E087: Applying Lean to Nonprofits and Healthcare with Matt Horvat

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Posted on October 25, 2021October 25, 2021
Posted in Management, Nonprofit, Podcast, Volunteering

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My good friend Matt Horvat is the founder of Lean Portland, and has extensive experience in process improvement in various industries like Construction, Healthcare, Insurance and Consulting. He discusses why he set up Lean Portland, and shares his first pro bono volunteer projects with a nonprofit in Portland.

We discuss:

his background in Industrial Engineering and his early work in the construction industry
the importance of daily huddles and management systems
how 3P and the 7 ways exercise helped create a better customer checkout experience that engaged nonprofit staff
how A3 helped setup a lung cancer screening process
his experience working with local nonprofits in Portland
the importance of leader standard work and checklists
a tour he set up to showcase a tiered daily huddle system at a healthcare system
a demonstration of his new software program/app for daily management called Lean Routine, which can be found at https://leanroutine.app/

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You can watch the full video of the interview here…

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Have you ordered the new book, “Lean Six Sigma for Good: Lessons from the Gemba (Volume 1)?” The book is made up of 8 chapters written about experiences from Lean and Six Sigma practitioners, to give you tips and tricks to help you work with nonprofits in your area. All proceeds donated to charity. We are also close to releasing Volume 2, so check back for the latest news.

Transcript

Brion (B): So today, I’ve got Matt Horvat, my good friend. Matt, will you give us a little introduction about your background in Lean and process improvement and how you eventually set up this Lean Portland group that I’ve talked a lot about?

Matt (M): Yeah, you bet. About 15, 20 years of history here in two minutes or less. No, but really, I guess I started studying psychology in college and I got really interested in human performance. I stumbled into industrial engineering and then really just gained a lot of love for the business aspects of leadership and management systems. My classes were performance measurement systems and management systems engineering where we just did silly little plots of how often we raised our hand in class as a predictor of grade and it really made sense to me, that kind of basic approach at teambuilding. So I landed a job in construction after college just because you’ve got to make money, you’ve got to live, and that eventually turned into a job working as a Lean consultant in the construction industry.

B: I think that’s something that’s not really talked about too much is that application of Lean in construction, so I was always kind of intrigued when you would share some of the things you learned there.

M: Yeah, actually, it’s been a great background just for my everyday life and special projects and project management. The whole industry is geared toward getting people to come together to all do something special and unique and for the first time ever. So we still have a lot of craftspeople that know their skills, but the leadership to pull a big team together, and I mean like our smallest jobs were $30 million up to a half a billion-dollar projects, so like big data centers where we had to get the structure complete in 100 days. Big projects with lots of resources, so we set up planning systems. It was basically one time up for a big, giant mapping session, and then we’d take that information into a chart and systematically take a look at it on a monthly, weekly, and daily basis.

I can’t tell you how many little smiley faces I stamped on weekly work plan for people who made their commitments. That was kind of the currency of projects to get stuff done is everybody had to do their plan. So it was all about planning and conversations and making promises and people to people looking each other in the eye. It just made a lot of sense. That was like 10 years until I got into healthcare.

B: What drove you into healthcare?

M: Mostly, I just wanted to be local. I wanted a job where didn’t have to travel all over. I was working in the Southwest so I saw a lot of projects in Texas and LA and the Bay Area, but I eventually wanted a family and I wanted to be at home, so to speak. And so I grew up outside of Portland here in a small farming town, so I came back to Portland and just started applying for jobs and the local medical group gave me a chance so then I got kind of into– it was a Lean job, but they just needed somebody to help them get stuff done, so did a lot of just like special project, project management, and then eventually some training and some coaching as the organization grew and my job changed and they were acquired. Changed again and it changed again and it changed again, but I’ve been able to stay at home every night now since I got into healthcare.

B: Because you were doing consulting before that, right, with a lot of travel?

