THE WHITE HOUSE

Office of the Vice President

For Immediate Release September 7, 1993

Chapter 3

Empowering Employees to Get Results

When Nature has work to be done, she creates a genius to do it. Ralph Waldo Emerson

Two hundred years ago, George Washington recognized the common sense in hiring and promoting productive managers--and taking authority away from unproductive ones. One hundred years ago, Emerson observed that we all share a common genius, ignited simply by the work at hand. These American originals defined the basic ingredients of a healthy, productive work environment: managers who innovate and motivate, and workers who are free to improvise and make decisions.

Today, our federal government's executive branch includes 14 cabinet departments, 135 agencies and hundreds of boards and commissions. These entities employ more than 2.1 million civilians (not counting the Postal Service), and 1.9 million members of the military, spend $1.5 trillion a year, and, directly or indirectly, account for one third of our national economy1. Their tasks are both massive and difficult. As the National Academy of Public Administration wrote not long ago, "The federal government now manages ... some of the most important and complex enterprises in the world."2 But it does not manage them well.

Admittedly, "management" is a fuzzy concept, hard to recognize or define. But poor management has real consequences. Money is wasted. Programs don't work. People aren't helped. That's what taxpayers and customers see.

Inside government, bad management stifles the morale of workers. The "system" kills initiative. As Vice President Gore, responding to the concerns of Transportation Department employees, put it:

One of the problems with a centralized bureaucracy is that people get placed in these rigid categories, regulations bind them, procedures bind them, the organizational chart binds them to the old ways of the past--The message over time to...employees becomes: Don't try to do something new. Don't try to change established procedures. Don't try to adapt to the new circumstances your office or agency confronts. Because you're going to get in trouble if you try to do things differently." 3

Cutting red tape, organizing services around customers, and creating competition will start to generate an environment that rewards success. Now, we must encourage those within government to change their ways. We must create a culture of public entrepreneurship.

But changing culture is a lot harder than changing rules and regulations. An attitude of powerlessness and complacency pervades the federal workplace. As one veteran of many government reform initiatives observed, "Changing government is a bit like moving the town cemetery. It's much harder to deal with the feelings it arouses than with the relocation itself."

The Quality Imperative

Of course, many thought that turning General Motors around would be impossible. If you talked to their employees, the same undoubtedly was true of General Electric, Motorola, Harley-Davidson, and scores of leading corporations before they embraced a new management philosophy. In the 1970s and 1980s, as technology began to revolutionize everything and global competitors began to take away market share, firms that had grown fat and happy had to face the facts: This wasn't the 1950s anymore.

These firms quickly discovered that economists can be wrong: More isn't always better: better is better. One by one, they began to pursue a new goal--quality-- and to reorganize their entire businesses around it.

The quality imperative is simple: Do everything smarter, better, faster, cheaper. It is not simple, however, to obey. It means dismantling the old ways of doing business. The same tired command hierarchies that continue to bind government are being scrapped daily by companies on the rise. In their place, firms seek new ways to manage and organize work that develop and use the full talents of every employee. They want everyone to contribute to the bottom line--that is, to produce goods and services that match customer needs at the lowest cost and fastest delivery time.

The quality movement has spawned many proven methods and mantras, each with its loyal fans: management by results; total quality management; high-performance organization; business process reengineering. But the quest for quality--in performance, product, and service--unifies them all.

Government has recognized the quality imperative. In 1987, the U.S. Department of Commerce instituted the Malcolm Baldrige National Quality Award. Now the object of fierce competition, it recognizes private firms that achieve excellence by pursuing quality management. In 1988, the Federal Quality Institute began awarding the Presidential Award for Quality to federal agencies that do the same. The Presidential Award criteria, modeled on Baldrige, set new standards for federal government performance. The President should encourage all department and agency heads to manage with these criteria in mind.

Changing the Culture: Power and Accountability

Companies do not achieve high quality simply by announcing it. Nor can they get to quality by hiring the services of the roving bands of consultants who promise to turn businesses around overnight. They do it by turning their entire management systems upside down--shedding the power to make decisions from the sedimentary layers of management and giving it to the people on the ground who do the work. This rewrites the relationship between managers and the managed. The bright line that separates the two vanishes as everyone is given greater authority over how to get their job done.

