EP: 036 The Healthcare Parallel: Why Optimizing the OR Alone Never Works

Let me describe a meeting that happens every week in hospitals across America. The CFO is looking at spreadsheets, cost their up again. Instrument budgets are blown. Premium labor through the revenue leaking somewhere. It can't be traced. The COO is filled in complaints from surgical services cases starting late. Surgeons frustrated. Or efficiency stuck at a ceiling. Nobody can break through. The CNO is watching quality metrics that won't improve near misses ticking root cause analysis that keep pointing back to the same place of inflexion. And when they turn to SPD direct as an ass, what exactly is happening? They get explanations like staffing challenges, volume spikes, supply chain issues, difficult surgeons, all of it is true. None of it satisfy. The meeting ends action items assigned. Everyone agrees to try harder. Six months later, same meeting, same conversation, same frustration. This episode I told you about IBM and how Luke Gertzner discovered that the problem wasn't the people, it was the system. Today I'm bringing that lesson home because what happened at IBM is about is happening in your hospitals all across America right now. This is Brip to Leave. I'm excited to be back. Here on this show, again, I'm excited to welcome you back, Bridgebuilders to Brip to Leave. This is the business of developing amazing leaders of this generation and next to come. I'm your host, Dr. Jake Taller, Jake Cousin. This is episode 36 season 3. This is the Read and Teach series from my newest book, Operational Blindness. If you missed last episode, go back and listen. We laid the foundation that IBM's story, the Gertzner insight, and why changing people doesn't work when the system is broken. Today we're building on that. We're taking the IBM lesson and mapping it directly onto healthcare. In this episode, I'm going to give you this condition, give this condition a name and a name that once you hear it, you won't be able to unsee it or unhear it. Let's get into it. Before I go further, I need to address something. Some of you listening, Art and Healthcare, your executives, operators, business leaders who found this podcast because you care about leadership, organizational transformation, operational excellence. You might be wondering, why are we spending so much time talking about their process and departments, what does instrument reprocess and have to do with me? Here's why this matters to you. Every organization has its own version of SPD. Every organization has that upstream function that support that support department, that back office operations, that leadership treats as overhead. They call it a sensory, necessary evil, something to be managed and unoptimized. In almost every organization, that overlook function is quietly constraining the performance of everything downstream. And healthcare surgical services is the revenue engine. It's where the money is made and SPD is the upstream constraint that determines whether that engine runs smoothly or sputters. You can optimize the ORRU one, better scheduling, faster turnovers, happier surgeons, but if the instruments aren't ready, none of it matters. So when I talk about SPD, I'm really talking about the constraint management. I'm talking about upstream, downstream dynamics. I'm talking about how organizations become blind to the functions that actually determine their performance. And if you, if you're in manufacturing, your SPD might be supply chain or your maintenance department. If you're in tick, it might be infrastructure team or your QA process. If you're in professional services, it might be your back office operations or your knowledge management system. The principle is universal. The functions, you overlook, become the sillings that you can't break through and we focus on SPD because that's our expertise. That's where we spent 20 years, but the pattern we're going to discuss, they apply everywhere. All right. Now let me bring this home to healthcare specifically. Here's what I've learned after more than a decade in operational turnaround and more than 20 years of our business, healthcare solutions being in healthcare operations turnaround, typically supporting their processing and periop departments. The patterns are the same. Hospital to hospital system to system region to region, the names change, the organization charge change, the specific complaints change, but the fundamental dynamic is identical. A leadership knows something is wrong with SPD. They can fill it. They see the symptoms everywhere, cost overruns, OR frustrations, quality concerns, but when they try to get answers, they typically hit a wall. The SPD director has data that looks fine. The metrics are acceptable. The trays are getting processed and the fires are actually getting put out. So why does everything still feel broken? And this is the question I have obsessed over for years. I've kept seeing talented SPD director smart experience, heart working people who genuinely believe that they were doing well while the organization around them was drowning. They weren't lying. They weren't lazy. They were incompetent. They weren't incompetent. They just couldn't see what everyone else was seeing. And that's where I realized this isn't an