M: It was, yeah. And that’s actually how one of the triggering events for starting Lean Portland was I was a traveling consultant when I landed here and I wanted to have some friends and like-minded people, a network. I’d been involved with the group down in Dallas, Texas that was sponsored and organized by Mark Graban so I kind of had his model, Lean DFW. You can Google that and kind of see that group. It was for his clients and his friends and his business partners in the area. They’d go to his house for a woodfired pizza party. The man really loves great outdoor cooking.

And so we did a lot of soup nights here at my house for the first couple of years and we eventually organized around some common themes that we all shared which had a lot to do with just giving back to the community and helping build up the skills of nonprofit leadership and all the principles of Lean that we know and love around helping people who do the work really take charge of how the work’s done and how their work area is organized and setting things up for success really at the ground level. Nonprofits, it’s just really ripe environment for that kind of– there’s just such a huge need for it.

B: Yeah, and just so many organizations. What year did you start with the healthcare? About what year did you get a job in healthcare?

M: I think it was 2011.

B: Okay, so still pretty early in terms of Lean and healthcare. I would think it was early to mid-2000s maybe when I felt like it was starting to take off.

M: Yeah, so not unheard of. In the Pacific Northwest market, Virginia Mason is a big leader in that space as well as all the big players have been dipping their toe in it, even if it wasn’t an organized management system now. But I recall having tours with Seattle Children’s and really being impressed with their work based off of a lot of large consultancies that are supporting and have been around for 15, 20 years prior just outside of the healthcare industry. So we had some good examples around here, some pretty good benchmarks to set a high bar.

B: The amount of healthcare facilities in Portland was pretty surprising. I think I had seen something with where people are employed the most, and it was like hospital systems were near the top there. And then you look at all the nonprofits, especially like in Portland where everyone trying to help out and fixed some kind of social problem or issue. Yeah, I think both those industries are very ripe for opportunity still and I think that’s been really fun being part of the Lean Portland group to go out and work with nonprofits and teach them. So far, I think it’s been really well embraced. It’s not easy by any means, but definitely they’re open to getting some help, so I think that’s been good. It makes it a lot easier instead of being pushed away.

M: Yeah, I really got lucky that I stumbled into a friendship and a relationship with a gentleman by the name of Richard Coley. He is a senior consultant and had been doing pro bono projects pretty regularly, like annually, as a way to give back to the community for a long time. So at that stage of my life, I wasn’t really ready to show up to an organization and sell consultant services or even giving them away. I wasn’t organized like that and Rich, he’d been practiced, he knew what to do, and so really led our first long-term engagement with Friends of the Children and kind of set our model down for just working with them. I was able to stand back and watch him engage with the client at the executive level to manage that relationship, and then also learned a lot of skills around just the tools we used in the typical process improvement work we did.

And so as a way to help people in their middle or early in their career in Lean, it was a great way to get a lot of exposure and education and experience. At my job where I showed up to everyday, there were just so many rules to follow and I had to use certain tools that they bought and there wasn’t a– we had a lot at stake, so I had to just kind of play by the line of what I needed to do at work. But in the nonprofit area where we were just really trying to help people, it was where the rubber met the road and we had to be very basic and very practical and we had to be very helpful every time we showed up because nonprofit leaders, they just didn’t have the resources to let me learn on the job, so to speak, so it was a go time.

And so that really became, I felt, a part of what Lean Portland was all about too. It was about giving back and doing these projects for nonprofits who otherwise didn’t have some resources like ours available. But it was also time to go get some skills and be around other Lean people who knew about a certain methodology and then let them run with it and then let me learn from that. So I learned really great things. My first A3s were at nonprofits, my first 3P was at nonprofits, my first value stream mapping was at nonprofits. I was able to just get so many tools in my toolbox just by hanging out and doing these volunteer projects, plus we built all these great relationships with people on the ground. I still go into ReBuilding Center all the time and spend an extra 30 minutes just chatting Steve, Peter, and seeing what’s going on, what’s new and how they’re organizing their bins and their newest customer experience kind of organizational method to make processing donating materials from drop-off to the floor streamlined and organized.

