White House Management Advisory Board

On Monday, President Obama signed an executive order creating a new White House advisory board to be populated by corporate executives who will provide cutting-edge best management practices to their government counterparts.

As noted by Government Executive’s Robert Brodsky, “The President’s Management Advisory Board will provide the White House and the President’s Management Council with strategic advice on matters related to federal productivity, technology and customer service.”  This advice will be largely directed to the existing President’s Management Council, comprised primarily of the deputy secretaries of the major federal departments.

The executive order says that the 18 members of the board, which will be chaired by Jeff Zients, the government’s Chief Performance Office, will be:

“ . . . appointed by the President from among distinguished citizens from outside the Federal Government who are qualified on the basis of a proven record of sound judgment in leading or governing large, complex, or innovative private sector corporations or entities and a wealth of top-level business experience in the areas of executive management, audit and finance, human resources and compensation, customer service, streamlining operations, and technology.”

This Board is one of a series of recommendations stemming from a January summit of corporate CEOs the White House sponsored.

The General Services Administration will host the Board, and there will be a full-time career executive director appointed.  The Board was granted a two-year lifespan.

As noted in an earlier blog posting, it might be an interesting idea to turn to employees for ideas, as well.  The Administration has created an initiative to support innovation awards and contests.  But it might also consider something like the Australians, who are creating a cadre of their top 200 career senior executives who would serve as resources to their version of the President’s Management Council to lead government-wide management reform initiatives.  Linking this cadre with the members of the advisory board could create an interesting dynamic, and the board’s executive director could then have a really fun job!

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The OMB Prize Memo

OMB deputy director for management ,Jeff Zients, released a 12-page memo, “Guidance on the Use of Challenges and Prizes to Promote Open Government.”

Jason Miller, of Federal News Radio, reports that this memo expands on a commitment made in President Obama’s FY 2011 budget and extends the pilots of the OMB SAVE award competition and several other pilots conducted by agencies last year.  It is now a federal policy to use challenges and prizes as a way of spurring innovation.

Agencies will need to designate someone to run the prize and challenge initiatives for their agencies, and there will be a cross-agency “community of practice” of agency staff to support, design, and manage prizes.

The Administration says it will make available a web-based platform for prizes and challenges by mid-July for agencies’ use.  The memo notes: “. . .a prize should not be an end in itself, but one means within a broader strategy for spurring change.”  It offers six examples of potential prizes.

The memo also identifies some potential legal authorities under which agencies create prizes, in addition to the potential use of existing grants and cooperative agreements.  The memo also says that “An agency without explicit prize authority . . . “ may be able to do so under the “’necessary expense’ doctrine” but that they should consult first with their agency counsel!

This won’t be easy, though.   It goes on to discuss the importance of Federal Advisory Committee Act compliance and ethical issues, and cautions against the federal endorsement of products or services, violating intellectual property rights, complying with the Paperwork Reduction Act, the Privacy Act, etc.

So, in the end, “If you have any questions regarding this memorandum, please direct them to opengov@omb.eop.gov!  Or check with your friendly agency general counsel!

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:

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.

Using Performance Measures

The federal government’s chief performance officer, Jeff Zients, declared at a recent Senate hearing: “The test of a performance management system is whether it is used.”  He thought federal agencies were failing the test.

So what should agencies do?  Well, last week, the Association of Government Accountants (AGA) released a research report last week that offers practical and concrete advice based on a recent study,“State and Local Governments’ Use of Performance Measures to Improve Service Delivery.”  According to AGA’s Hal Steinberg who led this effort, “This project was intended to determine how performance measures are used by governments to improve service delivery and also to describe their efforts in such a way that other governments can adopt similar practices.”

The study identified the key elements of performance management that contributed to service improvements.  It validated these elements via a series of case studies of four local governments (Baltimore, MD; Fishers, IN; New York City, NY; Westminster, CO) and Washington state government, as well as a broader survey of 175 other localities.

Key Findings.  Not surprisingly, the study concluded “. . . success appears to depend on the commitment and involvement of a chief executive who sees the process as a tool for improved performance, and not just a compliance activity.”

Other key success factors included:

  • the use of consistent measures from period to period to sustain attention on the measures, at the same time recognizing that measures can and should be modified when necessary to reflect changing requirements or expectations of stakeholders
  • regular and frequent analysis of the performance results data in comparison to prior periods, targets or benchmarks.
  • regular reviews of the analysis and results by the chief executive and/or his designee with the responsible agency heads, and
  • agreements with the agency heads on steps to be taken when the data reveal the need and opportunities for improvement.

