The Impact of Three Years of Experience and a New Governor on the State of Washington'sProductivity ProgramAuthor(s): Raymond RyanSource: Public Administration Review, Vol. 38, No. 1 (Jan. - Feb., 1978), pp. 12-15Published by: Wiley on behalf of the American Society for Public AdministrationStable URL: http://www.jstor.org/stable/975403 .

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12 PUBLIC ADMINISTRATION REVIEW

purchasing costs. (2) The Lieutenant Governor's Office of Nursing Home Ombudsman and the Department of Health and Social Services received funds to develop on a pilot basis a more refined formula for nursing home reimburse- ment, so that the dollars spent more accurately reflect serv- ices provided.

Other sources of productivity ideas have been explored and institutionalized in Wisconsin. A merit award pro- gram, established in 1953 to solicit employee suggestions, received a national award in 1976 for saving more money that year than any other suggestion system. It has saved the state more than $3 million. In late 1975, a labor-manage- ment cost savings commission was established to receive suggestions from unionized employees. Savings, when ac- crued, will be shared among all union members.

Since 1972, Wisconsin has met and overcome major or- ganizational, budgetary, and management obstacles to im-

proved productivity. Without the dedication and high competence of Wisconsin's managers in government, this task could not have been accomplished. I am proud to say that, more than ever, state managers are responsive to the public and committed to the major goals of Wisconsin's productivity program: increased services at the same cost, or the same level of essential services at less cost. Testi- monial to our success in jointly meeting these goals is the fact that I could propose, for 1977-79, a third consecutive no-tax-increase executive budget.

As predicted in 1972, Wisconsin's productivity program has created its own momentum. The decentralized nature of our productivity efforts has served to actively involve and stimulate each of the managers throughout the state. With this approach, Wisconsin has achieved many of the productivity gains still being sought by the states having large and expensive productivity commissions.

THE IMPACT OF THREE YEARS OF EXPERIENCE

AND A NEW GOVERNOR ON THE STATE OF

WASHINGTON'S PRODUCTIVITY PROGRAM

Raymond Ryan, Wofac Company

During his 1972 reelection campaign, Governor Daniel J. Evans of the State of Washington stressed his intention to further develop the efficiency and effectiveness of state government agencies and programs. Business leader task forces had undertaken efficiency studies of state govern- ment as early as 1966, and many of the recommendations resulting from those studies had been implemented. It was clear that in 1972 the Governor had a different kind of pro- gram in mind. Early in 1974, the then director of the Office of Program Planning and Fiscal Management (OPP & FM) presented a plant to the Governor, who subsequently announced a comprehensive state government productiv- ity-improvement program. By executive order a 28-mem- ber Advisory Council to the program was established.

The State Plan

The state "Productivity Program" plan first recognized that state agencies had, over a period of many years, intro- duced a wide variety of operating improvements; but that these were unfocused, invisible outside the individual agency, and did not represent a systematic approach to improving general performance. Also, the plan recognized the existence of two major, productivity-related efforts already under way which were aimed at system-wide im- provements to state government performance: the Pro-

gram Decision System (PDS) and Alternative Futures for Washington.

PDS was the state effort to establish a program budget to replace the traditional line-item, agency-by-agency bud- get. It called for agencies to provide several levels of work- load and activity information and to establish effectiveness measures for all program functions. OPP&FM was con- fident that initial efforts, although expected to be of un- even quality, would represent an important advance over traditional budget approaches. The Productivity Program plan counted on PDS to integrate productivity approaches, projects, and measures into the budget process so as to institutionalize improvements in visible form.

The Alternative Futures for Washington Program, also under the direction of OPP&FM, was established to de- velop a continuing grass-roots citizen involvement in the long-range policy planning process for the state. When integrated productivity improvement efforts began, citi-

Raymond M. Ryan is vice president of Wofac Company, a divi- sion of Science Management Corporation. He served as special as- sistant to the governor, State of Washington, and was director of the state's productivity program. Mr. Ryan has been a consultant to numerous federal organizations. His management experience includes executive positions with the International Labour Or- ganization, the City of Chicago and the State of Washington.

