Calm In The Storm

or much of the past decade, the nation's most vilified government agency, the Internal Revenue Service, has been enmeshed in turmoil. So David Mader, who recently retired as one of the agency's top executives, might be expected to say that he left one tough job behind.

On the contrary, Mader looks back on the agency's recent years as by far the most exciting and gratifying phase of his 33-year government career. Mader can even pinpoint his single most thrilling day in government service: Oct. 1, 2000. That was when the IRS officially discarded its old, geographically based management structure and "stood up" a brand new system built around four divisions serving distinct taxpayer groups.

"It was exhilarating," recalls Mader, 55. "To be part of that process and to be part of that team was just an incredible experience. I couldn't think of perhaps a better way to end my federal service than to be part of that effort."

Mader's upbeat assessment of what was, by all accounts, a grueling and exhausting period for IRS officials is typical of his steady, indefatigable work style, say colleagues. The last few years of Mader's three decades at the IRS-which included excoriating public hearings, legislation mandating a top-to-bottom reorganization and massive personnel changes-were some of the most tumultuous at any government agency.

Through it all, Mader remained calm and unflappable, toiling long hours to turn the sometimes-vague directives of Congress and the administration into practical policies. As the agency's assistant deputy commissioner, he was one of a small group of top executives working closely with then-Commissioner Charles O. Rossotti to completely redefine both the agency's priorities and its day-to-day operations.

Now a management consultant advising government agencies, Mader stresses that he was part of a team and claims no solo credit for any single change at the IRS. Certainly many top executives helped steer the agency through the first phase of its massive reorganization, including Deputy Commissioner Bob Wenzel, who also is retiring this year.

There's no question, though, that Mader played a crucial, early role in what is turning out to be one of the most far-reaching agency overhauls in federal government history. As an IRS veteran who'd held a wide range of jobs within the agency, Mader was prized as an internal expert with a long institutional memory. His cool head also made him a key negotiator with IRS stakeholders, particularly labor leaders.

"Dave knew the ropes," says Rossotti, now a senior adviser with the Carlyle Group, a prominent Washington-based equity firm. "He knew what the obstacles were because he had been involved in a lot of previous [reorganization] efforts. So he was a key resource in making a lot of those changes happen."

A GROWING PORTFOLIO

A native of Jersey City, N.J., Mader joined the IRS in 1972 as a management analyst in New York, having started his government career in 1970 with an 18-month stint at the General Services Administration. He earned his bachelor's degree in political science from Mount St. Mary's College in Emmitsburg, Md., and also took graduate courses at Maxwell School of Public Administration at Syracuse University.

Mader worked his way up the ranks, joining the IRS Executive Development Program in 1986. He went on to serve as assistant director in the agency's Detroit Computing Center, and later as assistant director of its New Jersey District. Invited to take a job at IRS headquarters 13 years ago, Mader jumped at the chance. "I'm one of the few people that actually wanted to come to Washington," he says. Mader's jobs before becoming assistant deputy commissioner included assistant commissioner for human resources and chief of management and finance.

He eventually assumed responsibility for the day-to-day operation of much of the agency's personnel system and physical infrastructure. He was in charge of recruitment, training, workforce development, labor/employee relations, payroll processing, office equipment, facilities and security, among other areas. When Rossotti became commissioner in 1997, he made Mader a member of his inner circle. Rossotti valued Mader as a veteran of earlier attempts at reorganization, including the tax systems modernization effort rolled out in 1990. That program ran aground amid budget and morale problems.

Mader had weathered his share of political turbulence at the IRS. Under pressure to improve its collection efforts, the IRS in 1994 declared tax compliance a priority. But horror stories of tax collection abuses created a backlash. In 1996, Congress created the National Commission on Restructuring the IRS to consider major reforms. The following year, the Senate Finance Committee began public hearings attacking the IRS. The politically charged messages and public pressure left many executives reeling.

