“What’s the Return on Investment (ROI) on Lean?” This question gets asked a lot early in a Lean journey.
It’s a bit of an odd question for those farther along in their transformation, because Lean gradually becomes the management system and is so core to the culture that it becomes difficult to identify unique expenses for Lean work.
When a Value Stream is consistently missing its targets, or when the Lean program overall is not providing the “X:1” ratio of projected ROI, senior leaders get concerned and consider stopping the investment in Lean.
What I have come to realize, having observed and/or coached over a dozen organizations on the journey, is that the key opportunity to maximize the investment is often missed.
Most of us think of the “investment” in Lean and its “return” strictly in terms of dollars. Dollars invested are relatively easy to measure and are key to achieving our mission. After all, the saying “No margin, no mission” is true. We can’t ignore the dollars.
The opportunity we miss is the investment of time, most importantly senior leadership time, spent going to the gemba, participating in events, and attending report outs.
It’s challenging for senior leaders to find the time for these activities. As a former CEO with multiple demands on my time, I lived this challenge first hand. It took a commitment on my part, dedication to standard work, and a relentless executive assistant to make it happen.
Our Lean transformation at Sutter Gould Medical Foundation was, and remains, a success in no small part because all of our physicians and support staff knew that their leaders were fully committed. When they saw leaders
- at their huddles,
- shadowing their work,
- attending report outs, and
- participating in week-long improvement events,
there was little doubt about our priorities. And as a result, our multi-million dollar investment in Lean paid off.
Now as I go around the country, it’s clear that the key difference between healthcare organizations that succeed or struggle with Lean is senior leadership participation.
Look at your own organization’s Lean transformation:
- How is it going?
- If you are the CEO, are you investing your own time to ensure its success?
- If you are, congratulations. Your team appreciates it more than you know.
- If not, why not?
Investing your time will do more to Maximize Your ROI than anything that anyone else in the organization can do.
So, here is a modest proposal for a New Year’s Resolution: Invest 5-10% of your time in your Lean Transformation. It will likely be the best investment you will make all year!