The Presidential Quality Award sets forth seven principles to identify excellent government agencies:

Leadership: Are your top leaders and managers personally committed to creating and sustaining your organization's vision and customer focus? Does your effort extend to the management system, labor relations, external partnerships, and the fulfillment of public responsibilities?

Information and Analysis: Do your data, information, and analysis systems help you improve customer satisfaction, products, services, and processes?

Strategic Quality Planning: Do you have short-term and long-term plans that address customer requirements; the capabilities necessary to meet key requirements or technological opportunities; the capacities of external suppliers; and changing work processes to improve performance, productivity improvement, and waste reduction?

Human Resource Development and Management: Is your agency's entire workforce enabled to develop its full potential and to pursue performance goals? Are you building and maintaining an environment for workforce excellence that increases worker involvement, education and training, employee performance and recognition systems, and employee well-being and satisfaction?

Management of Process Quality: Does your agency systematically and continually improve quality and performance? Is every work unit redesigning its process to improve quality? Are internal and external customer-supplier relationships managed better?

Quality and Operational Results: Are you measuring and continuously improving the trends and quality of your products and services, your business processes and support services, and the goods and services of your suppliers? Are you comparing your data against competitors and world-class standards?

Customer Focus and Satisfaction: Do you know what your customers need? Do you relate well to your customers? Do you have a method to determine customer satisfaction?

But with greater authority comes greater responsibility. People must be accountable for the results they achieve when they exercise authority. Of course, we can only hold people accountable if they know what is expected of them. The powerless know they are expected only to obey the rules. But with many rules swept away, what is expected from the empowered?

The answer is results. Results measured as the customer would--by better and more efficiently delivered services. If the staff in an agency field office are given greater voice over how their workplace and their work are organized, then the customer deserves to spend less time waiting in line, to receive a prompt answer--and everything else we expect from a responsive government.

Vice President Al Gore
Reinventing Government Summit

Philadelphia, June 25, 1993

So how do we change culture? The answer is as broad as the system that now holds us hostage. Part of it, outlined in chapter 1 , lies in liberating agencies from the cumbersome burden of over-regulation and central control. Part of it, detailed in chapter 2 , hinges on creating new incentives to accomplish more through competition and customer choice. And part of it depends on shifting the focus of control: empowering employees to use their judgment; supporting them with the tools and training they need; and holding them accountable for producing results. Six steps, described in this chapter, will start us down that road:

First, we must give decisionmaking power to those who do the work, pruning layer upon layer of managerial overgrowth.

Second, we must hold every organization and individual accountable for clearly understood, feasible outcomes. Accountability for results will replace "command and control" as the way we manage government.

Third, we must give federal employees better tools for the job--the training to handle their own work and to make decisions cooperatively, good information, and the skills to take advantage of modern computer and telecommunications technologies. Fourth, we must make federal offices a better place to work. Flexibility must extend not only to the definition of job tasks but also to those workplace rules and conditions that still convey the message that workers aren't trusted.

Fifth, labor and management must forge a new partnership. Government must learn a lesson from business: Change will never happen unless unions and employers work together.

Sixth, we must offer top-down support for bottom-up decisionmaking. Large private corporations that have answered the call for quality have succeeded only with the full backing of top management. Chief Executive Officers--from the White House to agency heads--must ensure that everyone understands that power will never flow through the old channels again. That's how GE did it; that's how we must do it as well.

Step 1: --Decentralizing Decisionmaking Power

To people working in any large organization--public or private--"headquarters" can be a dreaded word. It's where cumbersome rules and regulations are created and good ideas are buried. Headquarters never understands problems, never listens to employees. When the Office of Personnel Management (OPM) surveyed federal employees, fewer than half expressed any confidence in supervisors two layers above them--or any confidence at all in their organization's overall structure.4

Yet everyone knows the truth: Management too often is happily unaware of what occurs at the front desk or in the field. In fact, it's the people who work closest to problems who know the most about solving them. As one federal employee asked Vice President Gore, "If we can't tell what we're doing right and wrong, who better can?"

