I guess I have a burr in my saddle this week, being Independence Day and all, since I'm commenting on something from the UK again today. I don't mean to come across as anti-Brit, as I love the UK. I saw this article from the excellent newspaper The Independent – “Public sector finds itself in dire need of cost controllers to wield the knife“.
On the one hand, it's encouraging to think that the government there is looking to Lean and Six Sigma methods. However, if “cost cutting” is all they want, they're likely to give Lean a bad name, to give us more “LAME” than Lean.
The article begins with a description of the coalition government's desire for Six Sigma methods:
A public sector long-used to plentiful funding and comfortable remuneration is having to turn to the private sector to find the axemen it needs to implement unprecedentedly savage cuts, with so-called “Six Sigma” experts – the SAS of cost controllers – in particular demand.
The Government has been trying to recruit scores of senior cost cutters since the coalition was formed, with demand expected to increase again after the October spending review.
“Cost cutters”??? I thought Six Sigma was all about quality. If the government wants to focus on old-fashioned cost-cutting, they can use usual methods (they can cut services or “sack” people).
The article continues:
At that point each individual department will be given its spending limits for the next five years and some will have to secure 40 per cent savings, a tall order even in the private sector. No government department has had to engineer such savings since the Second World War.
A 40% savings quota? That seems a disaster waiting to happen, setting an arbitrary quota like that. If the UK government truly can improve quality, they'll be able to provide the same services at a lower cost. If they're bullied into a cost target, they'll likely have to cut corners and do things that harm quality.
The government, or maybe just the author of the article, misunderstands or mischaracterizes Lean as well, saying:
Experts in “lean” methods – keeping stocks and costs to the minimum as perfected by Toyota – are also sought.
This is such an outdated, limited view of Lean and the Toyota Production System, it's laughable. It's as if somebody just heard of “just in time” or the old 1980s book Zero Inventories.
Regular readers of this blog realize that Lean is so much more than just low inventory. Too bad The Independent, or possibly the UK government, doesn't realize that. Either The Independent is as clueless as the WSJ or it's the government. You often can't tell if an article like this reflects bad thinking on the part of the subject of the article or on the writer.
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Mark, great post, but somehow it got doubled up… from the second “The article begins with a description of the coalition government’s desire for Six Sigma methods:” on could be removed. I keep wondering when Congress is going to legislate some Black Belt cost cutters onto all the gov’t budget busters.
Mark, to me these examples partly reveal a larger trend in journalism: cost-cutting, decrease in quality, etc–trends that Jay Rosen and James Fallows, among others, have written persuasively about on their respective blogs.
Mark, I’m one of the civil servants in the UK on the receiving end of the cost-cutting – and coincidentally just starting out on a Lean journey. From over here it looks like both the government and the press have (deliberately?) misunderstood Lean philiosophy and each is outbidding the other on how many cutbacks Lean can deliver.
Unfortunately, I’ve seen it with my own eyes, I’ve tried to sell the engagement and the quality, and all I’ve got is ‘Yes, but how much money will it save? When can we reduce jobs?’
Like your other blog post on the heath union, our union is also, unsurprisingly, against Lean as they only see the cuts and none of the benefits. They’re actually crying out for lean (like me!) but all they’re getting is LAME. I’m greatly saddened by civil servants’ cost cutting ideas on the Spending Challenge http://www.hm-treasury.gov.uk/spend_challenge_ideas_1.htm. There’s a better way than centralising stationery orders and using our own pens – but nobody’s explained it properly.
[…] UK Government Wants Lean and Six Sigma or Just Cost Cutting – Mark Graban takes on simultaneously the misunderstanding of lean by the press and the misapplication of lean by the UK Government. […]
Mark, Erik Hager always told me not to use the term efficiency in any discussion about Lean. His term was effectiveness, as in the effective use of resources – people, product, leadership etc. Erik is fond of saying that people just don’t know, what they don’t know. That’s the problem Lean has right now, people have been misinformed, not deliberately, in applying Lean to simply cut costs. In manufacturing this is a necessity because of competition and low wages in foreign countries. When I try to communicate Lean ideas, managers and CEO’s want to know how much money it’s going to save them, what is the ROI. I don’t know if healthcare is in the same boat as manufacturing but it probably will be in the future. Trying to sell quality and engagement is not as sexy as saving costs.
[…] UK Government Wants Lean and Six Sigma or Just Cost Cutting – Mark Graban takes on simultaneously the misunderstanding of lean by the press and the misapplication of lean by the UK Government. […]