I First Person Firsthand lessons from experienced managers How in the world, I wondered, do we get bureaucrats to strive for "continuous improvement^" They invented the status quo! Quality Comes to City Haii by Joseph Sensenbrenner Government may be the biggest and the oldest industry in the world, but tbe statement "I'm from the government, and I'm here to help you" is universally considered a bad joke. Increasingly, people don't believe that government knows how to belp or wants to bother. They find concepts like "total quality," "customerdriven," and "continuous improvement" foreign to everything they know about what government does and how it works. They wish government would be more like a well-run business, but most have stopped hoping it ever will he. Today, fortunately, a new channel bas opened through which business and progressive husiness practices can have an impact on the cost, efficiency, and overall quality of government. This channel is the quality movement-tbe rapidly growing acceptance of the management prac64 tices tbat W. Edwards Deming developed and persuaded Japanese industry to implement after the end of World War II. As more and more U.S. industries work witb and profit from Deming's techniques, we have to wonder whether it's not possible to develop a public sector that offers taxpayers and citizens tbe same quality of services they have come to expect from progressive businesses like Motorola and Westinghouse. My answer to that question is yes, it is possible. Moreover, while I was mayor of Madison, Wisconsin from 1983 to 1989, I took several steps to make it happen. Mayor of Madison, Wisconsin from 1983 to 1989, Joseph Sensenbrenner is now a consultant on the application of total quality management in the public sector. I acted in response to a changing climate. Just as major corporations like Ford and Harley-Davidson have bad to improve or perish, so too the marketplace now confronts governments witb shrinking revenues, taxpayer revolts, and a new insistence on greater productivity and better services. "People are making comparisons," says one quality expert. "They can call American Express on Monday and get a credit card in tbe mail by the end of the week, but it takes six weeks to get a lousy driver's license renewed. You migbt not think the motor vehicles division competes witb American Express, but it does in tbe mind of tbe customer." Welcome to Madison These problems came alive for me when I was elected to the first of three two-year terms as mayor of HARVARD BUSINESS REVIEW March-April 1991 Madison in 1983. As state capital and home of the University of Wisconsin, Madison smolders politically even in quiet times. Although life had returned to relative normalcy after the upheavals of the Vietnam War, government was still on the defensive. The Reagan revolution was cutting sharply into revenues (the city lost 11 % of total revenues between 1983 and 1989) even as our service area continued to grow and costs continued to rise. Madison's property-tax base is constrained in two ways - naturally hy the city's location on a narrow isthmus, artificially by the volume of land and buildings devoted to the university and to county and state government. By 1983, we were taxing taxable property nearly to its limit and beginning to turn to controversial measures like ambulance fees to make up the difference. Budget hearings were hecoming an annual nightmare. The people of Madison did not want their services cut or their taxes raised. In their view, city services were in a steady decline already, even as they paid more for them. From what I could see, in many cases they were right. But I felt boxed in. My previous managerial experience - as the governor's chief of staff and as deputy state attorney general - was nearly useless in getting a handle on the mixed operations of municipal government. As deputy state attorney general, I had run an office where I was an expert on every aspect of the work, and I practiced a good deal of participatory decision making. As mayor, I could not run an executive office, deal with the city council, and also be an expert on lawn cutting, snow removal, and motor vehicle maintenance. And it was out there on the front lines that systems were breaking down. For example, a 1983 audit disclosed big problems at the city garage: long delays in repair and major pieces of equipment unavailable for the many agencies that used Madison's 765-unit fleet of squad cars, dump trucks, refuse packers, and road scrapers. The audit gave a depressingly vivid and complete picture of the sympHARVARD BUSINESS REVIEW March-April 1991 toms of the problem (for example, vehicles spent an average of nine days in the garage every time they needed work), but it offered no clear explanation of why things were so bad. Like other managers in similar situations, I felt inclined to call in the shop boss, read him the riot act, and tell him to crack the whip and shape up his department. Just about then, an assistant in my office suggested I attend a presentation by W. Edwards Deming, the then 82-year-old statistician and guru of the Japanese industrial miracle. Deming's approach is no doubt familiar to many businesspeople, but it was unlike anything I had ever heard. It sounded like common sense, but it was revolutionary. American industry, he said, had been living in a fool's paradise. In an ever-expanding market, even the worst management seems good because its flaws are concealed. But under competitive conditions those flaws become fatal, and that is what we are witnessing as U.S. companies lose market share in one area after another. If there was