The Social Security Administration's Atlanta field office has shown the wisdom of empowering workers to fulfill their mission. Since 1990, disability benefit claims have risen 40 percent, keeping folks in the Atlanta office busy. So workers created a reinvention team. They quickly realized that if they asked customers to bring along medical records when filing claims, workers could reduce the time they spent contacting doctors and requesting the records. That idea alone saved 60 days on the average claim. Even better, it saved taxpayers $351,000 in 1993, and will save half a million dollars in 1994. The same workers also found a better, cheaper way to process disability claims in cases reviewed by administrative law judges. Instead of asking judges to send them written decisions, they created a system for judges to send decisions electronically. It's quicker, and it eliminates paperwork, too.5

Now here's the other side of the coin. A Denver Post reporter recently uncovered this bureaucracy-shaking news: It takes 43 people to change a light bulb.

An internal memo written by a manager at the U.S. Department of Energy {Rocky Flats} plant recommended a new safety procedure for "the replacement of a light bulb in a criticality beacon." The beacon, similar to the revolving red lamp atop a police car, warns workers of nuclear accidents. The memo said that the job should take at least 43 people over 1,087.1 hours to replace the light. It added that the same job used to take 12 workers 4.15 hours.

The memo called for a planner to meet with six others at a work-control meeting; talk with other workers who have done the job before; meet again; get signatures from five people at that work-control meeting; get the project plans approved by separate officials overseeing safety, logistics, waste management and plant scheduling; wait for a monthly criticality-beacon test; direct electricians to replace the bulb; and then test and verify the repair.6

This example drives the point home: Too many rules have created too many layers of supervisors and controllers who, however well-intentioned, wind up "managing" simple tasks into complex processes. They waste workers' time and squander the taxpayers' money.

Decentralizing the power to make decisions will energize government to do everything smarter, better, faster, and cheaper--if only because there will be more hands and heads on the task at the same time. Vice President Gore likens the effect of decentralization to the advent of "massive parallelism"--the technology used in the world's fastest supercomputers. Standard computers with central processors solve problems in sequence: One by one, each element of information travels back and forth from the machine's central processor. It's like running six errands on Saturday, but going home between each stop. Even at the speed of light, that takes time. In massively parallel computers, hundreds of smaller processors solve different elements of the same problem simultaneously. It's the equivalent of a team of six people each deciding to take on one of the Saturday errands.

Ranchers, allowed to graze their cattle in Missouri's Mark Twain National Forest, regularly must move their herds to avoid over-grazing any plot of land. Until recently, ranchers had to apply at the local Forest Service office for permits to move the cattle. Typically, the local office sent them on to the regional office for approval, which, in some cases, sent them on to the national office in Washington. Approval could take up to 60 days--long enough, in a dry season, to hurt the forest, leave the cows hungry, and annoy the rancher.
Thanks to an employee suggestion, the local staffer now can settle the details of moving the herd directly with the rancher. If the rancher comes in by 10 a.m., the cattle can be on the move by noon. Ranchers are happier, cattle are fatter, the environment is better protected--all because local workers now make decisions

well within their judgment.

America's best-run businesses are realizing enormous cost savings and improving the quality of their products by pushing decisions down as far as possible and eliminating unnecessary management layers. The federal government will adopt this decentralized approach as its new standard operating procedure. This technique can unearth hundreds of good ideas, eliminate employee frustration, and raise the morale and productivity of an entire organization.

