e-Zsigma July 2003 Newsletter
Six Sigma SpotLight:Mayor Graham Richard, City of Fort Wayne, Indiana |
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Six Sigma SpotLight is a regular feature of the e-Zsigma newsletter, and allows us to introduce one of the global six sigma community's superstars. Fort Wayne native Graham Richard has been Mayor of Indiana's second largest city since January 1, 2000, and has been a strong voice for change and improvement in the government sector, leveraging his previous term as Indiana State Senator, as well as his nearly three decades of business management, organizational development and marketing experience in the private sector. (For more information on Mayor Richard, please visit http://www.cityoffortwayne.org/mayor/meetmayor.htm. Mayor Richard first came to our attention due to his progressive work in bringing Six Sigma to the City of Fort Wayne, and providing his team the vision as well as the tools and training to bring about breakthrough improvement in many of the vital services they provide their customers: the citizens and businesses that call Fort Wayne home. We recently had the privilege of sharing a few moments with Mayor Richard, and asked him a few questions about Six Sigma, the City of Fort Wayne, and the challenges for business excellence in government... -------------------------------- 1. News: "Where did the decision as well as drive to implement Six Sigma in the City of Fort Wayne come from, considering there were no existing examples or success stories in the public sector to support the decision? Was this a leap of faith, or was there significant deliberation and research that led to the decision to move forward?" 1. Mayor Richard: "This was a leadership decision on my part, but it was with a great deal of personal experience. In 1991, I helped found the TQM Network, which was an outgrowth of a business incubator that I founded about five years earlier, called the Fort Wayne Enterprise Center - which was the first industrial business incubator in Indiana. At that time, small and medium size manufacturers were coming together and asking the question, "What do we do - we've got all of these different customers that are asking for quality audits, and how do we improve the ability for us to both communicate that we are producing quality products and for us to make our own improvements?" Initially TQM was five or six companies. It has since grown to about 40 companies - and in that period of time, from 1991 to my (Mayoral) campaign of 1999, I probably visited and worked with well over 100 companies. I could quickly determine what made a competitive, high performance enterprise. I was very intrigued with applying what I had learned to government. I came to believe it was the kind of transformation that local government could reach. This was not really a leap of faith... it was the transference of applied knowledge and experience from one domain, private sector - manufacturing businesses principally, to the nine different business units we have within City government. What I knew, that a lot of people really didn't recognize, was that parts of government are very transaction-oriented. They are very comparable, quite frankly, to a manufacturing business or to the transactions that take place in finance businesses. We have 75,000 customers to whom we sell water and sewer services. We have a wide range of services that are transactional, everything from approving and issuing permits to how people have to interact with our government for snow removal and solid waste collection. So, there really was a lot more in common with the business sector than people might have thought, but it hadn't been recognized that way (in the past)." 2. News: "What would you consider to be one of the City of Fort Wayne's biggest Six Sigma successes and why?" 2. Mayor Richard: "The first success was about the culture and the attitude. When I came to city government, there was no "can do" attitude. It was more a, "You can't do that because… Well, we've always done it this way, Well, I don't think that would work"... So, the number one characteristic was to see the cascading of the (Six Sigma) successes lead others who previously were pretty entrenched in a very old-fashioned, hierarchical structure. Disengaged thinking occurred from middle management to the front line in terms of, "That's not my problem… I don't have any ownership of that solution or that challenge". I would cite three projects that I think are the greatest successes. I initially chose to focus on projects with high external value, from the point of view of the highest value to our customers. I knew that we needed to get some wins that the public: our customers, our taxpayers, would celebrate and that would fuel additional effort internally for the kind of defect reduction, cycle time improvement, and customer satisfaction improvement that would build a core of support. With our "Pothole Project", people said it was impossible to fill potholes in such a rapid fashion, but we basically took it from about 24 hours down to the point where we are actually filling within "3 hours" from the time we are notified of an existing pothole! The second project also deals with how customers view us in a very visible way. These customers aren't the average, everyday citizen. They are the project owners, building owners, architects, engineers, and consultants. We have twelve different agencies, many of which are not under the Mayor's control. They are run by the county or State government... what we call our "Land Improvement Permitting Process". We brought that down from an average of 51 days to an average of less than 14 days to get the permits you need to begin the construction of your building. That is dollars in our pocket, it's job-creation, it is encouraging an attitude that says, "Come on in - do business in Fort Wayne because we're cutting the red tape and making it easier and more friendly