Government needs a new management style, scholars say

A new book by two government reform experts urges agency leaders to adopt a new management style, one that focuses on relationships with people outside their own departments, including private contractors, nonprofit partners and other government agencies.

Stephen Goldsmith, former mayor of Indianapolis, and William Eggers, a director at Deloitte Research, say that federal executives spend too much time managing inside their own agencies, when they should be nurturing networks beyond their immediate purview. Executives and other federal employees need a new set of skills, closer to those found in business schools than in public policy schools, they say in their new book, Governing By Network: The New Shape of the Public Sector.

Goldsmith and Eggers offer the 2003 Columbia spacecraft explosion as a prime illustration of the new "networked" government. Boeing and Lockheed Martin joined forces to operate the space shuttle, and blame for the disaster seemed to lie somewhere between the two companies and NASA.

To counter the confusion over accountability, Eggers said in a recent interview with Government Executive that federal managers should set up explicit frameworks for handling outside contracts, which should include performance goals, incentive systems, risk allocation and a governance board. "You need to be doing it in a way so you ensure you're able to catch problems before they start," he said.

Some innovative executives have used networks to create success stories, the authors say. The National Park Service joined with a nonprofit to raise money to restore the Golden Gate National Recreation Area in San Francisco. "Governments working in this model rely less on public employees in traditional roles and more on a web of partnerships, contracts, and alliances to do the public's work," Goldsmith and Eggers write.

The authors show that privatization of government work is growing: For-profit companies managed 70 percent more public schools in 2001 than 2000, and between 1990 and 2000 the number of prisoners housed in privately run prisons increased by almost 900 percent. The ratio of contractors to soldiers in war also has grown, from one in 50 to 100 in the first gulf war to one in ten in Iraq in 2003.

Too often, the authors say, responsibility for managing contracts is handed down to procurement officers instead of being handled by top executives. "If you're a senior government executive, this is something you need to know a great deal about," Eggers said.

He added that in the private sector, senior executives spend a significant amount of time on relationships with outside firms, and even competitors, that they collaborate with. When 70 to 80 percent of an agency's budget goes toward private contracts, as is the case at the Energy Department and NASA, executives should be spending much more time managing those relationships, said Eggers.

Goldsmith, who is a professor at Harvard's Kennedy School of Government, said he first noticed the need for management across agencies while he was the mayor of Indianapolis. Services were organized by specialty, and not by geography, he said.

"We had specialized jobs… but nobody was in charge of a neighborhood," he added, creating a need for cross-pollination across services.

Applying that idea to the national level led him to conclude that federal agencies need to spend more time working together, as well as with other outside collaborators.

Goldsmith called the President's Management Agenda, which primarily focuses on agencies individually, a "necessary prerequisite" to integrating the departments. Before networking across entities, he explained, performance measures and financial systems must be in place. Goldsmith worked as special adviser to Bush on his agenda's faith-based and not-for-profit initiatives.

In addition to senior executives, the authors say other federal employees also need a different set of skills in order to deal with managing contracts and relationships outside their own agencies. Goldsmith noted that the anticipated baby boomer retirements of federal employees will give the government an opportunity to hire different kinds of workers.

While he acknowledged that unions may be suspicious of attempts to reorganize the labor force, he said federal workers also will benefit, because agencies "can outsource the mundane and leave the more fulfilling work."

He added, "This is a great opportunity for the workforce to enhance satisfaction of their jobs."