How the Feds Invented Lean Manufacturing

Before Toyota, there was the Social Security Administration.

SSA’s executive director Oscar Powell. Source: LOC

Some people claim that hard times make strong men. Perhaps it is true. In any event, World War II was a hard time that made organizations stronger, where the war demanded peak efficiency from agencies such as the Social Social Security Board (now the Social Security Administration).

The war not only made the Social Security Board a strong organization, it made it a lean organization, too. The Board invented, and practiced, ideas about continuous improvement decades before businesses adopted them as part of the lean manufacturing movement. Its management was not only ahead of its time, but it was more modern than ideas pushed by later government reformers—and far more modern than federal management even today.

The Board crafted this management style—adapted from factory management training—due to wartime necessities. It needed to dramatically streamline its operations due to shortages and turnover, and pursued two initiatives to do so. First, it aimed for immediate improvements with its “why survey.” Second, the Board ambitiously pursued a new mindset of constant improvement through its permanent work simplification. These initiatives not only dealt with the issue at hand, but even anticipated the management style today known as lean manufacturing.

Today, the US government again faces grave challenges, but we lack the clarity and can-do spirit of the Board’s leadership. Across the political spectrum, observers highlight problems with the federal bureaucracy without proposing concrete steps to deal with them. If they want to actually deal with the problems they identify, they should study the wartime Social Security Board, which believed that government problems could be tackled and that better procedures could be taught.

Social Security goes to war

During World War II, the Social Security Board suffered from the shortages and turmoil of the wartime economy, as did all civilian organizations. Its executive director Oscar Powell (pictured above) said:

In one large branch of the organization, last year’s turn-over was 100 percent. Like other agencies, the Board has also had to face actual or impending shortages of supplies and equipment and also the particularly severe shortages of office space and housing in Washington.

The wartime turnover put extreme stress on the Board through ruthlessly exposing inefficient procedure. In peaceful times, if organizations have inefficient procedures their employees eventually learn the unofficial shortcuts as they gain experience. But during the war, employees left as soon as they learned the ropes, making any inefficient procedures a permanent handicap. Procedures therefore had to be flawless if the Board wanted operate even tolerably well.

To hone its procedures, it undertook work simplification, a management style I have written about previously. Work simplification trained managers in iteratively simplifying procedures to improve operations; it was adapted from the training that factory managers received.

The Board’s work simplification initiative operated on two levels.

First, the agency pursued short-run victories by reviewing its major procedures top-to-bottom, which culminated in its “why?” survey. This allowed it to eliminate needless data collection, reduce procedural bloat, and transfer excess equipment to the military.

Second, it pursued long-run transformation aimed at institutionalizing this nimble mindset, thereby developing its permanent work simplification procedures. Whereas traditional work simplification made procedural improvement the job of all middle managers, the Board made procedural improvement the job of all employees whatsoever. To accomplish this, it trained all employees in the skill of simplifying procedures.

This innovation—continuous improvement by all employees—is precisely the same kaizen method that was popularized as part of lean manufacturing.

Do ask me “why”

The Board had prided itself on its focus on operational excellence, feeling that the organization’s youth gave it vigor and a sense of mission. When the war began, the agency’s leadership accordingly leapt into action: it swiftly decentralized and simplified its operations and began identifying needless equipment. The leadership discovered, for instance, 280 telephone extensions that were no longer used, and concluded that 375 file cabinets and 220 typewriters could be transferred to the war effort due to underutilization.While this was a good start, really tackling the challenge required procedural improvement. Its leadership stated:

The problem is to identify and do away with the habits and practices which have grown up accidentally, or which, having once been useful, are no longer warranted at this time.

The Social Security Board’s most sophisticated effort was from its Bureau of Old Age and Survivor’s Insurance, which solicited suggestions for improvement in its “Why” Survey. This survey reviewed more than 50 major activities of the Bureau, asking the employees—everyone from top management to new hires—which steps were needlessly complex or even wholly unnecessary.

Starting in the fall of 1942, the Bureau spent six months examining its methods. It heard more than 6,500 suggestions by more than 2,000 employees. The Board adopted proposals ranging from large, such as closing or consolidating field office, to seemingly small, such as eliminating data collection it realized it could automatically generate. But at the scale of a government agency, even minor tweaks saved serious money. By eliminating the needless data collection, the agency saved $218,000 in printing and personnel costs—about $4.5 million, today!

