Government Needs Better Management, Obviously

Each year presidents announce in their budget proposal a list of projects intended to improve life in the U.S. An annual thread is the emphasis on the latest thinking in management. Starting two decades ago the plan was to adopt business management practices. Recently the focus has been on measurement and data. The repeated goal is ‘efficiency and effectiveness’—those words appear regularly. The members of the Senior Executive Service are expected to make it happen.

In the mid-1990s, the idea that business practices are a panacea generated a high level of interest. It triggered a label: New Public Management. By the end of the Clinton administration it had lost momentum. New ideas and new acronyms have been introduced. But the results continue to be disappointing. Performance problems that have been the focus of the media along with the Government Accountability Office’s “high risk” list tell us agencies have a long way to go.

What the planners failed to realize is that the business management practices—strategic planning, goal setting, performance measurement, etc.—do not explain a company’s success. Every business, including those that fail, relies on those ideas.

A New Understanding of the Problem

What government leaders have failed to appreciate is that management systems do not deliver effective management. Government agencies—like all other organizations—need a talented, committed team of executives to deliver the promise of mission statements. SESers should be at the forefront of “delivering a high-performance government.” But I doubt anyone expects that to happen soon.

One might argue government is at a Catch-22 moment. If performance problems continue, its unlikely Congress will support investments to strengthen the SES. At the same time, it is clear that improved performance is unlikely until there is reform. That is an obstacle to moving forward.

The most recent reform effort, GPRA Modernization Act of 2010, makes someone responsible for performance management—a chief operating officer working with a performance improvement officer. Their success, however, depends on the almost 8,000 SESers, a guesstimated half a million managers and supervisors, and over 2 million nonsupervisory employees (plus an army of contractor personnel). It’s early, but the law has already been referred to “as the latest chapter in a history of U.S. federal performance reforms that have largely failed to meet expectations.”

A recent column on the FCW website, “What program management really means,” discusses the problems with managing large information technology projects. A former chief information officer at the Internal Revenue Service said, “This is not really a technology problem as much as a skill and cultural one. Culture is the biggest issue.” The article highlighted the importance of “softer, less measurable skills—intangibles such as . . . being able to deftly manage large groups of people and organizations.”

Focusing on the Importance of People Management

Agency performance depends on large groups of people. Those “intangibles” have to this point been largely ignored in the work on systems, measurement and technology. Looking back, that has been a weakness in reform initiatives through the years. Government has been unwilling to consider the revolutionary changes in the way work and workers are organized and managed in other sectors. It was only last year that someone realized that executives and managers should be accountable for employee engagement.

Intangibles or, more accurately, subtle differences in management practices reinforce the importance of performance and explain why some companies are much more successful than others. Every company relies on goal setting, for example, but high performers discuss progress in meetings, modify goals in response to changing conditions as the year unfolds, identify problems, develop plans to address root causes, and hold managers accountable for progress.

The practices of high-performing companies that could be adopted by government are discussed in a report Charles Fay and I co-authored for the IBM Center for the Business of Government, “Managing for Better Performance: Enhancing Federal Performance Management Practices.” Improved management will not require a big budget or depend on difficult-to-develop skills.

An issue that in hindsight we failed to address is accountability. Business executives and managers have a shared understanding that they are accountable for achieving planned results. When they succeed they can expect to be rewarded; if they fail they anticipate adverse consequences. The threat of being fired exists, but the business culture encourages educated risk-taking. Accountability in the absence of consequences is little more than a word.

Overcoming the Barriers

There are barriers to building a high-performing SES. Highly qualified individuals have to see the SES as an attractive opportunity. Salaries have deteriorated relative to pay levels in the private sector. The last independent analysis was in 1989—25 years ago. (The second Volcker Commission report in 2002 discusses compensation, but does not include a comparative analysis.) Retirements are projected to be high and the loss of experienced talent will increase the need for reform.

This is not a simple problem. The “fix” is entangled in the current politics. Entrenched practices are difficult to change. Internal teams with Office of Management Budget guidance have the best prospect for success. Retraining will be needed, but if new practices and skills are not encouraged, the time will be wasted. SES needs once again to be an attractive career path. Above all agency leaders will have to make reform a priority. It’s a badly needed investment.

Howard Risher managed compensation consulting practices for two national firms and has written four books, including Aligning Pay and Results. He has an MBA and Ph.D. from the Wharton School.

(Image via Sergey Nivens/Shutterstock.com)