a devil in the piece, Deming said, it was our system of make-and-inspect, which if applied I Applied to toast, the government approach to quality wouid go, "You burn, 111 sorope." to making toast would he expressed: "You burn, I'll scrape." It is folly to correct defects "downstream"; the critical issue, he said, is to get your "upstream" processes under control so you can guarantee the outcome every time. To do this, an organization must create a culture of quality; it must master proven quality techniques. Most important, it must define quality - first, as continuous improvement in pleasing customers and second, as reducing the variation in whatever service or product it offers. As Deming described tbe organizational changes required to produce his culture of quality, I found myself thinking that this was, perhaps, what I had heen searching for. It also occurred to me that it would take a revolution to get it. Autonomous departments are the virtual essence of government bureaucracy, so how was I going to implement Deming's command to break down harriers? "Cover your ass" and "go along to get along" are ancient tenets of the civil service, so how was I going to follow Deming's admonition to drive out fear and license more workers to solve problems? Most daunting of all was his command to install continuous improvement not just as a goal but as a daily chore of government. My God, government invented the status quo! And what were the voters going to think of "quality" as a cost item in a city budget? The First Street Garage These were some of my thoughts as I headed back to city hall. But I had another: there was nowhere else to go. 1 had already seen that management by objective and threats of audits were not going to produce change. I might as well try it, I thought. And the city garage, where the rubber hit the road, seemed a likely place to start. The manager and mechanics at the First Street Garage were surprised to see the mayor and a top assistant show up to investigate their problems; most previous mayors had shown their faces only when they needed a tankful of gas. Over the next few years I learned again and again the crucial importance of the top executive getting personally and visibly involved on the battlefield of hasic change. For the most part, the crew at the garage were doubters. But when I met Terry Holmes, the president of Laborers International Union of North America, Local 236, I looked him squarely in tbe eye, pledged my personal involvement, and confirmed his membership's central role. He agreed to participate. We formed a team and gathered data from individual mechanics and from continued on page 68 65 FIRST PERSON the repair process itself. We found thai many delays resulted from the garage not having the right parts in stock. We took tbat complaint to the parts manager, who said the problem with stocking parts was that the city purchased many different makes and models of equipment virtually every year. We discovered tbat the fleet included 440 different types, makes, models, and years of equipment. Why tbe bewildering variety? Because, the parts manager told us, it was city policy to buy whatever vehicle had the lowest sticker price on tbe day of purchase. "It doesn't make any sense," one mechanic said. "Wben you look at all tbe equipment downtime, the warranty work that weak suppliers don't cover, tbe unreliability of cheaper machines, and the lower resale value, buying what's cheapest doesn't save us anything." Our next trip was to the parts purchaser. He agreed witb the mechanic. "It would certainly make my job easier to have fewer parts to stock from a few reliable suppliers. But central purchasing won't let me do it." Onward to central purchasing, where we heard this: "Boy, I understand what you're saying hecause I bear it from all over the organization. But there's no way we ean change tbe i We found one chronio service failure whose cause and solution were well known - but no one ever fixed it. policy. The comptroller wouldn't let us do it." Enter tbe comptroller. "You make a very strong ease," he admitted. "But I can't let you do it because the city attorney won't let me approve such a thing." On to tbe city attorney. "Why, of course you ean do that," be said. "All you need to do is write the specifications so they include the warranty, the ease of maintenance, tbe availability of parts, and 68 the resale value over time. Make sure that's clear in advance, and there's no prohlem. In fact, I assumed you were doing it all along." Tbis was a stunning disclosure. Here was a major failure of a city service wbose symptoms, causes, and solution were widely known but that had hecome ehronie hecause government was not organized to solve it. No doubt there are dozens of large corporations that have made similar discoveries about their own bureaucracies. (Indeed, Deming would not he famous in tbe business world if this were not the case.) But for me - and, I later learned, for local governments all over the country and the world - tbis kind of discovery was eye-opening. This first exercise confirmed point after point of Deming's paradigm and suggested strongly that what worked for husiness would work for govemment. To hegin with, tbe source of tbe downtime problem was upstream in the relationship of the eity to its suppliers - not downstream where tbe worker eouldn't find a missing part. The problem was a flawed system, not flawed workers. Seeond, solving the problem required teamwork and breaking down barriers between departments. The departments were too self-contained to be helpful to one anotber, and helpfulness itself - treating the people