Treasury chief says attacks reveal leadership weaknesses

Treasury Secretary Paul O'Neill said Thursday that the Sept. 11 terrorist attacks have revealed holes in the leadership and performance of federal agencies.

"It's only under crisis that you find out where you're not as excellent as you could be," O'Neill said at a luncheon in Washington sponsored by the Council for Excellence in Government. "I wish I could tell you I found the government in tip-top shape, but I can't."

O'Neill, former chairman of Pittsburgh-based Alcoa, the world's largest aluminum producer, and former deputy director of the Office of Management and Budget, said the aftermath of the attacks highlighted shortcomings in Treasury's own agencies, such as the Customs Service's inability to quickly examine cargo coming into the United States. Long lines of containers formed at entry points. Putting more people at busy entry points is only a temporary solution, O'Neill said. The Customs Service must put in place technology to speed cargo shipments through border crossings.

More broadly, O'Neill said agencies must examine their leadership practices. He laid out three principles that government leaders should adopt if they expect their organizations to be great.

First, all employees in an organization, regardless of rank, should be able to say they are treated with dignity and respect. In a strong organization, "there isn't a lot of order-giving," O'Neill said. "There's a lot of working together."

At Alcoa, O'Neill had a headquarters building designed in which every employee, manager and executive, including himself, received 81 square feet of office space and was no more than 45 feet from an outside light source. O'Neill said transforming the historic Treasury Building into a modern workplace is more of a challenge, but that there are other ways for leaders to demonstrate their respect for workers.

For example, O'Neill demanded better workplace safety at Alcoa, which has cut its level of lost workdays due to injuries fivefold over the past decade. O'Neill has similar plans for the Treasury Department. "No one should ever be hurt at work," he said.

Second, O'Neill said, all employees must be given the tools and assistance they need to do work that gives meaning to their lives. He said employees should not see their work as only a contribution to their organizations, but as making a difference in the world around them.

Third, employees should be able to say that somebody noticed what they did, O'Neill said.

Most executives cannot say their organizations live up to those standards because they manage workers instead of leading them, he said. "Organizations of any size that are managed instead of led are performing at about 40 percent of what their real potential is," O'Neill said.

Leaders should demand excellence from their employees or they won't live up to their potential, he said. For example, he noted, some Treasury Department bureaus were closing their financial books in 45 to 48 days when he arrived at the department. He told accountants to close their books within three days by next June. Since then, some of the bureaus have already figured out how to close their books in eight days.

"Goals shouldn't be negotiated," O'Neill said. "They should be based on what is possible. … At Alcoa it took us two and one-half days to close our books, and we didn't start early."