Calling on Corporate Leaders: Now vs. Then

The White House sponsored a forum last week of about 50 corporate executives to seek  insights about how to successfully transform large organizations.  These included the leaders of Facebook, Southwest Airlines, Microsoft, and Whirlpool. Listening to the videos, it was quite reminiscent of a similar forum, sponsored by Vice President Gore’s reinventing government initiative almost 17 years ago.  While the participants were different, much of the challenges, and the advice, are still the same!

 

White House Forum on Modernizing Government (January 14, 2010).  The forum, held at the White House, was organized around three themes: streamlining operations, transforming customer service, and maximizing the return-on-investment from technology.    The forum broke into five work groups to ensure an interactive dialogue.  Each of the work groups was chaired by a deputy secretary.  At the end, each group came back to the main room with a summary of key points.

Here are video links to each of the five breakout groups:

• Breakout Session: Transforming Customer Service 1
• Breakout Session: Transforming Customer Service 2
• Breakout Session: Transforming Streamling Operations 1
• Breakout Session: Streamling Operations 2
• Breakout Session: Maximizing Technology Return on Investment

The final summary session, lasting 30 minutes, was concluded by chief performance officer Jeff Zients, who said there would be four “next steps:”

• The best ideas from the forum would be posted on the White House site and anyone could comment or expand on them.
• OMB would issue a report summarizing key findings and develop an implementation plan by February 15, with a timeline, milestones, key challenges and ownership of initiatives
• OMB would provide implementation assistance, including informal networks with the forum participants
• Each of the 50 or so forum participants would be called for individual de-briefs on their advice and insights.

White House blogger Jesse Lee did a good job of summarizing the 22 key points.  One that sounded like a direct lift from reinvention was: “Engage managers in customer service.  Require executives to put themselves in customer shoes by calling into call centers as customers, taking customer service calls directly, and consistently signaling that they pay attention to customer feedback.”

Summit on Reinventing Government (June 25, 1993).  Vice President Al Gore led a day-long summit at Congress Hall, in Philadelphia, PA, on “Creating a Government That Works” to examine ways to make government work better and cost less.  Its purpose was to examine how the federal government could learn from cutting-edge businesses and state and local governments that have incorporated innovative ways of improving their operations.  These included leaders of General Electric, Motorola, and Harley-Davidson.  Afterwards, Gore identified several key approaches to transformation and six take-away lessons:

How do we change culture? Part of it lies in liberating agencies from the cumbersome burden of over-regulation and central control. Part of it hinges on creating new incentives to accomplish more through competition and customer choice. And part of it depends on shifting the focus of control: empowering employees to use their judgment; supporting them with the tools and training they need; and holding them accountable for producing results.

 

Following are six steps, identified by participants in the Philadelphia Summit:

 

• First, we must give decisionmaking power to those who do the work, pruning layer upon layer of managerial overgrowth.
• Second, we must hold every organization and individual accountable for clearly understood, feasible outcomes. Accountability for results will replace “command and control” as the way we manage government.
• Third, we must give federal employees better tools for the job–the training to handle their own work and to make decisions cooperatively, good information, and the skills to take advantage of modern computer and telecommunications technologies.
• Fourth, we must make federal offices a better place to work. Flexibility must extend not only to the definition of job tasks but also to those workplace rules and conditions that still convey the message that workers aren’t trusted.
• Fifth, labor and management must forge a new partnership. Government must learn a lesson from business: Change will never happen unless unions and employers work together.
• Sixth, we must offer top-down support for bottom-up decisionmaking. Large private corporations that have answered the call for quality have succeeded only with the full backing of top management.

Improving the Presidential Transition

On Wednesday, January 13, approaching the first year anniversary of the Obama administration, the Partnership for Public Service will release a report entitled, Ready to Govern: Improving the Presidential Transition, on improving the presidential transition. Based on exclusive interviews with key transition officials from both the Obama and McCain campaigns, and the Bush White House, this report examines the transition beginning early 2008 through the President’s first year in office. 

The report offers recommendations to the White House, campaigns and Congress include making major fixes to  the Presidential Transition Act, so the next president can be ready to govern on day one. According to the Partnership, Ready to Govern will be available at ourpublicservice.org. 