execution problem. This isn't a training problem. This is a people's problem. This is a visibility problem. And that visibility problem, it has a name. And I'm going to read to you a section in a book. I mean, in case you're following right now, I'm actually taking an excerpt. I'm taking time throughout every single episode to actually read an excerpt out of the book. And the beautiful thing about our book, operational blindness, is that when you go to the table of contents, you actually have each one of the segments actually itemized out. And this is very important because a lot of people just put chapters and you put the title of the chapter and then the page of the chapter. And then when you're going back to try to get references of that chapter, you're trying to remember which subset in the chapter, do you know what page and where was it. And so we've already pulled out each one of these little segments and we've created the table of contents to follow the segments. So if you fall in love with a segment, you can just notate in your table of contents so you don't have to always keep referring back and looking at colors as you speed pass each page trying to figure out where you last held your notes. So today we will be reading out a page 24 through page 26 of our newest book, Operational Blindness. And it will be available here pretty soon. If you don't have access to it, you can get if you listen to this as a playback and it's the book is already out, you know exactly where to go. You can go to Amazon and actually go ahead and get this book. And if you are an executive, we're actually gifting this book to you. You just have to stay to the end of the episode to figure out exactly how you can get a free copy of this book yourself as our thank you to you. All right. So I've spent over a decade, I'm on page 24, the healthcare parallel going into page 25. And over a decade and operations turn around and over 20 years with our company, we've spent many health care operations and I watched the same patterns, Gertson are observed at IBM play out and I watched the same pass pattern Gertson are observed at IBM play out in hospital after hospital, ask any hospital executive about thorough processing and you'll hear variations of the same refrain. It's a cost center. It's always reactive. It's a necessary headache that we manage as best as we can. The expectations are low and even those low expectations often go unmet. The explicit assumption behind all of this is clear, SBD can't transform. They're not strategic assets. They're overhead. You're you contain the cost, manage the crisis and hope for the best. That's simply the nature of thorough processing elephants can't dance. But here's what I've learned over a decade of turnaround and over 20 years as simple health care is spitting the space working in and around these departments. The limitation isn't real. It's a belief. It's just like IBM. That belief is invisible to people trapped inside it. The thorough processing director who tells you everything is under control, is it lying? They genuinely believe it. The metrics they track turnaround times volume process productivity ratios all look acceptable. The fires get put out. The trades get processed and the ORs keep running more or less. They can't see what you see. They can't see the surgeon's frustration. They can't see the case delays that cascade through the OR schedule. They can't see the cost over runs that show up on the CFO spreadsheet. They can't see the quality risk. They keep the CNO awake at night. They're not hiding the truth from you. They're hidden from the truth themselves. And this is what I call operational blindness. And it's the hidden force destroying health care operations from the inside out. It was from our book, a segment from our book, operational blindness, page 24, 25. I want you to think about how your organization talks about SPD, not in official documents and real conversations in the hallway and the leaders should meet when the SPD direct isn't there. What do you have? It's a cost center. It's always reactive. It's a necessary headache. We just have to manage it. The language reveals everything. When you call something a necessary headache, you've already decided it can't be excellent. You already lowered your expectations. You've already accepted dysfunction as the baseline. And here's the thing. That acceptance becomes self-fulfilling prophecy. If you believe SPD will always be reactive, you don't invest in making it proactive. If you believe it's just a cost center, you don't treat it like a strategic asset. If you believe it's a headache to be managed, you don't give it the attention that will make it stop being a headache. The belief creates the reality it predicts while SPD is starting is the starting point for period operative turnaround. Now let me explain something that it took years to fully understand. When health systems want to improve period operative performance, where do they usually start? The OR. Makes sense, right? That's where the action is. That's where the revenue is generated. That's where the surgeons are. So they invest in OR scheduling software. They bring in consultants, optimize turnover times. They implement lean processes for room setup and they get some gains, maybe 5, 10% of