If offered greater responsibility, will employees rise to the task? We are confident they will. After all, few people take up federal work for the money. Our interviews with hundreds of federal workers support what survey after survey of public service workers have found: People want challenging jobs.7 Yet, that's exactly what our rule-bound and over-managed system too often denies them.
Action: Over the next five years, the executive branch will decentralize decisionmaking, and increase the average span of a manager's control.8

Currently, the federal government averages one manager or supervisor for every seven employees.9 Management expert Tom Peters recommends that well-performing organizations should operate in a range of 25 to 75 workers for every one supervisor.10 One "best company" puts Peters' principle to shame: "Never have so many been managed by so few," Ritz-Carlton Vice President Patrick Mene told Vice President Gore at the Philadelphia Summit. "There's only about 12 of us back in Atlanta for 11,500 employees. And it really starts with passionate leadership."11

Working toward a quality government means reducing the power of headquarters vis-- --vis field operations. As our reinvented government begins to liberate agencies from over-regulation, we no longer will need 280,000 separate supervisory staff and 420,000 "systems control" staff to support them.12 Instead, we will encourage more of our 2.1 million federal employees to become managers of their own work.

Put simply, all federal agencies will delegate, decentralize, and empower employees to make decisions. This will let front-line and front-office workers use their creative judgment as they offer service to customers and solve problems.

As part of their performance agreements with the President, cabinet secretaries and agency CEOs will set goals for increasing the span of control for every manager. (See Step 3.) The federal government should seek to double its managerial span of control in the coming years.

Some employees may view such pruning as threatening--to their jobs or their chances for promotion. It is true that the size of the federal workforce will decrease. But our goal is to make jobs meaningful and challenging. Removing a layer of oversight that adds no value to customers does more than save money: It demonstrates trust in our workers. It offers employees in dead-end or deadly dull jobs a chance to use all their abilities. It makes the federal government a better place to work--which will in turn make federal workers more productive.

As private companies have found, the key to improving service while redeploying staff and resources is thinking about the organization's staffing and operating needs from the perspective of customer needs. What does each person's task add in value to the customer? The Postal Service has developed a single criterion: It asks, "Do they touch the mail?" Where possible, other agencies should develop similar simple, easy-to-understand criteria.

Pioneering federal offices have used the full variety of quality management techniques to decentralize. Many focus on passing decisions on to the work teams that deal directly with the customer. Some have produced impressive results, both in productivity and management delayering.

The Internal Revenue Service's Hartford district office slashed the time required to process a form on "currently non-collectible" taxes from 14.6 days to 1.4 days. Then it replaced time-consuming case reviews with an automated case management system and began using the manager's time to upgrade employees' skills. Delinquent tax dollars collected rose by 22 percent. The office chose not to fill vacant management positions, investing part of its staff savings in new technology to boost productivity further. Eventually, it cut overall case processing time from 40 to 21.6 weeks.13

At the Robins Air Force Base, the 1926th Communications-Computer Systems Group cut its supervisory staff in half by organizing into teams.14 An Agriculture Department personnel office that converted to self-managed work teams beefed up customer satisfaction and now uses only one manager for every 23 employees. At the Defense Logistics Agency, self-managing teams in the Defense Distribution Region Central eliminated an entire level of management, saving more than $2.5 million a year.15 In 1990, the Airways Facilities Division of the Federal Aviation Administration maintained approximately 16,000 airspace facilities, with roughly 14,000 employees. Today its workforce is organized in self-managed teams instead of units with supervisors. They now maintain more than 26,000 facilities with only 9,000 employees.16

Other decentralization and delayering plans are in the works. After a successful pilot program in 11 field service sites, the Department of Veterans Affairs is recommending an agencywide effort.17 Over the next 5 years, the Department of Housing and Urban Development (HUD) plans to convert HUD's field structure from three to two levels, eliminating the regional offices. HUD will free its five assistant secretaries to organize their own functions in the field. It will transfer many of its application and loan processing functions to private firms. While letting staff attrition dictate staff reductions- - HUD promises no layoffs--HUD plans to retrain and redeploy people into more interesting jobs, with better career ladders and better access to managers. HUD believes its restructuring effort will improve customer service while saving $157.4 million in personnel and overhead costs.18
Step 2: --Hold All Federal Employees Accountable for Results

It's easy to understand why federal employees--including the hundreds who aired their deep frustrations to the National Performance Review--would care about empowerment. It adds new, positive dimensions to their jobs.

