The PE Playbook: What DOGE Can Learn About Efficiency Without Sacrifice

by / ⠀News / January 3, 2025
The PE Playbook: What DOGE Can Learn About Efficiency Without Sacrifice
The PE Playbook: What DOGE Can Learn About Efficiency Without Sacrifice
The announcement of President-elect Donald Trump’s Department of Government Efficiency (DOGE) has both sparked national debate and placed a spotlight on the topic of government spending. Surprisingly, the new department, to be led by Elon Musk and Vivek Ramaswamy, has garnered bipartisan buzz. Senator Bernie Sanders chimed in with unexpected support for trimming waste within the Pentagon. As more join the debate, it’s become clear that while the methods proposed by DOGE leaders may be controversial, the issue behind the proposed department has made one thing apparent: efficient spending in government isn’t a partisan problem but a national one. As the federal government gears up for a major operational transformation, it may be worth examining the playbook followed by those in private equity (PE), including titans such as Carlyle, KKR, and Blackstone. These firms have honed their cost-cutting methodologies to improve profitability without compromising operational integrity. Some of the world’s leading PE firms have achieved these goals by outsourcing cost-cutting procedures to third-party specialists such as SIB, a firm that has helped clients cut over $8 billion in costs.  The combined techniques of targeting inefficiencies, strengthening supplier relationships, and implementing sustainable solutions could provide a powerful framework for the DOGE initiative. By borrowing strategies that PE firms have used to deliver billions in savings, the government might avoid a lengthy reorganization process and instead fast-track its path to effective cost management.

Spending Inefficiencies Within the Federal Government

The federal government has long struggled with inefficiencies in running and scaling its various offices and operations. Improper payments from federal programs have totaled nearly half a trillion dollars over the past two years alone. However, the challenge in restructuring isn’t only about cutting costs; as DOGE moves forward with its stated mission, it will be essential to do so without sacrificing essential services or destabilizing the workforce. This is where the private equity model can be used as an example to follow. Instead of pursuing drastic measures that create headline-grabbing savings but inflict long-term damage, firms like Carlyle, KKR, and Blackstone focus on sustainable efficiency, which delivers better returns for their investors in the long term. The federal government, which has both a major workforce and taxpayers to serve, could learn from this philosophy.
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The Efficiency Model of Private Equity

Private equity firms are no strangers to the pressures of delivering results. Their business model depends on extracting value from portfolio companies while preserving — and often enhancing — their operational integrity. Strategies within the PE playbook include targeting fixed costs, data-driven decisions, collaborative vendor relationships, sustainability over shock, and unbiased expertise. By targeting fixed costs, firms like KKR have scrutinized expenses such as supply chain management to drive efficiency and profitability. One example of this is how KKR’s operational improvements across portfolio companies have delivered significant results by reducing waste without compromising quality. Data-driven decisions are emphasized by firms such as Carlyle, which has leveraged data and industry benchmarks to reveal inefficiencies and confirm that every decision is backed by measurable data points. Maintaining collaborative relationships with vendors has been integrated into Blackstone’s strategies, in which the firm works with suppliers to find mutually beneficial solutions. This approach encourages better service delivery while strengthening the relationship over time. Emphasizing sustainability over shock means avoiding the slash-and-burn approach and prioritizing long-term gains. This treats efficiency as an ongoing process, not a singular event. Unbiased expertise has long been obtained in the private equity world through the use of external consultants who bring fresh perspectives and specialized knowledge that in-house teams may lack. 

