In January 2014, the senior management of NEA Baptist Health System (NEA Baptist) took

advantage of the inauguration of a new hospital to initiate a profound organizational transformation with the deployment of what they called the Baptist Management System (BMS). This system consisted of a visual control room (obeya in Japanese) at the executive committee level and huddle boards at the department level. Its goal was to identify gaps that prevented the organization from achieving its vision of providing the right care at the right time in the right place and at the right cost. Since 2014, NEA Baptist had also deployed other elements of BMS such as Toyota Kata, TWI (Training Within Industry), and Idea Generation.

This initiative was led by Brad Parsons, CEO of the NEA Baptist Health System, and Skip Steward, chief improvement officer at Baptist Memorial Health Care Corporation. NEA Baptist hired top management consultants to educate and train the executive committee, managers, and staff.

Deploying a lean-inspired management system was no easy task, however. It took two years before most people felt they could fully grasp what the management system was all about and connect the dots. One manager told Parsons, "Now I know what the priorities are, and I can relate to the steps I'm taking in line with the challenge and purpose. I understand the whole picture, and the huddle board helps since it's a constant reminder." This was music to Parsons's ears!

In summer 2018, despite the significant progress made over the past four years, Parsons was

dismayed by what he was told one day by a nurse manager. She explained, "Mr. Parsons, what

we're doing is great. We can see our gaps, and people are engaged. But, you know, it takes a lot of effort, and it would be much easier to go back to command and control!"5 Parsons couldn't get

those words out of his mind. He reflected on the challenges of running a complex organization and wondered how to be sure the system they were building was sustainable. NEA Baptist and the Baptist Memorial Health Care Corporation

Serving northeast Arkansas, the NEA Baptist Health System consisted of NEA Baptist Memorial

Hospital in Jonesboro, Arkansas, and several outpatient clinics. The hospital was a six-story

structure with 228 beds plus expansion space for a total of 300 beds. It provided a wide range of

medical care services and treatments using state-of-the-art diagnostic and therapeutic technologies. NEA Baptist had 2,000 employees and was one of twenty-two hospitals and systems in the Baptist. Memorial Health Care Corporation (hereinafter, BMHCC or Baptist Corporation) spread throughout Arkansas, Tennessee, and Mississippi. The Baptist Corporation employed 22,000 people. Since its modest beginnings in 1912 with a 150-bed hospital, the Baptist Corporation had grown to meet the expanding needs of the communities it served in the mid-south area of the United States, at one point becoming the largest privately owned hospital group in the country. It offered high-quality, safe, integrated, patient-focused, innovative, and cost-effective medical care. Serving a community was about more than just helping patients feel better, however. It was about helping entire communities become the best they could be.1

Opportunities for a new management system

In spring 2013, Steward was recruited by Dr. Paul DePriest, executive vice-president and chief

operating officer of BMHCC. Steward had twenty-six years' experience, mainly in the

manufacturing sector, and was named system director for performance improvement - the sole

employee in his department. When he was hired, DePriest told him that "health care is fifty years

behind industry." Steward explained: "I thought he was joking! We spent the first six months

getting to know each other - Then I realized he was right!"

For the first eighteen months, Steward explored various health care models. During this period, he did little more than shake hands. His objective was to build relationships with employees and

managers of the Baptist system. He explained: "What I picked up very quickly was that when it

came to health care, more so than manufacturing, it's all about interpersonal skills."

In August 2012, Parsons, then working at a sister Baptist hospital, was asked to oversee the

construction of a new building that would house the expanding NEA Baptist. A Fellow of the

American College of Healthcare Executives (ACHE) and a community hospital executive with

demonstrated strengths in hospital operations, Parsons had fifteen years' experience in hospital

administration. He realized that this would create an opportunity to engage all employees in

continuous process improvement. The new building would require process changes at every level: new environments and new volumes would require a different way of thinking. He explained:I wanted to address things differently than in my previous jobs. I wanted to avoid the situation whereyou feel out of control at the leadership position, doing some firefighting and waiting for the next crisisto arise - a situation faced by most leaders working in health care.

