Archive for the ‘Lean Management’ category

Continuous Improvement Is About Engaging Employees

April 15, 2012

Not very long ago Honeywell was a troubled company. Several years ago Honeywell changed how it operated by focusing on continuous improvement and engaging all levels of employees. The new management approach, which also involved the implementation of Six Sigma has had a positive impact.

Every department in Honeywell, including the smallest shop-floor unit starts the day with a short meeting (under 15 minutes) to identify problems and ideas for improvements, which are then pushed up to senior managers. All workers are expected each month to come up with two implementable ideas for doing things better.

This simple form of communication and tapping into employee ideas has reaped huge benefits for Honeywell as explained in a recent Economist article.

Sales in 2011 were 72% higher than in 2002, and its profits doubled to $4 billion. It used to take 42 days to make and deliver a sophisticated toxic-gas detector, for clients including Intel and Samsung; now it takes ten. The production process used to consume the factory floor; now, it uses merely a quarter of it. This has freed up the rest of the factory to make lots of other products.

In my 17 years of government experience it was a rare event where employee ideas were sought to improve how services were delivered. An important part of Toyota’s and Honeywell’s success has been the constant feedback sought and obtained from employees on how to produce products better. While many companies do not solicit and implement employee ideas, Toyota implements an average of nine ideas per employee per year.

We need more elected officials and department heads in government who are willing to communicate with and listen to ideas from employees and citizens on how to improve the operation of government. We need government officials who are willing to move beyond setting up a suggestion box.

How Denver Health Spectacularly Improved Their Operations

February 12, 2012

Patricia A. Gabow, M.D., CEO of Denver Health and Hospital Authority, has spectacularly  improved Denver’s public hospital and busiest trauma center by asking the right questions and implementing Lean.

In a blog post by Matthew Weinstock at Hospitals and Health Network Gabow says, “I was really becoming frustrated that we were doing things pretty much the same way as when I was an intern 40 years earlier,” Gabow says. “I started to ask myself, ‘Is there any other industry that has been so stuck in time and been successful?’ I talked to a service line director about it and he suggested that we did things the same way because it worked. ‘Give me a break. We can do better.’ I told him.”

So, around 2004, Denver Health applied for and got a grant to see if there was indeed a better way. They built an advisory panel and brought in experts from other leading industries — Microsoft, Siemens, and FedEx. Gabow held upwards of 60 focus groups with Denver Health employees, asking two key questions:

“What are the things that keep you from being efficient?”

And,

“what do you see happening to patients that you think is wrong?”

After a year of studying operations, leadership determined that there wasn’t “one magic bullet,” Gabow says. Instead, they realized that they needed a series of “linked endeavors.” That’s when they turned to Lean management. Gabow says Lean is appealing because it is based on respect and innovation. Secondly, the tools used in Lean are intuitive and relatively easy to teach and learn. Implementing Lean management  in 2005, has resulted in the following achievements:

  • Trained more than 250 employees as black belts in Lean
  • Completed more than 400 rapid-improvement projects, resulting in that $135 million financial benefit due to performance improvements
  • Last year alone, the hospital saw $46 million in financial benefits from Lean projects.
  •  Impressively, Denver Health has achieved the high quality marks and boost to the bottom line without reducing the workforce.
  • #1 — ranking in patient survival among the nation’s academic medical centers
  • 100 percent — number of patients receiving antibiotics in pre-op
  • 80 percent and $1.75 million — drop in blood clots among hospitalized patients and the savings as a result of reduced complications
  •  An impressive 60 percent drop in Denver Health’s observed to expected mortality. “That meant that last year, 250 people walked out of our hospital alive who would have been expected to die at another academic health center.” stated Galbow.

As CEO of Denver Health, Gabow’s leadership and willingness to ask questions has had a huge impact at the hospital. What do you think of the approach utilized by Gabow at Denver Health?

The Unfortunate Death Of Six Sigma In Erie County

January 30, 2012

American City and County Magazine ran an article recently titled Trimming the fat-or-not with Lean Six Sigma by Stephen Ursery. The article refers to the success of Lean Six Sigma in Irving Texas and its failure in Erie County according to Mark Cornell spokesperson for Erie County Executive Mark Poloncarz.

In Irving Texas, according to city manager Tommy Gonzalez Lean Six Sigma has improved operations by:

  • slashing the review time of a commercial building permit application from 49 days to nearly four days;
  • consolidated printers and copiers to save the city approximately $230,000 annually and reduced energy expenses;
  • the city also has eliminated 110 positions, helping save more than $30 million in total over the past five years.

Gonzalez says. “[Lean Six Sigma] is just something that I would really like government to do more off”.

