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DHS Transformation Initiative: Anything But Transparent

Cascade Commentary

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In a world full of names, acronyms and management change plans, taxpayers can get lost. When the information to describe these programs is not transparent to the public, we cannot keep up with what our tax dollars are purchasing. Moreover, we cannot wander into discussions of government services without an entire world of letters swimming together to shorthand the names of agencies and programs. This alphabet soup is almost guaranteed to confuse those being asked to fund all these changes: the taxpayers.

For example, DHS stands for the Department of Human Services, which has the second largest tax-funded budget in the state of Oregon. Then there is TI, which stands for the current taxpayer-funded DHS Transformation Initiative. The 2007-2009 budget includes a budget note of $3.2 million to begin the Transformation Initiative at DHS. An intense review of work practices geared to efficiency and financial savings. Finally, there is Lean (a name, not an acronym), a detailed analysis process that looks for value or time savings at the core of one’s work. Lean phrases include “value stream mapping” and “kaizen,” a Japanese word for a “eureka” moment of discovery and continuous improvement. Lean is the fundamental base for DHS transformation. All this is very confusing to an outside observer trying to ensure that tax dollars are well spent. Using a combination of DHS employees and contract staff, the goal of TI is to turn DHS into a world-class organization, one initiative at a time.

Lean’s popularity began in the 1980s when Americans noticed the great advances taking place in Japan, where corporate changes focused on continuous quality improvement, or the ability to change rapidly to meet customer service needs. The methods used have had a variety of names, including Total Quality Circles, Total Quality Management, and now Lean. DHS is depending on the Lean process to be the engine for its Transformation Initiative. But has the investment in quality improvement paid dividends in the past, and is its application to a monstrous-sized government organization the key to taxpayer savings? Will there be leadership throughout the department to ensure new processes are implemented?

DHS has had several Quality Improvement or Office of Process Improvement teams in the past; all have been dissolved after several months or years. Historically, the department has fared poorly in enterprise-wide initiatives, often due to lack of sustained leadership to ensure implementation and follow-through. Transparency will be critical in this current attempt to reengineer the department. The taxpaying public needs to have a clear view of the efforts and investments.

While the successes of the process improvement efforts within the DHS financial unit are highly touted, success throughout the department has been less than transparent. The DHS Lean Implementation Manager apparently does not know, or cannot tell us, how much tax money has been invested, how much money has been saved, or what outcomes have been achieved to date with Lean process improvements. A transparent budget for expenditures and savings for efforts thus far is not available.

Here is what we do know about costs:

Phase 1 of the Transformation Initiative has ended. The $3.2 million contract with McKinsey & Company has produced a roadmap for Phase 2 (additional expenses accrue daily for DHS staff time.) The roadmap for operations includes a “sequenced list of events in each division and across DHS focused on improving operational efficiency,” purchasing “prioritized areas of opportunity to capture savings through strategic sourcing,” and the organization’s “opportunities and best practices in organizational configuration and structure,” along with process and outcome baseline and benchmark data. The training of over 50 DHS Lean facilitators has taken place enterprise-wide to advance the Lean efficiency process at unstated costs. While DHS Director Dr. Bruce Goldberg mentions Transformation Initiative accomplishments in his weekly Director’s message, it never includes a price tag of costs or budget savings to taxpayers. Additionally, during the current DHS budget presentation before the Human Services Ways and Means Subcommittee, little data or budget savings are revealed. The glaring lack of budget transparency makes it impossible to assess these efforts.

The Transformation Initiative has admirable goals, but are they achievable? Can we afford the process? Many great DHS leaders have brought their vision for a leaner organization, and most have failed in the past. They failed not for lack of passion to see the agency perform better, but from a lack of sustainable effort, vision, and leadership from everyone from the governor’s office to the legislature, the union staff and the management of DHS. Little has changed to expect this time to be any different. Without transparency surrounding the project, we will never know the successes or failures.

An even larger question looms: Will money truly be saved, and will taxpayers benefit financially from the savings? In Lean it is critical to identify the entire value stream for each process, which almost always exposes enormous, indeed staggering, amounts of waste. Will the DHS accounting methods reveal the true costs of implementing Lean and the true savings from the identified waste? Early indications show no transparency for amounts expended or dollars saved. If money is saved, taxpayers and legislators may never know. But in the mess of the Oregon state government’s alphabet soup, what are a few million dollar signs or decimal points here and there? They are just never noticed.

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