It seems we are all in agreement on the idea that the government isn't awesome at running its business and that we would like our political leaders to focus on the core functions of government and privatize the rest. One item that stood out to me from Marc's post is that the military promotes those good at war, not good at running a business. Unfortunately there is a lot of correlation in the business community, and I'm sure Ed has seen some examples too.
It is not uncommon for businesses to promote people due to their technical skill into a role where the technical skill is no longer needed...but into a role where a whole bunch of business savvy and management is necessary.
When I got my MBA, I had a very good experience and got what I wanted out of my graduate schooling. But, I was disappointed that many of the core classes were geared towards teaching non-business people basic business skills instead of teaching a business person (me) next level skills. My program, the managers program at the University of Iowa, as opposed to the full time or executive program, may have well been called the Rockwell Collins MBA. Based in Cedar Rapids, this program catered to teaching engineers from Rockwell business skills. There were like UI MBA programs in Des Moines (aka the Maytag MBA) and the Quad Cities (aka the John Deere MBA).
At least these companies were trying to teach engineers and technical specialists the business skills they needed to be successful as managers. Does the military provide any such training, especially utilizing outside resources who know more than running a business than the military? If not, they should.
Monday, May 27, 2013
Ed on Government, not Politics
It was awesome reading Marc's unabridged post this morning, and re-reading Brad's kick off on Government inefficiency. This is clearly a hot topic that we all have strong opinions about. I guess it's my time to chime in and give my two cents.
First, I would say that Marc hit the nail on the head. The most important element and first step in controlling government spending is to figure out what government should do, and what they shouldn't do. Non-core functions like chow halls, mail service (which is so 20th century), motor vehicle licensing, and health care (just my opinion) are NOT things that I believe our government should have a stake in. In fact, if you just came up with the list of current government spend in these non-core areas and decided to outsource them to private contractors with a for-profit interest in efficiency and effectiveness you would save enough to ensure all of our military forces had more than enough money to protect our nation from all enemies, foreign and domestic. Heck, enough to fill all their printers with paper too!
Marc commented in his post that government contracting is BIG BUSINESS and he's so right. The idea of having the US government as a client is a market opportunity that almost any civilian company would drool over. And most certainly go to great lengths to win and retain these large and profitable contracts. I've worked for companies that thrived in the government contract space.
One further impression I had from reading Marc's post was that it appears government is cutting almost randomly in all the wrong places ... Paper and Christmas parties, are you kidding me? Is this really where most of our government dollar is being spent?
Having been a part of big cost cutting exercises in private businesses, they always start with "the big rocks". Big rocks are those components of your current spend that make up the biggest part of your total costs. Generally speaking big rocks are often in the three buckets of (1) people, (2) bricks and mortar - real estate costs, office buildings, (3) technology - computers, phones, networks, etc. I'm not saying these three buckets make up the bulk of the big rocks in all businesses, but in the service based businesses I've generally been a part of it is. So, what are our government's big rocks? My guess is in people, bricks and mortar, and then maybe technology. I haven't seen too many government entities with a shortage of staff that are housed in buildings that looked frugal or were built in lower cost real estate areas. Hmmm?!
I wish we could find a way to elect business people to political positions rather than politicians. Ross Perot jumps to mind immediately - forget for a moment whether you would want someone like that running our country. The point here is that it isn't just the CEO who has to have a business head (the President of the United States) but the entire executive team (Congress). How about we let Bill Gates and Warren Buffet run our country's fiscal policy for the next two years? They would probably do it charitably for no salary too. Let them have the reigns and after two years they are done, regardless of how much or little people liked their efforts. That would surely right the ship.
I'm for small government because of what Brad and Marc stated in their respective posts, and what I've added above. And I believe firmly that for-profit contractors to the federal government for non-core functions would drive tremendous efficiencies in our current system that are required to reduce our burgeoning deficit and put the United States of America on much firmer fiscal ground. And really, who doesn't want that?
First, I would say that Marc hit the nail on the head. The most important element and first step in controlling government spending is to figure out what government should do, and what they shouldn't do. Non-core functions like chow halls, mail service (which is so 20th century), motor vehicle licensing, and health care (just my opinion) are NOT things that I believe our government should have a stake in. In fact, if you just came up with the list of current government spend in these non-core areas and decided to outsource them to private contractors with a for-profit interest in efficiency and effectiveness you would save enough to ensure all of our military forces had more than enough money to protect our nation from all enemies, foreign and domestic. Heck, enough to fill all their printers with paper too!