JANUARY/FEBRUARY 1978

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PRODUCTIVITY IN GOVERNMENT 13

zen task groups throughout the state were in the first phase of the program. This phase involved the definition of alter- native policy choices for a period 10 years in the future, covering the entire range of growth and development issues facing the state. PDS was seen as the mechanism through which the state government's response to citizens' policy preferences would be organized and made visible.

The plan specified that the Productivity Program it- self would work through a small professional staff housed within OPP&FM to accomplish two broad goals: First, to act as staff to the Advisory Council, which was to identify opportunities for system-wide productivity im- provements; and second, to develop action plans and ideas for state agencies. These would be implemented through a revised OPP&FM structure that would give management improvement a higher priority than previously existed.

Productivity Program Implementation The program recognized productivity improvement as

an extended process, not susceptible to cheap, easy, "quick-and-dirty" approaches. In selecting objectives, therefore, emphasis was placed on long-range solutions and improvements. The plan assumed that systemic changes were necessary and that identification of opera- tions needing change would be a primary program objec- tive. The Advisory Council was seen as an instrument of change through which inhibitors to productivity improve- ment would be identified. The Council membership had been carefully chosen to represent the major interest groups with "clout" in the system. Included were business leaders; state legislators; agency directors; professional and clerical employees; officials of employee organi- zations; citizen group leaders; and representatives from the media, higher education, federal, and local government.

Several short-range objectives were included in the plan as a basis for building toward larger range objectives. Among these were:

* maintaining the Governor's leadership role and direct involvement with the program,

* stimulating individual agency productivity programs, * working toward a new organization and management

capability for OPP&FM, * early organization of the Advisory Council and iden-

tification of its specific objectives. Organization of the Advisory Council proved to be a

longer and much more complex task than anticipated. De- veloping consensus with so large and disparate a group took several meetings. Eventually, the Council approved establishment of four primary subgroups to consider (1) personnel policies; (2) operations and methods; (3) work measurement and management; and (4) resource management (including technology and capital invest- ment). The Council also adopted a two-year work plan to guide progress toward its expected termination date, December 31, 1976.

Advances were made toward other objectives. Produc- tivity coordinators at senior levels were identified to assist individual state agencies in working with the program. The coordinators helped prepare a report of recent productivity

JANUARY/FEBRUARY 1 978

improvements in state agencies, which received extensive and favorable public attention. A survey of state agency managers, sponsored by the Advisory Council, identified major inhibitors to productivity and influenced the Coun- cil's priorities.

Contacts with federal agencies, in order to develop sup- port of program objectives, were most fruitful. A commit- ment was received from the National Science Foundation to support a two-year effort to develop productivity mea- sures for two social service programs-foster care and nursing homes. The project was under the direction of the Productivity Program but involved the cooperation of the State Department of Social and Health Services (DSHS). This social service measurement project successfully ac- complished first-year objectives and appears to be on the track toward accomplishment of all measurement objec- tives established for the two-year term.

HUD granted the Productivity Program funds for three projects: (1) the creation of a State Technology Office; (2) a pilot study in the State Department of General Ad- ministration of a "Total Performance Measurement" sys- tem developed by the federal government; and (3) a case study of the Advisory Council as a model for other state and local governments. An Intergovernmental Personnel Act grant through the U.S. Civil Service Commission sup- ported a state employee communications survey. Each of these grants produced successful results for the program and added to the amount of information available to other state and local governments.

Innovation Group The HUD-supported State Technology Office assisted in

developing a work plan to implement recommendations of an earlier study of state government telecommunications policies. It was also instrumental in organizing states and cities into a Pacific Northwest Innovation Group. The pilot test for the Total Performance Measurement system in the State of Washington's Department of Administra- tion was highly successful. As a direct consequence of the pilot test, funds have been requested in the current state budget for extension of the measurement system to five additional agencies in this biennium. The case study of the Advisory Council has been completed and will be made available through HUD to interested jurisdictions. The communications survey provided valuable information on the relationships among various forms and levels of com- munication and state employee attitudes toward state gov- ernment, agency, and job performance.

