A Few Notes about This Blog

This blog shares my insights on the design, introduction and active management of effective sustainability programs in hospital settings. Unlike the thousands of discussions on sustainability's altruistic, conceptual and technical aspects, though, this blog approaches the discipline from organizational management and development perspectives.

Over the past few years there has been a lot of discussion in the trade media around the American Hospital Association's new "Sustainability Roadmap for Hospitals," which complements the association's excellent work in its recent "Executive Primer on Hospital Environmental Sustainability." (
http://www.hospitalsustainability.org/)

With the AHA - as well as Practice Greenhealth, Healthcare without Harm and other organizations - staking authoritative claims to the topic, why do I think it necessary to add my two cents? Here's why. The AHA executive primer covers several of the big concepts any good sustainability program should have. Further, its roadmap details many of the high-level steps needed to create and run it. However, neither will be able to adequately explore institution-specific details for successful organizational design, change management and program effectiveness.

That's not a failing of AHA's superlative work; it is simply recognition that when it comes to management programs, such as sustainability, one size does not fit all. Each hospital needs to custom design its own sustainability program to meet its specific needs, including working within its resource limits and opportunities. Helping you and your institution work through the details is where this blog comes in.

The first few blog posts address basic concepts, including the special challenges healthcare delivery organizations face whenever they create new performance capabilities. After that the discussion will shift to the key questions a hospital – or, any other organization for that matter – must answer in creating and running a sustainability program and, by extension, an all-encompassing corporate social responsibility program. Then, the discussions dive into the "how-to-do-it" details with a big emphasis on anticipating and controlling obstructions to success.

Rather than prescribe rigid off-the-shelf methods that may have worked well elsewhere – yet, might not work so well at your hospital – these discussions will pose key questions that must be answered by the best minds at all levels of your institution to create a customized program.

This blog is a serialized body of work. So, if this is your first visit, I highly recommend that you start with the oldest post date and work forward from there. The entries will make a lot more sense that way.

For those of you who work in other industries, substitute the words "hospital" and "healthcare" used throughout the posts with the name of your industry or company. You'll probably find the information in this blog fits your field and organization quite well.

Lastly, if you are a sustainability professional, I would be honored if you sign-up to follow this blog and share it with your colleagues. Also, please feel free to share your views and experiences.

Thank you for stopping by.

Thursday, September 30, 2010

Definition of a Hospital Sustainability Program's Strategic Objectives

The last post examined the use of SWOT analysis techniques to define a hospital's current advantages and disadvantages in environmental sustainability.   Armed with this institution-specific information, the next step is to define a sustainability program's strategic objectives.


A Few Essential Definitions
Before we start, let's define a few planning terms.  If you've been around the healthcare industry for a while, you know that nearly every plan – irrespective of topic, scope or position within the hierarchy – ends up being erroneously called a "strategic plan".  But, in an organizational management sense, not all plans and their elements are strategic; there are also tactical plans, operational plans and project plans, too.  It really is important to distinguish between the various types of plans, as well as their various elements and functions.   It is also important to understand the relationships between these plans, elements and functions.

Why the fuss?  When hospital leaders at any level fail to distinguish between the functions of strategies, tactics, operations-level plans and implementation projects, they risk almost certain failure in successfully linking strategic intentions to operations-level activities.  Without an effective linkage structure, strategic objectives remain nebulous hopes, dreams – and, yes, sometimes institutional hallucinations – rather than measurable successes.   As Stanford University professor, Jeffrey Pfeffer, said in his book, The Human Equation: 

“More important than having a strategy is the ability to implement it.”

Here are some functional definitions of planning elements that distinguish between strategies, tactics, operations-level plans and project plans.

·    A strategic objective is a high-concept statement of what the whole organization will achieve to:
o        Create a new capability or
o        Resolve a major poor-performance issue.  
Strategic objectives are sometimes expressed quantitatively, such as time-constrained waste and energy-use reduction targets, but that isn't always necessary.

·    Drilling down from high concepts, tactical plans mandate the goals and targets that must be reached by specific organizational functions and units to contribute to the achievement of each strategic objective.  Focusing on specifics, there may be several goals within tactical plans to achieve a single strategic objective.  Further, these goals are quite often expressed quantitatively.