Marc commented in his post that government contracting is BIG BUSINESS and he's so right. The idea of having the US government as a client is a market opportunity that almost any civilian company would drool over. And most certainly go to great lengths to win and retain these large and profitable contracts. I've worked for companies that thrived in the government contract space.
One further impression I had from reading Marc's post was that it appears government is cutting almost randomly in all the wrong places ... Paper and Christmas parties, are you kidding me? Is this really where most of our government dollar is being spent?
Having been a part of big cost cutting exercises in private businesses, they always start with "the big rocks". Big rocks are those components of your current spend that make up the biggest part of your total costs. Generally speaking big rocks are often in the three buckets of (1) people, (2) bricks and mortar - real estate costs, office buildings, (3) technology - computers, phones, networks, etc. I'm not saying these three buckets make up the bulk of the big rocks in all businesses, but in the service based businesses I've generally been a part of it is. So, what are our government's big rocks? My guess is in people, bricks and mortar, and then maybe technology. I haven't seen too many government entities with a shortage of staff that are housed in buildings that looked frugal or were built in lower cost real estate areas. Hmmm?!
I wish we could find a way to elect business people to political positions rather than politicians. Ross Perot jumps to mind immediately - forget for a moment whether you would want someone like that running our country. The point here is that it isn't just the CEO who has to have a business head (the President of the United States) but the entire executive team (Congress). How about we let Bill Gates and Warren Buffet run our country's fiscal policy for the next two years? They would probably do it charitably for no salary too. Let them have the reigns and after two years they are done, regardless of how much or little people liked their efforts. That would surely right the ship.
I'm for small government because of what Brad and Marc stated in their respective posts, and what I've added above. And I believe firmly that for-profit contractors to the federal government for non-core functions would drive tremendous efficiencies in our current system that are required to reduce our burgeoning deficit and put the United States of America on much firmer fiscal ground. And really, who doesn't want that?
Friday, May 24, 2013
Government Waste
something. Oh wait...
I agree with you, and I would like to mention a few things based on my military experience and government efficiency. Considering that the Department of Defense had to make $50 million in cuts in this fiscal year alone, I feel like I know a little bit about it.
One of the problems, at least from a military perspective, is that the military doesn't promote people who are good business managers. It can be a contributing factor, but there isn't a military job specialty for business affairs, something that would require an MBA for example. Military job specialties have to do with a war function, and yet at some point people reach a position where they have to deal with budgets, expenditures, management, etc. The assumption that they have good business sense is a bad one.
In the 20+ years that I've been in, I've seen a lot of things change on the business end of things, and some of them are not without controversy. For example, years ago the military started to privatize military housing, and I'm not sure there are many anywhere that are still run solely by the military. Someone was smart enough to realize that a civilian company could run it much more efficiently, or like a business if you will. In the end it's cheaper to pay that civilian company a certain amount and let them figure out how to run it at a profit. Not surprisingly, the housing (for both families and single military members) has improved since being privatized.
Another example is food service. Galleys, chow halls, dining facilities, whatever you want to call them, aren't run by the military any more. They are all contracted and run by civilians. Even when I was in Iraq, the dining facilities were run by contractors, NOT by the military. I mentioned some controversy involved with contracting services because there is some rub when it comes to having to rely on contractors to support a war. Contractors can say no and walk away. Employees can quit and walk out the door. Many of the war functions now are even carried out by contracted civilians. Companies contract to drive fuel trucks, provide security, intel support, etc. When I was in Iraq I worked with a ton of civilians.
And one more example... many military bases have a few military police officers that patrol the base, but usually perimeter security (gate security) is contracted. We call them "rent-a-cops".
All that to say, there are areas where the Department of Defense has been smart enough to realize that civilians do it better. Government contracting is big money. There is still room for abuse, but at least the government can point the finger at someone else for mismanagement.
