps.ahrq.gov/data_files/publications/st528/stat528.shtml

Explore New Ideas with Feasibility Studies

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As organizations emerge from the crisis management required during Covid19 and take up their strategic planning, many are feeling the need to “reset”.  The time seems right to revisit what was important prior to Covid19 but also take a closer look at what was accomplished during the pandemic.  This includes the new ideas and innovation in service delivery born out of necessity.  The pandemic was also a time for increased collaboration among organizations working together to address priority needs, which brought about more new ideas.  As a result, you may have at least one (maybe more) new ideas waiting to be tested on a larger scale or even explored for the first time.

A new idea...but... Covid19 could have been the impetus for new ideas, however it may also have left your organization with thin margins – or none at all.  If so, capital investments must be chosen more carefully than ever.  At the same time, workforce shortages are increasing the number and scope of responsibilities on everyone’s plate.  So where can we find the time to explore that new idea more fully before making the “go / no go” decision?  Business Plans have always been a great tool for this, but done well, require time to gather and analyze a range of information and develop the basic tenants of implementation so that the idea can be truly tested.  With tight capital and an overstretched leadership team, is there an alternative?

Another Approach  Feasibility Studies may be a viable option.  They can be thought of as a lower investment precursor, and sometimes alternative, to Business Plans.  While Business Plans fully explore whether (or not) an idea is a sound business decision, Feasibility Studies can be thought of as further upstream thinking: is this idea even doable and realistic?  Good opportunities for application include:

♦ New Services or Products

♦ Changes in a Core Process

♦ Process or Quality Improvement Efforts

♦ Exploring New Customer Markets

♦ Changes in Organizational Structure or Capacity

♦ Partnerships with Other Organizations

Though more limited in scope and detail, Feasibility Studies contain several key components also found in Business Plans, including an overview of the opportunity, a description and quantification of the target market/customer, and an assessment of risks.  Financial analysis is often high level.

One Destination...Many Paths  In cases where the findings are very promising and more or less conclusive, Leadership may proceed directly to implementation.  In other cases, they may opt to proceed to the development of a Full Business Plan.  In that case, some of the work of the Business Plan will already have been completed and can be incorporated, saving time and effort.  Both Business Plans and Feasibility Studies also provide valuable information for implementation planning, especially for large scale / scope projects. So, depending on your idea and situation, there are actually many potential paths from idea to project start (see diagram at right).

Right Tool...Right Time  In certain situations, a Business Plan would be the best tool for exploring and planning for a new service or major change.  That is why Boards and Leadership Teams rely on them to make a final go / no go decision on those kinds of major projects.  However, if you are an earlier stage with your idea...still wondering if it is a good one or not...and time is tight, then the Feasibility Study may be a viable option depending on several other considerations.  And just like Business Plans, you can easily take on the work internally or outsource the work for an even quicker answer.

If you want help deciding on the best path to take your idea to “start”, or you want help with a Feasibility Study, Business Plan, or Implementation Plan, contact me at your convenience.

Jeff

Nolan’s 3 Questions for Improvement…and more!

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What are some of the most lasting and useful things you have learned…things you find you can apply over and over through the years and they just keep working?  It might be a concept, a technique, or a key piece of information.  Look in the top drawer of your own professional tool kit and I’ll bet you’ll notice something in common.  Many of the best tools work well in a variety of different applications.  This versatility is part of what makes them so useful.  I have found this to be true with some of the tools and concepts I’ve learned in the field of Quality Improvement, including one of my own favorites, Nolan’s Three Questions.

Dr. Thomas W. Nolan, a statistician, author, and consultant, gave us a framework for process improvement in the form of three simple questions:

1) What are we trying to accomplish?

2) How will we know that a change is an improvement?

3) What changes can we make that will lead to improvement?

Nolan recommended that those working in quality improvement should know, or determine, the answers to these three questions in order to ensure the efficiency and effectiveness of their work, which in turn should follow the Plan-Do-Check-Act (PDCA) Cycle (see diagram).  Indeed, I’ve found the exercise of answering these three questions to be an excellent tool in beginning any improvement effort, and they are very effective in diagnosing why an existing effort has stalled.  However, I’ve also found them to be a useful construct for other work, including:

  • - Targeting research efforts
  • - Organizing feasibility studies and business plans
  • - Refining dashboards and balanced score cards
  • - Adding clarity to strategic initiatives

If you’ve not had a chance to apply Nolan’s Three Questions, give it a try.  Let me know if I can help.  It is just one of many tools from the quality field that you might find helpful in both quality improvement as well as in other work.  Just as every leader needs to master the basics of finance or marketing, knowledge of quality improvement fundamentals has become another requirement in today’s organizations.  You can learn more about quality improvement tools, principles, and application from the American Society for Quality.

Jeff

New Tool: Scenario Sensitivity Analysis

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I’ll admit, I’ve always been on the fence about Scenario Planning, but I have a hybrid approach that may help you sleep better at night.  Let me explain.

