Strategy

Innovation 101

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The world continues to revolve and to rotate, and yet some mornings, like today, I find myself asking why bother.

Moammar Gadhafi—the name does not even pass Word’s spell check which should tell him something about his popularity—dressed in his Michael Jackson garage sale Thriller outfits is discovering quickly that his Lawrence of Arabia shtick is about as effective as is Congress’ pretense at leading from behind.  Speaking of which, now that Congress are back from Nebraska’s beaches, maybe they can save the country.

What else?  Kim Kardashian is married—whew, I thought that would never end, Jimmy Hoffa has sworn off drinking tea party, and Chaz, minus some of the important parts will be appearing as a man on Dancing with the Stars.  I will be appearing as a giraffe on Animal Planet.

The country keeps getting curiouser and curiouser and where does that leave your business in an economy that has gone Byzantine?  It appears choices are somewhat limited.  Firms can wait until the unknown influencers become known, they can wait for Washington to sort out who’s on first, or they can decide to innovate.

When I think of innovation I think of it as follows: knowledge plus need equals innovation.  To renew or change.  From a firm’s perspective, before innovation can have application, questions must be defined and answered:

·         What is the need:

  • Declining market share
  • Uncertain markets
  • Poor economic conditions
  • New technologies causing obsolescence
  • Entering new markets

·         What knowledge is required

·         What can be renewed

·         What must be changed

Doing today what you were doing yesterday is not the picture of innovating.  It is the first day of the last days of your business.  Moving your production to China, or your call center to India is not innovative, it is cutting cost.  Anyone can cut costs, until there are no more costs to cut.  Then what?  The most effective way to cut costs is to turn off the lights and lock the door.

Healthcare IT: Musings of a drive-by mind

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It takes a lot of energy to dislike someone, but sometimes it is worth the effort. It is not easy being a consultant.  One client required that I shout “unclean, unclean” as I passed through the hallways.  Maybe that is why I leave newspapers scattered around the floor of my desk, so nobody can sneak up on me without me being able to hear them.

I have a knack for complicating simple things, but the voices in my head tell me that is better than simplifying complicated things.  Either way, I appreciate those of you who continue to play along.  Just remember, if you choose to dine with the devil it is best to use a long spoon.

You’ve probably figured out that I am never going to be asked to substitute host any of the home improvement shows.  I wasn’t blessed with a mechanical mind, and I have the attention span bordering on the half-life of a gnat.

I’ve noticed that projects involving me and the house have a way of taking on a life of their own.  It’s not the big projects that get me in over my head—that’s why God invented phones, so we can outsource—it’s the little ones, those fifteen minute jobs meant to be accomplished during half-time, between pizza slices.

Case in point—trim touch ups.  Can, brush, paint can opener tool (screwdriver).  Head to the basement where all the leftover paint is stored.  You know exactly where I mean, yours is probably in the same place.  Directions:  grab the can with the dry white paint stuck to the side, open it, give a quick stir with the screwdriver, apply paint, and affix the lid using the other end of the screwdriver.  Back in the chair before the microwave beeps.

That’s how it should have worked.  It doesn’t, does it?  For some reason, you get extra motivated, figure you’ll go for the bonus points, and take a quick spin around the house, dabbing the trim paint on any damaged surface—window and doorframes, baseboards, stair spindles, and other white “things”.  Those of us who are innovators even go so far as to paint over finger prints, crayon marks, and things which otherwise simply needed a wipe down with 409.

This is when it happens, just as you reach for that slice of pizza.  “What are all of those white spots all over the house?”  She asks—you determine who your she is, or, I can let you borrow mine.  You explain that it looks like that simply because the paint is still wet—good response.  To which she tells you the paint is dry—a better response.

“Why is the other paint shiny, and the spots are flat?”

You pause.  I pause, like when I’m trying to come up with a good bluff in Trivial Pursuit.  She knows the look.  She sees my bluff and raises the ante.  Thirty minutes later the game I’m watching is a distant memory.  I’ve returned from the paint store.  I am moving furniture, placing drop cloths, raising ladders, filling paint trays, all under the supervision of my personal chimera.  My fifteen-minute exercise has resulted in a multi-weekend amercement.