for you to do business". The third project is missed trash pickups. We have a vendor that we've employed on a five-year contract to do the trash pick-up. The goal was a 50% reduction in missed trash pickups. This was an interesting partnership. When we (asked) them to participate on our Six Sigma team, they accepted with the understanding that the implementation of the improvements would have to come from them. The team met that goal - in fact recently, there was one particular day where there wasn't one missed trash pickup in the entire city!" 3. News: "At an IQPC conference in October last year, one of the topics you addressed was, "The challenge of removing politics from the equation to make Six Sigma a culture that continues when administration and leadership change". Can you share some insight on this subject with our readers, and also comment as to how much has Six Sigma become a part of the City of Fort Wayne culture?" 3. Mayor Richard: "It's not easily predicted what will take root in an organization. We have nine labor unions and 11 contracts. We have very separate and diverse business activities. It's not uncommon for some people in city government - we're about a 200 million dollar enterprise with 2000 employees at the height of our summertime employment - to not even know what other parts of the city do. For instance, if you are on the Police or Fire Department, you've classically seen yourselves as part of that sub-sector - you have a different union contract, you get different compensation, you have different State laws that regulate what you do - there are separate pension plans. What we've tried to do is to use Six Sigma as a way for people to use data, get results, and participate in the process of not only analyzing but also implementing the change so they feel like they are having a real impact. For example, a woman in our waste water treatment plant who had been there for about 20 years told me that as a result of her Six Sigma project, to substantially reduce energy costs, she learned skills that she is using with her church/high school youth group and the Girl Scout troop that she helps to manage. She says, "I now can't look at problem solving in the same way I did before". We have one project in the wastewater treatment plant where we had an EPA mandate to invest almost 1.7 million dollars in a new centrifuge because we weren't getting the level of output of sludge that we needed to meet our EPA requirement. The project was about getting compliance: produce more sludge at the correct level so we can avoid buying another centrifuge. All the operators thought, "Oh, I know it! I've been doing this for years. I know how to produce better sludge than you produce." After using Six Sigma -- Measure, Analyze, Improve, and Control-they discovered none of them were right. The data provided the solution and the anecdotal evidence proved to be inaccurate. That whole team has changed and has driven that change deep within the organization. There are many more process improvement projects percolating up from the organization. We've also tied some of our performance to pay. We're seeing in five of our union contracts a direct link between an improvement goal being reached and a paycheck. I think it will be difficult, particularly after eight years, for somebody to come in and change radically back to the old culture once people have used the tools and obtained a level of performance. Let me give you an example of "road miles paved"… It is interesting that a group of individuals are now paving 55-60 miles per year versus 21 miles per year (prior to) when we introduced the need to accelerate that process. They said, "It's just not possible!" Now that the State (of Indiana) has cut back drastically on the amount of money for road resurfacing, I said to them that we might have to go back to 21 miles per year because we won't have the money in 2005 or 2006. You should hear the outcry! "You can't do that! We know we can do 60. In fact, we can do more than 60 per year!" So, the same group who, two years before, had said it was impossible... it can't be done... has reached a higher level of performance. They don't want to go back and be perceived as under-performing. I think it is that momentum that will carry this through in the culture because so many people won't tolerate and won't accept mediocrity after they've had levels of performance that they consider closer to excellence." 4. News: "In a recent press release, you announced that 2004 will see a "performance-based budget" where, "...Instead of requesting funding based on what they got last year, departments will have to set specific, measurable goals and performance targets to justify spending increases." What role will Six Sigma play in supporting this new budget process?" 4. Mayor Richard: "We don't have a roadmap that is as clear as I would like it to be in light of the adversity we are facing with a 19 million dollar revenue reduction, because of property tax delinquency, fewer people working and therefore paying less income taxes. What we will end up doing in the 2004 budget process is take certain parts of City government and be much more focused on the connection between a performance based budget and Six Sigma. It's been very difficult for us to get buy-in for Six Sigma in the Police and Fire areas - partially because of the culture. There is a strong paramilitary, hierarchical command, the overtime hour situation and the constant pressure to do what's most urgent, and immediate. I would suspect that we will make some progress in the 2004 budget, but it won't be until the 2005 budget that we really connect finance issues to the Six Sigma process. One of the things we are doing is that as we're shifting, which I've learned from the other companies using Six Sigma, the linkage to finance. The CFO and financial measures are really critical to a maturing Six Sigma organization. We didn't start with that kind of strength and support. We'll be doing more of that, and the proof in how effective we are in linking the use of Six Sigma to our financial measurements will come in 2005 and 2006." 