How did a Texan city manage to become a lean municipality? Nancy Bartlett, President of the Bartlett Alliance, and Tommy Gonzalez, City Manager, share with LMJ the story of Irving.
Back in 2006, Irving was a successful and traditionally managed local government organisation. Located in northern Texas, between the cities of Dallas and Fort Worth, the city had over 2,000 employees serving more than 210,000 city residents, with a daytime population that doubled to over 400,000 people.
A large portion of the Dallas-Fort Worth International Airport is located in Irving, which also has five global world headquarters (such as Exxon Mobile’s) and numerous Fortune 500 and Fortune 100 companies. The city collects 73% of its tax base from commercial businesses – not a good thing during an economic crisis.
In May 2006, the new city management brought a heightened focus on organisational processes, structure and service delivery methods. Lean was introduced in 2007, and since then Irving has saved over $45 million and 50,000 employee work hours while meeting higher demands for service.
The city practiced sound fiscal management that allowed funding of projects and programmes during an economic time when many cities were decreasing service levels. We improved citizen satisfaction by double digits in all city departments.
During tough economic times, Irving did not layoff or furlough employees. We instead reduced our fixed costs by $20m as a result of our lean six sigma programme, automation, sharing of resources, cross-training and realignment of services.
In Irving culture change meant a new way of delivering city services. To achieve this it was imperative to find a way to sustain the new way of thinking over time. At the same time, it had to be something real that people could understand.
We needed to provide employees with the tools and resources to do their job. That required three things: building intellectual infrastructure (Think), reinvigorating passion (Feel) and delivering tangible results (Touch).
Building intellectual infrastructure
The first order of business was to seek input from stakeholders, which included business and community leaders, council members, directors, and departmental leaders. The feedback was then shaped into a strategy.
The strategic plan targeted key improvement areas and customer requirements. It outlined 10 goals supported by various strategies and it became a fully functioning document that was used to report progress and results at each council meeting, during the budget process, and during neighborhood meetings.
We used it to help us stay the course when politics created stormy weather. We used it when we had disagreements in our council on which direction to take on a given issue. Most importantly, we used it to lay out the vision for what we wanted to achieve as a city.
The focus on the goals has led to a multitude of results: we have reduced the crime rate by over 30% for the entire city; we have rid the city of over 100 apartments that were considered level 4’s – the worst designation for an apartment complex; and we improved seven major thoroughfares in such a way that it improved the visual impression of the city and created a whole community where before there was a divide.
Irving revised its vision, mission and values statements in 2007 to ensure everyone understood them. We began with 100 managers who crafted the initial drafts, and then asked a vertical segment of the organisation to provide additional review and comment. Finally, the draft was sent to all employees for online input.
The mission of delivering exceptional services was put in place. We also added different components that helped communicate the true meaning and essence of what this meant to our employees and to the citizens they served. First, we incorporated the idea of great service into the employee evaluation. We then created an On-the-Spot award to recognise exceptional performance.
By doing these two things, we were able to set the expectation for excellent service and then let our employees know when they are doing something really exceptional. We then incorporated an annual award for exceptional employees in several categories, including trades and labor, administrative, management, etc. We made the idea of learning the mission statement fun by giving out gift cards or cash for being able to recite it.
So we set the expectation, made it fun to learn the expectation (the carrot), included the expectation in the employee evaluation (the stick), and we rewarded exceptional performance with the two awards (carrot, carrot). It pays to have more vegetables for your employee-centric diet.
A clear message on our expectations for leadership in our organisation was also necessary. We thought it quite crucial to illustrate the importance of respect. We also conveyed other messages such as having open communication, being positive, working well as a team, and being competent. Finally, accountability had to be the centerpiece of everything we did and how we treat one another.
We felt respect actually means something when it is tied to accountability. We made a commitment to stop the use of profanity and backed that up with disciplinary action with a zero-tolerance policy. To our semi-surprise, our staff seemed highly motivated with this new mantra. It is with this type of intellectual infrastructure that we built a case for challenging our folks.
In 2007, we decided to implement lean six sigma methodologies to more fully align “how the work gets done” with our mission. This did not immediately please everyone. There were plenty of naysayers, doubters and disbelievers – a few of them on the leadership team. They decided to simply wait until we went back to the more traditional approach to city management. We didn’t. Instead, faster than anticipated, the culture shifted dramatically.
The main way we were able to gain followers was by highlighting early results, concentrating on the big payoff projects. For example, the re-negotiation of our energy contract saved $20.2m over a seven-year period. We reduced the cycle time of our commercial permitting process from 16 business days to an average of less than four days. Reports that were taking eight months to complete were now put together in seven days. We were able to give more resources to our teams while reducing their workload and improving service delivery. We were able to focus our attention on what the customer found valuable. These small and big wins convinced staff.
The right people must be trained at the right time. Implementing lean six sigma was envisioned to be the underlying framework for many of the cultural changes that would take place. We had three key people participate in six sigma green belt training in the fall of 2007. They created an implementation plan for introducing LSS into the organisation, both in terms of training and project selection. It became obvious that the whole leadership team should be the first group trained, as we needed them to not only understand what lean six sigma was, but to also have enough knowledge to select appropriate projects within each of their departments and lead change.
