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SPANNING THREE DECADES OF VALUE MANAGEMENT LEADERSHIP

November 15, 2001

HOW TO FIND MORE TIME FOR COST MANAGEMENT INITIATIVES

We all realize that time is fleeting and before we know it the day, week, month and year is over and we haven’t found enough time to fit in all of the cost management initiatives we planned in any given year. This fact is based a corollary of Murphy’s laws that says that, “routine work expands as time permits, thus driving out all time for higher level creative work” such as cost management. 

This law reminds me of a purchasing audit I was retained for a few years back by a CEO of a large healthcare system who wanted to know why his Vice President of Purchasing was generating only meager savings for his corporation?  After inter-viewing his purchasing executive and her buyers, I found that the purchasing executive was spending 80% of her time on capital equipment purchases (the balance of her time was spent answering phone calls, staff questions and attending meetings). And her buyers were spending most of their time processing routine purchase orders or expediting them. When I got back to my office after the interviews I called the CEO for a debriefing that went like this.  Mr. CEO it’s very clear to me that the reason that your purchasing department isn’t saving money is that they are caught up in routine work, thus leaving no time available for saving money for your healthcare corporation (Murphy’s Law in action).  He then asked me what is the solution to this conundrum?  I will now share with you the answer that I gave this CEO, since we all have the tendency to fall into activity traps and lose our focus on cost management too:

1.     Set monthly, quarterly and annual savings goals that you submit to your boss in writing. 

There is no better self-motivator than making a commitment to your boss that you are going to save a set amount of money monthly, quarterly and annually.  Then report in writing -- monthly, quarterly and annually -- how you are doing against your savings goals to your boss.  I can guarantee that you will make your target savings monthly, quarterly and annual with this tactic, because no one wants to tell their boss that they failed to meet their own goals! 

2.    Carver out time daily, weekly, monthly and quarterly for savings initiatives to meet your goals. 

Savings just don’t happen by themselves, you must make time for them daily, weekly, monthly and quarterly on your calendar.  You start by breaking down your savings goals into daily, weekly, monthly and quarterly tasks and milestones with completion dates for each savings project. For example, if one of your goals is to save 5% on your operating room custom packs by the first quarter of 2002, you would need to list all of the tasks, milestones and completing dates for each phase of this project (e.g. establishing cross-function team, investigating methods and practices, value justify pack components, bidding out packs, bid analysis, bid award, etc.). Then place these specific tasks, milestones with completion dates on your calendar where they will be a constant reminder.  This technique will keep you for doing something else that you believe must be done first, before your cost management projects.   

3.    Delegate, Delegate, and Delegate. 

We all know what delegation means, but do we really do it?  Frankly, most of us could delegate more if we really analyze our delegation habits, but we don’t because we think we can do whatever we are doing better than anyone else can.  In reality this is a myth, especially when it pertains to cost management.  Every hospital or system has committees; teams and individuals that you possibly have overlooked that can partner with you and champion your cost management initiatives much better, faster and more thoroughly than you can individually.  So use these forums and organizational resources to plan, organize and implement the savings initiatives that you are proposing.  Then everyone gets credit and you get a big win too!  

As these tips suggest, finding more time for your cost management initiatives doesn’t need to be a daunting or intimidating experience, but preferably should be a natural extension of your routine workday, week or month.  It all starts with integrating your cost management projects into your planning calendar, making a commitment to your boss in writing, delegating your project tasks more often, and getting started with these new habits today.

 Copyright © 2002 The HCP Group, Ltd.

Robert T. Yokl, President, The HCP Group, Ltd., has over 35 years of experience as a consultant and manager in the field of Supply/Value Chain Management and is one of the country's leading healthcare experts in value analysis, value engineering and materials management. He is the developer and program leader of the award winning Certified Value Analysis Practitioner Training Program™. Mr. Yokl is also the developer of the healthcare industry's leading ValueNetCentral™ Value Analysis Software. Over the past two decades he has trained thousands of healthcare managers in his patented Strategic Value Analysis™ and Team-Based Project Management™ processes and has assisted scores of organizations in developing their own value management programs. He has published six books, videos and audios on supply/value chain management. His latest book being, “ Strategic Value Analysis™: The #1 Smart Strategy for Taking Cost Out of a Healthcare Organizations’ Supply/Value Chain”.