Intellectuals Solve Problems; Geniuses Prevent Them.

Albert Einstein

The Mother of All Fences

Over a hundred years ago, Australian wool growers, outraged at the decimation of their herds by native wild dogs, made a landmark business decision. It may have been one of the great knee-jerk reactions of all time. It has cost millions and millions of dollars and the expenditure of untold thousands of hours of labor in the blazing Outback sun. And sadly, it may have hurt business far more than it has helped.

The problem: Dingoes, wild dogs native to Australia for at least 3500 years, taking their fair share of lambs in clandestine raids on the newly introduced and rapidly expanding sheep camps. The wool growers, naturally enough, were outraged.

Their solution: build a fence. A six foot high fence. A fence that eventually grew (over the next hundred years) to be over 3300 miles long. A thousand miles longer than the great wall of China!

A Little Leaven Ferments the Whole Lump

The VA Scandal Just Keeps Spreading - National Journal

The only surprise about this headline story should be why it caught so many unaware. Just a glimpse at the risks, rewards and bonus structure for management would have predicted the inevitable outcome if one additional piece of data had been available to the public, capacity. Capacity in this case is the maximum amount of patients that can be seen given the number of doctors, clinics, SOP’s (standard operating procedures for given ailments), the various medical devices and hardware available to perform the SOP’s. Alleviating these capacity constraints were apparently beyond the VA’s capability due in large part to the fact that congress held the purse strings. Whether the bonus structure was devised before the capacity problem was recognized or after makes little difference except to ponder whether the monies spent on bonuses could have alleviated some of the capacity problem. Once the process capacity is reached trying to increase motivation is useless. You must change the underlying process which is extremely difficult in a government regulated industry, especially when congress is trying to hold the line on spending.

So what is the solution? Well complaining and harping on all the capacity constraints probably was answered by a statement either spoken or insinuated “if you can’t solve this problem we’ll get someone who can!” The ultimate motivator! Obviously it worked. Law abiding citizens were motivated to the point of breaking the law and eventually making that practice systemic throughout a large portion of the VA system. Here is a quote from the Tampa Bay Times:<.p>

“An audit, ordered by the White House and released Friday, said more than 60 percent of veterans hospitals manipulated wait times and said there is a “systemic lack of integrity” at some VA facilities.”

Do these VA employees believe they broke the law? I doubt it. They didn’t keep two sets of books as widely reported but devised a scheme to wait until capacity was available to schedule the patient for an appointment. They probably thought this was fair especially if the bonus structure was in place before the capacity problem existed. They were only leveling the playing field so to speak.

I also doubt that this practice was not known at the highest levels of the government. The head of the House Veterans Affairs Committee would not take bonuses off the table because “there are hardworking people that deserve those bonuses”. That is a very odd stance for a government official to take based on the perceived corruption surrounding those bonuses. Especially given the fact that attaining them is moot given all the constraints.

So, are there any lessons to be learned from this and other like situations?

  • Model the process flow and run simulations using historical data.
  • Produce capacity analysis with all known constraints and add to simulation.
  • Take bonuses off the table and pay for performance if you feel monetary motivation is necessary.
  • Always pay bonuses for breakthrough process changes not to increase the speed of employees work. Speeding up work is all too often the hawthorn effect and will most likely result in more mistakes along with inevitable shortcuts in the process. Time and motion studies will provide another constraint in the aforementioned simulation and provide a standard for work.
  • Always add integrity to the process! In this case, which is really patient throughput, have the patient or guardian verify the dates associated with initial contact and appointment.
  • Monitor and communicate in real-time.

I would be surprised if the majority of these actions were not already a part of the overall process. However, communicating in real-time the actual data (minus patient identifiers) associated with the process flows along with the capacity percentages as they are occurring, will turn out to be a protection for management not an indictment. In this case the cloak of secrecy serves no purpose but to hide perceived embarrassments. On the other hand real-time communication for all to see will serve to awaken congress and there constituents to the real needs of the VA and there patients.

The old management adage of don’t come to me with a problem until you have a solution (and then it becomes a real challenge to expose the problem at all) is a mistake that runs rampant in business and government. We have seen the disastrous results time and time again, most notably in the auto industry, but they are not the only ones. When the “solution” impacts profits then the problem may only come to light when it impacts the customer in a significant way. That usually means death! For the public and sometimes for the company.

Is Perfection in Business Possible?

Most will say no. Even consultants who focus on Quality improvement will tell you that it is unattainable. In fact, very few of them have ever helped a client reach the nirvana of six sigma, much less perfection. I have spent almost a lifetime focused on this pursuit and believe it or not, I have made some breakthroughs. I have found that it is possible, even within a very complex medical device production, to achieve error-free, mistake-free, and omission-free processes. One client has not had any errors, mistakes or omissions for more than seven years and counting.

Most consultants today say that a change in attitude is all it takes to improve performance. Attitude is a cornerstone of Quality Improvement programs. But it is a real hindrance to accomplishing operational perfection. I realize this flies in the face of virtually every program ever devised for improving any operation, but