The Bureau of Old Age and Survivor’s Insurance saw results: as its workload increased by 6.1%, it asked for merely 1.7% greater funding for administrative overhead to handle it. However, the Social Security Board felt that it couldn’t depend on one-off initiatives. These impressive results had to be institutionalized.

Train once, simplify twice

To lock in this new mindset, the Board turned to work simplification. However, they did not use the standardized work simplification training material that I have previously written about. They had a good reason—it hadn’t yet been written! The governmentwide work simplification course was still being created by the Bureau of the Budget.

Since the Board was developing its approach from scratch, it studied the original sources that work simplification adapted, namely the training methods for factory workers called Training Within Industry (TWI).

The Board principally studied Job Method Training, which was a TWI method for simplifying tasks. Job Method Training takes some concrete operation—in factories, perhaps welding two parts together; in government, perhaps handling a certain form—and breaks it down into a list of granular steps. The employee then goes down the list and asks why each step is necessary, what its purpose is, what best way to perform it is, and so forth. Through answering these questions, employees were then able to rearrange (and sometimes eliminate) these steps, thereby eliminating complexity to achieve the greatest possible efficiency.

So far, this is precisely the same as the standard governmentwide work simplification material. However, the Social Security Board decided to adapt in a creative way—and an even better way than the (later) governmentwide training.

The Board’s director summarized its twist on Training Within Industry:

Naturally, that program has had to be adapted somewhat; the biggest change we have made has been to enlist the whole staff—top, bottom, and middle—rather than to make work simplification the job of supervisors alone.

Traditionally, Job Method Training was used to train factory managers; similarly, work simplification was ordinarily used to train government managers. The Social Security Board, by contrast, decided to train every last employee and developed a method of instruction to do so.

First, a supervisor would call a staff meeting with his reports and explain the purpose of Job Method Training, and ultimately introduce an instructor sent by the Board’s leadership. Each subordinate would pick a part of his office’s work and, using the trainer’s coaching in Job Method Training, suggest an improvement to the office’s procedure. At a subsequent meeting, each subordinate presented his suggestions to the manager and the instructor, leading to a group discussion about the suggestions’ feasibility.

The team would then actually enact every feasible suggestion and incorporate the revised procedure into its daily work. The Board found that each session resulted in many good suggestions—so good that, frequently, several individual suggestions had each saved more money than the entire training session had cost. Its director summed up:

This process may seem to require a large investment of time. It does. But the returns on our investment so far are so large and so immediate that we want to invest all we can at such a rate of interest.

This training was intended not as a one-off initiative, but as a permanent new way of working. For instance, the Board created forms for employee suggestions and judged managers by their ability to elicit them. The new mindset was intended to be:

a continuing way of operating the Board wherein every supervisor seeks the cooperation of his subordinates in finding constantly better and simpler ways of accomplishing the work of the unit.

With this new approach, the Board stood ready to face the challenges of total war.

Lean training emigrates

The history of the Social Security Board during the rest of World War II is not especially interesting, but the history of this training after WWII is very interesting.

The Board had borrowed its Job Method Training, as stated, from the broader approach of Training Within Industry. TWI died out in American industry almost immediately after the war, while it continued in government (under the name of work simplification) up through roughly the 1960s.¹

However, TWI was a big hit abroad, particularly in Japan. Companies such as Toyota used TWI’s approaches (such as Job Methods Training) to adopt a nimble, iterative approach to improving manufacturing operations called the kaizen method. In this approach, companies aim to create “a culture where all employees are actively engaged in suggesting and implementing improvements to the company” through constantly streamlining manufacturing operations one step at a time—particularly by drawing upon shop floor workers’ knowledge.

These foreign manufacturers eventually ate the lunch of established American corporations. As a result, their management style of lean manufacturing (which included more than kaizen) was, by the 1980s, held up as a paradigm of exemplary management.

The Social Security Board’s practices were not merely reminiscent of kaizen, but something that can reasonably be called an independent invention of it. Both the Board and Japanese manufacturers began with the same material, namely TWI training methods. The Board adapted TWI in much the same way that Toyota did: allowing every entry-level bureaucrat to improve processes is roughly equivalent to Toyota’s famous ability for any worker to stop the assembly lines when things went awry.

The Board even spoke about its management in a way that sounds like platitudes from the 1980s, with its director saying:

the job all of us must do and keep on doing can be done only from within and by the whole organization, from bottom to top. It can be done only by enlisting the interest and brains and efforts of all the people who do the job and so know it better than anyone else. No detail is too small, and no activity too large, to be worth critical review, reappraisal, and the indicated action.

