Tag Archives: government

Lean Thinking in Minnesota Government

The Office of Governor Pawlenty issued a press release on Minnesota’s Drive to Excellence effort:

Increased Quality via Lean Continuous Improvement Reform – The State has adopted
“Lean Thinking” as its preferred process improvement tool. So far, 18 agencies are actively
involved, with 302 staff members participating in 38 Kaizen improvement events. These
events have yielded significant improvements in the delivery of state government services,
from issuing duplicate birth certificates to processing State Soldiers Assistance requests.

The Drive to Excellence includes 15 specific projects for reforming state government, ranging
from strategic procurement to a Lean continuous improvement effort and the reform of state grants
management. The projects focus on improving quality and customer service and reducing costs in
the delivery of government services to citizens.

Read about more public sector management improvement efforts on my Public Sector Continuous Improvement Site.

Related: Six Sigma In New York Local GovernmentTransformation and Redesign at the White HouseThe Georgetown Kentucky WayPublic Sector Management

Federal Government Chief Performance Officer

A Quality Manager for Obama

President-Elect Obama has hired a quality manager, and her name is Nancy Killefer. She is the newly appointed “Chief Performance Officer” whose mandate is to manage budget reforms while eliminating waste in government processes, ultimately making it more effective. An MIT & McKinsey alum, Time calls her the “first official waste watchdog.”

Previous administrations have had exactly the same thing (regardless what Time magazine says), so I don’t think we should get carried away. Eliminating wasteful government spending is a refrain from every new administration. She will be running the Office of Management and Budget (OMB) and have this new title “Chief Performance Officer.” OMB has been the official waste watchdog, for at least decades. They are far from understanding muda. Time will tell if there is any change on that score going forward, I am skeptical.

Here is very typical OMB language from a 1995 memo by Alice M. Rivlin, Director of OMB:

Management controls are the organization, policies, and procedures used to reasonably ensure that (i) programs achieve their intended results; (ii) resources are used consistent with agency mission; (iii) programs and resources are protected from waste, fraud, and mismanagement; (iv) laws and regulations are followed; and (v) reliable and timely information is obtained, maintained, reported and used for decision making.

I worked with improving management in the federal government at the Office of Personnel Management, Office of the Secretary of Defense, Quality Management Office and the White House Military Office. I was one of the founders of the ASQ Public Sector Network (now Government Division) and have managed the Public Sector Continuous Improvement Site since 1995. There have been plenty of great efforts to improve management in government that have made real progress. But there is much more that needs to be done.

There are complications in applying management improvement in government but they are fairly minor comparatively. In general, the difficulty is not the necessary adjustments for a different environment than the private sector, but similar challenges to improving private sector management.

In 1982, The Grace Commission provided a report to the Regan Administration. Radio Address to the Nation on the Management of the Federal Government by Ronald Reagan, October 29, 1988

“We also set up the Private Sector Survey on Cost Control led by Peter Grace — almost 200 top business executives. This Commission spent months looking at every part of the Government, finding out where modern business practices could eliminate waste, fraud, and abuse in the Government. When they were through, they’d come up with 2,478 suggestions. And almost every recommendation we could put into effect without congressional action has been implemented. And we’ve saved close to $80 billion. We’re hoping that the next Congress will pitch in and do its part.”

The Clinton administration had the National Performance Review which was the closest thing to an attempt to move toward my concept of management improvement.

The current administration had their own President’s Management Agenda. Government Accountability: Efforts to Identify and Eliminate Waste and Mismanagement Hearing before the Committee on International Relations, House of Representatives, September 4, 2003.
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Department of Defense Lean Six Sigma

Gordon England, the Deputy Secretary of Defense, signed a directive establishing policy and assigning responsibilities to institutionalize the effort throughout DoD. See a webcast of his speech [the broken link was removed] on lean six sigma to a DoD conference on continuous process improvement.

Leading Business Transformation the “Lean” Way [the broken link was removed]

Since it began employing LSS, the Department of the Navy (DON) has completed 1,700 Black Belt/Green Belt projects and over 2,000 Kaizen events (i.e., action-oriented events designed to improve existing processes). Initial projects were designed to build confidence and gain momentum for success in high-impact core business value streams. The DON’s total of 3,399 trained LSS Green Belts exceeds the Secretary’s goal of 2,000 by the end of 2006, and of the 935 trained LSS Black Belts in the DON, 93 have attained American Society for Quality (ASQ) Black Belt certification.

Naval Air Systems Command (NAVAIR) joined with Raytheon to complete an LSS project, which ultimately saved $133.5M across the 2006 FYDP and $421M over the life of the Joint Standoff Weapon (JSOW) Block II program. The integrated product team developed a three-tier approach to reducing weapon unit cost over a two-year period. Success of the JSOW program has led to development of a follow-on Block III weapon system.

The Marine Corps is applying LSS concepts, analytic techniques, and tools to improve the process for identifying, evaluating and acquiring critically needed warfighting equipment. Initial analysis focused on the evaluation stage, where improvements reduced the time required for this step by 35% – from 131 days to 85 days – and identified savings valued at $135K per year.

