The Formula for Operational Excellence in Government

Successful efficiency efforts have several important things in common, as three case studies illustrate.
September 7, 2017
Formulas on a chalkboard.
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By Stephen Goldsmith  |  Contributor
Professor of practice at the Harvard Kennedy School and director of the Innovations in American Government Program
By Jane Wiseman  |  Contributor
Leader of the Institute for Excellence in Government

If there were a playbook for more efficient government, would you read it? How about a how-to guide for cutting your city's operating costs by $15 million or $25 million a year? Or a guide to achieving $33 million in process efficiency savings for your state? Three case studies, highlighted below and now available in greater detail from the Harvard Kennedy School's Operational Excellence in Government Project, explain the implementation steps, the key challenges and the driving factors for success:

• A description of how New York City stopped paying for empty desks and offices, right-sized its real-estate portfolio and generated $15 million in annual operating cost savings as well as $4 million a year in energy cost savings. The project adopted private-sector office-modernization concepts that increased efficiency and proved millennial-friendly. It also identified policies that wasted space, such as a cumbersome process to send old computers to surplus that had turned valuable conference rooms into electronics cemeteries.

• A study of the steps Atlanta took to generate $92 million in one-time savings and $25 million in annual operating savings or new revenue by implementing recommendations of its Blue Ribbon Commission on Waste and Efficiency in Government. Significant savings were achieved by selling excess city property and by aligning employee health care costs with private-sector standards.

• The details of how the state of Washington used performance management and process improvement to generate $33 million in annual savings, drive efficiencies such as 1 million avoided hours waiting in line at government offices, and save lives by achieving a 15 percent decline in speed-related deaths. The process- improvement effort returns $4.50 for every dollar invested by the state.

The Operational Excellence in Government Project, funded by the Laura and John Arnold Foundation, seeks to identify and celebrate success in making government more efficient. We chose to highlight these cases based on the strength of their results. In looking across the cases certain commonalities recur:

A clear sense of purpose. Atlanta faced a $1 billion infrastructure backlog and needed operational savings to fund repairs to bridges, roads and city buildings. This urgency and focus motivated the commission to identify $199 million in savings in just three months. New York City also had an urgency behind its efficiency effort in that the city faced a significant budget shortfall after the financial crash of 2008. A strong sense of purpose focuses the message on the goal, which helps because messaging about process in government is a recipe for boredom.

A plan and a way to stay on track. Washington state developed a realistic multi-year roadmap for implementation of its efficiency initiative and made it public. The clarity of roles and responsibilities, from the governor to department heads to customers, was explicit, as was the timeframe for delivery of each step. Atlanta developed perhaps the most comprehensive set of roadmaps and delivery schedules for each of the efforts it undertook, and its templates are included in the case study. Each of the three cases had strong project management and consistent reporting of status and results.

Strong executive and project leadership. The right-sizing of New York City's real estate portfolio was a high priority for then-Mayor Michael Bloomberg, who himself worked in an open-plan office and who as a businessman wanted to adopt private-sector best practices. The designation of the city's first chief asset management officer was a signal to department heads that this project was important. The project leader, Theresa Ward, was able to convey the urgency to department heads as she tracked progress and reported it publicly throughout the project. In Washington state, the personal, frequent and direct involvement of the governor inspired employees to engage in process-improvement problem-solving.

External expertise to inspire innovation. Atlanta gained significant value from the participation of private-sector leaders on its commission, with insight on a variety of issues, including lowering the cost of employee health insurance. In Washington state, 130 corporate partners devoted time and expertise to the Lean process-improvement efforts via training, mentoring and coaching of state employees. Corporate and university partnerships can help create support for government efficiency efforts and generate new ideas.

Reliance on data, early and often. The single factor that distinguishes these cases from efforts that have not been as successful is the focus on data. New York City used "rentable square feet" as its metric for assessing the size of the real-estate footprint and for setting targets on reducing overall occupancy costs. Washington state not only gathered data for its performance management effort but published it online in dashboards. And Atlanta used financial and operational data at every step, from estimating potential benefits of each effort to tracking the success of its results.