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Lean Government's Promise of Going 'Lean'

It's the latest, busiest trend in government management. Just don't call it a fad.

In these incredibly tough budget times, you would think government agencies would be working extra hard to find ways of doing things more efficiently. Unfortunately, leaders across the country are grabbing the same old playbook -- hiring freezes, travel restrictions, delaying maintenance and so on.

They're not examining the actual work being done -- the operations are fundamentally the same. Instead, they're left with tired, overworked employees trying to do the same operations with fewer resources.

This approach creates an illusion of efficiency. Real efficiency is about looking at the systems -- the way work itself is designed -- and finding ways to streamline the work so that we do our important tasks very well in less time and with less hassle. Systems are where the costs are incurred. Systems are where the customers show up. Systems are where the value of the agency is created. And systems appear to be the last thing anyone is focusing on.

What exactly is Lean Government? It's a mindset and a discipline to increase our capacity to do more good. There are four key steps:
1. Be clear about your purpose and bottom line. What good are you trying to create?

2. Know what customers want and what they value.

3. Build great widgets. Permits, child abuse investigation reports, substance abuse counseling programs, tax audits and so on.

4. Find a way to make the widgets better, faster and cheaper. Notice the sequence. To paraphrase Peter Drucker, the father of modern management, it does no good to make more efficient that which should not make at all.

But there is one promising new fad on the horizon that may actually change this. Some of you may already be acquainted with it: It's called "Lean." Like most management fads, this one started in the manufacturing industry. In fact, it's often referred to as Lean Manufacturing. Based on the system Toyota used for producing high-quality low-cost vehicles, Lean focuses on reducing waste. In this case, that means any activity that does not add value to the customer.

Lean is the reason Toyota dominates the auto market. Lean is the reason an Iowa business can get an environmental permit up to 90 percent faster these days. Lean is the reason Missouri taxpayers get their refunds in two days -- all with fewer resources. Quite simply, Lean is the best hope for actually helping government deal with the challenge of crushing demand and limited resources.

The Promise of Lean Thinking

So what make Lean so promising in government? Three things.

1. Lean actually focuses on operations. The whole point of Lean is to rethink the way we produce what we produce, to increase our capacity to provide value to those we serve. Lean recognizes that inefficiency resides in our systems and our operations -- the way we have designed our work. Lean is not another planning model, measurement method or accountability system. Lean is not a pithy slogan or something you tell employees to do. Lean actually focuses on the work of the agency.

2. Lean has a measurable impact on time, capacity and customer satisfaction. That is, it actually works. Lean projects produce amazing results, and they're often completed in as few as five days. The typical results of the teams I have worked with include 80 percent faster processes, 50 percents drops in customer wait-times, doubling capacity, reducing phone calls and, of course, savings costs. Change agents in Iowa, Maine and Georgia are experiencing similarly impressive returns.

How is this possible? I touched on the key to this in a previous column, Extreme Government Makeover. On the show "Extreme Makeover: Home Edition," the team constructs a house in only seven days, as opposed to the nine to 12 months it typically takes to build a new home. How does the team do it? By focusing on all time-wasters and eliminating them. The team doesn't cut corners -- the family still gets a roof. But the "Makeover" crew finds a way to work on the corners at the same time they are installing the plumbing.

That show is a perfect illustration of the opportunities in any process, government included. For almost any process, the actual labor accounts for less than 5 percent of the total time a process takes. So in a nine-month permitting process, there may be about two weeks of actual hard labor. A hiring process may involve three days of work stretched out over three to four months. Where does all that time go? Batching, bottlenecks, backlog, checking, re-checking and CYA. A Lean approach works to eradicate the lost time by eliminating these barriers. When the system runs faster, we can get more done with the same resources.

3. Lean involves employees. Specifically, the employees who work within the system being improved. We've tried employee involvement before, with suggestion programs, quality teams and so forth. While the intent of those programs was good, the focus was too small. Employees may be able to suggest ways to improve their own performance, or the piece of the process they're involved in. But systems cut across silos. Most employees can only see a part of the whole system. Therefore, what might help them personally be more productive could actually hinder the larger system. Lean projects, on the other hand, involve all the key players in a system (including the customers) to analyze the whole thing.