At the report release, a panel, including Martha Kumar, Director, White House Transition Project, will discuss the report’s findings and recommendations.  Martha outlined some of her insights on the  most recent presidential transition in the latest edition of the Center’s  Fall/Winter 2009 issue of The Business of Government Magazine , in an article entitled, Government Security Initiatives with an Impact on the Transition.

Here’s an excerpt:   

Martha Kumar, Director, The White House Transition Project

One of the aspects that makes the 2008-2009 transition such a well thought out one is the groundwork laid by government actions taken to enhance national security. The Congress and the president viewed a smooth transition a national security necessity and both branches took action on issues related to getting a new administration up and running as soon as possible. The impetus for much of their preparatory work was the events of September 11, 2001. The attacks on the United States that day had a substantial impact on the shape of the 2008-2009 transition. In two particular subject areas discussed here, the National Commission on Terrorist Attacks Upon the United States [the 9-11 Commission] recommendations shaped the course of the 2008-2009 presidential transition. Security clearances for administration nominees and contingency crisis plans are areas where Congress and the administration took action.

The focus of this article is the thoughts and reflections of those involved in the most recent presidential transition on these two issues: security clearances for administration nominees and contingency crisis plans. Developed through interviews I conducted with those active in the transition, the piece describes the actions officials took and their thoughts about what happened during the pre-presidential period in preparing for a smooth handoff of power.

The 2008-2009 transition taught us that all benefit when a president directs early and thorough preparations for the change of administrations.  At the direction of President Bush, Joshua Bolten guided a government-wide effort to define and then meet the needs of the new administration. Presidents today cannot afford to let preparations wait until after the election. Through legislation, executive direction, and individual effort, the Congress, President Bush, and career and political officials in the departments and agencies all worked hard at preparing the next president and his team for the responsibilities of governing, especially in the national security area. 

Download a copy of the article: Government Security Initiatives with an Impact on the Transition

Listen to an interview with Martha Kumar on presidential transitions: The Business of Government Hour

Join us next week for a Special Edition of The Business of Government Hour  as Martha will be our guest and provide more insights on the last presidential transition.

Providing healthcare to military personnel and their families

Profile of Rear Admiral Christine Hunter, M.D. Deputy Director, TRICARE Management Activity

The provision of healthcare services is a critical mission for the U.S. Department of Defense (DoD) and its military health system (MHS). It goes to the core of military readiness. From frontline combat support hospitals to its TRICARE program, the MHS provides care to its troops and their families on multiple fronts. “The [MHS], the entire system,” explains Rear Admiral Christine Hunter, M.D., deputy director, TRICARE Management Activity, “exists to provide health services in support of our nation’s military mission. We say ‘anytime, anywhere,’ and more recently, ‘whatever it takes, wherever it takes us.’” 

With close to 9.5 million in beneficiaries and a budget in the tens of billions of dollars, Hunter manages a TRI CAREprogram that plays an important role in having an MHS that is fully integrated. The centerpiece of the MHS is the military hospitals and clinics “Complementing the direct care system,” notes Hunter, “is a family of contract-type products in which we use civilian medical resources to provide care, either where military care is not accessible, where we are not physically present, or where there are additional services that we would like to provide to enhance our benefit program.” TRICARE is the healthcare program serving active duty service members, National Guard and Reserve members, and retirees as well as their families, survivors, and certain former spouses worldwide. 

Recently, TRICARE Management Activity selected contractors for its Third Generation (T-3) managed care support services contracts. “We divide the nation into three regions—north, south, and west. Contractors bid a package of healthcare and services that will complement our military direct care system in those areas and take care of patients who don’t live in close proximity to a military base or facility,” explains Hunter. These new contracts are set to focus on a more holistic pay for prevention approach, improved disease management, greater patient choice, improved information exchange, and financial incentives to mitigate fraud, waste, and abuse. “The goal,” says Hunter, “is to provide the best care and services, access whenever and wherever you need it, and with this new generation of contracts, to really focus on health and prevention.”  With the increase in American life expectancy, our healthcare focus has turned from acute diseases to the managing of chronic illnesses. As a result, the focus on prevention and wellness has taken a central role. “We believe that the medical home model is one way to achieve what we call the ‘quadruple aim’ in healthcare,” says Hunter. She is referring to the Institute for Healthcare Improvements’ Triple Aim, which seeks to improve patient health, enhance the patient experience; and encourage responsible management of the cost. MHS adds readiness to the Triple Aim. “We say ‘readiness plus the Triple Aim gets to the quadruple aim.’ This quadruple aim can be effectively achieved under a medical home model, where a patient has access, continuity of care, a sustained clinical relationship, and coordinated care,” says Hunter. Patients are more engaged in their personal health and care, working with their clinicians to manage chronic conditions and enhance well-being. 