This is what usually happens when the plan isn’t tested or isn’t validated.  My plan was to be done by the end of halftime.  Poor planning often results in a lot of rework.  There’s a saying something along the lines of it takes twice as long to do something over as it does to do it right the first time—the DIRT-FIT rule.  And costs twice as much.  Can you really afford either of those outcomes?  Can you really afford to scrimp on the planning part of IT?  The exercise of obtaining HER champions and believers is difficult.  If you don’t come out of the gate correctly, it will be impossible.

Back to my project.  Would you believe me if I said I deliberately messed up?  Maybe I did, maybe I didn’t, but the one think I know with certainty is that I now have half-times all to myself.

Healthcare IT meets Ben & Jerry’s

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The idea for this blog came about after reading a PowerPoint presentation by Doctor Alberto Borges.  All mistakes can be attributed to me.

When one is witness to the number of external influencers trying to shape policy on healthcare, reform, and healthcare IT, the best one can hope for is that hidden somewhere under the pile is a pony.

But let’s be real—the pony has suffocated.

While it is okay to point the finger of blame at the usual suspects—payors, lobbyists, and the lawmakers—let us not forget to ensure to point out the role paid by the healthcare IT applications vendors.

“Who me?” You ask.

Decrease costs, increase quality, decrease errors.  I did not invent these words; they are written on your websites.

Prior to 2008 the value of EHR vendors’ stocks plummeted.  Look at them now.  How does one explain the difference?  Can the gains be attributed to vendors having rewritten their applications?  New technological innovations?  If not, what else could it be?

Meaningful Use.  Meaningful Use tied to Medicare payments and a twenty billion dollar incentive to get providers to do something they otherwise would not have done.  Could life be any better if you are sitting in the EHR Tower’s corner office?

What if we think about the issue this way?  Let us suppose all of the leading ice cream manufacturers lobbied Congress to push for including ice cream machines in all new cars starting in 2012…silly idea, but then again, so is Meaningful Use.  Not only do the ice cream machines have to be installed, but they have to be able to communicate with one another.  That way, if I happen to rent a car, the ice cream machine in my rental will already know what type of ice cream I like to eat.

Now we already know that no car buyers and no car builders will think much of being forced to buy or make cars with pre-installed ice cream makers.  But, perhaps there is a way around that.  Maybe in some self-serving way the Cookies and Cream lobby can convince Washington of the merits of pushing through their agenda.

Time passes, and still the idea is not getting much purchase.  What happens next?  The ice cream manufactures get Congress to pass the Ice Cream Tech Act—ICTA.  And as part of the ICTA Act, Ben and Jerrys, Baskin Robbins, and Haagen Dazs convince our friends to offer the auto manufacturers a twenty-billion dollar rebate for building cars with built-in ice cream makers—ICTA Initiatives.

Now, why would the Ben’s and Jerry’s do this?  Good question.  They will do this because they know that without offering a large financial incentive the car company executives will not do what they want them to do.  Now to insert ice cream makers, you can imagine that the car companies will have to go way off message, will have to change their strategy, and will have to incur all sorts of costs that have nothing to do with selling cars.

And that brings us back to the start of this story.  There is a reason why EHR vendors needed to lobby Congress to put forth more than twenty billion dollars of lottery money, and that reason is healthcare providers would not be doing EHR the Meaningful Use way unless there was a monetary reason to do it.  There certainly is no business reason to do it.

And for the most part, if providers calculate an ROI on EHR, even factoring in the incentive payments, there is still no reasonable financial argument that can be made.  In fact, when the cost to meet Meaningful Use is factored in, the financial argument worsens.

So, what will happen?  Here is what we know so far.  The Meaningful Use deadlines draw closer, meaning there is less time left to get the incentive dollars.  Implementations of EHR continue to falter, be redone, and under deliver.  The result is that the purchase of EHR systems will slow, and many EHRs will be uninstalled.  When there is no time left to get the incentive dollars, only then will EHR implementations be driven by the needs of the providers, and the government will no longer be driving the process.

 

EHR: Men Behaving Badly

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When I lived in Colorado my friend and I decided that instead of running during our lunch break we would sit in on an aerobics class. Our plan was to hide away in the back of the class, watch the ladies, and then head back to the office. No sweat—literally, that was also part of the plan. Our thought process was that if women and other lower life forms could do it, how difficult could it be? We were mainly manly men; excuse the use of alliteration.