B: I’d agree. I think getting to know everybody in our group has been really powerful. And great and learning a lot from others, like you said, I think that’s been really a surprise benefit of that Lean Portland group. But also, yeah, the nonprofits we work with are great people and they have a passion for what they’re working on, and so it’s just nice to work with people who have something they really care about and it’s something important. And the work they’re doing is really important. Just like in healthcare, it feels really impactful when you can help them make a difference or change something or make something easier.

I think that was something that we realized quickly too was just how stressed for time they were and that you had to come in, yeah, and try to be effective with them because they don’t have hours to sit and plan like maybe at my corporate job where people could do more thinking and they weren’t frontline, dealing with issues and activities for the day. So we didn’t want to go in there and waste their time by any means.

M: Yeah, totally. I recall how long still the change takes, but engaging the staff really made a difference. I’m thinking at the cash register and the whole checkout flow project we did at ReBuilding Center. That was maybe six months of just weekend work, a few hours here and there, but a little bit of training. At the beginning, it was like a fun launch. People were together and had nodding heads in seats. And then what I think really sold the staff, and one person in particular, was after our 3P event where we were cutting out cardboard shapes for the new layout of the floor plan and process for things.

We landed on it and Ella Rose, she looked at me and she said that she didn’t trust us when we got started, but she sees how it’s coming together now and she was very grateful at that point because we were able to, at the end of it, they’d rebuilt the whole area. Made it a lot bigger and more line of sight and easier flow and faster processing. It was so beneficial in so many ways for her and it was just really fun to see her embrace this change that it was at the beginning. She was very nice and very pleasant, don’t get me wrong. Behind the curtain, she was unsure. She didn’t know where we were coming from, she didn’t know why we were there, but then it all just worked out and we can go there now and see all these changes. It’s really powerful.

B: It looks really great too, that checkout area. Didn’t you do two seven ways exercises to get 14 different configurations or something? it was pretty cool.

M: That’s right. We identified customer requirements at first, and then compared those different designs to the requirements and landed on what ended up being Ella Rose’s first pick, but all things aside, we did the exercise and really fleshed out all kinds of options. It was great.

B: And I know part of the some of the work we were doing there, I think we were talking about even what is the daily checklist for opening the store or closing down the store, and I think we were trying to work through that a little bit with just what are the things that need to get done on a daily basis. And then I think, a couple of years back, you’ve been working through maybe an app or a website tool to work through some of that as well. Can you talk to me about that tool?

M: Yeah, thanks for that, Brion. And I think anybody on the call can resonate with the idea around how just backsliding happens. At the ReBuilding Center, we set up little informative kiosks at all entrances so that customers, when they came in the door, can know just how to shop and interact with the sales floor and the products and the cash register process. They have a little place for the tape measure and a place to write some notes, but every day, you’ve got to drag that thing out, you’ve got to set it up, it’s got to be in the right spot with the right materials and supplies. And if you forget that one day, that’s where just processes break down. It’s just natural tendency to go back to chaos.

So the idea is just around of a checklist in this app is just put presence of mind to the few things that you’ve agreed to, to do on an everyday basis, on a recurring basis. Whether it’s even weekly or monthly or you can set the time periods, but then every day, set the thing up, check. And then the app is designed to give you a trend graph that shows team-based performance. So if you’re a leader, you can use this with your staff as a way to make sure people submit their timesheets every week or if you’re interested in coaching, make sure you set aside two hours every week for coaching. Check the box, and then you can see a trend graph of that and the group can see it too. So leaders of leaders, like if you have a director and a manager team and they’re all agreeing to coach people, we can have some team-based accountability really easy just to see if people have been doing their checklist.

Now, it’s still just a checklist. You can always just check the box and not do it, that’s human nature also, but the app is something that will help out a little bit. And if you don’t mind, Brion, I’d like to share my screen and do a quick demo. We’re at kind of the alpha going to beta phase. We’re going to rewrite the frontend here pretty quick to do some major improvements to get it to our beta stages, but it works now. You’re welcome to go here and log in with we have three login options and you can play around with the app today.

B: Is that leanroutine.app, right?

