taken separately. in other words, the · mindset to achieve this systemic goal of the organization....

How is Your Management System Working? 1


Every enterprise has a Management System,

whether the people inside know it or not. This

Management System may have been

intentionally conceived and deployed, or it

may have developed ad hoc. For better or for

worse, there is a Management System. Even if

many of the system components are good,

they will fail if not integrated properly in the

overall Management System.

To understand what a Management System is

or might be, first one must understand what a

system is. At its most basic definition, a system

is a whole that cannot be divided into

independent parts. The human body, for

example, is a system consisting of many

interdependent subsystems like the circulatory

system, the respiratory system, the digestive

system, and so on. Any one of these parts

cannot function and survive on its own. The

body lives and thrives in the interactions of the

subsystems. The parts of a system satisfy three

conditions:

1. Each of these parts affects the whole

and is necessary.

2. No individual part has an independent

effect on the whole system. The way

that each part affects the whole

depends on what the other parts are

doing. The parts are interdependent and

connected.

3. No subgroup of parts has an

independent effect on the whole

system. If parts of a system are grouped

into subgroups or subsystems, they have

the same properties as do the individual

parts.

We know the properties that make up a

system are the product of the interaction of

the system’s parts, not the sum of those parts

taken separately. In other words, the

properties of the whole are derived from the

interaction of the parts and not the actions of

those individual parts.

The late Dr. Russell Ackoff, a pioneer and

leader of systems thinking and management

science throughout the second half of the last

century said:

“Managers fail to diagnose

the failures of the fads they

adopt; they do not understand

them. Most panaceas fail

because they are applied anti‐

systemically. They need not

be, but to do otherwise

requires an understanding of

systems and the ability to

think systemically.”

I would argue that at a very high level your

Management System should be made up of

three dimensions. Imagine in your mind that

you have a triangle and on each corner is one

of three nodes representing these three

dimensions. The three dimensions represented

by the three nodes are Purpose – People –

Process, which sum up the critical areas that

need to be captured in the Management

System. The results of your Management

System come from the interactions of these

three dimensions, not the sum of the

dimensions taken separately. Within each

dimension there are many subsystems and, of

course, within these large dimensions there

are many questions for any enterprise to


answer to help understand if the parts and

subsystems are connected or disconnected.

From the dimension of Purpose, one might

initially question what the company’s long

term strategic and philosophical purpose

should be. What are the large strategic

imperatives that must be achieved over the

next one to three years? What are the large

hypotheses that we believe will address those

imperatives? How will we ensure proper

alignment? How do we think about

deployment? How often will we review? How

do we think about studying our effort and then

making adjustments when needed? There are

many more questions that I am sure you could

imagine to help connect the dots.

From the dimension of People, one might

question how people are trained. How do we

ensure people are engaged? How do we

capture all their amazing ideas? What kind of

culture do we want? How do we show respect

and lead with humility? How do we deal with

people issues when they arise? What do we

want leadership to look like in our company?

How do we treat people as individuals? There

are so many questions, and it is always good to

remember that everything we are trying to

accomplish is done through People.

From the dimension of Process, one might be

initially interested in a simple question ‐‐ what

is our Standard? Are we following the

Standard? How much variation exists in the

process? How do we think about improving

the process? How do we think about problems

or obstacles that are in our way moving

forward? What was our last experiment? What

did we expect to happen and learn from that

experiment? What actually happened? What

did we learn? These questions could become

very detailed as we move up and down

throughout the organization.

If we stop to reflect, we realize that most

things connect to something else in an

enterprise. All of these elements, connected to

each other, are also constantly changing.

Understanding the relationships and

interconnections of the elements of a system

makes better decision‐making possible and

creates visibility for improvements. Systemic

thinking encourages improvements which are

made on the system as a whole rather than on

individual components of the system (e.g.

departments), which is often where ideas for

change are initiated. A sign of a mature culture

of excellence is the elimination of a silo

mentality, replaced by an enterprise mindset.

By looking at the big picture and having an

enterprise mindset, people are aware that

changes in one part of the organization

invariably affect people in other areas. They

communicate and collaborate with each other

concerning the long‐term enterprise‐wide

implications of each decision. Here, leaders are

being intentional at trying to connect the dots.

