New chief performance officer to demand results from feds

Federal employees can expect Nancy Killefer, the government's first chief performance officer, to listen to their ideas and concerns but also demand substantial operational results, according to friends and former colleagues of the management consultant.

A Treasury Department veteran, Killefer specializes in performance management and reshaping organizational processes. For the past several years, she has served as a senior director in the Washington office of management consulting firm McKinsey & Co., where she created a division focused primarily on government reform.

"Nancy has strong respect for federal employees," said Carl Moravitz, Treasury's budget director from 1995 to 2003 and now a managing consultant at IBM Business Consulting Services. "But she's also a hard driver that looks for competence all the time."

As CPO, Killefer will be tasked with ensuring that federal agencies operate more efficiently and effectively. She also will serve as the deputy director for management at the Office of Management and Budget, a position Clay Johnson has held for the past five years. Only the OMB role requires Senate approval.

Killefer has experience wearing multiple hats. From 1997 to 2000 she served as Treasury's assistant secretary for management, chief financial officer and chief operating officer, helping to manage the department's 14 bureaus and 160,000 staffers.

As part of the Clinton administration's reinventing government initiative, she also led a major modernization at the Internal Revenue Service, helping to make the agency more performance-oriented.

"When they called, I said, 'If you're willing to embrace significant change, then you're looking at the right person. But if you just want to keep the trains running on time, don't ask me to do this job,'" Killefer recalls on her McKinsey bio. "It turned out to be a great opportunity."

Obama repeated the anecdote during Wednesday's press conference announcing Killefer as CPO, adding, "When I heard that, I knew I'd chosen exactly the right person for the challenges we face."

Obama said he would instruct members of his Cabinet and their key staffers to meet with Killefer shortly after the inauguration -- and regularly thereafter -- to discuss ways to run their agencies with more efficiency, transparency and greater accountability.

"What you'll see is a focus on results as opposed to focusing on buying things," said Jim Flyzik, president of the consulting firm TheFlyzikGroup, who worked with Killefer when he served as Treasury's chief information officer.

And, while Killefer will no doubt want to leave her imprint on the new CPO position, those familiar with her management style do not expect her to push for another massive overhaul of federal operations, such as President Clinton's Reinventing Government initiative or the Bush administration's President's Management Agenda.

"I don't think she will come in and try to reinvent the wheel," said Max Stier, president of the Partnership for Public Service, where Killefer sits on the board of directors. "She has appreciation for the good work that has already been done and will build off of the tools already in place."

Stier said Killefer has a willingness to listen to and cooperate with the federal workforce. Many expect that her approach will be a departure from the top-down structure embraced by the Bush administration's government reform initiative.

"She understands and recognizes the work of people in government," Stier said. "She will be an ally for the workforce."

Killefer began working for McKinsey in 1979 and returned in 2000 at the end of the Clinton administration. She later opened up the firm's public sector practice.

A 55-year-old mother of a teenage son and daughter, Killefer avoids working weekends to spend more time with her family, according to her McKinsey bio. That schedule could be challenged by an Obama team notorious for 80-hour workweeks.

As he left office, Clinton appointed Killefer to a five-year term on the IRS Oversight Board, a public-private group of experts that supervises the agency's business practices and spending.

As chairwoman of the board from 2002 to 2004, she piqued the Bush administration and OMB by presenting Congress with an alternate IRS budget, asking for additional funding to chase down high-value tax delinquents and provide greater customer service.

In a 2006 Business Week op-ed, Killefer addressed the conflicting demands of modern government: "Americans today say they want to limit the cost of government, but they also want more homeland security, better managed borders, more disaster readiness, extra help in the face of global trade, cheaper health care, and better public schools. These demands sit uncomfortably with our budget deficit and our natural desire not to pay more taxes. In short, we are stuck in a productivity bind: We want more output but no more input."

She also called on political leaders to create a body she coined "Gov-Star," which would be modeled after the fund-rating agency, Morningstar Inc. The entity would be responsible for independently measuring program performance; developing data that could be compared progressively among programs, governments and the private sector; and providing the data to Congress and the public.

"But in government, pressure without support can yield demoralization and underperformance," Killefer wrote in the op-ed. "So we also need to adopt key transformation initiatives: incentives that allow agencies to reinvest savings to the top line of programs; the introduction of chief operating officers at public agencies, to be appointed based on management experience in government or leading corporations; and a SWAT team of management experts at the Office of Management and Budget to help lagging agencies."

Obama embraced the SWAT team idea in September on the campaign trail, a sign that Killefer may have been on his radar before the election.