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The Problems with Management-Driven Improvement in Government
We did not expect to find that the most successful transformations of government operations in our study would be characterized by front-line–driven improvement. Like so many others who have worked with continuous improvement (CI) in the public-sector, we were unwittingly working under two assumptions, both wrong. First, radical performance improvement in government must be driven by high-level leadership, whether elected or administrative. Second, the same approaches used in the business world will work in government too. But government is not a business, and what works for CI in the private sector does not always work as well in the public sector. We were surprised when we figured out why.
The Limitations of Top-Driven Improvement
When we talk with people about improving efficiency in government, they often bring up one of the handful of high-profile national government initiatives that have taken place over the last century. These initiatives had bold goals and visionary agendas, and they held out the prospect of major change.
One of the more successful high-level initiatives to promote government efficiency in the United States was the Commission on Organization of the Executive Branch of the Government, more commonly known as the Hoover Commission. Established by President Truman shortly after WWII, its purpose was to realign government from a wartime to a peacetime configuration by consolidating federal government departments in order to eliminate duplication of services. Truman appointed ex-President Hoover to head the non-partisan commission, which had equal representation of Democrats and Republicans. Hoover had a reputation as a reformer from his leadership of the “War on Waste” shortly after WWI, while he was Secretary of Commerce in President Coolidge’s administration. The Hoover Commission ran from 1947 to 1949, and was reestablished from 1953 to 1955 by President Eisenhower, to address concerns over the rapid growth in the size of government during the Korean War. The two commissions offered a total of 587 recommendations, more than 70 percent of which were implemented through a combination of administrative action and congressional legislation.1 Some of the notable outcomes of the commission’s work included the formation of both the Department of Health, Education, and Welfare (HEW) and the General Services Administration (GSA), as well as the modernization of the federal budgeting process.
Another prominent national effort to eliminate waste in government was initiated in 1982 by President Reagan. He created the Private Sector Survey on Cost Control (PSSCC), popularly known as the Grace Commission after its head, J. Peter Grace, CEO of W.R. Grace and Company. The commission’s charge, as Reagan famously put it, was to “drain the swamp.” Its final report contained hundreds of detailed examples of government waste (many of which are listed in the book Burning Money that Grace published later2). The report estimated that its nearly 2,500 recommendations would generate more than $424 billion in savings in just the first three years after their implementation.3 Congress ignored all the policy-related recommendations, but a few of the specific examples of waste identified by the commission were acted upon.
In March 1993, President Clinton asked Vice President Gore to lead the National Performance Review (NPR), an interagency task force whose goal was to streamline the Federal government. (In 1998, the NPR was renamed the National Partnership for Reinventing Government.) The NPR’s two-thousand-page report with 383 recommendations claimed that $108 billion could be saved through less bureaucracy, reducing overhead, program changes, and streamlining the contracting process.4 Just like Reagan’s initiative, its ambitious agenda of reform and improvement ran into strong political headwinds, and relatively few of its recommendations were implemented.
A more recent national-level initiative to transform government took place in Britain under Prime Minister Tony Blair. While he ran for a second term, his campaign message focused on improving the areas of education, health, crime, and transportation. Shortly after being reelected in May 2001, Blair created the Prime Minister’s Delivery Unit—which adopted the Deliverology approach developed by Sir Michael Barber, its first head—to follow through on his campaign promises. Although it did achieve most of its goals, most notably on the childhood education front, the Delivery Unit was abolished by the coalition government in 2010, after Blair resigned from office.
Such high-level initiatives—whether at the national, state, or city level—are important for big-picture moves, such as restructuring agencies and making major policy changes. But they cannot do much to improve day-to-day operational efficiency. They are not capable of penetrating the multiple layers of the government hierarchies, each of which has its own set of inefficiencies. These inefficiencies can only be rooted out by the people closest to the problems involved.
Think back to the long lines at Denver Licensing. Had Mayor Hancock tried to improve the city’s performance exclusively through directives from his office, how could he have discovered the inefficiencies that were obvious to Loucks and her staff? The best he could have done was to throw money at the problem, perhaps engaging outside consultants (who would know far less about the processes than the front-line staff), or maybe by hiring more personnel and adding service windows, while ignoring the underlying causes of the inefficiency.
To get at the operating problems of government, improvement efforts need to be led at the level of the problems they are trying to solve.
Government Is Not a Business
The central premise of Osborne and Gaebler’s 1992 book Reinventing Government, one of the classics on improving public-sector performance, is that the path to superior public-sector efficiency is for government to be run like a business.5 The book is well written and persuasive, and it makes a strong case for something that many people have long believed.
But government is not a business. It has a fundamentally different role in our society, operates with a unique set of checks and balances, has a much more complex mission, and answers to a diverse constituency with interests that often conflict. Public-sector managers face an entirely different landscape than their private-sector counterparts. As such, not every business practice translates seamlessly into a government setting. Some need to be modified; others do not work well at all.
