King County leaders' role model: Toyota
County Executive Dow Constantine and his deputy Fred Jarrett — an unlikely political pair — hope to save county government by running it more like a business. They've made some progress, but they still face long odds.
Seattle Times staff reporter
King County Executive Dow Constantine and his deputy Fred Jarrett make an odd couple.
Constantine is a liberal Seattle Democrat and serious rock fan with The Who song title, "5:15" on his license plate. Jarrett, a former Republican and retired Boeing manager from Mercer Island, wears tweed jackets and Harry Potter glasses and talks in technocratic terms such as "through-put" and "product-based budgeting."
In the 2009 primary, the two ran against each other for executive. When Constantine won the November finale, he reached out to his former rival, hiring him to be a "partner more than an underling."
Constantine, 49, says he doesn't always understand Jarrett, 62. But as the two shared the campaign stage, he realized he and Jarrett had similar ideas about the need to change county government, not to dismantle it, but to save it.
Now they're trying to make it run like Toyota. They're adopting Toyota philosophies and practices — as have Boeing and Group Health — called "Lean" management. Above all, Lean requires a constant focus on customers and continuous improvement. It also requires patience.
It's not a quick fix. Jarrett calls it a "journey." He and Constantine have proposed a new bureaucracy to carry out their initiative.
Early returns are promising. Employees have already found ways to shorten tasks in several departments. In part thanks to efficiencies, Constantine proposed a 2012 budget that preserves almost all county services.
His willingness to hire strong subordinates and innovate has won him praise from civic groups, union leaders and Republicans. It's as if he's doing what voters expected from Barack Obama: Turn down the rhetoric, reach across the aisle, wring more efficiency out of government.
The Municipal League of King County reported this year that Constantine's team "has made a positive start on its reform agenda."
"The whole culture of county government is different since Dow took over," said County Councilmember Kathy Lambert, a Republican from Redmond. There's more information sharing, better relations with the council, she says. "And Lean is the new cool."
"Anytime we're modeling government after the private sector, it's a good thing," adds Councilmember Reagan Dunn, also a Republican.
All of which positions Constantine well to run someday for higher office, such as governor.
But whoa, Jarrett says, the Lean program requires a deep commitment throughout the workforce. A survey by Industry Week in 2007 found that only 24 percent of companies with Lean programs achieved significant results.
"What I've told Dow is he can't run for governor," Jarrett said in a joint interview with his boss. "This is an eight-year job."
In their division of duties, Jarrett is essentially Mr. Inside, overseeing daily operations of a $5 billion budget for an array of regional services from treating sewage to running buses, from locking up criminals to vaccinating children in poverty.
Constantine is more outwardly, politically focused, building public support for his proposals, working with the County Council and elected officials at the local, state and federal levels.
"I fill the CEO role to Fred's COO (chief operating officer)," Constantine explained.
"Fred is the idea guy about products," said budget director Dwight Dively, whom Constantine lured from Seattle City Hall, where he served a similar role for three mayors. "Dow is the guy with the political skills and relationships to make that work."
One of Constantine's attributes, some say, is his willingness to surround himself with strong people. When he was a County Council member, Constantine hired Sharon Nelson, an environmental activist and former bank vice president — with "a very big personality," he says. Nelson went on to become a state senator.
"Dow always hired very competent people," Lambert said.
He seems confident enough to regard Jarrett as something of a sensei, or teacher, in Lean parlance. One of the first assignments Jarrett gave his new boss was to read a book about myths that hinder government reform, "We Don't Make Widgets."
Constantine texted Jarrett a photo of himself with his nose in the book one weekend — while sitting on a beach with a piña colada.
Constantine and Jarrett aren't the first politicians to proclaim they're bringing business discipline to government.
What's different, they say, is Lean's track record over 50 years and their vow that it's not just a flavor-of-the-month.
Lean demands that efficient work add value to a product. If a process doesn't add value, it's muda, or waste.
This added value is accomplished through constant scrutiny of tasks and systems and relentless efforts to improve them. Lean also tries to constantly measure value.
"My line for years has been that the root word in accountability is 'count,' " Jarrett said. "And if you can't count it, it isn't accountability."
Lean relies on front-line workers to do this, persuading them it's safe to speak up and point to problems. In Lean, "problems are golden," wrote Group Health CEO Scott Armstrong in a message to employees. "If we don't know our problems, we can't improve."
But executives and managers can't possibly know all of their organization's flaws, said Jarrett, who visited Japan while at Boeing to study Lean.
"If you look at Toyota, you think, 'Some engineer in a balcony figured out how to do that,' " he said. "The answer is 'No, the people doing the work figured out how.' And that's the reality of how you get a high-performance organization."
That means employees have to be assured they won't reform themselves out of a job. "Your job may change, you may need to be retrained, but if you come to this to help us, we'll make sure you are treated fairly, and we're not asking to make yourself obsolete," Constantine said.
In many ways, the county's adoption of Lean was born of necessity.
"Private-sector companies don't get serious about this until they've lost money," Jarrett said. "The economy has put us in that position."
Their idea is to shave 3 percent every year from county spending through efficiencies. That would allow the county to afford inflation and the growing population's increased demand for services.
To spread his gospel of "perpetual change," Constantine sends "Dow-grams" to employees encouraging them to take risks and "fail forward."
Jarrett got Boeing to lend the county a Lean consultant, Frank Newman, who helped guide pilot projects that studied bottlenecks in processes to renew vehicle licenses and reclassify employees.
After a weeklong exercise — which starts by mapping every possible obstacle on a wall-sized sheet of paper — employees came up with ways to cut the time for mail-in license renewals from three weeks to four days. They shortened the job-reclassification process, which has taken two years for some employees, down to 10 weeks.
After staffers finished that exercise, some acknowledged they had been skeptical.
"I was wondering at first," said Ralph Cady, a human-resource analyst. "By the end I was amazed at what was accomplished."
To push the Lean effort through county government, Constantine and Jarrett say they need a Continuous Improvement Group, like Group Health has.
Constantine has proposed spending $617,000 next year to create four new staff positions to carry out the Lean initiative.
Dunn, one of the more fiscally conservative council members, said he's a fan, for now. "I don't mind investing a little up front to save money down the road," he said.
Dave Freiboth, head of the King County Labor Council, is also on board.
"The Toyota system is based on employee cooperation. Back in Japan their unions were very much involved," Freiboth said. "So a Lean system that includes employees on that level has every element of success and it's something we embrace."
He just wants to see workers get credit for efficiencies such as lower-than-expected health-care costs. It was employees prodded by Constantine's predecessor Ron Sims, Freiboth says, who lost a collective 24 tons of weight, bought more generic drugs and shifted their insurance to Group Health.
It's too early, reported the Municipal League, to tell whether Constantine's "new thinking will permeate all parts" of the county workforce.
His plan could lose momentum, the league noted, if county finances improve and the "shared sense of need and crisis" is lost. Much of Constantine's leverage to push Lean comes from the grim alternative of layoffs that employees face if they don't attain efficiencies.
And as any dieter knows, the challenge is staying lean.
Even organizations that have succeeded at Lean, have a hard time sticking with it.
The Shingo Prize committee, which gives awards for Lean excellence, found that many past winners have not sustained their progress, according to the Lean Enterprise Institute.
It takes daily coaching, according to the institute, and deeply embedded routines.
"This is really about how you become a learning organization," Jarrett says. "Even if you get the structures in place, even after you do the journey, you still have to practice, just like baseball, just like football, so when you get in the game and need to execute, it's second nature, the neural network is there."
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