You can get great results for a period of time with command and control management style, and

companies are proving that all the time, but I was interested in creating something that was sustainable

in a way that Toyota sustained its operations, continually improving and continually adapting.In 2012 DePriest, Parsons, and a team of NEA Baptist leaders visited Denver Health (Denver,

Colorado), which had been recognized by the Shingo Institute for its lean management system.

After exploring various models, the NEA Baptist leaders decided to adopt the Shingo model, not

just for the model itself but for its ten guiding principles of operational excellence, which govern

how daily tasks are performed. Parsons explained: "We liked the idea of a principle-focused model

for creating the management system. The principles of the Shingo model closely mirrored our

values as an organization."

Parsons met Steward in June 2013, and the two colleagues quickly became friends.

1 Steward gave

Parsons a book by Pascal Dennis titled Getting the Right Things Done,2 which discusses strategy deployment and Plan, Do, Study, Adjust (PDSA) at the executive level. Steward also shared his thoughts on other management models. Parsons explained:Steward has a way of getting me to think about the processes we employ, how we can challenge whatwe have been doing. We were very excited about the opportunity to build a new system with the construction of the new building, but we quickly saw that this was a very scary undertaking, even withas much planning and preparation as we had done. I don't know if there can ever be enough planningand preparation.

The two men gradually introduced the Baptist Management System to the others. Steward

explained:I already knew early on that I wanted to introduce Toyota Kata, but there was no way that managersand employees would let this guy with a funny name, Skip, come in with this funny name "Kata!" So,

I ran an experiment. We chose to introduce something not threatening, like the A3,3 but more importantly, we introduced the language. I knew that if people wouldn't buy into the language, I was done. I would have to go find another job. But they did embrace the language. It's not, however, a perfect story. The number one mistake was that they made A3 an individual sport; it's a team sport. There should always be a coach, and there should always be a learner. No one followed that. Most people took it in a command and control way and said, "We'll start filling out the A3 report." But at least we introduced the language where, four years later, if you use the terms "current condition,"

"target condition," "countermeasures," or "challenge," that's not a foreign language. So, that was the

experiment, and the experiment went well in the sense that managers and employees embraced the

language.

Steward added:

I'm a big believer in lean and the Toyota Production System (TPS), but I'd rather have a conversation

around a management system because a traditional lean consultant would start introducing things like

5s and Kanban. One anecdote: not so long ago, we were visited by a leading lean health care organization. They were surprised that we weren't using all the traditional lean tools. We want

employees to think about the important work of the system and the strategy we're using to achieve our

goals. That's the work of the management system. In the future, we might need those tools, but I think

we need to talk first about a management system. It's easier to really connect with people by meeting

them where they are.

During the first eighteen months, DePriest began introducing progressive leaders such as Parsons

to the Shingo principles (Figure 1), which started more conversations and led to the development

of the Baptist Management System. The Shingo model says that "1) ideal results require ideal

behaviour; 2) beliefs and systems drive behaviour; and 3) principles inform ideal behaviour."

Steward explained, "So when you look at the Shingo model creating results based on a set of

principles, the principles guide a group of systems that we use, and the systems pull the right tools."

Even before construction of the new hospital was finished, DePriest had announced to the Baptist Corporation that NEA Baptist would be a model site for a new management system. According to Steward, NEA Baptist's learning journey had a ripple effect on the entire corporation. For example, employees from NEA Baptist volunteered to help kick off various initiatives at other Baptist hospitals across the system. Baptist Management System

The Baptist Management system (BMS) was built on three dimensions: Purpose, People, and

