February 8, 2009 in City

Training comes with big cost

Council willing to spend $90,000 on Six Sigma
By The Spokesman-Review
 

Another mayor, another plan to spend money to save money.

The Spokane City Council agreed this week with Mayor Mary Verner’s proposal to spend up to $90,000 to train 16 employees in Lean Six Sigma, a business productivity program hailed by supporters as a way to improve service and reduce costs.

The expenditure comes two years after the release of the controversial Matrix report, a $260,000 efficiency study completed by a California consulting firm. That report, which was shelved soon after Verner was elected, came on the tail of former Mayor Jim West’s Priorities of Government initiative, which was developed with the help of a $150,000 payment to another consultant. And in the late 1990s, city officials paid yet another consultant to give efficiency advice.

“The question really is do we have the political will when we find these efficiencies to execute them,” said Councilman Mike Allen, who voiced reservations about the proposal but ended up voting with the rest of the council in favor of it. “We need to have that. Otherwise, we’re wasting the taxpayers’ dollars.”

The City Council authorized a no-bid contract paying up to $90,000 to the Indiana-based Lasater Institute, which was formed last year by William Scott Lasater. City officials say the actual price will be $76,000, including Lasater’s travel expenses to Spokane. That’s almost $5,000 for each of the 16 people who will be trained. Lasater began the training sessions in Spokane this week.

City spokeswoman Marlene Feist said that administrators compared Lasater’s credentials against seven other firms. That list shows Lasater had the cheapest price and was the only of the eight trainers who met all the city’s requirements. She said officials first heard of Lasater last year when the city’s training coordinator attended Six Sigma training led by Lasater in Indiana.

Critics, however, say it’s impossible to know if Lasater is the best and cheapest option because no one else was allowed to bid.

Donna McKereghan, a former City Council candidate and a member of the state Legislative Ethics Board, said city officials didn’t try hard if they thought Lasater was the only choice. She added there are qualified people living in Eastern Washington who could teach Six Sigma.

“You can find all sorts of places that are doing it,” McKereghan said. “For $90,000, we could train 225 employees.”

But city officials say that few trainers have experience with municipal government.

“Many vendors of Lean Six Sigma are focused only on manufacturing and have little if any experience with Lean Six Sigma applications to public service and municipal government,” the City Council’s resolution said.

Lasater has trained officials in cities in Oregon and Indiana, including Fort Wayne, which has strongly embraced Six Sigma and has attributed millions of dollars in savings to the program. Fort Wayne city spokeswoman Rebecca Karcher said officials are happy with Lasater’s work.

Under the agreement with the city, Lasater will give three employees “black belt” training – that’s four weeks of sessions. The other workers will receive two weeks of “green belt” training.

“I exhibited a fair degree of skepticism,” said Public Works Director Dave Mandyke, a long-time Spokane administrator. “I’ve been through a number of management theories in the past. Most of them did not stand the test of time from one administration to another.”

And since no Spokane mayor has served longer than three years since Jack Geraghty left office in 1997, or two terms since David Rogers departed City Hall more than three decades ago, that’s amounted to a lot of shifts and shelved initiatives.

But Mandyke said he’s embraced Six Sigma because the change will be driven by employees who won’t change from administration to administration.

The older efficiency reports “were primarily top-down theories that didn’t have the buy-in of the people in the trenches,” Mandyke said.

Councilwoman Nancy McLaughlin said she regrets her vote in favor of hiring the consultant group that performed the Matrix report.

“What I didn’t realize at the time was having the study done and having buy-in to implement those studies is a whole different story. I didn’t realize the amount of push-back that there would be.”

She added that city officials have agreed to pay for the Six Sigma training by forgoing other training that had been planned.

“I always think fiscally first,” McLaughlin said. Administrators “weren’t coming in and asking for something over and above the budget.”

Six Sigma has been widely used in the corporate world to adopt strategies credited with ending waste and improving service.

But it’s also been ridiculed for its use of the kind of business jargon highlighted in Dilbert cartoons. The NBC sitcom “30 Rock” recently mentioned the program in an episode in which Tina Fey’s character calls a Six Sigma conference “a bunch of drunks talking about synergy.”

Six Sigma jargon was sprinkled into the presentation about the system at Monday’s council meeting. The employees picked for the training were labeled “change agents,” for one. (On his Web site, Lasater says his program “provides a systematic methodology for change agents.”)

McKereghan, who e-mailed officials this week to question the expense, said the training costs too much, especially considering the severe recession.

“When you didn’t act on the inefficiencies that you talked about last time, and the time before that, and the time before that, and the time before that, what good reason do I have to believe that when you identify the inefficiencies this time, you’ll act?” McKereghan wrote.

Referring to recent layoffs in the city’s building department, Verner said the poor economy makes Six Sigma even more important.

“This ongoing bad news is one more indicator to me that we can no longer afford to keep operating under business as usual,” Verner wrote in an e-mail she sent to city employees on Tuesday.

Jonathan Brunt can be reached at jonathanb@spokesman.com or (509) 459-5442.


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