By Lawrence Rosier Principal Management Consultant December 16, 2013
This proposal was ignored by Texas State Bureaucrats. Possible saving to the State of Texas $1 Billion.
Over the years the Texas state government has successfully privatized many operations of the government. Indeed the Texas public would like to see the entire state government privatized. Reinventing a state government is thought to be nearly impossible but now we have an approach using the author’s General Reform Model that addresses the problems that prevent the state from operating like a private business. The process uses simplified steps making a smooth conversion of the entire state government to a Team Managed organization.
The biggest obstacle to reforming the Texas state government is the government itself. To start with the elected state legislature and Governor Perry must champion the reforms by implementing a State Reform Commission to oversee the implementation of the reforms. I would start the reforms with the Texas Legislative Budget Board (LBB) and when this is completed expand the reforms throughout the state government. The reason for doing the LBB first is that it is the powerful bureaucracy that runs the state government. The State Reform Commission transfers some of this power back to the elected officials allowing them to make reform decisions.
Another major problem is the state’s ineffective Budgeting method. State governments use a top-down budgeting system which is based on past expenditures in a Cash Accounting system. This obsolete budgeting system does not reflect what the actual cost of what any state function should be, only what was expended on the function in past years. In private businesses most costs are accumulated from the bottom-up enabling the accounting department to know what a function actually costs. The state’s top-down budget no doubt contains all the inefficiencies that one can think of. Top-down budgets are virtually worthless when trying to ascertain true costs for measuring in performance Management. This is the primary cause of inefficient government and it is used in nearly all state governments. The most costly assumption made by state governments is that the current top-down budgeting system makes bureaucratic agencies efficient. This budgeting problem is the primary reason for the state’s in ability to manage its functions like a private business.
A third problem is the state’s Bureaucratic organization structure itself. Bureaucracies tend to manage their public image more than the peoples business. Most are wasteful and are as much as 20% overstaffed creating a top heavy and sometimes toxic bureaucracy with many disgruntled employees. In the author’s General Reform Model the Functional Lean Teams become self managed and migrate smoothly to a new Team Managed organization.
The approach begins by examining all of the LBB’s processes simplifying them and making them efficient. This would be far too costly to be done by outside consulting firms. But not for an implementation of Enterprise Lean aka Toyota’s TPS (Toyota’s Production System) which trains all state employees to implement the changes to their jobs using a tool called Value Stream Mapping.
A fourth problem is the state’s obsolete IT Systems which need to be replaced with a modern Relational Database Management System. This recommendation is not a part of the proposal but its need will become obvious when the state government is reformed with its IT system also needing to be brought up to date. I suggest a new facility be built hardened against tornadoes for a Cloud IT System following the Washington State Example.
The following Proposal will Reinvent the Texas State Government and Make it operate even better than most private businesses.
Proposal for Texas State Government Reform
By Lawrence Rosier Principal Management Consultant
Lawrence Rosier & Associates
Revised Proposal January 24, 2013
This proposal is for the reform of Texas’s state government with the implementation of the General Reform Model developed by Lawrence Rosier Principal Management Consultant. I recommend that the implementation begin with the Legislative Budget Board (LBB) followed by the rest of the state government.
The General Reform Model implements Enterprise Lean throughout the state government. The Enterprise Lean concept was developed by Toyota to improve the culture of the company’s work force increasing the efficiency and effectiveness of the organization. Lean empowers employees to innovate and make continuous improvement to their jobs. The benefits to the state are from efficient operations but also the change in culture the way government employees view their jobs. In the second step of the General Reform Model; data developed by the Lean Teams is used for Work Measurement and from that staffing and budgeting is determined. The final step is the conversion of the Bureaucratic organization to a Team Managed organization.
The main goal is to get the highest efficiency and effectiveness possible in state government while maintaining desired state services. The General Reform Model recommends that a “State Reform Commission” be authorized to have oversight of the implementation of the reforms with the Principal Management Consultant reporting to them while in charge of the day to day activities of the implementation of the reforms. The reason for having the Commission with oversight over the implementation of reforms is that state bureaucracies do not reform themselves.
A second goal is to add transparency to the actual costs associated with each state function with a new bottoms-up budget allowing the people’s elected representatives insight in to the budgetary process. The General Reform Model is designed to accomplish these goals through: changing the culture of government employees, determining the actual staffing required, the development a new bottoms-up budget and moving from a bureaucratic organization to a Team Managed organization.
Implementation of the reforms can be done at minimum cost to the state using a Lean professional trainer from a local University in a train-the-trainer project and a Management Consultant familiar with the General Reform Model. All other implementation staff are borrowed and trained from the states existing personnel using the state’s own resources. This has significant advantages with trained personnel remaining in key jobs with the state when compared with implementations involving a high number of outside Consultants who leave when the implementation is completed taking critical knowledge with them.
The Proposal for the Implementation of the General Reform Model
by Lawrence Rosier Principal Management Consultant
I suggest meetings to allow Texas government leaders and staff members to become fully familiar with the primary method I am proposing using my General Reform Model. My other Reform Models should also be reviewed in this meeting as options for getting even greater efficiency in government. All Reform Models are based to some extent on the concept of employee involvement in Lean Teams.
The first step is the formation of a “Texas State Reform Commission” with broad powers to lead and implement state reforms. I suggest that the governor appoint the members of this commission with legislative approval. This is necessary for legitimacy and to make sure that data developed through Work Measurement is maintained and controlled in data bases by the elected Legislative Budget Committee and not by the individual agencies.
