A Performance Innovation That Actually Works

The “theory of constraints” can help governments address the core of practically any problem.
April 2019
(Ovadia Benishu)
By Mark Funkhouser  |  Publisher
Former mayor of Kansas City, Mo.

Every state has an unclaimed property program that returns money, stocks, dividends, utility deposits, insurance proceeds and other valuables to people who have lost track of them. When Terry Brown took over as Virginia’s claims processing manager, the unit had been backlogged for three years and the average time to process a claim was 120 days. Today, there’s no backlog, and the average processing time is less than nine days. The unit did this without more money, more people or new technology.

Brown and her team achieved these process improvement results using business management concepts such as Lean and Six Sigma. Process improvement is a useful tool, and the results achieved by folks like Brown are impressive. But Kristen Cox, executive director of the Utah Governor’s Office of Management and Budget, would argue that it alone isn’t the solution for all of the complex challenges faced by government.

Cox is a practitioner and advocate of the “theory of constraints,” which looks at the goals and the core problems that prevent systems from achieving their objectives. Cox says that the theory of constraints is more than just process improvement. It “is all about helping people get clear on designing the right policy or service in the first place before even going down the road of process improvement,” she told me recently.

In Stop Decorating the Fish, Cox and her co-author, economist Yishai Ashlag, have distilled the essence of the theory of constraints into a cute little fable in which “decorating the fish” stands for doing “the common and ineffective things” that have no real impact on performance. They refer to those actions as “the seductive seven,” and it’s a familiar list: more money, technology, reorganization, training and communication, data, accountability, and strategic planning. “We feel gratified,” they write, “when we successfully launch a new strategic initiative, secure more resources, or stand up a new IT or data analytics platform. But we need to ask, did we substantially move the needle after all of this work?”

From “creating a culture of innovation” to “developing predictive analytics,” Cox and Ashlag line up all of our favorite performance improvement toys and dump cold water on them. But the good news is that what comes out is ideas that can truly allow governments to make dramatic improvements in people’s lives. In case studies from areas as diverse as traffic congestion, government contracting and benefits eligibility determination, they show how to identify the core problem and address it in ways that would significantly improve outcomes.

Given the enormous legacy costs that most governments have, the challenge is to meet the needs of those they serve largely within existing resources. Here, too, Cox and Ashlag’s work is important because a critical piece of their method is to identify those things that governments can stop doing so that more resources can be focused on the right things. Capacity isn’t the issue. Cox told me that of the many systems she’s worked with, “I haven’t been in one that didn’t have significant capacity. Meaning, they had all the resources they needed to gain huge improvements.”

The critical question today isn’t about big or small government. It’s about more competent government that’s equal to the needs of those it serves. That’s what I think we’ll get when we put tools like those advocated by Cox and Ashlag into the hands of folks like Brown.