On TV, hospitals are a frantic and dangerous place.
EMTs rush patients on gurneys down tight hallways, plowing through crowds. Doctors run from room to room, scurrying between patients that all need immediate care and attention. And everyone seems to be screaming – all the time.
From Scrubs to General Hospital, every depiction of the medical world on TV seems crafted specifically to make the point of just how hectic life can be in the healthcare industry.
But no scene is more symbolic of this reality than the emergency heart surgery.
In this scene, a patient is rushed into the hospital. They’ve probably already stopped breathing and they’re on the verge of dying. The only thing that can save them is a perfectly executed open-heart surgery. And the doctors only have 5 minutes.
It’s emotional, tense, and suspenseful.
Will they pull it off and save the day? Or will this patient die on the table.
Admittedly, I’m not a heart surgeon. But it does seem pretty likely that any time you cut someone’s chest open and start tinkering with the most vital organ in the body, it can be a bit perilous. Not only is the job itself difficult and requires decades of specialized training, intimate knowledge of human anatomy, and an enormous amount of natural physical ability, but the stakes are also sky-high. It’s life or death.
While business decisions are rarely so dramatic and cutthroat in the moment, there are some parallels. The success of a business is often decided by only a small number of people, under intense pressure, and without a clear picture of everything that will come from their decisions. And in some cases, these decisions may tinker with the elements of what makes a business tick.
That’s especially true when it comes to operations – the heart of any organization.
The role of operations is the art and science of taking things apart, putting them back together, and hoping that they still work – or, ideally, work even better than before. Often, the risk of failure is immense and the consequences of a failed project could ripple across the entire business.
Unfortunately, this is also the reason many companies miss enormous opportunities when it comes to operations and innovation.
Risks & Rewards
Making a shift from one way of doing business can be a scary change. It entails a lot of risk. And, often, there’s no easy way to make the change gradually. It’s all or nothing – win or lose.
But even more importantly, we often see the role of operations as one of incremental change. Operations teams are asked to find small, simple changes that can generate the biggest returns for the business. Of course, this is a smart place to start. But sometimes leadership avoids or ignores opportunities that seem too difficult or complex.
Major operational change is usually seen as risky. It’s an unnecessary solution to a nonexistent problem.
This is why so many companies fail to innovate. They’re afraid.
The risk of royally screwing something up seems to dwarf the potential advantage of improvement in operational efficiency. So things stay the same. Companies do the same things in the same ways for years – or decades – until someone comes along and disrupts the entire market.
At the heart of the decision is a risk-benefit analysis. Unfortunately, we are hardwired to value immediate safety over even an enormous long-term benefit (like not being disrupted by a more innovative competitor).
What many companies fail to see is that operational innovation may, in fact, be a life-or-death situation, at least as far as their business is concerned. Failure to innovate has been the nail in the coffin of many of the world’s largest brands over the last 20 years.
Barnes & Noble, Blockbuster, and Blackberry all missed the writing on the wall.
On the other hand, Progressive made operational innovation a top priority. At the same time that other companies were being torn down by newer, more efficient business models, this 80-year-old insurance company grew revenues nearly 10x in just over 10 years.
They accomplished this by relentlessly pursuing innovation in their most basic operations – claims, processing, risk profiling, etc. By developing new, more-efficient processes, they were able to reduce costs and lag time.
One of Progressive’s biggest changes was introducing Immediate Response claims processing. By retooling their operations – offering a 24-hour claims center and mobile adjusters available on-demand – they were able to cut the time between claim and adjuster examination from 7-10 days down to just 9 hours, on average. Even better, those adjusters were given the tools and authority to settle a claim on the spot, sometimes even writing a check the same day.
This approach has paid off big time. Not only has Progressive’s customers enjoyed better, faster service, but the company is able to save money by streamlining the entire process and reducing overhead.
While most companies and executives can see looming trouble in their industry, they allow themselves to become paralyzed by the fear of risk with such a transformation. They’re in the operating room, but can’t get up the nerve to make the incision.
So – the question is then – how do we decouple the risk of operations innovation in such a way that allows firms to innovate more freely?
Making Operations Safer
Oddly, the comparison between open-heart surgery and operations may also hold the answer to how companies can de-risk their processes for innovation.
Historically, surgery has always been an enormous risk for patients. Until as late as the 1960’s, death rates among those who went under the knife were astronomical by today’s standards. Something like 1 in 10 patients would die on the table, even as late as the mid-20th century.
But now we see most surgeries as relatively safe. We trust doctors and hospitals to perform them in the safest possible way and, with the exception of a few high-risk cases, accept that surgery isn’t all that dangerous.
Why is that?
Surgery was made safer.
Of course a big part of that came in the form of improved science. We gained a better understanding of how the body works and we also developed new tools that made it easier and safer to perform surgery. But that’s not all.
There were some very deliberate frameworks put in place that have made surgery into the seemingly innocuous thing that is today. And we can apply some of that framework to operations, too.
Five keys that have driven forward the world of surgery:
- Professionalization - Surgery used to be performed by anyone with medical experience. Now, it’s done by only those with very specific training and experience. Operations teams should have focused knowledge and experience of business processes in order to understand it from both a strategic and tactical level.
- Specialization - Beyond just having Operations staff, world-class teams often comprise several types of operations professionals who have intimate knowledge of specific aspects of the business model.
- Routinization - Every surgery follows a specific routine and procedure to minimize the chance or errors and mistakes. Operations should work the same way. Create a standard list of checks, analysis, and considerations that keep the team from overlooking anything as they go about their work.
- Redundancy - Surgeons often work in teams as an additional guard against oversights or mistakes. Develop internal processes that allow your operations team to cross-check each other and identify potential issues before they’re put forth as part of any change.
- Evaluation - Medicine is largely driven by analyzing and understanding empirical evidence and specific cases of failure. No operations process is 100% fool-proof, but by deconstructing past successes and failures, your team can continue to improve their process to include less risk. Consider this an operations process for your operations process.
What’s clear is that in order to reduce risk on something that is inherently risky, we must first take steps to control and confine the threats that exist. Surgeons, hospitals, and medical schools have spent decades refining the process to remove the risk and make it possible to perform surgery on more patients and achieve better outcomes.
As an operations leader, your role is the same.
Study and understand the role that operations plays within your organization. Identify potential risks and then take steps to neutralize those risks in order to advance innovation.
It may not save someone’s life. But it just may save your company from a slow, agonizing death by disruption.