Podcast Summary
Bred To Lead | With Dr. Jake Tayler Jacobs
Host: SIPS Healthcare Solutions
Episode 36: The Healthcare Parallel: Why Optimizing the OR Alone Never Works
Release Date: January 20, 2026

Main Theme & Purpose

In this episode, Dr. Jake Tayler Jacobs unpacks the critical concept of “operational blindness” in healthcare operations, using the sterile processing department (SPD) as a universal case study. Drawing on lessons from IBM’s turnaround under Lou Gerstner, Dr. Jacobs argues that real organizational transformation is only possible when leaders address upstream constraints—like SPD—instead of focusing solely on optimizing high-profile, downstream environments like the operating room (OR). The episode challenges listeners to reconsider how “unseen” departments act as bottlenecks and why fixing the system, not just the people, is the only path to sustainable excellence.

Key Discussion Points & Insights

1. The Recurring Meeting & the Real Problem

• [00:01] Dr. Jacobs tells a story familiar to many in healthcare: executives gather for a regular meeting, frustrated by rising costs, delays, and untraceable revenue leaks, only to find that metrics from the SPD “look fine.” Action items are assigned, but months later, nothing changes.
• Key insight: The actual issue is systemic, not personal or managerial. “Last episode I told you about IBM and how Lou Gerstner discovered that the problem wasn’t the people, it was the system.” [00:38]
• Memorable moment: The loop of unsatisfying explanations (“staffing challenges, volume spikes, supply chain issues, difficult surgeons”) never solves the root problem.

2. Why SPD Is Everyone’s Problem

• [03:02] SPD is more than a departmental problem—every organization has its own “SPD”: the overlooked, upstream support function that quietly limits downstream performance.
  • Healthcare: SPD constrains the OR
  • Manufacturing: Could be supply chain or maintenance
  • Tech: Infrastructure or QA
  • Professional Services: Back office or knowledge management
• Quote: “The functions you overlook become the ceilings that you can’t break through. And we focus on SPD because that’s our expertise…But the patterns we’re going to discuss—they apply everywhere.”

3. The Pattern: Systemic & Universal

• [05:00] Across hospitals, regions, systems, the names and charts change, but the core dysfunction remains:
  • Leadership senses SPD is broken, but can’t get satisfactory answers
  • SPD leadership believes they’re performing well (metrics look fine)
  • Downstream, everything feels off—costs, delays, quality issues
• Quote: “They weren’t lying, they weren’t lazy…They just couldn’t see what everyone else was seeing.”

4. Introducing “Operational Blindness”

• [08:30] Dr. Jacobs defines and reads from his book Operational Blindness:
  • SPD is treated as a “cost center,” “always reactive,” a “necessary headache.”
  • These ingrained beliefs become self-fulfilling prophecies.
  • Notable excerpt: “They can’t see what you see. They can’t see the surgeon’s frustration. They can’t see the case delays that cascade through the OR schedule…They’re not hiding the truth from you. They’re hidden from the truth themselves.”
• Quote: “The belief creates the reality it predicts.” [13:25]

5. The Upstream Constraint & Why OR-Centric Fixes Fail

• [14:25] Hospitals investing in the OR (scheduling software, Lean processes) see initial improvements, then inevitably “hit a wall.”
  • Analogy: The OR is the river’s mouth; SPD is upstream. If there’s a dam upstream, widening the river downstream does nothing.
  • “You cannot optimize downstream performance when the upstream constraint is unaddressed.” [15:20]
• Result: Cases start late, surgeons wait, quality is compromised.
• Theory of Constraints: “You can optimize the OR to perfection. But if SPD can’t reliably deliver instruments, the OR will never perform at its potential.”

6. Disconnected Realities: Metrics vs. Outcomes

• [18:30] SPD tracks internal metrics (turnaround times, process productivity) that look fine, while organizational outcomes (delays, costs, risks) tell a different story.
• Quote: “The SPD director is measuring one thing, you’re experiencing another. And nobody has built the bridge that will let them see what you see.” [19:45]
• Memorable analogy: NASCAR team—driver (surgeon), pit crew (OR), garage (SPD): all essential, all interdependent.
  • “You can have an amazing driver. But if the car is crappy, the pit crew is crappy, it doesn’t matter.”