The first LSS initiative for Army aviation scheduled maintenance was deemed a success and signals a more efficient future for maintaining the Fort Rucker helicopter fleet. More than 32 days of scheduled maintenance were saved during the first LSS effort for Aviation Unit Maintenance involving UH-60 Black Hawk helicopter scheduled maintenance. The first helicopter inducted into the newly developed process was returned to flying status in just 18 days, which included a four-day break for the Fourth of July weekend. That is a 67% improvement in phase flow efficiency from the previous average time of more than 50 days of phase cycle maintenance for the UH-60.

See: online six sigma resources and lean manufacturing resources from the Curious Cat management improvement web site.

Related: Government Lean Six SigmaPublic Sector Continuous Improvement Site – Transformation Through Lean Six Sigma [the broken link was removed] – Army Business Transformation [the broken link was removed] – History Of Quality Management OnlineMore Lean GovernmentArmy Lean Six Sigma
Doing More With Less in the Public Sector: A Progress Report from Madison, Wisconsin by William G. Hunter, Jan O’Neill, and Carol Wallen, June 1986.

Businesses Tell the IRS They Are Not American but Executives Stay in USA

I have previously written about the ethically challenged companies that claim they are not American to avoid paying the taxes that they owe. For some reason the executives, often seem to stay in the USA though? It is sad that such behavior is tolerated.

10 Big Businesses That Have Moved Their Headquarters Abroad to Pay Less U.S. Taxes [the broken link was removed]

Halliburton: Houston-based Halliburton, which offers a broad array of oil-field technologies and services to upstream oil and gas customers worldwide, announced the opening of a corporate headquarters in the United Arab Emirates city of Dubai on March 12, 2007. The company, which was once led by U.S. Vice President Dick Cheney, said that its relocation was part of a strategy that it announced in mid-2006 to concentrate its efforts in the Middle East in order to attract business.

Yes the same company taking billions in Pentagon no-bid contracts (Company Official Defends No-Bid Army ContractHalliburton Contract Critic Loses Her Job – Halliburton’s Fleecing Ends — Or Does It? [the broken link was removed]).

And that isn’t all – read this on how they don’t pay social security or unemployment… taxes since they are not an American company when they hire American’s to work for the US government in Iraq. Top Iraq contractor skirts US taxes offshore – “Kellogg Brown & Root, the nation’s top Iraq war contractor and until last year a subsidiary of Halliburton Corp., has avoided paying hundreds of millions of dollars in federal Medicare and Social Security taxes by hiring workers through shell companies based in this tropical tax haven.”
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Confusing Customer Focus

Misuse of the “Customer” Concept

“We are told that the airlines are our customers,” FAA inspector Charlambe “Bobby” Boutris said. “But we have a more important customer, the taxpayers” who want government to ensure a safe aviation system.

That’s crazy. The FAA is supposed to be serving and protecting the passengers, not the airlines. This is like a supervisor in a workplace treating their employee as a customer… even in a “servant leadership” environment, that’s not right.

“Customer focus” is good, but only if you properly define customer relationships. I’d prefer the FAA think of me and my fellow travelers as the “customer,” not the airlines.

I agree there are several different customers. This is actually not uncommon outside of government but for government agencies multiple “customers” that might have divergent desires are more frequent. But the “customer” frame of reference I still think has value.

I actually think the problem is the way people choose to interpret the idea. If I buy a car from a dealer they don’t sell it to me for $100. They don’t agree to not tell the government so I can avoid sales tax. They don’t agree to sell me a car that is not legal in the state. Customer service does not mean do what is in the interest of the customer irregardless of laws, regulations, good business practices, etc..

I would say doctors don’t give patients anti-biotics for viral infections (but actually they do). They shouldn’t. When doctors behave irresponsibly and give antibiotics in ways that harm the heath of society, some might try to claim it is because they are giving the patient/customer what they want. That is not a reasonable excuse.
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Stupid Bureaucratic Requirement

Quaker teacher fired for changing loyalty oath

California State University East Bay has fired a math teacher after six weeks on the job because she inserted the word “nonviolently” in her state-required Oath of Allegiance form.

“I don’t think it was fair at all,” said Kearney-Brown. “All they care about is my name on an unaltered loyalty oath. They don’t care if I meant it, and it didn’t seem connected to the spirit of the oath. Nothing else mattered. My teaching didn’t matter. Nothing.”

Modifying the oath “is very clearly not permissible,” the university’s attorney, Eunice Chan, said, citing various laws. “It’s an unfortunate situation. If she’d just signed the oath, the campus would have been more than willing to continue her employment.”

Modifying oaths is open to different legal interpretations. Without commenting on the specific situation, a spokesman for state Attorney General Jerry Brown said that “as a general matter, oaths may be modified to conform with individual values.”

“I honor the Constitution, and I support the Constitution,” she said. “But I want it on record that I defend it nonviolently.”

