Can He Fix It?

Dave Steele has a black belt in efficiency. And it’s worth $120,000 a year.

Steele, Spokane’s former real estate and facilities director, is being paid a $94,628.16 salary — $120,000 if you include benefits — to head up the city’s newly formed Employee Led Innovation (ELI) center. His job is to do what high-priced outside consultant couldn’t: cut costs and eliminate inefficiencies, while actually improving employee morale.

Earlier this year, the city of Spokane spent up to $90,000 to turn 17 Spokane employees into “Green Belts” and “Black Belts” using a quality improvement process called Lean Six Sigma. (Getting your green belt takes two weeks of intensive training. A black belt takes four.)

Originally, Lean Six Sigma was for manufacturing. “Lean” was Toyota’s technique for cutting flab from its manufacturing line. “Six Sigma” was Motorola’s. The combination has swept through corporate America. GE swears by it. So does Samsung.

If the words “Six Sigma” bring flashbacks of high school statistics, you’re on the right track. Lean Six Sigma is heavily math-based; it’s all about splitting up processes, scrutinizing each cost, crunching the numbers and then finding ways to streamline.

“Government is very good at adding extra pieces,” Steele says. “You added one, but can we take these other three off?”

Steele works with city departments and, using Lean Six Sigma statistical wizardry, identifies processes that are too slow, too expensive or too error-ridden. Then he talks with the employees on the ground — the ones actually laying the pipe or filling out the forms — to find solutions.

By using this strategy, the city of Spokane has already whittled down its minor contract time approval time from 29 days to only 10.

Some things, like employee morale, defy quantitative analysis. For those, Steele uses surveys, ranking systems and personal conversations.

“You’re also looking for those things that drive employees crazy,” Steele says. Getting rid of those extra layers of bureaucracy — think the TPS reports from Office Space — save money, save time and improve morale. If done right, it’s a win, win, win.

Indeed, for the process to succeed, there has to be employee buy-in. There’s still some skepticism, though. “So far, most of the employees, they are waiting for more information,” Steele says. “They’re a little bit gun-shy.”

The Prototype
For those skeptical that Lean Six Sigma can work for city government, advocates love to point to Fort Wayne, Indiana.

When Graham Richard became Fort Wayne’s mayor in 2000, the city was wary of this “Six Sigma” thing he kept talking about. But soon he was the toast of national efficiency experts, an author of a book on the subject and featured in US Mayor magazine.

Over the past decade, 300 Fort Wayne employees were given Lean Six Sigma training.

“We saw savings of over $10 million specifically attributed to the Lean Six Sigma processes,” former Fort Wayne finance director Ryan Chasey says. “Keep in mind that our Six Sigma efforts were not fully geared toward cost-saving, they were also geared toward service improvement.”

In a figure that may send Spokanite hearts a-flutter, Fort Wayne decreased the time it took to fill a pothole from two days to three hours. And all this, Chasey says, without laying off a single person.

In Spokane, City Administrator Ted Danek says, Lean Six Sigma has already borne results. Danek says the city has saved $30,000 so far.

By scrutinizing the regional solid waste site system, they found that the city could save thousands of dollars by simply rejiggering the site’s security. And by selling excess refrigerant the city could make $2,000 a year.

Danek expects more savings to follow quickly: “Call me back in about four weeks,” he says. “We’ve got a huge big-dollar item that’s in the final phases.”

The Skeptics
Not everyone is as confident Lean Six Sigma can succeed. Former City Council candidate Donna McKereghan worries Spokane can’t imitate the Fort Wayne experience because, among other reasons, we don’t have a Graham Richard.

“He brought the vision, and the experience, and the passion,” McKereghan says.

But Graham Richard doesn’t accept that analysis.

“Bloom where you are,” Richard says. “Leadership can come from the civic side, from a small business group, or the city council.”

Others question whether the city, with an expected a $7 million budget shortfall, should be creating a new $94,600 job. To help pay for the new job, the city eliminated an empty traffic technician position. The remaining $45,000 will be paid from utility department budgets. Ideally, Steele will save those departments enough money to afford him.
Danek says Steele’s job requires the sort of clout that comes with a large paycheck.

“Here’s the deal, it’s a senior-level position,” Danek says. “You have a whole new system in place where folks like Dave Steele are going to have to interact with the senior executives. The person leading that should be a senior executive as well.”

Steele’s salary is not unusual for a city employee. It’s only $5,470.56 more than Steele’s salary as real estate director. It’s on the same salary bracket as the deputy director of human resources.

But it’s also a far higher salary than similar positions in Fort Wayne. By comparison, the salary for Fort Wayne’s “Quality Enhancement Manager” was only $48,516. And after 2005, after only five years, the Quality Enhancement Manager position ceased to exist. Instead, its duties were spread throughout other members of the administration.

One way Fort Wayne kept costs low, Richard says, was by creating task forces made up of volunteers from private local companies that used Six Sigma, instead of hiring outside consultants.

Richard praises Lean Six Sigma, but cautions against seeing it as a panacea, as opposed to what is: a tool. “It’s like saying, gee, everyone should use a hammer or a saw,” Richard says. “It’s important not to focus on the tools, but what is the outcome we want.” The city’s strategic plan — the destination — is more important than how you get there, he suggests.

For some processes, he says, using Six Sigma process is too slow, too in-depth, and too intensive to be efficient.

Meanwhile, Fort Wayne aerospace scientist Jeff Pruitt, who also blogs at fortwaynepolitics.com, says Spokane’s program should have more accountability than Fort Wayne’s.

“I see [Lean Six Sigma] as a path to give money to more consultants to waste taxpayer money,” Pruitt says “There needs to be some up-front outline of what the program intends to accomplish.”

True to his Lean Six Sigma training, Steele says the best way measure the success — or failure — of the Spokane’s new program is, well, to actually measure it.

“I think the only way you can truly show the results is to be able to quantify it,” Steele says. “I want to see one project a month come out of the ELI center that has a positive impact. … I think I will be able to identify exactly what we’ve done.”