Below, the image comes from geometry and is

related to what is called an “Icosahedron”. I

am using it as a picture for our mind’s eye to

show the complexity of systems in companies

and the difficulty of connecting the dots. The

triangle initially mentioned has grown. Once

again let us remember the quote from George

Box, “All models are wrong, some are useful.”

The triangle model mentioned earlier exists at

a high level and is incomplete, as all models

are. There are numerous examples of this in

healthcare. Let’s look at an example where a

goal was provided to a Radiology Department.

When speaking to the director of that

department, she said that her department had


been provided a goal of a seventy‐minute CT

scan turnaround time. Since many patients in

the ED get a CT scan, it makes sense to align

the CT Department’s goal with the Emergency

Department’s goal to reduce total length of

stay to 120 minutes.

After taking a closer look at the goals of the ED

and their activities, it was clear that it would

be very difficult if not impossible for the

Radiology Department to hit its goal without a

value stream, or systemic,

approach. There are also

several unit‐specific or silo

processes outside of Radiology

that affect this goal. The ED,

the Laboratory, and Radiology

must all work together,

collaborating their individual

processes into one patient

value stream that meets the

more systemic goal of creating

greater value for customers. Even though the

Radiology Director was able to eliminate a few

minutes in her phase of care within the

Radiology Testing Department, it was not

enough to meet the goal of the system. For

example, included in the 70 minutes to

complete CT, there is a 42‐minute period from

the time the order is placed until the patient

arrives in the CT department. Together, ED and

Radiology must work together to collapse this

time in order to meet the overall systemic goal

of 120 minutes throughput time for patients

using the Emergency Department.

Furthermore, if labs are needed, all three

departments must coordinate to ensure that

all processes are done concurrently within the

time limit. All the processes that take place

from the time the ED physician places a CT

order to the time the Radiologist signs his/her

report must work together with an outward

mindset to achieve this systemic goal of the

organization.

The communication and collaboration with

each department concerning the long‐term

enterprise goals don’t always align. Good

team members, doing their very best job to

make their own department the very best it

can be, will not, by itself, be adequate. This

reductionist approach can lead to local

departmental optimization, but often at the

price of sub‐optimization of the

entire system. Imagine how

much more the Admissions,

Radiology, Respiratory,

Laboratory, and other

departments could achieve if

they all were working on the

same ED Length‐Of‐Stay goal

together, learning how each

process affects the other?

To think systemically is very difficult, because

it is counterintuitive. We have been told, and

maybe even said ourselves throughout our

careers, that if each department or individual

does their very best, then as a whole we will

do our very best. This is not necessarily true,

because when you improve the performance

of each part of a system separately you do not

improve the system as a whole and are very

likely to hurt it. This is counterintuitive to how

many of us have been trained in college,

graduate school, medical school, and in life.

Consider the physician for a moment. He or she

is a very important component of the overall

healthcare system. If the physician works

diligently to optimize his or her own efficiency

but does so at the expense of the patient’s

experience or quality outcomes, than value is

lost. The doctor’s attempt to gain personal


efficiency resulted in the healthcare system

failure to create greater value for customers.

This same concept applies to all healthcare

workers and healthcare professionals.

Simply put, when we think systemically, we

must ensure we are connecting the dots. The

better we understand the connection between

the parts or subsystems, the better we can

make changes that improve the system.

Remember that the properties that make up a

system are the product of the interaction of

the system’s parts, not the sum of those parts

taken separately. Therefore, if one is not

getting the properties (or results) that they

expected, then maybe everything is not

connected appropriately.

We looked at the need to have several

departments connected to achieve the overall

Challenge (i.e. goal or objective) of an

organization. Now let us look within a

department. Recently I was speaking to a CEO

of a hospital about his frustration with a

specific department and its lack of

improvement around a specific lagging metric.

I asked him about the Challenge that they

were striving to achieve and dug into why this

was important and how it was connected to

the overall strategic initiatives of that hospital.

Eventually, he was able to answer the

question, but when I pressed him if the folks

doing the work understood the “Why” behind

this big Challenge, he said, “Probably not.”

