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You want to deliver superior project outcomes, on time or early, on budget or below—with all the scope the project called for. You have to rely on outside organisations to provide products and services. What’s your ideal contracting strategy?
[ Listen to audio version, read by David Hodes]
Your investment and costs are your suppliers’ revenues and profits. Every dollar they make is a dollar you spend. How do you spend it wisely?
Essentially, you have two basic choices—time and materials or a fixed price. The first is based on a schedule of rates for the resources and materials you will consume. The second is a lump sum for a defined scope of work. Let’s take a closer look at these two scenarios and their tradeoffs.
Scenario 1 — time and materials: I use an engineer who charges out at $200 per hour; he submits timesheets for the number of hours worked; he is paid $200 for every hour worked. The owner party usually defines the scope of work and estimates how long it will take. A time and materials contract holds the buyer accountable for the payment of all the hours worked and materials consumed.
Scenario 2 — fixed price: I have defined the scope of work I want—for example, replacing an important piece of equipment in my plant. I go to my supplier, detail precisely what is needed and ask them to give me a fixed price to do the work. It’s then up to the supplier to estimate the time and materials required for the job and bid accordingly.
Given that you can’t buy from the same supplier for the same scope of work on two fundamentally different contracting arrangements, which strategy should you adopt? How do we solve the dilemma? What issues arise when adopting one scenario versus the other? What should go into your thinking?
We’ve already stated we want to deliver superior project outcomes. But from a contracting standpoint, what necessary conditions must we satisfy to do so consistently? On the one hand, we must effectively mitigate business risks; on the other, we need to optimise business benefits.
These two ideas do not contradict each other but simply look at the two sides of the coin of superior performance.
Projects, by their nature, are risky endeavours. Many things can go wrong, and we need to mitigate risks. There is, of course, an assumption that we have the capability to develop and manage effective risk plans and that we would never undertake a project that could destroy the organisation in its entirety. It would be better, in that case, to stop and think again.
On the flip side, we achieve superior project performance when we deliver the optimal business benefit from the investment we make in time and money. We don’t do projects for the sake of doing projects; we do them because we are looking for a business outcome. Delivering consistently superior project outcomes thus depends on optimising what the project does for the business.
“Do we really know what goes on in the mind of the supplier?”
Let’s look first at the risk management branch of the argument. Conventional wisdom tells us we can effectively mitigate business risks by establishing a contract based on a fixed-price arrangement. In this way, we have passed the risk on to the supplier, and it is up to them, based on their expertise and appetite for risk, to determine what price they charge for the scope of work we are asking them to perform. We further assume that if we put a competitive tender for the work in place, we will prevent the successful supplier from overpricing their risk into their bid to us.
But, do we really know what goes on in the mind of the supplier? How well do we understand their business conditions? Are they desperate for work and ready to underbid just to keep work coming in the door? Do they suspect we are pretty hopeless at clearly defining scope so that they feel confident raising subsequent variation orders will recover a lowball bid made to knock out the competition?
Why do we assume they are better at managing the risk of the project than we are? What is the effect on us to have a substandard supplier winning the contract on costs when we will wear the long-term consequence of their shoddy work? Procurement might feel they’ve done a great job getting the lowest price, but Operations suffer the enduring consequence.
And, let’s take a closer look at the inevitable arguments that will arise from changes in scope. How good will we be in the heat of project execution in determining the validity of a variation order? What will happen to the project manager as they see their project costs increasing, knowing they will have to explain away these variations all the way to the top. What will it do to the quality of the relationship between the owner and vendor parties if every day brings a new battle as to whether or not an additional payment should be approved? What will happen to the speed of project execution if the supplier becomes wary of doing anything not preapproved before the work contained in the change order can be started?
Now let’s look at the branch of the argument that calls for optimisation of the business benefits. Can this need best be served by engaging in a time and materials contract? Let’s assume, and it’s a big assumption, that we have the means to manage execution risk effectively. It’s an innovation, a way of planning and performing work that is better than any that has come before. It’s a gamechanger in terms of theory, method and tools. Grounded in robust reasoning and backed by a comprehensive and diverse swag of empirical evidence proving that it works.
