BCG White Paper on Lean in Government and Public Services
I’ve written occasionally about Lean efforts in government (see a list of posts here). There are formal Lean government efforts at varying levels of maturity and formality in a number of states, including Iowa, Jacksonville, Michigan, and Paul Akers’ LeanAmerica.org site. I’ll be doing a podcast with Paul sometime soon on this topic.
A white paper from The Boston Consulting Group (BCG) caught my eye and I don’t normally expect them to come across my radar. The paper is titled “More Than Lean: Raising the Quality of Public Services,” written by Agnes Audier, Ulrik Sanders, and Penelope Winslade, from Paris, Copenhagen, and Melbourne, respectively. A direct link to the PDF is here.
The paper makes some nice points about the people side of Lean that really should apply in any setting, but it’s weak on examples and real improvement data.
One thing I didn’t care for was their continual use of the phrase “lean optimization.” Unlike the mathematical optimization done in my Industrial Engineering roots, I don’t think of Lean as optimization at all. If anything, Lean is about making things better than they are today and always striving to get better, whereas optimization makes me think of sudden perfection, which isn’t typically possible in the real world.
The article stakes the claim that Lean in government should be good for all stakeholders: users, employees, and taxpayers. I make a similar argument about Lean healthcare being beneficial for patients, hospital staff and physicians, and the hospital itself. Lean has to benefit all, or it might be “L.A.M.E.” (or it might be just plain cost-cutting or suboptimization).
Some of you are probably already saying, “But government is different.” The BCG article admits as much but, as I’d argue with healthcare, Lean as a management strategy and philosophy can be applied in any setting where you have people and processes. And, no, I’m not suggesting we 5S people’s desks at the DMV.
The article points out three ways in which government is different (which I’m summarizing):
- The Equity Principle – rules and systems put in place in ensure fairness can make government processes slow and inflexible, government’s typically not rewarded for being innovative or individualizing services.
- Lack of Competition – This is pretty self explanatory, that many government services are a monopoly (although I’d add that people can vote with their feet and go to another city or another state)
- Perverse Incentives – Cost savings and efficiency improvements often lead to budget cuts as a “reward” (although this happens in industry, too)
BCG’s conclusion is these factors “add to the complexity of lean strategies” rather than leading to a conclusion that Lean doesn’t apply. The same thing about complexity can be said about healthcare. Yes, healthcare is complex and different, but Lean works.
BCG emphasizes something that I’d hope would be obvious to Lean practitioners – you have to involve everyone and you have to involve the people doing the work. This apparently isn’t obvious to leaders who typically read consulting firm white papers.
From the article, forgiving the “lean optimization” term:
“it is essential with lean optimization to show from the start that the organization is prepared to support the staff and give them the power to find and implement solutions.”
I’m not really on board, though, with their statement that incentives and performance management systems are really necessary. Targets would likely cause dysfunction – that’s why I’d prefer to rely on intrinsic motivation and the goal to make one’s work easier than arbitrary goals and targets (see the Deming literature and Daniel Pink’s book Drive: The Surprising Truth About What Motivates Us on this).
BCG is correct to emphasize QUALITY, though, as a primary driver. This is refreshing when you might expect government to only be interested in cost. Granted, we HAVE to reduce cost, but let’s do it the right way, through process improvement, instead of just trying to cut, slash, and burn.
From the article:
“In our experience, lean projects that start with a relentless focus on the quality of service have a better chance of engaging and motivating employees to eliminate waste and duplication – and will result in more sustainable improvements in efficiency.”
Again, I find this to be true in hospitals (government-run or private).
Unfortunately, the weakest part of the white paper are the two “case studies.
The first says that a European police department (which earlier failed to find economies of scale from mergers) found lean to be effective in “improvement in the quality of police services without requiring any increases in funding.” But there’s no specific numbers or real evidence, unfortunately.
The second case study focuses on a European hospital that had these benefits:
- Reduced emergency waiting times by 30% (from a starting point of 5 hours)
- Increased operating room utilization rates by 20%
- Freed up 10 million Euros to support other improvement efforts
Yes, this is government, but those results wouldn’t be at all surprising to those involved with Lean healthcare.
The healthcare example emphasized kaizen working groups made up of clinicians and other hospital staff. Again, from the article:
“Because the staff devise the solutions, their commitment to delivering them is real and sustainable.”
And in one final re-emphasizing of that point, the BCG piece says:
“In government, of course, the engagement of employees is critically important for achieving results that are acceptable to the many different stakeholders.”
I can’t think of ANY setting or ANY industry where that point is not critical – it’s not just government.
The article ends with:
“When done properly, lean initiatives can achieve the quality improvements and step changes in efficiency that governments – and their citizens – want to see.”
What are you seeing? What are you wanting to see? Do you have anything to report about Lean in your city, state, or country?