The stress of military life can take its toll on the well‑being of service members and their families. Recently, the DoD introduced the TRICARE Assistance Program (TRIAP), which leverages evolving telecommunication technologies to bring behavioral healthcare closer to TRICARE beneficiaries. “Our beneficiaries and their families have been everywhere around the world, subject to the stressors of a brisk operational tempo and repeated deployments that take their toll on both the individual and the family. We’ve encouraged them to come forward if they need counseling, need someone to talk to, are suffering any consequences of what we’ve asked of them or what they’ve given to their country.” Hunter acknowledges that there is a stigma associated with asking for such help. “Many have been reluctant to do so. To walk through the door of a clinic labeled ‘mental health’ is sometimes seen as a sign of weakness.” TRIAP takes it to your home computer. “You can dial in on the web,” explains Hunter, “If you have a web cam, one of the commercial technologies like Skype, then you’re able to access a counselor 24‑7, 365.”   

Rear Admiral Hunter faces many challenges in her new role. Improving beneficiaries’ health and satisfaction is front and center. “I’m a student of Admiral Mike Mullen. When he was chief of Naval Operations, he talked about listening, learning, and leading—in that order—and doing that every day as a leader. His words echo in my mind. I need to learn what these individuals need, what their families need, and what we can provide. My role is to integrate it. It is also to inspire those who report to me to learn more, do more, and be more creative with the tools we have.” Framing her leadership approach is a credo of optimism, opportunity, and innovation: “You’re faced with many challenges, but every challenge brings with it an opportunity to learn and combine the talents of the best of the best. We have the best of the best in the [MHS].”

Listen to:  The Business of Government Hour Interview with RADM Hunter

Managing a responsive supply chain in support of U.S. military operations

Profile of Vice Admiral Alan Thompson, Director, Defense Logistics Agency

Though formally established in 1961, the U.S. Defense Logistics Agency (DLA) can trace its roots to World War II. Since its inception, DLA has played a significant, and ever increasing, role in support of U.S. defense operations around the world—meeting the needs of the warfighter. “It was formed,” explains Vice Admiral Alan Thompson, director, DLA, “to consolidate similar logistics functions from each of the military services—Army, Navy, Air Force, and Marine Corps—into a single Department of Defense logistics provider.” As this single logistics provider, DLA has sought to supply the warfighter faster and more efficiently, filled with nearly every consumable used by U.S. military forces around the globe. “We provide a wide array of support,” describes Thompson, “1,600 weapon systems, 84 percent of the spare parts that support U.S. armed forces, including nearly 100 percent of support for fuel, food, other energy, medical supplies, uniforms, construction equipment, and a wide variety of different commodities.” In addition, DLA also manages the reutilization and disposal of surplus military assets. It offers supply chain services that encompass storage and distribution, as well as humanitarian support at home or abroad.

Vice Admiral Thompson leads a global enterprise with operations in 48 states and 28 countries, and Fiscal Year 2009 sales/service of close to $38 billion, which would place it in the top 65 on the Fortune 500 list of companies. He doesit with a total staff of 25,000 working very closely with the U.S. Transportation Command. “There is almost nowhere,”underscores Thompson, “that you will find a military operation or installation where there’s not a DLA presence.…We process over 100,000 orders from military customers daily, award over 8,000 contracts daily in response to these orders, and provide nearly 5 million individual items to armed services in support of operations.” As a result of the Base Realignment and Closure Commission recommendations of 2005, DLA has moved beyond being a wholesale provider of material to being an end-to-end supply chain manager—managing eight different supply chains. “This allows us to be much more effective,” according to Thompson, “because we are now directly connected to the customer that’s consuming these products. We have much better business intelligence on what’s going on. We can then take that back through the supply chain and acquire the needed material in a timelier manner—ultimately producing a far more efficient logistics support capability than we have had in the past.”

