Governments around the world want to deliver better education, better health care, better pensions, and better transportation services. They know that impatient electorates expect to see change, and fast. But the funds required to meet such expectations are enormous—particularly in the many developed economies where populations are aging and the public sector's productivity hasn't kept pace with that of the private sector. The need to get value for money from governments at all levels is therefore under the spotlight as never before. But cost-cutting programs that seek savings of 1 to 3 percent a year will not be enough and in some cases may even weaken the quality of service.

To address the problem, public-sector leaders are looking with growing interest at "lean" techniques long used in private industry. From the repair of military vehicles to the processing of income tax returns, from surgery to urban planning, lean is showing that it can not only improve public services but also transform them for the better. Crucially for the public sector, a lean approach breaks with the prevailing view that there has to be a trade-off between the quality of public services and the cost of providing them.

Lean basics

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