Process. From these three dimensions, the management system was divided into three levels. The first level was that of the executive committee, with the strategic obeya - called the Safe room1 at NEA Baptist. "The goal of the management system is to align our actions, facilitate the deployment of our strategy, and engage our employees around a common goal," explained Parsons. "This is why the True North is clearly inscribed at the top of the wall, where the various strategic pillars are located. For NEA Baptist, the True North is 'Improving health care for our patients.'" According to Parsons, "The True North is the core of our business. It must resonate for our consumers, our patients and their families, and our employees." As they were constantly looking for better ways to illustrate how the dots were connected between every component of the system, Parsons and Steward often used a gear train illustration in presentations as a visual aid (Figure 2). Each strategy became a pillar of the wall. Each pillar could be subdivided into sub-strategies. For example, under "Right care," NEA Baptist had three sub-strategies: patient experience, quality and safety, and care management (see the three columns under Right care in Figure 3). Parsons explained: "The idea of population management, the idea of managing care for a group of people that use our health system, is what we track here. It's a great link to quality and patient experience and creating access to our system. There has been a great evolution of our thinking in using this board." Under each sub-strategy, the board was divided into three sections: the strategic A3, the monthly updated status A3, and the metrics.

The strategic A3 specified the gap between the current situation and the goal to be achieved. For

the new fiscal year, which began in October, the directors would formulate hypotheses to close the gap. During the summer, senior leaders would visit each department to present the hypotheses and engage in a catch ball process with employees, i.e., a process of establishing a two-way stream of information sharing across all levels of the organization. Parsons explained: "We play catchball with different levels of the organization, and employees can feel engaged by the projects formulated to fill the gap or they can formulate new hypotheses or gaps." Once the strategic A3 was finalized, it remained the same for the entire year, and the status A3 took over as experiments were run (see Exhibits 1 and 2).

The "check and adjust" at the health system level was a monthly cadence1 in the Safe room. After NEA Baptist closed its financials, senior executives would meet on the third Tuesday of every month. Parsons added:Thirty minutes is an ideal length of time to hit the highlights. To cover the entire strategies takes a littlelonger. Each director assigned to a strategy will take about eight to ten minutes to go over the statusand the metrics and answer questions. We're learning about issues that we need to learn more about.So, as a group, we can say, "We need to go see the emergency department to celebrate success or toask more questions about issues we may see." Our senior leaders want to be at the Gemba2 as much aspossible, but this structure gives us the opportunity to make sure we are intentional with our Gembavisits. These visits allow us to check on the strategically critical areas in order to meet our goals. The second section of the board was the monthly status A3, which indicated the learning achieved during the month and whether new actions were needed. Finally, the third section showed the performance metrics, which indicated whether the gap had been closed or maintained. At the tactical level, there was a huddle board for each department (Figure 4). This board showed the four pillars: Right care, Right time, Right place, and Right cost. Below each pillar, there was an tactical A3 specifying the initiatives the department should take in line with the strategic A3 in the Safe room. These initiatives were discussed in catchball mode with employees. The monthly status A3 specified what had been done and what still remained to be done. The board showed metrics, where employees could view initiatives and whether they had reduced the gap. Employees met weekly for fifteen to thirty minutes. The meeting was led by the department manager. Employees were able to review key performance indicators for the department and check and adjust their tactical plans against their performance. How were their plans working? Were other countermeasures needed? What were the next steps? Initially, senior leadership asked that department huddles occur right after the monthly cadence in

the Safe room, but that tended to interfere with departmental workflows, so departments began to

schedule huddles when it was most convenient for their staff. The department manager would meet with senior leaders as necessary after the Safe room monthly cadence.

Susan Liven good, director of inpatient nursing services, summarized the benefits of the huddle

board as follows: "I can easily walk over here and know what's going on. Having the staff involved with this board gives them the opportunity to give us ideas, to let us know what they think is working and not working. We align their efforts with the specific strategies of the organization." Finally, at the lowest level, Kata boards monitored daily initiatives in the departments.

