The Trump Administration continues to investigate the idea of merging some of the services of the federal Office of Personnel Management (OPM) with the General Services Administration (GSA). They are using a Six Sigma-based method to analyze potential outcomes.
The administration has recommended the merger, but Congress blocked it. However, in an end of the year report for 2019, the OPM Office of the Inspector General listed “proposed OPM merger with the General Services Administration” as one of the top “environmental challenges” facing the colossal federal department.
First proposed in June 2018 as part of the Trump Administration’s “Delivering Government Solutions in the 21st Century” report, the proposal called for transferring a majority of OPM functions to GSA. This includes human resources, healthcare and insurance, and information technology.
The administration requested $50 million for the initial reorganization costs. Both the U.S. House of Representatives and the U.S. Senate declined to include the funding in the current budget. The Trump Administration, however, is still considering its options. One includes using the Six Sigma-based Tollgate methodology to handle the merger.
How Six Sigma Helps With Mergers
For those interested in Lean and Six Sigma, the politics of the proposed merger is less interesting than the possible use of process improvement methodology to get it done.
Both the OPM and GSA are gargantuan. While other governments have used Six Sigma to improve taxpayer-funded operations, this would rank among the biggest such endeavors.
In attempting to prepare for the merger, OPM has started to use Tollgate, a “Six Sigma-based process used for mergers and acquisitions in the private sector, to steer the proposed reorganization plan,” according to Global Government Forum.
According to the Inspector General report, OPM is searching for ways to educate employees, many of whom are confused by the potential merger, as well as analyze cost benefits and areas where operations could be more efficient.
Stephen Billy, deputy chief of staff for OPM, told a congressional committee in 2019 that OPM is using Tollgate to make an analysis of the merger, while the Trump Administration is using it to evaluate the proposed merger’s impact on OPM stakeholders.
The term “Tollgate” refers to an authority that signs off on a phase being completed before moving on to the next phase. With mergers, this approach is often paired with the Six Sigma DMAIC methodology – Define, Measure, Analyze, Improve and Control – in which each step in the merger must pass through a Tollgate before moving onto the next step.
Providing Structure and Discipline
As explained in a report from Deloitte, Six Sigma is a key component in successful post-merger integrated business planning (IBP). Not surprisingly to those who know at least the fundamentals of Six Sigma, it provides a structured and disciplined approach that leads to successful mergers.
The Deloitte report notes that organizations often fail to identify the key priorities after a merger or acquisition when moving into IBP. A first step is to use Six Sigma tools and techniques to analyze the business impact of merging operations, identify the best options to optimize merged processes and develop a plan for implementing them.
The process involves:
- Understanding the mission and strategy of the merged operations
- Analyzing the operating model, including process, policies, governance structure, metrics and key performance indicators
- Assessing talents within the pool of employees
- Assessing the technologies available, including IT systems and business intelligence tools
The number of mergers and acquisitions has increased in the past decade around the world. But Deloitte notes that only about 50% have proven successful.
Whether an OPM and GSA merger happens remains to be seen. But for those interested in how Six Sigma can make government more efficient, it’s an issue worth following.