In Erie County Mark Cornell stated the following in an e-mail to American City and County Magazine:

“The current administration (Chris Collins) has yet to provide any proven, quantifiable Six Sigma savings data that can be validated in [statutory accounting principles] or county budget documents.” “The seeming inability or unwillingness to prove the dramatic multi-million-dollar savings claims raises fundamental questions about the reality of the Six Sigma program and whether it is actually generating savings, process improvements or some other outcome.”

In an earlier post I mentioned that when Chris Collins was Erie County Executive the County’s web site listed 35 Six Sigma projects. By utilizing Six Sigma in Erie County the back log of processing child support cases was reduced from 7,281 to 103. Other Six Sigma projects focused on improving the response to after hour sewer complaint calls, and reducing the length of time to process nursing home applications.

These nitty gritty type projects are often not sexy or exciting but they are where citizens needing help get sucked into black holes of bureaucracy. Improving back logs and response time if possible without simply hiring more people is huge. To improve government you have to be willing to wade into the details of process and procedure to find where the bureaucratic glitches are. Chris Collins to his credit did that in a very specific way in 35 documented instances. Perhaps some of the Six Sigma success in addressing back logs or response time cannot be specifically quantified in dollars and sense perfectly, but such performance improvements are still meaningful and important.

Chris Collins’ arrogant personality hurt the image and acceptance of Six Sigma in Erie County. Newly elected county executive Mark Poloncarz’s personal dislike of Collins and everything Collins stood for has caused the unfortunate death of Six Sigma in Erie County.

Six Sigma has been successfully implemented in many private and public sector organizations and I believe that it was worthwhile continuing in Erie County. Governor Cuomo in fact has been utilizing Lean successfully in several state agencies.  Organizational change does not happen on its own, it has to be encouraged through an identified process or procedure. If Poloncarz is not going to use Six Sigma, then what process is he going to use to improve the operation of county government?

In addition to private sector companies such as Toyota, Lean has been implemented at the following municipalities and governmental agencies: San Diego County Health & Human Services Agency, King County, Washington, Brown County, WI, Fort Wayne, Ind., Hartford, CT., Cape Coral, FLA., Jacksonville, FLA., Grand Rapids, MI., Florida Dept. of Revenue, Washington State Dept. of Licensing, Iowa Dept. of Natural Resources, Maine Dept. of Labor.

To learn more about utilizing Lean in government check out the following links:

http://www.businessofgovernment.org/sites/default/files/MaleyeffReport.pdf

http://www.evolvingexcellence.com/blog/2007/04/lean_government.html

http://www.epa.gov/lean/government/starterkit/

http://en.wikipedia.org/wiki/Lean_Government

To Make Government Cheaper You Need To Understand Its Main Cost Drivers

January 26, 2012

This part four of a four post series regarding Ken Miller’s great book Extreme Government MakeoverIn Part 1 we learned that government is like a house in that most of the important work goes on in pipes hidden from public view behind walls. The problem with improving the performance of government does not lie with employees. Improving government performance requires us to focus on changing the systems (policies and procedures), that employees must work with. Governments system of pipes are broken, rusted and twisted, which limits their capacity to serve the public.

In Part 2 we learned five strategies to make government work faster. In part 3 Miller addressed the concern of whether making government work faster will affect the quality of government services. As Miller explained serving customers faster can actually improve the quality of services.

In this final post we discuss whether making government faster, and better can also make it cheaper? As Miller explains to make government cheaper you need to understand its main cost drivers.

The Five Main Cost Drivers In Government

 #1: Time – Serve the Customer as Fast as Possible. 

The old adage that time is money couldn’t be more accurate for government. The longer something takes, the more it costs. When something flows through our system quickly, there is little need to track it, batch it, inspect the handoffs, expedite the bottleneck, and so forth. The longer something stays in our pipes, the more we have to manage it. All that management translates to more costs.

Nearly every phone call we get in the public sector is a defect; that is, it shouldn’t have happened. Don’t believe me? Go spend an afternoon in your agency’s phone center. The vast majority of the calls are either “Where is my stuff?” or “I don’t understand.” They’re defects. Rather than spending more money to log, track, and quality-control these phone calls, we should instead spend more time eliminating the source of these calls. Great customer service means never having to call.

Cost Driver #2: Transactions – Serve the Customer In As Few Visits As Possible.

In many government offices up to half of the customers should not be there. Many of them are there for the second or third time to get something done. Each visit costs a government office time and money.

“I didn’t get it” and “I don’t get it” are two of the biggest cost-drivers in government. Make things easier to understand for your customers, and you reduce the number of transactions — along with costs.

Cost Driver #3: Mistakes – Do It Right The First Time.

