An Excerpt from Ken Miller’s We Don’t Make Widgets

The Amazingly Ineffective (Crazy, Actually) Ways
Government Tries to Improve

In a comedy routine, Jerry Seinfeld asks, “Why is it that when men see a pretty woman in traffic they honk their horn? Do they really think the woman is going to stop what she is doing and get in? At no time in the history of man has this ever worked, yet men keep honking. Why? It’s the best idea they’ve come up with.”

The same is true with our government reform initiatives. They never actually work, yet we keep on honking. Here are some of my favorites:

The Blue-Ribbon Commission

Imagine that you are the shareholder of a large company and a new chief executive officer (CEO) has been hired. When the CEO was asked how she was going to make the company great, she responded “I’m going to form a blue-ribbon commission comprising retired government executives and professors as well as consultants who have never worked in our sector. We are going to have this esteemed panel fly over our factories at about 30,000 feet and then, using their expertise, they will tell us how we can be more efficient and effective.” Heck, for the fun of it, let’s throw some investors onto that commission as well.

What would you do? I’d sell my shares as fast as possible.

Yet this is how most government reform efforts begin — with a blue-ribbon panel of people who don’t understand how government works and also, amazingly, forget that the purpose of an organization is to achieve a higher return for its investors by building better widgets for customers in more efficient factories.

Here is a real-life example of the brilliance that comes out of these commissions. This comes from a real questionnaire sent by a real blue-ribbon commission to agency executives. Ask yourself how you would answer these four questions:

1. Are there functions your division/agency performs that may be considered by some to provide little value for the time and costs incurred?

2. What functions in your division/agency could be more effectively and efficiently performed? What can be done to improve their effectiveness and efficiency?

3. What functions in your division/agency could be more effectively and efficiently performed by another department?

4. What functions in your department are duplicative either within your department or across other agencies?

What do we get from these commissions? A thick report that basically tells people to stop using cell phones and cars, to automate everything that isn’t automated, and to centralize everything that is decentralized (until the next commission, which will advocate decentralizing everything this commission centralized).

You can’t improve government by looking at it from 30,000 feet. The problems with government aren’t visible at that level. It’s only when you open up the roof and see the factories inside that you can find the opportunities. Improving government is a battle that is won on the ground, not through the air.

The Politburo

What some people call the “politburo” are the central planners who lurk in the hallways of budget and planning divisions across the land. Their dream is a simple one:

If only we could link every dollar, every move, every bathroom break, and every copy machine to the objectives of the unit, which are perfectly in sync with the goals of the division, which are tightly aligned with the....

(Wait a minute! we’ve already used goals and objectives. What term can we use now? How about outcome? No, wait! We need to save that for later. Perhaps we could say intermediate outcome, which could feed multiple outcomes that culminate in the end outcomes. Brilliant!)

Of course, their dream is that elected officials will look at the tightly woven logic of the budgets and plans and be able to instantly see how each of their decisions will affect the citizens who elected them. The elected officials will then put aside partisan politics, preconceived biases, and constituent horror stories and make their budget decisions based solely on the facts. Their dreams do come true — in fantasyland.

I once started a project to see whether the cost of creating a budget this way actually outstripped the size of the discretionary dollars that were being allocated. The politburo sent the project to Siberia. The politburo, like the performance management KGB, are government re-formers. That is, they believe that there is no problem in government that we can’t fix with a better form. If we can redo the form, we can change government. The politburo tries to re-form managers. The performance management KGB tries to re-form employees.

I am a reformed member of the politburo. I was the principal architect of Missouri’s “Show Me Results” system. This elaborate system linking agency performance to statewide indicators was one of the first in the nation, and it helped the state of Missouri receive one of only two grades of A awarded by Governing magazine in the managing-for-results category. On paper, the system was beautiful, the envy of every Myers-Briggs INTJ in the land. However, when push came to shove and budgets had to be cut, how were decisions made? Politics.

One side forced cuts in education spending to make the other side look like the devil. Funding was cut to the environmental agency because of delays in certain construction permits. You know how this works. Were there positives to come out of the initiative? Sure. Departments worked together on common goals, the aims of government were a little more visible, budget people excelled at creative writing. But I’m not convinced these things wouldn’t have happened anyway, or that they justified the burden the planning produced.

”Show Me Results” failed at its two primary purposes: to help elected officials make more informed choices about where to invest taxpayers’ money, and to help agencies improve.

I’m convinced that nothing will help the former. And, as far as the latter, my belief is simple — you can’t plan your way to change. Planning is nothing more than intent, or wishing. Václav Havel, the great reformer of communism in the Czech Republic, is said to have stated: “Vision is not enough, it must be combined with venture. It is not enough to stare up the steps, we must step up the stairs.” Communism fell because there was no way the central planners could ever outperform freedom.

