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Today's episode is a video essay from Ken Segel, the CEO of Value Capture. Ken talks about the importance of the “Shingo Principles,” starting with “Create Constancy of Purpose.” What is a principle? Why are principles timeless and universal? Ken talks about that and more in the audio and video versions of this episode.
“Create Constancy of Purpose is defined as an unwavering understanding of why the organization exists, where it is going, and how it will get there.”
Value Capture is very honored to be a Licensed Affiliate of the Shingo Institute. As the only affiliate focused on healthcare, Value Capture has bolstered its proven, principles-based framework to help healthcare leaders guide their organizations toward operational excellence.
Here is Ken's Harvard Business Review article that he mentioned in the episode: Health Care Workers Protect Us. It’s Time to Protect Them.
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Ken Segel: Hey, everyone. I'm Ken Segel, the CEO of Value Capture. We support transformational health system leaders, and we're proud to be a certified affiliate of the Shingo Institute, which serves as the anchor of one of the world's great learning communities committed to the principles of enterprise excellence.
Today, I get to share with you a little more about what a principle is, and to illustrate with 1 of the 10 powerful Shingo principles that serve as the basis for building a sustainable culture of enterprise excellence.
The one I picked to start with is “Create Constancy of Purpose.” Over the next several months, my colleagues and I will be providing illustrations of all 10 Shingo principles.
In the Shingo movement, we posit that a leader's fundamental role is to bring these principles to life in the culture of the organization, so it's important to understand what they are.
What is a principle? A principle is a foundational rule that governs consequences, whether we want to believe in the principle or not. That last part is really important, whether we want to believe in it or not. It is operating in the background, and when our actions, which we call behaviors in the Shingo movement, align with it, good things happen.
When our actions don't, bad things happen. We say principles are timeless, universal. They apply everywhere, always, to everyone, and evident. That means they can be discovered, researched, proven, as the Institute has done.
Stephen R. Covey taught that values govern our actions, but principles govern the consequences of our actions. A good analogy is gravity. You don't have to believe in gravity for it to be governing consequences.
If you jump from a height without protection, you are likely to fall, and you may be injured. If you instead choose the stairs as a way to get down, because you are aware of gravity as a universal force, and you choose to align your actions, you are more likely to be safe.
The Shingo principles are the gravity of organizational excellence, if you will. To illustrate, let's go to the principle I selected, Create Constancy of Purpose. The 10 Shingo principles are divided into 3 categories – Cultural Enablers, Continuous Improvement, and Enterprise Alignment.
Constancy of Purpose falls into the Enterprise Alignment category, together with Think Systemically, and Create Value for the Customer. Create Constancy of Purpose is defined as an unwavering understanding of why the organization exists, where it is going, and how it will get there.
It enables people to align their actions, as well as to innovate, adapt, and take risks with greater confidence. When a leader creates those powerful conditions for the organization, our hypothesis about principles governing consequences poses that good things will happen.
If they don't, less‑positive outcomes for the organization will occur. I want to illustrate the concept of consequences following the principle with examples of leaders living and not living Constancy of Purpose in healthcare and outside of healthcare, via creating or not creating the condition of safety, both physical safety and psychological safety.
First, let's start with the terrible crisis we've all been living through, the COVID crisis. Positively, amidst so much strain and risk of harm, many of the leaders we've had the chance to work with were well on their way to making safety a precondition in their healthcare organizations.
That is something everyone in the organization knows. We don't trade off against any other value, like money or time. Before COVID hit, at these places, when something is unsafe, we stop, and we fix it, and we spread the learning. We don't sacrifice our team member's safety for any other good, and certainly not our patients. Safety is a precondition of excellence.
At one health system, a leading safety organization that had already worked hard and visibly on caregiver safety before the crisis…
It's now early in the crisis, when PPE was scarce across the country. Weeks ahead of the CDC's recommendation, the leaders decided to provide every staff member with a fresh mask every day, despite the risk of running out of PPE.
They also implemented universal patient screening far earlier than others. They wanted to send a signal to everyone in the organization that they would have their back, no matter what, and to pull everyone in together to solving safety risks.
Staff responded. With a greater sense of trust, this health system experienced fewer call‑offs than other systems, and people threw themselves into innovation. They developed the first FDA‑approved re-sanitization process as one of their innovations, though they turned out never to need it internally.
Last summer, my colleague John Toussaint and I wrote about the health systems that were creating Constancy of Purpose through a focus on safety, including caregiver safety, in the Harvard Business Review, if you'd like more examples.
Now, on the less positive side. At health systems where safety had not been raised to the level of Create Constancy of Purpose for everyone in the organization, there was greater mistrust when COVID hit, more call‑offs, more resignations, more retirements, less effective problem‑solving.
This compounded pressures on remaining staff and has led to increased patient safety incidents and poorer outcomes across the board. In other words, negative consequences, a negative cycle, which we've seen in far too many health systems, despite the amazing work of so many individuals and teams.
The principle of establish Constancy of Purpose was operating in the background in both the good and the bad, and whether leaders had successfully aligned behaviors with it, starting with themselves, across the organization, has dictated outcomes.
