Elon Musk, DOGE, and How Public Sector Transformation Fails Before It Starts

Last week, we covered how Elon Musks’s DOGE public service cuts aren’t just too aggressive – they’re downright destructive toward what they’re trying to accomplish.

I only wish that were the only strategic (non-strategic?) decision they were employing in their bureaucracy “reductions.”

They want to slash spending by an extraordinary amount, and keep the necessary services running without a hitch.

The real problem?

It’s at a much, much higher level.

And no amount of small steps can overcome the lurking dangers.

From Househunting to Headaches

Before we talk about the current changes to government administration, let’s bring it a bit closer to home.

Rather: to a home.

Let’s say that you’re shopping for your “forever house,” and you found the perfect place to raise a family: a beautiful neighborhood, big, tree-lined lots, shopping nearby, and a great school only two blocks away.

The only problem is: the house is run down.

Maybe even barely liveable.

Even worse, because of the leaky pipes, and the poor insulation, and the insect problems, and the neighbors complaining about overgrown trees and weeds, this house is actually more expensive to maintain on a monthly basis than all of the beautiful, magazine-ready houses immediately around it.

So it has everything going for it, except for it being a money pit.

What to do?

Why Quick Fixes Don’t Fix Anything

It’s pretty obvious where we’re going, here.

Sure, you could tape up some of the pipes, but if they were leaking that badly, the metal is probably corroded and needs to be replaced.

Maybe you could get used to the cold and heat, but if not, maybe you could use some of that left-over tape to try to quickly add some extra seal to the windows.

Insect problems? Clean and clean and clean! (And stop leaving food lying around, will you??)

As for the plant life, well, they say that gardening can be great exercise – if the problem is big enough and requires enough grunt work.

But all of that together requires constant effort, and none of it will make any meaningful progress toward fixing the underlying issues.

And the worst part?

Doing less of that thankless work will only make the problem worse.

Real Improvement Requires Real Investment

If you want to actually make that home the model of the neighborhood – and spend less money on a monthly basis to boot – you’re going to have to make some upfront changes.

You’ll need to hire a plumber, and you’ll likely have to fork out for some new pipes and drywall where they’ll bash some holes.

You’ll need to buy some new windows, and maybe even rip up the walls, install some new insultation and maybe put in new drywall. (If you can do this at the same time as putting in new plumbing, I think I spot some cost savings!)

Insects will require spraying, trapping, and maybe some extra sealant.

As for the outside, maybe you can hire an expert for a weekend, and maybe buy some sprays and a tiller. But you’re likely going to need to rip a lot of it out, and maybe do some re-sodding and lay down some brand new flowerbeds.

All this to say?

You’re going to have to be prepared to open up your check book.

DOGE Isn’t Renovating — It’s Just Skimping

Now, as mentioned earlier, this isn’t meant to be purely decorative, nor is it meant to be a demonstration of buying power.

These investments will hurt in the short-term, but they will be expected to re-coup their costs in the medium-term – and eventually lead to cost savings.

Which brings us back to DOGE.

They’re taking shorter showers and using plastic cutlery to save water.

They’re turning down the thermostat to reduce heating costs.

They’re learning to live with weeds and insects in an attempt to “become one with nature.”

And they’re doing all of this under the guise of actually improving the condition of the house, and increasing its value to the neighborhood.

Anyone who’s ever bought a fixer-upper – or even undertaken the simplest of home improvements – knows that inaction leads to even more run-down conditions.

Have They Thought This Through?

Now, again – and I can’t stress this enough – I’m not questioning the decision to reduce the government footprint. Services get expanded, and services get reduced – it’s the never-ending pendulum across virtually every public service in the world.

But as someone who accepts the right of the decision, I still have to apply my thinking cap (and years of expertise in just such a role) and question: how are they doing it?

Are they setting themselves up for success?

Do they have a sound methodology, at least in principle if not in detail?

Have they taken the time to understand the processes that they wish to transform?

And, perhaps most importantly: are they willing to become vested in the overall outcome?

Because any substantive change initiative has to first acknowledge that it ain’t free.

What the Phoenix Project Should Have Taught Us

The world has seen this type of “transformation” before, of course.

A very recent example was the Phoenix transformation project in Canada (a project that I promise you we will dig into many times, here and elsewhere).

The Phoenix case is one of the most high-profile public sector transformation failures in recent memory. It was meant to centralize and significantly reduce human resource services within the federal administration. The goal was to automate as much as possible, thereby eliminating the countless manual processes – and the employees needed to execute the processes.

Similar to DOGE, the government at the time figured that the quickest way to realize millions of dollars of savings from the project was to cut costs straight away.

And so well before the system was live, and well before anyone could even pretend to know if the project was a success, pink slips were issued across the bureaucracy.

And to make things extra spicy, they decided to move the whole set of operations about a 1,000 kilometers away, just to make sure no one had any second thoughts about the undertaking.

I know this is going to come as a giant surprise to everyone, but things didn’t work out exactly as planned…

A System That Couldn’t Add — And Leaders Who Didn’t Listen

The system just plain didn’t work.

By the account of one senior leader whom I talked to, when using the system, “2 + 2 = 5.”

And no one really knew why.

Because of cost overruns, leadership had made the conscious decision to maintain the budget by eliminating retroactive changes. So if someone had to go on leave to tend to an emergency, and they wanted to enter their leave the following day – it had to be manually entered by a human.

If someone got a promotion (or was let go), and the manager was a day late to notify HR – it had be manually entered by a human.

So, compounding the new system’s “creative interpretation” approach to basic math, a significant responsibility of the system’s workload was already being diverted to humans.

Which would have been a big efficiency problem in any situation.

But was made worse by their approach to “transformation.”

They Fired the Fixers and Lost the Map

After a couple of hundred thousand alarm bells went off without reprieve, senior leadership finally realized that they didn’t just have a series of aberrations on their hands.

They had a catastrophe.

And that catastrophe required some unique expertise using manual workarounds to set things right.

The only hitch was: they’d already fired everyone who could help, and then (somewhat inconveniently) moved to a building in another time zone.

And so became the incredibly arduous – and unreasonably expensive – process of somewhere acquiring the skilled fingers to a right a wrong that no one bothered to look out for in the first place.

An overall budget of just over $300 million soon doubled.

Then tripled.

And now, close to ten years later, estimates put the cost at over $3.5 billion.

And the best part?

They’ve already started looking for a replacement, because they don’t think the system can even be salvaged.

DOGE Isn’t Phoenix — Yet

Now, I’m not saying that DOGE will create another Phoenix in every department or agency they gut.

Maybe there will be only a few, or maybe there will even be hundreds.

Why I do know is: when introducing so many change in such a short time, you are virtually guaranteeing that there will be unforeseen issues.

And when those changes largely involve removing the people who could theoretically fix those changes, you are asking for trouble.

Issues become serious problems.

Serious problems become crises.

And crises become catastrophes.

After so many public service transformation failures, the lessons remain the same.
Invest a little bit extra to make the changes.

See how the changes go, and recalibrate as necessary.

Then make the cuts that the gains invite.

It’s so simple.

I just wish people didn’t overcomplicate it.

If you’ve been a part of a public sector transformation failure, I’d love to hear your take. What gets missed? Let me know in the comments – but no politics, please!