OMB’s New Deputy for Management Faces a Big Challenge

Performance management is not new. Presidents Clinton, Bush and Obama each had initiatives to improve management across government. Laws have been enacted; supportive technology installed; goal-based management practices adopted; progress reviews required—but the gains have been disappointing.  

Those efforts have been focused on the way agency performance is planned and reported. At lower levels, work management practices have changed little in decades. The civil service system and the approach to managing employees are stuck in the past. In contrast, over the same period, the private sector has undergone a revolution in the way it manages workers, and the performance gains have been significant.

Now Margaret Weichert is set to become the latest person to tackle the problem as the deputy director for management in the Office of Management and Budget. In her written statement prepared for her Senate confirmation hearing, she said she would “focus on three transformation areas” including  “people and the workforce for the 21st century.”

More effective people management will be central to the two other areas Weichert intends to focus on—IT modernization; and data, accountability and transparency—since government’s bureaucratic HR practices are known to impede reorganization plans and staffing. These priorities cannot be fully addressed within the existing civil service system. The success of all change initiatives depends to some degree on the buy-in and commitment of employees affected by the initiative.

In her written statement, Weichert emphasized her private sector experience with “complex, transformational change agendas.” She also acknowledged this is her first experience in public service.

The hearing did not cover her plans for the workforce, but unless she is ready to tackle the civil service system, the changes will be limited to what is best described as the visible tip of an iceberg. In the absence of reform, change will be limited to practices not governed by laws or budget constraints. The deeper changes needed involve changing the culture, collaborating with leaders to achieve agency goals, and making government a truly great place to work.

She agreed with the senators that reducing the workforce should be planned, not simplistically based on attrition. Textbooks outline the workforce planning steps: identify emerging knowledge and skill requirements; evaluate existing workforce capabilities; and develop plans to fill any gaps. Identifying employees who are likely to retire or resign is an easy step. The planning should also include identifying those workers who will not be needed. Perhaps more importantly, agency plans should include strategies to identify and retain employees with essential skills. The problem agencies have yet to solve is recruiting and retaining qualified talent to tackle tomorrow’s problems. Cybersecurity leads the list

Creating Healthy Organizations

Weichert should consider auditing agency workforce planning practices. She should also make developing a strategy to recruit and retain young workers a priority. The Millennial problem is not new. To state the obvious, if that continues, government services will deteriorate.

Weichert agreed that it’s critical to government operations to maintain high morale among federal workers. Recent history suggests she may be the only official who understands that.

Two very different organizations, McKinsey and Company and the American Psychological Association, now argue that it’s important to maintain a “healthy” organization. Both have research that confirms healthy organizations perform at higher levels. The APA has created a website, Center for Organizational Excellence, that provides resources and promotes the idea. It’s important enough for McKinsey to recommend measuring organizational health frequently throughout the year. The firm sees it as “a leading indicator of performance.”

The policies and practices associated with a high performance work environment are well documented.  The fact is the civil service system precludes a number of changes that would improve the work experience. That’s unfortunate since it diminishes the prospects for rewarding careers.

The needed changes are not limited to rethinking the civil service system, however. High performance organizations invest in developing talent. That includes investing in the cadre of executives and managers.  

There was a time, more than three decades ago, when the pay levels of officials and executives were reconsidered every four years. Canada and New York City have stayed with that practice. At a time when corporate executive compensation levels are steadily increasing, government needs to consider what can be done to make those jobs attractive.

But Weichert will not be able to solve these problems from OMB. OMB is similar to a holding company or corporate office in a large, diversified company. If she has not already realized it, she will have little direct influence on day to day management in agencies. Furthermore, as McKinsey argues, “change is not a top-down exercise.” Speaking as someone responsible for managing the performance system in two holding company offices, I know her plans will be met with at least delayed compliance.

In the private sector, incentive plans linked to planned changes commonly play a role but government seems oblivious to the power of financial rewards. Perhaps Weichert will be able to change that.

It’s not apparent what transformational change is being contemplated, but the starting point should be the management basics. There is solid experiential and research evidence confirming the value of virtually universal day-to-day management practices in successful businesses. The Government Performance and Results Act was a good starting point but now the use of stretch goals should be cascaded down through the management ranks, progress tracked and necessary adjustments made to stay on course. In the 1980s, merit pay for managers and supervisors was poorly conceived and failed, but linking their increases to achieving goals is the missing element today. Audits of day-to-day management practices would be helpful.

All executives and managers should be able to state the goals they plan to accomplish. The link to financial rewards is a proven private sector practice that reinforces accountability.

Government will not improve performance until agencies have the flexibility to introduce more effective talent management practices.