Let’s also assume that we can convince our suppliers to use this innovation for the planning and performance of their work. This ask is no simple matter; as the saying goes, to change the way they work, they will have to change the way they work. Whatever methods and tools they are habituated into using, they will have to abandon. In contrast to the fixed-price contract, we will demand they be far more tactically flexible to meet the work when and where it arises, according to what is best for the project—not necessarily what is best for their pocketbook.
We will have to respond to their legitimate anxiety that if we can get through the work quicker, without compromising safety or quality, they will, on the face of it, earn less overall. On the other hand, we will need to build trust with our suppliers not to drag their feet as a means of increasing their billable claims. We ourselves will have to live with the idea that we will not always have productive work for everyone to do. Nevertheless, we will pay them for availability, realising the benefit to us of them being precisely where we need them when we need them there. We will be delivering the project and its associated benefits sooner, dwarfing the excess costs.
The way of squaring the circle of our investments and costs being the revenue and profits of our suppliers is to look at the whole project system from above and include in it the complete value chain. Everyone wins when the owner wins big. As my first boss taught me—it’s easy to be generous out of profits. If you know the value of a day on your project regarding investment, costs and margin, you can escape the myopia of focusing only on screwing your suppliers down on cost.
The truth is that such innovation exists in the form of the Theory of Constraints and its associated methods of Critical Chain Project Management and Drum Buffer Rope production management.
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What’s next?
The change from standard thinking to Theory of Constraints (TOC) is both profound and exhilarating. To make it both fun and memorable, we use a business simulation we call The Right Stuff Workshop.
We’d love to run it with you. To learn more:
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[Background image: Decimated chess army, Louis Hansel on Unsplash]
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Healthcare professional jobs to be done
A clinician checking a monitor is performing an action. The job may be detecting a meaningful change in the patient’s condition soon enough to respond appropriately. A specialist reviewing a report may be trying to decide whether an intervention is suitable, rather than simply consuming more information.
This distinction matters to medical device development. A product can make an action easier while leaving the clinical job difficult or creating additional work elsewhere.
Question 1.1.4 asks how well your organization understands the jobs healthcare professionals are trying to get done. A strong answer describes those jobs from their perspective and uses evidence to identify the outcomes they need to achieve.
“The job explains why the information matters and what must happen after the professional receives it.”
Begin with what the healthcare professional needs to accomplish. Depending on the role, this may involve recognizing risk, determining eligibility, delivering treatment, explaining options or evaluating outcomes.
Keep the job statement independent of a preferred product. “Review our dashboard” describes an interaction. “Determine whether the patient requires a change in care” describes clinical progress.
Define the context and boundaries. The work may differ across acute care, routine follow-up and home monitoring. A job that includes several independent clinical purposes may need to be separated into smaller, researchable scopes.
The team should be able to explain why the professional performs the work, what constitutes completion and who depends on the result.
“HCP” covers professionals with different responsibilities, authority and expertise. A physician deciding on treatment, a nurse preparing a patient and a technician acquiring measurements may interact with the same device for different reasons.
Identify the job executor and the people who influence or support the work. Clarify who can make the relevant decision, who supplies necessary information and who acts on the result.
Do not assume that the purchaser, prescriber and daily user have the same needs. A product selected for one group’s convenience can introduce burdens for another.
Research each important perspective while retaining a clear account of the job under investigation. Differences across professional roles should inform the design rather than disappear into an average customer profile.
Clinical research combines observation with empathy interviews. Applied to healthcare professionals, it examines clinical work where it happens.
Watch how professionals prepare, locate information, make decisions and respond to interruptions. Ask them to explain recent cases and the reasoning behind their actions.
Observe the tasks before and after device use. A procedure that looks efficient may depend on extensive preparation by another team. A report that looks clear may require a clinician to reconstruct its meaning from several systems.
Discuss observations with the people involved. Familiar workarounds may compensate for a missing capability. Understanding them helps distinguish a product preference from a need that governs successful completion of the job.