"You were just in the middle of this perfect storm," says Michael Dolan, who was acting commissioner at the time of the 1997 hearings and who eventually stepped down. "So your chore was to know it's happening, and know it's got to happen, and try to steer those who are in the driver's seat to solutions that will be good for the population at large and good for the tax system, and won't savage employees."

Caught in the fray, Mader developed a reputation as a straight shooter and an impartial professional who could get things done. He became a key liaison with various IRS stakeholders, including officials in the Office of Management and Budget, the Treasury Department, the General Accounting Office, congressional committees and the National Treasury Employees Union. Mader was "almost an ambassador-at-large," recalls Dolan, who's now national director of IRS policies and dispute resolution at KPMG LLP.

One of Mader's critical relationships was with the Treasury employees' union, according to Rossotti, who had made it his policy to work with labor leaders. Mader "had a great deal of knowledge and a considerable amount of credibility," says Rossotti, coupled with "a real understanding of all sides of the issue."

According to Robert M. Tobias, who was president of NTEU at the time, the IRS and the NTEU were the first agency and union in the federal government "to move away from more adversarial to more collaborative relationships. And that was important both to the union and the Internal Revenue Service." Mader helped make that happen on the management side, says Tobias, who is now a professor in the Department of Public Administration at American University in Washington.

Mader began discussions with union leaders and other stakeholders about reorganizing IRS operations even before the 1998 IRS Restructuring and Reform Act required the agency to embark on an overhaul of its operations. This enabled him to anticipate problems and even help steer legislators away from potential land mines.

"In part because I had worked in so many different parts of the organization over my years, I was in a very good position to be able to describe to people how the current operation was performing," Mader says. Even more importantly, he adds, he was in the right spot "to try to understand what the interests and intentions [of IRS stakeholders] were, and then . . . bring that back to the rest of the organization to help influence the actions that we would subsequently take."

In the subsequent reorganization, the agency set out to replace its 50-year-old structure of regions, districts and service centers with four new "customer-oriented" operating divisions. It also adopted flexible personnel policies, cut layers of management by half and redefined top jobs. More fundamentally, the agency shifted its emphasis from collections and compliance to informing, educating and serving customers.

Amidst all this, IRS officials had to keep up the day-to-day work of collecting some $2 trillion in taxes and processing 228 million tax returns a year, managing a workforce of 100,000 employees, and keeping track of a $9 billion-plus budget. "Some of us referred to it as similar to flying a 747 in the air . . . but at the same time changing out . . . all the engines and all the parts of that plane, and creating a new plane in the process," says Wenzel.

ENJOYING THE WILD RIDE

Mader's human relations background thrust him into the thick of what became a key element of the reorganization: a completely new set of rules for hiring, training, evaluating, rewarding and compensating employees. The flexible personnel rules that Mader helped put in place at the IRS have become a model for other federal agencies, says Hal G. Rainey, a professor at the University of Georgia's School of Public and International Affairs.

Rainey singles out Mader's work on the so-called "critical pay" program, which authorized the IRS to hire up to 40 outside experts at salaries up to that of the vice president, as being particularly significant. The challenge was to integrate a cadre of private sector executives into the IRS top ranks while avoiding any appearance of impropriety, something that Rainey argues the agency did well.

"That was Dave's baby," says Rainey. "He stewarded that program very carefully to make sure it worked. And that was a very important part of the effort."

Mader also helped launch the IRS' new pay-banding system, which gives agency managers more flexibility in setting salaries and makes raises contingent on performance, not longevity. "Some of it was really new territory, uncharted, and Dave was really instrumental in leading that," says Wenzel. "It was a dramatic change, and this affected all the IRS senior executives, of which we had 240 at the time."

Mader spent hours talking with and listening to IRS managers, explaining the new rules, and reassuring them about what lay ahead. It was a thankless job. Among other changes, managers were called on to compete for redefined positions in the new organization. Many of the new personnel rules were controversial and caused resentment. "It was difficult in the early stages, when we were beginning to design a new organization," Mader concedes. "There were concepts that we were working with that weren't necessarily cast in stone. And it made, I think, some employees nervous when we couldn't tell them what the final answer was going to be."

