New Public Management: Lean State, Lean Government

(March 4-11, 2005)
By Atty. Jose Maria Z. Carpio

Atty. Jose Maria Z. Carpio

Introduction

“Customer is King.” This is Germany’s cardinal rule of public management, which struck me the most in the seminar on “New Public Management: Lean State, Lean Government” sponsored by the Friedrich Naumann Stiftung at the International Academy for Leadership in Gummersbach, Germany, on March 4-11, 2005. We were 23 participants representing 18 countries around the world: South Africa, Tanzania, Zimbabwe, Egypt, Jordan, Palestine, Argentina, Brazil, Guatemala, Mexico, Serbia & Montenegro, Bulgaria, Slovak Republic, Estonia, Thailand, Malaysia, Philippines, and Sri Lanka.

Coupled with this Customer-is-King culture, our facilitators explained, is a long history of strong local governance in Germany. To date 13,929 Municipalities form the backbone of Germany’s 16 Federal States. Thus, at our visit to Gummersbach’s “Burgerservice,” I was amazed to know that people apply there for their passports, driver’s license, car registration, and for practically all of a citizen’s dealings with government. A One-Stop-Shop. Its ambience was also corporate and business-like, with visiting citizens quickly assisted professionally—thus no queues. If at all there is some waiting, people can relax on comfortable seats and browse through newspapers and other reading materials or enjoy some exhibits and product displays. Clean restrooms with paper towels are also provided nearby. In addition, office hours are flexible, with early opening or late closing on certain days and even Sundays to accommodate working people.

Other services German Municipalities provide are:

• Supply (water/energy)
• Disposal (waste, sewage)
• Building and maintaining schools
• Local public transport
• Road construction
• Town planning
• Theatres, museums
• Sport facilities
• Hospitals
• Kindergarten, etc.

Now, this municipal “Burgerservice” for Customer-is-King is but one aspect of Germany’s leading practice of New Public Management (NPM), which holds out a “customer orientation” and “product approach” in public service. Even in Manila, the German Embassy has provided new and more comfortable facilities for visa applicants, and I, for one, was done with the interview and documentation process in about 10 minutes upon entry. However, it is said that the German Federal Government and the Federal States are still far from a lean state and the principles of NPM.

New Public Management

NPM is a service culture that emphasizes the centrality of the “customer,” as well as accountability for results. Accountability is facilitated by clear separation of decision-making levels or the separation of the strategic from the operative level: politics decides the what, administration the how. More transparency, more efficiency and more quality as well as reduction of expenses are the main targets of implementing the NPM towards a “Lean State” and “Lean Government” through “Lean Management.”

The pure meaning of the concept of a Lean State is: “A state reduced to the minimum of duties that have necessarily to be conducted by the public hand.” It is a question of what has to be taken over at which standard of quality by whom.

“Lean Management,” in turn, is a work model in the private sector, which transfer into the public administration makes it possible to work more efficiently. This covers considerations of economic efficiency together with a new definition of “waste,” that is, “everything that does not benefit the citizen.” This also involves a new leadership style shaped by:

• Management by objectives
• Teamwork
• Flat organization
• Project management
• General expertise rather than specialists
• Performance related payments

Lean management is further guided by at least ten “working principles” that include:

1. Teamwork
2. Self-reliance and direct personal responsibility within the constraints of agreed targets
3. Self-control in the sense of self-regulation and self-optimisation
4. Customer orientation
5. Service priority
6. Standardisation of work that comes up repeatedly
7. Continuous improvement
8. Direct elimination of the root causes of any mistakes, deficiencies and shortcomings
9. Thinking ahead
10. Small, manageable steps

With NPM, public administration is no longer viewed as a tool of coercion wielded against unpredictable citizens. Public service ought to, and delivers quality and satisfies its customers. This is known as Total Quality Management (TQM) which involves methods to increase efficiency and quality.

TQM is based on the experience that the quality, cost and the time required to manufacture a product or provide a service should be designed in an interconnected, process-oriented fashion. Quality assurance is a process which requires permanent updating and quite some time to build up and install. For this end, the importance of developing certain criteria and standards or benchmarking cannot be gainsaid.

Thus, the core of NPM is the accountability for results. These results must be in very clear and practical terms, like less waiting time or less expenditures for more quality.

