Business Model
Fire and EMS organizations have a fiduciary responsibility to the people who pay the bills, be they taxpayers, donors or business sponsors. Whether an organization‘s annual budget is $10,000 or $100 million, it is responsible for providing the best possible service for the dollar. But how many fire and EMS members have business management competencies? How many organizations have a chief financial officer with an advanced business degree giving the fire chief financial advice? How many organizations have key decision-makers at the highest levels who have real-world business experience?
In his book The World is Flat, Thomas Friedman discusses how economies around the world are becoming more interconnected. In the global economy, business success depends on collaboration and outsourcing, especially outsourcing those tasks or jobs that divert focus or resources from the core mission of the organization. Friedman cites Dell and the outsourcing of its computer repair services.
If a computer needs repair, the owner calls the 800-number or uses the Dell Web site, where he or she is communicating with a UPS employee, not a Dell employee. That customer-service representative will take the necessary steps to get the PC picked up and delivered to the UPS logistics facility in Louisville, Ky. When the PC gets to the facility, a computer repair technician who works for UPS will assess the computer, make the necessary repairs, and have it picked up for return to the customer, good as new. At no point during that entire transaction will a Dell employee lay a finger on that PC. This new business model allows Dell to focus its efforts on its core mission: producing and selling the best computers possible in a highly competitive global market.
The fire service needs to embrace such horizontal thinking. How many fire leaders attain knowledge and understanding outside of response to fire and EMS emergencies? Think about it. What is the last leadership or management book that you read or Web site that you visited that was not authored by someone in the fire business? When is the last time you attended a business or management seminar not sponsored by a fire or EMS organization? To think horizontally, you have to become acquainted with people and subjects outside your “silo.”
Outsource anything that is not essential to core-mission services. In my organization, apparatus and equipment are easy to get because they are-one time purchases; new positions get more expensive every year. Here are some ideas on getting more bang for your buck without the need for full-time employees:
- Logistics. Outsource supply-chain management functions. The medical supply vendor can manage the consumable EMS supplies at fire stations. Why should firefighters manage warehousing and delivery operations? The same can be done for station and vehicle maintenance supplies. It‘s likely to be more efficient and effective for the respective vendors to do these jobs; they are already doing it for other businesses in your community every day.
- Training and development. Education requirements are expanding faster than most fire service professionals can keep up with while still delivering the core services. There are good specialized private-sector training and education companies; many are owned and operated by fire and EMS professionals who‘ve retired from active service or have moved on to their second career. The quality is good and the price is right, compared to developing and maintaining the same within an organization, especially with training budgets and constantly rotating personnel.
- Station maintenance and upkeep. A rookie firefighter in my department is paid, calculated on an hourly rate, $13.20 per hour, plus an additional 18% for benefits. I have an employee making $15.57 per hour to mop floors, clean windows, cut the grass and take out the trash. The lieutenant and the other firefighter on duty are being paid $24.60 and $17.36 per hour respectively to help him. Outsource these types of internal services and to free up highly skilled employees so they can train, preplan target hazards, deliver educational programs to the public, and complete other specialized tasks. Wouldn‘t that be much better use of these full-time personnel and their technical skills in meeting our core mission?
Fire and EMS organizations will need to operate more like private-sector companies, particularly as local governments struggle to make ends meet financially. This is particularly true as new revenue streams within communities are identified to help pay for the delivery of fire and EMS services. With more departments receiving non-tax revenues from sources, there will be increased expectation — as there should be — from public and local government officials to operate service delivery like a lean and mean business.
October 5th, 2007 at 4:05 pm
I have a certain amount of trouble with outsourcing. The best parallel i can think of is the engineer/technician that uses a computer or calculator to solve problems and when the tools don’t work the problems don’t get solved.
There is no vested interest by the outsourced participants and it shows. Have you ever spent two hours on the phone to get “dell” to help you fix your computer? One and half hours to get the right person and minutes to get it fixed. Remember you all ready payed $150.00 for the service contract when you bought the computer. It is by no means a good solution, but that is how they do business today.
Use an outside company to solicit donations for your organization; there cut is high and they really don’t represent the organization. If they are highering someone who doesn’t belong to the organization where is the accountability? I will donate to some other organization.
Outside training is important but there should be some practice [drills] and guidelines inside the organization to make them work. Someone in the system has to be able to teach the others or it will all collapse. You can’t outsource everything.
Sincerely,
Ex-chief Purchase FD
October 5th, 2007 at 5:49 pm
Outsourcing is appropriate for some items, but to say that you should not expect your firefighers to do maintenance type items around the fire station is wrong. Unless your team is out of the station on runs most of the time.
We are stewards of the public’s money whether you are managing a paid department, the Chief of a volunteer department or managing a combination of both. We should expect our personnel to be fully employed, and that’s how we got into the EMS field. As technology advanced, we had less fires, although when they occurred they tended to be more severe. Therefore, we looked at EMS to provide more service to the public we answered to every day.
So to outsource to free up more time has to be justified by making the issue what are we going to use the free time for - because it must be productive. We owe that to our taxpayers.
October 9th, 2007 at 10:52 am
Robert, I am probably more sympathetic to your argument than most U.S. fire service executives. But I am also highly critical of approaches that emphasize managerial or productive efficiency over economic or Pareto efficiency.
The privatization efforts your propose have been widely implemented in many jurisdictions in the U.S. and abroad, but have failed to improve fire service efficiency more than marginally. If we are truly serious about improving efficiency without compromising our effectiveness, fire departments must consider alternative ways of managing community risk. Such investigations could reveal that our 18th Century approach to emergency service is no longer well-suited to the realities of a 21st Century society.
Chief Mignone’s comment addresses the importance of the public service ethos, and underscores the value of looking for true efficiency rather than marginal solutions. Chief Hulbert’s suggestion that improving productivity should be a higher priority only serves to underscore my concern that we remain more concern with doing things right than doing the right things.
An emphasis on economic efficiency would force us to confront the overall benefits and costs of strategies such as domestic sprinklers. If this technology is better, it should deliver superior fire protection over time at less cost than fire departments operating the way we do today. How might we restructure ourselves to promote such an approach? How might we hedge the technical and financial risks inherent in any transition to such an approach? How do we overcome opposition to spending public funds on private goods?
These and many more difficult questions face us if we’re serious about efficiency. If you find the questions about how the answers to these questions affect our self-identity troubling, then you will more than likely avoid asking them altogether.
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