This fad has real promise. This fad has a chance to radically reshape government. And if I keep calling it a fad I'm going to greatly upset my friends in the Lean Government community. But that's exactly why I'm writing this column. The tenets of Lean are too important for this approach to be relegated to a mere fad. A fad is something we follow for a short time with exaggerated zeal -- like the Macarena and CB radios. We desperately need "lean thinking" in government. But the way it's being introduced, it's destined for the bottom of the toy box with my pet rock, Furbee and "quality circles."

So how can we avoid this fate for Lean?

The Three Barriers to Lean's Success in Government

1. The industrial jargon is a turn-off. Having lived through TQM and reengineering in government, I saw first-hand how repulsed public-sector people get with private-sector terminology. Visions of "ISO-9000 certified factories producing just-in-time defect-free widgets" did not light a fire under government managers. The Lean terminology of waste, value stream, Toyota Production System, supply-chain, and 5S isn't helping either. All of these terms conjure up visions of cogs in a machine mass-producing undifferentiated widgets for happy customers. This is the exact opposite of how most people view their work in government.

For any of you who have read my book We Don't Make Widgets: Overcoming the Myths That Keep Government From Radically Improving , these arguments will sound familiar. And they are precisely what I wrote the book to address. The Lean concepts -- increasing capacity, making processes flow more smoothly and understanding what customers value -- all can have a huge impact on government performance. But only if people in government believe the concepts apply to them. The more we obfuscate helpful concepts with industrial-age terminology, the more barriers we put up to achieving change.

And while we're on the subject of jargon, you might want to revisit my column on buzzwords and why you should never give your shiny new change initiative a name.

2. Government executives generally don't care about operations. Most elected officials and government executives didn't join government to manage. Instead, they are driven by a deep desire to advance a cause, a policy issue or a political agenda. They get excited about bold new programs and solving big problems -- not about making the widgets. But the key to results in government is a combination of innovative policy and improving the performance of operations. There has to be a balance between "bold new stuff" and improving the "stuff we already have." Right now, though, the balance is out of whack. We have too much emphasis on policies, programs, politics and people and not emphasis on our processes. So how do you get government executives and policy makers to care about operations? That brings us to barrier number three.

3. The emphasis of Lean is on the wrong thing. The current focus of Lean is on reducing waste. This is a noble intention, of course. But I fear that, unless the Lean practitioners rethink their message, they will meet the same fate as Total Quality Management. TQM struggled in government for two key reasons: first, the manufacturing jargon; and second, TQM was ultimately an elaborate solution to a problem we weren't having. The emphasis of TQM was to reduce defects. And it did an amazing job at it. The control charts, the histograms, the fish-bone diagrams all helped identify, measure and reduce defects. So why didn't government jump on the bandwagon? Why weren't there Pareto charts in every agency lobby? Because reducing defects was not the problem in government. Our biggest hurdle doesn't involve defects or mistakes. The number-one challenge facing government is capacity. Simply, we don't have enough resources to keep up with ever-expanding and ever-more complex workloads.

That's why I'm really excited about the promise of Lean for government. I have seen first-hand that this approach gets to the heart of improving government: It increases our capacity to do more good. And that's how we address barrier number two, how we get execs to start care about operations. When we improve the processes of government, we free up the capacity to take on the "bold new stuff." That's what Lean should be emphasizing -- not the waste-reduction itself, but the ultimate effect that has, allowing managers to tackle the items on their wish lists.

There's a belief that when the current economic crisis lifts, we will all go back to life as normal. I'm not that optimistic. We in government have not met this crisis by fundamentally rethinking what we do and how we do it. We have met the fiscal challenges by cutting positions and freezing spending -- we'll come out of the crisis with less capacity to accomplish government services than we had before.

That's why the aftermath of this budget crisis is the perfect time to use the principles of Lean to radically rethink what we do and how we do it. We should use this time to help policy makers understand the potential of improving the operations of government. Will it succeed? If we can overcome our limiting beliefs, get past the language barrier and tap into people's desire to make a difference, then we've got a real shot. In the meantime, I'm going to get my acid-washed jeans out of the dryer, put on my Snuggie and Twitter you about the progress.

Founder of the Change and Innovation Agency
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