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Leveraging Lean Six Sigma – Wringing Out Costs

Alas, as is true in the private and non-profit sectors, a great plan is useless without execution and the will to see things through. There are several vexing and problematic things that work as roadblocks to rapidly deploying the improvement to processes that are unique to governmental operations. I am going to share my observations here NOT with the intent to vilify anyone who currently works in government operations. Let’s face it — it has taken over 100 years to create the current state of government operations. Instead, I believe it’s important that all the concerned parties face up to some facts and begin working together to break those roadblocks down.

Only through understanding the roadblocks in an open and honest way can we find ways to break through and quickly improve “efficiency” and “right-sizing” in government operations. These issues are not unique to the state of Michigan either — they are alive and well in federal, city, school, college and county government operations in Michigan, and in every state in the U.S.

The issues we must understand and address together that precede any meaningful changes include:

  1. Breaking the status quo: takes a willingness to change.
  2. Focusing on innovations and outcomes versus protecting “turf”.
  3. Facing the reality of cost: 80% or more of the cost of most government operations is people.
  4. Facing the reality of the solution: all organizations can only function through people and only the people working in government can make the necessary changes effectively – no one knows the work better than the people who do it, and no one can do a better job making the necessary changes.
  5. This is where YOU come into the picture: only an informed public that understands the options will be able to support a non-partisan solution.

Let’s look at each of these.

Breaking the Status Quo – a Willingness to Change

Without a compelling reason for change — there won’t be any. This is a leadership challenge that ultimately can only be fixed by you. Each taxpayer has a voice in who will be the leaders of our government operations — our politicians who make the laws and set the budgets. Only by making “efficiency” a non-partisan platform issue will we end up with the leaders at all levels of government who will have the courage — and support of voters — to act.
The good news is this: getting more efficient in government is not unprecedented. In parts of our government operations, you will find examples of how this works in practice.  The U.S. military has been on the quest to learn and apply operational excellence and LSS methods for years — and has succeeded in many areas to achieve great improvements in efficiencies without decreasing our nation’s security. I personally know many people who are living proof it works.

All we need now is the will to require change. More on how we can do that later.

Focusing on Innovation and Outcomes Versus “Turf”

Once we get past the top-levels of leadership — we now get to the thousands of middle-level managers in government, the unions, communities, and other “special interests.” The trick here is to get currently divided, “silo” structured organizations to come together and look at what can be done to innovate what we do and streamline and reduce the cost of government operations without sacrificing value-add services provided to the public. A simple idea is consolidating purchasing and accounting to a single location — thereby fully leveraging the purchasing power of the entire organization with fewer vendors who in turn can share savings based on a bigger economy of scale.

This area — consolidation and streamlining of government operations — offers huge and quick opportunities. State, county, and city government operations are all full of redundant processes that are candidates for consolidation.

But there is a rub: Who is going to be the lead dog? If, for example, all city government operations in a county were going to join forces with the state and county government to have a single, consolidated (and much more efficient) central organization for schools, social services, police, fire, street maintenance, etc., who decides how this will now be structured? Natural human tendencies are to protect what you know and are familiar with and resist what you don’t know or control. For sure this is true: no matter what decision is made to consolidate and streamline – someone will be unhappy with the decision.

Stakeholder groups will feel their ox is being gored no matter how carefully we attack these issues.

The only sensible solution to this problem is to bring the parties together and take a look at the best outcome solution. Start with clearly documenting the basic value-add services to be provided by government without worrying about who provides that service today. Once we have a handle on the activities that specifically add value the public clearly will pay for, we then can evaluate all the other activities we don’t want to pay for. By focusing on a specific outcome — say, providing public safety — we then can back the most efficient solution that keeps public safety people in the right places at the right time. By doing this in a manner that used the desired outcome to shape the design of the most efficient support process to achieve its promises to give a non-partisan, non-special interest solution.

