By Steve Kelman
The rise of a global marketplace may make services much less expensive. Steve Kelman wonders if government can take advantage. (Stock image)
Last week's Economist tells a story, in an article entitled "The Workforce of the Cloud," about a private company that needed to hire somebody to translate a video.
"For translating a 22-minute video from English into Spanish at short notice, 7Brands Global Content, a professional translation firm based in New York, quoted 'approximately $1,500,'" a fee the article states is in line with the going rate for established translation companies.
The customer then decided to try two online "talent exchanges," Elance.com and (the largest of the firms in this space) oDesk.com. Both companies have a large stable of freelancers available to bid on various kinds of tasks (Elance has 2.5 million people registered, about a third in the United States and the rest abroad). The customer screened the bids to weed out those with little or no experience or without good customer ratings, and found quoted prices of as low as $22. (That's $22 as a fixed price for the whole job, not per hour.)
$1,500 vs. $22? Does that get your attention in these tight budget times, government agencies?
These new online marketplaces are taking advantage of the spread of freelance work, by part-timers and young people, and the rise of a global marketplace (finalists on the bid in the article were from Argentina, Brazil, Indonesia, Mexico and the Philippines). As the article notes, as these markets mature, and good freelancers start getting a lot of work, the rates for reliable people are likely to rise – but there's a lot of room between $22 and $1,500 for customers to benefit.
These online markets have customer rating schemes and manage the payment process for the buyer. Odesk.com also has a method for monitoring whether work is being done when it is claimed to be done for those working on hourly rates (by taking pictures of workers at their screens at random intervals).
The federal government buys hundreds of billions of dollars of services a year. Clearly, this kind of marketplace for freelancers is inappropriate for the vast majority of these buys. But if the government can get these kinds of savings on even a tiny, tiny fraction of services purchases, this can add up. There must be fairly routine, low-security, non-mission critical, low-dollar buys (perhaps many of them under the $3,000 micropurchase threshold where customers could simply use this service directly, with no further ado) where the government should try this method.
If I were an agency, I would start very small, see if this works, and go back to people who have done a good job the first time. (We call it "past performance.") Translations – the first example cited in the article in The Economist – come to mind, but there must be other kinds of clerical work for which this would be good as well. And if an agency only wants to use U.S. labor, there's of course nothing to prevent considering bids only from Americans.
This is an example of innovations out there in the commercial marketplace that the government – especially in these tough times – should be exploring. Who wants to try?
Posted on Jun 11, 2013 at 12:09 PM1 comments
The culture of government in China, like the culture of that society in general, is quite punitive. "Punishment" is a common word. When something goes wrong, the instinct is often to arrest somebody first and ask questions later. Subordinates fear and bow to bosses in a way that reminds one of Western organizations from a century ago or more.
So it was with considerable surprise that I read an article in Hong Kong's South China Morning Post while in China recently, discussing newly announced efforts in Shanghai – a previous pacemaker in China whose local economy is now somewhat faltering – to encourage reforms in local government policy and management by stopping the punishment of well-intentioned innovations that fail.
According to the article, the city government, in announcing plans "to encourage local officials to 'reform and innovate,'" stated that it "promised not to punish those who dare to try new ideas but may not achieve their objectives – so long as their efforts are made in good faith and don't lead to windfall gains for those officials." (The latter caveat takes into account China's huge corruption problem.) The policy also said that "the city will reward officials at various levels who show initiative for innovative ideas even if their reforms fail to meet targets."
Innovation is important for government. Government often underperforms. If that's true, then we can't continue to do business the same way – we need innovations to improve performance. And valuable innovations often yield huge performance or cost savings returns.
Yet that doesn't mean anything labeled "innovation" is a good idea. Indeed, most innovations fail. It is often hard to predict which innovations are going to work, so in practice if you want successes, you must be willing to tolerate failures.
But that creates the problem for government. Ideally, you want to make it easy to try out an innovation on a small scale, stop it quickly if it's not working, and scale up if it does work. However, if people get slapped in the face every time an innovative idea fails, they are going to get slapped a lot – a problem that becomes even worse when there are few rewards for success. Government folks quickly get the message: Innovations will bring you trouble when they fail , and don't get you anything when they succeed. The Shanghai city government policy is thus designed partly to counteract one of the great impediments to innovation in government.
Needless to say, the problem is also one we also very much have in the United States. It's embarrassing that this is coming from a large local government in China rather than the U.S. government.
It is really a challenge to bring about a culture change here. How does one avoid feeding media stories about government officials being praised or rewarded for failing? One can almost hear the cries of "where's the accountability?" And, from a managerial perspective, how does one balance the desire to make room for innovations and their potential for failure with an expectation for high performance?
But the right answer can't be the dramatic underproduction of innovations that the current incentive structure in government produces. That's why the Shanghai effort should be welcomed – it will be interesting to see if anything comes of it.
Posted on Jun 07, 2013 at 12:09 PM4 comments
IRS employees learn to line-dance in a video that has created a new controversy for the agency. Is it another example of wasteful spending?
As of early Monday morning, a Google search of "IRS dance video" yielded over 64 million hits, not bad for a story that only broke over the weekend. At the risk of unleashing a torrent of abuse, may I ask why?
This video lacks some of the features that gave legs to last year's GSA conference scandal. The GSA conference took place in Las Vegas (known for its glitz and excess, even though it's really an inexpensive place to hold conferences). There were photos of the offending GSA regional administrator lolling in a huge hot tub, and videos shown on TV appeared to show employees advocating being lazy or wasting money (though both videos were parodies).
The IRS video, on the other hand, features a group of nerdy and uncoordinated IRS employees trying to loosen up by doing the "cupid shuffle" (I will confess that I – perhaps like some boring IRS employees -- am such a nerd that I had never heard of this dance before).
Frankly, the political and public reactions to this video are depressing, not because of what it says about the IRS but because of what it says about expectations of how government organizations should be managed and how government people should behave. (Forbes published one such reaction.)
Modern organizations often produce their products or services in groups. To be more productive, organizations therefore have an interest in employees feeling good about each other, making it easier for them to work together effectively. They also recognize that productivity is generally enhanced when people feel good about their work environment. For that reason, modern organizations typically invest in trying to get employees to move beyond only formal interactions so that they may feel good about each other. That includes jokes and spoofs. "Work hard, play hard" is a common view. A Google search of the phrase "team building conference" yields more than 1 billion hits.
Instead, the view about government, rather than the view about managing in the private sector, seems more akin to what might be called the Gradgrind school of management, which was prominent in the early years of the industrial revolution. (Gradgrind is the name of the main character in Charles Dickens' novel Hard Times, a school headmaster who was cold and heartless to his young charges. The word today, according to Wikipedia, is "used generically to refer to someone who is hard and only concerned with cold facts and numbers.")
In this mentality, interactions should only be formal. People shouldn't feel any emotional ties to each other. And of course they should never laugh.
Government is usually not the most fun-loving, informal work environment, in touch with its feelings and with high bonds among teams. The IRS dance spoofs were efforts to try to counteract those problems. The reaction, unfortunately, gives government a really strong message: bureaucrats need to act like bureaucrats. Don't get out of your boring lane.
Gee, sounds like just the kind of organization a normal person should be attracted to, right?
Posted on Jun 03, 2013 at 12:09 PM10 comments