Like those of many Americans, the TV in my bedroom is tuned to the news channels while I get my day started. Recently there was a gem of a story on CNN when reporter Tom Foreman interviewed the CEO of Cessna. The general aviation manufacturer in Wichita, Kan., has struggled with shrinking demand brought on by the recession. In an effort to save jobs and position the company to recover more quickly, Cessna's managers dug down to the details of their processes and created some fascinating results.
One of the actions the CEO reported as the cameras showed the interior of a massive building was to completely clean out the large building and reassemble it. But the reassembly was based on details. For example, the decades-old process of having a wing lie flat while pieces were attached to the top and the bottom was changed. The detail: Put the wing in a vertical position, which avoids the awkward position of attaching parts overhead and lying above the wing.
Another detail was changing the sequence of attaching parts. The new process is to attach the most expensive parts last. That way the company preserves capital by having the expensive part on hand for less time.
There are three deductions from the story that are relevant to HME companies. The first and most important is to clean out the building and start over, detail by detail. It is unlikely that the economy has assaulted home care providers like it has Cessna, but regulations and payers have. More important, the economy will rebound for Cessna, but the issues affecting your profits will remain unchanged.
To "clean out the building," start by listing each business process. Tell your team to forget the way it is done. They are starting over. Forget the resources they have and don't have — nothing is off limits. The team should be prepared to adapt and change.
Next, tell your team to rewrite their process with the requirement that it consume the least possible keystrokes, footsteps and miles. Third, ask your company's team to figure out how to get from where you are to where you want to be within a reasonable time frame. Remember the details, like turning the wing from flat to vertical.
The second deduction from the Cessna interview is to take advantage of the power of universal benchmarking, or the use of best practices from other industries. In our industry, we are always asking how other providers are performing. What is normal? To the extent that another provider employs a better process that can be adopted, that is good. But internal and industry benchmarks will only produce incremental improvements, which are not enough. Radical changes in business environments require radical changes in business processes, and universal benchmarking is the path to the radical change for HMEs.
Listening to stories like Cessna's is the start of universal benchmarking. Routing delivery techs with no left hand turns, like some providers are beginning to do, is an example of implementing universal benchmarks set by UPS.
As I pondered the report about Cessna, I wondered if the CEO had regrets while taking pleasure in the success of the company's cost reduction measures. Cessna had laid wings flat and ordered engines early for decades. It raises the questions of why the less efficient processes were tolerated for so long, how much time and money was wasted in all of the years the company was less efficient and how much shareholder equity that would equate to. Thus, the third deduction: Delay results in enormous waste.
In a conversation with a public relations consultant years ago, she made the comment, "People change when the status quo hurts too much." In the last couple of years, we have seen that play out with Cessna, GM, the automotive and financial industries, governments and more. For our industry, the greatest pain is yet to come. Moreover, there is no need to accept the waste that comes with the status quo.
So, build new processes with the fewest possible keystrokes, footsteps and miles. Look well beyond our industry to find your new processes. And, rather than waiting until it hurts to change, enjoy the benefits of change before the business environment removes them.
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Wallace Weeks is founder and president of Weeks Group Inc., a Melbourne, Fla.-based strategy consulting firm. You can reach him at 321/752-4514 or wweeks@weeksgroup.com.