Part of the cost of mistakes is obvious: You have to do the work again. But the true cost goes beyond that. The real cost of mistakes is the CYA they leave in their wake. Someone messes up; they’re told to never do it again; so they build in safeguards. But more CYA measures mean less capacity to do the work itself, which leads to more pressure, more rushing, more mistakes.

Instead of inspecting, we need to be preventing.

Cost Driver #4: Specialization – Have As Few Hands Touch It As Possible.

A Plan Review Specialist III costs more than a Plan Review Specialist II, who costs more than a Plan Reviewer. Higher specialization leads to higher wages and higher costs. Beyond the obvious, though, are the real cost drivers: Specialization creates CYA. Every time we specialize, we create a handoff. You do this, she does that. At every handoff, we eventually have to log work that comes in, assign it, track it, expedite it, log it out, and transport it. None of that stuff adds value. It just adds cost.

Cost Driver #5: Management – Leave People Alone and Let Them Do Their Work

Perhaps nothing drives up cost as much as the good intentions of management. Take a look at your day. What are you doing today? How much of it is mission work? How much of it moves the water through the pipes? If you’re like my workshop participants, you are spending less than 50 percent of your day making the widgets. Where does the other half go? Management. Staff meetings, budget exercises, team-building, accountability sessions, performance reviews, and on an on.

When we talk about “Better Faster Cheaper,” it’s not a best-two out-of-three situation. You’ve got to have all three. And you can. But you have to know where to start. If you start with “cheaper” — that is, with a focus on cutting costs within the systems you already have — you will likely become slower and make more mistakes. Most cost-cutting initiatives — consolidation, furloughs, layoffs, reduced equipment — rob us of capacity. Their effects are compounded when they impact our bottlenecks. Lost capacity slows us down. When things are moving slowly, corners get cut and people rush in order to expedite. These activities drive up mistakes.

If you start with “better” — focusing on quality and on not making mistakes — you will likely become slower and more expensive. When the goal is simply to eradicate mistakes, we often add layers of CYA and additional inspectors. These drive up cost and slow things down. But if you start with “faster,” you’ll actually get the other two. If we speed up the system and unkink the pipes, we can get more done with limited resources. When we go faster, we eliminate the biggest cost-drivers. By going faster, we also increase quality. You can’t be fast and make mistakes — you’ll get bogged down in rework. To be fast, we must eliminate handoffs and CYA and all the things in the system that cause mistakes. By making the system faster, you increase the capacity of the staff, which allows them to spend more time doing quality work.

Better, faster, cheaper. Start with faster and you get all three.

Do you agree that to make government better, faster and cheaper, the place to start is by focusing on doing things faster? Do you agree with the main cost drivers Miller has identified?

Operating Government Faster Improves Quality

January 24, 2012

This is part three of a four post series regarding Ken Miller’s great book Extreme Government MakeoverIn Part 1 we learned that government is like a house in that most of the important work goes on in pipes hidden from public view behind walls. The problem with improving the performance of government does not lie with employees. Improving government performance requires us to focus on changing the systems (policies and procedures), that employees must work with. Governments system of pipes are broken, rusted and twisted, which limits their capacity to serve the public.

In Part 2 we learned five strategies to make government work faster. In this part Miller addresses the concern of whether making government work faster will affect the quality of government services.

How Operating Government Faster Improves Quality

If you watch a few episodes of Extreme Makeover: Home Edition, there’s one thing that you’ll notice pretty quickly. The houses they build aren’t shacks. They’re actually quite impressive. The high-quality homes are built to meet all the right municipal codes and standards. They have roofs, multiple stories, gutters and usually a dozen flat-screen TVs scattered throughout. It’s not as if the builders get to the big reveal at the end of the episode and say, “We only had seven days! You didn’t really expect us to put in windows, did you?” When I talk to people about making government go 80 percent faster, the first question they throw back at me is whether quality will suffer. Won’t going faster make our work sloppier? Absolutely not. I am not advocating cutting corners. It’s not about skipping the windows or leaving off the gutters.

Is Extreme Makeover doing fourteen months of work in seven days? No. They are doing seven days of work in seven days. The way we go 80 percent faster is not by doing the tasks themselves faster, but by radically rethinking the system so that we’re just doing the tasks — only the tasks — with as little lost time as possible between them.

