Veterans Affairs Secretary Bob McDonald is making news with his plans to reorganize the Department of Veterans Affairs. Secretary McDonald plans to create a Chief Customer Service Officer and VA-wide customer service organization to better provide services to Veterans and is exploring options for shared services “to improve efficiency, reduce costs and increase productivity across VA.” The Secretary’s moves are a good start. VA, like most large agencies, has more than its share of redundant organizations.
Redundancy has many costs and not all of them are financial. Here are just a few:
Customer service suffers. When more than one part of an organization offers similar services, how do customers know where to go? If they do not have external customers, how do internal folks know where to go? When a customer starts in one place but needs to be in another, how is the customer handed off? If the organization have a mechanism for handoffs that is seamless, there is not a problem, but seamless handoffs are rare.
Work expands to match the number of people. Where I have personally witnessed extreme redundancy, the people in the organizations created work processes that filled up their time. Rather than focusing on the most efficient processes, they added steps to justify their existence. At the Defense Logistics Agency, before we consolidated HR services, we had one operating HR office that had the highest number of HR Specialists per customer in the entire Agency. Their average time to fill jobs was 8 months. You could give birth to new employees almost as fast as they could hire them. When we started examining the problems, we found everyone wanted to have a hand in every step of the hiring process. Rather than having an abundance of people producing exceptional results, we had too many people chasing too little work and complaining that they were overworked. The sad fact was that they were overworked, because they had created such abysmal processes that they did not have the resources to execute them. The solution was not more resources, it was fewer people, fewer dollars, and fewer organizations.
Redundant organizations require redundant management structures. Every organization has a management structure to support it. Using HR offices as an example, at DLA we had 7 operating HR offices and a central processing office, each with an HR Officer, division chiefs and support staff. When their work was consolidated into 2 centers, we were able to eliminate 6 GS-15 jobs, numerous GS-14s, and a number of support jobs. Each manager wants to have his or her own priorities, their own style of leading, and their own reporting processes. In today’s dollars, the cost of a GS-15 (with fringe benefits) is about $185K. Just 6 of them cost more than $1.1 million dollars. In a Department like Veterans Affairs, the number of redundant management structures would be significant and the benefits from streamlining them would be tremendous.
Costs are too high. Redundant management structures are not the only way redundancy adds costs. When more than one organization is responsible for similar work, they often create new and incompatible systems, have different training requirements, assess performance in different ways, and have facilities that cost far more than a single organization might need. Every box on an org chart has a cost associated with it. The greater the number of boxes, the greater the cost. At the Department of Homeland Security, we found one of the highest costs was for information technology. Every component (and some subcomponents) had their own systems. For example, we had multiple Learning Management Systems. Those redundant systems cost the Department at least $5 million per year more than a single system would cost. DHS had more than 400 HR systems of various kinds. The Department is making good progress on reducing the number and has a handle on the problem, but the problem is repeated in much of the government.
Self-preservation becomes the enemy of efficiency, change and everything good. Organizations and people in them are remarkably good at ensuring their jobs continue to exist. Solutions that begin with “let’s consolidate these 8 offices into 2” do not usually get a warm welcome. People protect turf, they protect budgets, and they protect FTE. Rather than focusing on large-scale solutions, we find them trying to fix problems within their own box on the org chart. The result is a government that costs more than it should for the services it provides. As we found at DLA, many of those people were overworked at the same time their customers were getting substandard service.
I have written before about our accomplishments in DLA HR. We reduced our costs by 28% while dramatically improving the quality of service we provided. To accomplish that we had eliminate redundancy. That meant taking some difficult steps, including eliminating jobs, closing offices and changing how work got done. We did everything we could to give people whose jobs were eliminated soft landings, and were successful in placing most of them. In the end, the organization delivered far better service to its customers, customer satisfaction soared, and morale of the remaining staff increased to the highest level in the entire Agency.
VA Secretary McDonald is on the right track with his move to shared support services. If more agencies did the same, we could see millions of dollars saved or shifted from support services to agency missions, and we could say goodbye to the Office of Redundancy Office.