What Government Should Learn From Business

During every election cycle in the United States, at least one candidate talks about running government like a business. There is a limit to how far one can take this, since government and business have different missions. Businesses serve people in order to make a profit.  Governments just serve.

Despite that difference, the economic challenges of recent years drive at least one common need for business and government alike: do more with less. In pursuing this goal, government organizations should learn from principles and practices that the business world has been using for years. Two of the best examples are Lean and business intelligence (BI).

Lean is a set of principles and methods used to increase the efficiency and effectiveness of a process. It focuses on the activities that add value, and works to eliminate waste in the system. In a government setting, waste can be found in work backlogs, errors, rework and waiting. Many readers of this blog will have their own examples.

The Environmental Protection Agency has been championing the use of Lean practices in government for a few years. They report that EPA headquarters and regional offices have employed Lean methods to shorten process time frames by as much as 82 percent and reduce the number of process steps by more than 63 percent. CGN/Blackwell’s experience shows that applying Lean in service operations and processes provides improvements that yield more than a 10x return on investment.

Business intelligence uses a set of computer-based tools to analyze data in support of performance monitoring and decision making. Governments collect or generate huge amounts of data. With large data sets, there are real challenges in storing and organizing the data so that it is useful.  As “big data” gets bigger, the challenge will only grow. Governments can adapt tools that have been developed in businesses to share data across departments, track operational efficiency and evaluate effectiveness of government programs.

BI and Lean are complimentary tools.  BI can provide the data and performance metrics needed to identify and drive continuous improvement. Lean identifies the activities and data with the most value.

Whether you believe that government should be providing more service or using less resources (e.g. tax dollars), we should all agree on the goal to do more (service) with less (resources). In that aspect, government should be more like a business.

-Cyndi Hernandez, Manager