NPM in the Philippines

Coming home from the seminar, I realized that NPM may actually be a more effective means to realizing our dream of good government in the euphoria then of the 1986 EDSA “People Power” Revolution that at last ended the 20-year plunderous and spendthrift tyranny of the Marcos Dictatorship. In the 1987 Constitution we produced thereafter are these sacrosanct provisions: “The prime duty of the Government is to serve and protect the people.” (Art II sec. 4) “Public office is a public trust. Public officers and employees must, at all times, be accountable to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency; act with patriotism and justice, and lead modest lives.” (Art XI sec. 1)

NPM also tallies with how Thomas Jefferson—the Writer of the US Declaration of Independence to which our Constitution traces its libertarian moorings—put good government before: “A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor and bread it has earned – this is the sum of good government.”

But just a few weeks ago, we had the 19th year anniversary of the EDSA Revolution. Regrettably, the only good thing now about this holiday on February 25 is that EDSA was free of traffic. It was a breeze for me driving through EDSA to go to market at Farmer’s in Cubao.

Indeed, we have become cynical about EDSA because our government, among many other things like rampant corruption and patronage politics, is still so bloated by political appointments and saddled by duplication of functions as in the Marcos regime.

Take for instance the high number of executive departments we have at 21 compared to 13 only in Germany. It is no surprise then that we are mired in a fiscal crisis and burdened by a National Budget at a whopping P907 billion that would be funded through the increase in VAT rates and the scourge of more taxes. “Citizen is Slave.”

But with NPM for Customer-is-King, we can perhaps achieve some savings and efficiency and spare the people from yet another cross by abolishing at least one department for a start: the Department of Tourism (DOT).

Why the DOT? Local governments may be doing a better job already for tourism, tagged by economists as a leading sunshine industry. “Cooperative competition” for local and foreign tourists among localities could encourage more business and jobs, better services, stronger civic consciousness and social responsibility among our peoples.

Here, we can readily cite Manila’s Buhayin ang Maynila program, which has resulted in cleaner, safer and better environs such as the Roxas Boulevard shoreline walkway that now allows residents and tourists alike to again enjoy Manila Bay’s famous golden sunset.

Furthermore, well-known Philippine events are actually locally organized through Public-Private Partnerships like the Ati-Atihan in Kalibo, Dinagyang in Iloilo, Sinulog in Cebu, Pinagbenga in Baguio, and Peñafrancia in Bikol. Hence, there is really no need for the DOT.

Scrapping the DOT would be globally symbolic, too, for putting our fiscal house in order to attract more foreign investments or at least improve our country’s credit ratings given our poor marks at the recently concluded World Economic Forum in Davos. Besides, the salary and perks of a Cabinet Secretary alone can already send about a hundred children to elementary or high school. More importantly, our local communities may very well make tourism an engine for growth and for cutting off their colonial dependence on “Imperial Manila.”

In this respect we may see the great value of local autonomy and decentralization which the Constitution mandated and which the 1991 Local Government Code has fleshed out. Hopefully, NPM, as it stands for local initiative and clear separation of decision-making levels, would also encourage federalization, something that Rizal himself presaged perhaps from his own training then in Heidelberg, Germany.

For example, contrast Germany’s “Burgerservice” with how we obtain our passports: personal appearance in Manila or in each of 10 regional offices only. If you happen to come from the hinterlands of Mindanao, getting a passport would be quite a heavy cross and one huge expense as to hamper your constitutional right to travel. For sure, access to passports through each of our 1,610 cities and municipalities would be a big step forward in serving the “customer-kings,” especially those for whom a passport may be a ticket to survival and a better future as an OFW—it is their dollar remittances that in fact prop up our national economy.

Conclusion

NPM is a proven and compatible model for good government and should be a welcome endeavor in the Philippines. Its Customer-is-King approach fits well into our local setting and constitutional aspirations. However, achieving the Lean State entails a long process of government reengineering. It also requires resourceful creativity and, of course, political will for the Lean Government. For this end, we may take heed of Germany’s pioneering industrialist, Robert Bosch (Yes, the Bosch of our Bosch spark plugs, auto parts, household appliances, and power tools.): “Work not as long as you can, but as economically as possible…”