Is it Time for Lean Government?

The need for Government to reign in its escalating costs is prevalent in the daily reporting of every newspaper, television and radio broadcast.  One only has to look at these media reports to understand the issues facing Local, State, and Federal Government in closing budget gaps.  With 46 of our 50 states running budget deficits, the days of passing on increases and issues to the next administration are over.

Besides these alarming legacy costs, many Government sectors have identified that there are enormous wastes/costs involved in delivering current services.  The Governor of Connecticut, Dan Malloy, mentioned in his statewide budget address on February 16, 2011 some examples of this waste:

• There are 10 agencies in CT to make sure the other agencies do their job
• There are 5 agencies for business to work with to do business in CT, when there should be one
• There are 7 agencies focused on energy, when there should be one

In Minnesota there were 25 different agencies that a person with disabilities had to interface with, instead on one.

In the March 1, 2011, General Accounting Office (Federal, Non-Partisan) report:

“presents 34 areas where agencies, offices, or initiatives have similar or overlapping objectives or provide similar services to the same populations; or where government missions are fragmented across multiple agencies or programs. These areas span a range of government missions: agriculture, defense, economic development, energy, general government, health, homeland security, international affairs, and social services. Within and across these missions, this report touches on hundreds of federal programs, affecting virtually all major federal departments and agencies. Overlap and fragmentation among government programs or activities can be harbingers of unnecessary duplication. Reducing or eliminating duplication, overlap, or fragmentation could potentially save billions of tax dollars annually and help agencies provide more efficient and effective services. The areas identified in this report are not intended to represent the full universe of duplication, overlap, or fragmentation within the federal government. We will continue to identify additional issues in future reports.”

http://www.gao.gov/products/GAO-11-318SP

It’s very interesting to note in the GAO report that savings in the Billions/year can be achieved without hampering any programs!  In fact, implementing these recommendations would actually cause existing services to run more efficiently and effectively for their intended Customers, generating additional savings.

At the root cause of these organizational wastes, many are based on the services, processes, and procedures being “Government focused” as opposed to “end-customer focused (taxpayer)”.  Who really is the customer and how should they be serviced most effectively?

Lean is a set of tools and techniques that allows organizations to attack these wastes.  Some examples of State Governments using Lean/Kaizens:

Minnesota (http://www.lean.state.mn.us/LEAN_pages/results.html):

• Dept. of Human Services – Reduced the elapsed time for processing professional/technical contracts by 40% and reduced the amount of staff processing time by 30%.
• Veteran’s Affairs – 70% reduction in task time and a 58% reduction in wait time in the process for reviewing and approving financial benefits for qualified veterans seeking assistance.

Iowa (http://lean.iowa.gov/results/index.html): 142 Kaizens already done, such as:

• Dept. of Natural Resources – The construction procurement process – process steps were reduced by 46%, handoffs by 62%, and decisions were reduced by 56%.
• Iowa Workforce Development – Unemployment Insurance Tax Collection – reduced steps by 35%, delays by 56%, decisions by 30%, loop backs (rework) by 44% and handoffs by 78%.

Local Government is also utilized by (to name a few):

• Cape Coral, Florida
• Grand Rapids, Michigan
• Erie County, New York
• Ventura County, California

Links to these and other Government sites utilizing Lean can be found on:http://leangovcenter.com/govweb.htm

Similar to what would be done in the private sector; a more holistic approach to Lean embodies top management in the initial Lean training and, more importantly, how to introduce major change (Lean) into an organization.  Experience has shown that Lean, like any other major initiative, is more about changing the culture (Culture = “the way we do things around here”) of the organization (85%+ of the factors driving success), versus just a tools and techniques approach (15%).  If the actions, behaviors, systems & structures in the organization aren’t modified, success will be limited.  Ultimately, the broader the use of Lean and embedding it in the actual organizational culture, the more leverage/savings the organization achieves.

When Lean is coupled with annual employee attrition rates of 4% (historically) to now 6%+ due to baby boomers, Government can utilize Lean to provide improved services/capacity at less cost by removing the waste, while not having to replace departing employees.  In Lean Government deployment, attrition is advocated instead of layoffs.

A caveat when applying Lean is that the metrics for the “Measures That Matter” should have two components – the better, faster component for speed of service to customers/greater capacity and the cost/cheaper component to ensure the delivery of these services have less unit cost.

So, if Lean is so great, why hasn’t it spread like wildfire in Government?

1. Lean is a foreign paradigm to Government.  It’s new and seems like a panacea – how can something deliver less costs, reduce wastes and also provide better service and capacity at the same time (Lean does!)?
2. The “cost of not knowing” since Government leaders don’t know what or how to do Lean, it’s politically risky to take a leap of faith forward and use Lean.  So, slashing costs and increasing taxes through the old traditional methods wins out, leaving less service/capacity.
3. There is no competition in Government.  If you are the Mayor of a city, there aren’t 3-4 other Mayors competing for the city’s business or governance.  With no competition (except for elections), there is no outside driving force causing Lean to take hold, even in the face of huge budget issues

In summary, Lean is a clear solution for Government to provide greater service and capacity at reduced costs = Better, Faster, and Cheaper.  Finding good leaders in Government is the key to utilizing Lean and being successful!

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