M: That’s right. Thanks, Brion. There’s some education on the main page. When you do sign in, what you end up with is a checklist. And so what we’re going to look at is my personal set of checklists. And then some things to pay attention to here are the different teams that I’m on. Big functionality of this is team-based performance. So this is my tasks that I need to do today that are all current, and a quick view of some history. As you can see, I’m in the red for my checklist here, but I can also see that a couple of my teammates have been checking their tasks. That’s cool.

The checklist function, you can see I click it here, it pops over there. And then overall performance is here on the metrics tab. So this is a trend graph showing my percentage of my checklist completed per day. Not great performance, I must say, here. But what’s interesting is say I want to take a look at my teammates and what’s going on overall, this is the graph for every member of this team and we can look at people individually as well. So a six-month trend graph of Eric’s performance shows what looks great, relatively speaking and it’s all relative. It’s going to be totally dependent on how you set up expectations with your team on what good looks like here, although it’s pretty obvious there are some pretty major gaps here.

So if you’re looking for something as a way to just bring some general accountability to some routine tasks, you can use this for exercising or for diet, anything that you’re trying to keep your attention on on a day-to-day basis. That’s where Lean comes into this is because so much about Lean is how the leader shows up every day in front of staff and what are the few things? often, it’s like coaching, you might do a process observation on different problems, you might do a problem-solving session periodically like once a week with your team, you might do a daily huddle. Those are four immediate Lean tasks that should go on your checklist routine at the right routine for yourself. This just helps get some feedback for the group on how are people doing on their – can I say it? – Lean routines.

B: So you can put basically in there for a task, and then it’s just a checkmark or something you mark when you’re done each day?

M: Let’s assign a team to it. I won’t go ahead and set one up now, but easy to play with and pretty user-friendly. We still need to build out some help files and a glossary and brush up a little bit more to match the web-based version versus the mobile app. It’ll get sent to the Google Play and iTunes Store pretty quickly so that it’s pretty mobile-friendly. It works right now. You just have to save the bookmark on your desktop of your phone, but we’ll make a standalone mobile app as part of this new release that’s coming.

B: You said there’s a metric thing when you went to go create a new task. That was for tracking data?

M: Yeah, the way that works is– let me see if I’ve got. I definitely have some metric tasks available. Let me set up a new task and see if I can do this. Yes. So if you wanted to set up a task that allows you to make some progress – in this case, we’ll do hours – and you wanted to make it go of observing three hours a week, you can set up a metric task so that you can check off how many hours a week that you do. So this is set to a weekly task. I think possibly if I make it for a daily task. So now my new metric task right here, you can see it’s 0 out of 10. So instead of checking, we can say we did 2 of those today, we did 10 of those or 4 four of those now, and then once we get all 10, it marks the task as complete. So it’s a different approach at measuring something so that if you’re doing something extremely recurring, you don’t have to check so many times. You can just add the number.

And so it’s meant to be a general application for performance measurement. We wanted to provide that capability. We don’t have a real practical application for it in my personal checklist at this point, but I’d love to hear any feedback that somebody has about how they’ve used it and what’s working for them. Like I say, we’re really in alpha development stages of this.

B: So they can go in and get a free account and set it up and test it out?

M: You bet. Yeah, we are live on Amazon Web Servers at this moment.

B: I will put a link in there and encourage people to go in there and check it out.

M: Thanks a lot, Brion.

B: Anything you wanted to share maybe on the healthcare side?

M: You know, it was I guess you’d call it still like special projects. So there’s just so many applications of using good scientific thinking around getting new stuff done. One of my more recent projects involved setting up a lung cancer screening program. So the problem wasn’t like a gap closure problem in the sense of we’ve got a scorecard metric that’s in the red and we need to solve for it. It was more like if we set something up, a new program in the community, we can help the community in a better way. But we were able to use an A3 framework for that and generated some metrics to reflect around and use the framework of problem statement, current state, and target state, and root cause to help us get organized on the different parts of the program that we need to pay attention to and use that overall framework as the theme in our weekly and biweekly check-ins with the director team and the medical director team.

