Operational Redesign Considerations
Dear Representative McFarlane,
First of all I would like to thank you for
your earlier invitation to speak at the Redesign Caucus and for the
Minnesota Legislature’s interest in this very important topic. I
have listened to others address this caucus and have been impressed by
the thoughtfulness of many of the ideas put forward.
My comments below will focus on the
operational aspects of redesign – what it is and how might it best be
approached, or, in other words, how might someone actually approach a
redesign of Minnesota government operations.
Some background first: I am a
life-long citizen of Minnesota. I do not represent any public or
private organization nor am I engaged in any for-profit pursuits.
I simply am interested in efficient and effective government
I am a board member of Minnesota Seasonal
Recreational Property Owners (MSRPO), a citizen group that represents
the interests of lake and forest land property owners at the Minnesota
Legislature. My involvement with MSRPO has led me to this
caucus. MSRPO is also very interested in efficient government.
My professional experience comes from
companies like Dayton-Hudson & Target Corp, various divisions of
Control Data/Ceridian Corp, Unisys, Midwest Federal, & Health Risk
Management where I served in many different roles relating to
operational efficiency including strategic and financial planning
executive, internal audit executive, operations consultant, quality
systems and IT projects manager, systems auditor, systems analyst and
system designer. As an independent consultant, my clients
included Alliant Tech Systems, Fallon McElligott, Northcott AmericInn,
Conseco, non-profits like the National Minority AIDS Council in
Washington, DC, Minnesota’s 12 county South Country Health Alliance
and many others across various industries.
I hold an MBA from the U of M’s Carlson
School and have earned several professional internal auditing and
information systems certifications.
The common theme of my work has always been
operational effectiveness and operational efficiency. It’s been
the primary focus of my professional life.
Understanding Operational Redesign
What is operational redesign? Is it
re-engineering? Is it continuous quality improvement? Is
it like ISO 9000? They all are very similar at their core.
Objectives of operational redesign:
Serving customers (i.e. - Minnesota citizens) needs to a high degree
of satisfaction while keeping costs as low as possible by employing
efficient operational processes that also help to minimize waste and
Operational redesign in the business world
is forced by changing customer needs, competition, new technologies
and new regulations. In the public sector, new regulations
(statutes) play a key role in redesign. Almost any new bill
approved and signed into law will force redesign at some level of
government. So, legislators are continuously initiating
operational redesign at some level.
It is important to recognize that effective
operational redesign at the enterprise (state) level is an ongoing
examination of all operational processes to determine how well they
function together and to identify which ones need to be redesigned in
order to satisfy the objectives noted above.
Piecemeal redesign of independent
operational processes at a department, county or city level is always
underway and also achieves some valuable gains. But meaningful,
long term gains can also be achieved by examining all operational
processes (state, county, city, school district, etc.) as an
integrated system, or at the "enterprise" level. By doing so,
functional overlap and duplication at various levels of government can
more readily be identified and addressed. Operational systems
also can be more easily designed to maximize efficiencies using an
enterprise focus as opposed to building interfaces between the
disparate, independently designed operational systems of several
levels within the state "enterprise".
Framework: Government & Business
Framework for discussion: Government
is a large organization with many of the same characteristics as a
large corporation. They both have customers to satisfy and must
operate within financial limitations (budget). Both desire to
serve their customers well (add value) so that they can continue to
prosper. Both are comprised of numerous divisions (state,
county, city, school districts, etc.) and departments (DNR, MNDOT,
Dept of Revenue, Assessors, Public Safety, etc.).
The obvious difference is the much more
political environment of public organizations and the impacts that
this often has on the design of government operations.
Getting Started – the How and Why
So how does one get started with redesign of
Minnesota government operations?
First of all, there is no pre-established or
best practices "canned" approach for performing an undertaking of this
nature. There are guidelines or frameworks that can be employed
and some of these will be discussed later. Be wary of anyone who
already seems to know what it is that Minnesota should do to redesign
its overall government operations in order to become more efficient.
It’s much more complicated than that.
It’s important to keep in mind that
operational redesign projects are highly iterative in nature.
Subsequent steps in a redesign project are driven by what was learned
in the previous steps.
Key Assumption: to obtain maximum
benefits, enterprise-wide operational redesign involves an overall
examination of how government works in Minnesota as opposed to how
efficiently some subset of government operations is working.
It’s best to periodically look at the structure of government
operations in its entirety (state, county, city and all other public
entities) not just how well some subset (e.g. – MNDOT or the DNR) is
Why do this? All organizations,
business or government, have a certain amount of independence and
inertia. They can have long-standing operations and budgets and
will generally act to protect their independent interests. They
can be taken for granted because of this. Sometimes nobody asks
why or what is it costing to operate in a certain way.
From a purely operational perspective,
systems and processes are continually being modified in response to
changing customer needs, new laws and competitive pressures to the
extent that over time they can become so unwieldy and costly that, at
some point, a complete redesign of operational processes using newer
technology and revised operational structures and procedures is
So, the overall operations of large
organizations are at risk of losing their effectiveness over time.
Large businesses experience this all of the time, so does government.
At some point (usually after considerable study) a top-level decision
is made to do one or more of the following:
- scrap one or more operational systems and design new
- combine two or more divisions or departments or create a new
- rearrange the responsibilities of some divisions or departments,
- eliminate a division or department.
These are all potential outcomes of
The Importance of a Vision & Strategic
How useful is it to start out a redesign
project with a vision statement and some strategic objectives?