One of the biggest sources of water into the pipes — at DMVs and at lots of other government offices — is repeat customers. In a typical DMV office, up to half the people in line are there on their second, third, or fourth attempt. Despite all the letters the state mailed explaining what to bring in, despite detailed lists on the website and the huge signs in the lobby, customers inevitably would forget to bring all the necessary documents. For the DMV offices Miller worked with, the customer service model had amounted to “Too Bad For You.” Customers were told to go home, get the right documents, and come back again later. In fact, our stats showed that six in ten customers were being sent away. When they would return (angry and frustrated), they’d clog the line and rob us of capacity. We worked with the managers to shift from a “Too Bad For You” approach to a “How Can We Help?” model. For instance, the most common reason customers were being turned away was for failing to bring proof-of-insurance documentation. For lots of people, locating an insurance card is a fool’s errand. It’s just not gonna happen. So under the new management approach, no customer was sent home until we’d done everything we could to find the right information for them. In most cases, this involved having the customer move out of the line while somebody contacted the insurance carrier and had the card faxed over. This worked, but it required a lot of effort. Finally, the management built relationships with all of the major insurance providers to get electronic access to their policy lists. They did the same thing with county tax collectors, because the second most frequently forgotten item was a proof that you had paid your property taxes. Now, someone like me can walk into the office completely oblivious of my civic duty and walk out with a shiny set of plates. These measures led to more than a 50 percent reduction in repeat visitors.

In public assistance offices, Miller has worked with customers who have to go home to get more documents are handed a piece of paper for each document. The papers show exactly what the document looks like — with pictures — along with step-by-step instructions for how to get it and support numbers if any questions arise. Repeat visits dropped dramatically.

The reality is that, when you study your pipes, most of the problems you deal with happen at the very beginning. The very first interface with the customer creates most of the havoc we deal with later on. If a form letter is hard to understand, the customers do the wrong thing. If an application form is too complicated, customers don’t fill it out correctly. If the data-entry screens are too complex, the employees don’t fill them out completely or accurately.

By straightening our pipes, we move people through the system faster. The remarkable thing is that we also do it better. It’s better for the customer — shorter waits and fewer frustrations. But it’s also better for government. When we’re able to help customers right the first time, we’re left with more resources to assist the people who really need our help. We increase our capacity to do more good, and that’s better government. We can make government faster, and we can make it better. But the billion dollar question is this: Does that make it cheaper? Which we will discuss in my next post.

Do you agree that operating government faster can improve the quality of services?

Make Government Faster By Focusing On The Space Between Tasks

January 23, 2012

This is part 2 of my series on Ken Miller’s  great book Extreme Government MakeoverIn part 1 I explained how Miller describes government as a house where the important work goes on in the pipes hidden from public view behind walls. Miller’s position is that the problem with government is that it cannot meet the demand for its services becuase the pipes of government are a rusted tangled mess, which makes it difficult to moves things through in a smart, fast, cheap way.

Miller claims that he can make your program, department or agency operate 80% faster. How? Not by making employees work faster but by making the time between tasks faster. According to Miller the space between tasks is where opportunity lies for improving government performance.

Miller states: “The actual work time — the labor in a process — typically consumes less than 5 percent of the total time a customer experiences. Ninety-five percent of the time a customer spends in our pipes, nothing is happening.”

Miller has five strategies to make your systems faster. They’re focused on that 95 percent of the time that gets lost in the system — not the 5 percent in which the actual labor takes place.

Strategy #1: Triage  

Most pipes in government are of the one-size-fits-all variety. We have one long, twisted pipe, and we make every customer travel through it. One of the most powerful strategies for speeding the flow is to actually create more pipes — that is, give customers other pathways they can travel.

Strategy #2: Simultaneous Processing 

Our pipes are divided into sections, and the water must travel through these sections one at a time. For example, building permits move from plan reviewers to code enforcement to the fire marshal and then the public health department. Your expense account goes to your supervisor, then her boss, then his boss, and then over to accounting, where it is reviewed and then processed and then approved. One of the simplest tactics for moving water through our pipes more quickly is to use simultaneous or parallel processing.

Strategy #3: Bust Your Bottleneck

In your whole agency, I’d bet there aren’t more than five places that are kinking your pipes. So how do you find your bottleneck? The simplest way is to go out and look for it. Put your waders on and find the puddles. In front of every bottleneck there’s usually a pile. It can be physical (stacks of paper, rows of file cabinets, overflowing inboxes) or virtual (a pending file, a queueing system, a workflow management system).

Strategy #4: Quit Your Batching

Batch processing holds one customer hostage to a larger group. Batches can be quantity-based or time-based. A quantity-based batch would be something like waiting until we have 100 applications before we send them on to the next unit to be reviewed. A time-based batch would be, say, a policy to only process payments on the third Thursday of the month. In either case, the customer does not flow smoothly through the pipe. Instead, he has to wait.

With a batch, we’re essentially adding a dam mechanism into the pipe: Water gets stopped until the level rises to a certain point. Then all that water floods into the next section of the pipe at the same time, which often creates backlog. Again, we have sitting water with all of its side effects: phone calls, tracking mechanisms, expediting, and so on. In an effort to save work, we create work.