Early in 1975, the Advisory Council presented its initial recommendations to the Governor (for extending work measurement coverage and for improvement in the state vendor payment system), which he approved and for- warded to OPP&FM for implementation. Yet within OPP&FM the first results of the Program Decision System were not as successful as had been hoped. They were ignored by the legislature in favor of the familiar line- item budget. Preoccupied with the difficulties presented by this situation, OPP&FM did not accord the necessary priority to developing the management capabilities to carry out the Productivity Program.

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14 PUBLIC ADMINISTRATION REVIEW

In March of 1975, Governor Evans moved the Produc- tivity Program staff out of OPP&FM and placed it in his own office under the direction of the special assistant for productivity and labor relations. This move helped strengthen lines of communications among the Advisory Council, program staff, and the Governor.

Interstate Information Exchange

Involvement in plans for national productivity improve- ment enhanced the State of Washington program when Governor Evans was appointed by President Ford to the board of the National Center for Productivity. Governor Evans also agreed to chair the newly created Public Sector Committee of the Center. This involvement provided the Washington program and the Advisory Council with access to additional information and insights on national and other state and local government productivity policies and progress. Encouraged by the extent of interest indi- cated by governors of other states in response to Governor Evans' communications with them through the Public Sec- tor Committee, program staff initiated a trial productivity information exchange. First a letter was sent by Governor Evans to all the other governors offering information on the State of Washington program and requesting informa- tion from each of them on any similar activities. More than 30 states responded, and the information exchange was continued and expanded.

Transition

In late spring of 1976, Governor Evans announced he would not seek another term and would return to private life in January 1977. There was an immediate and per- ceptible loss of momentum in agency response to Produc- tivity Program staff contacts. No such effect touched the Advisory Council, however. The Council had always re- garded itself as a long-term policy group, and proceeded to submit a final report as a summation of its work and as a potential program for a new governor.

Program staff, meanwhile, began immediately to pre- pare for a smooth transition to a new administration. Plans were made to provide information on policy, bud- get, administrative, program, and decision issues covering the full spectrum of state government activities. Prior to the November election for a new governor, Governor Evans issued operating instructions to all agencies based on these plans. Immediately after the election, the Gover- nor contacted Governor-elect Dixy Lee Ray and offered his full cooperation. A series of briefings followed, and in- formation prepared by the Governor's Office and the agencies were provided to the incoming governor and her staff.

At the request of the Productivity Program staff, the Governor-elect selected one of her top aides to work with the program during the transition period. This contact in- sured an important degree of continuity for the program. Governor Ray subsequently appointed her transition aide as director of OPP&FM. There are strong indications that

the new director intends to develop the OPP&FM capabil- ity in accordance with earlier plans of the Productivity Program and recommendations of the Advisory Council.

Governor Ray also responded favorably to the request for a replacement to direct the Social Services Measure- ment Project. The new principal investigator for the proj- ect is staff director of a committee studying the organiza- tion and programs of the 13,000-employee Department of Social and Health Services.

Advisory Council Final Report and Present Status

On December 31, 1976, the Advisory Council on State Government Productivity submitted its final report. Its 28 recommendations were grouped in four broad categories, as they related to: (1) direct impact on state employees; (2) organization problems and relationships; (3) improving management; and (4) improving measurement.

The Advisory Council selected ten of the recommenda- tions for top priority consideration (their order below does not reflect their importance): 1. Change the role of the Personnel Board from rule-

making to appeals only, and make the director of per- sonnel responsible for administration of the merit sys- tem.

2. Amend the merit system law to permit compensation to be based on performance and to permit productiv- ity bonuses.

3. Amend the state constitution to limit to 20 the number of executive agencies and to provide the Governor au- thority to recognize subject only to legislative veto.

4. Increase coverage of state employees by work man- agement programs.

5. Establish internal management-auditing policy; en- courage and assist agencies to perform management audits, program evaluations, and budget formulation.

6. Adopt training and career-development legislation for managers.

7. Provide financial and non-financial incentives to managers for achieving performance goals within the budget.

8. Adopt advanced management techniques including quality assurance and value engineering.

9. Have the Governor coordinate labor-relations policy among agencies.

10. Develop policy for state employee communications.

The first six items have favorable prospects for enact- ment. For the remainder, some action is likely, but timing is less certain.