Reorganization

For whatever reason, reorganizations are usually the first play out of the playbook. They are the inevitable recommendation of every blue-ribbon commission. Reorganizations happen at every level of every organization. New management; new organization chart. My brother worked for a large computer maker that isn’t Dell and went through five reorganizations in four years. New management, new structure. As I’m writing this, one state in our great nation is going through a major reorganization (headed by a blue-ribbon commission, of course) for the bold, strategic reason that ... there hasn’t been a reorganization in the past 30 years.

Why do we do this? I have a theory that I developed while playing LEGOs with my daughter. Organizational charts are a lot like LEGOs. They are made up of lots of little boxes that you can stack together, break apart, and combine with new ones. You feel like you are building something. You are creating. The almighty power of the creator is in your hands (OK, I’m getting carried away). But the point is, reorganizations are like executive LEGOs. They allow us to feel as if we’ve made an improvement when in fact all we’ve made is a change. (Never confuse the two.)

Will this ever stop? The following quote should cheer you up. Read the date twice.

We trained hard ... but it seemed that every time we were beginning to form up into teams, we would be reorganized. I was to learn later in life that we tend to meet any new situation by reorganizing; and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency, and demoralization of our subordinates.


Petronious Arbiter
Grecian Navy
210 B.C.

I hope you won’t question my patriotism, but isn’t this exactly how we responded to the tragedies of September 11, 2001? We reorganized, created a Department of Homeland Security, and now we’re all safer.

The problem with reorganizing is that it doesn’t improve the systems of the agency. It just changes where those potentially dysfunctional systems reside.

Focus on Individuals

Finally, when all the other ways to improve government have failed, we place the blame squarely where it should be: on the people. We just haven’t found the right way to “hold ‘em accountable.” We’re all familiar with this type of change strategy: It’s the “we’re okay, you’re not” philosophy. That is, “the organization would be doing great if you all could just get your act together and do a little more a lot better.”

Underlying initiatives like performance appraisals, performance management, training, personal development plans, and suggestion systems (and on and on) is the assumption that improved individual performance will lead to better organizational results. There are some cases where this is so (sales organizations, for example), but in most cases it reveals a fundamental ignorance of how work is done. Individuals work in systems. Poor performance can usually be traced to the system first. W. Edwards Deming’s famous estimate was that 96 percent of problems can be attributed to the system and 4 percent to the people. Let’s fix the system first.

Perhaps an example will help illustrate this point. The following diagram shows five sequential steps in a process as well as how much each step can produce a day. Because of the complexities of the jobs, each step may differ in length. At the end of the day, how many units can the organization produce? Seventy-five.

Now, let’s implement a popular individual-level change initiative — performance management. We sit down and meet with each person individually to develop goals and performance plans for the year. The far right of the figure shows the new goals. Now, how many units can the organization produce? Seventy-five.

What happened to all the increased productivity? It’s sitting in a pile in front of Jennifer. So what do we do next? Well, of course we create a performance goal for Jennifer to reduce the size of the backlog. This ridiculous cycle continues in perpetuity. Rather than the focus being on the individual performers in the process, the focus should have been on how to fix the system: eliminate the process bottleneck, reduce process time, and so on. Then the focus can shift to the skills and productivity of individuals.

Noted sage Peter Scholtes wrote:

All of the empowered, motivated, teamed-up, self-directed, incentivized, accountable, reengineered, and reinvented people you can muster cannot compensate for a dysfunctional system. When the system is functioning well, these other things are all just foofaraw. When the system is not functioning well, these things are still only empty, meaningless twaddle.¹

Individual-level change is built on some long-held, faulty assumptions and myths: basically that employees are not giving it their all, and it is management’s job to motivate them to do so. Most managers would never admit that this is what they are trying to do, but it is at the heart of every “people program.”

This motivation usually comes in two flavors — positive and negative. Most people would say that they abhor negative reinforcement. The era of the boss who yells at people, throws things, and embarrasses people is supposedly over (although I sure do seem to meet a lot of these types anyway). Instead, we’ve become a kinder and gentler management corps. We use the enlightened techniques of positive reinforcement — employee of the month, a recognition event, gold coins that can be cashed in for prizes, pay for performance, or even a good old-fashioned pat on the back. What we fail to see is that both techniques, positive and negative, are two sides of the same flawed coin.

