Two recent Governing news reports, "A Downsized Public Workforce May Be a Permanent Consequence of the Recession" and, just a week later, "State Spending Grows at Lowest Pace Since Great Recession," should be a red flag for public officials. Neither article suggests that a turnaround is in the foreseeable future. That suggests that governments are at a crossroads -- that they either will need to accept deteriorating government services as the new reality or adopt what for jurisdictions operating with traditional management practices would be a radical rethinking of the way work is organized and managed.
The second route would be a far smarter one for state and local governments, for their employees and for the public they serve, and there's plenty of experience in the private sector for them to draw on. The 1990-91 recession, along with increasing global competition, hit profitability severely and prompted corporations to abandon decades-old thinking. To that point, business organizations had not seen meaningful change since the post-war era. Executives made the decisions, managers carried out their commands and workers did what they were told. Companies were organized and managed as top-down, control-oriented hierarchies.
Workers were a cost to be controlled and minimized. Satisfying performance standards was all that was expected. What today is understood to be high performance was not a consideration.
But declining profitability prompted radical change. Layers of management were eliminated, decision-making was delegated and bureaucratic practices were eliminated, all to reduce costs and make companies more competitive. The old textbooks on organizational planning and work systems were effectively discarded. W. Edwards Deming, the Total Quality Management guru, was an early catalyst, arguing that front-line workers should be trusted. TQM was followed by re-engineering and the growing recognition that empowered workers could play a valued role in improving the efficiency of operations.
A meta-analysis in the early 1990s, based on more than 100 productivity studies, concluded that rethinking the work/management paradigm could trigger productivity gains of at least 30 to 40 percent, The years since have seen a revolution in management thinking. The business press through the decade reported significant performance gains when workers were empowered to address problems. Workers in a variety of settings now function independently and see their managers only occasionally. Research confirms that employees find the experience satisfying and rewarding.
The obvious point is that performance gains mean that fewer workers are needed. Technology is important, but the focus should be on fully utilizing the capabilities employees already have.
There are, to be sure, public employers that have adopted proven practices to raise performance levels. Tennessee's success was chronicled in Governing's November issue. And I recently posted a column in this space describing the significant gains and cost savings of Denver's Peak Performance program. Unfortunately, however, similar stories are rare. For the most part, state and local government lags far behind the private sector in rethinking the way work and workers are managed.
The barriers are obvious: decades-old civil service laws; elected officials focused on public-policy issues and who have little if any experience managing large employee groups; unions and an aging workforce that resist change; and supervisory practices that make government jobs unattractive to millennials.
Little help is coming from academia. Like elected officials, public-administration experts are focused primarily on policy concerns. In contrast to the private sector, there has been comparatively little research on innovative work practices.
And unfortunately, experts on people management have not been influential in government. Few human-resources directors report directly to elected officials. Their role continues to be dominated by administrative duties. Only a few HR directors have organizational roles that enable them to be accepted as champions for needed change.
We know what policies and practices can be expected to raise performance levels. Reform is not a simple problem, nor is the issue one that can be solved quickly, but the potential for improved results in government is certainly the same -- if not higher -- as in successful companies.
A possible early step would be to identify and publicize success stories. That's effectively what Denver has done. The former Peak Performance director is now a popular speaker at conferences. That is a success story that could be adopted at minimal cost in every jurisdiction.
Another possible step would be for government groups to undertake comparative studies to grade performance, as the Volcker Alliance did recently for state budgeting. Financial-management procedures were given grades of A to D-minus, and the report proposed a set of best budgeting practices.
Broad-based studies to assess workforce-management practices in government have never been undertaken, and what attention has been paid to best practices has not triggered widespread change. Grading management practices could provide the needed impetus. And it's time for ineffective practices to be criticized.
There is no reason to accept the argument that nothing can be done to stop or reverse service deterioration in government. The book Reinventing Government was published 25 years ago. The expectations it created were high, but in far too many states and localities reinvention has been forgotten. There can be no justification for continuing to rely on outdated management practices -- none. Change is possible; we know what needs to happen; the common thread in the few success stories we do have is the importance of strong, credible leadership.