Toyota Kata

In July 2015, while NEA Baptist was introducing its management system based on Shingo

principles, Parsons and Steward ran an experiment to introduce employees to the concept of Toyota Kata. While Toyota Kata boards were used to close gaps identified at the tactical level on the huddle board, Kata was not limited to those boards at the operational level. Their scope at NEA Baptist was far more encompassing. Steward explained:Kata is another step that happened almost at the same time. The reason I went to Kata was because Ineeded the Kata mindset to use other things such as Hoshin planning and TWI.1 So Kata became our mental model (Figure 5). This "meta-routine,"2 known as the Improvement Kata, permeates everythingwe do. If we go back to the gears metaphor, Kata is the oil that lubricates those gears. So Kata is notlimited to the visual boards we find at the operational level, although they offer an important way to get people engaged on the frontlines and develop their problem-solving skills. The Kata mental modelis present at every level of the organization, starting with the Safe room. To emphasize the importance of this meta-routine, Steward liked to stress the importance of sharing

thoughts. He was known throughout the Baptist Corporation, and even beyond it, for saying "show me your thinking" - a phrase he had borrowed from Toyota. He gave everyone in the Corporation

involved with the Baptist Management System a small blue replica of a human brain with those

words inscribed on it. This became an important symbol of the journey undertaken by BMHCC

(see Exhibit 3). The learner, who was the natural process owner, would meet with the coach in front of the Kata board for twenty minutes each day.

2 They would discuss the previous experiment addressing an obstacle that had prevented the department from reaching its target condition to help close the gap

in line with the challenge identified in the tactical A3 (Figure 6). They would go through the five

coaching Kata questions, ending with identifying the next step, i.e., the next experiment, and

agreeing on when to meet next to see what had been learned by taking that step (Exhibit 4). Concepts from Mike Rother's book Toyota Kata: Managing People for Improvement,

Adaptiveness and Superior Results were embraced right away. Steward created a four-day

workshop (later condensed to three days). In the four-day workshop, participants worked on their

Kata boards for three hours each day. NEA started with six boards (visual storyboards) and worked with an external second coach, usually Brandon Brown from Continuous Coaching Commitment.

Steward added: "You can't have training for the sake of training. You did the training and

immediately had to do something the next day. We were going to work and we were not going to

stop." To oversee the deployment of Kata at all levels, a shepherding group was created in January 2017.

The shepherding group, composed of coaches and second coaches, worked with Brandon Brown,

master Kata coach. Steward added:The coach doesn't come with the title, the degree. It's all about the skills. In our model, regardless ofyour title, you start as a learner for at least eight to ten weeks before becoming a coach. I am coachedevery week over the phone by Beth Carrington or Brandon Brown. I learned how to experiment becauseof Kata and JR.1 I've learned that failure is OK. I've learned how to treat people, how to interact with people."To implement a new process, you have two strategies," he added.You have the experimenting-driven mindset or the implementation mindset. With an implementationmindset, there are no obstacles. We already know what to do. This mindset is connected to projectmanagement and is linked to the command and control paradigm. In other words, just do it. In projectmanagement, there are tools associated with this top-down approach, such as the Gantt chart, whichtells you what to do, when to do it, and so on. However, it's the opposite of what will build scientificthinking and what we are trying to achieve with Kata.NEA Baptist still ran Kaizen events,

1 which they called "Get Better Jump Start." They ran just an few of these three-day events per year, and they were closely tied to Kata and TWI Job Methods (JM). "The cool thing," said Parsons, "is that it begins to create pull for the right tools."

Steward explained:We use JM to better understand our current condition and set our next target condition. So we use ourKaizen events in a different way than most organizations. Actually, we run our Kaizen events "Kata-style." Get Better Jump Start is used to run a ton of experiments in a short period of time after havingunderstood the challenge and grasped the current condition. At the end of the event, what is manifestedout of these efforts is a storyboard. So, instead of an action plan made of a long list of actions that needto be taken over the next weeks, we decide on the next experiment to run. Another way to put it: GetBetter Jump Start is like Kata on steroids! We're catapulting our way forward with Get Better JumpStart, so it blends in perfectly with Kata.

