Lean for non-profits makes perfect sense

During one of my introductory non-profit management classes, it occurred to me that Lean methods hold amazing potential for organizations that exist for social good above profitability. When these organizations depend on a budget of grants, fundraisers, and donations, it is of the utmost importance that their resources are used efficiently and effectively so the mission is carried out to serve the broadest possible population. The potential for Lean benefit is limitless.

Let's be honest. No one wants their charity donation to be used for anything other than forwarding the cause, right? When we make a $20 donation to the animal shelter, we certainly expect that almost all of that will go directly to helping animals. If we were told that half of that money would go toward overhead (administrative costs and general operating expenses), we would certainly be less likely to donate. Never mind that without these basic needs, the animal shelter could not exist. Somehow, we feel that that money needs to come from somewhere else. What if we knew that another $6 of that $20 would be spent on soliciting more donations? That would leave only $4 to pay for care and supplies for the shelter pets. Wait just a minute! This is unacceptable, right?

But....think about this: do we ever really get upset about, or even think of the overhead and operating expenses of a for-profit business? When we see a full page ad in the Sunday newspaper promoting an upcoming sale at a department store, do we scrutinize that store's ethics for trying to lure us in to buy their products or do we look at all the "good deals" and run right out to buy new things that make the store profitable? Right. So, why the double standard and how can we change this?

I propose that if people knew that their donations were being stretched as far as possible to generate the greatest good, they would certainly be more inclined to donate. Lean offers the tools to do this and if properly implemented and publicized, the act of continuous improvement within the org creates a PR opportunity like no other! Take a look at this video that highlights a food charity that increased their community impact with the help of the Toyota Production System.

Not only does this look like a great cause to donate to, but they also had the ingenuity to create this video and post it online, offering the incentive of a donated meal for each viewing. Creative solutions like this can revive a staff that is suffering from burnout, kick-start a fundraising campaign, and provide a greater sense of efficacy for volunteers. When you are working with a shoestring budget, its so important to make the most of it.

Continuous improvement at home

At one point, my sister and I both held positions that involved Lean methods at our job. We were on the same wavelength because we looked at things in our homes through a Lean lens. We often joked about how we "5S'd" the garage or created FIFO inventory management (first in first out) in the kitchen cupboards. Thinking this way was automatic and effortless for us once we saw the results at work so it only made sense to use what we learned around the house. It sounds rigid and stuffy to live like this, but its really just a more systematic way of proactively managing household tasks.

As a result of her family's scheduling confusion, missed appointments, and late bill payments, my sister posted a customized calendar in her kitchen with a 3x3 square for each day, large enough to accommodate a color coded post it note. This almost completely eliminated their problems. It looked almost like this one by Tim McMahon, blogger of A Lean Journey:

Photo courtesy of: http://www.aleanjourney.com/2011/05/lean-at-home-my-visual-schedule.html

Effective Lean efforts are visual and intuitive. One should be able to understand the visual cues with very little explanation or training, so it makes perfect sense that a family could use some of these tools to teach young kids and keep them involved.

When my repeated searches for other ideas about how to be Lean at home turned up very little, I wondered why. Perhaps its because the ideas are already out there, on HGTV or on Hoarders, and are just not being labeled Lean? Whatever the reason, I was happy to find Crisp's blog post Agile@Home-simplifying life using agile and lean principles. I especially enjoyed this annotated collage:

http://blog.crisp.se/2012/05/02/henrikkniberg/agilehome

The picture of the little girl washing dishes and choosing clothes from the piles are supposed to represent waste: work in progress and overproduction. The trip planning and homework chart are meant to track progress and visually lay out needs and scheduling intentions. The Kitchen Value Stream Map is a nice representation of how a process might be carried out in the kitchen. I'm not suggesting that every aspect of home life needs a set of work instructions but it might be worthwhile to give it a try on a small scale project. We can all think of something that needs improvement at home and as we've discussed before, Lean is all about small changes and continuous improvement.