you supplied or serviced as "customers" - was an unknown concept. Third, finding the solution meant including frontline employees in problem solving. The fact of being consulted and enlisted rather than blamed and ignored resulted in buge improvements in morale and productivity. When we actually changed our purchasing policy, cutting a 24-step process with multiple levels of eontrol to just 3 steps, employees were stunned and delighted tbat someone was listening to tbem instead of merely taking them to task. They were so enthusiastic, in fact, that they hegan to research the possihle savings of a preventive maintenance program. Tbey discovered, for example, that city departments did not use truck-bed linings when hauling corrosive materials such as salt. Mechanics also rode along on police patrols and learned that squad cars spend much more time at idling speeds tban in the higb-speed emergencies mechanics bad imagined and planned for in tuning engines. Various eity departments - streets, parks, police - helped the First Street mechanics gather data, and we ultimately adopted their proposals, ineluding driver cheek sheets for vehicle condition, maintenance sched- I We cut vehicle turnaround time fronn nine days to three days and saved $715 for every $1 invested in improvennents. ules for eaeh pieee of equipment, and an overtime budget to cut downtime and make sure preventive maintenance work was done. The result of these ehanges was a reduction in the average vehicle turnaround time from nine days to three and a savings of $7.15 in downtime and repair for every $1 invested in preventive maintenance - an annual net savings to the city of Madison of ahout $700,000. The Second Wave Despite the satisfying outcome of this first foray into publie-sector quality, I understood that we were far from having enough knowledge and experience to develop a program for the entire city work force. I attended a seeond, four-day seminar with Deming, and I enlisted the support of university faculty and loeal and national quality consultants. I also helped found the Madison Area Quality Improvement Network and recruited academic, professional, and corporate members. Today it is the largest and most active community quality council in the world. In the years that followed, corporate and academic experts provided the eity with in-kind .services that were worth hundreds of thousands of dollars. HARVARD BUSINESS REVIEW March-April 1 went about setting up a formal quality and productivity (QP) program that would eventually function citywide. I hired a full-time quality and productivity administrator - the first sucb public-sector position in the eountry - even though that meant giving up one of the four policy positions on my staff. 1 also organized a QP steering committee of top managers to direct the effort. Originally, the committee itself was a throwback to an older, hierarchical tradition: all top managers. Within two years, it replaced eight of its own original eleven members with two union presidents - Firefighters and AFSCME - three middle managers, two of our most enthusiastic frontline workers, and the president of the city council. The steering committee issued a mission statement that envisioned employee involvement, customer input, continuous improvement, creativity, innovation, and trust. On a more practical level, it said that the hallmarks of quality in Madison city govemment would he excellence "as defined hy our customers," respect for employee worth, teamwork, and data-based decision making. We called this foursquare commitment the Madison Diamond. Finding the lofty words was tbe easy part; now we had to live up to them. The first task was to recruit the initial cadre of what we hoped would become a quality army We set out to identify pioneers in several city departments - managers and frontline employees with the imagination and motivation to lead tbe way. Their most important characteristic, 1 found, regardless of political philosophy or training, was a strong ego: the capacity to take responsibility for risks, share credit for sueeess, and keep one eye on the prize. We found enough of these people to begin a new round of experiments like our suecessful First Street prototype. This second wave included projects in the streets division, the health department, day care, and data processing. We expanded the lesson we'd learned ahout purchasing at the First Street Garage to create a citywide "Tool Kit" program HARVARD BUSINESS REVIEW March April 1991 that got workers directly involved in choosing the most cost-effective tools and materials for their jobs. City painters picked the most durable, long-lasting paints for city housing projects, for example, and police officers chose the equipment they would be using every day in their patrol car "offices." Selections had to be made on the basis of hard data, however, so mnning the comparisons became quality projects for the employees. In the health department, the challenge was simply to give citizens quicker, hetter answers to their questions about clinies and programs. Employees began to sample and analyze the questions that were coming in, then on the basis (if that data they set up briefings for phone receptionists so they eould answer most questions directly. They also created a clear system of referrals for more complicated requests. Follow-up studies showed considerable improvement in the department's level of "customer" satisfaction. By gathering and analyzing data, the day care unit shortened its waiting list for financial assistance hy 200 names, while data processing customized and thus greatly improved its relations with internal customers. ^ I expected opposition from ;, voters, city council or our 14 unions. But the resistance canne from bureaucrats. As with our first experiments at the garage, the second wave of quality initiatives worked minor wonders in productivity and morale, and they met with little resistance - so long as the projects stayed small. But as the program grew to involve more departments and demand more time of managers, opposition began to emerge. 