Saturday, March 28, 2015

The Alberta Budget–Revenue, Spending and …. Productivity?

Productivity is never an accident. It is always the result of a commitment to excellence, intelligent planning, and focused effort. - Paul J. Meyer

The productivity of work is not the responsibility of the worker but of the manager. - Peter Drucker

The productivity of a work group seems to depend on how the group members see their own goals in relation to the goals of the organization. - Ken Blanchard

As the noise dies down from the Alberta budget, the experts have weighed in for and against and the coffee shops have been filled with opinions (with various degrees of intelligence behind them), there is something missing from the dialog that I think someone needs to have the courage to lay out in the open, expose to the light of analysis and address.

Some say the thing that is missing in the conversation is a lack of diversification of Alberta’s revenue streams and there is some merit to this.  Alberta’s revenue engine could stand for some improvement / diversification / isolation from the boom-and-bust budget cycles that are common with primary dependence on oil as a source of revenue.

Some say spending is out of control and needs to be reigned in or slashed mercilessly but running a government has never been known to be a cheap venture and random or across-the-board budget slashing has rarely been known to produce a positive result of any long-term value.

Meanwhile, public sector unions (whose members, by the way, account for 50% of Alberta’s government spending) say the real issue is not money but the fact that they are overworked and need more people to make government more efficient.

Yeah – right.

Blind hiring has never been known to fix anything in the public or private sector.

There is, however, a four-letter word that people either ignore or in the case of this budget, give lip service to but do little to address.

That four-letter word is productivity.

The mere mention of assessing productivity in the public sector draws a cacophony of protests from the public sector as they attempt to drown out the people who correctly point out that cost is not the issue – the real issue is the nature of the ROI (return on investment) on the money that is spent.

And as a long time observer of human productivity (I cofounded and IPOd a company that specialized in the capture, expression and prediction of human productivity mathematically), I have always been fascinated by the hot potato that is public sector productivity.

Now to be fair, there are a lot of public sector employees who provide exemplary performance and results.  It is that group of people who keep governments moving and who provide the services that citizens require.

However, this high level of dedication, performance and results are not the norm and as someone who has consulted at municipal, provincial / state and federal levels (in multiple countries), I wonder when Alberta’s government will have the gumption to tackle issues around enhancing the ROI of the public sector.

Here are a few examples from my own personal experience (the entire list is too long to include here):

  • Senior municipal IT workers who freely admit that they switched from the private sector to the public sector because the pressure to deliver is less, they can work less and they get a better pension.  They are building a complex infrastructure for which no customer has been identified as being interested in it but it looks good on their resume.
  • The lady with the Absorbine Jr. addiction (she drinks it) who walks around zonked out of her mind all day but cannot be touched for a variety of politically-loaded (read: union) reasons.
  • The lady who had spiders in her office and when facilities management showed up to remove them, blocked their entry to protect the spiders.  The standoff lasted a week, tying up a lot of resources almost full time, until the manager forced her to relent (much to the protest of the spiders, I’m sure).
  • The lady in a hospital blood testing center who played solitaire on her computer while two people waited for a blood test.  The phlebotomists wandered around inside waiting for someone to be admitted while she played for a high score.  After an hour, she called a colleague and indicated that she needed to be relieved because she was run off her feet.  The people waiting in the room looked at each other, shrugged and shook their heads.
  • An emergency room that shut down for hours and took no patients while staff waited for lab work to come back for a specific patient.  Timbits and the like were brought in as nurses and doctors laughed and cajoled in the back.  When I asked the receptionist if it was normal to take no one from the waiting room while waiting for lab work to return for a particular patient and when I noted that it was insulting for a room packed full of tired, sick people to listen to a party going on behind the door, I was informed that if I asked again, I would be escorted out of the emergency room by security.  The lab work took approximately 6 hours to complete.

While these are extreme examples (and I state again that there are many dedicated, professional, hard-working public sector employees), we have some room for improvement.

Whether we have a little room or a lot of room is matter of perspective, insight and analysis.

When it comes to such analysis, the perfunctory self-analysis often conducted by many groups is of little value as is many of their recommendations.  It is ironic that oftentimes, such analysis either produces extra processes and procedures that hinder people and diminish their productivity even more or it results in a recommendation that more people need to be hired “just because”.

Unfortunately, self analysis has rarely been shown to be effective in any public or private sector scenario.