Professionals often describe needs through the solution they know: another field, a different screen or a new report. These requests provide useful clues, but they still require interpretation.
An illustrative request for “all the data on one page” may reflect a need to establish whether enough information is available for a decision. The best response depends on the missing information, its relevance and the decision being supported.
Ask why the requested change matters. What uncertainty would it remove? What work would it reduce? What would the professional be able to accomplish more effectively?
Use the eight-step job framework to investigate the work surrounding the visible activity.
Treat these steps as prompts for discovery. In practice, professionals may revisit information, pause a procedure or return to preparation. The map should preserve the dependencies that make the job possible.
“Preparation and follow-up are part of the clinical job even when they happen outside the product team’s field of view.”
A desired outcome statement describes how the professional judges success. It identifies the direction of improvement, a measure, what is being controlled and the context in which it matters.
For example: “Minimize the time required to determine whether the information needed for an eligibility decision is complete.” Another might be: “Reduce the likelihood that a clinically significant change is missed during review of monitoring results.”
These are illustrative research statements, not claims of demonstrated product performance. They require validation with the professionals whose work they describe.
Avoid combining several outcomes into one statement. Speed, completeness and accuracy may all matter, but respondents need to evaluate each clearly. An outcome should also leave room for alternative ways of satisfying the need.
Clinical jobs involve interpretation and responsibility as well as information processing. Understanding the outcome does not establish that the product should take over the professional’s decision.
Clarify where the device supplies evidence, supports a task or performs a defined action. Examine what the professional needs to recognize limitations, handle exceptions and decide when additional expertise is required.
A design that reduces routine effort can introduce new review work or uncertainty. Research should capture these consequences alongside the intended benefit.
When professionals ask for greater confidence, determine what supports that confidence: appropriate evidence, clear limitations, interpretable results or a reliable escalation process. Design decisions should preserve the professional’s ability to act responsibly within the care setting.
Once qualitative research has produced clear outcomes, use quantitative research to determine their importance and how well current approaches satisfy them.
Ask professionals to rate the outcome itself, with a defined reference situation. Satisfaction should concern their current ability to complete the job, rather than whether they like a brand or presentation.
Include relevant variations in setting, experience and workload. The priorities of a high-volume specialist service may differ from those of a clinician who encounters the condition occasionally.
Opportunity assessment considers importance together with the gap between importance and satisfaction. It helps direct attention toward underserved outcomes. Apply consistent scales and interpret scores alongside the underlying evidence. Necessary safety requirements remain obligations even when survey respondents rank them differently.
Average scores can conceal important difficulties. A need may be well served for experienced users but poorly served for professionals without immediate specialist support.
Examine whether respondents cluster around different patterns of unmet outcomes. Investigate the circumstances that explain those patterns.
A group may struggle primarily to prepare the patient. Another may struggle to interpret results or coordinate follow-up. These differences can call for different product capabilities, training or service arrangements.
A target product profile connects prioritized outcomes with the Voice of Technology and the Voice of Business in one shared definition. For healthcare professional jobs, this creates a shared view of what the solution must enable.
Technical assessment examines feasibility and readiness. Business assessment clarifies objectives, resources and implementation conditions. Clinical evidence and relevant requirements shape what can responsibly be promised.
Record the important outcomes, intended users and operating context. Identify the measures and evidence that will establish whether a concept improves the job.
Use the profile to guide tradeoffs. A feature that helps one professional may transfer work to another. The team needs to assess its effect on the complete clinical activity and the patient pathway.
Concept evaluation should examine realistic tasks and scenarios with representative professionals. Ask what the proposed approach changes about their ability to achieve the priority outcomes.
Observe preparation, interpretation, exceptions and handover. Measure relevant effort or performance where the study supports it. Investigate whether support requirements make adoption practical in the intended setting.
A preference survey can identify an attractive concept, but it does not establish successful clinical use. Keep unresolved questions visible and plan the evidence needed to answer them.
Connect the results with the wider care system. The Theory of Constraints helps determine whether improving this job releases capacity or removes an obstacle governing patient progress.