What PE Can Teach DOGE

The inefficiencies that the federal government faces are not unique to the private sector; many large-scale organizations struggle with the challenges of scaling operations. This is where the PE playbook may be relevant. By outsourcing cost-cutting initiatives to third-party consultants with expertise in procurement and fixed-cost optimization, DOGE can sidestep common pitfalls and achieve sustainable results. In terms of scalability, third-party consultants bring experience working across organizations of all sizes, from lean startups to global enterprises. Therefore, their methods tend to be adaptable, making them good candidates for the unique scale and complexity of federal governments. They also offer greater accountability through the measurable outcomes utilized in the consultant model. In terms of workforce stability, third-party firms tend to focus on reducing waste, rather than workforce reductions. All of these come with a proven track record of private equity-backed cost-cutting. For example, Carlyle’s initiatives have consistently improved operational performance across industries, while Blackstone’s focus on efficiency has maximized value for portfolio companies.
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SIB as an Expert in Cost Reduction

One third-party leader in expense optimization is SIB Fixed Cost Reduction. SIB has collaborated with both private and public sector clients to implement PE-inspired strategies. These strategies include savings for electronics manufacturers and Fortune 100 company shipping optimization. SIB has assisted an electronics manufacturer in reviewing over $2.2 million in annual spending. This process led to a 9% reduction in key spending areas and $405,000 in annual savings, which was achieved without changing vendors or disrupting company operations. In another instance, SIB’s subsidiary, Shipware, partnered with a Fortune 100 company to optimize the company’s shipping costs. This resulted in an $8.5 million reduction in expenditures. Techniques utilized to reach these results included addressing existing contracts and diversifying carriers. Eric Steele, CEO of SIB, gave his thoughts on how SIB would contribute to DOGE’s mission, stating, “Government inefficiency isn’t just a theoretical problem — it’s a trillion-dollar crisis. By focusing on fixed costs like telecom, utilities, and vendor contracts, we’ve been able to achieve meaningful savings for clients without destabilizing their operations.”

Lessons Learned From Workforce Reductions

When Elon Musk acquired Twitter (now X), he made several dramatic executive moves that garnered a lot of media attention. While the large-scale layoffs at Twitter made headlines, they can also serve as a warning of the risks of rapid cost-cutting. As reported by CNN, Musk’s massive reduction of Twitter’s staff prompted increased scrutiny and lawsuits.  Such abrupt workforce reductions could potentially lead to the loss of institutional knowledge, plummeting morale, and reputational harm, which would have serious consequences within government agencies. “The Musk-led DOGE initiative has brought efficiency into the spotlight,” Steele of SIB notes. “But efficiency done poorly — through mass layoffs or disruptive cuts — creates hidden costs that outweigh the immediate savings. Our philosophy is to focus on collaboration and sustainability to ensure long-term success.”
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Seeking Bipartisan Solutions

Although there is no denying the partisan nature of today’s politics, governmental efficiency has become a bipartisan issue, capable of bridging ideological divides. Local governments, which have long been accustomed to operating on lean budgets out of necessity, have already embraced creative solutions to meet both their goals and their budgets. Federal agencies, with much larger budgets and legacy systems, could learn from these smaller-scale victories while using the PE model to scale their operations. Third-party consultants may be the best solution for finding the best way forward. By bringing the best practices of both private and public sectors, they can implement cost-cutting efforts that are both effective and equitable. The adaptable expertise brought by third-party consultants could enable governments to maximize resources, establish better contracts, and deliver better outcomes for their constituents.

An Opportunity for Action

As the DOGE initiative gains more buzz and momentum in the private and public sectors, the federal government faces a pivotal moment. Efficiency has progressed from a headline-grabbing buzzword to a new mandate for long-term success and sustainable solutions. By adopting private equity’s playbook and partnering with third-party consultants like SIB, the government can achieve results without the collateral damage of drastic measures. “Efficiency isn’t optional anymore — it’s essential,” Steele of SIB concludes. “With the right strategies and a focus on sustainable outcomes, DOGE can redefine what efficiency looks like in government and set a standard for decades to come.” With bipartisan support, a clear roadmap, and a commitment to sustainability, DOGE has the opportunity to redefine what efficiency looks like in the public sector. This key moment for the federal government could be the best time for new action. The solutions for a more efficient government are already present and ready to be applied, with no reinvention required.

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About The Author

Educator. Writer. Editor. Proofreader. Lauren Carpenter's vast career and academic experiences have strengthened her conviction in the power of words. She has developed content for a globally recognized real estate corporation, as well as respected magazines like Virginia Living Magazine and Southern Review of Books.

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