1 bad expected problems from structural sources: the 14 different unions that represented 1,650 of Madison's 2,300 employees,- tbe strong civil serviee system that included and protected all of tbe city's mid-level managers and most of Its department heads; the 22-member, nonpartisan city council (meaning no partisan bloc for the mayor's program); and Madison's "weakmayor" system of government that invested little authority in the chief exeeutive. But it turned out that the city council supported the program, and the unions grew increasingly helpful, The real opposition was not structural but bureaucratic. There were individual mangers wbo could not tolerate the idea of bringing their employees into decisions or who resented taking time to reassess tried and true procedures. There were employees who scorned the program as faddish and who looked on enthusiastic colleagues as management finks. There were cynics who tried to exploit the program hy packaging their pet projects as QP initiatives, and I had politieal opponents in a few departments who tried periodically to entice some reporter into prohing the "QPboondoggle." Most surprising and disappointing to me were the harriers ! discovered between work units, including even units in the same department. One department head told bis middle managers that be expeeted them to deal with quality prohlems while he, as he put it, "protected" the department from the rest of city government! He could hardly have devised a better way to nip eooperation in the hud and help problems multiply. The most unsettling indication of how far we had to go came early in the program when all the individual team members in our second wave of projects independently resigned. They felt their managers, who should have been giving them guidanee and support, were simply cutting them adrift and thus setting them up for failure and hlame. For their part, the managers believed that all they had to do was make an initial statement of support and invite subordinates to "call if you have a problem." Employees, of course, took this to mean, "I expect you to take care of it." 69 FIRST PERSON "Cargill -1 haven't come to the punch line yet!" I addressed this problem by discussing it directly with all tbe people involved. I then restructured our procedures to require specific work plans and regular, scheduled meetings between tbe frontline project teams and their managers. Contacts had to stop being intrusions into a manager's schedule. They had to hecome predictable exchanges of information and assistance to which team members were entitled. Internal and External Customers The parts-purcbasing and preventive-maintenance improvements I described at the First Street Garage are examples of projects in one department that belped other departments do their jobs more efficiently. Another example involved trash collection workers analyzing tbe pattern of injuries in their own work, weighing and measuring the refuse put out at the curb hy residents, and studying the lifting requirements of the refuse-packer trucks. Their proposals for restrictions on the size of bundles and better design of new trucks reduced neck and lower back injuries, saved lost time, and made working conditions safer, at no extra cost to the city. 70 In another project, seven city departments tbat used maps in their work got together, identified duplications of effort, and created a computerized database and a uniform map bank available to all departments as well as to Madison's private gas and electric utilities. Long lines of trash-filled trucks at tbe city's recycling plant gave rise to another project. Employees clocked truck arrival times, noted how they clustered, and proposed a staggered schedule of trasb collections tbat would cut waiting time. This proposal not only made the system more efficient; it also saved the money we were thinking of spending on an expanded dumping floor. But until the data had heen gathered, no manager was in a position even to consider such a solution. In projects that serve internal customers, government workers benefit directly at the workplace while taxpayers benefit from cost efficiencies and more smoothly functioning institutions. But such initiatives rarely make headlines, which go instead to projects that serve external customers and visibly change public-service delivery. In Madison, tbe most celebrated example was the creation of the experimental police district. During the late 1960s and early 1970s, violent antiwar demonstrations turned Madison into a kind of battleground. At one point, the governor called in the Wisconsin National Guard to secure tbe university campus. The harsh tactics used to put down these demonstrations left much of the community witb a distrust of the police. The officers themselves felt battle scarred and alienated from the city they were hired to protect. When a young police chief named David Couper arrived in 1972 witb newfangled philosophies of conflict management and citizen service, he was assailed with a series of grievances and lawsuits from veterans on the force. Couper, a former marine, responded to these tests with what he now calls a typical military