DP Tool Club 8/CDASC08.ISO/VRAC/NPR1993.ZIP/NPR03.TXT

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Chapter 3

Empowering Employees to Get Results

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Take two managers and give to each the same number of laborers
and let those laborers be equal in all respects. Let both
managers rise equally early, go equally late to rest, be equally
active, sober, and industrious, and yet, in the course of the
year, one of them, without pushing the hands that are under him
more than the other, shall have performed infinitely more work.
George Washington

When Nature has work to be done, she creates a genius to do it.
Ralph Waldo Emerson
***************************

     Two hundred years ago, George Washington recognized the
common sense in hiring and promoting productive managers--and
taking authority away from unproductive ones. One hundred years
ago, Emerson observed that we all share a common genius, ignited
simply by the work at hand. These American originals defined the
basic ingredients of a healthy, productive work environment:
managers who innovate and motivate, and workers who are free to
improvise and make decisions.

     Today, our federal government's executive branch includes 14
cabinet departments, 135 agencies and hundreds of boards and
commissions. These entities employ more than 2.1 million
civilians (not counting the Postal Service), and 1.9 million
members of the military, spend $1.5 trillion a year, and,
directly or indirectly, account for one third of our national
economy1. Their tasks are both massive and difficult. As the
National Academy of Public Administration wrote not long ago,
"The federal government now manages ... some of the most
important and complex enterprises in the world."2 But it does not
manage them well.

     Admittedly, "management" is a fuzzy concept, hard to
recognize or define. But poor management has real consequences.
Money is wasted. Programs don't work. People aren't helped.
That's what taxpayers and customers see.

     Inside government, bad management stifles the morale of
workers. The "system" kills initiative. As Vice President Gore,
responding to the concerns of Transportation Department
employees, put it:

     One of the problems with a centralized bureaucracy is that
people get placed in these rigid categories, regulations bind
them, procedures bind them, the organizational chart binds them
to the old ways of the past--The message over time to...employees
becomes: Don't try to do something new. Don't try to change
established procedures. Don't try to adapt to the new
circumstances your office or agency confronts. Because you're
going to get in trouble if you try to do things differently." 3

     Cutting red tape, organizing services around customers, and
creating competition will start to generate an environment that
rewards success. Now, we must encourage those within government
to change their ways. We must create a culture of public
entrepreneurship.

****************************
Our long-term goal is to change the very culture of the federal
government... A government that puts people first, puts its
employees first, too. It empowers them, freeing them from
mind-numbing rules and regulations. It delegates authority and
responsibility. And it provides for them a clear sense of
mission.  Vice President Al Gore
Speech to National Performance Review members
May 24, 1993
****************************

     But changing culture is a lot harder than changing rules and
regulations. An attitude of powerlessness and complacency
pervades the federal workplace. As one veteran of many government
reform initiatives observed, "Changing government is a bit like
moving the town cemetery. It's much harder to deal with the
feelings it arouses than with the relocation itself."

The Quality Imperative

     Of course, many thought that turning General Motors around
would be impossible. If you talked to their employees, the same
undoubtedly was true of General Electric, Motorola,
Harley-Davidson, and scores of leading corporations before they
embraced a new management philosophy. In the 1970s and 1980s, as
technology began to revolutionize everything and global
competitors began to take away market share, firms that had grown
fat and happy had to face the facts: This wasn't the 1950s
anymore.

      These firms quickly discovered that economists can be
wrong: More isn't always better: better is better. One by one,
they began to pursue a new goal--quality-- and to reorganize
their entire businesses around it.

     The quality imperative is simple: Do everything smarter,
better, faster, cheaper. It is not simple, however, to obey. It
means dismantling the old ways of doing business. The same tired
command hierarchies that continue to bind government are being
scrapped daily by companies on the rise. In their place, firms
seek new ways to manage and organize work that develop and use
the full talents of every employee. They want everyone to
contribute to the bottom line--that is, to produce goods and
services that match customer needs at the lowest cost and fastest
delivery time.
      The quality movement has spawned many proven methods and
mantras, each with its loyal fans: management by results; total
quality management; high-performance organization; business
process reengineering. But the quest for quality--in performance,
product, and service--unifies them all.

     Government has recognized the quality imperative. In 1987,
the U.S. Department of Commerce instituted the Malcolm Baldrige
National Quality Award. Now the object of fierce competition, it
recognizes private firms that achieve excellence by pursuing
quality management. In 1988, the Federal Quality Institute began
awarding the Presidential Award for Quality to federal agencies
that do the same. The Presidential Award criteria, modeled on
Baldrige, set new standards for federal government performance.
The President should encourage all department and agency heads to
manage with these criteria in mind.


Changing the Culture: Power and Accountability

     Companies do not achieve high quality simply by announcing
it. Nor can they get to quality by hiring the services of the
roving bands of consultants who promise to turn businesses around
overnight. They do it by turning their entire management systems
upside down--shedding the power to make decisions from the
sedimentary layers of management and giving it to the people on
the ground who do the work. This rewrites the relationship
between managers and the managed. The bright line that separates
the two vanishes as everyone is given greater authority over how
to get their job done.

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The Federal Quality Imperative

The Presidential Quality Award sets forth seven principles to
identify excellent government agencies:

∙      Leadership: Are your top leaders and managers personally
committed to creating and sustaining your organization's vision
and customer focus? Does your effort extend to the management
system, labor relations, external partnerships, and the
fulfillment of public responsibilities?

∙      Information and Analysis: Do your data, information, and
analysis systems help you improve customer satisfaction,
products, services, and processes?
∙      Strategic Quality Planning: Do you have short-term and
long-term plans that address customer requirements; the
capabilities necessary to meet key requirements or technological
opportunities; the capacities of external suppliers; and changing
work processes to improve performance, productivity improvement,
and waste reduction?
∙      Human Resource Development and Management: Is your
agency's entire workforce enabled to develop its full potential
and to pursue performance goals? Are you building and maintaining
an environment for workforce excellence that increases worker
involvement, education and training, employee performance and
recognition systems, and employee well-being and satisfaction?
∙      Management of Process Quality:  Does your agency
systematically and continually improve quality and performance?
Is every work unit redesigning its process to improve quality?
Are internal and external customer-supplier relationships managed
better?
∙      Quality and Operational Results: Are you measuring and
continuously improving the trends and quality of your products
and services, your business processes and support services, and
the goods and services of your suppliers? Are you comparing your
data against competitors and world-class standards?

∙      Customer Focus and Satisfaction: Do you know what your
customers need? Do you relate well to your customers? Do you have
a method to determine customer satisfaction?
*****************************

     But with greater authority comes greater responsibility.
People must be accountable for the results they achieve when they
exercise authority. Of course, we can only hold people
accountable if they know what is expected of them. The powerless
know they are expected only to obey the rules.  But with many
rules swept away, what is expected from the empowered?

     The answer is results. Results measured as the customer
would--by better and more efficiently delivered services. If the
staff in an agency field office are given greater voice over how
their workplace and their work are organized, then the customer
deserves to spend less time waiting in line, to receive a prompt
answer--and everything else we expect from a responsive
government.
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Our bedrock premise is that ineffective government is not the
fault of people in it. Our government is full of
well-intentioned, hard-working, intelligent people--managers and
staff. We intend to let our workers pursue excellence.

Vice President Al Gore
Reinventing Government Summit
Philadelphia, June 25, 1993
****************************

     So how do we change culture? The answer is as broad as the
system that now holds us hostage. Part of it, outlined in chapter
1 , lies in liberating agencies from the cumbersome burden of
over-regulation and central control. Part of it, detailed in
chapter 2 , 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. Six
steps, described in this chapter, will start us down that road:

     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. Chief Executive Officers--from the White House to
agency heads--must ensure that everyone understands that power
will never flow through the old channels again. That's how GE did
it; that's how we must do it as well.

Step 1: --Decentralizing Decisionmaking Power

     To people working in any large organization--public or
private--"headquarters" can be a dreaded word. It's where
cumbersome rules and regulations are created and good ideas are
buried. Headquarters never understands problems, never listens to
employees. When the Office of Personnel Management (OPM) surveyed
federal employees, fewer than half expressed any confidence in
supervisors two layers above them--or any confidence at all in
their organization's overall structure.4

      Yet everyone knows the truth: Management too often is
happily unaware of what occurs at the front desk or in the field.
In fact, it's the people who work closest to problems who know
the most about solving them. As one federal employee asked Vice
President Gore, "If we can't tell what we're doing right and
wrong, who better can?"

