Jump-Start

Two years ago, the Office of Energy Efficiency and Renewable Energy was a troubled organization. Its programs were politically popular, but they were managed inefficiently, and Congress questioned their effectiveness. The organizational structure made it difficult for the staff to work collectively and achieve agency goals. According to a March 2000 review by the National Academy of Public Administration, the Energy Department office's management problems stemmed from fragmentation among organizational units, emphasis on process rather than product, poor communications and weak decision-making processes.

The breadth and diversity of the office's activities contributed to the fragmentation. The office leads the federal effort to promote greater energy efficiency and the increased use of clean, renewable sources such as wind, solar, geothermal, biomass and hydropower. It manages research and development, promotes alternative-fuel vehicles, funds state and local low-income weatherization programs, sets energy efficiency standards for households, manages the government's in-house energy program, and much more.

But with 17 offices and 31 programs, the agency had developed a culture marked by divergent management practices and unnecessary organizational layers. It was impossible to implement common management practices across the whole agency. Program managers were shielded from accountability, and the senior executives at the apex of each sector were autonomous and insulated from political and policy oversight.

Meanwhile, President Bush's management agenda emphasizes results, not process. It calls for bureaucracies to be flatter, more responsive and unencumbered by turf battles. Taking account of the president's plan for improving performance and the findings of internal and external reviews, the Renewable Energy Office reorganized in 2002. It used an innovative model that streamlined and integrated program and business management for better performance. The goal was to create an organization focused on a single way of doing business.

Its new business model is based on five market sectors: power, industry, transportation, buildings and federal facilities. The agency consolidated 31 programs into 11 and streamlined administrative functions into a single program support office. These actions eliminated overlap and reduced layers between senior executives and program managers, who became more prominent, accessible, accountable and responsible. And having a program support office to handle administration allowed them to focus on the core mission-implementation of multiyear plans.

In creating this organization, the energy agency leaders pledged that there would be no staff cuts and that they would seek "win-win" situations in partnership with the employee union. The reorganization became effective on July 1, 2002, just three-and-a-half months after it was announced.

As promised, there were no reductions in force. Grievances filed by workers, which had averaged six per year before the reorganization, fell to zero. Planning and budgeting has become integrated, with common guidelines for multiyear program planning. The office recently completed a workforce analysis to ensure that employees with the right skills are available to programs. Field organizations will adopt common project management practices in the fall.

The "one way of doing business" model serves as a template for future reorganizations at the Energy Department, and it has caught the attention of the Office of Management and Budget and Congress. In fact, OMB has singled out Energy as the leader among Cabinet agencies in the effort to become results-oriented.

It was particularly important that the Office of Energy Efficiency and Renewable Energy got its act together quickly. During his 2003 State of the Union address, President Bush announced a Hydrogen Fuel Initiative to develop technology for commercially viable hydrogen-powered fuel cells, and the office was chosen to lead the effort. In less than two years, the office went from a fragmented, troubled organization to one capable of leading a high-stakes presidential initiative.

The revamping still is a work in progress, but so far, it demonstrates that radical reorganization is possible and can deliver powerful results. More important, it shows that government agencies can reduce layers, put the right people in the right positions, formulate a results-orientated budget and act corporately.