improvement. But then they hit a wall. The wall that everyone hits every single time, a ceiling that can't break through no matter what they try. You want to know why? It's because the OR is the downstream. You cannot optimize downstream performance when the upstream constraints is on a general interest. Think about it like a river. The OR is where the river flows into the ocean. That's where you see results. But SPD is upstream. It's where the water comes from. If there's a dam upstream and if there's a constraint blocking the flow, it doesn't matter how wide you make the river be downstream, the water isn't going to come. And SPD is that constraint. And instruments aren't ready. Cases start late when trays are incomplete. Surgeons wait. When quality issues slip through, patient safety is compromised. When the OR can't trust SPD, they build workarounds that consume resources and create friction. All of those problems originate upstream. And all of those problems limit what's possible downstream. This is why we always start with SPD when we do periopathy of turnarounds. Not because SPD is the most glamorous function, not because it's where the money is most visible, but because it's the constraint. And the theory of constraints tells us improving anything other than the constraint doesn't improve the system's performance. It just looks better. You can optimize the OR to perfection, but if SPD can't reliably deliver instruments, the OR will never perform at its potential. Fix SPD first, then harvest the downstream gains. Now here's what gets interesting. The SPD director is sitting in the leadership meeting. They're not hearing what you're hearing. They're not seeing what you're seeing. Their metrics look fine. Turn around times are acceptable. Volume is being processed. Productivity ratios are in range from where they sit. The operation is working. But you're experiencing something different. The CFO sees cost climbing away. They don't make sense. The COOC's OR efficiency stuck at a ceiling. The CNOC's quality risk that won't go away. The surgeons are complaining again. The OR director is frustrated still. Same organization, completely different realities. How is this possible? The answer is they can't see what you see. The SPD director isn't lying to you. They're not hiding problems. They're not being defensive just to protect their job. They genuinely don't know. The metrics they have access to turn around times volume productivity. The metrics measure activity. They measure what happens inside SPD. But the symptoms you're experiencing, I can executive, cost overruns, OR delays, quality risks, those are outcomes. They happen outside the SPD downstream in the OR and the CFO's spreadsheets and the CNO's incident reports. And there's no connection between the two. The SPD director is measuring one thing. You're experiencing another and nobody has built the bridge that will let them see what you see. Here's a side note. The SIPS hand. I don't have it on me right now. But our logo is literally the hand of upstream downstream connection. It is two hands actually shaking and working together. That's the OR and that's SPD. If they can work together and be on the same system that were both transparency is seen and they realize that they're both on the same team, much like a NASCAR team. When you think about NASCAR, it's a beautiful experience when you actually look at the functionality of the actual workflow. You have the driver. The driver's like the surgeon. That driver is the star. Everybody knows. But guess what? The driver without a car that is functional without a pit crew that is fast and that's on point will not be the greatest driver of all time. All things have to work collectively together. You can have an amazing driver. If the car is crappy, the pit crew is crappy. It doesn't matter how good the driver is. The driver will still won't succeed. If the driver's good and a pit crew is good, but the garage is bad, the people that's actually getting the car ready to be on the lanes so that it can actually start on the track. If the garage is tore up, then it doesn't matter how great the power fast the pit crew is, now smart the pit crew is and how on par they are with the driver. They still doesn't work. That's the same comparison as the surgeon with the OR. The OR is the pit crew. The garage is SPD. They all have to work simultaneously together in order to win every margin, every error, every moment matters when you're trying to win in 85,000. Every moment matters when you're trying to really win in the racing of cars. So when we're looking at the racing of health, truly getting that person back to where they need to be, that patient, everybody plays a part and everybody's part is different, but that's also okay. But the healthcare parallel to IBM is that IBM's division managers had metrics that looked fine by their internal measures, but customers were leaving. Market share was collapsing. The company was dying. The internal metric says success. The external reality said failure. Something in healthcare. SPD's internal metric say success. The organization's experience says failure. The metrics and the reality have become disconnected and because the SPD director can only see the metrics, they can only manage the metrics while the real problem