“A useful concept improves an important clinical outcome of the job and remains practical within the system delivering care.”
Examine one clinical job your solution supports. Can the team state its purpose, identify its executor and show which outcomes remain poorly served?
Observe the work, validate the outcome statements and measure priorities. Then test concepts against those outcomes and their effects on patient flow. That is how Patient Centered Design connects professional insight with better products and more dependable care.
A patient may ask for a smaller device, a clearer display or an easier app. Those requests matter, but they leave a deeper question unanswered: what is the person trying to accomplish, and why does the current approach make it difficult?
Someone using a monitoring device may want to understand whether their condition is changing, decide when to seek help or manage daily activities with greater confidence. The device is one means of achieving that outcome.
A powerful question asks how well your organization understands the jobs patients are trying to get done. A strong answer connects patient research with clearly defined outcome statements that become the formal user needs your teams use to build the design history file. Outcome-based user needs are easier to validate, flow more easily into design requirements, and result in faster time to market.
“A feature request describes a possible answer. Understanding the patient’s job to be done sets your design team up to deliver a better solution faster.”
A useful job statement describes an activity the patient needs to accomplish in a relevant context. It should remain understandable without naming your product or preferred technology.
“Use our app every day” describes behavior your organization wants. “Provide a way to recognize when a change in my condition requires professional advice” describes the outcome a patient actually desires.
The distinction affects research. If the team starts with the app, it will ask how to improve screens and interactions. Starting with the job opens questions about information, confidence, timing and support. The best solution may involve changes beyond the app.
Define a scope the team can investigate. “Live a healthier life” expresses an aspiration but is too broad to guide detailed engineering decisions on its own. “Minimize the time it takes to find a solution to my health concern without needing to talk to a doctor or call someone” gives a team a direction, a measure, an object of control and contextual clarifier(s).
Journey mapping shows how people move through a particular care pathway. Job mapping examines what they must accomplish to achieve their purpose, including the work surrounding the interaction with your solution.
The two perspectives complement each other. A journey may show that a patient waits for follow-up. The job perspective asks what they are trying to understand or decide while waiting.
This matters because current processes can become embedded in the team’s assumptions. Patients may need a reliable way to recognize an important change; they do not necessarily need the exact sequence of activities currently provided.
Use the journey to understand context and dependencies. Use the job to examine whether a different approach could help the patient achieve the desired outcome more effectively.
Patient research begins with observation and empathy interviews at the Gemba, the place where the activity actually occurs.
For patients, that place includes the home and the settings in which they manage health alongside ordinary responsibilities. Ask people to demonstrate routines, explain decisions and describe recent experiences.
Observe what they do. Immerse yourself in the circumstances surrounding the activity. Engage through questions that let them explain their purpose in their own language.
A person may say that managing treatment is straightforward while observation reveals multiple reminders, improvised storage or reliance on a partner. Those arrangements can reveal effort and uncertainty that have become familiar enough to go unreported.
The aim is to understand the why your solution will win before making any decisions about what your solution will do. Customers will want your solution because of the outcomes it gives them, not because of what you made.
Patients with the same diagnosis may struggle with different parts of an activity. Differences in confidence, experience, resources and support can change how they define success.
Recruit participants whose circumstances reflect the population you intend to serve. Include relevant variations in health literacy, technology familiarity, physical ability and access to care. Are you targeting the tech savvy millennial, a busy parent trying to run a family with four kids or a retiree living in a managed healthcare facility?
Research should also examine emotional and social needs. A patient may want reassurance about managing a task alone or worry about drawing attention to a condition. Keep these needs visible alongside functional outcomes without assuming one design choice resolves them all.
The job mapping framework divides a job into eight recurring steps. These steps prompt investigation beyond the most visible interaction.
Apply these prompts to actual patient work. Some steps may recur or overlap. The map should help the team discover needs, rather than force experience into an artificial sequence.
“The most useful innovation may help a patient prepare, recognize an exception or recover confidence before it changes the device itself.”
Interviews generate verbatims: patients’ own descriptions of experiences, difficulties and expectations. Preserve that evidence, then interpret what each statement reveals about the job.