Strategy # 5: Eliminate Backlog

The DMV is actually a great case study of the effects of backlog; you can literally watch the effects of falling a little behind manifest themselves every day. An office can open at 8 a.m., fall a little behind by 9:15, and by noon there are fifty angry people standing in line. The reason this happens with DMV offices actually has nothing to do with the productivity of the employees. It’s a function of random variation. At DMV offices (or food stamp offices or public-assistance offices), the number of customers who show up at any one time is completely random. With the exception of lunchtime, there’s no rhyme or reason. There is as much probability of four people showing up as forty. If four people arrive at the same time, the office is fine. But if forty people show up at once, the game is over and the office is wrecked for the rest of the day.

Fast-food restaurants also have the same problem of unpredictable customer patterns, with the obvious exception of mealtimes. That is, there is as much a chance of two customers walking in as twenty. If you’ve ever been at McDonald’s when a bus full of customers shows up, then you have seen the chain’s very sophisticated process for dealing with this. It’s called “BUS!” That is, when a bus is spotted rolling into the parking lot, an employee screams “BUS!” and the entire restaurant is transformed. Managers and supervisors stop what they’re doing and double-man the counters. Cooks start making popular items as fast as they can. All hands are on deck to get the line of customers served as quickly as possible — because if they don’t, the lines will be with them all day long. The whole day will be wrecked.

Armed with this insight, Miller created a “bus” process for the DMVs. Whenever a large group of customers all showed up at once, the entire office transformed. The managers came out of their offices and double-manned the counters. Back-office paperwork specialists came out to work the lines. Everybody pitched in until the line was gone, and then they went back to their regular jobs. It was an amazing thing to watch as everybody cooperated with each other. It was hard work, but the benefits were astounding. By not getting a little bit behind, they never got a lot behind. And life in the office got a lot better.

Designing processes so that you never fall behind requires a whole new way of thinking. In government we tend to practice the ancient art of annual management.To avoid ever falling behind, you actually have to manage more actively. For DMV or public-assistance offices, this can be a minute-by-minute battle. For licensing and permitting offices, this may be a week-by-week battle. You also have to cross-train your employees so they can step in to help during high-traffic times. Sound like a lot of management? It is. But not as much management as it takes to handle the call centers, the tracking systems, and the ever-growing pile of documents you get from backlog.

You can make government run faster by focusing on the space between tasks. What do you think of the above strategies for making government run faster?

Want Better Results? Build A Better System

January 22, 2012

Ken Miller has written a great book titled Extreme Government Make Overwhich I am going to write about in a four part series of posts this week. Miller is the founder of the Change and Innovation Agency, a firm dedicated to helping government increase its capacity to do more good. If you are interested in improving how your government agency or department works, I encourage you to pick up Miller’s book.

In Extreme Government Makeover, Miller explains government like a house with many pipes hidden behind the walls out of view doing the important work that allows a house to function. As Miller puts it:

The pipes of government — our systems, operations, and processes — are a mess. They’re kinked up, rusted out, and about to burst. Ravaged by years of budget cuts, reorganizations, and half-finished technology projects, the systems of government simply don’t have the capacity to keep up.

Second, we’ve got mold. Everywhere. Moldy thinking. Old ideas about people and motivation. We’ve come to believe that the problems with government are “people problems” — that public servants are lazy, unmotivated, and need to be incentivized to do the right thing. Oh, we don’t say it that way. Instead, we call it “pay for performance” or we create competency models and performance development plans. But the message to employees is the same: Government will improve when you improve. This moldy view of people has given rise to the accountability movement. And just like real mold, this movement has spoiled the air, damaged the foundation, and is making everyone sick.

Miller argues that the problem with government is not employees but defective pipes (policies, procedures) that do not provide it the capacity to do everything its citizens require. The only way to address capacity issues with a water pipe is to reduce the amount of water coming in or to increase the size of the pipes. Neither of these options is realistic for fixing government pipes. However, there is a third option, that reveals itself when you rip out the walls, tear up the floors and expose the pipes. The third option is to straighten the pipes so that the system can better handle capacity.

Our hidden system of pipes is the culprit for government performance problems, yet we always blame people because we can see them. Systems are invisible and its hard to improve what you can’t see. Miller explains it as follows:

Because the people are what’s visible, they get most of the attention when it comes to improving government. We try to motivate them, incentivize them, train them, and change them. We want them to do more, and do it faster. We want them productive, smiling, and adaptable. As W. Edwards Deming, the grandfather of the quality movement, proved years ago, “Six percent of the problems we experience can be traced back to people. Ninety-four percent are inside the system.” The variation, constraints, and problems are in the pipes.