The team that represents all the stakeholders now has a chance to truly innovate how government services are delivered; to make a non-political, non-special-interest influenced decision that provides the lowest total cost solution with maintaining and even improving the public value derived from the services provided. Two examples of innovation as tiny examples of what is possible in innovative thinking:

  • Toronto, Canada – parking enforcement. As I found on a dark rainy night to my dismay, cab drivers in the city of Toronto have been enlisted to write parking tickets. So, while waiting for fares they can perform a value-add service for the city in enforcing parking regulations, thereby increasing revenue – imagine hundreds of parking maids on the job 24×7 – and even make a few bucks on the fines collected.
  • Colorado Springs, Colorado – in the news “COP Program Has Cab Drivers Helping Local Police – A new partnership between a Colorado Springs business and local police has cab drivers looking out for crime.” A cab driver says “As a driver who’s out at all times of [the] night and all over the city, you see things going on and to have a direct way of reporting that to the police is definitely a plus.” Imagine what happens if the bad guys now know any passing cab can report and support enforcement.

Before we get too excited, we need to realize that in both these cases, we potentially will now need a smaller sized government operation, while at the same time increasing revenues and security. Somebody’s ox is getting gored for sure!

Facing the reality of cost: 80%-plus of the cost of government is people

Now for the hard part: The elephant in the room we must face is the fact that if the government needs to cost less, we need fewer government employees working smarter (not harder!) to provide high-quality services to the public. Already in flight nation-wide by government leaders are efforts to make sure public employees enjoy pay and benefits equitable with the general public — that makes sense. The much tougher issue is just plain needing fewer public employees as a result of innovations and working smarter.

Here’s a startling fact: on average, at least 50% of every tax dollar we spend in any government operation today is wasted — using the skills in OpEx/LSS has proven this repeatedly. Now, before you send me to hate mail or throw rocks through my front window, let me remind you this is not a vilification of the people who work in government. Despite what you may believe, almost every government worker I know is at least as hard-working and dedicated as employees are in the private/non-profit sector. You would be surprised how many unionized government employees will willingly work off-the-clock to make sure the public good is served from time to time.

The problem is not the people who work in government operations. It’s in fact that we have wasteful processes we force them to work within that create all the waste. This leads me to the next issue — the fact the best solution to eliminating the waste is through an inclusive approach that involves current government employees in fixing the problems.

Facing the reality of the solution: all organizations can only function through people and only the people working in government can make the necessary changes

Who are the folks that are the experts at the value-add work done for the public good? Yes. The government workforce that provides the services today.

Trust me on this one: If we are willing to engage the government workforce (including union leaders and members) in the process of “innovating” and “re-engineering” how we deliver public services, I am certain the results will be amazing. I can say this with great confidence because it has already happened and is happening in small pockets in government operations in many instances. That is, if we have the will to tackle tough issues.

What is missing is the will and the guts to make embracing an inclusive approach to operational excellence an across-the-board mandate, followed by providing the leadership and resources to make changes. Only by engaging the entire government workforce in a solution will a lasting and sustainable solution emerge. Lest we think this is a simple matter — it isn’t. In addition to the need for leadership, we must also invest in the necessary training and support for government employees to do the heavy lifting required for these changes to occur.

Only an informed public that understands the options will be able to support a non-partisan solution and the necessary leadership and resources to effect needed change

The state of Michigan has several promising sources of ideas and public awareness that we can tap into. The Detroit Chamber of Commerce is the most politically active chamber in the country (MetaOps is a member) that is actively involved in identifying and communicating options for change. Other sources of ideas and information to tap into including the Center for Michigan, Detroit Renaissance, Citizens Research Council, Leadership Michigan and the Mackinac Center, to name a few.

Where do we go from here?

For starters, you can do what I am doing. Get involved and make sure your voice is heard locally, and in Lansing. Let me share a little secret I learned from a lobbyist outside the legislative chambers in Lansing: If a representative gets just 10 emails about a particular subject they get nervous. Just 10 emails — not hundreds or thousands. So my advice to you is to find the venue that works for you to be heard on this topic — and speak up. With a loud, frequent, unified and non-partisan voice insisting our leaders must lead transformation, we have a shot at building the momentum for leadership that truly has the will — and backing — to make fundamental and lasting changes through innovation and leveraging LSS, OpEx, and BPR going forward.

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