If you are anything like me, most of the cleaning/rearranging projects that weigh on us are on the back burner until the day when we have more time or extra money to invest in organizational accessories. Most of the time, however, it is better to take that initial first step and do something. More often than not, you'll be motivated to keep going or pick up when you have the next opportunity. That's what I really enjoyed about my work on Lean initiatives in the factory. When you feel like you've accomplished something and can see and enjoy the results of your efforts, it perpetuates brainstorming and helps keep us engaged.

Lean isn't for everyone all the time

In last week's post, I referred to waiting as one of the seven wastes in Lean. This got me thinking about the challenges faced by service industries when they are seeking continuous improvement opportunities. It is true that there are times when the principles laid out by Toyota and the countless other Lean thinkers may just not work so well. That is perfectly okay. A counterproductive effort is the very antithesis of Lean so if the shoe doesn't fit, don't try to wear it.

In the same Special Report that I cited last week, we are told that minimizing process variability reduces errors and improves quality - the key to optimization. But would going Lean be a proper way to run a fire department? It's definitely inefficient to pay a bunch of firefighters 24 hours a day when the majority of their time is spent NOT fighting fires but would we be any better off if they were constantly busy and the fire fighting equipment was functioning at its capacity? The variability in this business involves the incidence of fires and that is simply going to remain uncontrolled, no matter how efficient the response to them might be.

Any time a business involves more service than tangible product, Lean is more challenging to fit. The customer is more integrated with the product and that complicates matters in a way that will be unique to each person. Any kind of personal selling involves a customized approach, whether that means your customer has their mind made up in advance or they want you to walk them through every potential option. If a process of selling is pre-planned, it's going to be difficult to hold to an allocated amount of time to make a sale if the customer wants to discuss some aspect of the product at length.

The following video has been shared on countless Lean forums and blogs. It helps us to remember that if there is no good reason behind the apparent "improvements," you will struggle to gain the support of the staff you are exposing to the so-called enhancement. Mark Graban explains the concept of Lean vs. L.A.M.E. (Lean as Mistakenly Explained or Lean as Misguidedly Executed) and is also the creator of this video, posted at his blog, leanblog.org.

What does Lean have to do with hospital beds?

There is a tendency to automatically associate Lean practices with products and production, posing a challenge in fostering a culture where it can be recognized as a tool for health care. As previously stated, however, Lean is a customer driven initiative. In health care, patients are customers and seeing things from their point of view is where an ethical Lean journey should begin.

The Boston Consulting Group and the University of Pennsylvania Wharton describe an approach to reducing waste and increasing "profit" in a hospital setting in their Special Report, Rethinking Lean: Beyond the Shop Floor. Partner and managing director at BCG Jon Scholl describes how a shorter hospital stay results in a quicker turnover of beds where hospitals can treat more patients without additional capital investment:

...a hospital with 800 beds that cuts average length of stay by just 10% can free up nearly 80 beds per year, enabling the delivery of more than 4,000 additional procedures and boosting operating profit by almost $30 million. 

Cartoon courtesy of: waittimes.blogspot.com

This seems like a pretty cold blooded and bureaucratic approach to caring for sick people. Or does it?

Overwhelmingly, patients surveyed reported more time spent waiting than anything else, beginning from the time they scheduled their appointment. Waiting is one of the 7 wastes in Lean. Booking appointments several weeks in advance leads to no-shows and consequent idle time. Another source of waiting occurs when patients are handed off between different types of medical professionals. A Lean approach to care might assemble a team that focuses on one patient at a time. Chris P. Lee, a professor of operations and information management at Wharton, explains “This reduces hand offs, it reduces medical errors, it reduces length of stay, and it improves patient satisfaction greatly.

Photo courtesy of www.levantar.co.uk

Ultimately, the biggest challenge to implementing improved systems in health care might be the actual time needed to focus on it. If you visit a clinic or hospital, you don't see nurses, doctors, or staff sitting around with nothing to do. They are all educated in their work, ambitious about helping patients, and have an interest in the reduction of pain and suffering. It takes a commitment at the management level to ensure that once the facility initiates their Lean journey, it will be funded, supported, and sustained.