      The Social Security Administration's Atlanta field office
has shown the wisdom of empowering workers to fulfill their
mission. Since 1990, disability benefit claims have risen 40
percent, keeping folks in the Atlanta office busy. So workers
created a reinvention team. They quickly realized that if they
asked customers to bring along medical records when filing
claims, workers could reduce the time they spent contacting
doctors and requesting the records. That idea alone saved 60 days
on the average claim. Even better, it saved taxpayers $351,000 in
1993, and will save half a million dollars in 1994. The same
workers also found a better, cheaper way to process disability
claims in cases reviewed by administrative law judges. Instead of
asking judges to send them written decisions, they created a
system for judges to send decisions electronically. It's quicker,
and it eliminates paperwork, too.5

     Now here's the other side of the coin. A Denver Post
reporter recently uncovered this bureaucracy-shaking news: It
takes 43 people to change a light bulb.

      An internal memo written by a manager at the U.S.
Department  of Energy {Rocky Flats} plant recommended a new
safety procedure for "the replacement of a light bulb in a
criticality beacon." The beacon, similar to the revolving red
lamp atop a police car, warns workers of nuclear accidents. The
memo said that the job should take at least 43 people over
1,087.1 hours to replace the light. It added that the same job
used to take 12 workers 4.15 hours.
     The memo called for a planner to meet with six others at a
work-control meeting; talk with other workers who have done the
job before; meet again; get signatures from five people at that
work-control meeting; get the project plans approved by separate
officials overseeing safety, logistics, waste management and
plant scheduling; wait for a monthly criticality-beacon test;
direct electricians to replace the bulb; and then test and verify
the repair.6

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I had seven teams of people each restructure our business...
After the third presentation, my executive assistant...said to
me, "Bill, this stuff is fabulous. In fact, we never would have
thought of these things.
But you've got to trust. People don't come to work with the
intent of screwing it up every day. They come here to make it
better.
Bill Goins, President
Xerox Integrated Systems Operations,
Reinventing Government Summit,  June 25, 1993
*****************************

     This example drives the point home: Too many rules have
created too many layers of supervisors and controllers who,
however well-intentioned, wind up "managing" simple tasks into
complex processes. They waste workers' time and squander the
taxpayers' money.

     Decentralizing the power to make decisions will energize
government to do everything smarter, better, faster, and
cheaper--if only because there will be more hands and heads on
the task at the same time. Vice President Gore likens the effect
of decentralization to the advent of "massive parallelism"--the
technology used in the world's fastest supercomputers. Standard
computers with central processors solve problems in sequence: One
by one, each element of information travels back and forth from
the machine's central processor. It's like running six errands on
Saturday, but going home between each stop. Even at the speed of
light, that takes time. In massively parallel computers, hundreds
of smaller processors solve different elements of the same
problem simultaneously. It's the equivalent of a team of six
people each deciding to take on one of the Saturday errands.

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Roam on the Range

Ranchers, allowed to graze their cattle in Missouri's Mark Twain
National Forest, regularly must move their herds to avoid
over-grazing any plot of land. Until recently, ranchers had to
apply at the local Forest Service office for permits to move the
cattle. Typically, the local office sent them on to the regional
office for approval, which, in some cases, sent them on to the
national office in Washington. Approval could take up to 60
days--long enough, in a dry season, to hurt the forest, leave the
cows hungry, and annoy the rancher.
Thanks to an employee suggestion, the local staffer now can
settle the details of moving the herd directly with the rancher.
If the rancher comes in by 10 a.m., the cattle can be on the move
by noon. Ranchers are happier, cattle are fatter, the environment
is better protected--all because local workers now make decisions
well within their judgment.
****************************

     America's best-run businesses are realizing enormous cost
savings and improving the quality of their products by pushing
decisions down as far as possible and eliminating unnecessary
management layers. The federal government will adopt this
decentralized approach as its new standard operating procedure.
This technique can unearth hundreds of good ideas, eliminate
employee frustration, and raise the morale and productivity of an
entire organization.

     If offered greater responsibility, will employees rise to
the task? We are confident they will. After all, few people take
up federal work for the money. Our interviews with hundreds of
federal workers support what survey after survey of public
service workers have found: People want challenging jobs.7 Yet,
that's exactly what our rule-bound and over-managed system too
often denies them.
Action: Over the next five years, the executive branch will
decentralize decisionmaking, and increase the average span of a
manager's control.8

     Currently, the federal government averages one manager or
supervisor for every seven employees.9 Management expert Tom
Peters recommends that well-performing organizations should
operate in a range of 25 to 75 workers for every one
supervisor.10 One "best company" puts Peters' principle to shame:
"Never have so many been managed by so few," Ritz-Carlton Vice
President Patrick Mene told Vice President Gore at the
Philadelphia Summit. "There's only about 12 of us back in Atlanta
for 11,500 employees. And it really starts with passionate
leadership."11

      Working toward a quality government means reducing the
power of headquarters vis-- --vis field operations. As our
reinvented government begins to liberate agencies from
over-regulation, we no longer will need 280,000 separate
supervisory staff and 420,000 "systems control" staff to support
them.12 Instead, we will encourage more of our 2.1 million
federal employees to become managers of their own work.

      Put simply, all federal agencies will delegate,
decentralize, and empower employees to make decisions. This will
let front-line and front-office workers use their creative
judgment as they offer service to customers and solve problems.

      As part of their performance agreements with the President,
cabinet secretaries and agency CEOs will set goals for increasing
the span of control for every manager. (See Step 3.) The federal
government should seek to double its managerial span of control
in the coming years.

     Some employees may view such pruning as threatening--to
their jobs or their chances for promotion. It is true that the
size of the federal workforce will decrease. But our goal is to
make jobs meaningful and challenging. Removing a layer of
oversight that adds no value to customers does more than save
money: It demonstrates trust in our workers. It offers employees
in dead-end or deadly dull jobs a chance to use all their
abilities. It makes the federal government a better place to
work--which will in turn make federal workers more productive.

     As private companies have found, the key to improving
service while redeploying staff and resources is thinking about
the organization's staffing and operating needs from the
perspective of customer needs. What does each person's task add
in value to the customer? The Postal Service has developed a
single criterion: It asks, "Do they touch the mail?" Where
possible, other agencies should develop similar simple,
easy-to-understand criteria.
     Pioneering federal offices have used the full variety of
quality management techniques to decentralize. Many focus on
passing decisions on to the work teams that deal directly with
the customer. Some have produced impressive results, both in
productivity and management delayering.

     The Internal Revenue Service's Hartford district office
slashed the time required to process a form on "currently
non-collectible" taxes from 14.6 days to 1.4 days. Then it
replaced time-consuming case reviews with an automated case
management system and began using the manager's time to upgrade
employees' skills. Delinquent tax dollars collected rose by 22
percent. The office chose not to fill vacant management
positions, investing part of its staff savings in new technology
to boost productivity further. Eventually, it cut overall case
processing time from 40 to 21.6 weeks.13

      At the Robins Air Force Base, the 1926th
Communications-Computer Systems Group cut its supervisory staff
in half by organizing into teams.14 An Agriculture Department
personnel office that converted to self-managed work teams beefed
up customer satisfaction and now uses only one manager for every
23 employees. At the Defense Logistics Agency, self-managing
teams in the Defense Distribution Region Central eliminated an
entire level of management, saving more than $2.5 million a
year.15 In 1990, the Airways Facilities Division of the Federal
Aviation Administration maintained approximately 16,000 airspace
facilities, with roughly 14,000 employees. Today its workforce is
organized in self-managed teams instead of units with
supervisors. They now maintain more than 26,000 facilities with
only 9,000 employees.16

      Other decentralization and delayering plans are in the
works. After a successful pilot program in 11 field service
sites, the Department of Veterans Affairs is recommending an
agencywide effort.17 Over the next 5 years, the Department of
Housing and Urban Development (HUD) plans to convert HUD's field
structure from three to two levels, eliminating the regional
offices. HUD will free its five assistant secretaries to organize
their own functions in the field. It will transfer many of its
application and loan processing functions  to private firms.
While letting staff  attrition dictate staff reductions- - HUD
promises no layoffs--HUD plans to retrain and redeploy people
into more interesting jobs, with better career ladders and better
access to managers. HUD believes its restructuring effort will
improve customer service while saving $157.4 million in personnel
and overhead costs.18
Step 2: --Hold All Federal Employees Accountable for Results
     It's easy to understand why federal employees--including the
hundreds who aired their deep frustrations to the National
Performance Review--would care about empowerment. It adds new,
positive dimensions to their jobs.