But why should taxpayers or social security recipients care? Taxpayers aren't interested in what rules bureaucracy follows. But they do care, deeply, about how well government serves them. They want education programs to give young people basic skills and teach them how to think, anti-poverty programs that bring the unemployed into the economic mainstream for good, anti-crime programs that keep criminals off the streets, and environmental programs that preserve clean air and water. In other words, they want programs that work.

But management in government does not judge most programs by whether they work or not. Instead, government typically measures program activity--how much it spends on them, or how many people it has assigned to staff them. Because government focuses on these "inputs" instead of real results, it tends to throw good money after mediocre. It pours more dollars into the old education programs even as student performance sinks. It enrolls jobless people in training programs that teach by the book, but places few graduates in well-paid jobs.

Ralph Waldo Emerson

A recent management survey of the largest 103 federal agencies sketches in stark relief this lack of focus on real results. Two-thirds of the agencies reported that they had strategic plans. But only nine said they could link those plans to intended results.19 In other words, many had planned, but few knew where they were going. That's a bit like trying to steer a ship by looking at its wake. As a result, some of our worst examples of "waste" are not rooted in corruption or incompetence, but rather in the simple lack of knowing what we are actually trying to
accomplish. As one despairing federal employee told us, "Process is our most important product."

Recommendations by the National Performance Review aim to revolutionize our method of navigation. "Today," Vice President Gore told one departmental meeting, "all we measure is inputs. We don't measure outputs--and that's one of the things we're going to change throughout the federal government."

Measuring outputs is easy in principle. It means measuring how many unemployed people get jobs, not how many people look for help at local Employment Service offices. Or it means measuring how many people received their social security checks on time, not how many checks were sent out from a local office. "Outputs" are, quite simply, measures of how government programs and policies affect their customers. The importance of pursuing the correct measures cannot be underestimated. As Craig Holt, an Oregon Department of Transportation employee who has worked with the ground-breaking Oregon Progress Board--our nation's first statewide experiment in comprehensive performance accountability--cautions: "Our focus has occurred through our indicators, not through our strategic plans."20

     Implementing the Government Performance and Results Act 
     To its credit, Congress has begun to recognize this need. In

July 1993, it passed the Government Performance and Results Act--a pivotal first step toward measuring whether federal programs are meeting their intended objectives. The act requires that at least 10 federal agencies launch 3-year pilot projects, beginning in fiscal 1994, to develop measures of progress. Each agency pilot will develop annual performance plans that specify measurable goals. They then must produce annual reports showing how they are doing on those measures. At least five pilots will also test "managerial flexibility waivers"--which exempt them from some administrative regulations--to help them perform even better. In exchange for greater flexibility, they must set higher performance targets. This is exactly the process of measured deregulation--"we agree to deregulate you if you agree to be held accountable"--that must be the basis of an empowered and accountable government.

At the beginning of fiscal 1998, after learning from the pilot programs, all federal agencies must develop 5-year strategic plans--linked, this time, to measurable outcomes! By the next year, every agency will be crafting detailed annual performance
plans--that is, plans that describe what they intend to achieve, not plans that detail how many pencils they will buy or people they will hire. And they will have to report their successes and failures in meeting those goals. The Office of Managenent and Budget may exempt very small agencies, and those agencies that cannot easily measure their outcomes will use qualitative rather than quantitative goals and measurements. After all, any agency can, at the very least, survey their customers and report the rating they are given.

President Bill Clinton
Remarks at the signing of the Government Performance And Results Act August 3, 1993

Setting goals is not something that agencies do once. It is a continual process in which goals are raised higher and higher to push agency managers and staff harder and harder to improve. As the old business adage states, "If you're standing still, you're falling behind."

That is why we strongly support the act. But agencies should not wait until fiscal 1999 to start integrating performance measurement into their operations. Nor should they limit themselves to the minimum mandates of the new law. The President, through OMB, is encouraging every federal program and agency to begin strategic planning and performance measurement, whether it is selected as a pilot or not.

