Return on Investment: Every Local Government Has a Story to Tell

Of all the recent trends related to bringing business practices to government, return on investment — or ROI — is one of the more difficult to translate from the private to public sector. It implies profit or gain which hasn’t traditionally existed in the government context. This doesn’t mean returns cannot be achieved on investments made. It means the definition of return needs to fit the context.

Newscasts are replete with stories about government projects gone awry. It is likely most of the projects serving as source material for these stories were not intentionally wasteful. It could be a better project was overlooked on the way to the failed one. I believe there are places to look to give the public sector more visibly successful projects.

•  Look for areas where productivity gains could be achieved. Most governments have a backlog of high-value work for people — if they could be freed up to do it. In order to find areas to make gains in productivity, people have to examine why current things are being done. In many cases, there are activities being performed that no longer bring value to the community. Instant return can be gained by simply discontinuing these practices.
   
• Improve processes and practices that have not aged well. It is often assumed technology can magically provide productivity gains in these situations. This is not always the case. Often colossal failures have resulted from large technology projects doomed from the start, as there was no return to be gained in the first place.
   
• Improve quality. Citizens have ever-heightening expectations for government. Communities tend to measure the amount of work done rather than actual indicators of quality. For instance, if you are measuring the number of potholes being patched per year as an indicator of achievement, the community may legitimately ask, “Why do we have so many potholes?” They don’t care as much about the ones you have patched as they do about the one that just tore a part of their exhaust system off. Measuring indicators of quality and improving on them can turn negatives into positives.
   
• Lower costs through better management. This almost always means analyzing data to look for areas where the cost of repeated tasks could be lowered. The challenge is that there is often a lack of data to analyze. If you don’t know where your money is being spent it is difficult to spot areas for improvement.

We are aware of many cases where organizations have been able to apply recouped hours to high value work, where citizens appreciate quality improvements and where costs of operation have been lowered. Government workers in these communities have a positive story to tell.

Organizations often don’t know where to start. It may be an outside opinion is in order. With some help you may find you can have a positive story to tell your community.