By summer 2018, eighteen boards were in place, with the expectation that that number would be

increased to twenty-three for the next fiscal year starting in October. NEA Baptist also used Kata

to guide the experimentation process with the deployment of TWI and Idea Generation.

Training Within Industry

Early in its journey, NEA Baptist deployed TWI Job Instruction (JI), Job Relations (JR) and Job

Methods (JM) with the help of author Patrick Graupp, one of the leading experts in the subject. As Steward explained, TWI was a sub-system of its management system. "When we encounter

obstacles, it helps us to move to the target condition, whether it be through standard behaviour

using JI, better relationships and trust with JR, or patterns of work with JM," he explained.

Steward added:Job Instruction is basically, "how do we create standard behaviour?" As we investigate our currentcondition, we quite often find that everyone is doing a task completely differently from everyone else,and that creates variation that creates defects and mistakes. So we often come in with JI inside of ourKata, and we put in a standard behaviour that helps move us toward our target condition. It's not theonly thing; it's not the only countermeasure, but it's a big one. JR really comes down to "how do wedeal with our relationship with our boss, a subordinate, or a counterpart?" In his new book, Mike

Rother2 says that when it comes to the coach and the learner, and developing a scientific mindset, the

root of it is relationships. Within our current condition, JM is really good at helping us understand our

pattern of work and then propose a new pattern of work for our target condition. This is how these three

elements blend in our system.

"We had to experiment our way forward. Using Kata was an opportunity to deploy Job Instruction and Job Relations," recalls Steward. "For instance," he added, making an American football analogy, "if we had deployed JR traditionally, we would have trained massive numbers of people, potentially outrunning our coverage." Steward was especially enthusiastic about JR:One thing that goes almost unnoticed in the management system is Job Relations; it gets ignored. If

you look at the card, it follows the four steps of Kata, just using different words (Figure 7). Instead of

asking, "what is the challenge?" it asks, "what is the end objective with this employee?"; instead of

saying, "grasp the current condition," it says, "give me all the data, the facts, beliefs, and opinions"; it

goes through a process.

Parsons added: "Today, if you and I have a good relationship, it's because it is based on respect,

based on humility, based on trust." It's worth noting that, in collaboration with the TWI Institute, NEA Baptist was instrumental in developing JR and JM for health care. A health care version of JI had existed since the creation of TWI during World War II, but not of JR or JM. Idea Generation

"NEA Baptist's idea generation efforts represent an organizational shift that is directed from the

top, but driven by ideas from the bottom. Every day, front-line employees see opportunities that

their managers do not, so we created a formal infrastructure to listen to our employees and act upon their ideas," said Craig Earley, assistant administrator, who spearheaded the deployment of Idea

Generation. In each of the departments using Idea Generation, employees would meet weekly in front of a whiteboard on which Post-it notes identifying problems were stuck (Figure 9). During the one-hour meeting, a facilitator, often the manager, would grab the notes and facilitate a problem-solving session aimed at improving operations for both patients and employees. NEA Baptist launched Idea Generation in October 2016. The first step was to train its executive

team in the concept and paradigm shift. The implementation team was trained by

Dr. Alan Robinson, co-author of The Idea-driven Organization. Drawing on their work with

companies worldwide, the authors explain the relevant strategies, policies, and practices. Four pilot projects were launched: two in the hospital and two in outpatient clinics. Earley explained: "We wanted those pilots to help inform our decisions on how to create an idea system." By August 2017, NEA Baptist had twelve departments using Idea Generation; six of those went live in spring 2017. Parsons explained: "With Idea Generation, we wanted to change the mentality from a command

and control culture. The message we were putting forward was that we wanted the staff to solve

these problems." Steward added:

Since we didn't know how to deploy Idea Generation, we used Kata to guide this experiment and help

us build this formal system. What we wanted to avoid with this experiment was the traditional

suggestion box. One concern we had was to have this replication process that no one was following.

This was the only reason we went slow with Idea Generation, and we're experimenting only with

certain units. If you go too fast with Idea Generation, before you know it, you'll have a bunch of people

implementing ideas without any link with the True North.

