By Jeff Niland
“The money is there. There is absolutely no need to raise taxes of any kind. The problem is that a lot of the money is being wasted.” J. Niland (Town Council 12/15/2009)
For 30 years I have worked for a large and extremely successful global corporation. My expertise is in finance and organizational efficiency. When I joined the company in 1980, the tools known as Total Productive Maintenance, Administrative & Support, 5S, Kaizen, and Flowcharting were early in their development and were guarded as company secrets upon which the company’s future relied. Over the decades, these techniques have continued to be aggressively studied and refined and portions have become available to the public. The best organizations in the world have embraced these proven techniques and trust their future to them.
One of the big learnings is that as waste and inefficiency are eliminated, organizations become less complicated, and other areas such as morale, quality, customer service, and safety improve dramatically. Using these tools, organizations are consistently finding they have 20% – 40% waste built into their daily routines. Organizations implementing these techniques typically see spending, inventories, quality problems, safety incidents, and maintenance costs reduced dramatically. And they see productivity improved 40%-70%. I live in this world, and much of my career has been spent turning organizations around (some larger than Gilbert, some smaller). That is what I am paid to do.
Last Fall, faced with a “budget shortfall,” the Town of Gilbert set up a process to allow citizens to participate and provide recommendations to help resolve it. This process was called the Citizens Budget Committee. Seven subcommittees of citizens were formed. I was selected to be on an eighth committee called the Steering Committee. In this capacity, my primary role was to assist the Town Council members in reviewing and refining recommendations submitted by the Budget subcommittees. This work began on September 17th and ended on December 7th. During this time we reviewed and provided feedback on a constant flow of ideas from the subcommittees. Near the end of this process, we were told we could submit our own recommendations. I submitted and shared three recommendations on December 1st. To my knowledge, these ideas have yet to be reviewed by the Town Council.
While on the Steering Committee, I saw no evidence that the tools and techniques referred to above are being used in the Town of Gilbert.
Examples of waste and inefficiency are all around us. Here is an example of what I am talking about. Recently I went to a large box hardware store to purchase a new door. The employee was super friendly. When I showed him what I wanted from the display, he indicated that the size I wanted would be a special order. He went to the computer and began trying to locate the number for the door I needed. He called an associate over to help, and eventually called another store to help find the proper order number. During this time customers came and left as the associate was too busy to help them. About 1 hour later the proper number was found and I was told the price and availability. The employee was very friendly, apologetic, and a pleasure to work with. I told him I would talk to my wife and we would likely be back to order the door. About two weeks later, my wife and I went to order the door. A different employee greeted us, and was very pleasant. I described what I wanted and he said no problem. The process was almost identical to my first experience. Other customers came and left, other employees were called to help find the number. Fortunately, after about 45 minutes my wife happened to open a huge catalog and found the door. The number was keyed into the computer, and there it was. We ordered the door.
If the store manager was asked if he could get by with fewer employees, he would probably say that everyone is already super busy and customer service would suffer and sales would decline. If you asked the employee if he was busy that day, he would likely say he was very busy helping folks and trying to keep a cheerful attitude.
In an organization that has implemented the proper efficiency tools, a culture is created that “can see” waste and inefficiency. There is zero tolerance for waste, and every time waste is found, it is eliminated. Typically each employee finds and improves something at least every month. In this example, the first time I went to inquire about the door the employee would have noticed that the number was missing from the display. Once the number was found, the display would have been updated for all the special order sizes so no one would have to repeat what he went through. In addition, he would have communicated such that all stores in the country would have their displays updated, and the company would have conducted an audit to see if any other special order displays for anything else were faulty. The company would have looked at their procedures to understand how this could have happened in the first place, and made corrections so that it wouldn’t happen in the future. This simple improvement could save this company thousands of wasted hours, while improving customer service and morale at the same time.
With that as background, I submitted three recommendations to the Town that represent the first steps of beginning this proven process.
* Implement Department Budgeting Goals. This involves three key principles. First, you get what you measure; second, people respond best when they are informed and can see the need; and third, every person must be involved in achieving the goal.
* Implement Department Performance Goals. The intent is that if money is the only thing that is looked at, there may be the temptation to consciously or unconsciously cut corners in other key areas such as quality, customer service, safety, etc. To prevent this, clear performance standards must be established for the overall organization and for each department.
* Provide Tools Needed to Eliminate Waste and Inefficiencies that are Invisible to the Organization Today. In many cases processes are the way they are for no apparent reason, they just grew into that process. It is amazing how many processes have never been looked at in their entirety. Sometimes technology or other changes have replaced one part of the process but were never integrated into the rest of the process. The key principle to resolve this is that each work process needs an owner to ensure the process is efficient and that individuals are properly trained.
These three recommendations provide enough savings that taxes or other revenue ideas are not needed. These will also generate new savings year after year. I have offered my services free of charge for the next year to help with the implementation and success of all approved recommendations. At this point I have not been approached regarding my offer.
One of the key things needed for these tools to work is full support from the leadership of the Town. Without that support, it is like forcing a horse to drink, and will be a failure. Truly a loss for the community.
This summary of recommendations is very brief and is intended only to provide principles. Many books have been written about these tools and how to successfully implement them.