IRS chief reflects on public leadership lessons

To succeed in the public sector, private sector executives who come to work in the federal government need people by their side who understand the government's budgeting, procurement and personnel rules, IRS Commissioner Charles Rossotti said Tuesday.

During a conversation reflecting on the lessons he has learned as head of the tax agency, Rossotti said private sector managers often think they can run government organizations the same way they ran their corporate offices. Instead, managers need to recognize the differences between government and industry, including the extensive oversight that exists within government, the various rules governing public officials' actions, and the constant public scrutiny of those actions. Having people who understand the rules can help managers get things done, Rossotti said.

Rossotti spoke Tuesday at a luncheon in Washington sponsored by the PricewaterhouseCoopers Endowment for the Business of Government. Endowment Executive Director Mark Abramson and Georgia Institute of Technology Professor Barry Bozeman interviewed Rossotti before an audience of government executives.

When Rossotti took over the IRS in 1997, lawmakers were holding congressional hearings that blasted the IRS for management problems and public opinion polls registered an all-time low in public satisfaction with the agency. Numerous groups, including Congress, the General Accounting Office and Vice President Al Gore's reinventing government team, recommended thousands of changes for running the IRS.

Rossotti decided to focus on a few priorities, including a reorganization of the agency, a commitment to modernizing the IRS' computer systems (after dealing with the Y2K problem), and instituting a culture of strategic planning and performance measurement.

Almost five years later, most outside groups say the IRS is on the right track toward boosting public confidence and improving taxpayer service. Rossotti said he credits much of the improvement to his executive team, which has included about 30 executives brought in from the private sector and 30 recruited from other federal agencies. "We have been able to retain some very excellent people," Rossotti said. "Putting that team together is critical."

Some of the other lessons Rossotti said he learned include:

• One of the key roles for government leaders is communication with outside groups. Rossotti has testified before Congress 48 times and frequently meets with tax practitioner groups, oversight groups and groups that represent taxpayers. Rossotti said leaders must plan communication time into their schedules. "It will take up a lot more of your time if you don't plan for it," Rossotti said.
• Communicating extensively with key contractors for large-scale projects to clearly lay out contractor responsibilities and agency responsibilities. The IRS' multi-billion dollar contract with Computer Sciences Corp. got off to a slow start because the IRS didn't do that very well, Rossotti said.
• Legislation that sets objectives and lets federal executives figure out how to meet those objectives is better than legislation that prescribes the specific methods that executives should follow to meet objectives.
• A five-year term for the IRS commissioner has helped Rossotti achieve his goals. Congress established a set five-year term for the commissioner in the 1998 IRS Restructuring Act. Rossotti is the first person to serve a five-year term, and his term expires in November. The set term makes it easier to implement reforms because subordinates know that the commissioner won't be in and out of the job before having time to follow through on his plans. Rossotti said a term appointment is appropriate for positions that are primarily administrative and have little or no policy role. "We don't have any significant role in what the tax code should be," Rossotti said.

The Federal Performance Report, a joint project of Government Executive and George Washington University, recently issued the IRS a B- for management, up from a C in 1999. The report credits many of Rossotti's reforms for the improvement.