Making Government Better— and Keeping it that Way
Governments at all levels must deliver more for less. The principles of lean manufacturing offer surprisingly apt solutions.
October 2015 | by Robert Harris
Governments around the world want to deliver better education, better health care, better pensions, and better transportation services. They know that impatient electorates expect to see change, and fast. But the funds required to meet such expectations are enormous—particularly in the many developed economies where populations are aging and the public sector's productivity hasn't kept pace with that of the private sector. The need to get value for money from governments at all levels is therefore under the spotlight as never before. But cost-cutting programs that seek savings of 1 to 3 percent a year will not be enough and in some cases may even weaken the quality of service.
To address the problem, public-sector leaders are looking with growing interest at "lean" techniques long used in private industry. From the repair of military vehicles to the processing of income tax returns, from surgery to urban planning, lean is showing that it can not only improve public services but also transform them for the better. Crucially for the public sector, a lean approach breaks with the prevailing view that there has to be a trade-off between the quality of public services and the cost of providing them.
Lean Basics: Developing a Performance Culture
When improving long-term performance is the goal, changing the process or the operating system will not suffice. The organization's culture must also change.
Some of these changes will be wrenching. A lean process, for example, requires a performance-tracking system that breaks down top-level objectives into clear, measurable targets that workers at every level must understand, accept, and meet. When performance isn't up to the standard, action is required. Tackling problems quickly and holding colleagues accountable for poor performance raises efficiency as well as morale. A lean process also tends to address the problem of "sticky" resources, prompting organizations to allocate them to shifting priorities more flexibly.
To mitigate the top-down nature of target setting, managers must often make changes themselves. In so doing, they should address the long-standing complaints of the frontline staff—complaints that typically include management's lack of engagement, a greater desire for teamwork, and the need to tackle underperformance.
Profound cultural changes generally follow and reinforce the lean transformation. The organization's morale rises as participants build capabilities and see others developing as well. Consider the processing of documents in the UK government office discussed earlier. Before the change, employees worked largely alone, processing batches at their own convenience. After the lean transformation, they began working as a team, which made everyone's activities transparent. Every team member helped to solve problems when performance dipped, and everyone worked together to identify opportunities for further improvement. The new mind-set, brought on by the lean reconfiguration, contributed to a 60 percent increase in productivity. This new transparency, however, also raised a whole new set of tough questions, including, "What should our performance targets be?" and "What happens when those targets are not met?"
Applying lean is difficult in the private sector, and more so in the public sector. Successful lean transformations must close the capability gap early in the process, so managers and staff can make the transition to a new way of working. Closing the gap typically involves hiring a few people with lean expertise and experience from outside the public sector to seed the transformation and build new internal capabilities.
Lean requires more than the courage to uncover deep-seated organizational problems. Without ducking this simple truth, politicians and public-sector leaders must outline the need for change, explaining its benefits and the logic of the planned approach. The challenge to do more with less will not go away. A lean approach, with its emphasis on lower costs but higher quality and customer service, is surely worth investigating.