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Profit Motive vs. Efficiency

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Richard Baron
July 30, 2018

There is lots of talk about how government can’t be profit motivated. “We are here for public

Service,” or “we need to care for our most vulnerable citizens” are phrases often heard on why government is not motivated for profit like the private sector. Unfortunately, many governments wrongly equate profit motive with efficiency. The loser in this scenario is our citizens.

Profit Motive vs. Efficiency

There is a big difference between profit motive and efficiency. Government can be efficient without a profit motive. Profit motive is aligning your services where you can make the most money. Private industry must do this to stay in business.

Efficiency is using your existing resources to the maximum extent. Any organization; private companies, non-profits, and governments have limited resources. These resources include; money, manpower, and time. Government can and must be efficient, even without a profit motive.

Why Is Efficiency Important?

Every government program needs to make the most of their limited resources to fulfill their mission. Efficiency is getting the most out of what we have. It is making sure we complete our tasks in the fastest and most cost-effective manner possible. This does not mean cutting back on services to our citizens. It means providing those services we offer in the most efficient manner possible.

Why Efficiency Gets Lost in Government?

In the private sector, efficiency is directly related to making a profit. And without profit, the private sector organization will go bankrupt. Efficiency is built into the culture of every private organization – it must or the organization will quickly cease to exist.

This same pressure for efficiency does not exist with government. Let’s face it – governments are a monopoly. We don’t have two city councils trying to out-innovate each other in the same city.

There is just no other place for a citizen to obtain a building permit or the many other services that government offers. We receive tax dollars whether we are efficient or not — It’s that simple. The pressure to be efficient is not inherent in the system as it is in the private sector.

Who Must Make the Change?

Top administration must be the driving force to instill government efficiency. This includes the city or county manager, the department director or the program manager. Weaving efficiency into a program, and not accepting the status quo, is leadership.

Efficiency must be in place for the external services we provide to our citizens, like health inspections, building permits and medical services. Efficiency must also be there for the internal services we provide to our co-workers, such as issuing paychecks, following through on tuition reimbursements and on-boarding new employees.

What Are Some Tools to Make the Change?

Lean and Six Sigma offer many tools for government to become efficient. Don’t be fooled by the fancy terms. The tools used in Lean and Six Sigma are common sense and can be applied by any employee once trained.

The most powerful efficiency tool for government is to map a process. Process mapping is a visual depiction of how a process works. Once the start and end points of a process are defined, a group of subject matter experts (usually those performing the actual work involved with the process) develops a visual representation of how the process flows. This is called a Current State Process Map as it depicts how the process operates currently.

Once everyone agrees that this is the current process (and many times people are surprised at how the process actually works) the team works on a process re-design called a Future State Process Map. By visually representing a process, waste steps can be identified and eliminated. Typical waste steps include hand-offs of an application to another person (or department), not training employees sufficiently or excess processing.

Eliminating waste steps allows the service to be provided in less time and with less cost. This allows more services to be offered at the same expense. The winner – our citizens.

Many Governments Are Becoming Efficient.  Why Not Yours?

Government does not have efficiency inherently built in to our culture. Top administration and program managers needs to infuse efficiency into every aspect of government. Many governments are making great strides in this area. Why not yours?


Author: Richard Baron is the author of Streamline – Your Path to Government Efficiency Starts Here, www.StreamlineGovt.com. Richard is a Process & Project Coordinator for Coconino County, Arizona and can be reached at [email protected].

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The American Society for Public Administration is the largest and most prominent professional association for public administration. It is dedicated to advancing the art, science, teaching and practice of public and non-profit administration.

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