Within ten minutes we had to peel ourselves from the floor, barely able to lift our arms and legs. What we’d viewed as an hour of simple stretching coupled with an hour of looking like mainly manly men had reduced us to a pair of whimpering sissy boys. We also learned that if you sit in the back of the class that in order to exit you had to make it past all of the ladies as you dragged your carcass from the room.

Fast forward a few decades. I went to an exercise class called spinning. Sounds a little like ballet. It’s a stationary bike. A large TV hangs on a wall. Once again the room is packed with non-males, including my wife. My take on it is that it’s a bike class for women who’d rather watch Regis and pretend to exercise instead of actually breaking a sweat. What the heck; I was already there, why not humor her. The instructor smirked at me when I asked her to tune the TV to ESPN. She inserted a CD of The Killers, cranked it all the way up, and we started pedaling. Pyramids, intervals, uphill, more uphills. Twenty minutes into it my water bottle was empty, my towel soaked. The ladies, including my wife, were chatting away as though they were walking the dog.

Not everything changes with time. Sometimes it is better to participate than to watch. Sometimes it’s better to watch. Sometimes, no matter how certain one is, one’s certainty is meant to be changed. Sometimes certainty is based on bad ideas. Like the certainty that comes from knowing, “We’re doing just fine, thank you very much.”

There’s a scene in Billy Crystal’s movie, City Slickers, where the guys are on their horses and one remarks, “We don’t know where we’re going, but we’re making really good time.”

What is that everyone holds with such certitude in healthcare IT? Is it the knowledge that even if EHR drops productivity by 20% it was still a good call? Is it that chasing Meaningful Use, even if it means forgoing supporting the business strategy is wise?

Spilt Tea: Why companies choose to fail

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At one time the single word Lubyanka was enough to bring normal Russians to their knees in terror.  Lubyanka is known best for being the headquarters of the Soviet secret police.  The basement of Lubyanka housed a prison which contained one hundred and eleven cells, cells used to hold and interrogate political prisoners during Russia’s purge.

Tea was provided to the prisoners twice each day.  A prisoner within each prison cell would place a teapot outside the cell. A prisoner, carrying a pail filled with tea, would pour tea from the pail into the teapot.

Tea spilled on to the floor.  The prisoner would clean the spilt tea with a rag.

Lubyanka’s prison operated for twenty-seven years.  Tea was served to the one hundred and eleven cells and spilled in front of each cell twice a day, seven hundred and thirty times a year.

Two million, one hundred eighty eight thousand spills.  The same number of cleanups.

Someone somewhere made the decision that it was easier or cheaper to spill and sop the water 2,188,000 times than it was to make pails with spouts on them.

What are the pails in your company?  What dumb, wasteful, redundant activities and processes have been left unchanged?

The most obvious one for most companies is call centers.

It is easier to take 2,188,000 calls each year about your bills than it is to fix the bills.  It is easier to take 2,188,000 calls each year about the bills than it is to get rid of the bills.  The same argument applies to a number of other processes.

And do you know where the fallacy in the argument is?  The fallacy comes from the erroneous belief that by having a call center, by answering calls you are actually providing your customers a service.

You are not.  All you are doing is wiping up spilt tea.

Who Killed CRM?

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I once said to my client in Madrid “Well, she’s no rocket scientist,” commenting on the performance of one of his team members.  Turns out I was wrong—she had a PhD in astrophysics.

Anyway.  Have you noticed that too many people view fixing business problems as rocket surgery?  These are the same people who confuse motion with movement.  These are the same people who come to work each day and work on what was happening yesterday.  Do you ever wonder who is working on what needs to be happening tomorrow?

If your own employees view going to work and company functions with less enthusiasm than they would have going to an all day Celine Dion concert in the dead of winter, is it any wonder that your customers are running away in droves?

Businesses begin to die the day they open their front door—ask GM.  What then is the secret sauce to remaining viable?

As different as businesses are from one another, the common factor among all businesses is one thing—customers.  Hospitals, banks, manufacturers, software companies all have the same mission statement, one they do not publish—We do stuff for money.  Guess who has the money—customers.  Businesses only remain in business by being able to one thing; getting those with the money to give their money to them.