As its footprint continues to expand and demands on its services increase, DLA has been seeking to transform how it operates. Vice Admiral Thompson identifies key priority areas that frame his strategic direction: warfighter support, stewardship excellence, and workforce development. “The whole reason DLA exists is to support our nation’s warfighters—that is job one. We are very involved in the support to ‘plus-up’ the forces and increased operations in Afghanistan, as well as the responsible withdrawal of forces from Iraq. This drives a great deal of activity for DLA. Over the last several months, we have worked to build the supporting base structure in Afghanistan for the increased forces,” describes Thompson.  DLA continues to plan for and execute its support for expanded operations in Afghanistan, including finding alternate supply routes and sources, while also working to reposition assets and forces in Iraq. “Over the last six months,” explains Thompson, “we’ve been working with the U.S. Transportation Command to open what we call the Northern Distribution Network, which is a rail network across the Central Asian states that enters Afghanistan from the north. Currently, about several thousand shipments have occurred, and over 80 percent of the material that has been shipped through the Northern Distribution Network is DLA material. This gives us a needed additional source of capacity for shipments into Afghanistan, and also provides alternatives if there’s disruption on the ground routes through Pakistan.”

The second priority area for Vice Admiral Thompson involves enhancing the DLA’s stewardship of resources. “We believe that the American taxpayer shouldn’t pay a penny more for the logistical support of the armed forces than is absolutely needed,” declares Thompson. Therefore, the DLA has undertaken a number of initiatives, such as reviewing and prioritizing its largest projects as well as identifying prudent cost reductions, to more effectively manage the cost of material and services it provides. “We are very focused on providing all that’s needed to support the warfighter in the field,” assures Thompson, “but we also believe it is essential to provide [that support] in the most efficient way we possibly can.”

 The DLA’s workforce is also vital to its overall success. “DLA has a strong history of valuing its people,” says Thompson. He admits that the DLA of tomorrow will require slightly different skills and educational backgrounds. His strategic direction ensures that DLA will continue to deliver on its current commitments, remain agile, and further evolve to meet its ever-expanding mission. “We will continue to build on our history of excellence,” Thompson emphasizes. “The overall level of support that’s being provided by DLA is at a historic high. I expect to see that continue to [increase] even more. I think the integration with each of the military services is going to be even greater.”

Listen to:  The Business of Government Hour Interview with VADM Thompson

Blog Index: Sept – Dec 2009

Following is an index of blog entries between the start, September 1, 2009, and the end of the year, December 31, 2009, organized around some major themes.

Web 2.0 and Social Media

Launching the BizGov Blog (09-01-09)

Blogs as Public Policy Forums (09-02-09)

Cloud Forecasting: A New Report  (11-12-09)

Social Media Trends for Government in 2010 (11-25-09)

Open and Transparent Government

What Do You Do With 110,000 Data Sets? (09-04-09)

New Transparency: Recovery.Gov (09-30-09)

Open Government: Implementation Guidance from OMB (12-09-09)

Implementing the Open Government Directive (12-15-09)

Collaborative Governance

Using Czars to Govern (09-11-09)

Creating Spirit Communities (09-30-09) (based on book by Rosabeth Kantor)

Citizen Participation

Blogs as Public Policy Forums (09-02-09)

Citizen Participation: An Update (09-15-09)

Using Crowdsourcing in Government (09-16-09)

Engaging Citizens in Oversight (09-22-09)

Citizen Engagement Newsletter by GSA (10-01-09)

On-Line Town Halls (10-26-09) Congressional Management Foundation Study

Citizen Participation: Other Countries Are Stepping Out (12-07-09)  UK and Australian Initiatives

Contract Reform

The Insourcer’s Apprentice: OMB’s Jeff Liebman (10-8-09)

Out- and In-Sourcing: True Confessions (11-11-09)

Bottom-Up Procurement Reform (10-13-09)

OMB: Trying a Change in Tone to Collaborating with Agencies (10-22-09)

Acquisition 2.0:  OMB’s Latest Acquisition Guidance (10-28-09)

Signs of Procurement Revolution (11-24-09)