     But why should taxpayers or social security recipients care?
Taxpayers aren't interested in what rules bureaucracy follows.
But they do care, deeply, about how well government serves them.
They want education programs to give young people basic skills
and teach them how to think, anti-poverty programs that bring the
unemployed into the economic mainstream for good, anti-crime
programs that keep criminals off the streets, and environmental
programs that preserve clean air and water. In other words, they
want programs that work.

     But management in government does not judge most programs by
whether they work or not. Instead, government typically measures
program activity--how much it spends on them, or how many people
it has assigned to staff them. Because government focuses on
these "inputs" instead of real results, it tends to throw good
money after mediocre. It pours more dollars into the old
education programs even as student performance sinks. It enrolls
jobless people in training programs that teach by the book, but
places few graduates in well-paid jobs.

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What you do thunders so loudly, I cannot hear what you say to the
contrary.
              Ralph Waldo Emerson
****************************

     A recent management survey of the largest 103 federal
agencies sketches in stark relief this lack of focus on real
results. Two-thirds of the agencies reported that they had
strategic plans. But only nine said they could link those plans
to intended results.19 In other words, many had planned, but few
knew where they were going. That's a bit like trying to steer a
ship by looking at its wake. As a result, some of our worst
examples of "waste" are not rooted in corruption or incompetence,
but rather in the simple lack of knowing what we are actually
trying to
accomplish. As one despairing federal employee told us, "Process
is our most important product."

     Recommendations by the National Performance Review aim to
revolutionize our method of navigation. "Today," Vice President
Gore told one departmental meeting, "all we measure is inputs. We
don't measure outputs--and that's one of the things we're going
to change throughout the federal government."

     Measuring outputs is easy in principle. It means measuring
how many unemployed people get jobs, not how many people look for
help at local Employment Service offices. Or it means measuring
how many people received their social security checks on time,
not how many checks were sent out from a local office. "Outputs"
are, quite simply, measures of how government programs and
policies affect their customers. The importance of pursuing the
correct measures cannot be underestimated. As Craig Holt, an
Oregon Department of Transportation employee who has worked with
the ground-breaking Oregon Progress Board--our nation's first
statewide experiment in comprehensive performance
accountability--cautions: "Our focus has occurred through our
indicators, not through our strategic plans."20

     Implementing the Government Performance and Results Act
     To its credit, Congress has begun to recognize this need. In
July 1993, it passed the Government Performance and Results
Act--a pivotal first step toward measuring whether federal
programs are meeting their intended objectives. The act requires
that at least 10 federal agencies launch 3-year pilot projects,
beginning in fiscal 1994, to develop measures of progress. Each
agency pilot will develop annual performance plans that specify
measurable goals. They then must produce annual reports showing
how they are doing on those measures. At least five pilots will
also test "managerial flexibility waivers"--which exempt them
from some administrative regulations--to help them perform even
better. In exchange for greater flexibility, they must set higher
performance targets. This is exactly the process of measured
deregulation--"we agree to deregulate you if you agree to be held
accountable"--that must be the basis of an empowered and
accountable government.
     At the beginning of fiscal 1998, after learning from the
pilot programs, all federal agencies must develop 5-year
strategic plans--linked, this time, to measurable outcomes! By
the next year, every agency will be crafting detailed annual
performance
plans--that is, plans that describe what they intend to achieve,
not plans that detail how many pencils they will buy or people
they will hire. And they will have to report their successes and
failures in meeting those goals. The Office of Managenent and
Budget may exempt very small agencies, and those agencies that
cannot easily measure their outcomes will use qualitative rather
than quantitative goals and measurements. After all, any agency
can, at the very least, survey their customers and report the
rating they are given.

****************************
It may seem amazing to say, but like many big organizations, ours
is primarily dominated by considerations of input--how much money
do we spend on a program, how many people do you have on the
staff, what kind of regulations and rules are going to govern it;
and much less by output--does this work, is it changing people's
lives for the better?


President Bill Clinton
Remarks at the signing of the Government  Performance And Results
Act  August 3, 1993
****************************

     Setting goals is not something that agencies do once. It is
a continual process in which goals are raised higher and higher
to push agency managers and staff harder and harder to improve.
As the old business adage states, "If you're standing still,
you're falling behind."

     That is why we strongly support the act. But agencies should
not wait until fiscal 1999 to start integrating performance
measurement into their operations. Nor should they limit
themselves to the minimum mandates of the new law. The President,
through OMB, is encouraging every federal program and agency to
begin strategic planning and performance measurement, whether it
is selected as a pilot or not.


If government is to become customer-oriented, then managers
closest to the citizens must be empowered to act quickly. Why
must every decision be signed-off on by so many people? If
program managers were instead held accountable for the results
they achieve, they could be given more authority to be innovative
and responsive.  Senator William V. Roth, Jr.
Congressional Record, July 30, 1993


Action: All agencies will begin developing and using measurable
objectives and reporting results.21

     In early 1994--in time to prepare the fiscal 1996
budget--OMB will revise the budget instructions it gives agencies
to
incorporate performance objectives and results, to the greatest
extent possible. Agencies will start measuring and reporting on
their past goals and performance as part of their 1996 budget
requests. The OMB instructions, along with executive office
policy guidance, will guide agencies as they develop full-fledged
goal-setting and performance-monitoring systems for the first
time.
      At the outset, managers may feel unprepared to set
reasonable performance targets. Some will lack any program data
worth its salt on which to base any future goals or performance
projections. Others, overwhelmed with "input" indicators about
program staffing and spending, will find it difficult to figure
out whether--or how--those measures directly relate to achieving
desired outcomes. Agencies will start preparing themselves by
reallocating enough resources toward performance planning and
measurement over the long term.

     OMB will help. Its budget analysts will be trained to
provide feedback and broad oversight to help craft an effective
system, and encourage agencies to improve measures that are
clearly
ineffective. OMB will negotiate stronger goals for agencies that
set their sights too low or perform poorly against their
indicators.

      Agencies will gradually build performance information into
their own budget guidance and review procedures, into their
strategic and operational plans, and into revised position
descriptions for their budget, management, and program analysts.
Nothing, however, will replace peer pressure as agencies vie for
performance awards or seek public recognition for their
achievements.

Action: Clarify the objectives of federal programs.22

     Many agencies will be unable to set clear measurable goals
until Congress simplifies their responsibilities. Programs are
bound by multiple, often conflicting, legislative objectives. The
complex politics of passing enabling legislation and then
negotiating annual appropriations forces some programs to be all
things to all people.

      For example, a training program targeted at unemployed
steel workers soon is required to serve unemployed farm workers,
the disabled, and displaced homemakers. Originally, the program's
purpose may have been to refer people to jobs. But congressional
maneuvers first force it to offer them training; then to help
them find transportation and daycare. All these are important
activities. But, by now, the original appropriation is hopelessly
inadequate, reporting requirements have multiplied geometrically
along with the multiplicity of goals, and the program is not
simply unmanaged--it's unmanageable. If agencies are to set
measurable goals for their programs, Congress must demand less
and clarify priorities more.

     In the private sector, leaders do not simply drop goals on
their organizations from above. Hewlett-Packard, Microsoft,
Xerox, and others involve their full workforces in identifying a
few goals that have top priority, and then demand smaller work
teams to translate those overall goals into specific team
measures. This process enables the people directly responsible
for meeting the goals to help set them. It also ensures that
every part of an organization aims at the same goals, and that
everyone understands where they fit in. It may seem a time
consuming process, but boats travel much faster when everyone is
pulling their oar in the same direction.

     With a new joint spirit of accountability, the executive
branch plans to work with Congress to clarify program goals and
objectives, and to identify programs where lack of clarity is
making it difficult to get results.

     Holding Top Management Accountable

     When General Eisenhower took command of the Allied
Expeditionary Force in World War II, he was given a mission
statement that clearly delineated goals for his vast organization
of more than a million and a half men and women: "You will  enter
the continent of Europe and, in conjunction with the other united
nations, undertake operations aimed at the heart  of Germany and
the destruction of her armed forces."

      In 1961, President Kennedy gave NASA an even clearer
mission: Put a man on the moon and return him safely to earth by
the end of the decade. As Vice President Al Gore told his
audience at a meeting with Veterans Affairs Department employees:
"There has to be a clear, shared sense of mission. There have to
be clearly understood goals. There have to be common values
according to which decisions are made. There has to be trust
placed in the employees who actually do  the work."