Anyone who has ever had a new puppy can understand these theories. When you first get a puppy, you have a natural desire for it to fulfill its natural desires outdoors rather than on your carpet. Deciding that you will be an enlightened manager of this puppy, you set about using all of your best positive reinforcement techniques. You have special “treats” ready to reward the dog’s success, and you use happy, positive language and generally make a great fuss out of anything that looks like progress. Then your patience slowly wanes as you spend yet another half hour on your hands and knees cleaning up another of your puppy’s accidents. You then interject some negative reinforcement — a spray bottle of water, a newspaper swat to the behind, a tantrum or two — until you finally reach a shame spiral of disgust. One simple question here: Who is motivated? You or the dog? As Frederick Herzberg would say: You are motivated, the dog is moved.²

The same thing happens every day with managers and employees. We continue to search for new techniques to motivate people (quick tip: all those motivational books by successful sports coaches say the same stuff over and over again), whether it’s throwing fish, casual Friday, or 360-degree feedback.

The truth is that we can’t motivate people. We can definitely move them, but motivation is about energy sources. The most powerful motivation is a limitless energy source — intrinsic motivation — that is inside people. When this engine is firing, we need do nothing but point it in the right direction.

Extrinsic motivation is finite. It comes from outside of us. When we as managers are providing the motivation, we are doing all the work. We are moving all of the pieces. You can choose to work this way but it will wear you out.

Many will argue that pay is a great motivator. It’s not. It’s a tremendously strong extrinsic mover — once. Then you have to do it again and again and again, at exponentially higher amounts, for it to have any effect. Today’s reward is tomorrow’s expectation. Think about it for yourself. If I doubled your pay tomorrow would you work harder? Better? Money is not a motivator, but unfair pay can be a lethal demotivator.

For many managers it is a great relief when they realize that it is not their job to motivate Bob. Instead, it is their job to ensure those factors that demotivate Bob (or get in the way of his intrinsic motivation) are removed and that the system Bob works in has been optimized to ensure excellent performance whether Bob, Ted, or Carol is working in it.

Does this mean we should not recognize employees? Should we not try to inspire them to greatness or help them be all that they can be? Of course not. We just need to understand why we are doing these things. Are we doing them as one friend would to another, or are we doing them as a new owner would to a puppy?

So why do we in government focus so much attention on individuals? Because we can’t see the systems! The systems are invisible as long as we are blinded by the myths. After we remove the myths, the systems will appear out of thin air, and we can set about the hard, but rewarding, work of making them the best they can be. It is then quite amazing to see what employees can accomplish in systems that work.

Technology

One of the simplest ways to look like a hero in government is to launch an automation project. These usually have grand names and catchy acronyms and are heralded like a cure for cancer. However, they have a dubious side effect: all change in the organization is officially put on hold until the new system is up and running. “Why, it would be silly to make that modification now when the new system will take care of that when it comes online in two years.” Of course, ten years later, when the new system is finally ready (and now obsolete), the “hero” has left town and the new management team is left explaining why the project took twice as long and cost three times as much.

Am I against technology? Absolutely not, I say (while charging my iPod). I’m just against technology for technology’s sake. One time I found myself in an absurd argument with a gentleman; it went something like this:

Me: Why do you want to automate this?

Him: Because it’s manual now.

Me: Why is that a problem?

Him: Because it’s not automated.

Technology projects in government have such a horrific track record that it’s amazing they ever happen. The technology vendors have to be happy that government executives turn over as frequently as they do because a long memory would not serve them well. It’s not just their extraordinary cost and their guaranteed tardiness that make them so destructive. It’s the impact they have on real improvement. A friend of mine refers to information technology projects as “paving cow paths.” That is, instead of boldly clearing new land — creating a new, more efficient process — IT projects tend to pave the old cow paths. The process is just as slow and unresponsive to customers as always, only now it’s automated.

Technology can be a great tool to help support initiatives that radically improve the key systems of government. When technology becomes the initiative itself, it inevitably lets everyone down. Why do we keep doing these things? How do we stop this madness and radically improve government? Achieve more with less? Become customer focused? Run better, faster, cheaper?

We have to bust the myths.

The good news is that to change, all we have to do is change our minds. It doesn’t require a $20 million IT solution.

What Works

This book is not a theory book full of musings over the proper role of government. Neither does it espouse a grand new way of budgeting that will instantly turn elected officials into rational decision makers. I will not be extolling the virtues of privatization or introducing any radical policy reforms that will end poverty.

This is a practical book that focuses on improving the performance of government. That is, rather than describing a government that could be or should be, we’re going to talk about how to improve the government we already have. Government agencies are collections of systems that have evolved over decades. To improve the agency, to achieve our outcomes, we have to improve these systems — there simply is no other way. Unfortunately, we don’t see the systems because we’re blinded by the myths.

So, what works? What works is a group of committed managers who see past the myths and who are working with teams of employees to improve the vital systems for the betterment of the organization, its customers, and employees.

1. Peter R. Scholtes, The Leader’s Handbook: Making Things Happen, Getting Things Done (New York: McGraw-Hill, 1998).

2. Adapted from the writings of Frederick Herzberg.

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