Enhancing Continuous Improvement,
Lean and Six Sigma Efforts
with Employee Suggestion Programs
Presented by
Presentation Overview
• Continuous Improvement, Lean and Six Sigma efforts
increasingly common in healthcare today
• Those efforts can be enhanced through a well-designed
team-based employee suggestion program
• Results from healthcare institutions that have launched
such programs
Presenters
Ron Bachman
– Former Ohio hospital CFO/CEO
– Leads Advisory Board for Performance Plus
– Twice earned Ohio Health President’s Award
for clinical quality, patient satisfaction,
employee engagement/satisfaction and
financial performance
Presenters
Bob Stergos
– 20 years experience in employee engagement
– Designed, sold and implemented team-based
engagement/suggestion programs for major
hospitals, airlines and manufacturing
companies
– Served as successful Team Leader in
6,000-employee program
– Active member of Ideas America (national
suggestion system association)
Definitions and Perspectives
Current cost-cutting strategies
• Become part of a system rather than remain independent
• Downsize
• Join Group Purchasing Organization (GPO)
• Create small group of Continuous Improvement/Lean/Six Sigma
specialists to work on select, management-directed projects
Definitions
• Continuous Improvement (CI)
– Gradual, never-ending change
• Lean
– Elimination of all non-value
activities and waste
• Six Sigma
– Decrease in process variation
Definitions
• Typical suggestion program
–
–
–
–
Low-key, ongoing
Under-promoted
Individual idea submitters
Nominal results
• Well-designed suggestion program
–
–
–
–
High-energy, short-term
Highly-promoted
Team-based
Dramatic results
What are the differences?
Typical Suggestion Program
Well-Designed
Suggestion Program
• Individual initiative
• Voluntary cross-functional
employee teams
• Low management priority
• Highest management priority
• Long-term, low-key
promotion
• 90 days, energized promotion
• Undocumented ideas
• Fully-developed ideas by
teams
What are the differences?
Typical Suggestion Program
Well-Designed
Suggestion Program
• No training for
participants or evaluators
• Extensive orientation and
training
• Evaluation perceived as
subjective and slow
• Timely and objective
evaluation process
• Negligible impact on P&L
• Significant impact on P&L
What are the differences?
Typical Suggestion Program
Well-Designed
Suggestion Program
• Limited recognition of
employee efforts
• Broader recognition of
employee efforts
• Cash awards lack trophy
value/proven not as
effective
• Promotable merchandise
awards that produce
greater results
• Does not address
implementation
• Drives implementation
What are the differences?
CI/Lean/Six Sigma
Well-Designed
Suggestion Program
• Less than 10% of
employees involved
• 15-75% of employees
involved
• Management-directed
projects
• Frontline-employee
initiated projects
• Low-key management
support
• Highly-visible
management support
What are the differences?
CI/Lean/Six Sigma
Well-Designed
Suggestion Program
• Very small number of
employees trained
• Every team leader, team
coach and evaluator trained
• Involves a small number
of lengthy projects
• Motivates hundreds of ideas
in 3-month timeframe
• Limited awards and
recognition
• Positive, immediate and
certain awards and
recognition
Comparisons
CI/Lean/Six Sigma
Well-Designed
Suggestion Program
• CI/Lean/Six Sigma
specialists confined to
limited number of
projects per year
• CI/Lean/Six Sigma specialists
serve as team coaches,
helping dozens of employee
teams document their good
ideas
• No element of “gainsharing” at frontline
employee level
• High-degree of “gain-sharing”
instilled at frontline employee
level
Shortfalls of Current Strategies
• Healthcare systems lessen local control;
decisions are made from corporate perspective
• Downsizing obviously lessens employee morale
• GPO arrangements focused heavily on supply chain
• CI/Lean/Six Sigma projects directed by management and
involve small percentage of employee population
• Specialized process control and cost-containment training
confined to “the few” rather than “the many”
• Organizations still struggling to positively engage frontline
staff
Suggestion Program
Overview
Suggestion Program Structure
• Select, research and develop
ideas
• Document and submit ideas
Cross-Functional Teams
(1 Team Leader per 5-member Team)
• Assist teams in program
mechanics and idea valuation
• CI/Lean/Six Sigma specialists
Team Coaches
(8-10 Teams each)
Program Manager
(In larger organizations,
may need Assistant
Program Manager)
Evaluators
Implementer(s)
• Administers program
• Manages program results
Resource
Personnel
• Provide costing info to teams
• Evaluate ideas
• Assign/initiate implementation
