Healthcare Innovation: Sense/Respond/Adapt series, part 1

More Consultants and Technologies? Or the Right Consultant and Technology?

 My years as a physician, healthcare executive, academic researcher and patient have taught me one thing for sure: in acute care medicine and management, although our predictions and estimates are usually correct, we really don’t know what’s going to happen tomorrow.

If you are a clinician, you know as soon as you say, “Boy, it sure is quiet tonight,” the ambulances from a crash of a busload of hemophiliacs arrive. For an executive, it’s always another unexpected cost, drop in volume, unfunded mandate, regulation, or audit that disrupts our best-laid plans. We live in an unpredictable world because unexpected, unpredictable things happen.

Most of us intuitively know that is true – but why is healthcare so unpredictable?

Maybe it’s because we don’t have enough rigorous, data-driven management systems in place (e.g., Lean, Six Sigma, Activity Based Costing, Compliance and Control); or we don’t have enough technology (e.g., EHR’s, Data Warehouses, Enterprise Resource Planning systems).

Are tighter management and more data systems the answers? How would we know? One option is to do a Root Cause Analysis. So let’s “Ask ‘Why’ five times,” using the mindset of a traditional executive decision maker.

  1. Why is healthcare unpredictable? Because our work is not standardized.
  2. Why is our work not standardized? Because we have too much process variation.
  3. Why do we have process variation? Because we haven’t gathered and analyzed enough data, done enough projects/Kaizens and implemented enough standard work, e., not enough project-based, process reengineering and control.
  4. Why not enough data, projects and implementations? Because that’s a lot of work requiring many experts doing lots of work to help reengineer processes.
  5. Why are too much work and not enough experts & technology a problem? Because we haven’t hired enough expert consultants and bought enough technology to standardize Best Practices and eliminate variation throughout the organization.

So, the answer must be: hire more consultants and buy more technology. Wrong!

This is exactly what we have been doing at steadily increasing rates and costs for the last forty years. Despite all our hard work and the diligent efforts of many committed intelligent people, no large healthcare organization can consistently provide more access to better, safer care at continually lower cost. That is the value-driven healthcare problem we must solve.

I’m not optimistic that “trying harder” with more consultants and technology is the answer. I see our current situation analogous to Dilbert’s:

Dilbert image

Think about your healthcare organization. Is Dilbert a cartoon, or a documentary?

If it is a documentary, you work in an organization that frequently hires consultants and uses technology to eliminate variation and implement new, machine-like, efficiency systems.

If that fits, don’t feel alone. These traditional “Mindsets, Methods, Strategies and Structures (M2S2)” are present in established organizations, both in and outside of healthcare.

In my four years as a Visiting Scholar at Harvard Business School, I discovered our data up/implement down M2S2 was built on management systems born in the Industrial Revolution of the late 19th Century and then brought to fruition with more consultants and technology in the mid 20th Century.

Now, the problem is our 21st Century world is much more complex, dynamic, and unpredictable, particularly in healthcare. So, should we hire more consultants, buy more technology and try harder?

The evidence shows that is not the right question to ask. Why? – Let’s put it this way: buying more forks will not make it easier to eat soup. It’s not more; it’s the right consultants and technology that will make the difference.

Here’s why (a quote from my book in Chapter 8),

“Exact medicine can no more be achieved than exact history. Because no human story with a foreordained plot can be anything but a fiction.”
Joseph Schumpeter

Traditional 20th Century consultants and technologies eliminate variation and increase control to effectively Make, Standardize and Sell profitable products and services. The objective was to implement “the plot” of standard work, compliance and control. In the simpler world of the Mid-20th Century, it worked and success was built on “Make/Standardize/Sell.“

In the unpredictably complex world of today, the compliance and control “plot” has become a fiction. We are great at improving what we know how to do, but find it almost impossible to adapt and do what we don’t know how to do: e.g., organically innovate. Harvard Business School and many other researchers’ data are clear; 95% of established organizations fail to innovate outside the framework of their current success. They fail to Sense, Respond and Adapt.

This is not a fight; Make/Standardize/Sell systems are still important, but most managers are pretty good at doing that already. It’s just that success in 21st Century, value-driven, healthcare requires a Sense/Respond/Adapt capability that traditional consultants and technology reengineering processes and standardizing work can’t deliver.

Like exact medicine, exact management can no more be achieved than exact history. Key to success in an unpredictable work is the ability to Sense, Respond and Adapt.

So, it’s not more; it’s the right consultants and technology. Fortunately, the history of innovation is clear about what the right consultants and technologies will do. They will:

  1. Support current Make/Standardize/Sell capabilities
  2. Simultaneously enable organizations to Sense/Respond/Adapt to create new value products and services.
  3. Understand the secret of success: it’s not either/or, it’s


What do you think? Do we need more consultants and technology or the right consultants and technology? And, if so, how would you identify them?

This is the first in a series of Agile, Adaptive Leadership Innovation M2S2 Guides designed to help you identify the right consultants and technologies to better manage in the present and Sense/Respond/Adapt to make the future.  In the next we explore the characteristics of Make/Standardize/Sell and Sense/Respond/Adapt in complex organizations.


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CEOs love talking about culture. Here’s why they shouldn’t.

Written by Lindsey Dunn on August 22, 2014 for the Becker’s Hospital Review, The Daily Beat Blog

Attributing organizational success to culture doesn’t help anyone, because no one knows what culture is.

Ask CEOs in any industry their secret to success, if their answer isn’t “the people,” $100 says it includes the word “culture.” In one edition of Wall Street Journal’s “The Experts” column on the five biggest priorities for CEOs, culture is mentioned 15 times!

But what the heck is “culture”? Continue reading

OMG – Knowledge versus the Elephant!

Written by John W. Kenagy, MD and David Westfall
Originally printed in the November 19, 2013 issue of “FYA, For Your Advantage”, a publication from TrendLeader Connections.

“Information is not knowledge,” so said Albert Einstein.

Especially, we might add, when it comes to healthcare.

In 2000, did you know what it meant to “google” something?  Don’t feel bad.  Most technology companies had no idea either.  Google’s founders originally offered Yahoo their innovative “search” idea for an even $1M.  Yahoo took a pass, likely because Google’s methods did not fit the usual information-seeking trends, corporate strategy, or current political environment of the company.

What happened?  Simple.  What Google offered Yahoo was unexpected information.  It did not conform to the company’s current Mindsets, Methods, Strategies, and Structures (M2S2) and thus was ignored.   For Yahoo that was unfortunate.  Google stock has just recently passed $1000 per share and now has a market cap now of $338 Billion.

So, what information is useful and expedient for success? Continue reading

National Healthcare Leader Visits Harbor Beach Community Hospital

Originally printed in the Huron Daily Tribune on October 24, 2013

Dr. John Kenagy, a former vascular surgeon turned healthcare advisor, provided a two-day workshop at Harbor Beach Community Hospital (HBCH) for leaders on methods to improve quality and provide more care while driving down costs. His trademarked program, “Adaptive Design,” is the outgrowth of his work that started when he was a Visiting Scholar at Harvard Business School. This work provided the foundation for his award winning book, Designed to Adapt, which received the James A. Hamilton Book of the Year Award in 2011 from the American College of Healthcare Executives. Continue reading