Analysis: Addressing the fiscal cliff is not enough

While Congress and the White House are busy crafting a solution to the fiscal crisis, federal agencies continue to do the nation’s business the way they always have, and Americans wonder what will happen next and what the impact will be.

Most recognize the need to respond to this crisis with fiscally responsible solutions that reduce spending and increase revenue in the short term. And many recognize the need for critical reforms to manage the deficit, ensure social programs are capable of achieving their intended purpose, fix the broken tax code, update the civil service system and improve the budget process. Yet distressingly few political leaders are addressing the inescapable fact that we must transform the way government works to ensure an effective approach to serving the American people within our means. That requires lower costs, fewer and shared resources, and reduced duplication and waste.

The current path is not sustainable, jeopardizing our standard of living, our position on the world stage and the government’s ability to serve its citizens. Changes will not be easy and everyone will feel the impact, but we cannot kick the can down the road by fixing the immediate crisis and hoping for a magic wand to fix the future.

We have an opportunity now to transform government into an efficient, results-driven, nation-centric institution. Reforming its performance would save money, eliminate waste, produce measureable outcomes, increase collaboration across agencies and improve public services.

Since the enactment of the 1993 Government Performance and Results Act, agencies have become more data-centric in their focus on performance. Yet leaders and managers do not always make effective data-driven decisions and true effectiveness is not well-understood. Duplication of programs and infrastructure abound, but technological advances can help significantly. Also, agencies are retiring people faster than they are hiring, potentially losing critical knowledge. But this also is a chance to create more effective ways of conducting work.

These factors and more provide the opportunity to take a fresh look at what government does and how it does it.

First, we have to ask what business the federal government should be in, what state and local governments should support, and what citizens should do for themselves. Then we can address the remaining issues. Consider these few examples:

• Do all farm subsidy programs still make sense? Some could be eliminated or made more effective.
• We spend $18 billion a year on 47 job-training programs across nine agencies. Are those programs still effective? Reducing administrative costs by 3 percent through a centralized management approach would save more than $500 million.
• Most agencies operate their own human resources systems. Since a central repository of data now exists for HR, payroll and training data, shared services could boost efficiency, reduce risk, and save millions in contract and duplicated dollars.
• We spend $62.5 billion a year on food assistance programs. Streamlining them would cut down on fraud, waste and abuse, and save up to $1 billion.
• How about a more streamlined multiyear budget cycle rather than the arcane one-year budget process we have now? Managers spend vast amounts of organizational resources, only to start over as soon as the budget cycle is complete. Some programs are stopped after a short period, wasting money already spent. Continuing resolutions end up costing agencies more and limiting their ability to execute key programs. The budget process could be streamlined into a multiyear approach along with the required oversight and controls.

Our political leaders and agency executives -- along with the private, nonprofit and academic sectors -- must come together to reduce costs by providing the right services efficiently and effectively.

To achieve this transformation, Congress and the president should immediately establish a statutory nonpartisan commission on government transformation. A long-standing, bipartisan, all-inclusive panel would drive consistent methodology for reviewing agencies, programs and infrastructure, and make recommendations for necessary changes.

This would not be a short-term effort such as the Simpson-Bowles Commission, which focused on fiscal policies. That commission accomplished comprehensive work in a short period, but it was not a statutory commission and lacked authority to achieve a return on investment. Likewise, the Government Accountability Office does great work reviewing programs, but does not have the personnel resources or authority to direct change.

A government transformation commission could systematically review programs based on specified criteria and a consistent methodology. It would report regularly and make recommendations for meaningful reform to the president and Congress. The commission would retain oversight to ensure results, collaborating with and educating agency leaders and managers. The panel would provide at least a tenfold return on investment.

The Government Transformation Initiative is working to establish such a commission. The effort is led by a nonprofit, nonpartisan, transparent coalition of corporations, associations and academics organizations.

From the top down, agencies must think and act differently. The significant changes taking place must combine with a new way of leading that views systemic program effectiveness as a critical management tool. Important initiatives and work must get done, but effectiveness cannot be overlooked. Leaders must ensure results are measured and capacity is built around efficient, sustainable systems. In order to have the right programs and to manage them well, leaders must not be afraid to make changes or to eliminate programs when they cease to add value.

Federal managers must be willing to share resources, systems and effective models across agencies and programs. They should be actively looking at how other agencies or other sectors do things and adopt those systems and infrastructure rather than reinventing the wheel. Congress must be willing to adjust appropriations and authorizations to support cross-agency initiatives that avoid redundancy.

Government leaders should work with the transformation commission to ensure their organizations are as effective as they can be. A collaborative, transparent effort with consistent and defined methodology will mitigate bias and ensure government is positioned to achieve the nation’s goals. The commission can provide the catalyst for systemic change.

Steve Goodrich is CEO of the Center for Organizational Excellence Inc., vice chairman of the Association of Management Consulting Firms and a founding member of the Government Transformation Initiative. He can be reached at sgoodrich@center4oe.com.

(Image via Rena Schild/Shutterstock.com)