The first act of the State Reform Commission should be to implement Enterprise Lean
In the LBB and later throughout the state government. Planning for Lean Training should done by the Reform Commission meeting with the council of the Management Consultant. The purpose is to resolve issues related to Lean training, Facilitators, Budget Analysts and specifically what the Lean Teams must do to meet the requirements for determining staffing and budgets. Each Functional Lean Team is required to maintain a daily log kept by the Team leader. Lean training should begin immediately by the state’s training staff. I would suggest that the normal training curriculum be suspended and an all out effort be made for Lean Training. Training should be made for staff members first followed by management and then Lean Facilitators. Lean facilitators organize and train each employee functional Lean Team work group which meets for one hour on a weekly basis. I suggest that the best Facilitators may be borrowed from HR staff but I have had success with secretaries and even copy machine operators. I do not bring any of my own staff to the job but chose to use and train current state employees to fill key implementation jobs.
There are two major Lean Team groups, high level and at-the-work-place Functional Lean Teams. High level Lean Teams use Management staff and are tasked to study inter-department and agency document flows. They may also be tasked is in the Consolidating Boards and Commissions Model. A third possible task is in the Consolidation of State Government Services Model. A key element of the High level Lean Teams is their role in management when converting from the bureaucratic organization to the Team Managed organization.
After a period of about six months most Functional Lean Teams, those that were organized and trained by Facilitators, should have their Value Stream Analyses completed. I have had success with doing the flow of the current method on long white butcher or brown wrapping paper taped around a conference room on the walls. The steps of the current method is completed first followed by the proposed improved method done directly under it. This is done to highlight the differences between the methods. I suggest that some Functional Lean Teams with significant savings present their improved method to management. After the presentation the rolled document is given to a Budget Analyst to determine the savings from the proposal. Budget Analysts are trained by the Management Consultant and are part of the implementation staff.
Activities of the Management Consultant
The management consultant will play a key role in being sure that the Lean teams are properly trained and the in selection and approach of the high level Lean teams. The Management consultant will insure that the activities of Budget Analysts currently employed by the state can determine the correct staffing level through Work Measurement and any expenses needed during the process. Some Budget Analysts may find the proper staffing for variable processes difficult to determine. If so the Analyst should wait for the Management Consultant to make this determination. This data combined with the number of occurrences of the function over time, obtained from a daily log kept by each Lean Team, provides the basis for an accurate functional budget. The data from the rolled document should be kept on a spread sheet by the Budget Analysts and summarized in a database where all of the states functional data is stored. The activities of Budget Analysts are important and will be followed closely by the Management consultant.
The Management Consultant will make a final review for the actual staffing required. Note that in most cases this is not a simple calculation due to variations in the times required to do even the same processes. Consolidation is required meaning most employees who currently do not have an activity that takes up their full time will have to be trained to also do a second activity while other employees will become redundant. The main skill required is in balancing the work load to give the remaining employees a full time job. This may be further complicated by activities which continually change and will require the training of a Work Planner to balance the work load assignments for those employees on a weekly basis.
In the final step the Management Consultant will begin the process of organizational reform by replacing the Bureaucratic organization with a Team Management organization with top management managing the state’s activities through Group Teams with each managing several Functional Teams. The Lean Teams at the Functional level will become self managed Functional teams with each of their elected leaders reporting directly to a Group Managed team. Group Managed Teams will assume their management role from the pre-organized high level Lean Teams. There is some flexibility in how this process actually occurs but it is necessary in order to eliminate the problems caused by the bureaucratic organization. The important advantage in changing from a Bureaucratic organization to a Team Managed organization is that the savings continues annually for years. But if the bureaucracy is allowed to stay in place after only a few years the level of staffing could grow to where it originally was. This is also the period of time for the reduction of redundant state government staff. Once it is known where staffing can be reduced layoffs or temporary reassignments should be completed within a month.
I have provided the following options to ease the trauma of layoffs.
1. Review State obligations to the public for new programs creating new jobs for personnel.
2. Over the years Texas has privatized part of its government I recommend that these parts of the state government be brought back and staffed with redundant government personnel. Because the new state reforms will make all of government more efficient than its privatized parts. These privatized parts of government will not be able to compete with government employees and still make a profit.
3. Explore the option of using Lean trained personnel in assisting City and County governments in the implementation of the General Reform Model at the local level.
4. Explore the option of the Four Day Workweek. A 36 hour workweek instantly increases productivity by 10%. The state of Utah has done this successfully.
5. Keep most redundant personnel in temporary jobs allowing attrition through continuous improvement.
Current knowledge about staffing has shown that nearly all bureaucracies are overstaffed by at least 10% and most are overstaffed by as much as 20%. But I have also found over staffing up to 30% and higher. Savings for the state of Texas from staff reductions (salaries and benefits) I estimate to be from $900 million to $1 billion from census data. For this estimate I have assumed up to 20% over staffing from regular employees and management. The actual savings to the state of Texas will most likely be larger than this estimate.
Lawrence Rosier & Associates 12143 Cedar Grove Rd. Rolla Missouri 65401
573 364 8789 Cell 573 578 4716
Email: lawrencerosier4@gmail.com
Website: http://lawrencerosierconsulting.blogspot.com
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