Valuing our Differences: How Cross-Sector Learning Stimulates Innovation

I remember the call distinctly: it was the summer of 2007, when the Superintendent of Duluth Public Schools called, seeking benchmarking partners.  He was looking for other school districts that were more advanced at using data to make decisions and to manage and improve performance.  I gave him two or three districts from which I thought his staff could learn, but I also gave him two businesses and one healthcare system, Essentia Health (then called SMDC) – an organization that was literally three blocks from his office, and an organization that I think had (and still does have) one of the most robust balanced scorecards in the US…

 

He benchmarked with several of the organizations, learning some best practices that he and his team could integrate back into the schools.  They learned techniques from very high performing school districts (one of which received the Baldrige Award), but he called me back months later to tell me that the most valuable insights they gained were from the health system, Essentia.  They learned a great deal about how to align measures with strategy (using Strategy Maps and other techniques), about how to use data at all levels within the organization to make better decisions, and about how to communicate results throughout the district and to external audiences (through software, posters, and other means).

 

His comment was something like this: “We learned from the other school districts, but the richest insights came from the businesses and the hospital.  It got us out of our environment; it challenged our assumptions; it stimulated some creative solutions.  I had no idea that one of the country’s best practices was literally down the street from my office.”

 

From that experience and under his leadership, we created what is now called the Twin Ports Performance Excellence Network, one of several community forums in Minnesota where leaders and practitioners can learn best practices in continuous improvement and performance excellence from other leaders and practitioners, oftentimes from industries and sectors very different from their own.  This forum, TPPEN, for short, averages about 25 attendees for each breakfast discussion.  Participants represent all levels of leadership (from CEOs and business owners to other executives to mid-level management), all functional areas (operations, marketing, finance, HR, quality, among others), from large and small organizations, and from all sectors (business, healthcare, education, nonprofit, and government).  And that’s what creates its spark.

 

Says Anne Schilling, quality assurance manager at AMSOIL in Superior (which produces synthetic motor oil) and one of the volunteers who manages and coordinates TPPEN programming: “The discussions are always thought provoking and insightful.  I’ve learned a great deal from other organizations in the community on how they are improving their leadership, their focus on customers, their workforce engagement, and their operations.  Certainly, I benefit from other businesses – including Cirrus, Jamar, maurices, and others.  But I’m struck by just how much I learn from area schools, nonprofits, healthcare, and government – insights I can take back to my company.”

 

Cross-sector learning.  It’s the foundation of what makes the Twin Ports Performance Excellence Network actually work (as well as the forums in Southeast Minnesota, Minneapolis, and St. Paul).  But it’s also part of the “secret sauce” that makes PEN work: it’s embedded in how we design our monthly breakfast programs; it’s a major component of our peer-to-peer Roundtables; it’s critical when we make benchmarking connections between members; and it’s foundational for our workshops and conferences. 

 

“Studying others outside our industry – and oftentimes completely outside of our sector – enhances my company’s ability to learn,” says Bob Mitchell, division quality manager at 3M.  “If we need to benchmark something technical within our business, I’ll seek other non-competing manufacturers.  But if we need to learn more effective ways of engaging with our customers, of conducting strategic planning, of managing our knowledge, or of developing our future leaders, sometimes we get more innovative ideas out our industry.”

 

There are countless examples of where cross-industry, cross-sector learning have stimulated incredible innovations:

 

• Legend has it that years ago Southwest Airlines benchmarked NASCAR pit crews to better understand best practices in pit stops, such that it could minimize the time it took to turn over planes at gates (because planes at gates don’t earn revenue).

• Domino’s Pizza benchmarked FedEx to identify ways of reducing drive time within their delivery routes.

• The cosmetic company Revlon benchmarked ammunition manufacturers to better understand product design of ammunition casing as a way to improve the durability of lipstick containers.

• Numerous surgery departments in hospitals have incorporated a simple, but very effective tool — the checklist – as a standard protocol to reduce errors in surgery.  The technique was first used in the airline industry by pilots to prevent aviation errors and now is standard in most OR’s.

