Why do process redesigns fail?
Despite these factors, Hospital A's redesign does not deliver the expected results. Hospital B, however, implements its redesign with great success. What was the difference? What was the key to Hospital B's success?
Since 1990, when Michael Hammer first described the concept of reengineering processes, (1) as well as in his 1993 book co-authored with James Champy, Reengineering the Corporation, (2) organizations from diverse industries around the globe have turned to process-based thinking and transformation to bring about change.
Yet, as Hammer himself recently pointed out, many organizations, despite creating excellent process redesign plans have made little or slow progress producing the kind of radical change they desire. (3) Why is there a disconnect between a well-executed design and the ability to attain high performance change?
Based on his research involving organizations that have been both successful and unsuccessful with process change, Hammer has proposed a framework, called the Process and Enterprise Maturity Model or PEMM. (3) This model centers on five characteristics that enable processes to deliver high performance over time.
These process enablers are mutually interdependent. Weakness in any of the process enablers will undermine the effectiveness of the entire process. Both Hospitals A and B had strong and mature process enablers in place. It is not enough, however, to have just strong process enablers.
You must have mature enterprise capabilities, as well. No matter how great your process enablers and process redesign may appear, an individual process cannot attain a high level of performance until the enterprise capabilities are at their highest level. (3)
Hammer describes four enterprise-level capabilities required for processes to take root in an organization. These include culture, leadership, expertise and governance. Since both hospitals have strong process enablers in place, how could they apply Hammer's framework to evaluate their respective enterprise capabilities?
From the standpoint of culture, Hospital B's operating room, when analyzed as an enterprise, supports and embraces a culture with clear expectations for performance across multiple dimensions, teamwork across all disciplines, personal accountability and a willingness to accept change.
For Hospital A, the answer is "maybe" or "we don't really know" when asked about these components of culture. Without a strong operating room culture to support process change, it is unlikely that redesigning an individual process such as patient flow will take hold.
The second enterprise capability involves leadership. Is the senior leadership team dedicated to systems thinking and does it take the lead in process efforts? Does the senior executive team exercise its leadership through vision and influence rather than from a standpoint of command and control? (3)
Hospital B's leadership team recognizes that process management and improvement is a way of managing the entire enterprise. The operating room process redesign is seen as one of the many strategic processes necessary to achieve the vision for the organization. They allow the operating room process owners and process participants to manage, change, and even radically redesign their own processes, rather than attempting to direct and control the individual operating room processes.
Hospital A's senior leadership team sees the operating room redesign as just another project, rather than as a way of managing the business. Any process management or change must be directed upward through a hierarchical chain of command, led by individuals who are not involved in the day-to-day management of the operating room processes. Without strong, process-oriented leadership in place, even the best redesign projects likely will fail.
The third enterprise capability is expertise. Is process management and redesign a core competency in the organization? Are there individuals across all levels of the organization, from the senior executive team to the front line employees, with skills in process thinking, management and redesign? Are there formal mechanisms for developing, training and maintaining process skills? (3)
Since Hospital B's senior leadership team looks at process management as the means to manage the entire enterprise, it is not surprising that process management and redesign skills are embedded in the recruitment and training at all levels of the organization. As a result, individuals, though not directly involved in the operating room processes, understand how the operating room redesign project will affect other processes.
For Hospital A, while those involved in the operating room redesign have expertise in process management and design, this expertise is not pervasive throughout the organization. Individuals not directly involved in operating room processes are neither interested in the outcome of the redesign project, nor do they understand the influence of processes across the entire enterprise.
Even with strong expertise in process management and redesign in the operating room, Hospital A is unlikely to succeed in the long term if others in the organization do not have the expertise in process thinking to understand the interdependence of processes across the entire organization.
Finally, the enterprise must have strength in its governance structure. Is the senior management team structured around processes, with process owners sharing accountability for enterprise performance, rather than individual process performance? Does the governance structure drive process oriented strategy and change? (3)
As stated previously, the senior leadership of Hospital B centers its strategy on the interdependence of processes. Its governance structure functions to direct strategy and reward performance across all of their processes. Because it recognizes the interdependence of its processes, Hospital B rewards enterprise-wide performance, rather than individual process performance.
Hospital A's governance structure is not process oriented. The hospital is divided into management silos. Success is measured and rewarded based on the performance of the individual silos. The result is little communication or cooperation across functions and processes.
Without a governance structure in place to support and reward process interdependence across the entire enterprise, it is difficult for a single process redesign to have far reaching influence and effects in the organization.
Since operating rooms and their associated surgical procedures are major drivers of revenue in hospitals, it is not surprising that many hospitals have attempted to improve performance by undertaking operating room process redesign and transformation.
Whether attempting this on their own or with assistance from consultants, the greatest redesign plans may not deliver the radical change and high performance expected. By evaluating both the process enablers and the enterprise capabilities together, however, an organization may not only predict its success or failure with process change, but more importantly it may identify the specific process enablers and/or enterprise capabilities that are an impediment to high performance process redesign.
David P. Tarantino, MD, MBA, is executive medical director of Shock Trauma Associates, P.A., a 50+ physician, multispecialty practice associated with the University of Maryland School of Medicine. In addition, he is the chief executive officer of The MD Consulting Group, LLC, a health care management consulting firm in Baltimore. He can be reached by phone at 410-328-2036 or by e-mail at email@example.com.
1. Hammer M.: Reengineering Work: Don't Automate, Obliterate. Harvard Business Review. July-August 1990
2. Hammer M, Champy J. Reengineering the Corporation: A Manifesto for Business Revolution. Harper Collins Publishers. New York, NY, 1993
3. Hammer M. The Process Audit. Harvard Business Review. April 2007
By David P. Tarantino, MD, MBA
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|Title Annotation:||Nuts and Bolts of Business|
|Author:||Tarantino, David P.|
|Date:||Jul 1, 2007|
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