Both campaigns are embracing aspects of Toyota’s world-renowned efficiency culture – dubbed Lean – which major Northwest innovators like Boeing and Virginia Mason Medical Center have copied.
Reform is a popular buzzword for gubernatorial candidates. Two-term Gov. Chris Gregoire famously pledged to “blow past the bureaucracy” when she first ran in 2004, a promise some government efficiency proponents say she hasn’t kept.
But Inslee and McKenna insist they’ll bring in new blood from the private sector and demand commitments to transforming state government into an organization that strives to cut waste and give the public more for each dollar spent.
McKenna says he has actually used “continuous quality improvement” techniques to cut at least $402,000 in waste from his attorney general’s office since 2011.
The biggest savings – more than $151,000 – came from two phases of upgrades that shifted phone services to Voice-over-Internet Protocol, or VoIP, through CenturyLink. Many other agencies were going with the state’s preferred vendor through the Department of Enterprise Services, but the attorney general’s IT director Jon White said people in his division suggested looking at what a rival could offer.
“Not only did we substantially reduce our per-line rate, but CenturyLink came in and cut our long-distance rate by over half,’’ White said.
Inslee says he gives McKenna credit for “starting the process by embracing” Lean, but said the AG has little to show for it in an agency that costs more than when he took office.
Inslee is promising to shake up government too by enlisting line workers in the Lean improvements.
“A lot of what the state does is make decisions,” Inslee said in a recent interview. “We want to find a way to leave less paper sitting on a desk.’’
The Democrat gave as an example: “One of the problems we have is timeliness of permitting ... We want to find a way to get you a decision on your permit as timely as possible.’’
Using Toyota’s method, employees in agencies that issue permits would hold brainstorming sessions to break down the permit decision-making process into every little step – then ruthlessly look for waste or steps that are not essential.
McKenna also wants to expand his own pioneering efforts to evaluate personnel in the Attorney General’s Office since 2005. As governor he said he would negotiate with unions to bring about “a compensation system that rewards performance not just seniority.”
McKenna said he used to give cash awards to high performers, typically $500 a year, using money saved from salaries. The Legislature ended that practice during rounds of budget cuts, and McKenna came under fire at the time for handing out more than most agencies.
The attorney general said that if elected governor he’ll ask lawmakers to reauthorize the practice, letting agencies pay extra out of existing budgets.
GOING ‘ALL IN’
Promises are nothing new.
Gov. Chris Gregoire backed up her famous “blow past the bureaucracy” claim by creating her Government Management Accountability Program, or GMAP. It was an idea borrowed from former New York City mayor Rudy Giuliani, and it has been credited with improving response times by Child Protective Services caseworkers who learn of child abuse.
The governor took a step further last December by issuing an executive order that asked every agency to do a Lean project over the following nine months. Some agencies were well ahead of the curve, including the prison system’s Correctional Industries division which started some Lean work as far back as 2005.
But Democratic state Rep. Mark Miloscia, who does accountability work for a living and ran for state auditor on an accountability platform, has said Gregoire’s approach is doomed. The Federal Way lawmaker says what Gregoire didn’t do – and what Inslee and McKenna need to understand – is they must make a major top-to-bottom commitment of resources to Lean if it is to succeed.
“To do Lean you have to have a real strategic plan – a five year plan on how you are going to do this,’’ Miloscia said, echoing the kind of things said by outgoing Democratic Sen. Jim Kastama, another Lean proponent from Puyallup. “The second thing is you have to do real assessment (and training). Last year, the governor vetoed money for Lean training.”
In her bid to start Lean at a time the state lacked money, Gregoire relied on loaned experts from Boeing and Virginia Mason to train her agencies’ trainers. But Miloscia said that approach was “laughable’’ and that the state needed to go “all in.’’
Miloscia declines to say what it might cost to do Lean right. But he did say the state would be seeing results “if we had started six years ago with a $3 million a year investment and took 10 years to do it.”
Experts at Boeing and Virginia Mason talk a lot the same way about their own efforts – that they made major investments including in training, and later were repaid.
Indeed, Virginia Mason turned losses in the late 1990s into profits and is ranked as one of the top hospitals in the nation.
One recent account in Partners magazine, which covers changes in the nation’s health-care system, said the “Virginia Mason Production System” changed everything from the shape of nurse work stations to how nurses are assigned, how doctors handle patients and how MRIs are prescribed.
But to get there, hospital chief executive Dr. Gary Kaplan took big steps in 2001 that resulted in visits by him and his entire senior management, clinical leaders and board chairman to Japan to see what Toyota was doing. It included visits on the production floor of Toyota and Hitachi air conditioning factories, according to the magazine.
Today, the work continues at Virginia Mason with a staff of two dozen people that teach employees about the continuous improvement ethic.
Changes have been no less dramatic at Boeing Commercial Airplanes. The jet-plane maker used Lean-like concepts to speed up the movement of planes down its lines as early as World War II but efforts to copy Toyota’s ideas began in the 1990s, according to spokeswoman Susan Bradley.
“I wouldn’t know how to put it in a dollar amount, but it does take upper level leadership and commitment,’’ Bradley said. “I think the lesson is you have to provide the resources. You need to have those experts that can go out and help people.’’
But if Boeing, Virginia Mason and other manufacturers in the region put money in first, the next governor is in the same fiscal bind Gregoire’s been in: facing a budget shortfall – coupled with a Supreme Court ruling that could require perhaps $1 billion more in new funding for education programs.
So finding $5 million or $10 million more for training managers and workers won’t be easy.
Thus far, both candidates are hedging a bit on how many taxpayer dollars each might invest in the effort. But both say they would look for ways to commit resources to the efforts, knowing there will be savings later.
“There is a training element. There is a cost to that. But you have to be willing to make the upfront investment,” McKenna says. “I think the governor deserves credit for issuing the executive order (telling agencies to start doing Lean). We’ll pick up where they leave off in their administration.’’
Inslee intends “to hire people ... who understand if you work for me you’ll have an expectation of being well-trained in Lean systems yourselves and also have a well-thought-out plan” for moving the agency forward. He also plans to measure the results, just as Boeing says it has done by bringing in third parties.