Low Cost Technically Incapable – Revisited

In a world where every penny should count, where we are told continuously how bad the economy is, do we really know what we are getting when we bring in outside help?  I can identify numerous types of consultancies that exist in the market.  However, there are two major types that seem to be pressing my buttons recently.

The first type of consultancy is far more staff augmentation then advisory support.  These companies are nearly incapable of providing any value to their customer other than eliminating busy work.  These companies are growing at a rapid pace in the Federal Government due to the trend toward Low Cost, Technically Acceptable contracts.  Many of these companies are so low cost and poorly managed that they can hardly hold on to staff long enough to even get properly acclimated to their jobs.  Because of the Governments growing reliance on this type of Contractor we have seen a growing presence of the second type of consultancy.

The second type of consultancy is the Advisory Firm (i.e. Think Tanks or Federally Funded Research and Development Centers).  These organizations run on the motto that we are XXXXX and we are here to help.  Many of these organizations are considered not for profit however, they have rates that often double or triple their counterparts in the first group.  Moreover, they are extremely good at making recommendations and writing reports without ever delivering a single quantifiable result.  They create work for themselves by identifying gaps in Government Processes and Programs, followed by making a recommendation that includes adding more staff to the project, then expecting someone else to deliver the results that they recommended.

With these two types of companies combined we have built ourselves a whole new platform by which to demonstrate incompetence.  We lean on the low cost technically incapable companies to deliver on the promises made by the overpriced non-producers.

So, where do we go from here?  The answer isn’t as hard as it seems.  There are numerous great consultancies around the world.  These companies are reasonably priced and have renowned delivery capabilities.  They have the ability to identify problems, develop and deliver solutions all while creating a sustainable environment where the organization will be set up for long term success.

How do we get there from here?

• Understand your needs or hire someone to help you identify those needs.  If you hire someone to help you define your needs, they shouldn’t be the ones doing the follow on work.
• Clearly define your needs in a clearly written Performance Work Statement (PWS)
• Identify performance metrics/goals that can be attained and will indicate the successful completion of the project/program/effort
• Hire the people who have proven that they can do the work
• Award work based on:

1. Response to PWS (what they can do for you)
2. Verified Past Performance (with references)
3. Key Personnel (people who will be contractually bound to do the work)
4. Price

Beyond hiring the right people to execute on the work that really needs to be done, be sure that any time you bring in contractors to provide assistance, build in a method to hold them accountable for delivery of specific products or services that clearly demonstrate a return on your investment.

Happy Leaning,

The Common Sensei

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GAO Report Identifies Billions in Waste

Lean Six Sigma Experts Pounce On New GAO Report

Atlanta, GA – According to the Government Accounting Agency’s 2012 annual report, released this week, tens of billions of dollars are wasted every year due to unnecessary duplication, overlaps, and just plain waste in the Federal Government.   Sen. Tom Coburn R-OK estimates that these wastes cost taxpayers as much as $100 Billion Dollars every year.

“This is not news to Effective Government Now, the Coalition of Lean Six Sigma professionals who came together in the Fall of 2011 at the invitation of Speaker Newt Gingrich, specifically to work with Newt’s vision that reducing the cost and size of government can be done thoughtfully with common private sector business applications.  We are not limited only to the politically charged choices of raising taxes or slashing needed services”, said Effective Government Now Chairman Jack Merritt.

Last Summer Newt said:

“There are a number of sophisticated management systems that create more productive, more effective patterns of work.

One of those systems is Lean Six Sigma.

If applied across the entire federal government, some estimate it could save $500 billion a year or $5 trillion over a ten-year period. By comparison, the [then] newly created “Super Committee” is [was] merely trying to save $1.5 trillion.

A properly focused Lean Six Sigma effort could reorient government to act in ways that would help balance the budget, grow our economy, accelerate job creation, and make America the most competitive country in the world.

To achieve this future, it will require us to work together to educate the American people, the news media and our elected officials, and win the argument for smaller, leaner, and more effective government.”

Speaker Gingrich had the right ideas nine months ago, and the GAO has just validated his foresight.  Republican Study Committee Jim Jordan pointed out that “… 11 different agencies run 94 different programs to encourage ‘green building’” and “13 agencies operate 209 different STEM education programs.”  The GAO highlighted 51 areas and 130 recommended actions.

The Effective Government Now Coalition believes that neither the Congress nor the President has acted responsibly to address the rampant waste in our government.  Recovery must be driven by both the Executive Branch and Congress.  Both must work together to set priorities and measure results, while holding the Departments and Agencies responsible with Lean Six Sigma.  This will require bold and experienced leadership.  We believe that Speaker Newt Gingrich is the right person, with the right vision, and the best track record to drive this necessary collaboration to fundamentally change the way our federal government spends and, in the future, saves money.