Scenario Planning – Yes! ..or Not Sold?  Scenario Planning does have its fans, and also, some skeptics.  Fans will maintain that if there is some major new development on the horizon – could be related to the competition, regulations, innovation, or funding, just to name a few – it would be foolish to not only acknowledge it, but even plan accordingly.  However, Scenario Planning also has its skeptics.  One reason is the scenario doesn’t always unfold as predicted.  Another reason is it may completely miss the occasional disrupter that isn’t on anyone’s radar (Covid19, surprise merger, etc.).  And yet, we often do have early indications about some potential disrupters.  Examples include the current workforce shortage, increasing tele-health adoption, inflation.

Two Planning Philosophies?  One more thing to consider.  Some Scenario Planning skeptics would also point out that there is also something inherently "reactionary" about building a Strategic Plan around an external development.  This reactionary mindset runs somewhat counter to the more "proactive" posture of creating something new...a desired future state.  One of my favorite Strategic Planning quotes frames this dichotomy even more clearly:

“There’s a current of thinking today which says that because things are changing so rapidly, it’s impossible to have a strategy.  All you need is to be agile and react to immediate change. That is wrong.  It allows someone else to determine the constraints under which you’ll operate.  Organizations with a strategy will set the terms of competition.”

Alvin Toffler, Hospitals and Health Networks, January, 1999

Finding the Best of Both Worlds.  In fact, identifying and considering countermeasures for  potential disrupters is a hallmark of well-done Industry and Market Assessments, which in turn are some of the most crucial early stage work in developing a Strategic Plan.  Ignoring scenarios that are plausible enough to have us worried doesn’t sound like a good idea.

So how do we “rethink” scenario planning, moving from a reactionary posture with regard to one major disrupter, to proactively preparing for a handful of possible disrupters.  This is what started me working on a tool which I call a Scenario Sensitivity Analysis.  Users of the tool, usually a small group, identify the handful of Scenarios that they are most concerned about and also believe are the most plausible.  A scaled matrix provides a framework for evaluating the impact of each scenario on each of their goals.  At least one leading measure is identified for each scenario, and where scenarios could have a high impact on any particular Goal, “early stage” insights are developed, to be built on and added to by a designated team if the scenario begins to materialize.  The tool can be used as part of the process for developing a new Strategic Plan or applied to an existing Strategic Plan.

A Better Way to Be Prepared.  As you continue to find the “new normal” in the (hopefully) waning stages of Covid19, you may have thought “who saw that coming?”  From what I have read, other than a few Epidemiologists, almost no one.  Covid19 taught us, among other things, that some scenarios can’t be anticipated.  So hopefully, worrying about the next wild card disrupter isn’t keeping you up at night.  However, not considering, and not making reasonable preparations for, the ones that we believe may indeed become reality would be regrettable, and if they materialize, make our plans more difficult to implement.  If in turn that is what keeps you from getting a good night’s sleep, I have a new tool that can help.  And, I am looking for opportunities to work with clients to make it even better.

Contact me at your convenience.

Jeff

Beyond Covid19 Part 4: Optimized Implementation

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In recent months, more is being written about a few positive impacts of Covid19, one of which is how it served as a catalyst for innovation.  Out of necessity, organizations had to find new and different ways to meet customer needs.  These changes could be thought of as mini innovations, and now that things are beginning to return to pre-Covid19 conditions, at least in some ways, these mini innovations are being reconsidered.  Should they continue and be hardwired into the post Covid19 reality?  Or not?

In addition, many organizations are finding out that customer needs and preferences have also changed, making some products or services in the Pre-Covid19 portfolio less relevant, while creating interest in some new ones (see Parts 1 – 3 in this Blog Series).

Now What?  Whether you have identified the need to now fully implement a new process, product, or service (an innovation) developed during Covid19, or launch an entirely new idea emerging from your efforts to level set as described in the earlier blogs in this 4-part series, you are now at the point of implementation.  How can you make sure implementation will go as smoothly as possible and help this innovation live up to expectations?

The Path to Better Implementation  Fortunately, there are some great tools to help you plan and execute the implementation.  One of them is called a Process Decision Program Chart (PDPC).  The PDPC provides a systematic framework to error-proof an implementation.  First, each problem that may occur or be encountered is identified.  Then each potential problem is linked to one or more undesirable effects.  Countermeasures are then designed to nullify or preempt the effect, or in some cases, prevent the problem from occurring.  Once complete, the PDPC can indicate where implementation plan revisions are needed, or enable the best response when a problem occurs.

Making it Work  When you decide to introduce an innovation in process, product, or service, whether related to Covid19 or not, be sure to make the most of the opportunity by optimizing the implementation.  I can help you leverage PDPC and other implementation tools to ensure your innovation gets off to the best possible start.

To recap the key points of this blog series:

1. Take time for a Customer Knowledge Reset and see how (not if) your customer needs have changed.

2. Conduct a Portfolio Audit to see if your services still match customer needs.

3. Identify the innovation(s) needed to meet new or changed customer needs.

4. Optimize your implementation to better ensure the success of the innovation(s).

It all reminds me of that old insight often shared about the Chinese word for Crisis being composed of the both “danger” and “opportunity” (or change point).   Covid19 was certainly a major crisis for most organizations and work groups, maybe your own.  However, as we begin to emerge from some of the most dangerous periods, let’s seize the opportunities that may have come with it.

Jeff