Building a culture of engagement with lean continuous improvement.

• Author: Kavanagh, Shayne C.

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Daniel Pink, the author of Drive: The Surprising Truth about What Motivates Us, suggests that the basis for a modern approach to motivation and engagement has three dimensions: (1)

* Mastery: The urge to make progress and get better at something that matters.

* Autonomy: The ability of employees to direct their own lives, have control over their work, and have a passion for what they do.

* Purpose: The yearning for work to be in the service of something larger than one's self. Purpose drives passion, which in turn drives employee engagement and commitment.

Other articles in this issue of Government Finance Review--"Planning More Powerful Meetings," "Applying Professional Developmental Tools to Employee Engagement," "Stretch Assignments Give Employees Room to Grow," and "Small Things Add Up: The Denver Peak Academy Approach"--share techniques designed to engage employees along the dimensions that Pink suggests. What is missing from a collection of individual techniques, however, is a systematic approach to changing the very culture of the organization. Culture is a system of shared assumptions, values, and beliefs, and it exerts a powerful influence on how people behave in an organization. Management guru Peter Drucker is reported to have said that "culture eats strategy for breakfast." This means that if a strategy to fully engage employees is to be successful, then the culture must be aligned with Pink's three motivational dimensions.

How can a government finance office build such a culture? As a first step, recognize that the traditional rewards and punishment approach to motivation and engagement (often referred to as the "carrot and stick" approach) is past its expiration date, a holdover from the Industrial Age. Many management philosophies persist from the industrial age, even though they're no longer appropriate for a workforce that is generally more educated than that the workforce of Henry Ford's heyday. (2) These philosophies include the ideas that driving change and improvement is a manager's job, whereas employees exist primarily to implement managers' ideas; the primary role of managers is to make sure that workers stay on task; and work schedules should be prioritized before attention to quality.

The second step is to replace the traditional culture with something better. To do this, a number of government finance organizations have turned to Lean management, a system of engaging all employees in identifying wastes and solving problems in order to continually improve processes and thus provide more value to the customer (e.g., a citizen or another department). Lean is best known for its expansive set of efficiency-enhancing tools, but the system's true power is in engaging employees in the work of the organization in a way that they have never before experienced--in other words, embedding Lean principles in the organizational culture.

This article examines how a number of government finance offices on the Lean journey have experienced employee engagement along Pink's three dimensions, realizing impressive improvements for their customers as a result. For readers who are considering (or have just started) implementing Lean practices in their governments, the experience of other governments may help illuminate the way ahead.

MASTERY: CONTINUOUS IMPROVEMENT OF THE STANDARD

If mastery is about making meaningful improvements to work, then Lean's potential is indisputable. Research has found that organizations that have implemented Lean fully experience improvements in productivity of 8 to 12 percent annually, while improvement of 1 to 2 percent is more typical for organizations that don't employ Lean. (3) The Lean governments discussed in this article have made similar gains from improvement in how they used existing resources:

* The State of Washington's Department of Enterprise Services Real Estate Services reduced the backlog of expired or soon-to-expire leases by 82 percent and moved from this stronger position to negotiate leases, resulting in cost avoidance of more than $8 million in lease costs over five years for agency clients.

* Gwinnett County reduced the average handling time for calls about appealing property valuations by approximately 50 percent by redesigning the appeal inquiry process. The redesign also allowed the county to handle a higher volume of calls without any increase in staffing. The result was reduced citizen frustration and more efficient processing of appeal requests.

* In the City of Baltimore, the retail business district licensing process had 93 steps and took nine months from initiation to completion. It now has 33 steps and takes six months to complete. As a result, abatements for businesses that owed the city money dropped from 101 in fiscal 2013 to 41 in fiscal 2014, and the percentage of businesses paying their fees on time increased from 68 percent in fiscal 2013 to 73 percent in fiscal 2014.

* In Fort Worth, it took more than 100 days to release Developer Community Facility Agreement financial guarantees and 71 days to obtain the contractor's final closeout paperwork. It now takes fewer than 30 days after final inspection to release/return financial guarantees and five to seven days to obtain the contractor's paperwork.

* By analyzing job applicant data and which applicants were ultimately hired, the City of Denton was able to make changes to the hiring process that cut the time it took to have new employees on board by 33 percent. The streamlined process has resulted in staff time savings across the city.

* The City of Roanoke went from an average of four months to 44 days, a 64 percent improvement, in recording deeds to new owners after a real estate tax sale. This reduction in time helped the city improve its relationship with buyers of tax sale property, which will improve the city's neighborhoods by eliminating blight.

Finally, we had the opportunity to visit King County, Washington, in person to see their Lean implementation firsthand. We'll use their experiences to illustrate many of the points made in this article.

Incremental Change. Lean doesn't accomplish these kinds of improvements through radical change in what staff members do. Rather, the change comes in how they do it. Employees are constantly encouraged to ask how work is accomplished and how they can provide greater value to their customers.

Achieving mastery starts with establishing the expectation that work will be improved in many small increments over time, which, when taken collectively, equal impressive gains. When employees understand that it is not their job to maintain the status quo, but rather look to improve it in small ways every...