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Sludge Audit
A sludge audit is an exercise by which someone sees how much sludge there is in a system. So you could imagine a hospital doing a sludge audit, asking what do the nurses have to do in terms of, let’s say, filling out forms or going to training sessions or going to places for things that aren’t directly relevant to their work. You could imagine a university doing a sludge audit with respect to what administrators and faculties and students have to navigate in order to be administrators and teachers and students. What’s the sludge they have to do in the course of a month?
And a sludge audit could be and should be focused on time. How many hours? And you might find in a hospital, for example, that nurses are spending 10 hours a week navigating sludge. And often, the consequence of doing the sludge audit is to produce a kind of collective, oh my gosh, we had no idea. Shouldn’t we cut that number?
Sludge audits can be informal and quick and qualitative where any institution can do one over a two-week period. You can also do, if you’re a large company or if you work for a large company, something that is more formal and involves actual numbers. And a sludge audit itself often builds morale because it shows respect for the people who are participating in it. And that’s a positive.
And the idea of a sludge audit ought to be a part of ordinary institutional life because it can be done in ways that are often quick and simple or ways that are complicated and extremely productive. Without them often there will be harm that’s produced and that’s very serious and that no one intended to produce and that no one ever sees until you do the audit.
Cost-Effectiveness Analysis
Cost-effectiveness is a very simple idea by which you ask, is the level of sludge you’re imposing excessive in light of the goal you’re attempting to achieve?
So let’s suppose the goal is to ensure that people get driver’s licenses who are entitled to driver’s licenses. You might impose, and some places do impose, a fair bit of sludge on people who are trying to get driver’s licenses.
You might learn through the sludge audit that if you cut that sludge in half, you could get the same goal, which is to make sure people who are getting driver’s licenses know how to drive and are otherwise eligible. So cost-effectiveness asks, are you imposing more burden than you need to achieve the goal?
Cost-Benefit Analysis
Now the cost-benefit analysis can be more complicated, but it’s really important. So suppose there’s a lot of sludge imposed in order for people to get economic benefits that are limited to people who are poor.
It might be that if you reduce the level of sludge, you will be reducing the insurance you get through large levels of sludge that people aren’t getting the benefits who aren’t entitled to it. So that is, a lot of sludge might be necessary to make sure that every single person who’s getting the benefit is entitled to it.
It might be if you cut the sludge in half you’re going to save a lot of time, but a certain number of people are going to end up getting the benefit who aren’t entitled to it. Now that amount might be two, it might be 200, it might be 2000. Now we’re doing a little cost-benefit analysis where we ask, reducing sludge does compromise something. Some people are going to get the benefit who aren’t entitled to it. Is it worth it? Maybe if only two people are getting the benefit who aren’t entitled to it, but you reduce sludge by a huge amount, that’s okay. But maybe if the number of people who get the benefit who aren’t entitled to is 10,000, that’s too steep a price to pay for sludge reduction.
So cost benefit-analysis makes us ask, what do we gain by sludge? What do we lose by reducing sludge? And sometimes reducing sludge, you will lose something. And the question is whether you’re losing a lot, in which case you might decide, okay, we don’t love sludge, but it’s justified.
Soliciting Feedback
A company can reach out to its employees, its customers or a government can reach out to citizens, let’s say, in the domain of education or in the domain of healthcare, and ask, is there too much sludge in the system? And it can give a definition of sludge. And then it can ask people, if there is, what should we cut?
Now, some companies and some countries have done exactly this and it’s been a goldmine of learning. The employees might say, “Look, the amount of requirements you impose on us in the course of a week is far too high. And here are five things you can do that will make our lives much better, which means we’ll enjoy our jobs more. And we’ll produce more for you.”
Or you could ask people who are trying to navigate some system, let’s say it’s the medical system, where are the pain points, as they’re sometimes called, that are sludge? And that will identify an action plan just because it’s going to have an assortment of ideas, some of which will be good.
Now reaching out to clients or customers or citizens is one way to do it. You can do it just by working with people internally who, chances are, will know things that collectively will be terrifically productive of an action plan. So I know of private and public organizations in many nations that have just informally asked their own people, where is there sludge?
And the result of that is to formulate a program of action for reduction. And even some of the small sludge-reduction efforts can produce big dividends where citizens, let’s say, can get access to job training that can turn their lives around, or where customers can get easy access to a process by which their complaints are answered when formerly it takes weeks or often there’s no response at all.