In brief

After the financial crisis of 2007-08, Denver’s city administration was suffering from the negative effects of spending cuts and job losses. In 2011, the incoming mayor, Michael Hancock, was determined to reinvigorate the city and its staff. He created Peak Academy as a place to introduce Denver employees to ‘Lean’ methods of driving efficiency through process redesign and innovation, from the attorney’s office to the police department.

The challenge

In 2011, the city of Denver faced a USD94 million budget gap. It had limited resources and city employees were suffering from years of cutbacks. “In the past few years, the city had cut 680 positions from its workforce, added furlough days and asked employees to contribute more to their pensions and health insurance. Morale was very low.” [1] The city administration was considered by some to be bedeviled by “antiquated, bureaucratic, and wasteful systems”. [2]

The initiative

“On his first day in office, Mayor Michael Hancock launched the Peak Performance effort. His vision was to build a world-class city where everyone mattered.” [3] He wanted to revitalise the city while “extracting the most value from every dollar spent”. [4]

Peak Academy was launched as part of the Peak Performance programme, its goal being to transform Denver’s administration into a “customer-driven, creative, sustainable, and data-oriented government”. [5] “The number one message we were trying to get across to city employees was that we are going to invest in you,” said David Edinger, Denver’s Chief Performance Officer who oversaw the Peak Performance programme. Then, as now, the programme partners with city agencies throughout the year to engage staff at all levels of innovative change, and is aimed at improving the citizens' experience with government.

“The Peak Academy offers classes to city employees and teaches the tools required to help them identify areas for improvement in their business processes.” [6] It applies the Lean methodology, a business process improvement methodology. “The core idea [of the methodology] is to maximise customer value while minimising waste. Simply, lean means creating more value for customers with fewer resources … The term ‘lean’ was coined to describe Toyota's business during the late 1980s by a research team headed by Jim Womack, Ph.D., at MIT's International Motor Vehicle Programme.” [7]

The Peak Academy initiative marries the Lean methodology with an internal employee team trained to teach and support other city employees. “The employees are presented with a challenge: improve these processes without new technology or resources.” [8] The Peak team facilitates process improvement events throughout the city, which are focused on anything from reducing queues at the Denver Motor Vehicle department to processing food assistance applications.

The public impact

Peak Performance only met half of its goal of saving USD10 million in its first full year of operation. However, in subsequent years, the cost savings far exceeded investments in the programme. In 2016, the programme saved the City USD11 million on an investment of USD1 million. The cost-saving innovations across the years have included the following:

  • “More police department desk jobs are now being performed by civilian employees." [9]
  • “In addition to saving money, the percentage of officers on patrol at any given time has increased from just under half to nearly two-thirds."
  • At the city attorney's office, which had been dismissing one or two cases a week due to missing files, new case-management software implemented using the Peak Performance approach eliminated the lost-file problem. Since then, the office's conviction rate has jumped by 9 percent.”

Rob Rock, a Lieutenant in the Denver Police Department’s Traffic Investigations Unit attended the Peak Academy. “I went into the class with a pretty open mind seeking ways that I could help my unit,” explained Rock. He credited the course with helping him understand how to identify ways to boost employee morale, improve customer services, and save the city money.

For example, soon after returning from the Academy, Rock wrote the following phrases on the whiteboard outside his office. “This makes my job harder to do” and “I wish I had this to do my job better.” He left a package of Post-It notes next to the board. “Within a day the board was getting covered with sticky notes and the management team and I started looking at what we could do,” said Rock.

One tangible improvement was to implement a pilot project that does away with the requirement that a detective from Rock’s division report to the scene of every vehicle crash involving a police officer and civilian, no matter how minor the incident. A mayoral executive order already mandated that a sergeant respond. Rock explained that the average response time for a detective was 35 minutes. People could sometimes wait for up to two hours for the detective and in only a few instances were the detectives’ skills actually needed. “Sending these highly trained detectives to the crash site was like telling an electric engineer to change lightbulbs in a flashlight,” said Rock. “The benefit in the time reduction and customer service we provided has been immeasurable.” Rock estimates the city has saved nearly USD11,000 by reallocating the detective’s time to higher priority cases.

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What did and didn't work

All cases in our Public Impact Observatory have been evaluated for performance against the elements of our Public Impact Fundamentals.

Legitimacy

Stakeholder Engagement Strong

The Mayor and the city’s departments were the main internal stakeholders. When Mayor Hancock launched the Peak Academy initiative, each city agency developed a strategic plan aligned with the mayor's vision by understanding who its customers were, how it delivered value to them and what areas there were for potential improvement.