Training all leaders in the more extensive green belt training would have been unnecessary and expensive: we instead created a Lean Six Sigma for Leaders workshop. As we gained more experience in LSS, through the next several years we did train others in various six sigma levels. The city now has five black belts, 30 green belts, 23 yellow belts and approximately 88% of the employees (1,650) have received white belt training (a one-hour module that ensures all employees understand what LSS is, learn the jargon, and are aware of potential opportunities within their work areas).
We redesigned all of our training to align with the strategic plan and Leadership Model for Results. This included a number of significant changes to what we trained, when we trained and how we trained employees. It brought about new energy and interest from employees to participate in workshops and a desire for on-going and long term learning.
We know that having passion for our job is directly related to how valued we feel at work, doing meaningful work, receiving helpful and actionable feedback and direction, and how we treat each other. That knowledge allowed us to align and fortify three key components of the transformational process: employee performance evaluations, reinforcement of organisational values and implementing succession planning.
We redesigned the evaluation to support the organisational culture changes taking place. For example, in the performance evaluation, we included the six organisational values created by the city’s employees so that they are now the first six items upon which every person is evaluated. That is a powerful message to employees which clearly demonstrates that these values have real meaning.
The evaluation also includes a coaching and developmental section to build on current skills, address any skill gaps and discover new skill development opportunities. The intent of that feedback is to develop leaders at every level of the organisation and to ensure we have bench strength as the torch passes from one group of leaders to the next.
DELIVERING TANGIBLE RESULTS
We built the intellectual framework and reinvigorated our employees’ passion, but what about the results? We created our strategic plan, we worked the plan, we continued to gather intelligence and data, and further refined the plan.
Data was used to identify and target areas in most need of improvement (crime, visual, traffic, corridors, neighborhoods, etc.). We defined KPIs for each of the 10 strategic goals, so we could immediately tell how we were doing. The strategy was aligned with the budget, and the results with the plan. Everything we did was tied to the plan and the plan was tied to what the “customer” wanted. Processes were improved to eliminate non-value added steps, reduce cycle times and improve service levels.
This gave us our game plan to address one of our biggest challenges, an aging workforce. Taking a closer look at how we were getting the work done, we put in place 70 cross-functional teams that put many employees in positions of leadership, some for the very first time. At the same time, we promoted over 500 people, we initiated mentoring and training programmes, we brought some baby boomers back to work, and we implemented a succession plan and encouraged people to take on more responsibility. We increased workforce engagement through the development of opportunities, incentives, rewards and recognition. We used the organisational chart as a tool to support the processes, systems and goals. We were able to reinvent our organisation.
Here is an example. Tudor Lane was filled with dilapidated apartment complexes. Living conditions were horrible, crime was rampant, drugs and prostitution were evident throughout the neighbourhood.
Once we identified the root cause, we took a different approach: we combined several city departments and a city council-appointed committee that had traditionally operated as stand-alone entities. They were doing good work, but the silo approach ultimately diluted their true high-potential effectiveness.
We placed Code Enforcement, Buildings and Standards and Building and Health Inspections under the direction of the Police Department. Many people thought this was crazy, including some members of those departments, some of our residents and business owners and even some public officials. But it gave us the power to focus on enforcement from multiple perspectives. We ultimately were able to demolish over 20 dilapidated apartment complexes, running the bad actors out of town and helping the remaining residents to reclaim their future.
When the apartments came down, we did not throw the former residents out on the streets. We helped them relocate, and our employees held food and clothing drives. And we made sure these residents now had safe, secure places to live. We also worked to secure funding for new, affordable homes. Construction will soon begin on 27 new homes on the very land that was once a haven for crime.
Another example of bringing employees together to define and solve a problem was the work we did with the Water Utilities crew, the first LSS project we did with a field crew. The issue we wanted to address was the number of trips between a job site and our warehouse.
The city of Irving is approximately 69 square miles and trips back and forth can be costly in terms of time and money, not to mention negatively impacting customer service. By asking the employees who did the work every day to look at the process and help us determine a better way to become more effective and efficient, a completely unanticipated solution was developed and implemented.
LSS is a useful tool to address the facets of the job that are cumbersome or difficult to complete. What better way to address “employee pain” than asking the employees themselves what they want to see fixed and how they want to fix it? The crew preferred to be working on the field rather than sitting in a classroom. But as they came to understand that city management truly believed they were the very people who could solve this problem, they helped us understand the issue. It wasn’t, as some suspected, that employees were simply wasting time driving back and forth; rather, it was the way the tools, equipment and supplies were loaded onto the trucks that were hauling the very large equipment necessary to locate and repair water main breaks. Ultimately, they determined that the two real issues were the design of the trucks and that there was no uniformity in how each crew loaded their supplies onto the trucks from one shift to the next.
They created a new truck, which now has 80% of the needed resources at all times. The savings were significant: 225 minutes per crew per day and with nine crews, that’s a savings of 8,775 work hours/year, the equivalent of 4.22 extra people. Rather than completing one to one and a half jobs a day, they now average two or more.
Over the past six years, our city has been very successful in the implementation of its lean six sigma programme (some other results are listed in the chart on page 21). Irving was recently named one of the top 50 cities to live in America and received a double AAA bond rating from Moody’s and Standard and Poor’s. Not exactly a coincidence.