Corporate leaders advise government on personnel, contracting issues

President Obama's Management Advisory Board, an independent panel of corporate leaders, suggested on Friday that the government must do more to incentivize its leadership and improve its operational management.

At its first meeting, the new board that was established to provide the White House with strategic advice on government management and operations, heard from administration officials on a range of topics, including the salaries of senior executives and the consolidated procurement efforts of federal agencies. Presentations also were delivered on information technology and federal customer service initiatives -- each of which the group will tackle.

For example, John Berry, director of the Office of Personnel Management, explained how the difficulties of attracting -- and then retaining -- the best and brightest to work in the government instead of taking more lucrative private sector positions are exacerbated by charges that federal employees are overpaid. Berry said the board could help dispel this notion because of its credibility in the business world. "When you carry that mission, it carries some weight," he said.

The panel likely will focus on ways to better train and develop senior government leadership, recruit candidates from outside of government, improve the federal performance management system and reward high-performing employees.

There are limits to what the group can address, however. The administration does not have much flexibility in its compensation scale for its Senior Executive Service, with salaries generally ranging from $120,000 to $180,000, said W. Scott Gould, deputy secretary of the Veterans Affairs Department.

Removing poor-performing senior executives is on the table, but Gould, who has eliminated 20 such positions at VA in the past two years, suggested reform will not be easy. "It's hard to do and takes a long time to go through the process," he said.

The board also heard about the government's efforts to improve its strategic sourcing of common commodities. The General Services Administration, which has developed blanket purchasing agreements that all agencies can use for the procurement of office supplies, plans to expand the practice in the future.

"Budget pressures are forcing agencies into these cooperative purchases," GSA Administrator Martha Johnson said.

Dan Gordon, administrator of the Office of Federal Procurement Policy, said the government "struggles mightily" to define its acquisition requirements and is too dependent on contractors for core services. "We use contractors to write contracts for other contractors," Gordon said.

Obama established the advisory board last April through an executive order to provide advice on how to implement best business practices on issues such as productivity, the application of technology and customer service.

The order called for the board, which is chaired by Jeffrey Zients, deputy director of management for the Office of Management and Budget, to include no more than 17 leaders from the private sector. On Thursday, Obama appointed 10 members to the board. An OMB spokeswoman said it's possible that more board members will be named.

The board members are Greg Brown, president and chief executive officer of Motorola Solutions Inc.; Sam Gilliland, chairman and CEO of Sabre Holdings, a travel technology company; Jeffrey Kindler, former chairman and CEO of Pfizer Inc.; Debra Lee, chairwoman and CEO of BET Networks; Gail McGovern, president and CEO of the American Red Cross; Shantanu Narayen, president and CEO of Adobe Systems Inc.; Enrique Salem, president and CEO of Symantec Corp.; Elizabeth Smith, CEO of OSI Restaurant Partners LLC; Tim Solso, chairman and CEO of Cummins Inc.; and Ronald Williams, chairman of Aetna Inc.

The board, which is purely advisory, will operate for two years, unless the White House extends it.