Earley further explained: "When we start with a group, we encourage employees to bring two ideas per week - that is two Post-it notes. At each meeting, the goal is to have every single participant leave with homework related to an idea that was brought forward. We stress that nothing is too small to go on the whiteboard."

He added: "We have an average of fourteen implemented ideas per person per year in each of those departments, and our top performers average twenty implemented ideas."

With regard to the formal infrastructure that supported this process and connected the dots, Parsons explained: "We have a procedure to escalate an idea from the front-lines to senior leaders." For ideas that needed capital investment, were highly cross-functional, or could not be approved by the managers, a committee met every Monday at 4 p.m. to serve as an escalation team, and staff were encouraged to propose any ideas that could not be implemented at the department level.

When staff were ready to escalate their idea, they wrote a short business case on why the idea

should be approved and took it to the meeting. NEA Baptist encouraged its front-line staff members to present ideas rather than their managers.

Progress made and future challenges

In the first year, there was a 50% decline in injuries from falls. In addition, $2 million was saved

through the management of physicians' preference lists, improved inventory management and

procurement, and time savings. Through Idea Generation and Kata, the orthopedics department

saw five more patients per day with the same staff levels. "All of this improves health care for our patients and aligns with the strategy set forth through our management system," Parsons explained.

"It is creating value for our customers, improving our business, and engaging our people. We are

progressing on two fronts: closing the gaps and developing our employee's scientific thinking

mindset, but it is a difficult balancing act."

Thinking back to the early days of the A3, Steward reflected on the progress made; "It's not about completing the forms. I have watched this team, and I have seen them improve each year compared to their first year. Their thinking... the forms are still the same. Their thinking evolved on how to think strategically inside the forms. Without the thinking, the forms are just pieces of paper."

Parsons added: "We have to migrate to 'it's the work'... I don't know if we've reached a tipping

point, but people are maturing into the system. The ultimate goal is to make it thework, not part of the work. In retrospect, there would naturally be things that we'd do differently. We've done lots of planning, practice, communication, education... but it wasn't enough. I don't know if it can ever be enough."

Steward chimed in: "Without the shepherding group overseeing Kata, I'm convinced we wouldn't still be doing this." Indeed, one aspect of NEA's governance model that supported the deployment of a lean-inspired management system was that there was no lean central office.

1 Instead, each initiative was supported by shepherding groups composed of managers and directors. These groups were coached by external consultants and supported by Steward, who single-handedly oversaw

improvement initiatives throughout the Baptist Corporation. Not having a central office was a

deliberate choice Parsons had made early on. He wanted to ensure that all managers and directors embraced the Baptist Management System; their responsibilities could not be delegated to central staff or "lean experts." In summer 2018, a shepherding group for Idea Generation was also launched, and JI was next on the agenda.

In August 2018, as NEA Baptist was putting the final touches on its strategic A3s for the next fiscal year (October 2018 - September 2019), Parsons received employee engagement scores from head office showing a spectacular increase over the previous year. He wondered if the time was right to build on this momentum and expand the deployment of Kata, TWI, and Idea Generation to other departments and outpatient clinics? Or should NEA Baptist first consolidate, making sure it had the right coaching capabilities before moving to the next level? Parsons understood the importance of maintaining the right balance between expanding and consolidating, and how running a complex system was like building a sandcastle; while adding new turrets, you had to watch out for erosion.

He recalled the words of the nurse manager who had complained about the effort needed to sustain such a management system. Yet other managers were pressuring colleagues to start their own Kata and/or Idea Generation board.

When they could, Parsons and Steward liked to end the week by discussing their journey to date

and the current obstacles and challenges. When Steward entered Parsons's office that late August

afternoon, he heard these words: "What's great about Toyota is that they study and adjust. So

what's our next step?" Questions: 3) Discuss how teams and groups were utilized for the initiative.Identify two examples.

4) How were ideas for change generated to form the plan implemented? Identify two examples.