But you can't TOTALLY turn stuff over. We still have to manage a budget at our command. We've done nothing but CUT CUT CUT in my last 10-15 years in the military. Anyone who has an idea that with the current wars the entire military is just riding high on piles of money doesn't have a clue of what it's really like. Some days I don't have any paper to put in the damn printer because we don't have the budget to get paper. I can't send my guys on training deployments because there is no money for it. We just got a message the other day that informed the entire Navy that you can't use any budget money for things like command ball caps (a uniform item), recognition plaques (for example, for someone who wins Sailor of the Year), or any uniform items (when people get promoted usually the command provides the new collar devices). We are slashing to the bone. The contractors that we have in our command? Yeah, they are getting furloughed one day a week for the next six months. That's a huge pay cut for them. So all those things we contracted for them to do? Mandatory furlough. Thanks congress.
I should add that many of things that people hear about military commands doing, we have to do with our own money, meaning the money out of our personal pockets. We don't use ANY budget money for things like command holiday parties or command picnics. We're not allowed to do that. The reason that I have to go serve food at Petco Park is so that we can have a fucking holiday party. Every dime that we spend on morale and welfare events is money that we have raised on our own. Nobody in the military is having ANY fun on the taxpayer's dime. My computer at work has 900 MB of RAM and it takes me 10 minutes to log on and open my email, but there's no money to buy RAM. If I want my computer to even work decently, I need to buy my own RAM and put it in the computer. The other day I taped a bunch of paper up on the windows on our office to keep the sun out, because we can't afford to run the air conditioner. It's utterly ridiculous. Can you tell I got a little worked up on this last paragraph?
So yes, it pisses me off that you have organizations like the USPS that are run so poorly. It's mail for God's sake, why can't we privatize THAT?? I have no doubt that FedEx or UPS could make a killing doing letter mail service in an efficient manner. One of the problems is the "govvies", or government employees. My understanding is that it takes a consent letter from God himself to fire one, but that's a discussion for another time. We kick out excellent Sailors because their body fat is too high, while the IRS puts a moron who was illegally targeting conservative groups and refuses to answer question from congress on PAID administrative leave. Nice business paradigm. The waste isn't down where the rubber meets the road, it's a little higher up where the incompetent managers sit with their thumbs up their asses. And then there's congress...
Okay, I'm gonna stop before this turns into an R-rated blog.
Wednesday, May 22, 2013
Our government is terrible at running its business
I've long been averse to politics, mostly because I am exhausted by the partisanship displayed by everyone from both sides. The two party system is flawed and generates very little progress amongst a sea of bickering and posturing. Life is about gray, life is about compromise. These are lessons our politicians rarely bring to the table to help move the needle on the many opportunities in our country for which political action is a solution.
But this isn't a post about politics. My cynicism has migrated/expanded to our federal government as a whole. Our government is just flat terrible at running stuff.
Post office run smoothly?...nope. Long lines, sporadic service, no urgency...and a $16B annual shortfall. Oops! How many companies are afforded that track record and still allowed to function? 25-30 years ago over 50% of private company workers in the US had pension benefits, today that number is 3%. Want to know why? Because the long term pension obligations create such a financial burden on the organization that it cannot be successful. That is unless you can just tax your customers and print your own money. In that case...PENSIONS FOR ALL! Want an example of pension obligations gone bad: Stockton, California. Check out the link HERE.
Let's pivot to another well-oiled government machine...the DOT. I went to get my license renewed recently. It took 75 minutes of which I spent approximately 3 doing something and 72 waiting. Some specific observations about this super-efficient organization:
Observation #1. There were roughly 12 people working that I could see. There were never more than 5 actually helping someone. For my entire visit, 2 were simply standing there watching/supervising others. Didn't have a clipboard, a PDA, not even a cup of coffee. Just stood there like a sentry next to a memorial on the national mall.
Observation #2. It took about 8 minutes to process my credit card transaction. This 8 minutes broke down as follows:
2 minutes - the DOT person queueing up the credit card machine so I could swipe my card.
.5 seconds - me swiping my card.
4 minutes - the credit card machine processing my payment. Must be a 64K connection.
2 minutes - the DOT person printing my receipt on a full page of paper on a printer 80 feet away, retrieving it, and delivering to me.
Can you imagine if it took you that long to buy gas, groceries, a coffee? By the way, this transaction was for $2.50. The $2.50 was $1 for my license renewal and $1.50 for a credit card processing fee. The DOT person was baffled why I wouldn't have any cash. I was baffled why the DOT paid her $5 for the time it took her to collect $2.50 from me.