goes unadjust. Now, let me pause here. What I just described, this disconnect between internal metrics and organization experience, this is the core of operational blindness. And if you're an executive trying to understand what this is costing you financially, I put together a resource that goes deep on exactly that. And it's called our operational blindness white paper. It breaks down. They're hitting costs. The instrument damage, the premium labor trap, the revenue leak is the quality exposure. We're talking millions of dollars that never show up on a standard P&L, but are bleeding out of your organization every single year. It's free. Download it at cipshealthcare.com, go to blog. And if you are a CFO trying to explain cost overruns, you can't trace it. This white paper will show you exactly where the money's going. If you are a COO, trying to understand why OR efficiency has a ceiling, this will show you the upstream constraints. If you are a CNN, worry about quality risk that won't improve. This will show you the iceberg beneath the surface of cipshealthcare.com. You can go to our blog and see the white paper. Pretty shine and bright. All right, let's keep building. So the condition, what is this condition? Well, obviously, we call it operational blindness. And I choose that term very deliberately. It's not because it's about how the operation functions. The process is the measurements, the workflows. It's not a character flaw. It's not a competence issue. It's an operational malfunction. It's structural. Blindness because it's about visibility or the lack thereof. The SPD director isn't choosing to ignore problems. They literally cannot see them. The information doesn't exist. The feedback loops are not built. The connection between what they do and what the organization experiences isn't measured. Operational blindness is a systemic condition in which leaders cannot see the dysfunction in their own operations because the measurement systems reporting structures and feedback mechanisms don't surface it. Let me break that definition down. Systemic condition. This isn't about individuals. It's about the system. You can't replace every person in the department and still have operational blindness. Let me tell you this again. You can replace every person in the department and still have operational blindness if the system remains unchanged. Leaders cannot see the dysfunction. The people affected often have the skills experience. The skills experience and motivation to fix problems if only they could see them. The limitation isn't their ability to act. It's their ability to perceive. Measurement systems reporting structures and feedback mechanisms don't surface it. You measure shapes what you see. What you see shapes what you manage. If your measurements are disconnected from outcomes that matter, you'll optimize for things that don't matter while critical problems still go unadjust. Let me ask you something. Let me ask you, do you know why this matters for you? I want to make this practical. Whoever you're listening, whoever's listening to this. If you're a CFO, you've been chasing costs overruns. You can't explain. You've been asking why instrument budgets keep climbing, why premium labor won't normalize, why the numbers don't add up. The SPD director gives you explanations that sound reasonable, but it just changes nothing. Now you know why they can't see what you're seeing. The cost you're tracking don't appear on any report they receive. The financial hemorrhage is invisible to them. If you're a COO, you've been investing in ORE efficiency, scheduling systems through put initiatives, turn over optimization, but you keep hitting a ceiling. No matter what you do, performance won't break through. Now, you know why? You've been optimizing downstream while the constraint says upstream blind. SPD is limiting what's possible in the ORE, but nobody's measuring that connection. You're trying to make cars go faster while the factory can't produce enough engines. If you're a CNO, you've been watching quality metrics that concern you near Mrs. incidents that trace back to instrument issues, a baseline of risks that won't improve no matter how many corrective actions you implement. Now you know why? The quality data you're seeing is the tip of the iceberg. Underneath are all of the catches, the work arounds, the problem solved before they become incidents. SPD can't see that iceberg anymore than you can. If you are the SPD director, you've been working harder than anyone knows, putting out fires, managing crisis, hitting your metrics, and still getting criticized, still feeling like nothing you do is ever enough. Now you know why? You've been managing what the system shows you, but the system doesn't show you what matters to the organization. You've been succeeding by the measures you have while failing by the measures other's use. If you're a VP of PERIOP, surgical services, you're stuck in the middle. You see both sides. You hear the ORs frustration, you hear the SPDs explanations, and you can't reconcile them because the visibility doesn't exist that will show you the truth. Now you have a framework. You're not dealing with people conflict. You're dealing with a visibility gap, a system issue, fix the visibility, restructure the