·    With strategic objectives and tactical goals raining down on an operations or administrative unit, an operations-level plan – which is produced by a unit's leadership – specifies how it will actually achieve its assigned requirements in terms of who will do what by when and how success will be measured. 

Because an operations-level plan is produced at the "working level" of an organization, its authors are able to inject day-to-day realities – including their unit's own most-pressing needs – into the planning and execution processes.   These are the kinds of issues often identified on unit-specific dashboards, balanced scorecards, and other financial and managerial accounting reports.

·    A project plan is a detailed sequence of steps along with a schedule and budget that enables a specific unit – as well as cross-functional teams – to achieve one or more of its assigned tactical goals and/or operations-level-plan requirements. 


A Leadership Dilemma in Healthcare
Take a look at that list of definitions again.  Now, for discussion purposes, remove the second and third definitions, which are the planning process links between strategic intentions and operational activities.  Think about how difficult it is for a unit manager – especially a clinician who has never spent a day in business school – to figure out what the senior leaders want her or him to do.  Regretfully, this is a common situation in far too many healthcare delivery organizations. 

Now, in the event a reader ever thinks I'm being critical of hospital unit managers, I'm not.  When it comes to the management arts and sciences, they simply don't know what they don't know.   How could they?  For their entire careers these dedicated, self-sacrificing people have spent most of their waking hours working healthcare miracles.  This is in contrast to focusing on systematic planning, organizing, controlling and leading, which of course are the four primary functions of management. 

I'm fond of preaching:

"Never punish people for the sins of the work process."

But, we do punish these superb clinical professionals by promoting them to leadership positions, yet providing them little in the way of useful, quality education and experience in managing organizations.  However, to fix this problem most hospitals don't have the resources to send their unit managers back to school to earn a management degree.    

So, instead, hospitals need to create management structures that enable leaders to make the right kinds of decisions at the right times and thereby learn by doing.  This is especially true for somewhat exotic programs, like sustainability, where not only management concepts are apt to be misunderstood and ill-applied, but so, too, are basic sustainability concepts.


Converting SWOT Analysis Findings into Sustainability Strategic Objectives
The last post explored a process to define high-priority sustainability strengths, weaknesses, opportunities and threats sorted into these five planning elements:

·    Program – Findings about the sustainability program itself

·    Compliance – Environmental, health and safety (EHS) -- as well as industry standards -- compliance findings for value-chain lifecycles  

·    Efficiency – Green efficiency findings for value-chain lifecycles

·    Revenue – Green revenue-generation findings for value-chain lifecycles, and

·    Transparency – Corporate transparency findings.

Now, we'll explore ways to convert them into high-concept strategic sustainability objectives.  The sustainability program champion along with the hospital's strategic planning director – plus, any other key players they deem appropriate – do the actual conversion of SWOT findings into a draft slate of objectives.  This draft slate of objectives is submitted for review and amendment by the hospital's senior leadership. 

Why include the strategic planning director when the sustainability program has a designated champion?  Because the sustainability program must be integrated at some point into the broader organization's planning and management processes.   Who knows how to do this better than the strategic planning director? 

Compared to the SWOT analysis, the conversion of SWOT findings into strategic objectives is actually quite easy.  The strengths, weaknesses, opportunities and threats boil-down into two planning categories:

·    Advantages – The strengths and opportunities findings, and

·    Disadvantages – The weaknesses and threats findings.

The advantage findings are converted into active-voice statements declaring:
·    What strengths need to be built-up or enhanced, and
·    What opportunities need to be expanded or exploited.

Here are some examples with and without quantitative mandates.  The first objective assumes a hospital's internal ability to effectively control expenses and a favorable external energy infrastructure.  The second objective seeks to exploit a hospital's training-and-development expertise to leverage an external competitive advantage through corporate transparency concepts.

·    Within the next 3 years the hospital will reduce its energy expenses by 20 percent while sourcing 50 percent of its energy from sustainable producers. 

·    The hospital will become a recognized industry leader in "green management" by developing sustainability experts within its rank-and-file.

The disadvantage findings are likewise converted into active-voice statements declaring:
·    Which weaknesses need to be resolved or reduced, and
·    Which threats need to be avoided or thwarted.

Here are additional examples of objectives that seek to resolve internal performance issues and external risks with and without quantitative mandates.

