Public services are often urged to be more like business – but business could learn a lot from public service improvement efforts too.
Government should operate more like a business.” This refrain is frequently heard from people complaining about government inefficiency – and over the years, government has certainly learned a lot from private sector practices, particularly when it comes to lean or continuous improvement (CI). But our research has found that perhaps with respect to CI, the reverse holds true. Business should operate more like government – at least, like some high performing government units.
The Practical Innovation in Government study was a six-year effort to identify what works, what didn’t, and why, in the deployment of CI in public-sector organizations. During the course of the work, we tracked the practices and performance of 77 public-sector organizations – ranging from small departments to entire cities and states – and conducted interviews with more than 1,000 people in the US, Canada, the UK, Denmark and Sweden.
What we found was surprising. Some of the improvement initiatives were struggling, while others were just getting started and had only made limited progress – but a handful of high performers had developed levels of efficiency and service that rivalled the best companies in the private sector. These standout examples offer a number of important lessons about improvement that business managers can benefit from. This article will explore three of them.
The most impactful CI efforts involve a front-line focus
One of the clearest differences between the highest-performing units in our study and their less successful counterparts was in the level of innovation and improvement activity taking place at the front-line level. In every one of the high performers, first-level supervisors and managers were engaging employees in solving problems and making improvements. These were not ad hoc improvement efforts, but were fully integrated into the normal way work was done every day. They involved small, easy to implement employee ideas that incrementally improved the unit’s performance, bit-by-bit.
The government units in our study that were less successful in their pursuit of CI or lean tended to focus most of their initiatives on medium and large improvement projects led by managers and/or professional staff. This is the way we most commonly see CI practised in the business world, where it can be reasonably effective. If top or middle managers in the private sector want to make a change, they usually have the power and resources to do so. But when government managers want to create change, they typically face a host of political, regulatory, structural and bureaucratic hurdles that can make the process painfully slow, inordinately time-consuming, and sometimes even professionally risky. Given these challenges, CI initiatives in government designed around management- or professional-driven approaches are hobbled from the outset.
Consider two examples from our study. Both involved the use of rapid improvement events (RIE), also known as Kaizen events. In this improvement technique, a small team dedicates three-to-five days to analyse and improve a specific issue or process. Typically, in the private sector, such an event is preceded by a bit of planning and followed by some activities to assure full implementation and deployment of the improvements worked out. Properly done, such techniques can result in quick dramatic performance improvements in a narrow area. But the RIEs we tracked – one in a state agency and the second in a city – took 18 and nine months to complete. Not very rapid.
Small front-line-driven improvements, on the other hand, largely avoid this drawback, because they fly under the radar of ‘higher-ups’ and the larger organization. There is a great deal of hidden power in front-line driven improvement. A small change that saves a few minutes in a process repeated many times throughout a day can save tens of thousands of dollars’ worth of time over a couple of years.
Large numbers of such front-line ideas can completely transform an organization. For example, Denver’s Department of Excise and Licensing – where 39 employees issued over 70 different types of licences – was able to cut the average time applicants waited in line to apply for a licence from an hour and 40 minutes (with some peaks of eight hours) to practically nothing over the course of 18 months, almost entirely through small front-line improvements. In the process, the department became a much better place to work: employee turnover dropped from 30% to almost zero.
The Washington State Patrol Garage, meanwhile, was able to eliminate a critical problem of dangerously high-mileage patrol cars on the state’s highways by tripling the rate at which it converted new vehicles to patrol cars. This was accomplished exclusively through ideas from its installers and required almost no additional resources. The garage has become a world benchmark for the conversion of factory fresh vehicles to patrol cars.
Research has shown that 80% of an organization’s potential to improve lies in the creativity and ideas of its front-line employees (as we explore in our previous book, The Idea-Driven Organization). They are the ones closest to the processes and practices used to do most of their organization’s work, and so are in the best positions to drive most improvement. How to fully utilize the power of front-line ideas is something a lot of business leaders could learn from these high-performing public sector units.
Problems come in all sizes and types. So must CI tools.