system, implement a new one, and the conflict resolves itself. A lot of people in a lot of organizations try to fix the people versus fix the system, fix the system, fix the problem. Fix the people, send them to the same system, same problem. If you're a CEO or in the C suite, you've been watching this dynamic play out without understanding why it never gets better. New directors get higher, consultants come and go, technology gets implemented, and somehow you end up back in the same place. Now you know why? You've been treating symptoms while the disease persisted. The disease is operational blindness, and until you hear it, the symptoms will keep reoccurring. We call the book, Operational Blindness, where healthcare leaders can't see, was costing the millions and finally had to fix it. We played also with the subtitle, Operational Blindness and the subtitle, the Hidden Force, destroying healthcare operations from the inside out. I don't know which one we'll go with, both the nice, but I think I like the destroying healthcare operations from the inside out, the Hidden Force, that's intentional. This isn't a loud problem, it's not a crisis that announces itself. There's no alarm that goes off, there's no red flashing light on the dashboard is quiet and visible, systemic. It accumulates in the background, while everyone's busy fighting the fires they can see, to cost pile up in the line items that get explained away, the OR adapts with work arounds that become permanent, the quality risk grows in silence until someone or something goes wrong. And the whole time everyone's working hard, everyone's trying, everyone thinks they're doing their job, but the system is making success impossible while hiding the evidence of its own dysfunction, that's the Hidden Force. Now once you name it, once you see it, you can start to fight it. So now you have the diagnosis operation blindness, the question is, what do you do about it? You can't just tell people to see better, you can't fix a visibility problem when it comes to a system by trying harder, you need to build new systems, new metrics, new feedback loops, new infrastructure that connects with SPD does to what the organization experiences. And that's what's there about design operating system is. Our there by design is the operating system that we built specifically to cure operational blindness. It's not a consulting engagement where someone shows up, right? So reporting disappears. It's a complete methodology, visible systems, operating rhythms, capability development, that transforms how SPD functions and how it connects to surgical services. We've implemented it in community hospitals, academic medical centers, large health systems, and when you install it, things change. Or delays drop, costs normalize, quality improves, and SPD directors finally have the ability to see their real impact and manage for outcomes that matter. And if you want to see what this looks like, if you really want to see and understand how our store by design operating system is literally changing hospital systems and ASCs all over the country, please request a demo or some time to talk to us. Go to cibzhealthcare.com, request a demo, put out more information. We'll love to talk with you. No selling, just a conversation. We'll show you how to met the biology works and whether it's a fit for your situation. I'm just going to be honest with you. We don't choose to work with everybody. I want to work with the hospitals and the leaders that want to dare to be different, that dare for change. I want to work with the hospitals and the leaders that actually want to do a full system upgrade. They want to change their entire infrastructure. And the truth is, we're okay with timelines on infrastructure for buildings, but not okay with timelines for infrastructure inside the building that keeps the building up. That's the thing. True change in implementation doesn't happen in 13 week windows. True change in implementation happens in the year cycles. A full commitment to actually developing new systems and infrastructure that can solve the issue of disconnect, operational blindness from the OR to SPD. When you fix the system, you fix the relationships because the system solves the issue. You can cure cancer out the body, but if my habits that got the cancer continue after the cancer is removed from my body, new cancer cells will be created. So it's the system of how I put things into my body, which helps me maintain and cure the elements that are inside of my body. As episode 36, Bridge Builders, the healthcare parallel, let me recap what we covered. The patterns that nearly destroyed IPM are playing out in healthcare, specifically in how we manage their process and period of services. SPD is the upstream constraints on surgical performance. You can't optimize the OR until you address what's limiting up stream. SPD leaders aren't lying. They aren't hiding problems. They genuinely cannot see what the organization is experiencing because the measurement system doesn't surface it. The condition has a name. It's called operational blindness, a systemic condition where leaders cannot see dysfunction because the feedback mechanisms do not exist. It affects everyone differently. The CFO sees unexplained costs, the COO sees efficiency ceilings, the