Monday, May 17, 2010

Why cost consciousness and productivity?

Why cost consciousness and productivity?
First, I don’t believe that we, as a state, will see a substantial increase in state revenues anytime soon. Additionally, I DO believe that we’re likely to see an increase in costs, especially healthcare costs.
Therefore, we have no choice but to improve the state’s productivity… raising taxes is not an option.

Let me define and explain productivity first. Simply put, it’s doing more with fewer resources (e.g., money) or more with the same resources. Productivity measures the efficiency of an organization. So why am I hung up on productivity? Well, if the state’s revenues remain flat and costs increase, we have no choice but to increase our productivity, doing more with less (raising taxes is not an option), so that we can continue to provide the state’s essential services. Unfortunately, productivity improvements themselves will not be sufficient to solve the state’s budget woes, we will also have to make some tough calls and reduce and or eliminate some services. Just being truthful... folks.

Okay, what about developing cost consciousness. For starters, I will require managers to measure and track productivity of their products and service rather than how well they’re blowing their entire budget. State employees need to start thinking about how they will improve their productivity and held accountable to do so. Managers need to do more than merely manage their budgets; they will be responsible to improve their operations productivity, quality, cycle time and yes, customer satisfaction.

As governor, I will ensure that the state develops a solid strategy to maintain its current budget levels. I will ensure that the state has a strategy map and balanced scorecard that includes productivity measures and targets for everyone. And I will provide quarterly updates on our productivity improvements to the citizens of Vermont. After all, its your money and you’re the customer.

I have many years of experience developing and executing strategies, driving productivity improvements to drive down costs.

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