·    The hospital will reduce its waste disposal expenses by 25 percent within the next 3 years through aggressive applications of the reduce, reuse and recycle principles (The 3R's). 

·    The hospital will become the healthcare industry benchmark for achieving all EHS regulatory requirements with least cost, effort and risk. 


What about Performance Breakthrough Objectives?
You may be thinking that these are fairly pedestrian strategic objectives.  Have a cigar!  You are correct and you aren't alone.  In producing these run-of-the-mill objectives, the sustainability program champion, the strategic planning director and, eventually, the senior leaders will also begin wondering:  "Shouldn't there be more to this?"  Indeed there should be more in terms of breakthrough performance objectives, which are sometimes called "stretch goals." 

It is a rare group of senior leaders that does not have a collective epiphany while reviewing draft strategic objectives.  During such events, they collectively realize that they must think bigger and bolder.  An easy way for them to start is to step back and look from their holistic leadership perspective for strengths, weaknesses, opportunities and threats that fell through the cracks earlier in this process.  Then, it is a simple matter for them to word-smith a few extra objectives. 

Once the holes in the set of objectives are filled, senior leaders need to turn their attentions to making sure most, if not all, draft objectives mandate performance breakthroughs.   As you might imagine, there are lots of opinions on how to do this.  My opinion is based on the Deming-inspired principles and methods of the Japanese Union of Scientists and Engineers (JUSE).  In case you didn't know it, the JUSE approaches provide the conceptual foundation for Lean and Six-Sigma methods. 

The following JUSE-based questions provide a process for senior leaders, the sustainability program champion, the strategic planning director and others to define breakthrough performance objectives even when they are not feeling particularly creative or well informed about sustainability topics. 

·     For any major performance problem, what does ideal performance look like? 

·     Next, what has kept the hospital from already achieving ideal performance?

·     Then, what are the root causes of these obstructions, as defined through a brutally honest Ishikawa analysis?

·     Lastly, what are the specific sustainability objectives needed to eliminate these root causes? 

As you might imagine, this kind of questioning can create eye-popping new objectives and beef-up the wimpiest of milquetoast draft objectives. 


O.K., What's Been Produced Here?
By this point, the process produces sustainability program objectives under the five sustainability plan elements of program, compliance, efficiency, revenue and transparency.  Now, senior leaders and their agents simply need to make one last pass to:
·     Cull-out redundancies
·     Remove any weak objectives that really do not rise to a level of significance   
·     Combine similar objectives, and
·     Re-prioritize the remaining set.

The result is a sustainability program's final set of strategic objectives.  These final objectives will be used in the next post to start building the critically important links between strategic intentions and day-to-day work activities. 


IN THE NEXT POST:   The First Linkage Step:  Defining a Hospital's Sustainability Tactics

Wednesday, September 8, 2010

The Prelude to Setting the Sustainability Program's Strategic Objectives and Tactical Goals

Let's Revisit the Go-Decision and the Development of Sustainability Policies
Before digging into this post's main topic, let's consider the fact that the methods described from here on out create a lot of details that require significant program management. As such, these methods and details demand far more of program participants than just casual dabbling in green extra-curricular activities.

So, as you read through this and subsequent posts you may want to reconsider the sustainability program options for your hospital.
  • Can and should a full-blown and effective sustainability program be implemented at your hospital that meets the demanding requirements of ISO 14000 and other standards?
  • Or, is it better to just do an occasional green project like the ones that can save the hospital some money on utility bills?
Be careful, now! Big institutions should think twice about their choice. You know which ones I'm talking about:
  • The hospitals that are so big and so good – or, so they think – they are not bound by geographic limitations, and
  • The regional and urban powerhouses that blanket the landscape with billboards and irradiate the airwaves with commercials touting their latest patient-care breakthroughs.
Here's why big institutions need to be careful. Any agile competitor that chooses to go whole-hog on sustainability may gain a competitive advantage over a big institution that takes the easy way out. It wouldn't take much greenwashing by a big house before it is beat-into-a-PR-jelly by a rival that has a superior sustainability program.

This also creates a situation whereby the rival institution can subtly cast doubt over the big institution's other claims, including the quality of patient-care.  In the end, it all boils down to maintaining stakeholder trust to protect the hospital's reputation, one of healthcare's most important intangible resources. It's a real risk; so, manage it wisely.