of approved ideas
• Close the loop; implement ideas
Motivation: Award Opportunities
Team Members
• Share equally in awards for approved
ideas based on projected net value
Team Coaches
• Earnings based on performance of their
teams
Evaluation Committee Members
• Typically VP level and above
Motivation: Award Opportunities
Program Manager
• Earnings based on execution of
assigned duties and performance
against program goal
Resource Personnel
• Earnings based on supplying timely
information
Top Performers
• Earn pre-determined top awards
The Role of Team Coaches
• Coach teams to success
• Facilitate idea generation and
concept development
• Provide initial screening of ideas
• Act as intermediary for required information
• Assist teams in idea valuation, utilizing
Continuous Improvement, Lean/Six Sigma
training
• Maintain program enthusiasm
The Role of Leadership
• Actively supporting and
encouraging participation
• Challenging employees to find
solutions
• Making exchange of information
and data easy and transparent
• Reviewing ideas and giving
feedback on a timely basis
• Celebrating success
Suggestion Program
Results and ROI
History
• First team-based programs began in 1982
• Typically high-energy, short-term programs
• Operated 200+ programs over 20 years
INDUSTRY
PROGRAMS IN
SAMPLE
EMPLOYEES
IN SAMPLE
ANNUALIZED
SAVINGS
$/APPROVED
IDEA
MANUFACTURING
PUBLISHING
AIRLINES
HEALTHCARE
INSURANCE
BANKING
TELECOM
48
11
13
83
15
16
5
122,109
13,957
314,193
170,855
43,301
33,363
34.750
$448,618,714
$31,527,763
$574,036.000
$186,498,806
$107,142,000
$79,011,000
$103,027,900
$18,440
$18,351
$55,331
$13,674
$19,048
$16,626
$17,059
Sample Healthcare Results
(80+ total healthcare programs)
CLIENT
ELIGIBLE
EMPLOYEES
# OF IDEAS
IMPLEMENTED
ANNUALIZED
SAVINGS
$/APPROVED
IDEA
Baylor Hospital
Good Samaritan
Marion General
Pennsylvania Hosp.
St. Thomas Hospital
Tulsa Regional
Mercy Hosp. (FL)
Scott & White Hosp.
Mt. Sinai Hosp. (NY)
Fort Sanders Hosp.
Baptist Med Ctr.
5,452
4,217
800
3,500
2,975
1,581
1,372
2,980
7,165
2,378
2,100
524
347
163
358
355
161
173
207
221
573
402
$8,452,380
$5,490,257
$1,170,558
$2,366,000
$5,533,850
$3,248,735
$2,305,908
$3,217,110
$5,335,923
$3,162,825
$6,956,055
$16,033
$18,288
$ 6,969
$17,385
$16,025
$19,673
$13,329
$15,542
$24,144
$5,520
$17,304
Current Case Studies
CLIENT
ELIGIBLE
EMPLOYEES
# OF IDEAS
APPROVED
ANNUALIZED
SAVINGS
$/APPROVED
IDEA
Methodist
LeBonheur
Children’s Health
Campaign 1
Children’s Health
Campaign 2
OSF HealthCare
2 hospitals of 8
11,000
15
$1,015,240
$63,452
6,000
79
$4,387,772
$55,541
6,000
66
$1,974,911
$ 20,572
1,400
63
$615,466
$8,431
Children’s Health
• Joe Don Cavendar, Associate
CNO
“I was impressed with the
number of ideas submitted.
Many were: ‘Wow. Why didn’t
I think of that? Ideas.’ I was
particularly impressed by the
thought and thoroughness
behind many of the ideas.
Many were final and ready for
implementation the moment
they were submitted. I really
appreciate all the hard work on
behalf of the staff.”
• Kim Besse, CHRO
“I was impressed by the
creativity and
engagement of team
members to suggest
improvements and to
work together to identify
ways to improve our
organization. Many ideas
required cross-functional
teamwork and
exploration…and all
involved were willing to
learn from each other to
achieve a positive
outcome.”
Forecasting Your 1st Year Return
Eligible Employees
10,000
X Participation Rate
x 25%
Employee Participating
2,500
÷ Members per Team
÷5
Number of Teams
500
x Ideas per Team
x 2.5
Ideas Generated
1,250
x Approval Rate
x 35%
Ideas Approved
438
x Savings per Idea
1st Year Gross Savings
x $25,000
$10,950,000
1st Year ROI—
Based on 10,000 employees
3-Year ROI—
Based on 10,000 employees
Forecasting Your Savings
• ROI Calculator to forecast savings:
http://bit.ly/1Rxtn5G
Conclusion
Suggestion Program Benefits
• Disseminates continuous improvement principles to frontline
staff by utilizing PI/Lean/Six Sigma specialists as
team coaches
• Improves business literacy and transparency at all levels
• Engages greater number of employees in
cost-reduction efforts
• Improves interdepartmental teamwork
and communications
Suggestion Program Benefits-2
• Impacts financial, organizational and employee needs
• Drives auditable financial results and significant ROI
• Program investment largely contingent upon results
• Provides WIIFM (“What’s In It For Me”) to frontline staff
• Reinforces “gain-sharing” culture via visible, tangible rewards
and recognition
Q&A
• Q&A
Performance Plus Contacts
Bob Stergos
Vice President, Engagement Practice
bstergos@performplus.com
M: 636.795.5192
Ron Bachman
Advisory Board Member
rbachman@Columbus.rr.com
M: 614.361.4308
www.ideasatwrk.com