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.

What do you think of that?

In service and servanthood,

Harry

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Related Posts

• The Alberta Economic Summit and Tough Decisions
• Alberta Bureaucracy - Spending Versus Productivity

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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.

Government and the Death Spiral of Status Quo

Status quo, you know, is Latin for 'the mess we're in'.- Ronald Reagan

I would say any behavior that is not the status quo is interpreted as insanity, when, in fact, it might actually be enlightenment. Insanity is sorta in the eye of the beholder. - Chuck Palahniuk

Some say that I should settle down, go slower and not push so hard, so quickly for such transformational change. To them, I say that you misunderstand the size of the problems we face, the strength of the status quo and the urgency of the people's desire for change. - Eliot Spitzer <<Great quote – questionable origin :-) >>

Minority House Leader Nancy Pelosi announced late last week that there was no point for Republicans to demand more cuts in the Federal budget because “the cupboard was bare”.  The Republicans are countering with the opposite message – that there is a LOT of fat that can be trimmed.

Their claims are fairly typical of governments in Canada and the US, at the federal, state / provincial and municipal levels.  Governments are constantly singing the blues about the financial difficulties that they claim to be experiencing while opposition parties exaggerate the amount of excess that can be cut from budgets.

There is a slight problem with these claims.

They are for the most part a lie …. for the moment.

But if we don’t do something more strategically and tactically intelligent soon, they will become a very painful, unrecoverable truth.

Their claims and the studies that back up those claims are often supported by people who have everything to win by protecting the status quo.

Unfortunately, those same claims, while benefiting many in the short term, will punish everyone in the long term.

The waste is indeed everywhere

Having consulted to all three levels of government in multiple countries for more decades than I want to admit, I am astounded by the waste of I have witnessed.  To write stories about it here would take hours to read and would be only the tip of the iceberg.

But is it any wonder that the waste continues?

Think about the parties involved whenever someone demands that an agency be reviewed for waste or opportunities for improvement.  More importantly, put yourself in their shoes and ask yourself if you would act any differently than they do.  The people involved typically include but are not limited to:

• the people at the agency who stand to lose their jobs if they expose too many shortcomings(would you admit that your job or the job of a colleague was superfluous).
• the large consulting companies who recognize that if they are too critical of a government client that they may be cut off from a multi-billion dollar cash cow that rewards them quite handsomely.
• bureaucrats who see change as a threat and therefore strive to minimize or delay change as long as possible (“Bureaucracy defends the status quo long past the time when the quo has lost its status.” - Laurence J. Peter)
• unions who are tasked with not only protecting their membership but in fact, are constantly seeking ways to expand their membership and their influence.
• upper / middle management of the agencies being assessed who, having allowed something to grow more inefficient for years, now face personal criticism unless they can justify that not only were they not wasteful with resources but in fact “have suffered from insufficient resources for years”.
• politicians who find rewards in ensuring that the status quo is not interfered with.
• people placed in charge of change but who are totally unqualified to make the assessment or to implement the necessary changes (or possibly have a history of failure in this area but are selected anyway).
• fully qualified people who select the wrong processes or data to analyze / implement change or attempt to bend the wrong processes or data to fit the situation.
• people who insist on making changes in absence of the knowledge of what motivates people to change, especially within the context of the team being studied (there is no one-size-fits-all rule - successful solutions in one area may not automatically work in another).  << This is a critical, complex and often overlooked or misunderstood element that must be handled appropriately in order to implement change successfully. >>
• people who are tasked with implementing changes but who have not been given the authority, resources (human, financial or other) or time to implement those changes (the idea being that the existence of a study is enough to keep most voters happy).
• the inability to break the deadlock between groups that agree that change is essential as long as “my group” is not changed.

Now in fairness, we must accept the reality that the systems that we have created or which we have allowed to grow organically are much more complex than many realize.  Some would posit that the complexity of such systems has exceeded our ability to understand, guide or correct.  But they are that way because we have allowed them to get that way, much in part due to the parties I just described.

All that being said, what is the one voice that is the most important to represent and yet often has the least representation at the table during such reviews?

It is the voice of the citizen – the primary stakeholder whom the agency being reviewed exists to serve.