That said; let's look at small hospitals, especially those hard-working, under-resourced miracle workers serving vast rural areas. The better option for them is probably the occasional green initiative that reduces overhead or operating expenses. With this option, small hospitals don't have to put much effort into freeing-up money for their other activities. C'est bon!

Whatever the choice, though, be sure it's clearly stated in the go-decision and sustainability policies. Leaders and staff do not need ambiguity around how much to do or not do in achieving the hospital's sustainability objectives.


The Prelude to Setting the Sustainability Program's Strategic Objectives and Tactical Goals
O.K., let's get back to designing the sustainability program. Now that the hospital leadership has made a go-decision and set formal sustainability policies, it's time to start fleshing out program details. Ultimately, the program content details – as opposed to the program process details – will consist of:

  • Strategic objectives for the whole hospital
  • Tactical goals for specific hospital functions, and
  • Specific capability-creation and performance-improvement projects for administrative and operational units throughout the hospital.
However, in this post, we'll stick to the initial step in defining strategic objectives and tactical goals, a strength/weakness/opportunity/threat (SWOT) analysis.  Subsequent posts will offer methods for actually creating them.


Some Sustainability Ideas Are Better for Your Hospital than Others.  Yeah, but, Which Ones?
As you saw back on Figure 2 in the August 17, 2010 post, there are lots of facets to sustainability. Further, when these facets are used with continuous-improvement (CI) planning methods, things can get really complicated in an almost geometric-progression sense of the word. If unchecked, you wouldn't believe the amount of information these methods can produce.

So out of shear necessity, winnowing techniques are integrated into these methods to reduce the volume of outputted information, as well as to prioritize it in terms of organizational needs. After all, a hospital only has so many resources to commit to sustainability. So, it might as well work on only the most important needs; i.e., the ones that provide the most-bang-for-the-buck, as the cliché goes.

Although there are all kinds of ways to make a management decision, in this case I like the approach shown in Figure 4.  (Click on the figure to enlarge.)  It is easy to understand and simple to use. Further, it doesn't need gigabytes of input data, especially the kinds that are hard to gather and analyze. That's because it uses readily available group consensus knowledge. Yet, despite the shortcomings of group opinions versus hard data, the method provides the ability to make good relative comparisons and establish rankings.


The methodology underlying Figure 4 is Failure Modes and Effects Analysis (FMEA), a proven actuarial and CI assessment technique used in insurance underwriting, statistical process control, Six-Sigma and Lean.  In addition to defining the degree of risk in adverse situations, which is the most common application, a modification of the technique can characterize the degree of benefit in positive situations. As such, these methods restrict the number and quality of SWOT analysis results.


Can't We Just Hire Someone to Do This Stuff for Us?
Yes, the hospital could hire any number of consulting firms to come in to do all or parts of a sustainability needs assessment.  Such assessments include regulatory compliance reviews, energy and greenhouse gas audits, waste generation inventories, and Global Reporting Initiative (GRI) conformance reviews.   In most cases these will cost a lot, the consultants will hone their craft, and the hospital's leaders still will not have gained insight into creating and managing a sustainability program that is well suited to the needs of the institution.  I suggest holding off on bringing in a lot of outside technical help until the hospital knows exactly what its most pressing sustainability needs are as the hospital's leaders define them.


An Approach to SWOT Analyses for Sustainability Programs
The pun from August 17th about taking a SWOT at determining the hospital's sustainability strengths, weaknesses, opportunities and threats wasn't really a joke. As with any serious planning effort, a SWOT analysis is a key step in focusing on an organization's most important concerns.

In the case of new initiatives, like sustainability, the trick is figuring out what factors to analyze. Not to worry, dear reader; you have an advantage in defining these sustainability factors. Many, if not most, of them are already shown on Figure 2 in the August 17th post. With a little extra effort the list can be edited with a few additions and deletions to make it applicable to your hospital.

Then, it's a simple matter of inserting the revised list of sustainability factors into a matrix like the one shown in Figure 5, below. (Click on the figure to enlarge.)  Et Voila! You'll have a ready-to-go SWOT analysis matrix to guide group efforts in defining your hospital's sustainability advantages and disadvantages. (Note, though, Figure 5 only shows the first five sustainability factors from Figure 2. You'll need to add many more pages to fit everything in from Figure 2.)
 


