Why Not Incentivize to Save with Value Analysis?
I have been fighting this battle for 22 years now to get healthcare organizations to incentivize their value analysis teams to save EVEN more money. Nonetheless, I seem to be loosing this battle, but not the war!
It has been proven beyond any doubt with our own clients that if you incentivize your value analysis teams to save MORE by giving them rewards and recognition you will increase your savings yield by as much 300+ percent. However, in the 22 years we have been working with healthcare organizations in the value analysis arena only one in eight of our clients has opted to do so.
The question is why? After thinking about this question for some time now, it seems to me that there is a “cultural Bias” in healthcare organizations against incentivizing any of their teams (LEAN, Six Sigma, value analysis, quality improvement, etc.). They believe that team members are already getting paid a salary to do this work so why should we give these individuals any extra incentive to do what they are already being paid for?
What is missing from this decision “not to incentivize teams” for their new, harder, different and time sensitive work (that they are assigned to do beyond their normally assigned duties) is that this work is a HUGE distraction from what these hospital employees think they are getting paid for. The result: Most staff members only give 40% of their time, energy and effort when assigned to teamwork – not 100%!
Change the paradigm! If you want to change this pattern of behavior in teamwork, you will need to change the perception of this work as burdensome by emphasizing that it is important, mission critical and essential to the financial health of your hospital. This is accomplished by incentivizing all of your hospital’s teams, including your value analysis teams, with rewards and recognition when they reach predetermined goals and milestones.
Believe it or not, by doing so you will quickly discover that your staff members will line up to become members of your value analysis teams (and all other teams), not avoid them. Better yet, it won’t cost your hospital a whole lot of money (about 3% to 5% of the savings) or time to establish and manage a team rewards and recognition program.
You will be repaid for your efforts with new and better savings that will generate as much at a 35:1 ROI on your investment. Doesn’t this sound like something your hospital and thousands of healthcare organizations around the country should have been doing for years? If not, why not…
The #1 Way to Create Winning Value Teams
In my last week’s blog article I talked about incentivizing your value team(s) to save, which is one of the key ingredients in creating winning value teams. This week I’m going to tell you how gift cards can be great rewards to motivate your value team(s) to go the extra mile for savings.
Incentivizing your value team(s) boils down to this essential unassailable fact “Everyone wants TO WIN. And if you create a good COMPETION, everyone will try hard to be in the winners’ CIRCLE.” says Henry Canaday. That’s why it is vital that you reward your value team(s) for their achievements in order to create excitement and ultimately better performance.
Gift cards make the perfect reward because your team members can choose from thousands of gifts, trips and entertainment venues vs. being forced to take what your management thinks they want. For instance, one IDN we worked with thought the perfect reward for performance would be an all expenses paid trip to attend a national material management conference. I know this wouldn’t be my idyllic reward – how about you?
That’s not all! You need a “point system”* to enable you to grant these gift card rewards along the way. Some of the criteria for awarding gifts cards to your team members could be attendance, completing projects on time and on budget, exceeding project goals, exceeding team goals, etc. The point here is that you will need a system (preferably on-line in real-time) to motivate your team members to exceed your expectations — not just meet them.
We Americans thrive on competition, big challenges and contests (that’s why there are so many successful reality competition shows on TV these days). So why not use this quirk of human nature to our advantage to motivate your value teams to be better than good? All it takes to do so is a contest that motivates, invigorates, excites and ultimately creates better performance for your value team(s) for the valued work that they do for your healthcare organization.
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*We have been installing “point system” incentive systems for 10 years now for our clients, so if you want to learn more about our IncentiveSave™ Dashboard to manage ALL of the elements of your Lean, Six Sigma or value analysis incentive programs please e-mail me at Bobpres@strategicva.com for more and bigger savings – now!
