Yale School of Management

How Can the Lessons from NUMMI Help Fix Health Care?

As a first-year student in the MBA for Executives Program, it’s often hard not to be impatient for our health care courses to start. In our core classes, rather than fixing the lens narrowly on healthcare, we’ve studied cases about golf balls, potash mining, rental cars, aircraft, and more. It turns out that each of these industries offers plenty of wisdom for healthcare. This week we learned about car manufacturing, and more than ever the lessons for healthcare are direct and critically important.

December 23, 2013

We were assigned a case that explores NUMMI, the 25-year joint venture between Toyota and GM designed, among other objectives, to bring lean manufacturing to the U.S. (Being an NPR nerd, I was excited that this case for Competitor was presented as a This American Life episode.) After becoming a model of transformation, the NUMMI plant and the collaborative venture it was home to ultimately failed. But as with any failure, it can be valuable if we can learn the lessons, iterate, and undertake the next venture more successfully.

Just after Toyota announced it was closing NUMMI, one of the central characters in the episode, John Shook, wrote a blog post, “Was NUMMI a Success?” He argues that, in some important ways, yes it was. It was actually transformative in terms of product quality and worker productivity and satisfaction. But he also wrote,

I would argue that there is still a LOT more to learn. About technology transfer, the dissemination of learning, the MANAGEMENT system that underpins and enables the more famous Production System, the importance and attainment of mutual trust between labor and management, about how to sustain a powerful operating system over decades and decades.

This, in fact, was one of the take-home lessons from the case assignment. You cannot sustain or spread innovation if you ignore the processes that support it. GM focused its scaling efforts on the factory floor environment, but made no real changes to the management, back office operations, or company culture. As a result, GM was never able to replicate NUMMI’s incredible early success in any of its other plants.

One of NUMMI’s legacies is that “lean” has transformed industries well beyond manufacturing. For instance, a whole industry has cropped up to implement “lean” operations in healthcare, like at ThedaCare, where a pilot Lean unit had zero medication errors, increased patient and staff satisfaction, halved the staff time spent on documentation, and increased nurses’ time spent with patients.

In an excellent book called On the Mend: Revolutionizing Healthcare to Save Lives and Transform the Industry, the ThedaCare leaders share the company’s core management principles:

  • Focus on patients (not the hospital or staff) and design care around them.
  • Identify value for the patient, and get rid of everything else (waste).
  • Minimize time to treatment and through its course.

And lastly, “Let no dogma go unchallenged.”

I believe that, just like at NUMMI, the health systems that will be most successful will be those that align all of their systems around the “true north” of high-quality, high-value patient care, with value in the eye of the patient herself. Patients value life-saving treatments, of course, but they also value the ability to get care close to their communities, to involve family and caregivers in their care, having providers they can trust and easily communicate with, and being safe from avoidable harm.

We urgently need to spread and scale care delivery models that continuously improve quality and reduce waste. Health systems must maintain constant focus on value to the patient and foster a culture of consistently delivering that value.



About the author

Amy Romano

MBA for Executives, 2015