A national provider of rehabilitation services for persons with severe disabilities was experiencing significant operational weaknesses, including employee turnover at 100% per annum. The impact of such turnover created many wasteful costs, lessened clinical outcomes, caused patient family dissatisfaction, reduced lengths of stay in some cases, and ultimately, financial losses for the Healthcare company. In affecting a turnaround of the business, our CEO went directly to program managers and staff to assess the situation where he found that the solution involved making fundamental business changes that benefited employees. These included: (1) raising salaries in the highest cost state for the care staff working directly with patients and families; (2) moving benefits eligibility down to 30 hours to enable flexible staffing for better recruitment, plus an ability to flex-up staff time without paying overtime; (3) eliminating heavy usage of high-cost agency staffing; (4) instituting better recruitment and on-boarding practices for lower paid care staff. As a result, recruitment, onboarding and training costs were significantly reduced, while the business could operate even better with fewer, higher quality staff in-place.
Lessons for today’s businesses: Executive Function Assessment and Skills Enhancement would have been invaluable to improve recruitment, placement, and training of care staff since turnover remained highest for this group even though overall employee turnover declined from 100% to 20%. Since clinical staff were not responsive to the demands of running a for-profit business, assessment of their Executive Function skills also would have prevented some mis-hires and unsuccessful promotions.
A high-volume manufacturer of low-end semiconductors was experiencing increased competitive pressures in its global business. As a result, a strategic decision was made to implement system-wide quality improvement methods combining the business practices of Drs. Deming and Juran. This system change process resulted in detailed process mapping of materials and product flow in from suppliers and out to customers worldwide. This required a total revamp of the company’s Asian factory and statistically-based measurement of quality levels for incoming supplies, product in the manufacturing line and failure rates at customers. These new metrics were applied at key process flow check points to control and eliminate waste through real-time, system-wide feedback. The business unit significantly improved its operating and financial performance as a result of this strategic initiative, including greatly reducing the working capital required to operate the business.
Lessons for today’s businesses: The lessons learned relate to applying a Systems Model so that nothing critical to performance lies outside the measurement systems. In this case, the critical assets were the materials, product and equipment used for manufacturing, with people playing a less important role due to routinized assembly requirements.
Yet in today’s conversion to services and technology-enabled businesses, the same need for controlling and measuring the Total System of critical processes is apparent. And in this regard, employees and people in general form the critical variables requiring systematic management. Just as in a product business, the leverage lies in measuring and controlling quality levels for incoming materials, completed product off the manufacturing line, and then shipments out to customers. Any business today will benefit from measuring and managing Executive Function Skills for incoming and existing employees to better measure and improve their performance which impacts all parts and functions of the business.
The executives of two different companies in the cable business decided that the failure rates of set-top boxes generating TV programming in the home required a strategic initiative to fundamentally change how this critical piece of equipment was being managed, or should it be said, mismanaged.
What was found in operations was that set-top boxes were being lost, stolen and misplaced at troubling rates, impacting costs and bleeding cash. More importantly, these problems were impacting customers who experienced these failure rates in their homes, creating service downtime and a need for product replacement, leading to anger and dissatisfaction.
The solution involved a Systems Approach combining the capabilities of a leading cable services provider with another company focused on the repair and servicing of set-top boxes. Process mapping and analysis discovered that 70% of the set-top boxes going out for repair were found to be “No Problem Found,” causing huge wasteful spending. Importantly, it pointed out the inadequacy of the testing function to properly detect equipment failures.
Design of tracking software and an equipment asset management system enabled proper control when combined with a security clamp-down and process improvements in warehouses, vehicle management and point of care in the home. The end result was transformative change in customer service, reduction in costs and improvement in asset-utilization.
Lessons for today’s businesses: The lessons learned start with the realization that a complex business could be depicted and transformed operationally through “Small World Models” that focused only on a small subset of critical assets and processes impacting revenues and customer service levels. In addition, these same Systems Models could cover the supply chain for equipment and services out to repair with only a few process and data checkpoints involved.
Apart from the set-top boxes and trucks servicing the homes, the critical human assets for process control and improvement were some of the least paid employees of the business – the warehouse personnel, equipment testers and truck-based home support installers. These under-appreciated personnel were turning over at rates that destabilized services and caused major revenue and asset losses.
Executive Function Assessment and Skills Enhancement would have been invaluable to improve recruitment, placement, and training of staff at every level of the cable operations, including in call centers. Churn of equipment and customers was a key business metric, and looking back, EF software and skills development technologies we have developed would have made a major impact for little added cost and effort.