The fact that government costs too much, takes too long, and accomplishes too little, are capacity issues. These are pipe issues. We have to straighten the pipes to speed the flow and we will get more done without additional resources. Our results come from our systems. If you want better results, build better systems.

As Miller states: The hallways of government are rife with mold. You can’t see it — we’ve wallpapered over it with vision statements, mission goals, customer-service policies, and employee-of-the-month plaques. But it is there, fouling the air, sickening the family, and destroying the energy and vitality of public service. How do you know if your agency has a mold problem? Check the symptoms: Low morale Poor customer service CYA Silo mentality or turf wars Slow processes Few innovations or ideas Constant complaining Apathy High absenteeism, grievances, and turnover Rampant distrust (of employees, customers, and management)

The fear is on the face of the frustrated worker who takes all the blame for the policies but lacks any power to change them. The fear sits in every question on the twenty-page form the customer must fill out, the one that culminates in the signature block filled with menacing legal threats. Everything about the place just screams “no can do” and “you’d better not.” And those are just the visible symptoms.

Want better results? Build a better system.

Do you agree with Miller that focusing attention on employee performance to improve results is the wrong approach? If you want better results do you need to build a better system?

Bringing Lean Management To New York State

January 8, 2012

In January of 2011 shortly after taking office as Governor, Andrew Cuomo signed an executive order creating the Spending and Government Efficiency (SAGE) Commission. The purpose of SAGE is to modernize and rightsize government to make it more efficient, effective and accountable.

On December 15, 2011, the SAGE Commission met and approved some interesting recommendations. As a supporter of utilizing Lean Management in government, I was pleased to see that the Commission has recommended the following:

Establish an Office of Lean Management for New York State – Hire two Lean Management professionals to develop Lean capabilities across state government by conducting training sessions for agency managers.

First pioneered at Toyota over 50 years ago, Lean is a philosophy and long proven approach for organizations of any size or type to continuously improve. With Lean there is a focus on eliminating waste, improving productivity, and achieving sustained continual improvement in an organization. Lean is built on the philosophy that small, incremental changes routinely applied and sustained over a long period result in significant improvements overall.

Lean seeks to foster a culture where employees are empowered to identify and solve problems. Lean organizations empower their members on the front lines by teaching them how to identify ‘waste’, or anything that doesn’t add value to the process.

Eight Common Wastes that are often roadblocks to efficiency:

1. Overproducing: unneeded reports, doing work not requested.

2. Waiting: time for approval cycles, waiting for information or decisions.

3. Transportation: unnecessary movement of reports, storage of documents.

4. Inventory: backlog of work, (permits, plan approvals) excess materials/info, obsolete databases/files.

5. Unnecessary motions: trips to printer and copier, unnecessary movement to find files and supplies, travel to meetings.

6. Processing waste: spending time on unnecessary processes that do not add value to the customer.

7. Defects: data errors, missing info, errors in documents, wasted effort on inspection or re-doing work that was already done.

8. Unused human potential: not fully utilizing employee problem solving skills to add value to the customer or the company.

Every program/department in government can be improved by addressing the eight items above. It is great to see New York under Governor Cuomo’s leadership moving to implement Lean as a way to improve the performance of government. Three New York agencies are already utilizing Lean to improve their operations:

Office of Alcoholism and Substance Abuse Services – Reduced the amount of time it takes to complete their Request For Proposal  process by 53% (146 days).

New York State Office for People with Developmental Disabilities –  It currently takes the agency 300+ days to do a State Auspice Transfer. By utilizing Lean the agency projects that it can reduce the time to 120 days.

Department of Environmental Conservation –  It currently takes the DEC 250+ days to issue a New Air Quality Permit. By utilizing Lean the agency projects that such permits can be issued within 121 days max.

For more information on how Lean is being used in government check out the following links:

http://www.businessofgovernment.org/sites/default/files/MaleyeffReport.pdf

http://www.evolvingexcellence.com/blog/2007/04/lean_government.html

http://www.epa.gov/lean/government/starterkit/

http://en.wikipedia.org/wiki/Lean_Government

What do you think about utilizing Lean as a way to improve government performance?

Reinventing A Government Agency Is Just Management 101

December 21, 2011

Tom Suehs through his great leadership skills reinvented a government agency that can serve as a lesson for others. As Melissa Maynard, Stateline Staff Writer reports:

Two years ago the Texas Health and Human Services Commission was the worst state agency in the country at performing a straightforward task: giving food stamp applicants a yes or no within 30 days in normal cases and 7 days for emergency cases.