So that’s one recent example of using A3 thinking in healthcare for a special project, and it’s just every direction on the compass needlepoint is an opportunity for improvement in healthcare. So whether it was a problem around too much time waiting in line when you show up to get service or it’s our schedule is too packed and we’ve got a figure out a way to see more patients because our schedule is booked out for 6, or 8, 10 weeks, those are all problems you can apply Lean thinking to straightaway. And so it was just rush, rush, rush, and as many projects that we could possibly manage and get organized around.

B: I think I also wanted to bring up the tour you set up with some people from I think it was Restore and maybe another nonprofit that you had us tour and look at a tiered huddle system.

M: Yeah, outside of special projects in healthcare, there’s a big emphasis on daily management, just as there is in a lot of industries out there. That’s where the checklist we’ve been talking about can really apply. So yeah, before installing daily management, there was just a lot more emails and a lot more delay to get problems solved.

Over the course of a couple of years, the organization I work with set up daily huddles for all of the teams at the beginning of the day to get your shift assignments and to know what the current problems are and some key communications and just a teambuilding check-in every morning. And then a while later, after the team got started in the morning, around 9 o’clock, all of the executive team would get back together too to get a report up and a flow up of issues that happened and other key communications that needed to occur at the senior team level. And so in that way, we’ve got, by 10 o’clock every day, everybody in the company is in touch with any current issues and all of our problems have been escalated to the right people to get them solved. So just it made the whole business a lot more agile and connected.

B: Yeah, I thought that was really cool just to see that structure and how quickly things got escalated all the way to the top leadership in the organization. It just feels like that should be a best practice for any organization regardless of the size. And so it was really cool to see that and I think the nonprofit partners that we brought along on that tour really got a lot out of it too.

M: I would encourage anybody listening out there to make phone calls to different organizations that you’re interested in learning about and asking for a tour. There are so many generous places that are happy to just spend a couple of hours out of their day walking some folks around. That’s how we’ve gone to go see the local Toyota distribution facility here, there has been quite a number of different construction projects we’ve been able to tour. Yeah, just get a group of folks and say you’re a team and ask for some learning. People love to share.

B: Yeah, and I think the organizations like to share too because it gives them a chance to explain what they do. I think they’ve found that it’s beneficial when outsiders come in and ask questions to them and they’re like, “Hmm, you know, I hadn’t thought about that and that’s a great idea. We should actually look at that.” So it’s a win-win as well. It’s not like you’re just burdening them with your time. They actually do get something out of showing what they do and there’s a lot of pride that people take in the improvements they’ve made too, so I think it’s an opportunity for them to share the great work they’ve done, get some accolades and some positive feedback.

M: Yeah, I remember touring the Nike airbag manufacturing facility with the kaizen team there. We did a really fascinating tour of the manufacturing facility and all their huddle boards and then all of their special projects area. But then when we got into the conference room after the huddle, the leaders there, which had been like shop floor supervisors for 20 years, they were so curious about how we would apply Lean in healthcare and had a whole bunch of questions for us too. It was just really fun to see all of the familiar things in their environment and I’m sure if they were to walk into the healthcare environment with their experience in Lean and management systems and kaizen, they could be successful too. It’s just really fun to connect.

B: Yeah, great. Anything else you want to share, Matt?

M: Thanks a lot, Brion, for taking the time out of your busy day to connect with me and it’s great to see you again.

B: Yes, you too.

M: Thanks for letting me share a little bit about Lean Routine app. I’m looking for feedback and just trying to get the message out there. Hope it’s helpful.

B: Absolutely. I’ve tried it out a little bit and I need to get back in there and put in some new metrics. I’ve got some home maintenance and cleaning stuff I think I need to add in there, so it’ll give me an opportunity to go back in there and get it going again.

M: Yeah, the discipline is the hard part. I hope it helps. Let me know.

B: Okay, will do. Thank you so much for your time, Matt. I’ll put your contact info. If someone wants to reach out and ask questions for you and wants to connect, I’ll put your LinkedIn. Is that the best way to reach you?

M: Yeah, or my email address.

B: Okay, I’ll put both those on there. All right, cool. Thanks, Matt. Thanks for your time.

M: Thanks, Brion.