5. News: "While Six Sigma continues to be adopted globally as a highly-effective business management system, spanning healthcare, manufacturing, financial services... almost any industry... we still don't see large-scale adoption by government. Why, do you think, has Six Sigma not been as popular in the public sector?" 5. Mayor Richard: "I think part of the challenge of being a leader in the public sector is to know when and in what way you can best use a tool for enhancing the performance of government. And I think the reason you don't have more of it in government is that you usually don't have people moving into government who have been CEO's of major, private sector organizations. I don't think it's easy for somebody who has been only in government all his or her life to understand the potential of Six Sigma. Very few come with a wide range private sector experience where they have had a chance to try and fail at culture change: implementing systems, training and mentoring. Many do not have process improvement experience. Business leaders have gone through two or three levels of experience with quality before finding the things that worked. I've spent a lot of time studying Peter Senge's work on the Learning Organization, (editors note: Peter M. Senge, "The Fifth Discipline", 1990, ISBN: 0385260946), and we're doing some innovative things here in that regard which compliment what we are doing with Six Sigma." Scroll up to right-hand side of page to continue interview... |
Mayor
Graham Richard, City of Fort Wayne, Indiana Click on image to go to The City of Fort Wayne website Continued from left panel... News: "Would you say that, as is the case in the private sector, Six Sigma success in the public sector demands top-down, leadership commitment and vision, and if so, what are some of the challenges this poses for that leadership?" Mayor Richard: "Yes, I do think so. You have to have a very clear-cut leadership commitment. This is not easy work… particularly, and I don't say this in any way critically - it's just the way it is, in a highly-structured, public sector, unionized environment. There are many centers of influence. We have a City Council who has to approve everything, including the Six Sigma budget. The opposing Party controls our City Council and they voted down any additional funding for Six Sigma training for the last two years. So, think of a CEO basically having a Board of Directors in an adversarial position to a major improvement project within the company that you are running. Instead of having alignment, you have opposition. Frequently, a government CEO will say, "It's not worth it… I'm not going to fight all those fronts… I'll just go along". You create a very risk-averse environment because you're justifying everything you do, even before you get any results. Consequently, people will be critical of what you're trying to do because they haven't seen any immediate results. Also, there are always people in any organization that say, "Look, I was here twenty years ago and I'm into my fifth Mayor, and he'll be gone in four years, so why should I bother?" Because of the nature of the way our organization is structured, as long as they are doing the rudimentary part of their job, it's pretty difficult to move, transfer, or dislodge someone who basically has a, "If it wasn't invented here, we're not interested" (mentality). Those are some of the challenges that are a little different between a corporate environment versus a highly-structured city government." 6. News: "Following on that last question, have you or your team been speaking to other public sector agencies or governments, either civic, state, or federal, with regards to their interest in Six Sigma, and learning from your experiences at the City of Fort Wayne?" 6. Mayor Richard: "I've been doing some speaking, but not a lot of writing. Fortunately, Michael George, (The George Group), heard me at one of the early (ISSSP) presentations, and is including my experiences in his book, (see book review in this newsletter). I have a strong personal friendship with John Hamilton, who is the head of the largest (Indiana) State agency. John and I were having dinner in Indianapolis, and he asked me what I was doing, and I told him about (Six Sigma). He brought all 25 of the individuals who run Family and Social Services Administration to Fort Wayne two years ago. They have been participating in the Black Belt training that we offer through the Master Black Belts who are former GE employees. They have three projects that are getting a million dollars or more of savings at a time when the State government has had the worst recessionary impact since World War II. I've chatted with Mayor O'Malley, I've chatted with the two Mayors up in Minneapolis/St.Paul. Roxanne O'Brasky, (President of ISSSP), is trying to put together a collaborative effort there as one of their first projects. It's not easy... My litmus test is that I say to whoever it is from another governmental unit interested in doing (Six Sigma), particularly when they see some of our results, "Will you come up for the two-day executive session on Six Sigma? Will you actually agree to be a Green Belt or Black Belt yourself, or sit through a full BB or GB session as though you were a participant, and get the whole feel of what it takes?" I'd say 9 out of the 10 Mayors who expressed some early interest are so busy, they're not willing to stop to do that, and that indicates to me that they are probably not going to be able to get it done. John Hamilton was an exception to that… he is, I believe, actually doing a Green Belt project right now. He did go through all of the Executive sessions. He got it, and most importantly, he made all of his senior staff at least go through the executive