In business, if managers want to make changes within their spheres of authority, they can usually do so. If doing so requires resources that they don’t already have, generally all they need to do is make the case for the change to their superiors and the resources will be made available. While this is a bit of an oversimplification and is dependent upon the organization, the manager’s position, and the specifics of the proposed change, it largely holds true. It is not surprising that CI initiatives where improvement efforts are almost exclusively led by managers and professional staff have proved to be the predominant modus operandi in the private sector.
It seems only common sense that managers and professional staff should lead improvement efforts in the public sector too, and that they should focus on projects that will have the largest impact. But when they do, they typically face significant political, regulatory, and bureaucratic hurdles that can make the process frustratingly slow and inordinately time consuming. It is much more costly—in terms of the time, effort, and emotional energy required—to make medium and large improvements in government than it is in business.
This is not to say that improvements at this level should not be undertaken, because they should. But if a CI initiative is based primarily on this type of improvement, it will severely underperform. Not only can fewer improvement projects be completed because of the time and effort involved, but management-driven improvement suffers from the same limitation we just discussed for high-level improvement efforts. As we shall explain in the next chapter, most problems in organizations are buried deeply in their processes and work practices, which makes them invisible to top and middle managers. In other words, management-driven improvement can address only a fraction of the problems an organization faces.
It is normal for top leaders to want to focus on solving big problems, which naturally pushes them toward management-driven improvement and away from front-line–driven improvement. We saw this pattern in many CI initiatives. For example, in one Midwestern state, the head of the CI office told us of his frustration at being swamped with major improvement projects that totally consumed the time of his small staff. He and his people had impressive professional credentials as well as considerable experience in both CI and organizational change. They had come to realize that for their work to have a lasting impact, they needed to embed front-line improvement into the daily operations of the state’s agencies. Unfortunately, top administrators relished their newfound ability—through the CI office—to address the problems they saw as important, so they kept piling new projects onto the staff.
In another case we studied, the CI office was able to avoid the trap of being consumed by larger projects. In the Colorado Department of Health Care Policy and Financing (think Medicare and Medicaid), the CI office had started out using the Rapid Improvement Event (RIE), the popular CI approach mentioned in the Introduction, that is designed to make quick, often radical, changes to a process. In the private sector, a typical RIE might take one to five days, plus a bit of preparation and follow-up time. However, when the department followed the standard RIE script, it took eighteen months to complete the first project. The excessive time was caused by the need to convince many people in different parts of the organization that the changes were needed, to ensure their needs were addressed, to make certain no policies or rules were being violated by the potential solutions, and to get all the departments that might be affected by the changes on board. After the project was completed, the manager in charge of the CI office realized that working on a single large process consumed all of her staff’s time and emotional energy. It was a poor use of the small group’s improvement capacity. So she streamlined and condensed her RIE process, and then she pared down the size of the problems her group took on. By focusing on more modest issues that could be addressed by getting the right people in a room for an afternoon, her team was able to solve many more problems and significantly increase the pace of improvement. The four-hour RIE became the department’s new improvement technique of choice.
Front-Line Improvement—Under the Radar
As we have mentioned, front-line ideas constitute the bulk of the improvement potential in an organization. But in government, they have an important additional advantage. Front-line improvement ideas avoid almost all the obstacles faced by management-driven change. Since most front-line improvements are small, low-cost, and easy to implement, they remain largely invisible, and generally avoid the issue of resistance. And so, provided they have the support of their immediate supervisor, front-line staff can address a host of problems with large numbers of these incremental improvements without higher-level managers or the government bureaucracy ever being aware of the changes.
How, for example, would anyone in city government outside of Denver Licensing become aware of the licensing technician’s idea to preassemble the sets of forms needed for specific license applications? Or how would anyone notice that the technicians had created a greatly simplified instruction manual so that applicants would no longer be confused by the software when doing criminal background checks? Even if some of these individual changes were to become known outside of the department, why would anyone complain? They are practical and inexpensive solutions to problems that don’t impact anyone outside of the licensing staff and the applicants. And only after many such improvements had eliminated the long lines might city administrators notice that something was different about the licensing department.
The high-performing organization-wide initiatives we studied had a lot of improvement activity going on at all levels, from restructuring major processes to modest front-line adjustments. But there was a distinct difference in how the management-driven improvement projects were run in these organizations. The managers involved integrated a front-line perspective into their problem-solving in a number of ways, such as including front-line staff as members of management-led improvement teams, seeking input on management issues from front-line employees, and getting timely information from front-line staff to inform higher-level decisions. Additionally, synergies were created between larger management-led improvements and front-line improvement activity. Large changes typically need a lot of small adjustments at lower levels to work well, and many issues identified at lower levels need higher-level involvement to fix. By working seamlessly between levels, both management-driven and front-line improvement were made easier and more effective.
While management-led improvement efforts are generally more challenging in government than in the world of business, a case can be made for front-line–driven improvement actually being easier in the public sector than in the private sector. During our study, we interviewed hundreds of front-line employees. We were struck by the pride many expressed in working for the government. They believed their work was important and that it was in the service of others and for the greater good. They wanted their units to perform well, and given the opportunity to make improvements, they had no shortage of ideas. In our experience, this strong sense of mission is not so widespread in the private sector.