 

And the list certainly goes on.

 

I believe cross-sector learning is valuable for several reasons:

 

• It stimulates creative problem solving, helps uncover innovative ideas, and helps leaders consider new applications for validated approaches.  What oftentimes is standard in one industry can be revolutionary in another.

• It encourages leaders and professionals to challenge the status quo – it stimulates change, and breaks paradigms.  Oftentimes we hear “it won’t work in our industry” or something to that effect, but when you see “it” working – and working very effectively in another industry, thank you very much – it encourages leaders to rethink what’s possible.

• It creates a competitive advantage.  Sometimes industries follow similar patterns due to similar technologies, similar environmental factors, similar marketplace needs, tradition or even habit.  But the organization that breaks out of that thinking – the one that applies techniques that are new to the industry – oftentimes creates new value for its customers and stakeholders.  Really, this is at the heart of innovation, and many organizations do it very, very well – Apple, Google, 3M, Mayo Clinic.  It’s also the heart of the “Blue Ocean Strategy”: when a whole industry is doing something one way, sometimes new value (and certainly far less competition) might exist by finding a new way.

 

I believe that many – perhaps most – best practices can transfer between different types of organizations.  Maybe it’s because everything except for an organization’s core operations (those processes that are used to design, produce, and deliver core products, services, and programs) is fairly universal.  Think about it: all organizations have customers, have workers, have data and information systems, have planning processes (or should have), have leaders, and so forth.  Sure, there are nuances, but how you train and develop your people; how you listen to customers; how you communicate vision, values, and strategy; how you reward and recognize staff; how you measure customer satisfaction; how you ensure ethical behavior – those processes and best practices could transfer across sectors.  And how it’s done in one industry might be unique when applied to another.

 

Which brings us to back to PEN.  There are many associations that stimulate knowledge-sharing within specific industries or sectors (many exist within manufacturing or within healthcare, for example) – and those are important networks.  In fact, PEN partners with them frequently.  But PEN is unique in that nearly all of our programs are intentionally cross-sector, creating forums for schools to learn from nonprofit and government agencies, nonprofits and government agencies to learn from healthcare, healthcare to learn from businesses, businesses to learn from schools.

 

Next month, PEN hosts our annual conference, PENworks 2015 (April 27-28).  We’re featuring more than 20 local, regional, and national organizations on the journey to excellence – each sharing how there are improving leadership effectiveness, focus on customer, workforce engagement, strategy development and execution, data-based decisions, using Lean to reduce waste, and many other best practices.

 

• There will be businesses (Andersen Windows, Seagate, DuFresne Manufacturing, PricewaterhouseCoopers, and Elevations Credit Union);

• there will be healthcare systems (Mayo Clinic, The Goodman Group [long-term care], Olmsted Medical Center, St. David’s Health System, and Hill Country Memorial Hospital);

• there will be education institutions (Centennial School District, Duluth Public Schools, and Hennepin Technical College);

• there will be government agencies (Olmsted County, City of Minneapolis, State of Minnesota, SD National Guard, and Dakota County); and

• there will be subject matter experts (such as Good Leadership Enterprise and Compass Affiliates).

 

There are big businesses; there are small nonprofits.  There are those early on their journey to excellence; there are those who have been sustaining efforts for over a decade – four of which received the 2014 Baldrige National Quality Award.

 

The (cross-sector) learning will be deep; the networking will be rich; the energy and inspiration for starting or accelerating improvement initiatives will be high.  Part of the value of PENworks comes from the content these leaders will share.  But part of it will come from the spark created in learning from other types of organizations – in thinking outside your box, in finding new ways to transfer and adapt proven approaches.

 

There’s value in our organizational differences.  I hope to see you all at PENworks!

 

For information or to register for PENworks, visit here.

 

Never stop improving!

 

Brian S. Lassiter

President, Performance Excellence Network (formerly Minnesota Council for Quality)

www.performanceexcellencenetwork.org

http://twitter.com/LassiterBrian 

 

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