Workforce and Employee Engagement

Federal  Jobs:  A New Era (09-03-09)

Recognizing Civil Servants (09-18-09)

Ask Employees How to Fix It, Part I (09-17-09)

ISO Good Ideas:  Ask Employees, Part II (09-23-09)

Governing by Suggestion Box (10-20-09)

Dealing with Poor Performers (10-16-09)

Government Performance

The New Obama Performance Team (09-25-09)

Jump-Starting Performance Management (09-28-09) (Senator Carper Hearing)

Priorities and Principles for Performance (10-06-09) (OMB’s Zients Debute)

New Senate Task Force on Performance (10-23-09)

OMB’s New Performance Principles (10-29-09) (Zients’ Senate Budget Testimony)

More on the Senate Performance Hearing (10-30-09)

Data-Driven Performance: Senate Budget Hearing (12-11-09)

Happy Birthday GPRA! (12-16-09) Breul

Performance Reporting: Rhetoric vs. Reality (12-18-09) by Jonathan Breul

Using Performance Measures (12-22-09)

Managing Performance: A Series (12-23-09)

Model 1:  Performance Administration (12-24-09)

Model 2:  Siloed Performance Systems (12-28-09)

Model 3:  Performance Management Framework (12-29-09)

Model 4:  Performance Governance (12-30-09)

Program Evaluation and Use of Analytics

New OMB Program Evaluation Guidance (10-07-09)

Davenport:  Make Better Decisions (10-27-09)

Risky Business:  What is Enterprise Risk Management? (10-15-09)

Financial Management

Fiscal Sanity: Lessons from Around the World (12-08-09) by Jonathan Breul

FY 2009 Financial and Performance Reports (12-10-09) by Jonathan Breul

Presidential Transition, the First Year

Link to the IBM Center’s Presidential Transition Blog, 2008-2009

Falling Behind on Appointments (09-24-09)

Searching for a New Comptroller General (12-14-09) by Jonathan Breul

Health Care Reform

Health Care Reform Implementation (Part 1)  (11-30-09)

Health Care Reform Implementation (Part 2) (12-03-09)

Doing Big Things in Government (12-01-09)

Sustaining Health Care Reform (12-02-09)

Recovery Act

Engaging Citizens in Oversight (09-22-09)

New Transparency: Recovery.Gov (09-30-09)

Recovery Act: Shifting Mindsets (11-06-09)

Lessons on Reform

Lessons of Reinvention (09-07-09)

Dispatch from Saudi Arabia (11-2-09) an International Conference on Public Administration

Reinventing Saudia Arabia (11-03-09)

Saudi Conference: Lessons for Us (11-05-09)

Recovery Act: Shifting Mindsets (11-06-09)

Conversations with Leaders and The Business of Government Magazine

The Business of Government Magazine: Fall 2009 (12-09-09) by Michael Keegan

Allen, Thad  (12-11-09)  by Michael Keegan

Childs, Robert (12-29-09) by Michael Keegan

Fauci, Anthony (12-10-09) by Michael Keegan

Conversations with Leaders: Dr. Robert Childs

In the corporate world, and throughout the federal government, information is a very valuable asset. Having timely access to this information, and using it to inform strategic decision making, have become critical in today’s competitive, networked, and interconnected world.  Information technology (IT) plays a  central role in making this happen.  We spoke with Dr. Robert D. Childs, senior director, Information Resources Management (IRM) College, about the mission of the IRM College, its successes, its cultivation of the next generation of IT leaders, and its expanding partnerships. 

