Leadership: Your Way Has to be the Best Way

Or at least it has to be good enough to switch everyone else to it successfully

Introduction

There isn’t a whole lot of manufacturing going on in this country, today.  What does go on certainly isn't of the just-get-it done variety, but it is rather formulaic.  If you’re building cars they have a range of engines ,a few transmissions and the basic difference is the way they look.  Most of what passes for work in the US is not manufacturing however.  We are a service economy and the majority of what gets done has no tangible output.  it is exceedingly easy, therefore, to think that everything that doesn’t directly impact the client is not important.  Today we are going to examine this attitude and how it impacts the success or failure of a business.

The Problem

Whatever business you are in has a core set of products and services and everything else is seen as a cost center.  Since we don't like cost, and it is the enemy of profit, most businesses fall into the just-get-it-done attitude for anything that isn’t directly contributing to profit.  Accounting falls under this umbrella, but most business people are accountants at heart and want to be able to pull a P&L or at least know what the bank balance is, so that is a bit different.  For anything that isn't accounting, however, emailing a spreadsheet is usually good enough.  That has the flexibility of, well, flexibility.  You came up with it in 15 minutes, you can change it in 15 minutes.  It doesn’t really matter if you spend hours or days or weeks creating and typing into spreadsheets, you know what needs to be done and you are just-a-doing it

Tribal Knowledge

While you are just-a-doing it, you are not available to think and innovate.  You are also contributing to tribal knowledge or the business processes that are only documented inside your skull.  What are you going to do when your spreadsheet gets corrupted or lost?  What are you going to do when you simply have too much to do and have to train someone to do what you do?  

There is No Such Thing as Workflow

While you are typing things into a spreadsheet and not using your brain and emailing that spreadsheet up the chain for whomever it is to do whatever it is that they do, you are actually holding up progress.  Maybe Betty Joe in accounting is sitting and waiting on you to finish your step in the process.  Sitting is a bad thing.  Meanwhile, you are in just-a-doing it mode, where a highschool kid could do what you are doing.  Workflow is everything right?

No, no it isn’t.  This linear thinking is wrecking your business.  It is amazingly simple to get into the linear way of thinking but it is wrong. Let's go back to the automotive metaphor we started above.  If Ford did things linearly, there would be a guy digging up iron and aluminum and another guy waiting on him to deliver the ore and a third guy waiting to smelt it, and a fourth, fifth and sixth guy waiting to cast pistons, and engine blocks and crankshafts,  Ford, meanwhile would make about one F150 per employee per year and it would cost a million dollars.

Instead, Ford thinks of dependencies.  Engines have the dependencies of pistons, camshafts, cylinder heads and crankshafts.  These things can be manufactured all at the same time, then transported to the assembly site.  Ford also cross trains the crankshaft guy to make camshafts, the process is similar.  When, then, the camshaft guy gets backed up, he can call the crankshaft guy to come help.  The manufacturing process is governed by the Theory of Constraints.

The Theory of Constraints

Eli Goldratt explains The Theory of Constraints in his book “The Goal.”  This is the way we get away from workflow thinking and emailing spreadsheets and start actually running a business instead of a bunch of data entry clerks running from fire to fire in their asbestos boots.  The theory is basically that you can only be as fast or efficient as your weakest individual contributor.  That process is the bottleneck.  Your job is to figure out a way to alleviate that bottleneck, then move on to the next weakest link, and so on.  In the camshaft example above, we used an idle resource to help the bottleneck be more productive.  

The Solution

How then, do we get away from processes documented in wetware (damp for some of you) workflow thinking and emailing spreadsheets?

Automation

To solve the problem of workflow thinking we automate the automatable.  We will analyze how to do this first then we will give an example of how Sentia has automated the health insurance industry.

Analysis

The first step in automating anything is determining the desired inputs and outputs.  In the case of the F150 earlier, we have raw materials, personnel and equipment producing a car.  The second step is  determining what it is you are automating., so we have to look at each individual contribution and its dependencies.  

Third, we have to compare the cost with the benefit.  Sure it would be great to have a factory making F150s at the rate of two per second with ore coming in one end and trucks coming out the other, but that is cost prohibitive.  

At Sentia we have done this analysis and automated entire industries.  For example, as a health insurance company, you have three inputs: a doctor, a procedure and a patient.  You have one output: payment for procedures performed.  

That is it.

Everything that your insurance company does that isn’t “pay for your healthcare" is useless and probably fraudulent.

What Does This All Mean?

If you do the analysis, you know that you are doing things the best way possible.  In 2012 I lived in Charlotte, NC and watched Duke Energy buy Progress Energy lock stock and barrel.  Then they went on a quest to figure out which company had the best processes.  That task is still ongoing.  Today, Progress is doing business as usual just in a different spot. That means that Duke and Progress have completely separate systems, duplicating work and effort, and costing money.

If Duke had done the analysis we are discussing, they would have known that their processes were better and automated as above, they could have folded in Progress’ book of business and never looked back.  It may have taken a month for the database guys to get the clients in the correct systems, but then it would be over.  Instead everyone is still emailing spreadsheets and dropping the ball and generally consuming more resources than necessary.  

That means less profit.  That means higher energy bills in North Carolina. Just-get-it-done, is not the way to run a railroad.

At Sentia, we have, as we stated, automated the entire health insurance industry.  The way we do this is to provide the practice with our state of the art, universal Electronic Medical Records system (EMR).  As the doctor documents the patient encounter, we detect and pay for  procedures performed in real time.  That eliminates the need for medical coding, adjudication, denials, delays, networks, brokers/salesmen, skyscrapers in every major city in the US and hundreds of thousands of employees. It also cuts out over 50% of the cost

Conclusions

If you aren’t absolutely sure your way is the best way, it isn’t.  If your processes and procedures are in someone’s dampware, someone will come along and automate your business and put you out of it.  If you are emailing spreadsheets, you are going to fail.

We have shown you how and what to automate.  All you have to do now is to execute the plan we have set forth for you.  The good news is that you are in excellent company and if things are done correctly, you have an amazing opportunity to be the dominant or only force in your industry.