DRIVE TO EXCELLENCE CAMPAIGN, DAN MCELROY SPEAKS AT NAIOP PUBLIC POLICY COMMITTEE MEETING

“The state of Minnesota is an enterprise, just like your businesses,” Dan McElroy told NAIOP’s Public Policy Committee at its January meeting, “with one big difference: at the moment, the governor is the enterprise’s only employee.”

Changing that, and initiating a host of other changes in the way that state government does business, is McElroy’s new mission, and he is passionate about it. Recently appointed Senior Advisor on Innovation to Governor Pawlenty, McElroy is largely responsible for guiding the governor’s “Drive to Excellence” program. McElroy views his role as helping to design and put into place an entirely new model for state government. The model not only views the sum of Minnesota’s agencies and services as a single enterprise—with an enterprise-wide mission of serving Minnesota citizens—but it makes access to those services simple and intuitive, and delivers them economically and efficiently.

McElroy said there is an urgent need for the program to succeed, given state government’s bleak outlook. “There will be pressure on state resources for the next 30 years,” he said, while government’s ability to perform and deliver services will be sorely tested as it copes with an anticipated large turnover in experienced workers.

“Forty percent of state employees and 60 percent of their supervisors will be eligible to retire over the next nine years,” he said. “At the same time, our customers—Minnesota’s taxpayers—are demanding that government perform to the same 21st Century standards that your businesses must meet.”

“To make government more responsive, effective and affordable in the face of growing taxpayer resistance to constantly rising tax burdens, several things must be done,” he said.

“Government productivity can no longer be an oxymoron. We have to convince legislators that increasing productivity is not a partisan issue, and we must have their support.”

“We also must increase the state’s investment in technology,” he said, pointing out that a recent national study ranked Minnesota 47th in the nation in the use of technology to do its work—“ahead of Mississippi, but behind Guam,” he added.

“We also have to deal with the big issues of changing the culture of our workforce, making better use of our existing resources, and working closely with our employee unions,” whom he described as “reasonably supportive of our goals."

Although the effort is in its early stages, McElroy ticked off some recent successes: a five percent reduction in executive branch staffing; an increased emphasis on digitizing records that has already cut the state’s office space requirements significantly; and enhanced capabilities for online license renewals and electronic tax filings.

The latter he termed a “huge success”, with 63 percent of individuals and 99% of businesses now e-filing their taxes. “In fact,” he said, “Minnesota’s Department of Commerce now leads the nation in electronic filing.”

Following a series of focus groups with managers and employees, McElroy’s team selected six key project areas in which to work, “because we believed that each of them had a high likelihood of being able to drive systemic change,” he explained. Each of the following areas is now a major focus of the “Drive for Excellence.”

Strategic Sourcing, a new organizational approach designed to gain leverage for state purchasing, estimated to have already saved the state $10-15 million in purchasing IT services.

Licensing, with the goal of creating a one-stop “licensing portal” for renewing licenses for the more than 500 different occupations regulated by the state, “covering everything from truck drivers to apprentice turtle-catchers---yes, a state license is required for that,” he said. State licensing activity is currently the province of 42 boards and commissions and 62 separate systems, according to McElroy.

Grant Management, creating new organization and tools for better managing the $1.9 billion in state grants to local governments.

Building Codes, creating a unified agency to administer construction codes within the Department of Labor. McElroy said that, as of the first of the year, the state now has “150 people administering plumbing, engineering, electrical enforcement and inspection, building codes and standards, and residential building contractor regulations—all in one place, all now able to talk to one another.”

Real Property, with a goal of centralizing the inventory and management of more than 5,000 individual properties owned by the state. “We need to determine what we own, how we own it, and what we can do with it,” he said.

Information Technology, creating an enterprise-wide approach to technology services purchasing and accountability.

McElroy said his office will also be working to eliminate the “use it or lose it” mentality that pervades departmental budgeting and spending. “We want to create a kind of ‘bank’ within state government, to make sure that the savings we achieve are reinvested to make our functions even more efficient, rather than simply being wasted on new spending.”

Describing the opportunity before state government as huge—savings to be generated in the six project areas already underway are estimated at $580 million over the next eight years. McElroy also said the need for reform is urgent.

“There are no longer any inherently Minnesota jobs,” he said. “If we are going to compete in a global economy, our state government must function as efficiently and effectively as our businesses.”

Information on the “Drive to Excellence” and its impact is available at www.excellence.state.mn.us.