On the Mission and Evolution of the IRM College — We’ve completed celebrating our 20th anniversary last September [2008]. It made us think about a lot of things that have gone on in the past and how it has very much paralleled [changes] in society. We started thinking about what we really do, and we came up with the line, “Shaping the Future.” We put that in our catalog, and then we talked more about what does “Shaping the Future” mean? What do we really do with our classes and our programs? We discovered that what we’re really doing is crossing boundaries—interagency boundaries, international boundaries, and boundaries with the private sector.  Building communities of like-minded people was the second thing that we do—and by [extension] we transform organizations. We’re organized to really be flexible, innovative, creative, and be a hothouse for ideas that address the concerns of leaders in the information age. From the very beginning, we set out to do four things. The first was: be a distinctive institution—be unique. We visited [and] benchmarked against other colleges, other universities, and other institutes such as the London School of Economics. I went to Singapore, different institutions in Europe, and tried to learn how we could take their practices and use them. What I found out is, we were very unique already. Point two is: focus on the customer, either individuals or organizations. The third point is to secure and sustain the allegiance of DoD (Department of Defense) and the federal community. If you don’t have allegiance, if you don’t have money coming in, you can’t sustain your programs. Since then, we’ve added the private sector and international partners. The last one: achieve national and international recognition. Some people say, “Well, why are you concerned about that?” Well, it’s the fastest way to get attention and to let other people know what you have and what you can contribute.  

On Technologies Shaping the Classroom and Workplace of the Future — I think the classroom of the future and the workplace of the future are almost one and the same thing. We have to tie it to the lifestyle that people want. You have to give them the collaboration tools so they can do their jobs. I had a faculty member on the beaches in Hawaii conducting his distributive learning classes. I mean, why does he have to be in a classroom or in an office to do that? He has his computer;  he has his students connected, so that’s all he needs. There are other technologies that we’ve run into. They tie into a number of things we’re trying to do at our labs.  Telepresence is one; it is such an improvement over video teleconference. You really can be there. We’re using telepresence to project our faculty expertise to conferences we’re going to put on and courses we’re going to offer around the world. 

On the Future of the IRM College — I want to [share] a quote. I was asked to diagram my vision for the future, and I described it as such: 

“It is a series of at least 10 interconnecting crossroads, all meeting at the hub of an English-style roundabout. The titles of the roads were Defense, Policy, Economics, Government, Private Sector, International, Interagency, Business Processes, Best Practices, and Emerging Technologies. Every road was chock full of speeding and honking traffic and [great] potential for collision or collaboration. I was the cheerleading cop at the middle of that traffic circle, swinging my arms, shaking my body, and blowing the whistle. I had total confidence I was about to orchestrate a world-class symphony, and I can’t blame the diagram on exuberance of youth because it happened just a few years ago.”  

My job is to create an environment so that IRM’s creative faculty and staff can bring these things together. How do I see the future? I think it’s going to be totally mobile, incredibly compact, ridiculously “nano-tiny,” and eye-wateringly powerful. And everything around you that you see will become “hyperized,” socialized, “networkized,” and virtualized. 

Read this conversation in its entirety: Dr. Bob Childs

Listen to the complete interview: The Business of Government Hour

Searching for a new Comptroller General

According to the “Head Count” in today’s Washington Post, President Obama has filled 293 (56.9 percent) of his 515 Senate-confirmed positions.  Curiously, one position the Washington Post does not track is the Comptroller General of the United States.

The Comptroller General heads the Congress’  “watch dog” agency – the Government Accountability Office (GAO).   The Comptroller General is appointed for one non-renewable 15-year term.  Upon his resignation on March 12, 2008,  former Comptroller General David Walker appointed Gene L. Dodaro to serve as Acting Comptroller General.

A statutorily bipartisan Congressional Comptroller General Commission has been considering candidates.  Once the Commission wraps up its work, it will send President Obama a non-binding list of at least three potential nominees, and the President may request that the commission recommend additional individuals. The President then selects an individual from those recommended to nominate as the new Comptroller General. The President’s nomination must be confirmed by the Senate.  This same process led to presidential nomination of David Walker, who was nominated by President Bill Clinton, and former Comptroller General Charles Bowsher, who was nominated by President Ronald Reagan.

Roll Call’s Emily Yehle has been tracking the appointment process. See Search for GAO Chief Stuck in Neutral (September 14, 2009).   For more details, check out a pair of articles that Steve Katz and I published in Roll Call magazine) “GAO Requires a Multitalented New Leader “(July 6, 2009) and “Comptroller General’s Job Is a Balancing Act,” along with “Q&A with Former Comptroller General Charles Bowsher and David Walker” (part 1 and part 2) (July 7, 2009)

Fiscal Sanity: Lessons from Around the World

Jonathan D. Breul

I attended the Organization for Economic Cooperation and Development (OECD) Senior Budget Officials December 1-2 performance and results network meeting on measuring and evaluating countries’ stimulus programs.    The countries making presentations at this meeting were: Australia, Canada, Chile, Denmark, France, Hungary, Italy, Netherlands, Poland, and United Kingdom.