     In Great Britain, Australia, and New Zealand, many
department and agency heads are appointed for limited terms and
given performance agreements. Their reappointments depend on
achieving measurable outcomes. Senior officials from these
countries say that these agreements have improved organizational
performance more than any other aspect of their reinventing
government efforts. In the United States, many local governments
do much the same: In Sunnyvale, California, managers can earn
bonuses of up to 10 percent if their agencies exceed performance
targets.

Action: The President should develop written performance
agreements with department and agency heads.23

     Past efforts to institute management by objectives have
collapsed under the weight of too many objectives and too much
reporting. The President should craft agreements with cabinet
secretaries and agency heads to focus on the administration's
strategy and policy objectives. These agreements should not
"micro-manage" the work of the agency heads. They do not row the
boat. They should set a course.

     These agreements will begin with the top 24 agency heads. In
fact, Secretaries Mike Espy at the Agriculture Department and
Henry Cisneros at the Department of Housing and Urban
Development, as well as Roger Johnson at the General Services
Administration (GSA), and Administrator J. Brian Atwood of the
Agency for International Development are already working with
their top managers on agreements.

     Not everyone will welcome outcome measures. People will have
trouble developing them. Public employees generally don't focus
on the outcomes of their work. For one thing, they've been
conditioned to think about process; for another, measures aren't
always easy to develop. Consequently, they tend to measure their
work volume, not their results. If they are working hard, they
believe they are doing all they can. Public organizations will
need the several years envisioned under the Government
Performance and Results Act to develop useful outcome measures
and outcome reporting.

***************************
Measuring Outcomes

Outcome-based management is new in the public sector. Some U.S.
cities have developed it over the past two decades; some states
are beginning to; and foreign countries such as Great Britain,
Australia, and New Zealand are on their way. Sunnyvale,
California, a city of 120,000 in the heart of the Silicon Valley,
began the experiment 20 years ago. In each policy area, the city
defines sets of "goals," "community condition indicators,"
"objectives," and "performance indicators." "In a normal
political process, most decisionmakers never spend much time
talking about the results they want from the money they spend,"
says City Manager Tom Lewcock. "With this system, for the first
time they understand what the money is actually buying, and they
can say yes or no."24
Sunnyvale measures performance to reward successful managers. If
a program exceeds its objectives for quality and productivity,
its manager can receive a bonus of up to 10 percent. This
generates pressure for ever-higher productivity. The result:
average annual productivity increases of four percent. From 1985
to 1990, the city's average cost of service dropped 20 percent,
in
inflation-adjusted dollars. According to a 1990 comparison,
Sunnyvale used 35 to 45 percent fewer people to deliver more
services than other cities of similar size and type.
At least a half-dozen states hope to follow in Sunnyvale's
footsteps. Oregon has gone farthest. In the late 1980s, Governor
Neil Goldschmidt developed long term goals, with significant
citizen input. He set up the Oregon Progress Board, comprising
public and private leaders, to manage the process. The board
developed goals and benchmarks through 12 statewide meetings and
written materials from over 200 groups and organizations.
"Oregon," the board stated, "will have the best chance of
achieving an attractive future if Oregonians agree clearly on
where we want to go and then join together to accomplish those
goals."25
The legislature approved the board's recommended 160 benchmarks,
measuring how Oregon is faring on three general goals:
exceptional individuals; outstanding quality of life; and a
diverse, robust economy. Seventeen measures are deemed short-term
"lead"
benchmarks, related to urgent problems on which the board seeks
progress within 5 years. They include reducing the teen pregnancy
rates, enrolling people in vocational programs, expanding access
to basic health care, and cutting worker compensation costs.
Another 13 benchmarks are listed as "key"--fundamental, enduring
measures of Oregon's vitality and health. These include improving
basic student skills, reducing the crime rate, and raising
Oregon's per capita income as a percentage of the U.S. average.
Barbara Roberts, today's governor, has translated the broad goals
and benchmarks into specific objectives for each agency. This
year, for the first time, objectives were integrated into the
budget--giving Oregon the first performance-based budget among
the states. Great Britain has instituted performance measurement
throughout its national government. In addition, the government
has begun writing 3-year performance contracts, called "Framework
Agreements," with about half its agencies. These agencies are run
by chief executive officers, many from the private sector, who
are hired in
competitive searches and then negotiate agreements specifying
objectives and performance measures. If they don't reach  their
objectives, the CEOs are told, their agencies' services may be
competitively bid  after the 3 years.
*****************************

      Ultimately, no one can generate results without knowing how
the "bottom line" is defined. Without a performance target,
managers manage blindly, employees have no guidance, policymakers
don't know what's working, and customers have no idea where they
may be served best. If, for example, jobless people know how well
graduates of local training programs fare when looking for work,
they can better choose which new careers and programs offer the
best prospects. Informed consumers are the strongest enforcers of
accountability in government.

Action: The administration will issue one set of Baldrige Awards
for quality in the federal government.26

     For years, the executive branch has taken steps to recognize
and support good performance. In typical fashion, however, we
have created three different award systems, each administered by
a different organization. The Federal Quality Institute (FQI)
administers the Presidential Award for Quality; the President's
Council on Management Improvement administers the Award for
Management Excellence; and the Office of Personnel Management
awards the Presidential Quality and Management Improvement Awards
for tangible savings to the government of more than $250,000.
     The administration will issue one set of presidential awards
for quality. The Baldrige Award Office of the National Institute
for Standards and Technology will combine the existing awards
into a new set of Baldrige Awards for public service--to go along
with its private sector award. The new award will recognize
agency and work unit quality initiatives and ideas, based on
program
performance, cost savings, innovation, and customer satisfaction.

Step 3: --Giving Federal Workers the Tools They  Need to do
Their--Jobs

     Americans today demand a more responsive, more humane
government that costs less. Their expectations are neither
irrational nor whimsical. Over the past 20 years, the entire way
we do things, make things, even contact one another, has changed
around us. Businesses have no guarantees, no captive markets. To
compete, they must make things and deliver service better and
faster, and get their message out sooner. No one benefits more
than customers. It's no wonder these same people now turn to
government and ask, "Why can't you do things better too?"

     Transforming our federal government to do better will mean
recasting what people do as they work. They will turn from bosses
into coaches, from directors into negotiators, from employees
into thinkers and doers. Government has access to the same tools
that have helped business make this transformation; it's just
been slower to acquire and use them. We must change that. We must
give workers the tools they need to get results-- then make sure
they use them.


Employee Training

     After two decades of organizing for quality, business knows
one thing for sure: Empowered people need new skills--to work as
teams, use new computer software, interpret financial and
statistical information, cooperate with and manage other people,
and adapt. Indeed, business talks about a new breed of "knowledge
worker"--people who understand that, throughout their careers,
their most important task is to continue learning and applying
new knowledge to the challenge at hand. Knowledgeable workers are
our most important source of progress. They are, quite simply,
the currency of 21st century commerce.

     Business teaches us that ongoing training for every worker
is essential for organizations to work well. Not surprisingly,
the federal government under-spends on training and education,
just as it does on most other productivity-enhancing investments.
In 1989, the National Commission on the Public Service, headed by
Paul Volcker, estimated that while leading private firms spend 3
to 5 percent of their budgets on training, retraining, and
upgrading employee skills, the federal government spends less
than one percent.27

     And the little we do spend is not always allocated wisely. A
well-promoted 4-day training seminar packaged to appeal to
federal agency managers may seem like a good deal. It is not,
however, always what the agency needs. The Volcker Commission
concluded:
     Federal training is suffering from an identity crisis.
Agencies are not sure what they should train for (short term or
long term), who should get the lion's share of resources (entry
level or senior level)...and whether mid-career education is of
value...Career paths are poorly designed, executive succession is
accidental and unplanned, and real-time training for pressured
managers is virtually non-existent. At both the career and
presidential level, training is all-too-often ad hoc and
self-initiated.28

     Perhaps most striking is the paucity of career training for
people on the lowest rungs of the civil service ladder, or for
people without the leg-up of university degrees. These valued
employees may have the most tenure in an office. They may see and
know everything. Frequently, they are indispensable, because only
they know how the system works--and how to work the system.
Unfortunately, their abilities are rarely rewarded, despite their
desire to advance.

