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Building capabilities for sustainable operational improvements

Frontline capability building improves care quality while lowering hospital costs.


A large multi-hospital system in the western United States needed to lower its cost base without impairing quality of care. However, its staff was suffering from "change fatigue." Over the past several years, the system had implemented a number of lean improvement programs, but the results had been inconsistent and short-lived.

McKinsey was engaged to help the client achieve its clinical and financial goals through a system-wide, frontline-driven clinical operations transformation. We were asked to help the client:

  • determine the appropriate strategy
  • design and implement tailored operational solutions throughout the system
  • work with the staff to develop the capabilities required to make the transformation sustainable


Our first task was to build and communicate the case for change so that we could overcome the staff’s change fatigue. In addition to conducting rigorous analyses, we held discussions with hundreds of stakeholders throughout the organization to pinpoint the most important problems that were hindering performance at each hospital. The discussions also enabled us to identify many of the entrenched mindsets and behaviors that had hampered previous change programs.

In addition, we piloted a four-month transformation program in two hospitals. We were then able to hone the approach used in the pilot and roll it out across the system, four or five hospitals at a time.

The key to sustainable success in this case, we realized, was capability building. Although the hospitals needed better performance metrics and accountability tools, it was far more important that the client's staff members adopt a leadership mindset, change certain behaviors, and learn to understand and use lean processes.

Our approach to capability building focuses on three elements:

  • Just-in-time formal training at each facility, scheduled so that all members of the frontline and management teams are introduced to core lean concepts and leadership skills at the exact time each topic becomes relevant to the transformation.
  • Real-time informal training provided by McKinsey consultants—especially its clinician consultants—who work side-by-side with individuals on each hospital's front line.
  • A lean academy that offers system-level leaders intensive training on lean principles, problem-solving tactics, and leadership skills; the academy accelerates the speed of organizational learning by creating a set of internal change leaders who then become teachers themselves.

When the transformation was introduced at each facility, the frontline staff was encouraged to select four or five high-priority problems to focus on—problems that, if solved, would significantly improve the hospital’s clinical and financial performance. Many of the issues selected (e.g., emergency department and inpatient length of stay; operating room efficiency) were common throughout the system, but others (e.g., hospital-acquired pressure ulcers; durable medical equipment rentals) were specific to individual facilities.

Using the lean tools and their new leadership skills, the frontline teams identified the root causes of the problems and then developed solutions tailored to their hospital. As a result, the teams were able to strengthen their capabilities as they drove each aspect of the transformation forward and came away feeling that they were responsible for the very positive results. This encouraged the teams to continue identifying and solving problems on their own.


Over two years, the transformation has significantly improved each hospital's financial performance, including increased revenue, improved productivity and decreased costs. In addition:

  • mean emergency department length of stay has decreased 25 to 40 percent (depending on the hospital)
  • inpatients are discharged an average of 90 minutes earlier, eliminating the use of a high-cost overtime nurse flex pool
  • emergency department co-pay collections have doubled
  • the rate of first-case on-time starts in its operating rooms has improved by more than 40 percent

Perhaps most important, the client is confident that these improvements can be sustained because the capabilities of about 1,000 employees have been strengthened through training on hard and soft skills, regular team meetings, and daily one-on-one coaching.