One of the key lessons he learned, Mader says, is, "You can't communicate enough." An important part of his job, he adds, was to "explain to people what was going to happen, how it was going to happen and what their rights were, what their responsibilities were, and how critical they were going to be to our success."

Another lesson from Mader's tenure, though not one that he articulates, is simply: Work hard. Mader's unusual work ethic helps explain why he won so many awards during his three decades at the IRS. He won the agency's top honor, the Commissioner's Award, seven times. He also received the Meritorious Presidential Rank Award and the Distinguished Presidential Rank Award, and was the first IRS career employee to win the Treasury Secretary's Honor Award.

"He was just a very, very hard worker," Wenzel says. "He took his responsibility very seriously." Mader also took a fair amount of ribbing for his nonstop use of the voice mail system. A message from Mader was as likely to have come in at 4 a.m. as at 4 p.m., his colleagues say. Rossotti remembers many an occasion, in the weeks leading up to the Oct. 1, 2000, deadline for unveiling the agency's new management structure, when Mader's elbow grease kept the team focused.

"We had this whole incredibly elaborate planning process to plan the actual cut-over from the old organization to the new organization during the year 2000," recalls Rossotti. "But there were innumerable occasions when people would come in and say, 'The sky is falling, we're going to have to postpone this!' And Dave was always the point person who said: 'Let's get together first thing [tomorrow] and figure out a way to work this.' "

As Rossotti tells it, Mader would then invariably arrive at 5 a.m. and have a couple of meetings to brainstorm ideas before the rest of the team got in two or three hours later.

"People would roundly kid him about whether he had a life outside the job," says Dolan. As it happens, Mader is married with a grown son. He's an avid runner, and likes to hop on his Harley Davidson motorcycle and zip around the Virginia countryside. (He and his wife live in the Northern Virginia suburb of Centreville.)

Part of what helped Mader survive and even enjoy his wild ride at the IRS was his singular dedication to the agency, which he says engenders a certain esprit de corps among employees. "I think those of us who have made tax administration our lives basically recognize that collecting taxes is critical to the democracy," he says. "We don't have a country if we can't fund it."

Far from complaining about the many upheavals that marked his IRS career, Mader seems to delight in them. "I have to say, in the last five years, there were no low points," he insists. "It was an exhilarating, sometimes tiring experience. But it was the highlight of my 30-plus years."

Mader is one of several members of Rossotti's team to leave the IRS this year, including Wenzel, who retires in October. Mader is proud of what he accomplished as part of that team, but he acknowledges that the agency has a long way to go.

New IRS Commissioner Mark Everson, confirmed by the Senate in May, has shifted some of the agency's focus back to collections, declaring war on tax shelters and making tax law enforcement a priority. It's one of many areas that are still badly in need of improvement at the IRS, which has seen collections drop dramatically in recent years. The other big challenges ahead are reengineering the agency's business processes and bringing its technology infrastructure up to date, Mader says. But he adds that efforts to make the IRS more efficient and effective will never really be complete.

"I think if we do our job right, we're never going to be done," Mader says. "I think one of the lessons learned is that an organization needs to be constantly assessing and reassessing how it's performing its essential activities, and making adjustments."

Mader has become a spokesman, of sorts, for the IRS experience, something that he will continue in his new job in the Washington office of Purchase, N.Y.-based Sirota Consulting. He is leading a newly created public sector practice aimed at teaching federal, state and local government agencies how to use employee and customer attitude surveys to improve organizational performance, an effort he spearheaded at the IRS.

In the meantime, Mader has the following advice for his government colleagues: "Don't get comfortable. . . . Agencies shouldn't wait for a set of bad hearings to make the kind of improvements that can be made, and should be made."