BMV Philosophy: Customer to Come First

December 4, 2005

Andrea Neal column for Dec. 7 and thereafter
740 words

INDIANAPOLIS – When Joel Silverman agreed to serve as commissioner of the Bureau of Motor Vehicles, he had a pretty good idea what might lie ahead.

The challenges have been hammered home in recent days by the comments he’s heard from well-wishers: everything from "You’re crazy" and "You have to be nuts" to "I’ll pray for you."

No appointment in the administration of Gov-Elect Mitch Daniels carries as much symbolic significance as Silverman’s. That’s because no department of state government is as much a part of our daily lives. If you own or operate a vehicle in Indiana, and 5.5 million of us do, you have to deal with the BMV.

By appointing the former president and CEO of Galyans to the post, Daniels has implemented a policy change before taking office. He has told citizens that the BMV will not be a government bureaucracy known for long lines and bad service, but a retail business that exists to satisfy customers and shareholders — in this case, taxpayers.

It’s a challenge Silverman relishes because of "the opportunity for me to potentially have an impact on a lot of people."

Unlike some Hoosiers who’d rather get a root canal than conduct business at the BMV, Silverman has no personal horror stories to share, beyond having "had to wait in line for a while."

But he’s well aware of the agency’s reputation and, most recently, headlines of scandal. More than 30 people have been arrested over the past year in a scheme in which hundreds of illegal immigrants fraudulently obtained driver"s licenses and ID cards, some by paying bribes to BMV workers.

The outgoing BMV commissioner, Mary L. DePrez, has been on the job less than a year and deserves credit for moving to weed out bad employees and implement technological improvements. At first glance, Silverman says "the functionality" of computer upgrades now in progress "looks good."

But he says he will need more time to understand the root causes of the agency’s poor service and productivity.

A subcommittee of the Indiana Government Efficiency Commission in a report issued last month noted the absence of performance measurements or even centralized accountability within BMV. The department is unusual in state government because its oversight is shared, and thus diluted, by a chief commissioner and a five-member commission.

The legislature bears responsibility, too. Although the patronage system, in which the party in power got to run the BMV, ended decades ago, license branches have remained a form of pork for lawmakers who have overridden managerial decisions keyed to free market forces such as supply and demand.

As one example, the report noted, "There have been some egregious examples of distorted allocations of resources under the current system of locating BMV branches. Until a few years ago, one of the most populous counties of the state had only one BMV branch while another largely rural county enjoyed three branches." A lawmaker reportedly justified the three rural branches because they served as a social gathering place in his community.

Perhaps more troubling from a financial manager’s point of view: The cost per transaction at the bureau has been steadily and rather dramatically rising. From 1993 to 2003, the number of licensed drivers in Indiana grew 9.1 percent and the number of vehicle registrations grew 15.2 percent. During the same period, agency expenditures went up 231 percent.

Silverman approaches his task realizing that it won’t be possible to duplicate in state government the competitive forces that exist in a retail business like Galyans. In terms of efficiency and service, he sees his competitors as agencies in other states and intends to look carefully for models "rather than recreate the wheel."

Asked why previous calls to reform BMV have not led to enduring change, Silverman points to an "inherent reluctance to take action because there’s a penalty to be paid if it doesn’t work." As a successful businessman who retired young, the 52-year-old Silverman will be immune from career concerns that might discourage others in his position.

Ultimately, his success at BMV will be judged not by the amount of systemic change that occurs but the feedback of customers and shareholders. He bring to the task experience with a tried-and-true formula: "You win at retail by making each and every person who comes into the store happy, one at a time."

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