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participated in Kaizen and found that over half of them believed, incorrectly, that a Kaizen must be a substantial improvement. Therefore, the KPO improved its communication to remind staff to practice Kaizen by starting really small.
Activity 2: Reports Kaizen Metrics
Franciscan’s KPO is responsible for tracking and reporting monthly metrics for departments and the broader organization, including the participation rate and absolute numbers of generated Kaizens. For instance in 2010, 36% of staff and 75% of departments participated in the Kaizen program within Franciscan. There were 3,949 Kaizens completed at the three Franciscan hospitals, which is just under one Kaizen per employee including part-time employees, or 1.6 per FTE. The 2012 goal is 50% staff participation, with an average of 2.0 Kaizens per employee. Franciscan’s leaders believe there is still a huge opportunity to continue to expand the use of Kaizen in their organization. The KPO provides top-level managers with a detailed accounting of the Kaizen programs participation rate and ﬁnancial impact, which serves to remind them that the beneﬁts far outweigh the costs. Department managers can decide if they would like to print and post their numbers or their performance compared to other departments on their communication boards. At Franciscan, the completed Kaizens in 2010 resulted in a total documented savings of over $3 million. About $1.7 million of that savings was dollars that ﬂowed directly to the “bottom line,” and over $1.4 million of that was “potential” dollar savings through, for example, the saving of someone’s time. They try to clearly distinguish how potential savings do not immediately ﬂow to the bottom line of the organization’s income statement. For example, saving one hour of a nurse’s time may not mean one less hour of wages paid. Instead, that time may be used for another purpose such as enhanced patient care, which can be difﬁcult to put a dollar number on. Franciscan’s KPO tallies dollars saved in the Kaizen program because it is important for a successful business concern to have a proﬁt, surplus, or a positive return. Even in a nonproﬁt or government enterprise, a positive return is required to have money to reinvest in the future of the organization or to repay loans that ﬁnanced construction. In a Kaizen approach, employees should consider the ﬁnancial impact of ideas. It is not that ﬁnances are the most important thing, but they are one of the many considerations when we carve out time in our day to make improvements. The participation rate and number of Kaizens are objective numbers that are easy to agree on, but savings can be more subjective. In order to ensure the robustness and accuracy of the ﬁnancial impact data, Franciscan’s KPO assists the Kaizeneer in detailing and verifying the ﬁnancial documentation for any potential savings identiﬁed as being more than $1,000. For those that end up being documented as saving more than $20,000, a member of the ﬁnancial
Organization-Wide Kaizen Programs
department reviews them for calculation accuracy and evidence of potential or bottom-line impact. Like many hospitals, Franciscan leadership holds a monthly or bimonthly management meeting. At one of those meetings each quarter, there are 15 minutes reserved for reporting the status of the Kaizen program to all managers, directors, and VPs. Participation is reported to the organization by regularly publishing the following Pareto charts: ◾ ◾ ◾ ◾ ◾ The The The The The top top top top top 25 25 25 25 25 directors by year-to-date Kaizen count directors by percent staff participation departments by year-to-date Kaizen count departments by number of Kaizens per full-time employee departments by percent staff participation
At Franciscan, leaders are careful to focus on the positive by continually recognizing high performers. They are careful not to harm the dignity of the low performers by publishing anything with their names on it.
Activity 3: Coordinates Rewards and Recognition
Kaizen is an important way we visibly recognize and reward employee initiative. —Mischelle Frank Franciscan nurse At Franciscan, the KPO is responsible to pull the data on a monthly basis about to whom to award VIP points, sending it to the human resources department to ensure employees receive their proper points. Additionally, the Franciscan KPO conducts an annual awards ceremony in the auditorium where all Kaizeneers who met the annual individual goal are invited, along with representatives from departments that met their departmental goals, as well as the list of the Kaizen high performers. Franciscan’s leaders hand out award plaques to their seven best-performing departments in Kaizen count, also their seven best departments by Kaizens per FTE, along with the top seven money-saving Kaizens, and the seven individuals with the highest Kaizen count. Everyone who met the annual individual goal gets a certiﬁcate. At Franciscan, there are several quarterly contests that reward managers and staff for participation in the Kaizen program. Winners are drawn randomly from a hat, with no analysis of the merit of each Kaizen. For example, they conducted contests that rewarded the three top departments for having the highest staff participation percentage and the highest increase in their staff participation