Essential Elements. The research identified via the case studies several essential elements that must be present in a governmental system before it is likely to use performance measures to improve service delivery.   These were validated via the broader survey:

  • chief executive commitment and involvement in the overall process
  • relevant measures of at least outputs and eventually outcomes
  • periodic review and revision of the performance measures
  • frequent, regular collection of performance data
  • comparison of performance data to prior periods
  • regular review and analysis of performance results to ascertain the reasons for less-than-desirable performance and identify the opportunities for improvement
  • chief executive and other senior management participation in the reviews
  • agreement between chief executive and department managers on improvement plans
  • follow up on progress (or lack thereof) of improvement plans

Supporting Elements. In addition to the essential elements, the study also identifies several elements that survey respondents thought were important practices:

  • explicit targets for the performance measures
  • frequent comparisons of performance data to targets
  • comparison of performance data to the corresponding data from similar jurisdictions
  • intragovernmental comparisons (in states and larger jurisdictions)
  • support staff involvement in the reviews of performance results
  • budget reviews and deliberations considering the performance targets and results
  • budget resources allocated to programs rather than solely to object classes
  • programs for obtaining and considering constituents’ views
  • some process for assuring the data’s reliability
  • regular external dissemination of performance results

AGA concludes:  “This report demonstrates that the use of performance measures has already been adopted by many governments. It also provides guidance with which other governments can start to follow suit. The most significant missing piece is the desire and discipline to start and maintain the process-and that is ultimately up to each government body.”

Cutting Contractors

 OMB released a report today, “Acquisition and Contracting Improvement Plans and Pilots:  Saving Money and Improving Government,” which follows up on its July 2009 directive that agencies trim 7 percent – about $40 billion — from their contracting budgets over the next two years by improving their buying processes.

OMB says that agencies have undertaken several steps to achieve $19 billion in savings for the first year:

  • The 24 largest agencies, covering 98 percent of contract spending – have submitted plans with specific actions they will take to cut contracting costs and improve efficiencies.
  • Agencies have identified initiatives to save 10 percent of money spent through new high-risk contracts (noncompetitive, cost-reimbursement, or time-and-materials/labor-hour contracts).
  • Agencies have identified at least one pilot initiative where over-reliance on contractors may affect performance and then reassess the workforce mix.

OMB also reports that the Chief Acquisition Officers Council is “identifying new strategic-sourcing approaches, and how to structure contracts so as to provide better value for a lower price for commonly acquired goods and services.”

In a related story, the Washington Post’s Ed O’Keefe reports OMB deputy director Jeff Zients said “The government is the world’s largest total buyer of goods, but has permitted agencies to act as separate customers for too long, contributing, in part, to wasteful spending” and that OMB will increase most agencies’ acquisition workforces by about 5 percent in the coming fiscal year.

OMB offered several examples of how agencies are trimming their contracting costs:

  • Homeland Security standardized department-wide its desktop operating systems, e-mail, and office automation.  These standardized requirements allowed the Chief Information Officer to award a single contract, resulting in expected savings of $87.5 million over the next six years.
  • Energy’s National Nuclear Security Administration (NNSA) launched a contracting tool that puts a service need up for bid “like e-Bay” that serves as a reverse auction where bidders offer their lowest price.  NNSA is seeing an average cost savings of 18 percent so far.
  • IRS switched from cost-reimbursement to a firm-fixed-price contract vehicle for processing support services, saving $6 million over the old approach.
  • Labor is investigating the potential benefit of in-sourcing a subset of contracted workers who currently process foreign labor certifications to see if this allows increased efficiency.

OMB says it will launch an on-line dashboard in spring 2010 to “allow the public to track whether agencies are progressing in their efforts. . . . Where progress is insufficient, OMB will work with agencies to develop aggressive steps to meet their targets.”

The Washington Post article also noted: “One item missing from the report is eagerly anticipated guidance on the definition of “inherently governmental functions,” a critical term in the contracting community that would clarify the tasks and services contractors should no longer conduct. Obama asked OMB to provide guidance on the matter in March. The agency promised to deliver an answer by year’s end, but officials said they need a few more weeks.”

More on Senate Performance Hearing

Yesterday I highlighted Jeff Zients’ testimony before the Senate Budget Committee’s Task Force on Government Performance.  But there were two other witnesses who provided some interesting insights, and Senator Mark Warner offered a glimpse of where the Task Force might be heading.

Sir Michael Barber, who led the Prime Minister’s Delivery Unit under Tony Blair, described how Blair created and used the Delivery Unit after he was re-elected in 2001.   “Its mission was to secure delivery of about 20 major domestic policy priorities, selected by the Prime Minister in consultation with his cabinet colleagues,” he began.