An illustrative verbatim might be, “I keep checking because I don’t know whether the reading matters.” The desired outcome may concern recognizing a meaningful change or understanding what action is appropriate.
A structured outcome statement identifies the direction of improvement, a measure, the object being controlled and relevant context. For example: “Minimize the time required to determine whether a change in a reading requires contacting my care team.”
Ask the team if there are uncovered outcomes that can set your solution apart related to how it is purchased, installed, received, set up, learned with training support, transported, maintained, upgraded, replaced or disposed.
This formulation gives research and design a clearer target. It does not establish a clinical threshold or promise that a device can safely make the decision independently, but often the features that will make your solution “easy to use” or set you apart will come from these outcome statements.
Several comments may describe the same need. One comment may contain multiple needs. Review the evidence carefully before combining it into a set of outcomes.
Remove duplication, separate distinct outcomes and retain links to the original accounts. Use plain language that patients can understand. Avoid embedding a particular feature in the statement.
Check the interpretation with participants or other appropriate reviewers. “I want fewer notifications” might mean reducing irrelevant interruptions while preserving important information. Treating it as a demand to suppress all alerts would misrepresent the need.
The output should be a coherent set of outcomes organized by job step. Completeness and clarity matter but typically it is ideal to have at least 100 and no more than 200 outcome statements for the team.
Qualitative research discovers needs and explains them. Quantitative research helps determine how widely they matter and how well existing approaches satisfy them.
Ask patients to rate the importance of each outcome and their satisfaction with their current ability to achieve it. Make the reference situation clear so respondents evaluate comparable experiences.
A high scoring importance outcome with low satisfaction deserves investigation. High satisfaction may indicate that the need is already well served so the team can use what already exists and put more time in creating innovative solutions to high importance low satisfaction outcomes. Low importance can reduce its priority, although clinical safety requirements cannot be dismissed through a popularity score.
Use a research design appropriate to the intended population. The outcome statements are easy to rate on a five point Likert scale. Choose population quantitative research in alignment with your target persona groups.
The Outcome Driven Innovation approach uses importance and satisfaction to identify underserved outcomes. Its opportunity calculation adds importance to the positive gap between importance and satisfaction.
Use compatible scales and a clearly defined calculation. Interpret the result alongside the underlying responses, research quality and the clinical context.
Examine differences between groups. An outcome that appears adequately served overall may remain difficult for patients with less support or a different level of experience.
These differences can reveal meaningful segments based on unmet needs. They help the organization avoid treating demographic similarity as evidence that patients need the same solution. Prioritization should retain enough detail to explain whose outcome the proposed improvement will change.
A target product profile brings the priority outcomes together with business goals, available technology and other relevant requirements. It helps the team agree what success should look like before committing to a concept.
Translate patient outcomes into design inputs and measurable requirements while preserving traceability to the evidence. Define which questions remain uncertain and what research or testing will resolve them.
Evaluate concepts against the outcomes they are intended to improve. Ask whether the proposed approach reduces effort, uncertainty or difficulty for the relevant patients and results in higher satisfaction scores than the baseline solution. A favorable reaction to an attractive prototype provides limited evidence unless the team can connect it with better execution of the job.
A priority patient need may involve work performed by a clinician, caregiver or service provider. Investigate those dependencies before deciding that a product change will solve the problem.
The Theory of Constraints helps identify where improvement can change the performance of the wider pathway. A better patient interaction can have limited effect if access to essential support remains constrained.
A Value Management Office can coordinate the initiatives needed to address these connected issues and keep investment aligned with patient outcomes.
“Patient insight becomes useful design evidence when the team can show which outcome matters, who struggles with it and how the solution improves it.”
Use patient jobs to be done to review one priority patient job. Can your team state it clearly, map its steps and demonstrate which outcomes are highly important and poorly satisfied?
Start with observation and patient conversations. Build and validate the outcome statements, measure priorities and test concepts against them. That discipline gives Patient Centered Design a practical foundation for better products and more lives changed for good.

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