Governor Doug Ducey Follows Big Pay Raises for Select Few With Scorecards for State Agencies

Governor Doug Ducey Follows Big Pay Raises for Select Few With Scorecards for State Agencies
State of Connecticut

Arizona Governor Doug Ducey says he wants state agencies to make everything they do more efficient and that his office will issue scorecards next year to measure their efforts.

Ducey began ramping up the state's Government Transformation Office after taking office in January, calling the project his "Lean Transformation Initiative." His predecessor, Jan Brewer, created the office in 2012 and made him — then State Treasurer — one of its leaders.

Ironically, the program cost the state $1 million last year. But officials say it's an investment that will have big payoffs for the future, both in time and money.

Heading up the effort is Ducey's chief operating officer, Henry Darwin, who won accolades for putting similar efficiency projects into place while he was director of the state Department of Environmental Quality.

"Because of the success we saw at my agency, the governor asked me to do this for the entire state," Darwin says. "We're one of the first states embracing this."

Arizona joins other states in implementing "lean" principles developed by Toyota Motor Corporation in the 1990s with the goal of improving services.
Arizona joins other states in implementing "lean" principles developed by Toyota Motor Corporation in the 1990s with the goal of improving services.
Bertel Schmitt

He insists the program isn't about "cutting corners," adding, "We're not talking about sacrificing quality in any way."

The concept comes from Toyota Motor Corporation production systems, Darwin says.

The premise, he says, involves putting "customers" — whether members of the public or other state employees — in a room "with people who actually do the work" and with an expert in "lean processes." The expert maps out every step, typically covering a wall or two in Post-It notes. Things required by law or quality must stay, but in the end, "you come up with a shortened version" of what needs to be done, Darwin says.

Often, paperwork-like applications for various permits will sit in a state employee's inbox for days or weeks, he says. Employees now are trained to handle things more quickly, to reduce the number of steps to a given end, and to double-check key information in various permits and applications.

A new report from Darwin shows that in this fiscal year, which ended September 30, the Government Transformation Office roughly doubled its efforts to streamline services. Overall in 2015, the project had 23 agencies participating and claims to have redirected more than 62,000 hours of state employees' time for other uses. That's up from nine agencies and 30,000 redirected employee hours in the state's fiscal year 2014.

Examples include:

* Certificates to become a municipal bus driver in Arizona last year took the Department of Public Safety 46 days to complete; they're now done in four days.

* Getting a liquor license for a restaurant used to require 145 days with the Department of Liquor Licenses and Control; it now takes 77.

* Registering as a Medicaid provider with the Arizona Health Care Cost Containment System previously took 56.6 days, but now it takes 4.36 days.

Eighteen state agencies reported similar successes in the Transformation Office's 2015 report. (See PDF below.)

As part of the effort, each agency will create a scorecard in 2016 that, at some point, will be made public. 

"The one-page scorecard will contain the agency's key performance measures that best represent how the agency is doing with respect to customer value and taxpayer return on investment," Darwin told 35 key agency directors in a September email. "To be clear, though, the scorecards will not be used...to blame or criticize."

Darwin told the directors the last part "may be difficult to believe." But when the same program was implemented under his leadership at the ADEQ and found numerous indicators of poor performance, the findings "were used as a wrench, not a hammer."

While the efficiency effort cost the state $1 million last year for the hiring of experts in lean processes and other expenses, each state agency has been asked to spend additional money with their own resources. Any investment in leaner government services should result in a savings of two or three times the investment, Darwin contends.

Tim Jeffries, the quirky new director of the state Department of Economic Security, announced last month that he's created a Lean Transformation Office within his agency to further Ducey's goals.

Vicki Mayo, a businesswoman who ran an IT company with her husband, was picked to lead it. Mayo had been working as the deputy assistant director of the division of Employment and Rehabilitation Services under DES since unexpectedly quitting as Ducey's handpicked second-in-command at the new Department of Child Safety.

The process is helping the DES "become more efficient, more kind and more awesome," Jeffries maintained in a November 2 statement.

Previous successes at streamlining the DES include reducing the time frame to issue licenses for child and adult developmental homes, and better efficiency in handling requests for proposals,

Upcoming efforts for Ducey's project include a faster hiring process for state correctional officers and for approving family foster homes.

While the Ducey administration claims Arizona is a leader in so-called lean, the move toward the Toyota method has been used in recent years by federal agencies, including the U.S. Environmental Protection Agency, by at least 10 other state governments, and by several municipalities.

Ducey's been focused on making Arizona lean in another way, too. In his latest budget, money was reduced for schools, roads, counties, and municipalities, which in turn probably shrinks overall government services in Arizona.

At the same time, as New Times reported this week, Ducey had annual salaries jacked up for about a third of state agency directors, including many of his personal picks for the offices.


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