     One staffer in the Justice Department's Civil Division
alerted Vice President Gore to her quandary:

     I'm watching the role of our legal secretaries change. Less
and less of the typical secretarial duties are being performed,
simply because the attorneys do a lot of their own drafting of
documents... However, for a secretary to start to move into a
legal assistant position... or into a paralegal role, is frowned
upon... As far as training goes it's impossible... That prevents
a lot of people from...moving into new jobs that are going to be
of more benefit to the department...We've lost a good number of
secretaries who have moved elsewhere, because they cannot go any
further here.29

     Employees at the top rung, too, must keep learning. Managers
and executives face the same hurdles in keeping up with
technology as do front-line workers. Technicians must stay up to
date with system advances and new techniques. The growing band of
federal export and trade personnel must learn more than foreign
languages--they need to master the language of negotiation as
well. Indeed, employees in the Office of the U.S. Trade
Representative currently receive no systematic training in
negotiation skills or the cross-cultural styles and patterns they
are likely to encounter in their work--a situation the office is
now planning to correct.30
     Perhaps most important, training is the key that unlocks the
power of bottom-up decisionmaking. At the Reinventing Government
Summit, General Electric Executive Vice President Frank Doyle
detailed the GE experience: "We had to educate our entire
workforce to give them the tools to become meaningfully involved
in all aspects of work. Empowerment...is a disorderly and almost
meaningless gesture unless people doing the actual work are given
the tools and knowledge that self-direction demands."31

     During the National Performance Review process, almost every
one of the agency teams identified a specific learning need
critical to their agency's quality improvement and mission. In
addition, several common training concerns demand governmentwide
action.

Action: The administration will grant agencies the flexibility to
finance training needs.32

     Leading corporations view training as a strategic resource,
an investment. Federal managers tend to view it as a cost. So in
government, worker training isn't even included in most budget
estimates for new systems or programs. This is puzzling and quite
short-sighted, since new workplace innovations, like advanced
software, won't transform employee productivity unless those
employees know how to use them. Although training may be the best
and least costly way to improve worker performance, government
executives view it as a "quick fix," unworthy of any planning
effort.

     Perceptions are changing, however. Today's management
literature is full of talk about the value of
on-the-job-training, computer-based instruction, expert systems,
work exchange, mentors and other tools for learning. Since 1992,
OPM has been steering agencies toward more comprehensive training
initiatives.

     We will grant agencies a substantial portion of the savings
they realize from decentralizing staff and reducing operating
costs (see chapter 1) to invest in worker training, performance
measurement, and benchmarking.

     Budget directives further complicate an agency's ability to
train workers effectively, particularly when its own budget
office, OMB, or Congress cut line items for employee training.
Such over-specified reductions deny employees the access to
skills they need to be productive, to advance in their careers,
and to adapt to new technology.

Action: The federal government will upgrade information
technology training for all employees.33

     Every year, more and more federal workers must use
computer-based information technology in their jobs. If business
is any guide, our government reinvention efforts will only
quicken the trend. Pen and paper exercises keep moving to the
screen. Lateral files now form database records. Video- and
computer-based courses make learning possible anytime, anywhere.
Money no longer changes hands; it's transmitted digitally. People
not only talk, they "message." A meeting of the minds can take
place without the bodies present.

     Other chapters discuss how we will speed the procurement
process for technology and how we will deploy technology to alter
what we do and how well we do it. Here, we want to stress that
much of the federal workforce lacks the training and background
to use advanced information technologies.

     Compared to the private sector, the federal government
invests few dollars and scant time in technology training.34
Federal agencies provide insufficient incentives to motivate
their workforce to seek technology training, scarce opportunities
to obtain training--even when it's desired and necessary--and
rarely incorporate technology training in the strategic planning
process. The longer we wait, the farther behind we fall.

     This foot-dragging costs the taxpayer dearly. We do things
the old way, not the cheaper, more efficient way. Or we start
doing things the new way, but we don't go far enough: We buy
computers for our workers, but not the training to use them
properly, so the software and hardware investments are wasted. We
invest in new systems, and our people can't make them work.

     Training should begin with top nontechnical managers, to
help them focus on uses, management, planning, and acquisition of
state-of-the-art information technology. By May 1994, OPM and GSA
will jointly develop and administer information technology
training for non-technical managers and presidential appointees.
The New York City Department of Personnel, already in the
technology training business, offers a useful model of monthly
half-day sessions for executives covering ten topics: strategic
planning, reengineering, implementing systems, electronic mail,
video conferencing, voice-enhanced technologies, geographic
information systems, database management, imaging, and
multi-agency complaints and inspection systems. Our effort will
help every senior manager earn a certificate that signifies his
or her level of technology competency. Parallel training and
certification efforts will target Senior Executive Service
members and information resource managers.
     Anyone who has grappled with computers--from the basics of
word processing to the complexity of expert systems--knows that
we often learn best how to use software by finding a technology
"pal": someone who knows the ins and outs of a particular
software application and is willing to share that knowledge. To
spread information technology training and use in the entire
federal workforce, the existing Federal Information Resources
Management Policy Council will help motivated agencies set up a
program of collegial assistance for a wide range of technology
applications. We will tap the cadre of techno-proficient
individuals spread across the federal government to provide
occasional on-line help or personal assistance on demand to their
struggling colleagues.
      Finally, starting late in 1993, new contracts for
technology acquisition--or those in early stages--must include a
provision for training. If agencies work together, they can cut
such training costs dramatically. When Texas contracted with four
statewide technology training firms to train state employees, it
cut the price to $60 to $110 a day per worker for a wide range of
skills. An even larger customer, the federal government should be
able to land an even better bargain.

Action: Eliminate narrow restrictions on employee training to
help develop a multiskilled workforce.35

     The Government Employees Training Act (GETA), which
authorizes agencies to manage and determine their training needs,
defines training as a tool for "increasing economy and efficiency
in government." The rules written behind this 1958 wording
severely limit how agencies can use training today. Training too
often is ad hoc and seldom linked to strategic or human resource
planning. Managers generally are not able to get the information
to determine the return on their training investment. Even worse,
existing restrictions dictate that any training be related to an
employee's official duties--thus ensuring that our Justice
Department secretary does not become a paralegal. These rules
keep federal employees single-skilled in a multi-skilled world.

     By early 1994, OPM will draft legislation to amend GETA on
three fronts. OPM will redefine the objective of federal training
as the "improvement of individual and organizational
performance." It will relate the use of training to achieving an
agency's mission and performance goals, not to a worker's
official duties. And OPM will seek to end the distinction between
government and
nongovernment training, giving public employees access to the
best training services available, no matter who provides them.

      Clarifying the purpose of training in GETA will reinforce
the need to use training to improve performance and produce
results. Removing the distinction between government and
non-government training will deregulate the in-government
training monopoly, introducing competition that will improve the
quality of learning opportunities for federal employees. And
linking training to an agency's mission will ease employees'
efforts to become adept at all the skills they need as empowered
workers. We urge Congress to join in the quality effort by
passing these important amendments early in 1994.

     Management Information Systems

     Management isn't about guessing, it's about knowing. Those
in positions of responsibility must have the information they
need to make good decisions. Good managers have the right
information at their fingertips. Poor managers don't.

     Good information comes from good information systems.
Management information systems have improved in lockstep with
every advance in the telecommunications revolution. New
management information systems are transforming government, just
as they have business, in two ways. They can make government more
productive--the benefit we discuss in this chapter--and let us
deliver services to customers in new ways, which we take on in
chapter 4. Indeed, today's systems have enabled businesses to
slim down data processing staffs, while giving more employees
access to more accurate data. This shows up on the bottom line.
If federal decisionmakers are given the same type of financial
and performance information that private managers use, it too
will show up on the bottom line--and cut the cost of government.

     Sheer size alone would make the federal government difficult
to manage, even under the best of conditions. Unfortunately,
federal employees don't work under the best of conditions.
Indeed, when it comes to financial information, many are flying
blind. It's not for lack of staffing: Some 120,000
workers--almost 6 percent of non-postal service civilian
employees--perform budget, accounting, auditing, and financial
management tasks.36 But when OMB surveyed agency financial
reporting systems last year, it found that one-third were more
than a decade old, and only 6 percent were less than 2 years old.
One-third failed to meet Treasury and OMB reporting standards.
Two-fifths did not meet their own in-house reporting
standards--meaning they did not provide the information managers
wanted. And more than half simply lacked the computer power to
process the data being entered.37

     We all know the potential costs of lagging systems: They
contributed to the $300 billion savings and loan bailout,38 $47
billion in nontax delinquent debt, $3.6 billion in student loan
defaults, and so on.

     Fortunately, the process of updating our management
information systems has begun. In 1990, Congress passed the Chief
Financial Officers (CFO) Act.39 It designated an OMB deputy
director as the federal government's chief financial management
officer. The Office of Federal Financial Management was charged
with establishing financial management policies across the
government and monitoring agency audits. The act also created
chief financial officers in 23 agencies. The OMB deputy chairs a
CFO Council to deal with improving financial management across
government.