7. Operational Blindness: The Definition

• [22:30]
  • Systemic: Not about individual competence or effort.
  • Structural: Visibility is missing because the system’s measurement and feedback mechanisms are broken.
• Quote: “You can replace every person in the department and still have operational blindness.”
• Key Insight: “What you measure shapes what you see. What you see shapes what you manage.” [24:10]

8. Practical Impact for Different Leaders

• [26:10]
  • CFOs: Chase unexplainable cost overruns
  • COOs: Hit ceilings in efficiency, despite downstream efforts
  • CNOs: See persistent quality risks
  • SPD Directors: Meet targets but still get criticized
  • Periop VPs: Caught in conflict with no clear solution
  • CEOs: See endless cycles despite turnover and consulting spend
• Quote: “A lot of people in a lot of organizations try to fix the people versus fixing the system. Fix the system, fix the problem.”

9. The Cure: System, Not Slogans

• [29:00]
  • Telling people to “try harder” or “see better” doesn’t solve a visibility gap
  • The solution: build new systems, metrics, feedback loops that align SPD’s work with organizational outcomes
  • Dr. Jacobs introduces SIPS Healthcare’s “Sterile By Design” operating system as a methodology to align and connect, not just consult
  • Commitment to change means building new infrastructure, not just tweaking policies

10. The Deeper Cost—At Work and Home

• [31:40]
  • Operational blindness isn’t just a professional frustration—it follows leaders home, becomes anxiety, and impacts personal well-being
  • Many leaders feel guilt for systemic issues they can’t control
  • “What happens at your job does affect you at your home life…if you are a leader…there is some function of blindness…that is not your fault.” [34:20]

Notable Quotes & Memorable Moments

• On self-fulfilling prophecies and beliefs:
  • “When you call something a necessary headache, you’ve already decided it can’t be excellent.” [13:25]
  • “The belief creates the reality it predicts.”
• On visibility gaps:
  • “They’re not hiding the truth from you. They’re hidden from the truth themselves.” [11:54]
• On the inadequacy of “trying harder”:
  • “You can’t just tell people to see better. You can’t fix a visibility problem by trying harder.” [29:15]
• On leadership responsibility:
  • “A lot of the mistakes happening in healthcare are not your fault. You’ve been trained in a specific way and a lot of times you’re reprimanded on the very way you were trained…It’s a total new system that’s needed.” [36:40]
• Analogy memorable moment:
  • “You can have an amazing driver. But if the car is crappy, the pit crew is crappy, it doesn’t matter how good the driver is, the driver…won’t succeed.” [20:40]

Key Timestamps for Important Segments

• [00:01]: The weekly executive meeting: recurring frustrations in hospital leadership
• [03:02]: Why every organization “has an SPD”—the universal upstream constraint
• [08:30]: Reading from Operational Blindness—defining the syndrome
• [14:25]: Why OR optimization alone fails—explaining the “wall” everyone hits
• [19:45]: The NASCAR analogy and how disconnected metrics breed dysfunction
• [22:30]: Operational blindness defined; system over individuals
• [26:10]: Practical impact: CFOs, COOs, CNOs, SPD Directors, Periop VPs, CEOs
• [29:00]: Solution is systemic: new metrics, new connections, not slogans
• [31:40]: How operational blindness bleeds from workplace to home

Final Takeaways

• The SPD (or its equivalent) is often the unseen bottleneck controlling the flow and quality of downstream operations.
• Efforts to optimize high-visibility domains will stall if upstream dysfunction is unaddressed.
• Operational blindness is a systemic, not personal, failure of visibility and measurement.
• The cure lies in fundamentally restructuring how systems, metrics, and feedback connect departments and their outcomes—not in blaming or replacing people.
• Both organizational health and personal well-being are at stake; the invisible frustration leaders take home is rooted in these systemic gaps.

Next Steps for Listeners

• Download the “Operational Blindness” white paper at sipshealthcare.com for a detailed breakdown of hidden costs and solutions ([28:00])
• Explore Operational Blindness (the book) for a comprehensive diagnosis and roadmap
• Schedule a demo with SIPS to see the “Sterile By Design” system in action
• Reflect on your organization’s “SPD”—what’s your upstream constraint?
• Share the episode with leaders struggling to make sense of operational blockages

Closing Quote:
“The elephant can dance. But first we have to help it see.” — Dr. Jake Tayler Jacobs [38:42]