In many organizations, great ideas can be doomed by four simple words: Let’s form a committee. Not in Maryland’s Anne Arundel County.

Facing a proposal to privatize the water and wastewater utilities, the county Department of Public Works formed a steering committee. Supported by widespread employee involvement, it improved operations substantially. Accomplishments included:

• Saving $13 million in payroll and benefits during the last nine years, without job layoffs

• Cross-training employees to improve efficiency and productivity

• Changing to a skill-based pay system

• Reducing costly corrective maintenance and increasing preventive maintenance.

Moreover, union and management personnel worked together to make it all happen, says Karen Henry, manager of the department’s Excellence in Cost-Effective Leadership (EXCEL) program, the catalyst for changing the department’s culture.

Going private?

The changes began in 1998 after a private firm offered county officials a plan to take over the water and wastewater services and run them more cost-effectively. At the time, a consultant’s study showed that the utilities could operate almost 20 percent more cost-effectively under private operation.

“The county executive felt we could do better, so the county refused the offer,” says Henry, who joined the department in 2000. “We knew we had to reorganize and change our management practices to compete with private companies.”

Management and the union (representing all nonmanagement employees except clerical staff) agreed to work together. “Union buy-in was critical because it made changes more acceptable to employees,” Henry says.

The project started with the steering committee, composed of five union officials and five department managers, and a facilitator. The committee was charged with finding ways to reduce costs and reorganize positions without reducing service levels. The committee formed sub-teams as needed to study various issues. Those teams were made up of one union official and manager from the steering committee and about a dozen other employees from throughout the department.

The union and management had never worked together before except on contract negotiations, and it wasn’t always smooth sailing. But both parties were motivated by a mutual goal: improve operations without layoffs. “They had to learn how to work together without an us-versus-them mentality,” Henry says. “Even today, it’s hard sometimes, but it’s well worth the effort.”

Flexible workers

A major part of the reorganization centered on flexible worker job classifications. A flexible worker is a hybrid employee of sorts, trained for multiple duties. Previously, if a pump failed at a pumping station, an operator would get a call and in turn contact a mechanic and an electrician, plus a truck driver to pick up the pump for repairs.

“We needed four or five people to do the job because the operator wasn’t allowed or trained to proceed,” Henry says. “Now, flexible workers are trained to do diagnostic troubleshooting and can handle most minor problems, like a machine calibration, for instance. They also can unwire and remove a pump from service.

“In addition, the flexible workers are responsible for preventive maintenance of all equipment in their service area,” she says. “With 275 pumping stations and seven wastewater treatment plants, there’s a lot of equipment out there.” The department kept mechanical and electrical specialists on board to handle technical work, such as pump rebuilding, that flexible workers can’t do.

Thanks to the job reclassification, the department has eliminated 31 positions since 1999 as they became vacant, mostly through retirements. That has saved about $1.4 million per year, or nearly $13 million in the last nine years.

When employees retire, the steering team decides if the position needs to be refilled. The team waits to see how things work without the position before making a decision. “In some cases, the team decides to refill the position,” Henry says. “Our goal is to eliminate 17 more positions.”

Skills determine raises

Another component of the EXCEL program is a skills-based pay system for about 100 flexible and maintenance workers, who account for about one-third of the department’s 350 employees. Before, raises were essentially based on years of service. Now, those employees only get raises if they acquire new skills.

To do so, they receive classroom and in-the-field training. Then they take a test, which could be a field test or a written or oral exam, or a combination. If they pass it, they get a raise.

Employees who don’t want to be flexible workers are trained to handle more specialized jobs. For instance, mechanic jobs used to be classified as Level I, II or III. Since flexible workers now do work previously handled by the first two classifications, training is required to get the remaining mechanics up to Level III. In those cases, existing Mechanic III employees do the training.

The renewed emphasis on training has increased efficiency. “We see fewer mistakes in the field of the kind that used to stem from lack of training,” Henry notes. The department’s training budget is now 3 percent of the total budget.

The increased training and a sharper focus on preventive maintenance performed by flexible workers brought another benefit: a dramatic decrease in more expensive corrective maintenance. “When you wait for equipment to fail, it results in a lot of overtime pay and the expense of, say, rebuilding a pump or buying a new one,” Henry says. “If there’s no redundancy, we have to do it right away, which can increase costs.

“In 2001, we were doing 30 percent preventive maintenance and 70 percent corrective maintenance,” she notes. “Now we’re at 68 percent preventive maintenance and 32 percent corrective, with a minimum goal of 60 percent preventive and 40 percent corrective. We can’t quantify the money saved, but we intrinsically know it’s a substantial savings.”

Change takes time

It took about three years before visible, measurable changes occurred, and none of it happened without employee anxiety and uncertainty. “The changes upset and scared a lot of people,” Henry recalls. “People had never been tested to keep a job before and never had things measured so closely. Changing the way you do business makes people skeptical and creates anxiety about what’s going to happen next. Employees wonder where they’re going to fit into this new organization.”

It helped that much of the decision-making was pushed down to the working teams. And once employees could see that the changes made their jobs easier, things really got rolling. “When people see how changes positively affect things, they gain momentum,” Henry says. “That’s much more effective than meetings and posters. Even one person who really believes in the changes can make a huge difference.”

After almost 10 years, the program isn’t complete. But every time a change gets implemented successfully, the process gets a little easier. “We learn from our mistakes — it’s a philosophy of continuous improvement,” Henry notes. “Initially, some people envisioned a beginning and an end. But it’s continually evolving. I don’t think it will ever have a true end.”

And to think it all started by forming a committee.