Also, as I promised, I wanted to illustrate what a leader can do with Constancy of Purpose tied to safety, with a case from outside healthcare. I think this one is really powerful. Our founding non‑executive chairman was Paul O'Neill, the retired CEO of Alcoa, as well as former US Treasury Secretary.
In 1987, on day one of becoming CEO at Alcoa, O'Neill began to establish workforce safety as a precondition at Alcoa, a means toward becoming habitually excellent in everything they did. He also made clear that integrity would be a fundamental value.
Over time, Alcoa came to say that they aspired to be the best company in the world, illustrated by being the best in the world at everything they did, without exception. To make this true, and not just words on a page, he worked relentlessly to see that some key supporting concepts for the principle of Constancy of Purpose were fully in place across all of Alcoa, in dozens of countries, and ultimately, across more than 140,000 team members, and tens of thousands more contracted partners. To name just two, one of the supporting concepts is “see reality.” As Shingo notes, most organizations create barriers that make it difficult for people to see and tell the truth about what they see.
O'Neill had his team create a real‑time safety learning system, the first application of the intranet at Alcoa, and ensured that leaders across the organization had 24 hours to report and analyze every lost‑time safety incident and 48 hours to report an initial solution.
It was then the responsibility of leaders and everyone doing similar work across the organization to look at these reports every day and to see and correct similar risks in their own areas, starting with Paul, who modeled it every day.
He knew it had to be not only OK to identify problems, so they could be solved together, but this had to be a required behavior. This, of course, required psychological safety and helped to create it. In order to produce physical safety, we needed psychological safety, and vice‑versa.
This real‑time learning system and the required behaviors surrounding it were a good example of another supporting principle for leaders trying to work with this principle, which is, “align behaviors with performance for everyone.”
When it came out that actually the most powerful business unit at Alcoa, with a supposed stellar safety record in his divisions, had knowingly not reported two major safety incidents which involved significant harm at plants in Mexico, O'Neill let him go, and was very public about the reason, tied to Alcoa's fundamental values.
The behaviors to uphold safety as a precondition, to maintain constancy of purpose, had to apply to everyone, especially the leaders. What were the consequences for the company as a whole?
Between 1997 and 2000, O'Neill's tenure as CEO, Alcoa became the safest place to work in the world, despite the grave dangers of aluminum smelting and production, and grew its market valuation by more than 800 percent.
Two generations later, Alcoa's incident rate was four times lower still than in 2008. Today, Alcoa's DART rate, a measure of worker safety, is 10 times better than the average American health system, despite the great safety challenges of metal production.
What about Constancy of Purpose? How does that actually work on individuals within the company? How do they know what to do and to innovate because of it? I want to tell you a story. Many years later, we at Value Capture put on a series of seminars for CEOs to learn these powerful ideas together.
As part of that, we had a retired senior vice president of Alcoa share his perspective. In doing so, he told a story about a time when Alcoa, which acquired a lot of companies, acquired a very major company and was required as part of this acquisition to divest immediately on day one much of its operations to avoid over‑concentration in the industry.
It came to the attention of many of the senior leaders on the day, that day one, however, that the company they were acquiring had polluted the water in a particular town in Texas through one of their plants.
The question arose as to what to do. There was some discussion, and some folks on the legal side said, “Well, don't say anything. We're under no obligation. This isn't going to be ours in about an hour.” Someone in the room asked the question, “What would the best company in the world do?”
Instantly, that settled the question. Within hours, Alcoa was moving water trucks to supply safe water to everyone in the community, pulled back that disposition until they could fund the remediation work in the area, and make the town safe again for its residents.
The interesting part of this story to me was I watched after Bill made this presentation, and Paul O'Neill came up to him, who was also presenting at the seminar, and said, “Bill, I never knew that story. No one ever told me.” Bill said to him, “Paul, we knew what to do. We didn't need to bother you. You didn't need to know. You'd taught us well.” The same is true on the front line.
Today, generations after Paul's leadership and Alcoa's overall evolution as a company, you still meet many people who served as line engineers or line work people who will tell you stories about knowing what to do.
Not just when it came to safety, but to problem‑solving, and relationships with each other, and general approaches to excellence. They attributed directly to how they were led, the culture, and the constancy of purpose that was present at Alcoa.
It's been a privilege to share a little bit with you about the Shingo principles, starting with Create Constancy of Purpose. I hope you'll continue to learn more about the principles and what enduring legacy you can create as a leader by leading with them.
Please reach out to us if we can help. Thanks for taking the time to learn together today.
Mark Graban is a Senior Advisor for Value Capture and has served healthcare clients for over 15 years. Mark is internationally recognized as a leading author and speaker on Lean healthcare. He is the author of books including Lean Hospitals: Improving Quality, Patient Safety, and Employee Engagement, Healthcare Kaizen: Engaging Front-Line Staff in Sustainable Continuous Improvements, and Measures of Success: React Less, Lead Better, Improve More. He is also host of our “Habitual Excellence” podcast. Mark's full bio