Monthly Business Insight, Gregg Anderson, VisionQuest
Following the economic downturn that started in 2007, the efficiency of the Cayman Islands government has come under the microscope more than ever as our overall deficit approaches $1 billion.
Much of the anger aimed at the government comes from the business community that sees the government operating in a way that would bankrupt any private business, although some measures are now being taken to address this. While the private sector is tightening its belt and learning to cope with a slew of new regulations and fees, the government creeps toward seriously addressing entitlement programs, inefficiency and redundancies across all government departments and statutory agencies.
The 2010 Miller-Shaw Report recommended several ways of reducing government overheads and improving efficiencies, but some of the strategies have yet to be implemented. Deputy Governor Franz Manderson has finally admitted that core government needs external help to reduce overheads and personnel costs. This is probably because the same old strategies are being used – hiring freezes, salary caps, travel controls, postponing maintenance, etc.
A better approach for government is to use the concept of Lean Principles (aka Lean). Initially founded at Toyota in the 1930s and widely used in manufacturing post-World War II, Lean is the reason why Toyota dominates the automobile market. 3M, HP, Starbucks and many other businesses have used Lean or a similar system of continuous improvement much to their benefit. Saskatchewan Province, The U.K. police force, The U.K. NHS, the U.S. states of Iowa and Connecticut are among a few governments that are using Lean with amazing results.
Lean is a continuous improvement philosophy that organizations of any size or category can use. Lean is built on the premise that small, incremental changes regularly applied and continued over a long period produce significant improvements overall. Customers, employees, managers, suppliers and executives are involved in events normally called value stream mapping events devised to improve operational efficiencies and augment financial savings. By mapping the current situation, all collaborate to recognize and remove the non-value-added processes. This reduces wasted man-hours and enhances government’s customer’s satisfaction.
The result of Lean is increased efficiencies in services for government’s customers and a safer and more efficient workplace for employees. Our existing economic reality requires government to move at the speed of business; Lean is a device to get government nearer to this goal.
Ninecommon wastes defined
- Any process, whether meeting client needs or making products, is prone to eight everyday forms of waste that are frequently barriers to efficiency:
- Overproduction: unnecessary reports, undertaking work that was not requested.
- Waiting: time for authorization phases, waiting for information or decisions.
- Transportation: unnecessary movement of reports, documents storage.
- Inventory: work bottlenecks, (licenses, plan approvals) extra materials/info, and archaic databases/files.
- Unnecessary movements: visits to printer and copier, unnecessary trips to find files and supplies, travel to meetings.
- Processing waste: expending time on unnecessary processes that do not add value to the customer.
- Flaws: data errors, mislaid info, mistakes in documents, wasted effort on inspection or repeating work that was previously done.
- Unexploited human potential: not fully using staff problem-solving skills to add value to the customer or the organisation.
Although the complexity of government operations can make the process of specifying desired outcomes harder than it is in private businesses, every program/department in government can be improved by addressing the eight wastes above. Government employees who have to live with exceedingly bureaucratic procedures have many ideas as to how to improve operations. Unfortunately, they are rarely asked or involved in major decision-making processes.
Government should always be looking for ways to reduce costs, improve operations and service delivery. Implementing Lean initiatives could provide a framework for continuous improvement. Lean adoption could also save taxpayer money, improve workplace safety, and enhance government’s delivery of services to the public.
Gregg Anderson is managing director of VisionQuest Management Services Ltd., a boutique management consulting company that provides strategy, change management, governance, risk & compliance consulting services.