     But we need to do more--and quickly.

Action: The executive branch will create a coherent financial
management system, clarify responsibilities, and raise the
standards for financial officers.40

     Vastly improved financial management is critical to the
overall effort to reform government. First, it will save
taxpayers money. Trillions of dollars flow through the federal
government in any year; even a small improvement in managing
those funds could recover billions. Second, we need accurate and
timely financial information if managers are to have greater
authority to run federal agencies, and decisionmaking moves to
the front lines. Greater responsibility requires greater
accountability, or the best-intentioned reforms will only create
new problems. Finally, better financial management will present a
more accurate picture of the federal budget, enabling the
President, Congress, and agency leaders to make better policy
decisions.

     By the end of 1993, OMB and Treasury will sign a formal
agreement to clarify  their respective policymaking and
implementation roles, to eliminate regulatory confusion and
overlap for their governmental customers. OMB, working with
Treasury and the CFO Council, will charter a governmentwide
Budget and Financial Information Steering Group to oversee the
stewardship of financial planning and management data for the
federal government. In addition, by Spring, 1994, OMB will work
with the existing Joint Financial Management Improvement Program,
which currently develops and publishes financial system
requirements, and consult with Treasury and the agencies to
define exactly what constitutes an integrated budget and
financial system. At the same time, working with Treasury and the
CFO Council, OMB will develop a long-range strategic plan for
linking broad budget and financial information needs to the work
of agency managers and achieving performance goals.

     Finally, we will insist on higher qualifications for chief
financial officers. After all, many federal agencies are larger
than Fortune 500 companies. Americans deserve financial officers
with qualifications that match those in our best companies. By
March 1994, working with accounting and banking groups, the CFO
Council will create a continuing education program for federal
financial managers. At the same time, OMB guidelines will clarify
the precise financial functions the CFO should oversee, trimming
responsibilities like personnel or facilities management that lie
outside the CFO's main mission.

Action: Within 18 months the Federal Accounting Standards
Advisory Board will issue a comprehensive set of credible
accounting standards for the federal government. 41

     A recent GAO audit of the Internal Revenue Service unearthed
$500,000 of overpayments to vendors in just 280 transactions and
a video display terminal that cost only $752 listed at $5.6
million on the IRS books. Other GAO efforts found the Army and
Air Force guilty of $200 billion in accounting mistakes, NASA of
$500 million, and widespread recordkeeping problems across
government.42 In 1990, Congress concluded that "current financial
reporting standards of the federal government do not accurately
disclose the current and probable future cost of operating and
investment decisions including the future needs for cash and
other resources." In other words, if a publicly-traded
corporation kept its books the way the federal government does,
the Securities and Exchange Commission would close it down
immediately.

     It's not that we have no accounting procedures and
standards. It's that we have too many, and too many of them
conflict. Even worse, some budget and accounting practices
obscure the amount and type of resources managers might leverage
to produce savings and increase productivity.

     We must agree on stricter accounting standards for the
federal books. We require corporations to meet strict standards
of financial management before their stocks can be publicly
traded. They must fully disclose their financial condition,
operating results, cash flows, long-term obligations, and
contingent liabilities. Independent certified public accountants
audit their accounts. But we exempt the $1.5 trillion federal
government from comparable standards.

     Currently, the Federal Accounting Standards Advisory Board
(FASAB), established in October 1990, develops and recommends
federal accounting standards for OMB, Treasury, and GAO--which
together must approve them. Although we need almost a dozen sets
of standards, only one has been approved using this process in
more than two and a half years. We need to quicken the pace.

     The administration will give the Federal Accounting
Standards Advisory Board an 18-month deadline to release and get
approval of all 11 sets of standards. If it fails, the
administration will replace it with a new, independent board with
greater powers.
Action: The Administration should issue an Annual Accountability
Report to the Citizens.43

     The ultimate consumer of information about the performance
of federal organizations should be the American public. As
agencies develop output and outcome measures, they should publish
them. The customer service standards required by the President's
directive on improving customer service, outlined in chapter 2,
will be a first step.

     A second step will be a new report card on the financial
condition of the federal government. For the last 20 years, our
government has issued "prototype" financial statements, but no
one can assure their accuracy. Put simply, they would never pass
an audit. We believe Americans deserve numbers they can trust. By
1997, we will require the Department of the Treasury to provide
an audited consolidated annual report on federal
finances--including tax expenditures, hidden subsidies, and
hidden contingent
liabilities such as trust funds and government-sponsored
enterprises.44

     The Treasury and OMB will develop a simplified version of
the government's financial condition, to be published for public
consumption in 1995. Rather than a detailed, unreadable financial
account, it will be a straightforward description of the money
spent and its effects on achieving goals. We will call this the
Annual Accountability Report to the Citizens.

     Information Technology

     A few years ago in Massachusetts, a disabled veterans
caseworker who worked to  match veterans with available jobs took
some initiative. He decided to abandon his sole reliance on the
state's central office mainframe computer and take his personal
laptop, loaded with readily available software, on the road.
Suddenly, he was able to check a database, make a match, and
print a resume all during his first contact with an employer.
Quickly, he started beating the mainframe. His state
administrator took notice, and managed to squeak through a
request to the Department of Labor's Veterans Employment and
Training Service for grant funding and permission to reprogram
dollars in the fall of 1990. Soon after, 40 Massachusetts
caseworkers were working with laptops. In just one year,
Massachusetts jumped from 47th in the nation for its veterans job
placement rate to 23rd.

     Although this story screams success, it is unfortunately the
exception, not the rule. Normally, the Labor Department has to
approve the purchase of something as small as a $30 modem in the
field. Massachusetts got the funding only because it was the end
of the fiscal year and money had to be spent.45

     The point stands: When workers have current and flexible
technology to do their jobs, they improve performance. We need to
get more computers off the shelf and into the hands of federal
employees.

Action: The administration will develop a strategic plan for
using information technology throughout the federal government.46

     Transforming the federal government is an enormous, complex
undertaking that begins with leadership, not technology. Yet, in
helping to break down organizational boundaries and speed service
delivery, information technology can be a powerful tool for
reinvention. To use that tool, government employees must have a
clear vision of its benefits and a commitment to its use.

******************************
In short, it's time our government adjusted to the real world,
tightened its belt, managed its affairs in the context of an
economy that is information-based, rapidly changing, and puts a
premium on speed and function and service, not rules and
regulations.
President Bill Clinton
Remarks announcing the  National Performance Review
March 3, 1993
******************************

     Washington's attempts to integrate information technology
into the business of government have produced some successes but
many costly failures. Many federal executives continue to
overlook information technology's strategic role in reengineering
agency practices. Agency information resource management plans
aren't integrated, and their managers often aren't brought into
the top realm of agency decisionmaking. Modernization programs
tend to degenerate into loose collections of independent systems
solving unique problems. Or they simply automate, instead of
improve, how we do business.

     The President should expand the work of the existing
Information Infrastructure Task Force to include a Government
Information Technology Services Working Group. This working group
will develop a strategic vision for using government information
services and propose strategies to improve information resource
management. Also beginning in October 1993, OMB will convene
interagency teams to share information and solve common
information technology problems. In addition, OMB will work with
each agency to develop strategic plans and performance measures
that tie
technology use to the agency's mission and budget.


Step 4: --Enhancing the Quality  of Worklife

     When it comes to the quality of worklife, as measured by
employee pay, benefits, schedule flexibility, and working
conditions, the federal government usually gets good marks. Uncle
Sam is a family-friendly employer, offering plenty of options
that help employees balance their life and work responsibilities.
Flextime, part-time, leave-sharing, and unpaid family and medical
leave are all available. Pilot projects in telecommuting allow
some workers who travel long distances to work at locations
closer to home.

     The federal government would be smart to keep abreast of
workplace trends. Our increasingly diverse workforce struggles to
manage child care, elder care, family emergencies, and other
personal commitments, while working conditions become ever more
important. Recent studies suggest that our ability to recruit and
retain the best employees--and motivate them to be
productive--depends on our ability to create a satisfying work
environment. Johnson & Johnson, for example, reported that its
employees who used flextime and family leave were absent 50
percent fewer days than its regular workforce. Moreover, 71
percent of those workers using benefits said that the policies
were "very important" to their decision to stay with the company,
as compared to 58 percent of the employees overall.46

     The federal government must maintain its "model employer"
status and keep the workplace a humane and healthy place. It must
also ensure that, as we move toward improving performance and
begin to rely on every worker for valuable ideas, we create a
workplace culture in which employees are trusted to do their
best.