Any large organization must have a strategy in mind to be effective.
Redesign cannot take place very effectively without some type of
high-level direction that is agreed to by the management (in this
case, the governor and legislature).
In the absence of a vision and/or strategic
objectives, then "any destination is fine if you don’t know where
you’re trying to go". Alternatively, "how can you know when
you’ve met your objectives if you don’t know what they are?"
Neither of these situations is acceptable in any organization.
Agreeing on a vision for Minnesota
should be achievable regardless of political affiliations. For
example, a vision might be: "Minnesota will be a leader among states
in citizen satisfaction".
Some possible strategic objectives to
support this vision may be:
- "Minnesotans will be well-educated"
- "Minnesota will be a good place for businesses to grow"
- "Minnesotans will have effective health care"
- "Minnesota government will be efficient"
- "Minnesotans will have excellent recreational opportunities"
Note – the above sample strategic objectives
are rough examples and need to be enhanced so that they are
quantifiable, measurable and prioritized.
How will you know if you are meeting these
objectives? Answer: ask your customers (citizens) and measure
against quantifiable metrics.
Project Management Structure – a Key to
What kind of management structure is needed
for a redesign project? This is one of the most critical aspects
of a public sector redesign project. The Legislature or even the
Governor is not well-suited to manage this type of project.
Their handicaps include inadequate long term continuity, insufficient
project management expertise and closeness to the political process.
In order for such a project to be successful
over the long term, it must be managed by experts in the management of
enterprise-wide operational redesign projects and it should function
in an environment that is as independent of the political process
as possible. In some ways, the Legislative Auditor’s Office can
serve as an initial guide for setting up a redesign project management
structure. Both must have full and free access to all aspects of
government operations (staff, procedures, costs, etc.) and be
relatively independent in order to truly be effective.
The redesign project team should be staffed
by independent contract consultants having deep enterprise-wide
redesign project experience. Day-to-day management should be
provided by a project manager from within the same group. The
project manager should be free to enlist the assistance of public
employees (state, county, city, etc.) throughout the project as
project needs require. Contractors have the following
- Stronger independence and objectivity compared with public
- Offer a broad pool of specialized expertise that can be tapped
- Easier to reconfigure the project team, if necessary based on
An independent, non-partisan three person
group of overseers, acting like a board of directors and also
comprised of citizens having deep enterprise-wide redesign project
experience, could be established to periodically monitor the project
team to insure that they are making solid progress. This group
would also provide an interface with the Governor and Legislative
Leaders while freeing the redesign project team to focus on its work.
At the same time that it is important to
insure the independence of the redesign project team, it is also
critical to emphasize the importance of participation in a redesign
effort by all levels of government. This includes public
employees at the most basic levels of public service, whether it be a
state, county or city function. There must be a channel
available for all employees (and/or their departments) to communicate
their ideas about potential operational improvements or their concerns
about potential adverse impacts on customer service or on the
The redesign project team must also insure
that public employees are kept informed of the direction and progress
of the redesign project. Failing to communicate effectively with
all affected parties can seriously jeopardize the success of a
The first step in any major redesign project
is for the project team to understand the current operational
environment. Without this level of understanding, meaningful
redesign benefits are much harder, or sometimes, impossible to
achieve. This is a very significant part of any redesign
From top to bottom, a solid understanding of
all operational processes at the state, county, city and other
government levels must be achieved. Who is doing what? Why
are they doing it? Who are their customers? What systems
or operations are employed? How much does it cost? What is
their vision, strategic objectives or plans? How satisfied are
This first step is essential in order to
achieve a sense of how well the existing operational processes are
working, to identify where operational overlap (duplication) is
occurring and to be able to understand where the best opportunities
for operational changes (redesign) exist.
The politics of "who gets the money" to
operate certain components of the overall public operational system in
Minnesota (e.g. – public education, highway maintenance, natural
resources, public safety, etc.) can, if not controlled, render an
operational redesign effort useless. If the politics of
protecting turf rule the day over maximizing customer (citizen)
satisfaction, then any effort at operational redesign will never be
able to best serve all of the citizens of Minnesota.
Excessive political pressure to favor the
interests of any particular group of constituents at the expense of
the whole of Minnesota citizens can also greatly diminish the
effectiveness of an operational redesign effort.
Redesign at the enterprise level can be a
long term and costly undertaking. Its success will require a
long term commitment from folks who do not share the same political
philosophy. It will be tempting for some to use unrealistic
expectations of short term gains combined with the long term costs of
redesign for political leverage. On the plus side, an enterprise
level project can be compartmentalized or staged in order to help
address concerns about scope and costs.
The primary goal of operational redesign is
to achieve the objectives of customer satisfaction and operational
efficiency noted earlier. It is safe to say that there currently
is a high degree of public concern over how well government at all
levels is satisfying these objectives. Enterprise-wide
operational redesign can lead to improvements that will serve as
evidence to citizens that government is serious about how it spends
As importantly, redesign can allow
government to maintain adequate levels of service at a lower cost.
This can help to address another common citizen perception that
government’s primary solution to inadequate operational performance is
to allocate more money to the department or agency involved.
Continually striving to improve operational
effectiveness is one of the primary responsibilities of the management
of any enterprise and it is also one of the most positive undertakings
an enterprise can engage in.
Tom Spitznagle MBA, Certified
Internal Auditor (retired), Certified Information Systems Auditor
(retired), Certified Systems Professional (retired)