Feds could learn a lot from San Diego, study says

Federal managers can get a tan in San Diego, but they can also pick up something a lot more valuable-lessons learned from a highly successful government turnaround effort-according to a recent study by a Columbia University scholar.

In three years, San Diego County surfaced from the depths of mismanagement with a balanced budget, lower taxes and efficiently run programs, according to the study, "San Diego County's Innovation Program: Using Competition and a Whole Lot More to Improve Public Services."

In 1995, the county was about to plummet into bankruptcy. But a competition-based reform of government programs averted the crisis. "While competition remained the theme, most of the program improvements came from other innovations, such as reengineering, reorganization, privatization and contracting out," said the study, which was funded by the PricewaterhouseCoopers Endowment for the Business of Government.

Report author William B. Eimicke, director of Columbia University's School of International and Public Affairs, reviewed the county's major management reforms with an eye for lessons learned.

Among his findings: competing public services isn't always the answer. County competitions sometimes took more than a year to complete and similar or greater savings were achieved from privatization, outsourcing and reengineering.

But competitions have a profound affect on employees' attitudes and behaviors, Eimicke found. San Diego County held eight managed competitions and county employees won seven of them. In the process, they learned the value of measuring program outcomes and committing to improvement, bringing to their offices "a new atmosphere, characterized by analytical thinking," Eimicke wrote.

The leader of San Diego County at the time of the reforms also learned that ideas don't always transfer smoothly from the private to the public sector. For example, a plan to give county managers performance bonuses created a backlash in the media and among labor unions.

"Real pay for performance systems discriminate-there are winners and losers. This intense win/lose competition is fundamental. The San Diego County experience raises the question of how far government can go in bringing market practices to public organizations," the study said.

Although performance bonuses weren't a big hit, an effort to create a group to oversee the countywide reform effort-much like the National Partnership for Reinventing Government does at the federal level-was a success. The group pushed county departments to lower costs and improve service. It published cost comparison guidebooks to educate county teams and vendors on how to bid in managed competitions and brought in outside consultants to help the teams develop bids.

Federal agencies could learn a lot from San Diego's experience, Eimicke wrote. "The innovation initiatives made a substantial contribution to righting the county government."