Action: The federal government will update and expand
family-friendly workplace options.47

     Even under current workplace policies, federal workers still
encounter some problems. Many agencies do not fully advocate or
implement flexible work policies. For example, only 53 percent of
our employees with dependent care needs believe their agencies
understand and support family issues, according to OPM.
Thirty-eight percent indicated that their agencies do not provide
the full range of dependent-care services available. As one
example, OPM concluded that "...certain agencies may have
internal barriers that make supervisors reluctant to approve
employee requests to work part-time."48

     The President should issue a directive requiring that all
agencies adopt compressed/flexible time, part-time, and
job-sharing work schedules. Agencies will also be asked to
implement flexiplace and telecommuting policies, where
appropriate. Starting next year, we will allow federal employees
to use accrued sick leave to care for sick or elderly dependents
or for adoptions.49 We will also give credit for all sick leave
to employees who have been separated from and then rejoin federal
employment, no matter how long they were out of government
service.

     Congress has written into law some barriers to improving the
federal workplace. It should lift them. By January 1994, OPM will
submit legislation to remove limitations on dependent-care
programs and give agencies more authority to craft
employee-friendly programs, such as employee benefit packages. By
March 1994, OPM and GSA will propose legislation to enable
flexiplace and telecommuting arrangements.

     Finally, we urge Congress to reauthorize the Federal
Employees Leave Sharing Act which expires October 31, 1993 with a
few changes to improve program operations and allow interagency
transfers of annual leave. Voluntary leave enables employees with
family medical emergencies, who have exhausted all their
available annual leave, to receive donated annual leave from
their fellow federal workers. In just the last two years,
voluntary leave served more than 23,000 federal employees with
more than 3,742,600 hours of donated annual leave. The
dependent-care needs of more than 96 percent of federal employees
are met by the leave-sharing program.50


******************************
One of the things we learned... is that there's a strong
correlation between employee satisfaction and customer
satisfaction. If your employees are unhappy and worried about the
various baseline, basic needs, you know, of the quality of their
work life, they won't worry about customers.

Rosetta Riley
Director of Customer Satisfaction
General Motors
******************************

Action: The executive branch will abolish employee time sheets
and time cards for the standard work week.51

     In a productive workplace, where employees clearly
understand their agency's mission, how they fit into it, and what
they must accomplish to fulfill it, everyone is a professional.
The work culture must send this message in every way possible.
One easy way is to put an end--once and for all--to meaningless
employee sign-ins and sign-outs on time sheets.

     Many may consider this a trivial matter. But consider the
salaried Health and Human Services (HHS) employee who must still
sign in at a central location in her office every morning--and
sign out exactly 81/2 hours later. She must do this no matter how
many more hours she really works, and every employee in her
branch must sign the same list, in order of appearance.

     Occasionally, when she gets caught up in a meeting or lost
in concentration at her desk, she forgets to sign the book at her
appointed hour. Supervisors have "guided" her to avoid this
problem. She tells her supervisor, who agrees that the practice
is senseless, that it discourages her from working longer hours.
"What about us overachievers?" she asks him. "You lose," he
answers.

The truth is, we all lose. Yet HHS continues to spend dollars
training timekeepers.52

     The Department of Labor, by contrast, listened to complaints
from its employees about the needless paper-pushing and use  of
administrative time that repetitive timekeeping required. Under
the leadership of Secretary Robert Reich, and with full backing
of union presidents who represent department employees, Labor has
begun to dump the standard time card. After realizing that nearly
14,000 of its 18,000 employees work a standard 40-hour week,
department leaders decided to trust their workers to report only
exceptions, such as overtime and sick and annual leave. Since
only one third of Labor's workforce reports any exception in the
average week, the department is already saving paper and
time--and money. Standard time records are now submitted
electronically, without bothering employees.56

     The President should encourage all departments and agencies
to follow the Department of Labor's lead. The new policy will
allow for exceptions--for example, when labor contracts or
matters of public safety require them. But if we truly seek the
highest productivity from our workers, we must treat them like
responsible adults. In today's work environment, time cards are a
useless annoyance.

Action: The President should issue a directive committing the
administration to greater equal opportunity and diversity in the
federal workforce.54

     President Clinton launched his administration by appointing
cabinet and senior officials who, in his words, "look like
America." In doing so, he sent a clear message: A government that
strives for the best must continue to break down stubborn
barriers that too often keep us from employing, training, or
promoting the best people.

     While the President has set the stage, the current federal
workforce does not reflect the nation's diverse working
population. Overall, the federal government has yet to
successfully eliminate some discriminatory barriers to attracting
and retaining
underrepresented groups at every civil service grade level, or
advancing them into senior positions. A glass ceiling still hangs
over the employment and career prospects for women, minorities
and people with disabilities who work in the federal service.
Women account for only 12 percent of the top tier of the federal
employment ladder--the Senior Executive Service--and minorities,
nine percent.55 Serious disparity persists for both in promotion
rates to professional and administrative levels  that serve as
the gateway to further advancement. The numbers for Americans
with disabilities are even worse.

     Much can be done to make equal opportunity an integral part
of each agency's mission and strategic plan. The President should
issue a directive in 1993, committing the administration to
attaining a diverse federal workforce and increasing the
representation of qualified minorities, women, and people with
disabilities at all career levels. The order should instruct
agency heads to build equal employment opportunity and
affirmative employment elements into their agency strategic plans
and
performance agreements. In turn, agency leaders should require
managers and teams throughout their agencies to build the same
goals into their own performance plans--and should publicly
recognize those who succeed.


Step 5: --Forming a Labor-Management Partnership

     The federal workforce is changing. While the number of
employees has remained constant for a decade, the workforce is
much more diverse, with more minorities and women. It is better
educated and more mobile. And more employees work in
professional,
scientific, and highly technical jobs than ever before.

     Today, more than 125 federal unions represent about 60
percent of the federal workforce. That's 1.3 million civilian,
non-postal employees, or 80 percent of the workforce eligible to
participate in federal unions. The three largest federal employee
unions are the American Federation of Government Employees
(AFGE), the National Treasury Employees Union (NTEU), and the
National Federation of Federal Employees (NFFE).

     Federal employees and their unions are as aware of the
quality revolution as are federal managers. Consistent with the
quality push, federal employees want to participate in decisions
that affect their work. Indeed, GAO estimates that 13 percent of
federal workers already are involved in formal quality management
processes.56 At the IRS, for example, a Joint Quality Improvement
Process with the NTEU has spread throughout the agency--saving
money, producing better service, and improving labor-management
relations.

     Corporate executives from unionized firms declare this truth
from experience: No move to reorganize for quality can succeed
without the full and equal participation of workers and their
unions. Indeed, a unionized workplace can provide a leg up
because forums already exist for labor and management exchange.
The primary barrier that unions and employers must surmount is
the adversarial relationship that binds them to noncooperation.
Based on mistrust, traditional union-employer relations are not
well-suited to handle a culture change that asks workers and
managers to think first about the customer and to work
hand-in-hand to improve quality.

*****************************
We want to be full partners. We want to work. We want government
to work better. We want to be there in partnership to help
identify the problems. We want to be there in partnership to help
craft the solution. We want to be there in partnership to help
implement together the solution that this government needs. And
we're prepared to work in partnership to make some bold leaps to
turn this government around and make it work the way it should
work.  John Sturdivant, President
American Federation of Government Employees
Reinventing Government Summit,  Philadelphia June 25, 1993
*****************************

     The current context for federal labor-management relations,
title VII of the 1978 Civil Service Reform Act, presents such a
barrier. In 1991, the GAO concluded after an exhaustive survey of
union leaders, government managers, federal employees and neutral
experts, that the federal labor-management relations program
embodied in title VII "is not working well." GAO characterized
the existing bargaining processes as too adversarial, bogged down
by litigation over minute details, plagued by slow and lengthy
dispute resolution, and weakened by poor management. One expert
interviewed by GAO summed up the prevailing view: "We have never
had so many people and agencies spend so much time, blood, sweat,
and tears on so little. In other words, I am saying I think it is
an awful waste of time and money on very little results." Indeed,
the cost of handling unfair labor practice disputes using this
system runs into tens of millions of dollars every year.57

     We can only transform government if we transform the
adversarial relationship that dominates federal union-management
interaction into a partnership for reinvention and change.
Action: The President should issue a directive that establishes
labor-management partnership as an executive branch goal and
establishes a National Partnership Council to help implement
it.58
     The President's executive order will articulate a new vision
of labor-management relations. It will outline the roles of
managers and unions in creating a high-performance, high-quality
government. It will call for systematic training in alternative
dispute resolution and other joint problem-solving approaches for
managers, supervisors and union officials. And it will call for
agencies to form their own internal councils.