In 2009, Tom Suehs, who had served as deputy executive director at the Commission since 2003 became head of the state’s largest agency. Suehs also hired Stanley Stewart, a technocrat from Michigan, who had implemented an IT system in Michigan similar to the system Texas was struggling to make a transition to, known as TIERS. Suehs and Stewart took some key steps as leaders to turn things around at the Texas Health and Human Services Commission. Before discussing those key steps it is important to understand the way things were in 2009 at the Texas Health and Human Services Commission and the way they are today.

The Way Things Once Were

The most visible changes to address the backlog can be seen in the 316 eligibility offices scattered around Texas. When the backlog was at its worst, the atmosphere in these offices was palpably angry, as confused and frustrated applicants sometimes waited for hours, only be told to come back again another day.

Nora Sanchez’s experience was common. When her request to recertify herself and her kids for food stamps failed to go through, there was no warning, she says. “They didn’t send me anything,” she says. “I didn’t receive anything about whether I was pending or if I needed papers. Nothing.” When she went to the office in May of 2009 to ask about her status, she was told she would have to wait because they were still “entering Januarys and Februarys.” She called her caseworker twice a week, and never once got through. She always left messages but her calls were never returned. Sanchez says she made weekly trips to the office, waiting from two to five hours each time. And when she finally got to the front of the line, they just instructed her to wait for her letter to come in the mail.

The frustration was intense on the workers’ side, too. The eligibility system was operating on two different IT systems — neither of which worked very well, as a state audit notes. The legacy IT system, known as SAVERR, was no longer meeting the state’s needs. “It was cutting-edge when the microwave was cutting edge,” one worker joked. The legislature first approved the new system, TIERS, in 1999, but its development and implementation was plagued by glitches and delays. Often, employees were trained on the system by people who did not know how to use it themselves.

In the meantime, operating in two systems created cracks for clients to fall through. A client who had been approved for benefits and then moved to another town might not continue to show up as eligible. Online applications could be received but had to be manually typed into TIERS, which often operated at glacial speeds because of inadequate server capacity. Print-outs, paper applications and hand-written receipts provided the only paper trail whenever there were discrepancies, which was often. As Sandra Dillett recalls, “Somebody had to go and re-look at all the paper receipts to figure out what happened.”

New Leadership Brings New Results

Walk into an eligibility office today, and chances are you’ll be greeted pleasantly and asked about the reason for the visit. If you just need to pick up a food stamps application, the greeter will hand you one without having to wait. He or she can also answer simple questions right away.

If your case requires a more intensive response from agency staff, the greeter will push a button informing a new office management system called the “Nemo Q” why you are here. The system will assess how many workers are currently working in various roles and filter your case to the right person and place in line in order to maximize efficiency. The easier your problem, the faster the system will push you through, ensuring that the office doesn’t become clogged. While you wait, you’ll be able to take a seat in a clean, bright office and track your expected wait time on a large monitor. There’s a good chance that you’ll be able to complete an interview the same day, while you’re there, rather than scheduling a time to come back in the future.

The back-room improvements that Texas has made will have an impact on your visit as well, whether you’re aware of it or not. Fixing the programming glitches in TIERS and overseeing its successful statewide roll-out may be Stewart’s most important contribution to Texas’ turnaround. The new system makes it easier for workers to do their jobs. And customers no longer have to wait around while the system loads a new page or a worker tries to decipher the reason for error messages.

Just as importantly, it has improved the state’s ability to track its performance all the way down to the frontline worker level. It is what allows Stewart to pull reports every morning and pinpoint late cases. He follows up with the offices in question to troubleshoot.

Stewart also helped the state overcome other weaknesses in its technological infrastructure that were leading to customer-service problems. Finally, there is adequate server capacity and enough phone lines to handle incoming and outgoing calls. Before, busy signals were pervasive. Workers would have to wait for phone lines to open up before they could return phone calls when clients left messages.

In June, the federal government gave Texas a $6 million performance bonus for dramatically improving its payment error rate, moving it into the tier of “best” states for 2010. Characteristically, Suehs shared the reward with his employees. It was a powerful morale booster. Employees who received strong performance evaluations during 2010 got a bonus equal to about 4.5 percent of their annual salary.

One of the lasting lessons from Texas’ experience may be to not forget about the basics. While some of Suehs’ solutions were complex and expensive — system-wide process improvements, big IT investments, increases in staffing — other, equally critical remedies were surprisingly simple. Listening to employees. Keeping offices clean. Recognizing successes. “It’s just Management 101,” says Suehs. “Getting that employee to feel good about themselves, and making sure they know what their job is.”

Key steps that Sueh’s and Stewart took in turning around performance at the Texas Health and Human Services Commission were:

1) Listening to Employees –  Suehs made dozens of visits to eligibility offices and talked with workers at all levels about how their jobs were going and what he could do to help them. He solicited email input about how to fix the problems and personally read thousands of responses.