Observation #3. You are not allowed to have any electronic devices out. No phones, can't read email, be on the internet. No explanation why. The first time I went this rule was being ignored and the two aforementioned supervisors simply looked over the crowd like the sheepdog in a bugs bunny cartoon. The second time I was there one of the supervisors was monitoring the crowd like prisoners at auschwitz and scolding those with the nerve to disobey the clearly marked signs.
One other DOT note, when I called the state DOT line to get clarification on a license question, my estimated hold time was 45 minutes. Do you know what my clients would say to me if I told them I was making their customers wait 45 minutes to talk to a customer service agent?
And let's not forget about the latest IRS scandal, driven by purely political motives. Oh yeah, that's the organization that is going to be in charge of your healthcare. Worried yet? YOU SHOULD BE.
There is an important place for our government in this country. Defense of our nation, legal guidance and enforcement (although this itself has spiraled out of control, but that's another post), welfare support for those in need. But our government has no business running many of the businesses it is running, primarily because it is awful at it. We need to stop putting political science majors and lawyers in public office and start putting business majors in charge. And we need to keep as many pieces of our economy and country privatized as possible.
But this isn't a post about politics. My cynicism has migrated/expanded to our federal government as a whole. Our government is just flat terrible at running stuff.
Post office run smoothly?...nope. Long lines, sporadic service, no urgency...and a $16B annual shortfall. Oops! How many companies are afforded that track record and still allowed to function? 25-30 years ago over 50% of private company workers in the US had pension benefits, today that number is 3%. Want to know why? Because the long term pension obligations create such a financial burden on the organization that it cannot be successful. That is unless you can just tax your customers and print your own money. In that case...PENSIONS FOR ALL! Want an example of pension obligations gone bad: Stockton, California. Check out the link HERE.
Let's pivot to another well-oiled government machine...the DOT. I went to get my license renewed recently. It took 75 minutes of which I spent approximately 3 doing something and 72 waiting. Some specific observations about this super-efficient organization:
Observation #1. There were roughly 12 people working that I could see. There were never more than 5 actually helping someone. For my entire visit, 2 were simply standing there watching/supervising others. Didn't have a clipboard, a PDA, not even a cup of coffee. Just stood there like a sentry next to a memorial on the national mall.
Observation #2. It took about 8 minutes to process my credit card transaction. This 8 minutes broke down as follows:
2 minutes - the DOT person queueing up the credit card machine so I could swipe my card.
.5 seconds - me swiping my card.
4 minutes - the credit card machine processing my payment. Must be a 64K connection.
2 minutes - the DOT person printing my receipt on a full page of paper on a printer 80 feet away, retrieving it, and delivering to me.
Can you imagine if it took you that long to buy gas, groceries, a coffee? By the way, this transaction was for $2.50. The $2.50 was $1 for my license renewal and $1.50 for a credit card processing fee. The DOT person was baffled why I wouldn't have any cash. I was baffled why the DOT paid her $5 for the time it took her to collect $2.50 from me.
Observation #3. You are not allowed to have any electronic devices out. No phones, can't read email, be on the internet. No explanation why. The first time I went this rule was being ignored and the two aforementioned supervisors simply looked over the crowd like the sheepdog in a bugs bunny cartoon. The second time I was there one of the supervisors was monitoring the crowd like prisoners at auschwitz and scolding those with the nerve to disobey the clearly marked signs.
One other DOT note, when I called the state DOT line to get clarification on a license question, my estimated hold time was 45 minutes. Do you know what my clients would say to me if I told them I was making their customers wait 45 minutes to talk to a customer service agent?
And let's not forget about the latest IRS scandal, driven by purely political motives. Oh yeah, that's the organization that is going to be in charge of your healthcare. Worried yet? YOU SHOULD BE.
There is an important place for our government in this country. Defense of our nation, legal guidance and enforcement (although this itself has spiraled out of control, but that's another post), welfare support for those in need. But our government has no business running many of the businesses it is running, primarily because it is awful at it. We need to stop putting political science majors and lawyers in public office and start putting business majors in charge. And we need to keep as many pieces of our economy and country privatized as possible.
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