The Reinvention Revolution

an a top-down system be changed from the bottom up? Can freeing front-line managers from internal constraints induce innovative approaches to delivering service? Is real change in how the government operates in the offing?

In March, 600 federal managers attended a conference co-hosted by Government Executive in Bethesda, Md., to discuss these and other questions with Vice President Al Gore, top administration officials and organizational change gurus. Representatives of the more than 200 "reinvention laboratories" set up around the government as part of the National Performance Review (NPR) met their counterparts from other departments. They presented evidence both of successes achieved and problems that remain. General Accounting Office evaluators described results of the lab experiments to date as "extremely encouraging," citing multiple examples of improved service, reduced costs and an enhanced quality of work life for employees. Yet many lab representatives told of the obstacles presented by re- calcitrant officials and antiquated systems.

The Blob

Of central interest was identifying the impediments to the type of bottom-up change occurring at the labs. The biggest problem, said Gore, is the "old bureaucratic system," which he described as "the blob that keeps coming back at you like a character in a horror movie." Gore cited the example of credit cards being used by the government to purchase small items. He said some agencies have violated the spirit of the new approach by insisting that employees spend a week in training before they can get cards and by requiring them to submit "all sorts of new paperwork" each time the card is used. Gore told delegates to let the NPR staff know "where you have to have help, where you have bumped into obstacles that have to be removed."

An official from an Army Research and Development lab took up Gore's challenge, complaining that plans to implement more flexible personnel policies at the R&D labs were being held up in staff offices at the Pentagon. The official pointed the finger at the political appointees in charge of those offices, telling Gore that while he was encouraging others to break through barriers, "your own people are saying no."

Gore promised that NPR staff would follow up on the complaint, but other problems cited by lab representatives were not so easily solved. An Air Force official protested that "the entire function for managing civilian personnel has been taken out of the hands of managers." He argued that the Defense Department's Priority Placement Program, which guarantees laid-off employees the first right of refusal on new openings, had prevented him from hiring a computer specialist with the needed qualifications.

While the Air Force official and others complained about the Priority Placement Program, others urged that more programs like it be set up for employees threatened with job loss. One group recommended the President's Management Council (PMC) guarantee retraining, transition opportunities and portable benefits to the victims of downsizing. The conferees suggested that employees would be more likely to "buy in" to reinvention with such protections in place, but they also urged the PMC to "buy out those who will not buy in."

Another dilemma confronting conferees was how to institutionalize change. GAO's Curtis Copeland argued that the true value of the labs would be apparent only when changes spread beyond the lab sites. He argued for creating a clearinghouse to collect performance data to justify expanding innovations. A Voice of America employee objected, describing as "frightening" the prospect of "collecting data and sending it to a central processing point."

Changing Systems

The debate over institutionalizing change was but one facet of a larger exploration of whether real change can occur within existing systems or whether the systems themselves must be changed. David Osborne, co-author of Reinventing Government (Addison-Wesley, 1992), told conferees that the success of change in the public sector requires "intervening at the systems level." Osborne observed that most of the changes to budget, personnel and procurement systems proposed as part of the NPR had gotten hung up in Congress, adding that the Clinton Administration had made a "terrible mistake" in not enlisting Congress as a partner in the reinvention effort. Calling the labs "islands of innovation in a sea of bureaucracy," Osborne said the overall success of the NPR is threatened because the systemic changes made to date "haven't forced the system to accommodate you."

Elaine Kamarck of Gore's staff took the position that the real obstacles to change are as much cultural as structural. She noted managers' reluctance to give even their worst employees less than "outstanding" performance ratings, making discharge almost impossible. She said few managers are aware of the flexibilities allowed in personnel procedures and suggested creating an underground newspaper to publicize them.

Whither Reinvention?

Speakers offered a variety of suggestions as to the future direction of reform. Former Oregon governor Barbara Roberts emphasized the need for agencies at all levels of government to collaborate in addressing social problems that cross agency boundaries. Roberts cited her state's "Benchmarks" program, which sets specific goals for state agencies to reach, as an approach to "collaborative, results-driven" change that has allowed citizens to participate in identifying public priorities.

An Environmental Protection Agency representative provided an example of how collaborative models can work in a regulatory environment. EPA has achieved dramatic success in reducing the emission of toxic chemicals by taking advantage of companies' aversion to bad publicity. EPA's Chris Tirpak said companies identified as the largest polluters in the agency's Toxic Release Inventory had voluntarily approached the agency about getting assistance in reducing their emissions. As a result, the agency's goal of achieving a 50 percent reduction in emissions was met a year ahead of schedule, Tirpak added.

The Brick Wall

Politics looms in the way of many reinventors. "Congress is not an impediment but a brick wall," said one lab representative. "If they are not on board, all is lost." Lab representatives told of how Congress has impeded change by refusing managers the flexibility to move funds between line items and by not allowing agencies to keep a portion of the savings from improved efficiencies, for example.

The political system as a whole is "dysfunctional," argued Osborne. "It doesn't have the qualities that produce effective organizations." As an alternative, he urged the adoption of an array of market-based approaches to change, such as "customer redress" efforts. As an example, he cited British Railways' policy of providing riders with a 20 percent rebate when trains are delayed an hour or more.

Carolyn Lukensmeyer, a former NPR official, addressed political obstacles, telling conferees that "government reform and political reform are inextricably mixed." President Clinton, she said, had endangered the success of the NPR when he "walked away from political reform" efforts such as campaign finance reform early in his term.

If the obstacles to continued reform appeared daunting, spirits at the conference still were high. For lab representatives who have been struggling against the bureaucratic "blob" or who have been trying to punch through the Congressional "brick wall," the conference provided an opportunity to "reflect and reassess goals" and to develop new strategies, said Lukensmeyer.

In the next phase of battle, reinventors will gain the advantage of specific interventions by the Vice President and his staff. Following the presentation of recommendations by conferees to representatives of the President's Management Council, Kamarck promised a series of initiatives including:

• A meeting with mid-level political appointees to "give reinvention a boost;"

• Making management ability a criteria for hiring "where management is a big part of the operation;"

• Introducing reinvention criteria in the Presidential Rank Awards.

The conferees left with few illusions as to the difficulty of their task. They went away "rejuvenated but realistic about what's out there," as one attendee put it.