The city’s employees were also important stakeholders, and the initiative’s success depended on their being engaged. Understandably, some employees were concerned that the focus on Lean methodology would mean job losses. Edinger, Denver’s Chief Performance Officer in charge of the programme, said re-assuring employees that there would not be widespread layoffs and educating them on the goals of the programme was key. “We had the Mayor come out and say ‘you’re not going to lose your job. Your job may change, but it’s going to be because you’re doing more value-added work that matters.’” In just over a year after its inception, 10 percent of the city’s employees had been through the Peak Academy and they had identified USD6.8 million in savings.

The other stakeholders were those, e.g., Toyota, involved in developing and delivering the Lean methodology.

Political Commitment Fair

The participation of the city administration was evident. The mayor launched the Peak Performance programme on his first day in office, and proceeded to implement the Peak Academy initiative very rapidly. It sits within the Mayor’s Office and is a key component of Peak Performance. However, there was no information on support from other political parties.

Public Confidence Fair

The mayor was re-elected in 2015 with 80 percent of the vote, a very significant margin. This indicated a great deal of public confidence in his overall programme, but there is no information that links his popularity or re-election with the Peak Academy programme.

Policy

Clear Objectives Strong

The mayor was clear about the functions and role of the academy from the beginning, and the objectives have remained the same throughout. His overriding objective was to revitalise Denver’s administration, and achieve it, in part, by turning the city’s 10,300 employees into innovators.

Evidence Good

There were two main strands to his approach:

  • To focus on performance, and to set up a performance division, in the way that Baltimore’s CitiStat operated, as a management improvement programme that uses data to hold agencies accountable for their work.
  • To use the Lean methodology (see The initiative above) to support employees in their redesign of the city’s business processes. The main local hospital, Denver Health, already used Lean methods, so the city administration had a nearby example to follow. “We were very fortunate to have Denver Health,” said Edinger. “They were able to provide a lot of insight and guidance.”

Feasibility Strong

Given Denver’s budget constraints and the effect of cutbacks and economies on the city’s employees, the approach was well suited to Denver’s requirements, but some changes had to be made in the original plans on which the programme was modelled. “But CitiStat is centralised and top-down, and Dave Edinger, the ... chief performance officer, argued that a top-down programme was unlikely to yield results in Denver. [10] “Morale was very low,” says Hancock, thinking back to the beginning of his term. “They needed something to feel like they could take control.”

The programme was made feasible by adjusting the approach to achieving better performance. The Lean methodology provided the framework for putting the employees in control and producing greater efficiencies without additional costs (or job losses).  “To encourage participation among city employees, the team promised that no-one would lose their jobs as a result of efficiencies they proposed through the academy … That decision has been critical for getting government workers to embrace the programme ... For the curriculum, they borrowed heavily from the Lean business management model pioneered by Toyota.” [11]

Action

Management Strong

Peak Academy is managed by extremely qualified personnel within the Mayor’s Office:

  • Dave Edinger, the chief performance officer, “teamed up with Scotty Martin, the city’s process improvement manager, to create the Peak Academy”. [12]
  • Brian Elms (leader at the academy) is a creative public affairs and process improvement professional with 15 years’ experience in policy, legislative and programme management expertise, and with a knowledge of Lean methods.
  • Melissa Field (process improvement analyst) has over 6 years’ experience in public policy.

Measurement Strong

The metrics for evaluating and assessing those attending the Peak Academy were explicitly stated:

  • The City of Denver team opted to create several classes: Green Belt, or a four hour introduction to Lean, and Black Belt, a week’s intensive in Lean. One city employee used the lessons she learned from the Green Belt course to save about 1,000 hours of her time by streamlining the process by which letters were sent to homeowners who failed to pay their wastewater bills. The innovation, which involved changing the form of postage used to send the letters, saved the city about USD50,000 annually.
  • For Black Belt graduates, developing innovative ways to improve systems and better save and allocate city resources became an employee performance requirement, as they have to propose three innovations and see that two of them are implemented.
  • “Workers identified as ‘peak performers’ leave their agencies for three months to undergo more intensive training. On their return, they spend half their time doing the jobs they previously held and the half of their time training others on the Peak Performance approach.” [13] “People were going back to their agencies and telling their colleagues it was the best training they’d ever had,” said Edinger, the City’s Chief Performance Officer.

The innovations that employees saw through to implementation were largely to eliminate waste and, as a result, were measured principally in terms of cost-savings.

Although not explicitly stated as a goal of the programme, Edinger noted another measure of success was the degree to which city employees were using “the language they learned in their daily functions.” He pointed to a meeting of all political appointees in the city to discuss neighborhood engagement efforts. “The whole meeting was structured around the A3 way of thinking, which is a Lean concept we teach at Peak,” said Edinger.

Alignment Good

The main actors in the Peak Academy were the mayor, who originated the idea, and the Mayor’s Office. A pivotal role was played by the chief performance officer in the Mayor’s Office, who identified an approach that would work best with city employees and encourage them to cooperate with the Peak Academy. The leader and trainers of the Academy were also key actors, who had bought into the city’s own adaptation of the Lean methodology.