Design Principles – Creating Systems that Work

Monday, 13 February, 2012 10:59 Written by Vijay Goel, MD
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Design Principles Must Flow Across OrganizationI’m the co-owner (with my wife) of a los angeles catering company, Bite Catering Couture.  As I straddle the gap between strategy, understanding, and execution, I’m increasingly aware that “Design” is a fundamental skill any company requires to make its efforts efficient and effective.  The gap between great design and new initiatives is often where I’ve seen customers lost and initiatives fail.

To build this foundational capability, I wrote the following memo that will be used (in some evolving form) to evaluate every initiative we launch from this point forward.  Would be great to hear if others of you out there have come across better examples I can borrow/ steal to improve my team’s understanding of great design from a business / systems standpoint.

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Summary: Bite’s systems are the bedrock that enables us to scale our operations while guaranteeing that each customer will experience the extraordinary events that our brand stands for.  Good design ensures that our systems will be:

  • easy for our people to understand,
  • execution will occur automatically (post-implementation)
  • results-oriented and self-correcting

 

Objective: Lay out the key design principles that will be used to evaluate every process proposed at Bite.

Goal: To eliminate predictable delays and errors in implementing Bite processes.  We will always start with:

  • a clear vision of the desired future state
  • a clear metric for how we will track and measure success
  • a solid understanding of the likely challenges we will need to solve for
  • an understanding of the interdependencies with other existing initiatives and operations at Bite
  • an understanding of the resources required to execute on an ongoing basis and those required to plan and implement

Criteria utilized to evaluate design:

  1. Clear vision of the desired future state:  What does the successful implementation and execution of this system enable Bite to do?  What will it look like?  How is this different from today?  What choices or tradeoffs were made in selecting this vision for the future?    What is the business case/ expected return on investment?
  2. Clear metrics for tracking and measuring success:  How will we measure success? Do we currently track this metric today?  If not, what needs to be done to track it and who needs to be involved?  How will we ensure we’re accurately tracking results?  What is an acceptable score?
  3. Understanding of the likely challenges to be addressed: Where is this initiative likely to fail?  How will the planning and implementation steps reflect the difficulty of successfully reaching automatic execution?  What elements can be utilized to mitigate likely failure points?  What tracking/ piloting needs to take place to improve the likelihood of success/ key learnings. What checks and balances exist to ensure successful implementation?
  4. Interdependencies: What existing processes and initiatives does this system need to incorporate to work at Bite? Are we asking people to be in different places at the same time?  Does the proposed process reflect the connections to other operational requirements or realities?  Does this work for the Bite operating model and facilities? How will this be assigned to accountable individuals in a way that fits in with how they receive instructions today?
  5. Resourcing: Is there a clear and realistic (bottoms up)  projection for the resource impact to execute on an ongoing basis?  Is there a realistic timetable and resource requirement for planning and implementation/ piloting?  What is the cost and is it worth the return?
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Thoughts from TEDMED

Saturday, 29 October, 2011 18:18 Written by Vijay Goel, MD
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Just came back from an amazing stint at TEDMED, and left struck by a few things:

  1. Systems must constantly tune the balance of benefits, costs, and risks.  Unfortunately, the stakeholders in our health system are generally only thinking about one at a time.  This creates much of the inability to communicate and make progress.
  2. Disruptors don’t have the same chance of winning as in other industries.  When you make the hurdles to disrupt too high, you lock in the incumbents.
  3. Technology is beginning to create some paradigm shifts.  The existing structures will likely blow up quickly vs. transition slowly
  4. The Architecture for Personalized Health will look very different than that for our current system.  This will be a focus of an upcoming series on what a transition to personalized health will truly require and who will win and lose.
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Clay Shirky on Collaboration and Institutions

Tuesday, 14 June, 2011 23:25 Written by Vijay Goel, MD
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Terrific Clay Shirky talk on how the reducing cost of communication will change the dynamics of institutions — namely that the coordination cost of large institutions will become higher than the connecting and collaboration costs of small teams and volunteer individuals.

How does an institutional model (thinking in the world of FTEs) begin to understand the contributions of individuals on a power law curve? Competing organizational structures are going to be interesting…

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Creating a Performance Culture

Saturday, 11 June, 2011 22:35 Written by Vijay Goel, MD
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Culture

Just came across Netflix’s internal presentation on their culture.  It’s a pretty fascinating look at their approach to personnel.  Looks a lot more similar to a sports franchise than a public company.

This would indicate that the War for Talent is alive and well…and that companies are much better adding a few very talented individuals over many averagely talented individuals.

In the realm of the information society, where power laws rule over averages and medians, it seems that organization of organizations is beginning to shift.

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Managing Risk in Health Care

Friday, 29 April, 2011 02:14 Written by Vijay Goel, MD
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Been attending a terrific Health Evolution Partners conference.

One panel that really brought home the challenges of making a better system discussed whether providers would be able to bear risk successfully.

The assumptions of the Accountable Care model are that providers are going to want to take risk.  At some level, you can gain share and the provider would see a bonus for better performance.  At a deeper level, the provider may capitate or truly create a risk-bearing entity that enables it to truly win or lose based on the management of total costs.

A few things hit home:

  1. Providers (with a few exceptions) don’t know how to manage risk or even measure exposure.  They’re used to cash being paid for services.  Adding negative risk on already thin margins is likely to bring bankruptcy or bail out as soon as the first misteps or uneven catastrophic loss hits the balance sheet.  Insurers have much more padded balance sheets for a reason.  A strong reinsurance market that understands the risk to these risk-taking health entities will need to be created (which then limits the risk to providers)…making the scheme of providers bearing risk only partially relevant
  2. There is no objective metric for sharing risk.  A “currency” type metric similar to Nielsen scores (television) or FICO scores (credit history) will need to be put in place to enable the providers and payers to trade appropriately (and at scale) on the basis of risk adjusted individuals or populations (and risk reduction through better care).
  3. Almost no new entity (not already very far down the path before the legislation) should want to become an ACO in the near future based on the current regs.  The economics aren’t clear in a positive direction and there are too many requirements vs. projectable upside.  I find this sad.

More to come soon.

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