And while improving things for citizens is often cited as the reason for the study or analysis, when one applies measurable criteria to the study it becomes clear that competing interests ensure that they are often the last ones to be considered since they often don’t have a voice at the table (or their voice is not as loud as the voice of other parties).

So the next time you hear that the cupboard is bare or that another study is being undertaken to determine “efficiencies” that can be realized within an agency, take a look at who made the statement or authorized the study, who is conducting any analysis and who really stands to benefit from any downstream recommendations.

Because discovering who benefits from the analysis and recommendations will help you determine whether the changes being proposed (if any) actually benefit you – the most important stakeholder of all.

And when the wrong people benefit on a regular basis while waste and inefficiency continue to grow, there is ultimately only one measurable result that will be produced.

Do you care what that ultimate result is?

Do you care about the legacy that we are leaving for future generations?

Do you care about creating something better?

Good - what are you willing to do to create it?

In service and servanthood,

Harry

I'm not interested in preserving the status quo; I want to overthrow it. - Niccolo Machiavelli

Addendum – Respect For Those In Public Service

I would be remiss in my duty if I didn’t share my belief that there are many great public servants and wonderful politicians who are truly doing everything they can to make a positive difference to their constituency, state / province, country and the world-at-large, despite popular public opinion to the contrary.

Balancing multiple (often conflicting) demands from a wide variety of people who believe that their needs trump everyone else’s is very difficult to accomplish.

In addition, the complexities of today’s world are not easy to witness, understand or solve.  I have witnessed the disclosure of some information that left me shaken and wishing I hadn’t seen it and yet some people attempt to deal with it anyway at great personal expense.

And besides, if all public servants were truly dead wood, then the world would actually be far worse than it is.

So let’s celebrate, be grateful for and support the public servants and politicians who are actually striving to make a positive difference.

Because the only way we can create that difference is to collaborate with those who believe that a better world is possible – but only possible when we collaborate to create it and not hope that it happens by accident.

Addendum 2 – An Interesting Musing About Healthcare Costs in the US

Fried Chicken and Lousy Business Execution

I was amused to read this news item today of an enterprising pair of burglars who were attempting to break into a jewellery store by cutting through a common wall shared with a bathroom facility behind the jewellery store.

Unfortunately, the bathroom facility also shared a wall with a KFC and so when they broke through the wall, they and the staff of the KFC were equally surprised to see each other.

Undeterred and demonstrating some quick thinking, the burglars impromptuously held up the KFC and made off with some cash before being caught later.

Alas ….. this is what happens when great intentions and poor execution come together.

Business is no different

I had a conversation with a prospect recently who was lamenting the fact that despite having adopted the best processes that they could find in their industry, their results were actually worse than before they started.

“What problem did you identify that caused you to adopt these processes?”, I asked.

His reply was surprisingly candid. “We had evolved to a point where we simply couldn’t work together”, he said.

“Did you figure out why you couldn’t work together?”, I asked.

“No – why does that matter?”, he replied.

“Because if you didn’t know what the problem was, how did you go about selecting a solution?”, I asked.

The light bulb that went off in his head was so bright that it blinded me on the other end of the phone.

Before you pick a solution ….

Powerful processes, fantastic frameworks and beautiful best-practices (and awesome alliteration) are all well and good.

But if you don’t know what the problem is, then the solutions you are layering over the problem often become contributors to a larger problem instead of contributors towards a solution.

If, when a problem is identified and a solution selected, the problem and solution can’t stand up to the scrutiny of “how do you know?” in a measurable way, I’d be willing to bet you haven’t identified either very well.

Some people are happy to execute anyway with the blind optimism that everything will just “work out”.

That’s like leaving your office and driving around the building in ever-increasing circles until you eventually arrive home by accident, hours or days later instead of what could have been minutes … unless you run out of fuel, fall asleep at the wheel or get derailed by a detour.

Intelligent execution is everything

If one doesn’t execute intelligently, strategically and with effective tactical roadmaps, it is very difficult to anticipate what the end result will look like.

However, to blindly execute anyway with good intentions and poor execution, as in the case of these two burglars, produces a higher likelihood that you will end up with fried chicken instead of diamonds.

Now that’s fine if you like fried chicken.

But then again, if fried chicken is your thing, you can buy a lot more with a fistful of diamonds.

In service and servanthood,

Harry