In 1985, I was working in the semiconductor industry. The year was a blur; I had technical lead implementing a global Enterprise Resource Planning (ERP) system that stretched from Europe to Asia.
The night before “go live,” I sat in the operations room, reviewing the restart and recovery code for all background jobs that fed the system. At the time, fifty percent of ERP implementations were failing. Within the company, many people were hoping for the same — change was bad.
However, the leadership understood we were dead as an organization unless we could succeed.
In 1985, Edwards Deming was still alive and different quality schools were jockeying for followers. As with ERP systems, many saw the quality revolution as a threatening change or more cynically, “the flavor of the day” — a way for management to keep the troops occupied and shareholders thinking they were cutting edge.
The real leaders saw the power of systems thinking and statistics — essentially using the engineering discipline to ferret out waste and process corruption that compromised quality, increased costs, and alienated customers - on an enterprise scale.
Ultimatley, the ERP system implementation went smoothly.
This was a global effort driven by a relentless CEO, taking two years of code, process, and attitude adjustment. The results were staggering: Net inventory reduction of 50%, cycle time reduction of 33%, planning labor reduction of 50% and so on. Those of us involved were stunned at the success. And yet, we were now on par with the fifty percent of companies who had successfully implemented ERP — nothing that special but our logistics infrastructure was now competitive.
Healthcare is in 1985
Healthcare organizations are groaning under the cost and complexity of implementing Electronic Medical Record systems (essentially ERP for healthcare). Quality schools such as “Lean” are gaining in large and small provider organizations alike. Healthcare is poised to do what manufacturing did in the last century and nothing will stop it — not the dysfunctional political debate in Washington and not the institutions fighting real quality reform such as evidence based medicine. The cat is out of the bag.
I recently read John Toussaint’s On the Mend: Revolutionizing Healthcare to Save Lives and Transform the Industry. The book is mostly about the struggle to shift individual and organizational values — creating a new ethic focused on what is right for the patient.
Sounds easy, right?
Most in this industry operate below and far away from that perspective — usually as a matter of economic survival. Healthcare has one fundamental dynamic that can be terrifying to many: Better healthcare means less healthcare. The quality and systems revolution will shrink many organizations and destroy others. All this is being fought vigorously on the political stage.
Deming’s statistical approach to organizations took thirty years to impact manufacturing in America. Healthcare’s Deming, Jack Wennberg of the Dartmouth Atlas, will take longer.
In his nineties, Deming could look back and see his once reviled ideas turned into a near religion in U.S. manufacturing. Jack Wennberg’s ideas will ultimately become common gospel as well.
The reason is simple: because, like Deming, he is right.