Without OPM—Other People’s Money—there is no business.  We do stuff for money.  If that is true, should not every activity, every plan, every process, and every investment somehow contribute, somehow add value to the transaction of transferring OPM from them to you?  Are activities that do not add value to that transaction wasteful, redundant, or unnecessary?

Every business decision, every strategy, every acquisition, every hire should be evaluated in terms of whether or not they increase the firm’s ability to increase the amount OPM captured.

If this idea sounds too simple, that is because it is.  There is nothing complex about focusing on the customer.  But you would never know that from scanning the internet job boards.  Companies are looking to hire for a cornucopia of customer related positions; CRM, CEM, customer for life, customer first.

What do these companies need?  Business intelligence, a data warehouse, a chief marketing officer?  Hardly.  Marketing keeps trying to figure out ‘how do we get customers to pay attention to us?’  What they should be asking is “what do we have to do to pay attention to them?’

Most company executives would not know a customer if they sat next to one on the bus.  They may know about the customer; income, age, social stratification, number of children, but they do not know why they are a customer or why they were a customer.

Customers leave all of the time.  They leave to find a company that either treats them better, or one with which they do not have to interact.  Welcome to the land of customer initiated virtual RFPs.  Instead of companies deciding to whom they sell the stuff or their services, customers decide from whom they are going to buy.

CRM is dead and companies killed it.  Customers know when someone is trying to manage them and they do not like it.  Now customers are managing the sellers and they do not need multimillion dollar systems to do it.

If you are interested, this link goes to a presentation I have given on CRM:Dead or Dying?  Feel free to use it or to leave a copy on the desk of your CEO.

http://www.slideshare.net/paulroemer/crm-dead-or-dying

Is your company ADHD positive?

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It ain’t easy always being the one dumb enough to write the words on which others dread to tread.  “Get Paul to write it.”

A lot of companies need to go to the doctor.  Whether the firm suffers from malaise, ADHD, or depression is not really important.  Companies do not get ill, companies do not suffer.  Their employees do, get ill that is; companies merely serve as incubators of the malaise and facilitate it.

We have all seen it.  Remember Sally?  Her office was the down the hall, third door on the left.  Crayon drawings from her granddaughter hung from her credenza.  An imitation Tiffany desk lamp with a cracked shade was to the left of her monitor, and a half-dead philodendron in a clay pot grew through the slats of the Venetian blind.

Sally was always the first one in the office.  She was the person who cleaned the coffee pot and made the first pot of the day.  She filled her ceramic mug, the same one she had used for twelve years and using her pinkie finger like a swizzle stick stirred in two packets of artificial sweetener.

Each year Sally organized the Christmas party and she was the person who let everyone know when it was somebody’s birthday and she was the person who sent the flowers from the company if someone was ill or had a baby.  To many employees, Sally was the human face of the company.

Sally was let go, was downsized, was laid off, was fired.  Some guy named Bob now sits in Sally’s office.  It will never be Bob’s office.  Today it is as though Sally never even existed.  Her perfume no longer drifts down the hall.  Bob let the philodendron die.  The drawings are long gone along with the imitation Tiffany lamp with the cracked shade.

If you are the first one in the office you stand in the snack room trying to figure out who is going to clean the coffee pot.  Rather than cleaning it yourself, you have learned to make do with a cup of some sort of chamomile tea that smells of lavender.  You no longer know whose birthday it is or who just had a baby.

The company has changed and everybody went along with it.  First Sally, then Mr. Withers who worked in tax.  Two people in purchasing left on the same day.  It feels like there should have been a wake for them or like you should be wearing a black arm band.  You cannot remember the last time anyone went to lunch together.  You have seen the malaise and the malaise is you and him and her.

Companies spend millions of dollars trying to figure out how to boost earnings per share, how to improve productivity, or customer satisfaction.  They hire firms like BCG and Bain thinking maybe the answers are buried in the two hundred thousand dollar white paper they never read or in the multi-million dollar supply chain project or the hundred million dollar electronic health records system.  The end result—mistakes are made faster because they have been automated.  During the process of automation, more people along with their half-dead philodendrons were voted off the island.

It is as though those people never existed.  The only difference between those who never existed and those they left behind is that those left behind have not yet figured out that they never did exist.  To many companies the people are not any more real than the laptops, and perhaps less valued.  Inventory: 35 accountants, 72 programmers, twelve hundred laptops, and six half-dead philodendrons.