Other recommendations included a "sunset" law (several are under consideration in the legislature), and recreation of an Advisory Council on State Government Productivity (Governor Ray indicated in her campaign that she intended to establish a small group to provide recommendations on efficiency and effectiveness of state government).

JANUARY/FEBRUARY 1 978

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PRODUCTIVITY IN GOVERNMENT 15

It is too soon to judge the State of Washington Pro- ductivity Program as either a success or a failure; the ex- perience of the next few years will permit better judgment as to any lasting benefit. It appears from available evi- dence that the program offers much of the long-term

promise planned for it. Integration of its accomplishments into a strengthened program budget and a revitalized state budget, planning, and management agency will do much to fulfill this promise.

CITY AND COUNTY PRODUCTIVITY PROGRAMS*

Frederick O'R. Hayes

My observations on city and county productivity pro- grams are based primarily, but not entirely, upon a study of programs in eight local governments made between July 1975 and March 1976. Only three of the eight described their efforts as productivity programs; a circumstance that underlines the fact that productivity is a more recent rubric for programs to improve local government performance. Even where programs use "productivity" as a descriptive term, the word covers a wide range of activities designed to improve performance.

The eight governments include five large cities, two smaller cities, and one large suburban county. With two governments each in the far west, southwest, midwest, and northeast, only the southeast is unrepresented. The juris- dictions are divided evenly between those with elected chief executives and those with city manager charters.

Eight Local Programs'

In Dallas, an informal ad hoc productivity improvement program evolved from the strengthening of the Office of Management Services (OMS) in the early 1970's. The city manager has kept continuing pressure on the operating agencies for performance improvement, using the OMS to identify and analyze problems and monitor progress. So- lutions have come largely from the operating agencies, often with OMS participation and frequently through use of consultants, although a few agencies now have analyst staffs. Selective reorganization has played a role, most significantly in dividing the public works agency into smaller, more homogeneous departments. The major suc- cesses have been in the refuse collection, building main- tenance, and water distribution functions.

Detroit had, in 1973, negotiated a productivity incentive contract with its refuse collectors, a development resulting from a dispute on the use of new, larger sanitation trucks. The Detroit Productivity Center, created in the subsequent

*This article is drawn from a study funded by the Ford Founda- tion and the National Center for Productivity and Quality of Working life, and published by Lexington-Heath in 1977 as Pro- ductivity in Local Government.

JANUARY/FEBRUARY 1978

year, had its genesis in the idea advanced to incoming Mayor Coleman Young that productivity improvement re- quired a continuing effort by expert staff as opposed to the hurried ad hoc work on the incentive contract. The center was located in the city government reporting to the mayor; its mission was to provide technical assistance to agencies requesting it. The Center's staff completed industrial en- gineering studies and management analyses of vehicle and equipment maintenance, purchasing, tree trimming and removal, and other operations. The center was not effec- tive, however, in securing the early implementation of its recommendations.

Milwaukee's management improvement program was started 25 years ago as a result of the recommendations of a consultant study. The program is centralized in the Bureau of the Budget and Management which reports to the Board of Estimates-a hybrid body on which both executive officials and city council members sit. A high continuing level of accomplishment has had impacts throughout the city government. The reorganization of refuse collection has been the most important single result.

Nassau County's multi-municipal productivity project, covering Nassau County (N.Y.) and its three constituent towns, was initiated in 1972 by elected County Executive Ralph Caso. The program was based on a union-oriented strategy: A commitment was made to share productivity savings with the unions, and the unions were represented on every productivity committee. Over a two-year period, the productivity staff worked on refining contract lan- guage for sharing benefits and conducted or managed about 100 pilot mini-productivity projects. The project was killed in early 1975 by the Board of Supervisors' re- jection of the productivity benefit-sharing language in the proposed labor contract.

Frederick O'R. Hayes is a past Director of the Budget for the City of New York and has had a career in the federal service. Since leav- ing government he has been a visiting university professor and has written numerous articles about urban government problems. Hayes is author of Productivity in Local Government (Lexington Books, 1977).

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