And in fairness, there is a lot of abuse within the system, both by people who work in it and by the citizens that they serve, and this adversely impacts the productivity of the public sector workers (the good ones and the bad ones).

Are we getting ideal ROI from our public sector employees?

How will we know unless we have the courage to ask?

The Bottom Line

Voters get caught up in the game of analyzing the budget from a spending versus revenue perspective and politicians and unions can skilfully and artfully dodge the equally important (and expensive) issue – the issue of lost or diminished productivity.

The dilemma is that to ignore it is expensive from a financial perspective but to tackle it is expensive from a political / PR perspective.

But if we don’t have the courage to tackle the productivity side of government spending / investment, the fiscal scenario of government will continue to get worse with every budget since spending is guaranteed to increase over the years while revenue will constantly be an unpredictable beast of boom or bust.

Unfortunately, we have a situation where our leaders don’t have the courage to tackle the issue, they don’t have the interest to do so or it serves their one personal interests and purpose not to. 

If it was their money, the sense of urgency would be greater, I’m sure.

In addition, by not addressing productivity issues, we are also ignoring those public sector employees who give their all every day to provide the services that citizens need.

Citizens and private sector businesses cannot survive with infinite borrowing while productivity lags, either marginally or precipitously.

Neither can governments.

Does it matter to you?

Are you sure?

Because if people don’t demand these conversations from politicians, then maybe the people don’t care enough either and would rather merely vent in coffee shops.

If that’s the case, the people get the government they deserve and are as much responsible for difficult times as the people in power that they criticize.

And then the demand for better is merely a wish:

Wishes: If wishes were horses then dreamers would ride. But they're much more like cattle, so best grab a shovel.

Wishes: If wishes were horses then dreamers would ride. But they're much more like cattle, so best grab a shovel.

What do you think of that?

In service and servanthood,

Harry


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Addendum – Addressing Some Comments – March 29, 2015

I have received a lot of email from public sector employees who asked me to address specific issues.  Rather than answer them individually, I will respond to all of them in this addendum.

1. Why don’t you address issues in the private sector?

This post was intended to identify concerns in the public sector – concerns that are front and center given the discussions around the Alberta budget.  For those who claimed that this post praised the private sector as being perfect, if they read the post carefully, they will see that it does nothing of the sort.  I have noted concerns in the private sector in other blog posts.  The private sector gets many things wrong as well.  However, in the private sector, when an organization executes its productivity poorly, its reward is diminished profits, diminished market share, a diminished stock price and if it continues for too long, the company ceases to exist.  The public sector has no such worries or concerns – it has a safety net that the private sector does not have (with some exceptions).  The private sector is thus, for the most part and with some exceptions, self-correcting – the public sector is not and has no motivation to be so.  What is important to note is that just in the private sector, it is important to find what works well and find ways to emulate that in areas that need improvement.

2. Don’t forget the management of the public sector workers

A solution for assessing productivity strengths and weaknesses includes all levels, from the lowest level right up to politicians and bureaucrats (and even how citizens consume services).  Everyone contributes to strong or poor productivity and thus no one is exempt from analysis of productivity.

3. You can’t measure ROI for government entities because they don’t earn money

The return on investment is not only measured in dollars returned as is commonly expressed in the formula ROI = (gain – cost) / cost.  While this is a simplified measure for investment or capital spending, a return on investment can also be expressed in other forms, such as quality of service provided, the number of services provided versus what can / should be provided, the number of people providing a service versus how many are needed, the time required to initiate a service request response, the turn-around time required in providing services, etc.  There are a number of ways to measure and express this mathematically (non subjectively).

4. Assessing productivity is not as easy to do as you claim it to be

I never said assessing productivity is easy.  I said it was important.  There is a big difference.

5. Why don’t you offer solutions in your post – that would be more useful?

I don’t offer solutions here for three reasons.

  1. The solution for each area may have unique aspects to it.  There is no “one size fits all” solution that can be blindly applied to everyone in ignorance of data / analysis that must be derived first.
  2. Any solutions that could be provided would likely be lengthy and too academic for a simple post.
  3. The analysis and solution would likely be complex and require considerable time and resources.  Do you work for free?

I appreciate people who send me comments in a constructive or interactive tone. Rants or insults from people that such a blog is meant to disparage public sector employees come from people who resist change and thus resist the opportunity for positive growth.

The former serve the people of Alberta well.

The latter exist to delay change or to serve their own purposes – whatever they are.