Theory of Constraints Handbook - James Cox Iii [610]
The S&T tree is a company-wide alignment, synchronization, and communication tool. The goal is to have an ever-flourishing practice that continuously and significantly increases value for customers (patients), staff, and stakeholders. In the S&T, we agree that we are going to transform the revenues into net profits in less than four years to achieve the VV.
The tactic is to develop a DCE with recognition as a leader in providing high quality, reliable service to a select group of patients, and develop capabilities to capitalize on it without exhausting our staff capabilities or taking real risks.
The parallel assumptions or assumptions behind the tactics are that in order to realize the vision, our revenues must continue to grow much faster than the OE (hence, Throughput continually grows). However, if the growth is too fast and the staff-applied capability is not able to cope with the growth rate, the systems will collapse or oscillate and the quality and reliability of service will suffer. This will generate a negative feedback loop contrary to the vision.
Sufficiency assumptions (under “Take Note” in Table 31-3) are our reasons to believe that accomplishing a DCE will be at risk without providing another level of detail to our subordinates. The DCE is to satisfy a patient’s significant need to an extent that most other competitors cannot and will not do.
Level 2
Here we move to the next level in the tree as we see in Figure 31-13. Necessary assumption or assumption behind this level of strategy is that in healthcare the patients do not visit doctors for fun; every visit is stressful and a somewhat traumatic experience. The longer the patient has to wait to complete the care (the number of visits to the doctors), the greater the stress. Therefore, high quality and reliable treatment service is the patient’s significant need.
Strategy at this level (Level 2) is to have DCE by awareness in the market that our practice has a unique, systematic ability to complete all the necessary treatment with the fewest visits, shortest overall duration, and predictable reliable outcomes.
FIGURE 31-13 S&T for base growth—Level 1: VV, 2: base growth, 3: build (meeting promises), and 4: detailed tactics for meeting promises.
Parallel assumption or assumptions behind tactics will be that sustaining quality and reliability in healthcare is easier said than done. Having proven systems and enough support staff to back up our promises to patients is convincing. However, to make the systems capable of a “Wow” experience for patients is not easy. The patients do not talk about their experiences in the health care setting as much as they talk about other services. However, the future referrals depend upon word-of-mouth.
A tactic is to implement dynamic practice management capabilities for quality and reliability of services. We need to have sales and marketing capabilities to grow the practice and to have buffer capacity to respond to emergencies and to avoid lapses in quality when rapid growth takes place.
Sufficiency assumption is that building a DCE advantage is not easy, implementing new processes requires a willingness to increase staff and increase training programs, building capabilities to market and sell is no less difficult. However, sustaining all three elements is the challenge.
This brings us to the next level on the right side of the tree.
Premium Competitive Edge
Parallel assumptions behind strategy are that to increase the probability of achieving the vision, it is helpful to have the ability to charge premiums, even on a small portion of total production. It is like hospitals providing executive health where busy executives can be treated in the shortest possible time with the highest quality for a premium. Some dental groups market to hotels, resorts, and restaurants to provide emergency care for fractured teeth, loose crowns, etc. The teeth-in-an-hour concept was promoted in different parts of the country and is another example of speed of care for a premium. Medical tourism is where patients