overview, so nobody was taking shots at somebody else." 7. News: "You have mentioned on several occasions in the past the City of Fort Wayne's membership in the TQM Network, (http://www.tqmnet.com/index.htm). Can you tell us a little bit about TQM, your involvement there, as well as some of the benefits membership has brought the City?" 7. Mayor Richard: "We would not be able to do what we are doing without the collaborative effort of the TQM Network. It's just wonderful to see all of the companies that are using Six Sigma in our community. By the way, a sidebar benefit, I was recently on a recruiting trip in another city where the lead person was doing Six Sigma for his company. He talked for twenty minutes about his Six Sigma project at the beginning of this very important presentation. Afterwards, this gentleman came up to me and said, "The climate that you are talking about (at the City of Fort Wayne)… being a really competitive city, is so attractive to us, because you are doing the things that we do… You talk like you are one of us! Annually the TQM Network sponsors CEO Round Tables. At each of these one of the forty TQM member CEOs shares their best practices. Recently I was invited to be the presenter at one of the Round Table Sessions with regard to how the City of Fort Wayne is doing with our quality improvement, Six Sigma, and all the other things we are working on." 8. News: "In closing, Mr. Mayor, I wanted to go back to a less-than flattering commentary that appeared in "Governing" on July 30, 2001, (http://governing.com/view/vu073001.htm), where staff correspondent and author, Jonathan Walters, ended his brief, but turgid description of Fort Wayne's introduction of Six Sigma with,... "So, for those career managers in that nameless Midwest city who are on the receiving end of this one, please accept my sincere sympathy. But remember, the sillier the name, (i.e. Six Sigma, Black Belts, etc.), the faster they disappear. In fact, this one will be gone in about Six Seconds, or by the next election, whichever comes first." With almost two years since that article was published, what response would you like to give to our readers, Mr. Walter's readers, and perhaps even to Mr. Walters himself?" 8. Mayor Richard: "I tried to call him three times. I think his book, called "Measuring Up", is a very good book. I think Jonathan Walters is like a lot of people who don't really know what Six Sigma is - they haven't gotten in deep enough. They haven't taken Jack Welch's deep dive into what's really going on. It's sad that somebody, who is a leading writer on performance enhancement for local governments, wouldn't even meet with me, wouldn't accept an interview, and wouldn't talk about what we were doing in a reasoned presentation with data and facts. He simply read that we were using Six Sigma, and he kind of made fun of it. Quite frankly, my Mayoral opponent also did that. In the campaign, she said, "Oh, six sigma, six shmigma… you just talk buzz words Graham… none of this stuff means anything". Well, not long after that, the local CEO of BAE Systems called me and said, "(BAE has) just won the Industry Week Top Ten plants in the northern hemisphere, using Lean-Six Sigma, and I'd like you to invite you to celebrate with us at our local coliseum with 800 people. I know what Six Sigma means, and I am really appreciative of the fact that the City of Fort Wayne is trying to use my tax dollars more effectively by using Six Sigma". So, the proof is in the pudding, and what counts is that we're much more effective in very tough times. Maybe (Jonathan Walters) will read the upcoming Lean-Six Sigma book by Michael George - maybe he'll be in a mood where it will sink in and not just criticize something he doesn't know much about." News: "I hope, as I am sure do you, that as more and more governments across North America and around the world take a look at some of these best practices, the proof will be in the pudding…. Mayor Richard, it has really been a privilege." Mayor Richard: "Let me cap it off by another measurement - there's an independent organization you might want to follow up on - it's called the "Digital City Awards". The City of Fort Wayne ranked 10th in cities of 150,000 to 250,000 people last year. We were 3rd this year. Over time, measurements that people aren't thinking a whole lot about today will become indicators for where companies will want to locate and grow their businesses. I believe, where there is adversity, there is always advantage. We are experiencing this horrendous crisis of local and state government financing -- this is the first time in Indiana we've had three straight years of less dollars available for government than we had three years ago -- you cannot sustain government the same way. When you have more people to serve, more services that are needed, and fewer dollars - you have to change. Those who figure it out will be competitive survivors, and those who don't… their communities will be losers." News: "It has been a privilege speaking with you Mr. Mayor. I know that I, as I'm sure a lot of our readers, will be watching the (City of Fort Wayne) election very closely, and we wish you the greatest success going forward. We can only hope that some of our readers in the public sector will also take to heart what you have shared with us today and begin to explore the tremendous opportunities offered by Six Sigma for government and the public sector." Editor: For more information on the City of Fort Wayne's Six Sigma program, please visit: http://www.cityoffortwayne.org/6sigma.htm. To see another article describing Six Sigma in the Public Sector, please visit; http://newsdesk.inel.gov/contextnews.cfm?ID=390 Not sure how Six Sigma can be apply to the Public Sector? Be sure to review this article; http://www.e-zsigma.com/Newsletter/20-Sep-2002-08.htm
Rod Morgan, e-Zsigma, Inc. --------------------------------
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