I have been accused by some of my readership of being unduly negative, offering problems but no solutions. In service of a remedy, a proposal: faced with huge deficits and proposed federal and state tax increases, why not reengineer government?
What is Reengineering?
Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed. Back in the 80’s I met the man who coined the term, Dr. Michael Hammer. At the time, American companies created elaborately overstaffed and redundant bureaucracies. One department of a corporation had no idea what another department was doing. Many times they were both doing the same thing. It was also the dawn of leveraged buyouts and corporate takeovers. Either companies became “lean or mean” or they were takeover targets.
The need for reengineering was encapsulated in Gordon Gekko’s speech (Wall Street-1987) at the Teldar Paper shareholder meeting:
Teldar Paper has 33 different vice presidents each earning over 200 thousand dollars a year. Now, I have spent the last two months analyzing what all these guys do, and I still can’t figure it out. One thing I do know is that our paper company lost 110 million dollars last year, and I’ll bet that half of that was spent in all the paperwork going back and forth between all these vice presidents. The new law of evolution in corporate America seems to be survival of the unfittest.
Applying a good measure of common sense Dr. Hammer and his team examined business processes and determined where overlapping functions could be eliminated and consolidated. His focus was to eliminate unnecessary work and make the core functions operate more efficiently. The result often was better service, fewer but more focused employees and ultimately happier customers.
A Stroll by the Department of Commerce
Around the same time, during my work on a case in Washington, DC, I went on a stroll past the US Department of Commerce. In an ugly, New Deal building overlooking the Mall, there were thousands of offices, some with window planters. These folks looked like they had settled into their careers for the next 30 or 40 years. What did these people do? More importantly now, what do we need them to do?
Between 2004 and 2008 employment in the US Department of Commerce increased 10%, from 30,000 to over 33,000 employees. The mission of the Department is stated as:
a. Participating with other Government agencies in the creation of national policy, through the President’s Cabinet and its subdivisions.
b. Promoting and assisting international trade.
c. Strengthening the international economic position of the United States.
d. Promoting progressive domestic business policies and growth.
e.Improving comprehension and uses of the physical environment and its oceanic life.
f. Ensuring effective use and growth of the Nation’s scientific and technical resources.
g. Acquiring, analyzing, and disseminating information regarding the Nation and the economy to help achieve increased social and economic benefit.
h. Assisting states, communities, and individuals with economic progress.
I am using Commerce for illustrative purposes, as they oversee many valuable functions such as the census count, the national weather service and the patent and trademark office. But do we need a federal bureaucracy to promote economic programs, coordinate faith based community programs, advance scientific technology? It also raises the question of overlapping functions with other federal agencies such as State, Treasury, Defense, and Labor.
The Golden State – California Dreaming
California is mired in a deep budget crisis threatening to bankrupt the state. Nonetheless, the legislature has chosen the path of budget cuts rather than reengineered state agencies. A could be the question of why governmental regulation is even needed in all these areas. One enterprising blogger has catalogued 489 separate California state agencies. There are commissions, bureaus and agencies on seemingly everything from funerals and cemeteries to cultural resources to the status of women. At one time each agency, commission, council or bureau served a purpose. But each now has its own political constituency fighting for its preservation.
The Reengineering Solution
Unfortunately, Michael Hammer passed away last year. However, many carry on his work. One does not have to be an expert to see that applying the principles of reengineering would improve governmental efficiency and public service. Most importantly, it would ameliorate the need for increased taxes. Government is quick to criticize business for its excesses. It is time for business and concerned citizens to make government also earn its way. Perhaps, Michel Douglas could be enticed to make a new movie: Sacramento: the Sorrow and the Pity or Nightmare on Capitol Hill.
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