approach: "You'll be nice to citizens, or you'll have hell to pay!" Tbis got him nowhere, of course, and after several frustrating years he took a sabbatical, rethought bis management approach, and familiarized bimsclf with Deming's quality gospel. He then decided, as he puts it, "to run tbe department for the 95% who did tbeir jobs well, rather than write tbe ruLs for the 5% who were difficult." He identified progressive officers interested in transforming the department and rebuilding community confidence. Together they created an elected employee policy-making council, a committee to look at the department's future, and a police mission statement tbat made peacekeeping the department's primary role and put law enforcement second. This was a risky move, considering the probable reaction if people thought tbe police were neglecting detection and apprehension, hut the new strategy had hroader implications. It meant the department could deploy resources to work on the underlying causes of crime, interact with schools and neighborhood organizations, develop relationships with minority and student leaders, and put a higher priority on outreach. Most important, perhaps, it created the "constancy of purpose" that Deming has always put first on bis list of techniques for achieving total quality. continued on page 74 CARTOON BY GEORGE DOLE FIRST PERSON In 1986, Couper and 50 police volunteers decided to test tbe new mission statement. Tbey believed that a decentralized police district with a neighborhood headquarters would lead to more effective peacekeeping by giving better service to residents and by encouraging officers to "adopt" the neighborhood and vice versa. Police precincts were an old idea, but this was different: officers in the district would elect their own captains and lieutenants, determine their own staffing and work schedules as a team, and network with neighborhood associations to set law-enforcement priorities. Having worked witb Couper for 14 years, tbe union bad learned to trust bim, and it accepted the idea. Several months of surveys and data analysis resulted in the Madison Experimental Police District on the city's South Side, with its station house located in the aldermanic district of a relatively junior member of the city council. Because the officers had done tbeir homework, they were ahle to nip In the bud an effort by the council president to locate tbis political plum in her own ward. Tbey could sbow that their proposed location provided the best service to priority areas and populations, including the elderly, as well as the fastest access to all parts of the district. Soon, South Side residents were seeing their police on tbe streets, at neighborhood meetings, and at their doorsteps to interview them ahout their concerns. Home burglaries decreased 28% between 1986 and 1989, while the rest of the city saw a 15% increase. Otber statistics were equally impressive. Dollar savings included the reduction of overtime to 200 hours for tbe whole experimental district in 1988, eompared with 980 hours for an equivalent number of officers from the central office. This savings was achieved after officers in the district ran a study of the kinds of calls tbat kept police on duty beyond tbeir regular shifts. They discovered that a high percentage of such calls were not urgent, so they arranged with dispatchers to put tbese calls on a "B" list if they came in less than 45 minutes before the end of a shift. When new officers 74 came on, they would take those calls first and attend to them at regular pay. Although this triage meant some delay in police response for some police customers, I never received a single complaint about it. Tax dollars were saved, and surveys showed that citizens were satisfied with police service and tbat 85% of officers in tbe special district bad bigher levels of job satisfaction tban in their previous assignments. Remaking City Government As the business reader knows, Deming-style quality is not a quick fix or a magic bullet; it is a top-tobottom revolution in the definition of "business as usual" that takes years to accomplish. There's no reason in the world to think it can be done more quickly or easily in government than in industry. But in Madison, we saw encouraging gains in just a few years. Some wary union leaders and members turned out to be among my strongest backers. Terry Holmes, the tough master mechanic and longtime union president, became a staunch ally. "Before the quality program, all we did was put out fires," he once told me. "Morale was low. The message from management was, 'You don't know wbat you're talking ahout. Do as you're told."' Once the program was well under way, however, the message became, "You and your teammates understand your work better than management ean. Tell us how to help you do it better." Some managers who were initially highly skeptical became advocates of the program over time. Speaking of his own subordinates' quality team, one department bead told me, "I bad a 'show-me' attitude for three years and they finally showed me." In 1987,1 offered my five best managers merit raises from a special pool of money I had set aside for recognition. To my astonishment, all five refused the money. To single them out as heroes, they said, would be setting up a star system and, by implication, denying credit to the efforts of their teams. Wbat people wanted and needed was regular, daily feedback about the things they were doing well, pats on the back, notes from the CEO or, in this case, the mayor. They were performing as teams and they wanted to be recognized as teams. We made immense progress in tbe