My Week at Private Equity Boot Camp – Businessweek


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My Week at Private Equity Boot Camp – Businessweek.

Posting a few interesting pieces of data I have come across recently. I thought this one is interesting because it describes the use of the Toyota Management System in a sort of novel way. And, as I would normally wonder if this private equity approach is using “real” LEAN or a variant, I think it’s impressive that they have accomplished Toyota alumni involved. This makes me think that there is a lot more going on beyond daily kaizen and stopwatch tracking. See what you think.

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ePatientDave
ePatientDave

Great piece, Ted - thanks. 

'

Best line of all, within my limited experience with Lean discussions:

 

"To survive, you cut people. To grow, you cut waste."  I'll use that over and over.

MarkGraban
MarkGraban

 @ePatientDave It's OK to cut people if the organization's survival is REALLY at stake - having to cut some jobs to save the rest of them (but as a one-time event and management needs to fall on their sword for allowing that situation to occur by overhiring or not managing the business well).

 

But, projecting that your hospital's margin is going to fall from 5% to 3% because of reimbursement cuts really doesn't meet that criteria. Hospitals are (mostly) falling all over themselves to layoff people to "cut costs" in response to reimbursement cuts. Yeah, it sucks to have your revenue slashed, due to rates or volume. But, I'm working on an article now about how some hospitals are continuing their "no layoffs" approach, using Lean as an alternative to layoffs. As one CEO said, he's "sick of the cycle" where they layoff people and then FTEs creep up again because "throwing people at the problem" is their default solution. The beauty of Lean is that reducing costs is the end result of improving service, while firing people is just lazy lemming management.

MarkGraban
MarkGraban

Here's a take from one of the oldest lean blogs:

 

http://www.evolvingexcellence.com/blog/2012/04/lean-in-the-forces-of-evil.html

 

It sounds more like "slash and burn" tactics than anything... not sure if that's really Lean, which is supposed to be long-term focused...

Ted Eytan
Ted Eytan moderator

 @MarkGraban Hi Mark,

 

Thanks for this - it was a good read! Knowing you and knowing the LEAN community, I am/was suspicious, too. 

 

The perspective I've taken is that I can't imagine that these veterans of true Toyota Management System would implement just the tools, and it's very possible that the author of the BusinessWeek article simply didn't know what they were looking for, so only reported on the most obvious tools part of LEAN. There are some hints in there that more may be going on, especially in the comments of the employees that indicate things are calmer in the work environment. 

 

Ultimately someone would have to go to the Gemba to take a look to see what's really happening - has anyone done this or are people just working on what's written in the BusWeek article?

 

Always good to get your take on these things,

 

Ted

MarkGraban
MarkGraban

 @tedeytan Yes, articles like this are often shaded by the writer's perspective and bias, especially when they don't know anything about Lean.

Ted Eytan
Ted Eytan moderator

 @MarkGraban Well I say we should find out. We have the social media tools, can we connect with anyone working in these organizations for their comment - maybe a cool LeanBlog interview????