By November 29, 2010 12 Comments Read More →

BCG White Paper on Lean in Government and Public Services

The U.S. CapitolI’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):

  1. 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.
  2. 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)
  3. 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?

Creative Commons License photo credit:  kevindooley


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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

12 Comments on "BCG White Paper on Lean in Government and Public Services"

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  1. Bryan says:

    Hi Mark,

    Interesting take on lean in government. About two years ago, while I was driving to work, I listened to some radio commentary on how the Vermont state government hadn’t passed a law in 9 months! The moral of the story was that people were suffering because the government wasn’t acting in an efficient manner.

    I take the opposite view. Normally, all things should be improved and brought to the end user in a faster, better manner and with a higher quality. In the case of government, however, an efficient government will lead to more laws of unintended consequence in higher frequency. This can only inevitably lead to a faster erosion of our freedoms, if you subscribe to that line of reasoning.

    A small, slow, neutered government is better than a large, nimble powerful government.

    • Chris says:

      Bryan,
      Most of the needed lean application in government is not in the legislative branch, but rather in the offices that actually deal with the results of all the legislation. Every office that deals directly with the public in some manner could use improvement in some manner (e.g. wait times at the offices, “cycle times” for paperwork processing, and reduction of “red tape” wastes).

      • Bryan says:

        Hi Chris,

        If I were improving wasteful activities using lean tools, I’d be called a “tool-junkie,” and accused of engaging in L.A.M.E. implementations and probably labeled as short sighted for seeing the root of the problems.

        So, you say that we should improve the government agencies who are charged with tackling the laws thrown at them. I say, perhaps we should look at the laws themselves, the initial premise(s) behind why the laws came into being and whether or not that law is providing any value to the self-governed. (i.e., solving a public problem that cannot be tackled more efficiently in a society where individuals engage freely and cooperatively without government interference or involuntary coercion of its citizens) If the law is wasteful, unjust, or protects special groups, then there is a strong probability that lean improvements are only going to optimize localized segments of the government and not benefit the whole. (Kaizen = Change for the Better, not optimize the local, wasteful, shortsighted law)

        • Chris says:

          Sometimes the only thing you can do at the beginning of a lean implementation is improve wasteful activities, but eventually (if truly lean not L.A.M.E.) you can get down into the deeper issues causing the waste.

          You have no argument from me that the PA cycle that our legislatures practice does not work – I would love to see PDCA used. Unfortunately, I don’t see our legislatures implementing a rational process anytime soon, but local offices charged with implementing those wasteful (but good intentioned) laws can do better today and in the near term.

    • Andrew Bishop
      Twitter:
      says:

      Interesting observations! Isn’t Vermont a part time legislature? Inaction by design, perhaps?

      So… maybe a lean legislature results in just what you envision: rather than “efficiently legislating” (passing more laws), they pass the laws we need (customer defined value) and throw out the ones we don’t need (statutory 5S??) at the required pace (oh my gosh, we’ve discovered legislative takt time!)

      Good luck with “respect for people” though. I think the electoral system presents some pretty steep challenges there!

  2. Priscilla says:

    Interesting that conversations about lean in government almost always devolve into political opinions.
    I want conversation about the possibilities for serving people better: clean drinking water, working street lights, reduced crime, safe nursing homes, efficient unemployment insurance…
    A swarm of opportunities for lean!

    • Andrew Bishop
      Twitter:
      says:

      Priscilla:
      I agree. The politcal conversation is almost inevitable, though, because policy, as set in code and statute by legislators and developed in a political world, is behind how the agencies that deliver services work and what services they deliver.

      In any event, enlightened leaders in these agencies could lead meaningful improvement, whatever the statutory context may be, and we’d all be better off.

      And, just as a side note to those who think government can do nothing right, I’d observe that one of the key distinctions between government and the private sector (not noted in the summary of the white paper Mark provided) is that we don’t allow government to fail. There are plenty of businesses that are run WORSE than the government – they just don’t last long! Freedom to fail is a foundational, cleansing principal in free enterprise from which governments (at least the permanent functions) generally do not benefit.

  3. Priscilla says:

    Thanks Andrew,
    Government programs fail all the time, though. They just don’t get deleted or removed.

    We can all go insane talking about “government.” Which branch-judicial, legislative, or executive? Which entity-federal, state, local? Which program- highways, education, social services? We would never generalize about private sector business the way we do about government. (Well, I may be wrong here. I remember a lot of talk about corporate greed.)

    What I care about is making meaningful improvements in the executive branch. And it can be done.

    • Mark Graban
      Twitter:
      says:

      Many of the same things can be true about “healthcare.” If we’re fixing processes at the hospital that treat patients, what about the big picture system of asking why people are getting sick or getting hurt?

      There’s always a tension (a healthy one?) between an ideal scope for system change and a practical scope. I know my head hurts when we talk about the huge “healthcare system” but even changing the system at a hospital (or in a single department) can be a challenge.

      I’d like to see government focus on effectiveness – for example, if I needed a business license, get that license to me with minimal delay and without errors. Now, the big picture question about why I need a business license? A question for another day, perhaps.

  4. Priscilla says:

    Yes. We must move away from “either-or” thinking: ideal or practical; health care system or a single department; big picture or focused improvements.

  5. John Hunter says:

    I helped found what became the ASQ Public Sector Network a long time ago. I created a web site for those interest in public sector management improvement. There have been many great public sector efforts in Deming and lean style improvement for decades. There are some challenges but also some advantages for public sector efforts.

    In Out of the Crisis Deming stated: “Government service is to be judged on equity as well as on efficiency.” I think that is true. Many government improvement efforts are essentially identical to what they would be elsewhere. Removing not value added steps is not different. Reducing cycle time is no different.

    Most of the time you don’t have to worry about differences due to the public sector nature. But when you do it still is basically the same ideas you just realize that some concessions to efficiency won’t be made. The problems implementing the ideas in public sector organization are far more likely to be the same problems faced elsewhere (executives that don’t support the effort, contradictory actions by managers and executives, turnover of executives, focus on fire-fighting, focus on what my next performance appraisal with say, talking about evidence based management but not actually doing it…).

  6. Bryan Lund says:

    All of things we strive to do in private enterprise is probably the farthest thing from the minds of lawmakers pushing their newest crusade:

    http://www.burlingtonfreepress.com/article/20101204/NEWS02/12040311/Groups-call-for-Vermont-tax-on-sweet-beverages

    Try improving the system built around this!

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