The Productivity Paradox

As our organization implements lean, we are running into fears that our employeeswon’t be as productive after a lean project. There’s a theory that we’ll be “paying people to wait around” for patients / customers to show up.

I’m pretty fascinated by this fear, since lean concepts of value are supposed to be be employed for the workers as well as for the customers. While there may be people to want to be paid for waiting around, I’ve seen studies that indicate that most healthcare folks want to be valued for the good work they produce in an efficient and pleasant environment.

It’s always been clear to me that as process productivity goes up, in a service environment, service productivity goes down – and vice versa. Think of it this way – if you have someone behind a registration counter, who is already busy, and someone walks up – that someone willhave to wait. And we do this in healthcare all the time – because we’re afraid that we won’t be getting our money’s worth out of an employee, we make sure they have more than enough to do. An idle employee costs money, in this paradigm; a waiting customer doesn’t.

The lean concept of takt time is a great help here – measuring how many “units” or “customers” need to be served in a given time, and staffing accordingly (assuming an efficient process!). But as expense accountants know, we would rather have workers 100% busy and patients waiting, than workers 85% busy and no patients waiting.

I was struck by a similar concept in the recent book, “Fast Innovation” (George, Works, Watson-Hemphill, 2005). Creative engineers were found to be less efficient when working at 100% productivity. It seems that the engineers were most efficient when they were working at 85% productivity – because this allowed them to adapt to sudden demands for design changes during the testing phases, and they didn’t have to prioritize among many projects (robbing Peter to pay Paul) in order to adjust to a critical need.

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I wonder whether we should pay more attention to this aspect of process design, when moving through our projects?

Comments 2

  1. cheezer

    Excellent article, Sue. I’ve always struggled with explaining the concept of workers "not working" in a lean environment to management. The cost accountants still rule this area, to the detriment of the customer. As soon as someone is seen not running their machine, Sr. Management starts screaming that we’re overstaffed.

  2. Sue Kozlowski

    Thanks for your comment! I am reminded of an argument that I had with a former boss, in which I stated my plan to improve the process efficiency by 30%. The immediate response was, "Great – that means I can cut your staff by 30%!" It took me a while to convince him that the improvement in service would bring gains beyond the salary savings.

    Or again, when I was helping to automate a process, the marketing blurb stated "You will be able to eliminate up to 2 positions!" When my boss came around asking which 2 positions could be cut, I had to tell her that we only had 2 people in the area, and they would be needed to run the instrument, so if she cut them both we’d have an instrument without anyone to run it. That hadn’t occurred to her. Again we had to have that conversation about improvement in service vs saving salaries.

    It certainly is a "never-ending process of continous quality improvement!"

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