We have all witnessed the recent political events unfold in Washington 
regarding raising our national debt ceiling. During the back and forth political commentary the majority of the debate revolved around either increased spending, cutting expenses or in some cases both. The ultimate outcome was to be expected and the lowering of our credit rating should not come as a surprise.
However, absent for the most part in the “negotiations” that occurred was any serious debate regarding the mismanagement areas of waste, fraud and abuse. According to one recent government study an estimated 10% ($500 million) of the Medicare annual expenditure can be traced back to fraud alone. This is one area related to only one so-called “entitlement” program. Carried out across all such programs the amount of tax revenues funding these wasteful practices is staggering. These mismanagement areas are not limited to just entitlement programs, but can be found in every tax funded entity of our Federal Government.
We do not have spending or a revenue problem in Washington we have a management problem. Yet it is not surprising that these areas of mismanagement are essentially being ignored, and thus allowed to grow. The real reason can be found in the entrenched system that has flourished in Washington. To truly attack the categories of waste, fraud and abuse is to effectively uncover and acknowledge management failure, which then exposes and threatens careers. It is for this primary reason coupled with the necessary degree of effort that, these draining practices receive little attention. The career bureaucrats and politicians have been the benefactors, while the taxpayers and legitimate recipients’ of services suffer.
Yet the destructive elements of these practices, and the reason for their existence, are not solely limited to Washington, they exist to varying degrees in all organizations whether public or private. The extent to which they negatively impact any organization is directly related to the extent to which the organization continually puts forth effort to root out the draining practices.
Unfortunately most organizations, especially in the past few years, have taken a similar approach as Washington. When the need arises to reduce expenses to shore up bottom line performance most organizations have looked at the easy areas to trim. Unfortunately most of the trimming has revolved in some way around employees. As the trimming was taking place the employees were effectively looking around and seeing numerous areas where waste could be eliminated, abuse curtailed and fraud stopped. Yet these areas were not being addressed in any serious way, which left the workforce confused, disenchanted and disengaged. The ultimate result is a minor amount of expenses are cut, the workforce is wounded and the organization is actually weakened.
For any organization to strengthen its performance and operations, these 3 destructive elements must always be constantly examined and addressed. However, to do so, a simple yet essential process must first be established. The process steps should include:
- Acknowledgement that wasteful practices do exist and are a natural by-product of any organization.
- The identification and open acknowledgement that these elements exist should be viewed as effective management and not failure.
- Each category area should be specifically defined as they relate to any particular organization.
- Once defined, a listing of areas to address should be created under each category.
- Each identified area should be studied to clearly establish the current state and the desired state. This should be followed by a simple gap analysis and prioritized countermeasures.
A critically important component in addressing these crippling categories is to ensure an effective communication strategy has been developed and implemented before action is taken. A well-informed workforce will be the greatest ally in an all out assault on these practices. However, if left uninformed they can become the greatest barrier to success.
When launching a campaign to attack these 3 specific areas it’s essential to identify all the existing areas under each category. This requires a certain level of extensive thought coupled with a broad definition. For example under the category of waste, every injury should be classified as waste along with any corresponding workers’ compensation cost. Inappropriate and unnecessary utilization of healthcare benefits is a largely unnoticed area of waste. Operational overtime unless driven purely by excess capacity demands is traditionally waste. The list goes on when viewed from a non-traditional perspective. Evaluating each of the category areas from a broad and deep perspective is essential to truly identify all the improvement opportunities in any organization.
When attacking these destructive categories it is imperative that no area is treated as a sacred cow. All areas at all levels must be open to evaluation in order for universal organizational support to fully develop. Isolate any area from scrutiny, which traditionally happens, and the environment will be chilled minimizing effectiveness and support. Everyone’s backyard must be explored, and finger pointing must not be allowed to surface in any debate.
The greatest weapon available to any organization in addressing destructive practices is the workforce. They are the on-the-spot experts who have the best knowledge and understanding of the organizational strengths and weaknesses. Armed with the tools and support to improve organizational performance the workforce will drive waste, fraud and abuse to the lowest possible level. Cutting expense is easy, identifying the drivers to expenses related to wasteful practices and developing effective countermeasures takes organizational commitment and dedication. Yet to achieve organizational superiority such effort and attention to detail is essential. A critical question to ask is simply should our customers pay for internal practices that negatively drive up cost.
While the recent events in Washington have angered many, one only needs to look internally to see the same events. If we are justified to be angry with our leaders in Washington, are our employees not justified to be angry with us?
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