Private sector experience could serve performance czar well

President Obama's pick for chief performance officer is a government outsider, but observers say Jeffrey Zients' private sector experience could prove valuable in improving federal programs and reducing waste governmentwide.

Zients, who also would serve as deputy director for management at the Office of Management and Budget, is a departure from Obama's first selection for the two positions because his experience is almost exclusively in the consulting and business community. Original nominee Nancy Killefer had served in several top Treasury Department positions during the Clinton administration; Killefer withdrew her name from consideration in February after issues with her personal income tax filings surfaced.

While Zients is not well-known in government circles, his private sector work earned him a spot on Fortune magazine's list of the richest Americans under 40 in 2002. He served as chief executive officer and chairman of the Washington-based Advisory Board Co. and as head of the Corporate Executive Board, a spin-off organization.

The firms, which were established by Washington businessman David Bradley, provide best practices and customized market research on health care and financial management. Bradley is the owner of Atlantic Media, the parent company of Government Executive.

"It's a fantastic model that, if brought to the public sector, could do a lot to help agencies decide which new management fad is really worth pursuing," said Robert Shea, who served as associate director of administration and government performance at OMB during the Bush administration and is now director of consulting firm Grant Thornton LLP's global public sector. "I don't know if he plans to use any of those methodologies in his [deputy director for management] job, but I hope he would."

Others hope that Zients would use his private sector experience -- which also includes stints at Sirius/XM Satellite Radio and, most recently, at Portfolio Logic, a firm that invests in business services and health care companies -- to break down barriers that often inhibit coordination among federal agencies.

"[The Advisory and Corporate Executive boards] are organizations that help share information effectively," said Max Stier, president and CEO of the nonprofit Partnership for Public Service. "That's something that needs to happen in government more and more."

Federal management observers noted that the established political and career staff at OMB could bring Zients up to speed quickly. Nonetheless, some raised concerns about the nominee's ability to navigate Washington politics.

"To get high level focus on management at OMB, let along the White House, you need to be pretty skilled at the game of politics," Shea said. "[Former OMB Deputy Director for Management] Clay [Johnson] was able to do it by virtue of his relationship with the president. And even then, he didn't always have his way."

Zients would lead the president's efforts on contracting reform, eliminating waste in the budget, building a performance agenda and enhancing the transparency of federal finances, OMB Director Peter R. Orszag said on his blog Saturday.

"The goal is not just good management or solid operations, but generating good results for the American people," Orszag wrote. "Through this performance lens, government operations become a way to drive better results, not an end in and of itself."

It's a process that appears to have begun immediately. On Monday, Obama held his first Cabinet meeting and challenged senior officials to find a collective $100 million in potential program savings. Agencies will be required to report back on their savings in 90 days.

Agencies already have begun to implement a number of cost-cutting initiatives, the administration said.

For example, the Education Department has reduced the ratio of computers and printers per employee, saving a combined $8.7 million. Meanwhile, the Veterans Affairs Department has canceled or delayed 26 conferences for a savings of almost $17.8 million, the White House said.

"None of these things alone are going to make a difference," Obama said during the meeting. "But cumulatively, they would make an extraordinary difference because they start setting a tone. And so what we're going to do is line by line, page by page, $100 million there, $100 million here, pretty soon, even in Washington, it adds up to real money."

But, Donald F. Kettl, the new dean of the School of Public Policy at the University of Maryland, said during the Excellence in Government conference in Washington on Monday that he worries the political pressure to cut waste and abuse -- and to eliminate an estimated $18 billion in earmarks -- could become all-consuming and distract officials from more pressing issues such as improving technology, leveraging performance and defining transparency.

"There has to be intellectual capital leadership from the top on those issues," he said in a keynote address at the event, which was hosted by Government Executive. "But we're not going to get there with distractions like the $18 billion, which is serious money, but I'd rather pay much more attention to stuff where we can see improvements being made."