I was struck by several things.

• First, countries have undertaken a surprisingly wide variety of stimulus programs.

• Second, there has been strikingly little evaluation or measurement of the performance or results of these interventions.  To date, most countries appear to be relying on macro economic indicators rather than more detailed reporting of jobs created/retained or measures of programmatic performance,

• Finally, and perhaps not surprisingly, the American Recovery and Reinvestment Act’s (ARRA) requirements for accountability and transparency appear to be far more detailed and comprehensive than anything I heard from other countries.

Role of performance information in economic stimulus packages

Nearly all OECD countries have introduced discretionary fiscal measures.  The size, composition, and proposed duration of stimulus packages vary widely across countries.  The average OECD country introduced a stimulus package with a cumulated budget impact of more than 2.5 percent of GDP over the period 2008-2010.

OECD countries launching the largest packages in the 2008-2010 periods include the United States, Korea, Australia, New Zealand and Canada.  The composition of these packages varies extensively.  Some countries concentrate on tax cuts for individuals and/or businesses, or on increasing public spending and investment, and still other countries combine these measures.  Countries whose packages concentrate strongly on public investment programs include Australia, Canada, Poland and Mexico.

The design, implementation and evaluation of these packages present unprecedented challenges for policy makers in OECD countries.  Some of the challenges include:

1. Finding the most effective size and composition of stimulus packages to achieve objectives
2. The speed and urgency of actions required to implement these packages pose challenges for traditional budget processes and procedures
3. The key challenges facing world leaders and individual countries are when and how to unwind the fiscal stimulus packages
4. How to monitor and measure the results of these packages

Exit strategies

In addition to questions of measurement and results, the Senior Budget Officials network discussed general approaches for an exit strategy to plan the transition to restore fiscal sustainability.  As countries come out of the economic and financial crisis with a sharp deterioration of their public finances, they need a fiscal recovery plan to get their finances in order to reduce debt burdens before long-term pressures (especially aging and health care) hit with full force.

Many of the fiscal actions taken during the crisis, while appropriate at that time, would be harmful if they stayed in place too long.  By 2014, debt ratios will be close to or exceed 90 percent in all G7 countries except Canada.  It is thus critical to avoid surge interest rates that might be prompted by concerns about high debt ratios.  The fiscal outlook is better for emerging economies, but it is unlikely that they would be shielded from a loss in confidence in public sector sustainability in the developed countries; as the recent crises has amply demonstrated, crises in confidence easily spill across borders.

The Senior Budget Officials believe that an exit strategy to plan the transition from the current levels of fiscal imbalances to more sustainable levels is clearly needed.  The OECD Secretariat therefore presented a draft report with 18 lessons learned from countries’ previous experiences of fiscal consolidation that will be presented to the G20.  Lessons #1-#12 were deficit reduction actions; lesson #13 focuses on reducing regulation inside government; lessons #14-#16 address reductions in public employment; lesson #17 deals with outsourcing; and the final lesson is “Yes, you can!.”

Out- and In-Sourcing: True Confessions

Harvard Kennedy School professor Stephan Goldsmith recently shared an insight he learned:  “It is always tempting to set arbitrary goals to drive organizational change. Like most temptations, this one should be resisted. . . . I fell into this trap in 2000, when I served as the chief domestic policy advisor to then-Governor George W. Bush during his presidential campaign. Looking ahead to how many federal officials would likely be retiring during the eight years of the next presidency, I suggested that candidate Bush pledge to replace only half of them, eliminating the remainder of these jobs through efficiencies and outsourcing.”

In mid-2001, President Bush set just such goals in his President’s Management Agenda by saying he would compete “commercial-like” positions in the government, based on the required Federal Activities Inventory Reform (FAIR) Act. This triggered agency foot-dragging and partisan objections.  Bush stuck with his agenda through his remaining years in office and in the end, instead of competing an estimated 425,000 positions, the Bush Administration competed nearly 51,000 as of the end of 2007.