One need not hire BCG or Bain to recognize the problem.  Look at the condition of the coffee pot sitting on the warm burner.  Look at the months of undelivered reports that are stacked outside of Sally’s office.  Look at the faces of those in the meeting with you or those who reluctantly came to the holiday party because they thought their boss was making a mental note of who did not attend.

Companies do not need a data warehouse or a business intelligence initiative to improve their performance.  People perform; data is nothing more than a collection of numbers.  People are what make data relevant. People are what make customers like a company or leave it.

Too many companies treat their employees as disposable and replaceable assets.  Customers will never see nor will they interact with the data warehouse.  They will assess the company based on their interactions with the employees; the receptionist, the person on the phone—the one paid the least, the one coached to smile while they talk, the one coached to get the customer off the phone as quickly as possible so they can get the next person in the queue off the phone as fast as possible.

These people did not break the company; the company broke the people.  The company created and sustained an environment of malaise and only the company can fix it.  The malaise will not improve by implementing casual Tuesdays, or by placing an employee suggestion box in the cafeteria.

Employees are a lot like customers—they are smart and they want to feel valued.  Wanna bet that there is a high correlation between customer satisfaction and employee retention?  If companies want their employees to instill an attitude in their employees such that the employees would be willing to die for the company, the first thing the company needs to do is to stop killing them.

Showing Initiative–learning the hard way

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Were one to judge America by what they read from scanning the headlines of the magazines in the supermarket’s checkout lane, the only items of note are that Jennifer Aniston may or may not be pregnant, and that another one of the Kardashian’s was getting married—no word as to whether or not she is pregnant.  The headlines provided no indication that we are at war or that the economy has been outpaced by my daughter’s lemonade stand.

Anyway.  I have been reading Solzhenitsyn’s The Gulag Archipelago, which should be on every reading list for Genocide 101.  In the book he describes numerous offenses which could get a Russian sentenced to Stalin’s gulags.  Some estimates suggest more than sixteen million people were purged under Stalin’s regime—enough people whereby those in power had to continuously invent new offenses.

In one such description Solzhenitsyn recounts a conference for Stalin’s supporters.  Every public gathering was attended by several members of the NKVD, the bad guys.  At the conclusion of the conference its chairman called for a verbal salute to Stalin which resulted in all of those attending applauding.  The vigorous applause continued for eleven minutes because everyone was afraid to be the first to stop applauding.

To stop applauding was to show initiative, was to be an individual.  Exhausted, the chairman finally stopped clapping; immediately, so did everyone else.  The chairman, a loyal communist, was arrested.  During his interrogation the interrogator told him “Don’t ever be the first to stop applauding.”  Darwin’s natural selection, and how to grind people down with stupidity.

Nonetheless, we return to Beaver Cleaverville.

Do you ever sit in a meeting thinking it would be easier to design a revolving sliding door than to agree with or understand whatever is going on in the meeting around you?  You scan the room eying the flock of sheep each of who think of themselves as lions.  Once again, the Pickle Factory’s leader had confused motion with movement.  You scribble yourself a note using your favorite crayon—the cerulean blue, ‘I have seen our future and it needs work.’

“Well, here we are,” says the moderator outfitted in her J C Penney imitation Vera Wang pantsuit.  For years her mind had run just fast enough to enable her thoughts to always be in the same place.

“Yeah, here is where we are,” you mumble into your cupped hand. “We have been here before and we will be here again and again.”  The person across from you seems to be humming “It’s a long way to Tipperary.”

These meetings make about as much sense to you as the game the Afghan Pashtun tribesmen play—buzkashi—sort of like polo except instead of using a ball they use a headless goat.  The executives rampage through the offices each day dragging the headless carcass of their business strategy to meeting after meeting hoping to score, and the more meetings you attend the more you feel like the goat.

“What are we supposed to accomplish today?” You ask.

“Your guess is as good as mine,” replies the moderator, her mind making its way back from its visit to the land of ultima Thule.

“No, your guess is better than mine,” you say.  “It is your meeting.”  ‘Lock the gate,’ you are thinking, ‘before the village loses its idiot.’  Everything is running behind and the team wants to make up for lost time.  Your job is to try to convince them that you cannot make up for lost time; the best you can hope for is not to lose any more.

