I ran across a couple of documents I had not seen about what was going on before the failed Indiana Welfare Eligibility Modernization was into full swing.  A couple of documents are very telling about the mindset of the administration.  The first is from FSSA called Eligibility Modernization: The Need for Change and the second is an article that appeared in reason.org called Steering Not Rowing.

The FSSA document cited six reasons on why the welfare eligibility system needed to be changed.  They were:

  1. Worst record of welfare reform in the country
  2. High error rates
  3. Slow processes that fall short of federal guidelines and provide poor customer service
  4. Inconvenient access
  5. Lack of consistency
  6. Lack of tracking capabilities and proper accounting programs

In the article Steering Not Rowing former FSSA Secretary E. Mitchell Roob outlined the problems in light of forthcoming solutions:

  • Lack of a central accounting system
  • A paper-based system
  • A general rule based on theory that if you can find someone in the private sector doing a service that mirrors what the government is doing, chances are the private company is doing at much higher quality and a much lower cost.
  • Efficiency leads to costs savings.

The State of Indiana (in general) has spent a lot of time putting in systems to track costs.  They spent millions implementing a Peoplesoft system to do just this.  The problem is they have spent so little time looking at the causes of costs.  Tracking costs does nothing to improve them.  In fact, spending money on ways to identify costs adds to costs and that is waste.

FSSA would be better off spending time finding the causes of costs associated with the design and management of work.  They are in the system (structure, work design, measures, technology, management thinking, etc.) and end-to-end flow from a customer perspective.  Something that typical government management can’t or won’t see. 

The assumptions around technology, automation and “paper-less” systems is one I see killing government on a routine basis.  Technology companies are making lots of money and nothing is getting better. 

The problem is the work design and not the need for more technology.  We perpetuate poor work designs by adding technology or automating them.  For government management it is to lock in the costs of a bad design.

Front office/back office and functional designs aren’t questioned they are automated.  For example, worker A passes documents to worker B  and the decision is made to automate the process.  Do we need the hand-off or the document?  This goes unquestioned and if you think about it IT companies don’t want to get rid of a poor design.  A poor design means lots of front office/back office and functional designs and the more of these we have the more revenue IT companies get to automate them or make them paperless.

The premise that efficiency leads to cost savings is unfounded.  Government management needs to learn to be effective.  A focus on costs and efficiency usually drives sub-optimization.  This means that we drive costs down in one area, but total costs are driven up.

The public sector would be wise to see John Seddon’s “Law of Costs.”  This is where government costs increase in proportion to the variety of demand.  The traditional design of government work is such that freedom must give way to efficiency . . . meaning the worker must be controlled.  The management paradox is that freedom by the worker is what gains efficiencies as the worker is best able to absorb the variety of demand that comes to government work. 

The ability to absorb variety by the worker requires less technology as only people can abosrb variety effectively.  Something that technology companies don’t want governments to understand.

Public sector innovation is possible, but it requires a new line of thinking about the design and management of work.  The State of Indiana and FSSA continues to miss opportunity as they are blinded by oversight thinking,  an obsession with technology and cynical view of the role of the worker.

We help government entities innovate through our unique approach to the design and management of work.  We can help you “see” the waste and sub-optimization of your systems and work with you to change management thinking and redesign.  To learn more go to www.thesystemsthinkingreview.com or contact the North American office at info.newsystemsthinking.com or (317)849-8670.