Barber said the 20 priority areas focus on issues that were most important to citizens, such as reducing crime and ensuring punctuality of the railway, and that were clearly measurable.  He described how targets were set, agency and program “delivery plans” were drawn up, and a routine of regular reports and problem-solving meetings was used to ensure action.

Paul Posner, president of the American Society for Public Administration and a former senior official at the Government Accountability Office, talked about the staying power of the concept of performance budgeting and how it has evolved over the past four decades.  He said that the Budget Committee could put in place a performance assessment process that could lay the groundwork for making performance-based budget choices. 

He noted that “the ability of policymakers to conduct such an annual review process is circumscribed by the structure of the budget process itself.”  For example, tradeoffs between spending programs and tax expenditures cannot happen.  So a housing grant and a home tax credit cannot be considered together in the budget process because these “policy tools” are “owned” by different congressional committees with different jurisdictions. 

He suggested “The Budget Committee Task Force might start by doing selective assessments of the portfolio of programs addressing common outcomes across the government,” such as programs related to food safety or low income housing.  He noted: “The Budget Committee is ideally positioned to lead the way in undertaking these crosscutting assessments” and that it has “the ability to use outcomes as the great unifier.”

Senator Warner observed that the British seem to have a better ability to reach across programs and outcomes than the US.  Sir Michael noted that while the Prime Minister does have authority to do so, he created cabinet committees around each of the 20 outcome areas, designated a lead minister, and gave each cabinet committee a budget to help coordinate action. The Parliament has little to do with this, but in the US any similar process would require a greater role for the legislative branch.

Senator Warner said his Task Force would undertake a “mapping” of programs, agencies, and congressional committees that touch upon a policy arena, and that the Task Force would select and map two or three policy areas as “proof of concept” pilots.  He got the agreement of OMB’s Zients to help, as well.

Next step – selecting the policy arenas!

OMB’s New Performance Principles

OMB Chief Performance Office Jeff Zients testified today before the Senate Budget Committee’s new Task Force on Government Performance.  He laid out a set of five key principles OMB will follow in developing a governmentwide performance management system.

He prefaced his remarks noting: “The test of a performance management system is whether it is used. . . the current approach fails this test.  Congress doesn’t use it.  Agencies don’t use it.  And it doesn’t produce meaningful information for the public.  There’s too much emphasis on process and not enough on outcomes.”

He went on to say: “This must change.  Federal managers and employees at all levels must use performance goals and measures to set priorities, monitor progress, and diagnose problems.”  He said that OMB wanted to build on lessons best practices from states, localities, other countries, and federal agencies.  He wants to use the best of what works to create a new performance management system based on the following five principles:

  • Senior leader ownership of performance management process.  Secretaries and Deputies will be charged with the setting of agency goals and will be responsible for performance against those goals
  • Cascading goals and measurements.  A clear line must link agency strategic goals and measures to unit-level, program-level, and ultimately individual targets.
  • Outcome-oriented, cross-agency goals and measurements.  Current goals and measures connect agencies to their missions, but broad government outcomes often require contributions from multiple actors across different agencies as well as outside the government.  Goals and measures must support coordination across these boundaries, with a clear sense as to who the “goal owner” is and what various organizations must contribute.
  • Relentless review and accountability.  Reviews must be performed at all levels of government on progress, at least quarterly. “Only this kind of relentless review process will result in performance management becoming ingrained into the culture of government.”
  • Transparent process.  Transparency plays a critical role in engaging the public, Congress, and the overall government workforce.  It promotes understanding, innovation, involvement, and accountability.

Zients noted some progress already.  Agencies have developed three to eight “ambitious, outcome-oriented high priority goals which they intend to achieve in the next 12 to 24 months” and this list will be released as part of the fiscal year 2011 budget process.  He also noted the use of management dashboards, such as the IT Dashboard, and said “We plan similar dashboards for other common government functions, including procurement, financial management, and personnel management.”   He also said OMB will look for ways to make agency Performance and Accountability Reports more useful.  The Department of the Interior’s report may be a useful model.

He said he looked forward to working with the Senate Budget Committee.  He said to the Senate task force, “we believe you have a unique perspective for examining how the government can more effectively achieve broad goals through multiple programs that cut across agency and appropriation boundaries.”

Chairman Mark Warner noted that his task force would be examining two to three policy goals and mapping out the programs, agencies, and committee jurisdictions involved, along with potential broad goals and outcome measures that might be developed.