You have always known that companies which do not tolerate dissent have a tendency to ignore dissenting information but they remember the dissenters—the first person to stop clapping. In a company lacking second sight and new ideas, the old ideas are often divided evenly among the employees.  The death spiral of silence—people avoiding threats of being voted off the island have a tendency to refrain from making any statement that may show them to have an original thought.  Showing initiative can result in your being sent to the company’s gulag.

Have you noticed that the more a firm’s competitive edge erodes, the busier the firm appears to be?  Once you have fallen through the looking glass the only way out may be for you to walk back the cat, that is travel backwards to see how it is you and the others became trapped in this house of mirrors.  The problem with that strategy is that to undertake it requires you to show initiative.

The firm’s gulag is filled with people like you.  At least when you get there you will be able to commiserate with people of a similar ilk.

 

Planning: What I Learned in the Twelfth-Grade

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Planning is not all it is cracked up to be—it never was—but it is a whole lot better than the alternative; not planning.

A lot of plans fail.  Too many people equate planning to golfing; after all, how difficult can planning be?  Apparently, judging from the results of failed plans, pretty difficult.  There are planners, and then there are real planners.  Just like there are golfers and real golfers.  Those planners in the first group are the ones, who on occasion, have to throw something on paper and call it a plan.

Planning can get you in trouble.  An example?  Sure.  Twelfth grade—Operation Red Belt.  My friend, now an FBI agent, was looking for a way to meet a really cute girl in the eleventh grade.  The first time he saw her she was wearing a red belt—hence the name of the op.

Since Al Gore had yet to invent the internet, the only way to learn anything about her was to stalk her, a good skill for him to learn considering his career choice.  we put together a written plan.  Scrawled across the top of the paper were the words ‘Operation Red Belt.’  We even outlined a series of questions he should ask to prepare him should he ever get a chance to talk to her.

One night we followed her home from a basketball game, killing the lights in his car so we wouldn’t be spotted.  We learned she lived at the end of the street.  After she went indoors, rather than turning around in her drive, we proceeded down the dirt road that led past the home figuring we would execute a three-point-turn and make our escape.

Unaware of the culvert on the narrow and muddy dirt road, we only managed to skillfully execute points one and two of the required three points in the turn.  The passenger’s rear wheel was spinning wildly in the culvert.  Right about the same time the sky opened up and it began to pour.

In an age without cell phones, the great planners were hopelessly marooned. The only house on the street with its lights on was Red Belt’s.  Realizing we had no choice, we walked through the mud and rang the doorbell, hoping we would be allowed to use the phone to call his parents.

He father answered the bell and invited us in.  Plans do not always work the way they are designed to work and, the consequences of bad planning are a lot worse in business than they were in the twelfth grade.

One thing your IT vendor will never tell you

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Permit me to let you in on a little secret—most firms have no idea how to manage their IT applications vendors.

In turn, this means they are managing you.  By the way, this is a bad thing.

The best way I have found to understand this problem is to liken what IT vendors tell you to what magicians tell their audience.  Bear with me.  If you have ever attended a magic show or watched one on television you will note that the best magicians tell you prior to their performance that they are going to lie to you.  In order for a magician’s performance to work on you any magician has to get you to suspend your belief.

A magician tells the audience that everything else you are about to hear and see is a lie.  And then they tell you they are going to cut someone in half, they do it, and your eyes are so amazed that somehow your brain forgets the bit about being lied to, about being led down a path of suspending your beliefs.

The difference between magicians and IT vendors is that IT vendors forget to mention at the outset—or at any other time—that not everything they tell you is true.  Things like what their system will cost, what it will do and how long it will take.

And because they do not tell you they are lying, once you have suspended your belief, you forget to unsuspend it.  Hence, you are caught up in their fantasy world and you foolishly believe what they tell you.

For the most part, IT vendors are not the people you want next to you in the EHR, ERP, or any IT foxhole.  In the dog-eat-lemming world of IT, never forget that the term ‘partner’ is an oxymoron.  IT is a business and the goal of every business is to maximize profits.  The best ways to maximize profits are to reduce costs and to increase revenues.  The only way to do so is for vendors to increase your costs.

Keep your eyes and ears open the next time your vendor offers to cut someone in half.