Group? What Group? 'You Talkin' to Us?
What group you ask? One like this.
  • The people who developed the hospital's sustainability objectives are the ideal core cadre to participate in the SWOT analyses.
  • Then, add specialists, such as accountants, IT professionals, facility engineers, risk managers, various types of clinicians, and the like.
  • Lastly, divide the overall group into small, two- to three-person specialty teams. Each team will define the hospital's strengths, weaknesses, opportunities and threats for one of the sustainability topics on the SWOT matrix. As a specialty team, the members should have a degree of expertise – or, at least interest – related to the sustainability topic. For example, the SWOT specialty team working on "audit results and other performance metrics issues" might include IT professionals, accounting staff, and performance improvement data analysts.
Remember, though, the same people are tapped time-and-time-again in hospitals for such ad hoc assignments. So, be creative. Find up-and-comers who are not on the "usual-suspects" list. Recruit – or draft – them under the legitimate guise of professional development

Once the specialty teams are created, senior leadership – through the sustainability program champion – will formally assign each team an accountability to complete their particular SWOT analysis. The accountability assignment should be stated minimally in terms of:

Who is going to do what by when and how success will be determined.


Oh, No! Not Work!
Before setting to work, the specialty teams should spend a bit of time studying-up on their respective topics.  After all, they will become the hospital's de facto subject matter experts.  With the Internet overflowing with sustainability information – some good, some wretched – it shouldn't be too difficult.  Places to look for information specific to healthcare include the American Hospital Association, Practice Greenhealth and Premier's GreenHealthy(R) program, as well as non-specific information from the Global Environmental Management Initiative, the Global Reporting Initiative, the U.S. Green Building Council, and my current favorite primer on the subject of corporate environmental sustainability, Wachovia's "Greening of America."  In their study, the teams need to define for themselves their topic's state of the art. 

The specialty teams will then answer the following questions in consideration of their particular sustainability topic:
  • What specific internal strengths does the hospital have? Which of them need to be built-up or enhanced?
  • What specific internal weaknesses does the hospital have? Which of them need to be resolved or reduced?
  • What specific internal and external opportunities does the hospital have? Which of them need to be expanded or exploited?
  • What specific external threats does the hospital face? Which of them need to be avoided or thwarted?
With these questions answered, each team then scores its analytical findings using the evaluation factors and formulas shown in Figure 4. Those findings that score above the statistical cutoff point are the most important.

The cutoff point should be set by the sustainability program champion. Although an 80th percentile cut-off is preferred, it is sometimes so restrictive that few, if any, findings rise to a level of significance. In that case a 50th percentile cut-off works better.


We're Awash in SWOT Findings. Now What?
With their work completed, the specialty teams deliver their high-scoring SWOT findings – with a concise justification for each – to the sustainability program champion. In turn, the program champion aggregates them for presentation to a senior leadership working group. This group should consist of three to five C-level officers, other high-ranking hospital executives, including the strategic planning director, and/or board members. The group reviews the list of SWOT findings and revises it by adding some findings and deleting others.  In revising the list, a key consideration for the leadership group is identification of those SWOT findings that can lead to breakthrough performance for the entire hospital, if acted upon effectively. 

The leadership group then sorts the revised list of SWOT findings into five sustainability program categories:

  • Findings about the sustainability program itself (Program)
  • Regulatory and industry standards compliance findings for value-system lifecycles (Compliance)
  • Green efficiency findings for value-system lifecycles (Efficiency)
  • Green revenue-generation findings for value-system lifecycles (Revenue), and
  • Corporate transparency findings (Transparency).
Of course, some findings will not fit easily into any single category. So, the group will need to make judgment calls.

These categories are the basic strategic elements of any corporate or hospital sustainability program. To help you understand their function, think of them as the five pillars or foundation blocks of the sustainability program just like the ones in the hospital's strategic plan.

Having the same planning function, it should be fairly easy for the hospital's senior leaders to include these five sustainability program elements as subcategories within the institution's broader strategic pillars or foundation blocks. This is an important consideration in integrating a sustainability program into the hospital's house-wide management system.


IN THE NEXT POST: Definition of the Sustainability Program's Strategic Objectives Using the SWOT Findings