Background
Most companies begin using Lean Six Sigma to improve their performance. However, they forget the first and most critical aspect of implementing Lean Six Sigma… measuring their performance. This white-paper will discuss how to launch Lean Six Sigma by first creating a company-wide Performance Scorecard System and how to use the Scorecard to make continuous improvement part of the culture of your organization.
To demonstrate how to create a Performance Scorecard System, we will use a case study of a hospital Primary Care department. We will outline the path the Primary Care department took to create their Performance Scorecard. Prior to the creation of their Scorecard, Primary Care associates worked without any quantifiable indication of how they were doing. Each Doctor and Nurse knew how their patients were doing, but they didn’t know how the department as a whole was doing.
We will show how they transformed themselves and used their Performance Scorecard to guide their Lean Implementation and improve every-day department business.
The Primary Care Performance Scorecard
In hospitals, one of the key performance issues is on time delivery of care. The Primary Care Department was not meeting its timeliness goals.
The first step of a Lean implementation is to make sure you are linking the project to improving measureable performance. Therefore, the first step is to make sure the area you are streamlining has a working Performance Scorecard.
The Purpose Statement
Before determining the performance measures on your scorecard, you need to make sure that everyone is clear on the organization’s purpose. This is sometimes called the Mission Statement. It is the reason everyone comes to work, besides the paycheck.
This Primary Care department came up with the very elegant statement:
“To Provide Comprehensive, Efficient Primary Care that Exceeds Patients Expectations”
Measures of Success
Once the purpose is clear, you can measure whether you are achieving that purpose. “Few measures in the hands of the many” is better than “Many measures in the hands of the few.” Therefore, this Primary Care department selected only five measures.
These measures are balanced and represent how the Primary Care department ensures they are providing great patient care.
% of Excellent Patient Satisfaction Survey Results
% Completion of Clinical Reminders
Seen by Physician On Time
Roomed and Ready On Time
Utilization of Access Appointments
Weighting the Scorecard
The next step is to prioritize these measures. This creates further focus for department employees. Not only have they created a few key measures, but they’ve prioritized them from most to least important.
% of Excellent Patient Satisfaction Survey Results = 35%
% Completion of Clinical Reminders = 30%
Seen by Physician On Time = 20%
Roomed and Ready On Time = 10%
Utilization of Access Appointments = 5%
Setting the Performance Levels
The last step to creating the Scorecard is to determine the performance levels. This is done with a color system:
Green (at or above) = Great Performance
Yellow (between green and red) = Expected Performance
Red (at or below) = Unacceptable Performance
% of Excellent Patient Satisfaction Survey Results: Green Goal = 90%
% Completion of Clinical Reminders: Green Goal = 95%
Seen by Physician On Time: Green Goal = 80%
Roomed and Ready On Time: Green Goal = 90%
Utilization of Access Appointments: Green Goal = 70%
The Scorecard Action Plan
Perhaps the most important part of the Performance Measurement System is the Action Plan. This is a list of projects that are happening in the department. This action plan has action item owners and expected completion dates. You should limit the number of action items/projects to 5 or fewer. The fewer actions the department is working on at one time, the more likely they are to get them done. Below is the Primary Care department’s Action Item List. All action items are linked to specific performance measures.
By having an action item list, you will make the scorecard more than a communication tool. It will tell associates in the department how they are doing, but more importantly, what the department is doing to improve performance.
It is also a tool that the Primary Care Director used to communicate with the Hospital Executives. She would sit down with the Executive Team to make sure they knew what she was doing and also to ensure they weren’t giving her department tasks to complete that was not going to improve the department and hospital performance. Executives have a way of asking their subordinates to do things for them, without thinking through if it is a “nice-to-do” or “critical-to-performance.”
Primary Care Performance Action Plan
Implement 5S in Primary Care Department – Nov 2008 (Primary Care Director)
Hire 3 additional Nurses – Sept 2008 (HR and PC Director)
Lean of Primary Care Patient Visit Process – March 2009 (Lean Team)
When one action item is complete, they can add another, so at all times they are usually working on five projects. To handle more ideas we made a list of projects-in-waiting that the human resource department will tackle when they finish current projects.
Using the Performance Scorecard
The Performance Scorecard must be put into action. To make the system effective, the Primary Care department reviews the scorecard with all employees each month at a 15 minute performance review meeting. This meeting is quick and effective. It reviews actual performance and an update on action items. It gives the Primary Care team a performance update and status of action items. No one is in the dark!
The Performance Scorecard and Executive Management
A very important part of making the Performance Scorecard effective, is to get buy-in from Executives. At this hospital we needed their agreement that these measures and goals were correct. Most importantly, we needed their promise not to add new projects to the Primary Care department without making sure that the current list was getting closed-out.
This ensures that new projects will directly improve their key performance measures. It is hard to limit action items in most organizations. Without visibility Executives and Managers tend to add action items without making sure they are completing what they started. However, if implemented correctly the Performance Scorecard System creates focus, both for the employees of the department and for the top management.
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