My take: stupid unthinking government action. First I can’t see what value the signing does at all. But even if you think there is some aim that having everyone sign supports does a Quaker inserting non-violently harm that aim in some way? Is it really unquestioningly doing whatever you are told that is the value that is what is being aimed for? Seems pretty clear to me from even this short article this teacher understands the constitution much better than most people and cares enough to take the values that constitution endorses seriously. While the government looks like they only care about getting their form on file and don’t care at all what the purpose of that form is (the purpose can’t really be just to coerce everyone to sign it, can it?).

To me she is doing a great service to defend that constitution with her actions. Hopefully she can do so and have her job. But standing up for what is right often can leave you worse off personally.

I understand that it is easier to ignore the purpose and just focus on compliance with the rules. But what does it say if your actions show that actually loyalty doesn’t matter and signing something you don’t believe is ok? It just bothers me that this loyalty oath situation puts an emphasis on empty promises above the true intent of the constitution. Devaluing it harms us all in the long term.

Related: The First AmendmentPublic ManagementCustomer Un-focus

Losing Consumers’ Trust

Last week their was a recall of 143 million pounds of beef in the USA. Lets take a short systemic view at what is going on. The public has an interest in a safe food supply which is difficult to enforce through caveat emptor (buyer beware). So this is a natural situation for government regulation (to protect the public interest) – plus it relates to public health which is another natural for government regulation.

The USDA regulates the industry and puts in place rules as new threats emerge. So a few years ago they instituted rules that if an animal can’t walk after the USDA pre-death inspection they be re-inspected “largely as a precaution against bovine spongiform encephalopathy, or mad cow disease .” It seems hard to argue with that plan. If the pressures to maximize profits (assuring every cow is processed) exceed the desire to take precautions to ensure the safety of customers the risk of losing the trust of consumers is great.

There have been several instances, that have been made public, which call into question how effective the system is at preventing self interest from endangering the food supply. That then calls into question the safety of all meat that is part of that system. Many in the industry seem not to realize that they will be judged by the failures of any in the industry. And in my view, it is in their interests to have strong protections industry-wide.

The export market for meat is large. For political reasons some countries aim to protect local farmers and ranchers (the USA is a huge subsidizer of farmers and ranchersSugar Industry Quotas). And when the system continually shows that bad practices are allowed to continue it makes it a very easy decision to not allow the import of meat. Why would a country want to import food from a system that fails to follow food safety standards (especially if politically that is what they want to do – this provides them a pretty darn good reason to do what they want).
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Why Pay Taxes or be Honest

This kind of stuff makes me mad. I was taught about robber barons in school (or actually I think by my uncle but…). And what I was taught was that business used to be seen as an amoral area. But then society agreed (or rather it no longer was an accepted excuse to claim business was an amoral area) that morality applied to whatever you did, whether you were at work, or not.

But we keep getting these continuing examples that are so distressing: Enron, Worldom, Tyco, Accenture, HP [the broken link was removed]… It is so disappointing that such behavior is mainly excused (until finally the evidence presented is so damning that most stop defending the specific case in question).
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Army Lean Six Sigma

Lean Six Sigma eases fiscal constraint challenges [the broken link was removed] by Beth Reece, Army News Service:

During fiscal 2005, the Army Material Command saw $110 million in savings and cost avoidance by implementing Lean Six Sigma practices. By removing waste and better controlling output, for example, Letterkenny Army Depot, Pa., reduced costs by $11.9 million in Patriot air defense missile system recapitalization. And Pine Bluff Arsenal, Ark., reduced repair cycle time by 90 percent and increased its production of M-40 protective masks by 50 percent.

Another press release on the Army’s use of Lean Six Sigma. See: online six sigma resources and lean manufacturing resources.

Gas Tax

An Increase in the Gas Tax Would Hurt Consumers and Slow the Economy [the broken link was removed]

Gross Domestic Product would decline by $6.5 billion per year, in real terms, from 2005 to 2014. In other words, this $131 billion in government revenues would shrink the economy by $65.5 billion.

There would be, on average, 37,000 fewer job opportunities each year. That works out to one lost job for every $351,000 in new taxes, which is equal to 11 years of work at average yearly wages.

Sure sounds bad. This was written in 2004 opposing a 5.45 cent increase in the gas tax. Of course gas price have gone up more than 10 times that amount. Those increased prices have the same negative impact of a tax increase but the increased prices paid go to foreign producers and the oil companies instead of the taxpayers. We would have been better off increasing the gas tax 50 cents a gallon and cutting the huge deficit instead of accepting such arguments.

Or just cut the gas tax: Why Congress Should Cut the Gas Tax [the broken link was removed], 2000

Gas Tax Now! [the broken link was removed] by N. Gregory Mankiw, 1999.

Many members of Congress have been pushing for a cut in income taxes, but they’ve been unsure how to pay for it. Fortunately, I’ve figured out an answer: with a tax increase. Let’s cut income taxes by 10% and finance it with a 50-cent-per-gallon hike in the gasoline tax.

That certainly is a better idea than what was done. Cut taxes and just have the next guy figure out how to pay for it (which will have to be by taxing the children and grandchildren of those granted tax cuts). When the government was projected to pay down the debt it had accumulated (the state when President Clinton left office) that was claimed to be taking money from citizens that was “theirs.” But piling debt on the children of the citizens that taxes are cut for is fine?

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