CNO sees quality risk, the SPD direct the C's metrics that look fine while everyone else criticizes them, and you can't fix what you cannot see. And right now most hospitals can't see the SPD clearly. Next episode we're going to be diving even deeper when we're talking about the dangers comfort of invisible beliefs. Oh, I can't wait for that. The beliefs that trap us feel like facts and why they make them so hard to change. Here's what I need for you to do. Subscribe, follow Nick's a new episode every week too or every other just depending on my flight cadence too. Share this episode. You know someone who needs to hear this. A leader who's been frustrated with SPD for years, a director who's been drowning, a dozen of why, a perioperative executive stuck in the middle of a conflict they can't resolve. Send this to them. Tell them to start with episode 35. Don't forget to download our white paper at sipshealthcare.com. Go to our blog section and see the white paper. And if you are ready to cure the blindness of your organization, please give the demo for us for you to be able to see what our sips healthier. A story about a design operating system is about and how hospital systems are getting rid of legacy technology and systems that have been proven not to sustain in today's time and they want change. If you want to join the community, go to breadtaleed.com exclusive content, master class videos and network of leaders who are building different bridge builders. The elephant can dance. But first we have to help it see. I'm Dr. Jake Taylor. Jake was this is bread to lead. Go and build your legacy. But most importantly, don't forget to be the bridge builder that the next leader needs. In order to see that true authentic God led leadership still exists. I know that we are just salivating over all of the information that we're going to bring. But unless you get the book or unless you help us with our service, help us get with us within assessment, we're going to be slow playing this whole season out. I'm so excited to help you identify the areas that are going on. If you are leader out there, I want you to know something. A lot of the mistakes that are happening in healthcare are not your fault. You've been trained in a specific way and a lot of times you're reprimanded on the very way that you are trained that the entire healthcare industry submits to. Visual learning, getting where you fit in and wonder why there is no order and no structure. In order to build true relationships, you need systems in place that manage those relationships from the OR to SPD or across the board. It's very key that we understand. If you truly want change, you have to be able to be the one that provides that change. And last but not least, I want to tell you something. What happens at your job does affect you in your home life? We say this. What happens at your job does affect you at your home life when you have operational blindness that you just settle for within your organization, not pushing or creating change. At this day, that anxiety follows you home. Why? Because if you're a leader working for the healthcare systems, the organizations, and there is some functions of blindness, which again, I tell you, it's not your fault. We're operating on old systems from 20, 30 years ago and a new modern world. It just doesn't work. It doesn't mean that it hasn't worked in the past. It means that that won't work today. So a lot of the issues that so many great leaders are dealing with are systemic issues that have to be dealt with with a new system being implemented inside your organizations. And I'm not talking about new SOPs and policies and processes. It's a total new system that's needed. But if you are in that space where you're needing to understand like, hey, I, I'm trying to figure out why I have anxiety, why I can't sleep at night, why I'm just gaining weight, why can't I not lose weight, why can't I get my body together, why can't I sleep right? I guarantee you, if you tie those functions of anxiety and disarray and crazy contentment over in your job and your career, the thing that you love the most, the thing you said yes for when people say yes, they don't say yes to becoming mega millionaires. They say yes to making an impact. But when the impact is now becoming your nightmare, there's something has to change because if it does not change, the only person that is affected by it is you. Is you the better you feel going to do the thing that you love to do, the better you feel coming home to those who love you. I love you. There's absolutely none you can do about it. This is bridge builders. This is bridge to lead bridge builders. And I cannot wait to see you next time. This is a great year. If you're going to be in Arizona, January 29th through the 30th, I will be speaking at the period of summer in Arizona. You're going to be in Austin in February to the OR NBC conference. I will be speaking there. We have a conference in a golf tournament coming up in Dallas. If you're interested in that, go to scrubbyscoreball.org to find out more about our golf tournament and our leaders' conference here that we have in Dallas. Every, I love you. There's absolutely nothing you can do about it. Most importantly, go be great because that's what God ordained you to be.