In the wake of the Katrina disaster five years ago, one Louisiana state agency leader used the “clean slate” provided as an opportunity to redesign the eligibility determination process for health-care benefits for the needy.
Ruth Kennedy, director of eligibility for Medicaid and the Children Health Insurance programs at Louisiana’s Department of Health and Hospitals, had been attempting to reform the eligibility determination process for several years. But when Hurricane Katrina hit, the eligibility system was largely wiped out. Staff and clients had been evacuated. Records were destroyed. Offices had to be replaced. Kennedy declared: “I don’t want to just rebuild. I want to build an improved system.”
Using Lean Six Sigma techniques, Louisiana designed a caseload management system based on the “pull” concept rather than the old approach of supervisors assigning batches of cases. Instead, available caseworkers would pull pending applications from a queue. This shifted the mentality of caseworkers from “my” cases to “our” cases.
Kennedy used common sense management and basic process management techniques to redesign this vital element of service delivery. In the end, she made a huge difference for thousands of beneficiaries of Louisiana’s public health-care system. In the process, she showed that, while process improvement techniques like Lean Six Sigma helps, it is leadership that matters.
Similarly, when businessman Graham Richard became mayor of Ft. Wayne, Ind., in 2000, he was already trained in Lean Six Sigma processes. However, his goal was not to deploy Lean Six Sigma methods throughout the city. His goal was to make the city government more effective.
During his eight years as mayor, he infected the city’s employees with his enthusiasm. Even the city’s nine unions joined the effort. More than 100 projects led to over $30 million in savings for the city -- and better services. In fact, the city claims pothole repairs that used to take 48 hours to repair are now fixed within 3 hours of being reported!
Is Lean Six Sigma a new management “miracle drug?” Like most new management innovations, Lean Six Sigma began in the private sector. It started in manufacturing and moved to services in the 1990s. Since 2000, it has been growing in government at all levels. In fact, over two-thirds of the organizational units within the Defense Department are currently sponsoring Lean Six Sigma initiatives. Lean Six Sigma methods are used to distinguish between value-added and non-value-added work (or waste), such as waiting in line, service delays, excess inventory, over-engineering, etc.
While the rigorous technical methods involved tend to be the focus of many observers, the crux of its value is that it empowers people closest to a particular business process to improve operations. In addition, Lean Six Sigma requires a broader view of the sum of all the individual processes, so employees can see how what they do fits into the bigger picture. So, for example, instead of just focusing on improvements in the finance office, finance improvements are developed in the context of the overall efforts of the larger organization’s mission.
Former Mayor Richard says the “issue isn’t commitment, it’s engagement.” While top leaders may be committed to a Lean Six Sigma initiative, the real test is whether employees use it in their day-to-day work. Management professor John Maleyeff found that successful Lean Six Sigma initiatives focused on three elements: developing an infrastructure, applying the technical methods on individual projects and ensuring implementation.
When developing a Lean Six Sigma infrastructure, leaders must be able to directly communicate the importance of the initiative and be willing to engage employees in the process before launching an initiative. By focusing on program improvement, leaders begin to focus the organization on being more data-driven and results-oriented.
In applying the technical methods of Lean Six Sigma, Richard wished he had incorporated the Lean methods sooner and emphasized managerial-level use of data. If he had to do it again, he said he would have better tailored training to government employees. Deployment of the initiative was easier in some city functions than others. He also found that strategic oversight was critical.
And finally, when implementing a Lean Six Sigma program, Maleyeff found, it is important to create a centralized focal point. While a new office may not be needed, a steering committee chaired by the top leader may be an important catalyst for attention. Also, the leader and the steering committee need to encourage organization-wide involvement, with trained champions in each organizational unit.
Should you use it? Some observers see Lean Six Sigma as just the latest management fad. However, Richard says that the key is to “create a team-based, disciplined approach” regardless of the name and methods adopted. Louisiana’s Ruth Kennedy concurs. There are many commonalities with other management techniques like total quality management. For new leaders who want to quickly make a mark, the availability of a tested set of methods that have been successful in a wide range of environments makes such an initiative easier to adopt, in many cases.