The Board shared feedback from its employees that once again would have been right at home in 1980s promotional material. The quotes included:

“I had always thought the supervisor was supposed to do all the planning of how to do the work. Now I feel it is part of all our jobs.”

“The thing that meant most to me was that the supervisor and others were interested enough in us to even ask our opinions.”

“I learned a lot about my own work that I didn't know before and I learned more about the other people's work. That made me see just how my job is important.”

“Always before I didn't know whether we were doing the job just as we should. We were sort of turned loose to do them the best way we could. Now we know just how to go about all our work and we know it is the best way—that we helped work out and that is officially approved.”

The Board’s director recounted one supervisor’s view of the process as a whole:

"It's unlike any reorganization we over had before," he said. "This one is from the bottom up. Everyone's in on it and is interested in making it work."

While Social Security was, of course, not actually a lean manufacturer (or any other kind of manufacturer), there were striking parallels to the kaizen idea of iterative improvement. The Board had used exactly the same sources that Japanese manufacturers used, had adapted the sources similarly, and even talked about management in the same way.

The Board had anticipated this major concept of lean manufacturing—right down to analogizing this method to being lean! The Social Security Board’s article on this management initiative ended by saying, “We must take off fat, for there is no fat on racehorses.”

Lean government, then and now

Today, the government’s need to operate in the face of increasing criticism and decreasing resources will require creative approaches. The Social Security Board’s playbook could still work. It can’t be imitated blindly: today’s challenges are not those of total war, and organizations and management have changed drastically since the assembly line era. But even if its methods cannot be adopted wholesale, we should still copy its approach—figuring out how to train every employee in improving his office’s work.

As there have been (and yet shall be) many harebrained schemes for revamping government training, it is worth highlighting three key points about the Board’s training: First, the training was comprehensive, as it taught every employee whatsoever to use his knowledge for procedural improvement. Second, it was a standardized training course that didn’t depend upon external consultants and therefore could scale. Third, it was institutionalized through standardized forms for suggesting procedural improvements and by requiring managers to elicit these suggestions. These three elements assured that the new culture would actually take root rather than prove a passing fad.

The main remaining questions for would-be reformers today are: 1) what approaches should civil servants should be taught, and 2) how would agencies use those skills to streamline their procedures?

For the former, the 1940s approach of Work Simplification is a worthy starting point, but there have been many new approaches since then. These include, for example, approaches for assuring that products are functional and intuitive, called user experience; and frameworks for rapid prototyping and development that (in software) are called agile development and which (in manufacturing) are associated with companies such as SpaceX.

The second question is trickier. It is impossible to say exactly what such training would look like, or precisely how it would be used—the whole point is that it needs to be carefully adapted to government, not copied mindlessly from business. But it might include, for instance, applying ideas about user experience to an agency’s own tools and software. Front-line workers at Medicare and the VA could flag buggy software that causes errors, and managers could be held accountable for addressing the problems.

Or as another example, the agile vision might suggest judging government projects on the time needed to get to a first, failed prototype of a new service or project—akin to SpaceX quickly trying prototype rockets that explode on launch. Extensive consultation or needlessly detailed contractual requirements shouldn’t just be unnecessary, they should be a failure that harms a manager’s career progression.

Finally, this history offers more than a playbook for better training. It offers a way of approaching the problems that we face today. The Social Security Board’s director claimed that the greatest obstacle facing the government was:

weariness which comes from knowing that we are in the midst of world changes about which we can do little individually while we must continue to carry on our responsibilities and must bear eventually some unknown brunt.

And this was what the Board attempted to confront—when everyone felt helpless in the face of world events, the Board attacked feelings of helplessness at work. Ownership and true responsibility was the solution to the helplessness induced by stultifying proceduralism.

Today, many people again feel that we face “world changes about which we can do little individually.” We can respond by adopt the spirit of wartime America. Today’s challenges are a chance to give every government employee newfound ownership over his bureaucracy’s performance, and for the government to operate as efficiently as lean and nimble manufacturer.

Appendix: Sources

The main source is the article Adjusting Administration to Wartime by Oscar Powell, the director of the Social Security Board whose picture adorns this article. It is in the public domain and readily available at the link above (courtesy of the Social Security Administration). The article is rather short and very much worth reading.

All other citations are given via links.

Sources:

1. Powell, Oscar M. “Adjusting Administration to War Time.” Social Security Bulletin, November 1943.

1. If you wonder what happened in the 1960s, I tell part of the story in my article Accounting for State Capacity.