Although most improvement potential lies at the lowest level of an organization, problems and improvement opportunities are found at all levels of the hierarchy and come in all sizes, types and levels of complexity. As such, it was not surprising to find that the high performers in our study were using a full range of problem-solving approaches.Their approaches varied but can be classified into tools to address three different levels of problems: small front-line improvement ideas that can be easily implemented locally; medium-size process-level problems that can be solved by assembling a small group of the right people and providing them with a little time and some resources; and thirdly, approaches for large complex systems-level issues that take significant amounts of time, expertise, resources and clout to resolve.
In the province of New Brunswick (Canada), for example, six different CI approaches were deployed. Daily management addressed quick, ‘just-do-it’ improvement ideas that emerged as part of regular work. Waste walks involved problems that took a bit more thinking and perhaps some research, but were still largely handled at the front-line level. RIE and Lean Six Sigma approaches were used for mid-level issues, usually involving process improvement: the RIE process was used when a group of the right people could get together for a few days to solve a problem or modify a process, with Lean Six Sigma used for more-involved problems that required a team to dig more deeply into a problem and perhaps gather some data.
The fifth and sixth techniques were used for large system-level problems that required more of a sustained campaign. Value stream mapping was used to understand a complex process and to focus improvement efforts, which were then often attacked using mid-level improvement methods. ‘Deliverology’ was deployed only when a complex problem needed a great deal of top-down – that is, political – authority to change and implement new policies or make more sweeping structural changes across departments. New Brunswick integrates all these approaches in its Formal Management System, through which the province is managed.
Here again, leaders should take note. All too often, CI efforts focus on a limited set of approaches.
Even large complex problems benefit from a front-line perspective
The high performers in our study were also careful to incorporate front-line knowledge and perspectives into their larger improvement projects, most often by a practice of including significant front-line representation on the project teams.
Managers and professional staff have a lot of specialized expertise, often based on a combination of advanced education and familiarity with higher-level aggregate information and a broader organization-wide perspective. Front-line employees bring grassroots perspective and an understanding of how work actually gets done. Adding this perspective to a team leads to solutions that are more grounded in practical realities and more likely to be accepted and used by front-line staff.
A good example comes from a Lean Six Sigma improvement project at New Brunswick’s Vehicle Management Agency (VMA). The project addressed problems with spare parts used to maintain more than 4,300 snowploughs, school buses and fleet vehicles. The VMA had a network of 31 repair facilities, each with a stockroom to source and supply parts for the maintenance operations. On an annual basis, these facilities made 190,000 transactions, dealing with 34,000 different kinds of parts. The problem was that the parts management system was cumbersome, inefficient and slow.
To deal with the problem, the VMA assembled a cross-functional team including stockroom clerks, purchasing staff and shop-floor mechanics. Led by a Lean Six Sigma Black Belt, over several months the team was able make process improvements that streamlined and sped up parts ordering, while cutting inventory by two-thirds. It saved Can$750,000 annually in recurring costs – plus an additional $1.3 million annually in ‘soft savings’. Key to the effectiveness of these changes was the heavy participation of front-line employees who were intimately familiar with the problems and knew what would work – and what would be accepted by their colleagues.
Throughout our careers, our main interest has been operational improvement. Most of our work has been in the private sector, where interest in CI has been strong for decades. But we also consulted with public-sector organizations. In these cases, we frequently completed our projects feeling that less progress was made than we would have expected in similar situations in the private sector. It was that observation that led us to undertaking the Practical Innovation in Government study: we wanted to know if there is something inherently different about government when it comes to CI.
We found the mission, structure, culture and operating realities of government means that what works in the private sector does not always work as well in government. But we also found that business leaders would be well served to take a closer look at what the high-performing government units are doing with CI. They are likely to find some universal lessons that we too often overlook.
Dean Schroeder is an award-winning author, consultant and academic. Alan Robinson is a professor at the Isenberg School of Management at the University of Massachusetts Amherst. They are authors of Practical Innovation in Government: How Front-Line Leaders Are Transforming Public-Sector Organizations (Berrett-Koehler, 2022).