Reference no: EM131475140

Lean Government: An Idea Whose Time Has Come

lean optimization originated with manufacturers such as toyota and later spread to service industries such as banks and retailers. at their simplest, lean production strategies help companies to boost produc- tivity by eliminating waste, reinforcing quality, and fostering a culture of sustainable, continuous improve- ment that focuses on problem solving. the benefits of a lean approach can also include customer satisfac- tion and employee engagement. the results are magnified when lean initiatives follow a fundamental review of the strategic environment and operating model of the organization.

More recently, the lean approach has also been applied in the public sector, where it has been achieving similar results for the benefit of users, employees, and taxpayers. there are significant long- and short- term pressures that make lean optimization an idea whose time has come for governments and other public bodies. one of the long-term factors is demographic change: the aging of populations will increase the demand for a variety of public services, while the falling birthrate in many countries is weakening tax revenues and creating future shortages of workers. another long-term factor is the rising expectations of citizens, who now demand high-quality, tailor-made public services that match the best in the private sector-"one size fits all" government services are no longer acceptable.

in the shorter term, the financial crisis has raised public-debt levels in many countries, further limiting the ability to increase government spending to meet the increasing demand for public services. even if governments would like to spend more, they have less ability to do so because globalization and demo- graphic change continue to shrink national tax bases. the financial crisis has also added to the demands on public services, with governments intervening to support the economic recovery and strengthen regulation. as new agencies and programs are created, there is an opportunity to adopt lean principles that can optimize their operations.

Real Step Change Is Possible

the lean approach is delivering results around the world in a variety of public services, including health, welfare, policing, courts, and transport systems. two case studies illustrate the approach and the gains. the first shows the benefits to the effectiveness of a national police service from a review of the strategy and operating model that was undertaken in consultation with leading police officers. the second demon- strates the considerable efficiency gains in a large hospital when employees were involved in devising ways to improve service.

Case Study A: Less Police Time Wasted, More Officers on the Streets

the experience of a european police department highlights the value of a thorough review of the operat- ing model in delivering fundamental efficiency improvements through a leaner organization. an earlier overhaul had created a national organization by merging previously autonomous districts into 12 regions under a central headquarters. But the mergers had created larger units without taking advantage of operational synergies-and had failed to produce the expected productivity improvements necessary to put more officers on the streets. the government decided that the police service needed further reforms in order to release the additional resources needed to tackle crime better.

the review began by examining why the previous reform had failed to generate the anticipated efficien- cies. it identified the need for changes in the operating model to centralize certain administrative tasks while building up management capabilities at the district level to allow greater freedom for local police stations to set priorities. Proposals to achieve these improvements were developed with the regional unit heads, whose contribution ensured that the changes were effective and that the efficiencies could be achieved. By helping the districts to use their resources more effectively, this partnership has led to a significant improvement in the quality of police services without requiring any increases in funding.

Case Study B: Faster Treatment, More Operations

reforms at a major european teaching hospital illustrate the benefits of lean change driven by the engagement of staff. With more than 8,500 employees and 1,900 beds, this medium-size institution subjected patients to unacceptable delays, underutilized the expensive resources invested in it, and constantly demanded extra resources from a budget already straining at the seams.

three objectives were set:

- Emergency room: reduce waiting times, which often exceeded five hours, by 30 percent

- Operating rooms: increase the utilization rate, which was well below best-practice levels, by 20 percent

- Financial resources: release more than €10 million (by reducing waste) to support other improvements in the hospital's performance

emergency room waiting times were analyzed to identify bottlenecks, which showed several unnecessary delays as patients moved through the process. a study of the use of operating rooms found that the failure to use them properly in the afternoon wasted one-quarter of their capacity, while operations often started later than scheduled in the morning. these findings were shared with the physicians, surgeons, nurses, and other staff, who were formed into 16 kaizen continuous-improvement working groups tasked with tackling these problems by formulating changes in working practices.

their efforts removed the bottlenecks that led to long delays for emergency room patients, tightened up start times for operations, and increased the use of operating rooms in the afternoon. the preliminary results confirmed that the ambitious service targets were attainable and allowed the closure of some of the underused operating rooms. similar approaches have now been implemented in other hospitals to encourage staff to identify the appropriate changes for their institutions and to motivate them to imple- ment those changes successfully. Because the staff devise the solutions, their commitment to delivering them is real and sustainable.