Government That Works

HUD adopts TPS-inspired change, empowering its people to better serve those who need their help most
by Dan Miller
July/August 2016
Government That Works
Building Hope
Secretary Julian Castro pays a visit to a HUD construction site in San Diego in 2015. When completed, this project will offer affordable housing to veterans.
Greg Castello admits that, when he told his colleagues at the U.S. Department of Housing and Urban Development (HUD) they’d be collaborating with Toyota, he did get some quizzical looks.
“There were quite a few jokes,” says the federal agency’s director of transformation. “Like, ‘When do I get my free car?’ And, ‘Toyota? We don’t build cars here.’ But, the fact is, we do have a production line. It’s just that it’s paper-based, data-based and people-based.”
Castello admits HUD’s production line, like that of most sprawling bureaucracies, is prone to inefficiency. Toyota, meanwhile, has spent decades continuously improving the Toyota Production System (TPS). It knows a thing or two about how to streamline highly complex operations and empower a culture of improvement where every team member can contribute to their job every day. And, through the Toyota Production System Support Center (TSSC), based in Erlanger, Ky., it stands ready to share this knowledge with organizations that have a true desire to learn and adopt TPS as a way to strengthen their operations.
HUD Secretary Julian Castro did just that in the spring of 2015. The former mayor of San Antonio witnessed firsthand Toyota’s process improvement expertise during his visits to the city’s Toyota Motor Manufacturing Texas plant. So he directed Nani Coloretti, HUD’s then recently appointed deputy secretary, to reach out to TSSC—a pro bono resource.
Tom Jones, Toyota advisor, made the first of his three-day onsite consultations in Washington, D.C., in the fall. Less than a year’s worth of visits and phone calls later, tangible benefits have already been realized.
“It’s happening slowly, but we’re making progress,” says Deputy Secretary Coloretti. “There had been numerous attempts at process improvement at HUD in the past. These are very difficult things to establish. But with Toyota’s help, we’re getting there. I can see it.”
Taking Hiring Higher
In the early going, the collaborators focused their attention on the agency’s hiring plan. That’s the process managers use to determine how many employees and at what staffing and budget levels they’ll need to meet their objectives for the coming year. Prior to TSSC’s involvement, the many related puzzle pieces took an average of 84 days to fall into place. Now? It’s down to just 11.
From there, Castello says they shifted their focus to four key projects:
  1. Hiring people—This was a logical next step after streamlining the hiring plan. Once boxes in the HUD org charter are created, it typically takes the agency six months to find, vet and hire people to fill them. The goal is to reduce that timeline to 90 days or less.
  2. Closing grants—HUD awards funding to create and retain affordable housing and reduce homelessness, among other reasons. The grants are typically valid only for a specific dollar amount and timeframe. The agency is building a standardized process to close completed grants.
  3. Processing housing conversion financing—Owners of HUD properties can apply to the agency for, essentially, the ability to take out mortgages to better maintain their properties. With Toyota’s help, HUD is looking to cut the processing time in half, helping neighborhoods improve more efficiently.
  4. Helping displaced tenants—Sometimes these property conversions require tenants to move out during construction. Previously, those who were affected had to fill out 5-7 different forms. This part of the process is being consolidated into a single user-friendly form.
While there have been some early wins, much work remains. But TSSC’s approach to these collaborations ensures that, increasingly, HUD will have the skills to eliminate the bottlenecks on its own.
“A big part of what we provide is a fresh set of eyes that can look at the issues differently,” says Jones. “The fact is, I don’t have the answers. They do. These are all very smart people who are capable of making improvements on their own. What they lacked was a structure to know how to go about it.”
Teaching Them How to Fish
“What Tom brought to us was, ‘I’m not going to fish for you; I’m going to teach you how to fish more efficiently,’” says Castello. “Our people did the work, with Tom looking on and interacting when needed. If we got stuck on a problem, he would step in and help us get through it. Then he would step back, nudging the train from time to time to keep it on the tracks.”
The fundamental shift, both say, is from a bureaucracy where power trickles slowly from the top down to one that empowers the people at the bottom of the process—those closest to the actual transactions with citizens—to make more of the day-to-day decisions on their own. “As long as it’s legal, moral, ethical and safe, we’re giving people permission to do what they’re being asked to do,” says Castello.
In the long run, Castello hopes this new mindset will catch on with other groups within the vast HUD universe. He is optimistic.
“The rank-and-file employees are energized by this,” he says. “I had one person, after I explained how we were going to work through the process, say to me, ‘Wait a minute: You’re going to ask us to think here?’ Later, that same person said to me, ‘This is the most fun I’ve had in the 10 years I’ve been working here.’ That’s real change.”
Meanwhile, Jones is feeling pretty energized himself.
"I'm impressed with how far they have come," he says. "I've been with Toyota 25 years and have always felt proud to work for this company. Partnerships like this are one of the reasons why."
To learn more about how Toyota shares its know-how, visit
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