     By October, 1993, the President should appoint the National
Partnership Council and charge it with the task of championing
these efforts and developing the next steps. The council will
include appropriate federal cabinet secretaries, deputy
secretaries, and agency directors; the presidents of AFGE, NTEU,
and NFFE; and a representative of the Public Employee Department
of the AFL-CIO. Federal agencies and unions will assign existing
personnel to staff the council.

Action: The National Partnership Council will propose the
statutory changes needed to make labor-management partnership a
reality.59
     GAO cited the need for a new labor-management relations
framework that "motivates labor and management to form productive
relationships to improve the public service."60 The Federal Labor
Relations Authority, The Federal Mediation and Conciliation
Service, and several agencies have been encouraging and
facilitating new labor-management cooperation efforts. However,
their efforts are being hampered by legal restrictions that focus
on the traditional adversarial models. The council will recommend
legislation to the President to create a better framework.

Step 6: Exerting Leadership

     Despite the federal government's solid core of capable
employees, it lacks effective leadership and management
strategies. In 1992, GAO delivered a stark diagnosis of the
situation. Our government, GAO reported, lacks the "processes and
systems fundamental to a well-run organization. Most agencies
have not created a vision of their futures, most lack good
systems to collect and use financial information or  to gauge
operational success and accountability, and many people do not
have the skills to accomplish their missions." This situation,
GAO concluded in a burst of understatement, was "not good."61

     The sweeping change in work culture that quality government
promises won't happen by itself. Power won't decentralize of its
own accord. It must be pushed and pulled out of the hands of the
people who have wielded it for so long. It will be a struggle.
     We must look to the nation's top leaders and managers to
break new ground. The President, the Vice President, cabinet
secretaries, and agency heads are pivotal to bringing about
governmentwide change. It is they who must lead the charge. Under
President Clinton's leadership they are determined to make it
happen.
     If we want to make the federal government a better place,
our current leadership must make it clear by what we do that,
when we offer change, we mean business. That is a promise we must
make to the entire community of hardworking, committed federal
workers. It is a promise we must keep.

Action: The President should issue a directive detailing his
vision, plan, and commitment to creating quality government.62
     Graham Scott, who as Secretary of Treasury for New Zealand
helped shepherd reinvention of that country's government,
cautioned Vice President Gore, "Our experience is that government
won't change unless the chief executive is absolutely 100 percent
committed to making it change."63 CEOs of corporations the world
over echo Scott's call.

     The first directive issued along with this report will
clarify the President's vision of a quality federal government.
It will commit the administration to the principles of
reinventing government, quality management, and perpetual
reengineering, as well as the National Performance Review's other
recommendations. In addition, it will detail the strategic
leadership roles of the cabinet and agencies in implementing
them.

Action: Every federal department and agency will designate a
chief operating officer.64

     Transforming federal management systems and spreading the
culture of quality throughout the federal government is no small
task. To accomplish it, at least one senior official with
agencywide management authority from every agency will be needed
to make it happen.

     Every cabinet-level department and federal agency will
designate a chief operating officer (COO). In addition to
ensuring that the President's and agency heads' priorities are
implemented, COOs will be responsible for applying quality
principles in transforming the agencies' day-to-day management
cultures, for improving performance to achieve agencies' goals,
for reengineering administrative processes, and for implementing
other National Performance Review recommendations.

     The COO will not add an additional position in the
secretary's or director's staff. Secretaries and agency directors
should designate the deputy secretary or under secretary with
agencywide authority as the COO. The COO will report directly to
the agency's top official.

Action: The President should appoint a President's Management
Council to lead the quality revolution and ensure the
implementation of National Performance Review plans.65

     A new President's Management Council (PMC) will be the
President's chief instrument to retool management systems
throughout the executive branch. It will act as the institutional
lever to drive management and cultural changes throughout the
bureaucracy. The PMC will ensure that quality management
principles are adopted, processes are reengineered, performance
is assessed, and other National Performance Review
recommendations are
implemented.

******************************
Unless everyone understands what a work process is, how to map
it, how to analyze and quantify its essential elements, no
organization will be able to reap the enormous gains in
performance that come with an involved and empowered workforce.
Frank Doyle
Executive Vice President, General Electric
Reinventing Government Summit, Philadelphia  June 25, 1993
******************************

     The President should appoint the Deputy Director for
Management of OMB to chair the PMC, and its progress will be
overseen by the Vice President. The council will include the COOs
from 15 major agencies and three other agencies designated by the
chairperson, the heads of GSA and OPM, and the President's
Director of Cabinet Affairs (ex officio). Its agenda will include
setting priorities, identifying and resolving cross-agency
management issues; establishing interagency task forces to
transform governmentwide systems such as personnel, budget,
procurement, and information technology; and soliciting feedback
from the public and government employees. It will secure
assistance from the CEOs, officials and consultants who have
helped transform major American corporations, states and local
governments, and non-profit organizations. In addition, the PMC
will conduct an annual performance review of the federal
government and issue an annual report to the public on its
findings.

     Working together, the President, Vice President, PMC and
every agency head will carry the quality message into the
sleepiest corners of the bureaucracy. Successful and innovative
agencies will be cheered; slower moving organizations will be
prodded and encouraged until change occurs.

Action: The President's Management Council will launch quality
management "basic training" for all employees, starting with top
officials and cascading through the entire executive branch.66


     However pressing the need, we cannot expect leaders,
managers and employees caught up in old ways to change overnight.
To nurture a quality culture within government, we must help the
entire workforce understand the President's vision. Unless we
train everyone in the new skills they need--and help them
understand the new roles they are expected to play--they can,
through passive or active resistance, frustrate well-intentioned
attempts to progress. So first and foremost, everyone will need
to learn what working and managing for quality is all about.

     The President and agency heads must send a clear message
about their commitment by becoming directly involved in the
design and delivery of quality training in their agencies.
Therefore, the PMC, working with the Federal Quality Institute,
will begin quality training with the cabinet secretaries and
agency heads. Training sessions will focus on defining a shared
vision, developing a strategy to embed that vision in the each
department, committing participants to lead and be responsible
for change, and
establishing a process for training the next level of management.

     Even as agencies reorganize around quality and customers,
their staff may need training to fulfill expanded job
responsibilities. Line staff may need to learn budget and
procurement processes. Managers may need help in becoming coaches
rather than commanders. We will pursue the goal of reaching the
entire federal workforce with quality training.

     It is worth noting that some cabinet secretaries already are
up on the quality learning curve. During the past few months,
more than 60 top field managers, contract lab directors, and
assistant secretaries have joined Energy Secretary Hazel O'Leary
for 6 days of total quality management training at Motorola
University in Chicago. They've agreed on a mission statement, set
the
department's core values, and put strategic planning in motion.
In the process, skeptics have become energized, egos have been
subsumed, hidden agendas unearthed and dispensed. In the words of
one participant, "Everyone is working as a team. We're incredibly
excited about doing better. In just 6 days of quality training,
we have moved from 'I' to 'we'."67

     Other departments are hot on Energy's heels. Such agency
leadership is pivotal to moving quality forward. As quality
innovator Dr. Joseph Juran told Vice President Gore, "As we go at
it energetically in the federal government... we're still going
to see some of the agencies step out in front and everybody else
is going to watch. And as they get results and nobody's hurt in
the process, others will be stimulated to do the same thing."68

Conclusion

     To change the employee culture in government, to bring about
a democracy of leadership within our bureaucracies, we need more
than a leap of faith. We need a leap of practice. We must move
from control to collaboration, from headquarters to every
quarter. We must allow the people who face decisions to make
decisions. We must do everything we can to make sure that when
our federal workers exercise their judgment, they are prepared
with the best information, the best analysis, and the best tools
we have to offer. We must then trust that they will do their
best--and measure the results.

     Indeed, we must let our managers and workers fail, rather
than hold them up to public ridicule when they do. Only if they
fail from time to time on their way to success will we be sure
they are even trying to succeed. Someone once asked an old man
known for his wisdom why he was so smart. "Good judgment comes
from experience," he said. And experience? "Well, that comes from
bad judgment."
     To transform the culture of our government, we must learn to
let go. When we do, we will release the same kind of creativity,
energy, productivity, and performance in government service that
was unleashed 200 years ago, and that continues to guide us
today.