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Buried Treasure: Mapping the Real Cost-savings in Government

Easy-to-find cost savings are a thing of the past. If you want to find treasure today, you have to dig.

When I was a kid reading comic books, there were always two ads that got rotated on the back cover — one for Sea Monkeys and another for a metal detector. I was curious about the Sea Monkeys (still am), but I was absolutely captivated by the metal detector. My mind filled with images of walking the beach, waving my magic device and finding unclaimed riches all around me. What kind of sack would I need to hold all that gold? How many baseball cards could I buy with it? Where could I find a good treasure map?

All I needed was a metal detector and a good map and all my problems would be gone, just like in The Goonies.

I was reminded of this when I attended Governing's Cost of Government summit last month. I met some truly wonderful people who were trying to get things done in these horrific budget times. They were great people searching for a better metal detector or a new map. For many this was their third or fourth pass combing the same beach.

The first time they'd tried, there were coins everywhere. They simply had to walk the beach and fill up the bag. The second pass was a little tougher. The metal detector didn't make much noise, and when it did it was usually close to a body builder and his girlfriend and they weren't moving. The third pass was tougher still. Convinced that perhaps the metal detector wasn't working properly, they bought better ones or borrowed ones from their private-sector friends. But still no gold.

Seems the only coins they could find were in the buckets of children playing on the beach, and they couldn't go after them without looking like the bad guy or making a little girl cry.

Today, the beach is completely empty. Ransacked. There are no more coins to find. No blue-ribbon metal detector is going to help them materialize. The surface has been picked clean.

But that's okay. Now we can put away the metal detector and grab a real tool — a shovel — and start digging. The treasure we all seek is buried underground.

As we discussed in our previous column, underneath the metaphorical floors, behind the walls and up in the ceiling are the pipes of your agency. The pipes — that is, the systems and processes — are how you deliver value to those you serve. Whether it's food stamps, permits, health inspections, court orders or whatever, they all travel through our pipes to meet the needs of those we serve. As we discussed, those pipes, unfortunately, are rarely short, straight pathways. Instead, they are kinked-up, gummed-up, twisted, contorted messes ravaged by 15 years of CYA, four reorgs and two failed technology projects. What used to be a one-day, three-step process has become a nine-month, 15-step odyssey. And that odyssey is very expensive.

The pipes, in addition to being how we deliver value and service, are also where all the money is going. Costs are in the pipes. If you want to lower the cost of government, you have to fix the pipes of government. You have to find a way to remove the kinks, straighten the curves and speed the flow. When we speed the flow, more water gets through. If we can move more water with the same resources, then we are reducing costs. If we move more water with less resources, then we have our gold mine.

Simple concept. So why isn't everyone doing it? Why aren't there teams of people in each agency working to understand their pipes, straighten them out and freeing up the lost capacity (and money) that inefficient systems contain?

Because we have a vision problem. No, not the lofty vision statements on the back of your ID badge — actual vision. We don't find the gold because we can't see it. We don't see the pipes in our agencies because we don't think of the work of government this way. We don't see the systems because we don't think about systems.

The converse of that is that we continue to focus on what we can see. We tend to see government in two ways: physically and fiscally.

Physically, government is a collection of buildings, fleet vehicles, radios, cell phones, copiers, paper, office supplies and people. These are all the things in government you can actually see with your eyes. When you try to improve what you can physically see, the solutions are fairly limited: Count it, automate it, consolidate it, upgrade it, modernize it, buy less of it or get rid of it. These are the grand ideas of the blue-ribbon commissions who, with no knowledge of or ability to see our pipes, grasp for what is tangible, what they can get their arms around. Which is why every blue-ribbon panel produces the same three recommendations: Consolidate, automate and motivate.

These solutions were all the easy coins to find on the beach. Most of you have suffered through the initiatives to print on both sides of the paper, turn out the lights in the Coke machine and take people's printers away. Was there money to be saved in those areas? A little. But the paper clips and fleet cars didn't cause the fiscal problem in government, and cutting them won't solve it either. The physical items of government are expenses; they are not costs. The costs in government are what cause those expenses to occur. The costs are in the pipes.

Fiscally, government is a collection of departments, programs, bureaus, sections, funds, budget categories, cost sections and people. (Incidentally, both the physical and fiscal ways of viewing government see people, which is why so many "improvement" programs are geared at people. That's a topic we will return to in a few months.). When you try to improve what you can fiscally see, the solutions are also fairly limited: Reorganize it, measure it, plan it, budget it, and hold it accountable. These are the ideas of the budget professionals who are chasing after the mythical obsolete program that is wasting everyones money in pursuit of outdated policy aims. If only we could get every agency and every program to complete a logic model, strategic plan, outcome measurements and hold them accountable, they will cough up these hidden leprechauns hiding their pot of gold.

The existence of these leprechauns is dubious. Their continued existence four years into the budget crisis is truly beyond belief. Government is not full of wasteful programs that accomplish nothing. Rather, when you run the ROI of all these programs they all come out positive. They all work, we just don't have the capacity to do them all. And that's our fundamental problem.

These two ways of seeing the work of government — physically and fiscally — have yielded modest returns. Bet we keep turning over the same rocks. To find the kind of savings we are looking for requires seeing the world completely differently, looking under new rocks on an entirely different beach. It requires seeing the work of government as systems and pipes. The pipes don't fit neatly in organizational boundaries or budget line-items. The pipes don't care if fleet maintenance is centralized or decentralized. The pipes just know that there is a lot of water coming in one end that has to make it out the other end.

The fiscal view of government questions the efficacy or necessity of the pipe. The physical view is trying to use cheaper pipe (plastic instead of copper). The reality is the pipe is here to stay because the people need the water it delivers. What we can change — and must change — is how that pipe is configured. A short, straight, high-velocity pipe is fundamentally cheaper than a long, twisted, low-capacity pipe. If we can move more people through a faster, shorter pipe, we have found our pot of gold.

In the coming weeks we will provide a map of the pipes that reveals where all the treasure is hidden and give you a dynamite metal detector to use on your agency. We will show you what drives cost, who drives cost, and most importantly how to make those costs disappear. We will also plumb the complex relationship between time and money and show how the things we do to improve actually make things worse.

All we ask in return is that you tell us what the Sea Monkeys really were.

Founder of the Change and Innovation Agency
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