Six Sigma

Deming, Health Insurers and the Myth of Scarcity

There's an absolutely riveting article about the record-breaking profits health insurers are making - even as they increase premiums to their customers by double digits.

How are they achieving these incredible financial feats?  Not only is it because of the usurious fees (with ever-increasing deductibles) they charge, but they are also benefiting from the economic downturn.

People keep paying their premiums, but because of those ever-increasing deductibles - now ranging from $2-4K per year - patients are not going to the doctor.  Or having necessary tests.  Or treatment.

Like for cancer.

Because, in this economy, when so many are one paycheck (at most) away from destitution, going to a doctor is a choice.  After all, you may need that money to pay for an unjustifiably priced gallon of gas so that you can get to work.

Unjustified, that is, if you're anyone other than an oil company.

It's gotten to the point that even the shareholders don't feel as strongly as before about the levels of profits the companies they invest in are making.  Even if they receive dividends.

Because, just as the politicians are so disconnected from what's going on along Main Street - or in people's homes - CEOs have lost sight of the fact that their companies are there to serve a greater purpose than simply for the few who own shares.

Or to fill their own pockets.

No matter the product or price point, they're supposed to be contributing to the betterment of society by improving quality of life.  Of everyone's life.

I'm a capitalist to the core.  I want everyone to make money.  I want those who strive - whether minimally or maximally - to proportionately benefit from the work they do and be able to buy what they want.

But I don't believe in exclusivity.  Not when the exclusionary policies and actions on the parts of CEOs and their corporations lead to desperation, disease - and death.

When did corporations lose any semblance of having a clue?

It's more than a Gordon Gekko.  It's not just that "greed is good."

It's that greed - impossible levels of personal and corporate greed - have become standard operating procedure.

It's unconscionable.  Those CEOs, speculators and others pursuing that strategy should be ashamed.

And, frankly, while I applaud the actions of Bill Gates, Warren Buffett and others in the billionaires' club for giving their money to charity - they left it awfully late.

And it's still not enough.

Deming, the management theorist who is the father of what we now call "Lean" and "Six Sigma" (among others), always said that there was no scarcity.  That scarcity is a myth.

That we create scarcity by creating management and corporate systems that either don't access the capabilities of our employees or adequately and fairly share the benefits of what those employees have achieved on behalf of their employer.

Or both.

He was right.  And now it's worse.

Because the health insurers are only one of, literally, a world of corporations that are making, literally, incredible profits.  With war chests of money that analysts and investors are starting to worry are getting too big.

And with speculators who drive prices of commodities up so high that they have to drive their own correction because the public responds by not buying.

What's their justification?  They're afraid - yes, afraid - that things might get worse.  Later.  At some point in the future.  Possibly.

Cowards.

It's time for executives to wake up and smell the coffee.  (I'm being very, very polite here.)

It's time for them to think about the context within which they and their organizations exist.

Everything is not about you and how much you and your cronies make.  Nor is it about "satisfying the shareholders" as you so conveniently excuse your actions.

It's about whether you're willing to do more than do well.  It's whether you're also willing to do good.  On everyone's behalf.

It's time to start.  Now.

Resource:

Health Insurers Make Record Profits as Many Postpone Care (NYT)

The iPad Rotation Lock. Quality and Innovation at Its Best.

I don't have one.  I've not even seen it in person.  But I want one.

It's the iPad.

Why, you ask?  What would make me decide that I need yet another technology gadget when I am the first to confess that I am not a techie and am not coming even close to using the capabilities of the technology I currently own?

It's because of the rotation lock.  That simply did me in.

The iPad (for those of you who have been on retreat with no communication for months) is the new category changing product that Apple released today.  It is a consumption tool rather than a creative one.  As such, it is designed far more for your leisure and enjoyment than it is for your workaday world.

One of its capabilities is that it has both portrait and landscape screen views.  That means (for those of you who are even less techie than I - of which, I know, there are very few) that you can use the screen either vertically or horizontally.

This is a wonderful thing.  On my iPhone (you knew I'd have one) I've gotten accustomed to turning that baby whenever I want a large screen version of whatever I'm looking at.  Only sometimes, when I physically turn and I don't want the phone to turn, it does it anyway.

Other than being a periodic distraction, it isn't a problem.  Just a thing.  A small thing at that.

Then I read that Apple had created a rotation lock switch on the iPad. (It's in the same position as the ringer/vibration switch on the iPhone.)  That means that when you're reading or watching and you don't want the screen view to shift under any circumstances it won't.

And that made me realize all over again why I love Apple, have done for so many years - and why they deserve it.

It's because they figure things out that I need before I've ever figured out that I need them or, better yet, could have them.

This is the essence of customer focus.  It is innovation at its best.

It is also the core definition of a high quality organization - whether you're providing products or services, are in the public or private sector or are local or global.

For those of us who worked in the realm of quality back in the days (and still today) one of the biggest challenges was getting everyone in the organization - from front line personnel to executives - to understand that it isn't about what the customer asks for.  It's about what you can give the customer that he or she never imagined.

That's quality at its best.  Sure it's kaizen and six sigma and lean.  But those are tools - and even they are for the purpose of giving the customer something better than they've ever experienced.  Anywhere.  From anyone.

Of the two voices to which an organization operates - the Voice of the Customer and the Voice of the Process - when it's done right the former is a whisper and the latter is a shout.

You have people inside your organization who are thinking and wondering and creating every single day.  They know what goes wrong and they know how to make it better.  They see what the organization provides and they innovate ways in their heads that will change the world - but that never see the light of day.

Whether those innovations are ever accessed and utilized is up to you.  They're there.  You just have to get your hands on those ideas and let the people who generated them take the organization places not even you ever considered possible.

Apple is a game-changer because Apple keeps figuring out ways that the game can be changed.

Sometimes it's as big as an iPod or as small as a rotation lock.  But, whatever it is, you know that the customer never asked for it.  Because we didn't know to ask.

Apple and its engineers did.  And they keep doing so.

There's no reason why you can't do that in your organization, too.  The only thing you have to do is start.  Now.

For more on strategizing and executing innovation and quality, click here.