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6/26/2009
Improving Government in the US

The application of systems thinking in government is being well-documented by my Vanguard partners and you can witness the improvements yourself by going to www.thesystemsthinkingreview.co.uk.  This is a great resource for local, city, state and federal government.  The debate wages on how big or small government should be, but whatever side you stand on services still have to be provisioned and it is in our best interest to provision them with the least amount of cost and improved service.  I have established in previous posts that there is no trade off between good service and costs.  If you improve service costs will go down . . . this is a government management paradox (read: The Zero-Sum Game:A Loser’s Mentality).

The problems with services provisioned by the government are many.  Too much focus on reducing costs, that in another paradox only increases them because we manage by visible costs alone in government, but it is the invisible costs that can’t be seen.  The types of wastes outlined by John Seddon in Systems Thinking in the Public Sector hold true for the US Government:
The costs of people spending time writing specifications.
The costs of inspection.
The costs of preparing for inspections.
The costs of the inspections being wrong.
The costs of demoralization
The functional separation of work conceived by FW Taylor 100 years ago still drives thinking in both the private and public sector.  This thinking along with technology leads to such foolishness as outsourcing that increase costs in the pursuit of transaction cost reduction.  This productivity mindset fails to look at the end-to-end costs (or total costs) in the pursuit of lowering the cost of a function or transaction leading to avoiding opportunities to reduce total demand (because most of it is unwanted or failure demand).  Outsourcing is not possible with technology, so we both outsource waste and lock it in with technology.

Shared services fares no better, the move is to achieve economies of scale and reduce transaction costs.  The problem is that costs are reduced by economies of flow (not scale).  We typically get the double-whammy of shared services and outsourcing where we are allowing our government to contract out our waste and add to it in many cases.  Most of the waste in shared services is because government management has separated the work into front office-back office or skilled – simple (functional or transactional).  A better way is to design against demand where the variety produced by service can be absorbed.

The other waste is targets set in government.  Targets become the defacto purpose of government agencies, creating measures that sub-optimize by focusing on compliance and provide poor service by restricting method.  The purpose should be to provision services against customer demand, finding measures that matter to understanding and improving the work, and liberating method.  This liberation of method achieves government innovation by allowing government managers to be responsible and choose what to do free from compliance.

The conversation will continue, and we will need to try new methods to improve the way the US Government provisions services and not new ways to restrict and costs to an over-burdened system.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.