This department was using a scientific

approach that had been successful in the past.

The CEO even admitted that the team

members had been engaged in the past but

now seemed to be disengaged. Can you see

where the high‐level triangle system of

Purpose – People – Process quickly became

disconnected? I am sure the people felt

disrespected, but we also miss getting what

the entire person has to offer. We missed their

creativity, successes, and failures. When they

do not understand the Purpose or the “Why,”

we might have their physical bodies but not

their hearts and minds. Most importantly,

these folks are closest to the actual work and

have the greatest impact on the results.

Within our company, the improvement system,

which exists within the overall Management

System, is made up of several subsystems and,

within those subsystems, each is embedded with

the necessary tools to enable the successful

outcome of the system. I often reflect on the

improvement system and the connection of the

subsystems and tools. I tend to be passionate

about the connection. Some of those subsystems

are elements like Strategic Deployment,

Improvement & Coaching Kata, Training Within

Industry (TWI) Job Instruction (JI), Job Relations

(JR), and Job Methods (JM), Standards, Visual

Workplace, etc. I fundamentally believe in these

elements because I believe them to be based on

principles. These principles are timeless and

universal. These elements may not be a part of

your improvement system or ultimately part of

your management system, but remember we

started off saying that every enterprise, whether

the people inside know it or not, has a

Management System. This Management System

may have been intentionally conceived and

deployed or it could have developed ad hoc. For

better or for worse, there is a system, and even if

many of its components are good, they will fail if

not integrated properly in the overall

Management System.

Systems drive behaviors in an organization.

Behaviors observed in any organizations

reflect that organization’s true culture. Earlier


in this article I talked about the three

dimensions of Purpose, People, and Process.

If the behavior of people in an organization,

relative to those three dimensions, are based

on true, universal guiding principles, excellent

results will follow. In other words, if how they

treat each other, how they understand and

align their purpose, and how they improve

their processes, are based on timeless

principles, their ideal behaviors will generate

ideal results.

Chris Butterworth stated it well when he

wrote, “To succeed, organizations must

develop management systems that align work

and behaviors with principles and direction in

ways that are simple, comprehensive,

actionable, and standardized. Organizations

must get results, and creating value for

customers is ultimately accomplished through

the effective alignment of every value stream

in an organization.”

There are many companies

and good intentioned

people promoting parts or

subsystems but as leaders

we must figure out how

they connect within the

overall Management

System. We also must take

the existing good parts or

subsystems and ensure they are connected

properly. Recently I had the privilege to

coauthor the book Creating an Effective

Management System: Integrating Policy

Deployment, TWI, and Kata. If this subject

interests you, we would be honored for you to

pick up a copy (bit.ly/effectivems). Finally, I

would like to encourage you to reflect on your

Management System and simply ask yourself

how your Management System is working.

ABOUT THE AUTHOR

Skip Steward currently

serves as Vice President and

Chief Improvement Officer

at Baptist Memorial Health

Care headquartered in

Memphis, TN where he

develops, directs, and implements performance

improvement activities identifying

inefficiencies; implementing strategies to

improve quality, service, and finances; and

fostering a culture of continuous improvement

and excellence.

ABOUT THE PUBLISHER

Lean Frontiers, Inc. hosts industry‐leading,

intensely‐focused learning events for the lean

community. These events take the form of

Large Summits, Hands‐on Workshops, and

Online Courses. Everything we do is focused on

involving EVERYONE in lean thinking and

developing required SKILLS to sustain it.

Involve Everyone: A successful, integrated lean enterprise must involve EVERYONE.

Our learning events are geared toward

those in Accounting, HR, IT, Product

Development, Supply Chain, Sales &

Marketing, and Executive Leadership.

Develop Skills: Most lean organizations

are missing core culture and behaviors

that sustain lean. To address these gaps,

we offer learning opportunities on skills

including TWI (Training Within Industry)

Job Instruction, Job Methods, and Job

Relations, Toyota Kata, Lean Coaching,

and Lean Leadership Development.

Learn More: www.leanfrontiers.com

taken separately. in other words, the · mindset to achieve this systemic goal of the organization....

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