2) Challenging Employees In A Fun Way – Suehs also worked at rebuilding morale among the workers. At the height of the backlog, Suehs asked the various eligibility offices to compete against each other in the “Commissioner’s Challenge,” a contest to see which offices could provide the best customer service by processing applications quickly and accurately. Suehs promised to personally grill a nice meal for the winners. It may sound like a summer-camp strategy, but numerous people interviewed for Melissa Maynard’s article pointed to the competition as a turning point that helped cultivate a team atmosphere and boost staff spirits.

3) Bringing In Outside Help –  At first, Stewart, who was retired, worried about how Suehs’ decision to give czar-like authority over the food stamp program to an “old black guy from Michigan” who comes highly recommended by the federal government would go over in Texas. As it turned out, Stewart’s outsider status lent him the credibility he needed to make major changes.

4) Utilizing Technology – Computer technology has improved the state’s ability to track its performance all the way down to the frontline worker level. It is what allows Stewart to pull reports every morning and pinpoint late cases. He follows up with the offices in question to troubleshoot.

5) Establishing Performance Goals – Stewart is clear about his goal: He wants Texas to be the top state in the country for on-time processing. “We’re going for 100 percent,” Stewart says. He’s getting close. Each day, Stewart reviews a detailed explanation of every delinquent case and follows up on the ones that trouble him.

Government agencies can be reinvented. Tom Suehs and Stanley Stewart exemplify the kind of leadership we need in government. What do you think about the successful turnaround of the Texas Health and Human Services Commission?

Utilize Lean Principles To Improve Government

November 16, 2011

With the election of Mark Poloncarz as Erie County Executive hopefully new ideas for improving how government operates will emerge. Poloncarz has already stated that he plans to scrap the Six Sigma program implemented by current County Executive Chris Collins. As a certified yellow belt in Six Sigma, I believe that Six Sigma methods can have a positive impact on improving government. However, Six Sigma with its heavy emphasis on statistical analysis is not the best fit for measuring and improving government performance.

A better fit for government is to utilize the concept of Lean. First pioneered at Toyota over 50 years ago, Lean is a philosophy and long proven approach for organizations of any size or type to continuously improve. With Lean there is a focus on eliminating waste, improving productivity, and achieving sustained continual improvement in an organization. Lean is built on the philosophy that small, incremental changes routinely applied and sustained over a long period result in significant improvements overall.

Lean is a much easier process for folks to grasp as a key part of it is to simply map out the steps of a particular process in a visual way for all to see. Lean does not utilize different color belts or the heavy statistical analysis of Six Sigma. Lean seeks to foster a culture where employees are empowered to identify and solve problems. Lean organisations empower their members on the front lines by teaching them how to identify ‘waste’, or anything that doesn’t add value to the process.

  Eight Common Wastes

Any process, whether it be to meet client needs or creating products, is susceptible to eight common forms of waste that are often roadblocks to efficiency:

1.      Overproducing: unneeded reports, doing work not requested.

2.      Waiting: time for approval cycles, waiting for information or decisions.

3.      Transportation: unnecessary movement of reports, storage of documents.

4.      Inventory: backlog of work, (permits, plan approvals) excess materials/info, obsolete databases/files.

5.      Unnecessary motions: trips to printer and copier, unnecessary movement to find files and supplies, travel to meetings.

6.      Processing waste: spending time on unnecessary processes that do not add value to the customer.

7.      Defects: data errors, missing info, errors in documents, wasted effort on inspection or re-doing work that was already done.

8.      Unused human potential: not fully utilizing employee problem solving skills to add value to the customer or the company.

Every program/department in government can be improved by addressing the eight items above. Government employees who have to live with overly bureaucratic procedures have lots of ideas as to how operations can be improved, they are unfortunately rarely asked or made part of any decision making process.

While the arrogant personality of out going County Executive Chris Collins has left a bad taste for many people regarding Six Sigma, I believe that it would be a mistake to eliminate Six Sigma without developing a process to engage employees in improving government performance. There is no process in most organizations for obtaining employee ideas to improve operations. While Chris Collins had difficulty working with others, his Six Sigma effort did have some success in improving government operations.

Lean is a proven way to engage employees and improve organizational performance. In addition to private sector companies such as Toyota, Lean has been implemented at the following municipalities and governmental agencies:  San Diego County Health & Human Services Agency, King County, Washington, Brown County, WI, Fort Wayne, Ind., Hartford, CT., Cape Coral, FLA., Jacksonville, FLA., Grand Rapids, MI., Florida Dept. of Revenue, Washington State Dept. of Licensing, Iowa Dept. of Natural Resources, Maine Dept. of Labor.

What do you think about utilizing Lean to improve government?