six years I was in office. By the end of 1988, we had trained 75 team leaders (who have a stake in the outcome of team decisions and who lead team meetings) and facilitators (who come In 198Z I Offered merit raises to my five best managers. All five turned them down - and for good reason. from other divisions or departments, have no stake in decisions, and take special responsihility for maintaining group process). We had also developed nearly two dozen projects and produced good enough results to warrant inviting all of the city's departments to apply for what we called "transformation status." Transformation status meant a long-term, departmentwide commitment to the new management practices, including continuous quality improvement and training for all employees in quality-improvement skills and data-gathering teehniques. The first two departments to accept the challenge were the police department and the Madison metro bus system. A year later, tbe streets division and the health department joined them. When I left office in 1989, Madison city departments were running between 20 and 30 quality improvement projects at a time, five agencies were in transformation, tbe city was giving training in quality to every municipal employee, joint efforts were under way with several state agencies eager to follow our lead, and eity workers left and rigbt were continuing to invent service improvements for internal and external customers. If I ever had questioned the feasibility of applying Deming's principles to public-sector services, my doubts had long since vanished. HARVARD BUSINESS REVIEW March-April 1991 In politics as in business, however, nothing is simple. On the plus side, my quality program was streamlining Madison city government, and though I insisted on giving credit to the people who earned it - producing political capital for me. In my 1989 reelection campaign, I received the rare comhined endorsement of the unions representing police officers, sheriff's officers, firefighters, and streets maintenance workers. Local papers praised my efforts to modernize puhlic-sector management, and the nationwide State and Loeal Government Labor-Management Committee, organized by AFSCME, tbe AFL-CIO, and tbe US. Conference of Mayors, singled out Madison's accomplishments in a television documentary tbat was broadcast across tbe country on Lahor Day. But this recognition was not enough to win me a fourth term. Other political factors were more compelling. There was my incumhency itself - no Madison mayor had heen elected to a fourth term in more than 50 years. There was the reemergence of a popular mayor of yesteryear in the field ot candidates. And, most fatefuUy of all, there was a major money referendum on the ballot. The issue was a lakefront convention center expected to cost $46 million. I believed the center was important for the eity; many others did not. I campaigned hard for the center as well as for my reelection, and we hoth went down to defeat by nearly identical margins. I take consolation in tbe fact the election was not a referendum on the quality and productivity program. To the degree tbat QP played a role, it was an asset, and even though I lost, I believe the culture of quality that my administration introduced into city government will survive, maybe even flourish. The city departments tbat embraced it and saw its power are still active believers, and my successor bas given QP his cautious support. Implementing a Deming quality strategy is not simply a matter of adopting a new set of slogans or a new accounting system. It's a matter of radical restructuring - part sociology, part systems theory, and part statistics - all aimed at liberating human ingenuity and the potential pleasure in good work that lie at least partially dormant in every organization. It may appear that corporations are in a stronger position to implement Deming's methods than are governments. Market forces exert great pressure on businesses to undertake fundamental change for the sake of efficiency and survival. But governments today are under equally ferocious pressure to economize. Deep federal deficits, state and local budget-balancing requirements, and the trials of finding revenue in times of economic contraction or slow growth will make life challenging for state and local government managers for years to come. My experience in Madison convinces me that quality-oriented businesses can contribute to keeping the public sector strong and efficient. As taxpayers, as providers of goods and services to government, and as community citizens, businesses bave a direct interest in lending a hand. If businesses insist on quality, offer tbeir expertise, share their training programs with government executives and team leaders, and search for quality programs to translate into puhlic operations, the payback can be substantial. Who knows - we may actually get governments that are there to help us. V Reprint 91208 "Sayyyyy... do you know anything about budgets} CARTOON BY MORT GERBERG 75 Harvard Business Review Notice of Use Restrictions, May 2009 Harvard Business Review and Harvard Business Publishing Newsletter content on EBSCOhost is licensed for the private individual use of authorized EBSCOhost users. It is not intended for use as assigned course material in academic institutions nor as corporate learning or training materials in businesses. Academic licensees may not use this content in electronic reserves, electronic course packs, persistent linking from syllabi or by any other means of incorporating the content into course resources. 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