But in the process, Congress put in place a number of barriers to make competitive sourcing and outsourcing more difficult, if not impossible.  The term “competitive sourcing” became so controversial that OMB changed the term to “commercial services management!”

So what is Goldsmith’s lesson?  “We had gotten it backwards. Any goals in reducing the federal workforce should have come only after an examination of the specific activities of the federal government and an analysis of the commercial availability (and suitability) of competitive services. Instead, goals were set in a vacuum, much like the debates about angels dancing on the heads of pins. . . . The pendulum has swung, and now OMB is pushing in the opposite direction. I made a mistake in 2000 when I proposed a percentage reduction in employees to President Bush, and I likewise believe that any arbitrary decision to pursue insourcing is equally ill-advised.”

But the pendulum has swung.  Here is a link to a series of Defense Department guides on the new emphasis on insourcing, and steps to take. . . . Who will write the next installment in True Confessions?

Recovery Act: Shifting Mindsets

The fuss surrounding the release of the first full report on the use of Recovery Act money last week reminded me of an experience I had in 1980 while working for a congressional oversight committee.  We had received an annual report with program data for FY 1977 that I thought was quite useful.  I then asked the agency for the FY 1978 and 1979 reports since I thought they would be useful as well.  The response was “we just released the 1977 report, the others won’t be available for another two years.”

Shifts at the Federal Level. And now with Recovery.Gov we have program data that are only three months old!  And people complain about some likely inaccuracies!  The whole Recovery.Gov effort is pretty amazing – a data dump from more than 131,000 sources collected (and reviewed quickly) in a three-week period.  The media focused on jobs created, but the real story is the creation of new ways of collecting and reporting large amounts of data and the shift in mind set about how to handle it.

Of course there will be errors (in fact, 21 percent of the reports submitted were revised afterwards).  But the shift in mind-set is remarkable.  Instead of demanding accuracy and spending months cleaning the data, the emphasis is on timeliness and the expectation that the data will be cleaned as a result of public exposure.

Recovery.Gov head Inspector General Earl Devaney is probably causing shock waves through the audit community with his radical approach (well, radical for auditors) of releasing data that likely has errors before investing weeks of time cleaning it up.  In fact, he told Federal News Radio’s Suzanne Kubota, “What we’re all seeing, at least following the first reporting period, is not particularly pretty. This data may cause some embarrassments for some agencies and some recipients, but I believe in the long run the embarrassment will encourage self-correcting behavior and make it better in the future.”

Shifts at the State Level.  This shift in mind set is creating real pressures to do business differently at the state level, as well.  States had to create web-based reporting forms so grant recipients could report their data.  According to Computerworld’s Julia King in her article, “States Scramble to Track Federal Stimulus Bucks,” states had to quickly:

• make data available,
• create business rules and processes to comply with federal reporting requirements, and
• devise ways to collect and aggregate data from multiple systems from across state government (since few have central accounting systems).

These efforts are having broader effects than just Recovery Act reporting.  It is changing mind sets and approaches just as importantly as it has been at the federal level.

• For example, Massachusetts Recovery and Reinvestment Office’s deputy director Ramesh Advani compared the first reporting cycle to the environment of a fast-paced startup company, according to King.  A long-term improvement going forward, though, is that the creation of this program office creates a reporting focal point for grant reporting in the state for the first time.
• Maine is also using the Recovery Act reporting experience to permanently improve its information transparency statewide, as well.
• Utah is using existing systems to report Recovery Act funds, rather than creating a new system.  According to King, because the state had a centralized IT and accounting system and had already undertaken a financial transparency project already, the  Recovery Act reporting requirements were relatively straightforward.  The biggest challenge was collecting and reporting sub-recipient data, which it had not collected before.
• The top-ranked state Recovery Act website is Maryland’s according to Computerworld’s Robert Mitchell, developed a sophisticated geographic information system to display where Recovery Act dollars were going.  In fact, a Washington-based research center has rated the Maryland Recovery Act site the best in the country for its efforts.  Visitors can view spending in specific areas, such as highway or housing, and drill down to see exact locations and other details.

So as mindsets begin to shift in terms of reporting data quickly and publicly in ways that can be readily understood, it will be interesting to see how long it takes before this becomes the governmentwide norm at all levels of government.  It looks like it didn’t take long in Maine and Utah!