If government is to become customer-oriented, then managers closest to the citizens must be empowered to act quickly. Why must every decision be signed-off on by so many people? If program managers were instead held accountable for the results they achieve, they could be given more authority to be innovative and responsive. Senator William V. Roth, Jr. Congressional Record, July 30, 1993

Action: All agencies will begin developing and using measurable objectives and reporting results.21

In early 1994--in time to prepare the fiscal 1996 budget--OMB will revise the budget instructions it gives agencies to
incorporate performance objectives and results, to the greatest extent possible. Agencies will start measuring and reporting on their past goals and performance as part of their 1996 budget requests. The OMB instructions, along with executive office policy guidance, will guide agencies as they develop full-fledged goal-setting and performance-monitoring systems for the first time.

At the outset, managers may feel unprepared to set reasonable performance targets. Some will lack any program data worth its salt on which to base any future goals or performance projections. Others, overwhelmed with "input" indicators about program staffing and spending, will find it difficult to figure out whether--or how--those measures directly relate to achieving desired outcomes. Agencies will start preparing themselves by reallocating enough resources toward performance planning and measurement over the long term.

OMB will help. Its budget analysts will be trained to provide feedback and broad oversight to help craft an effective system, and encourage agencies to improve measures that are clearly
ineffective. OMB will negotiate stronger goals for agencies that set their sights too low or perform poorly against their indicators.

Agencies will gradually build performance information into their own budget guidance and review procedures, into their strategic and operational plans, and into revised position descriptions for their budget, management, and program analysts. Nothing, however, will replace peer pressure as agencies vie for performance awards or seek public recognition for their achievements.

Action: Clarify the objectives of federal programs.22

Many agencies will be unable to set clear measurable goals until Congress simplifies their responsibilities. Programs are bound by multiple, often conflicting, legislative objectives. The complex politics of passing enabling legislation and then negotiating annual appropriations forces some programs to be all things to all people.

For example, a training program targeted at unemployed steel workers soon is required to serve unemployed farm workers, the disabled, and displaced homemakers. Originally, the program's purpose may have been to refer people to jobs. But congressional maneuvers first force it to offer them training; then to help them find transportation and daycare. All these are important activities. But, by now, the original appropriation is hopelessly inadequate, reporting requirements have multiplied geometrically along with the multiplicity of goals, and the program is not simply unmanaged--it's unmanageable. If agencies are to set measurable goals for their programs, Congress must demand less and clarify priorities more.

In the private sector, leaders do not simply drop goals on their organizations from above. Hewlett-Packard, Microsoft, Xerox, and others involve their full workforces in identifying a few goals that have top priority, and then demand smaller work teams to translate those overall goals into specific team measures. This process enables the people directly responsible for meeting the goals to help set them. It also ensures that every part of an organization aims at the same goals, and that everyone understands where they fit in. It may seem a time consuming process, but boats travel much faster when everyone is pulling their oar in the same direction.

With a new joint spirit of accountability, the executive branch plans to work with Congress to clarify program goals and objectives, and to identify programs where lack of clarity is making it difficult to get results.

Holding Top Management Accountable

When General Eisenhower took command of the Allied Expeditionary Force in World War II, he was given a mission statement that clearly delineated goals for his vast organization of more than a million and a half men and women: "You will enter the continent of Europe and, in conjunction with the other united nations, undertake operations aimed at the heart of Germany and the destruction of her armed forces."

In 1961, President Kennedy gave NASA an even clearer mission: Put a man on the moon and return him safely to earth by the end of the decade. As Vice President Al Gore told his audience at a meeting with Veterans Affairs Department employees: "There has to be a clear, shared sense of mission. There have to be clearly understood goals. There have to be common values according to which decisions are made. There has to be trust placed in the employees who actually do the work."

In Great Britain, Australia, and New Zealand, many department and agency heads are appointed for limited terms and given performance agreements. Their reappointments depend on achieving measurable outcomes. Senior officials from these countries say that these agreements have improved organizational performance more than any other aspect of their reinventing government efforts. In the United States, many local governments do much the same: In Sunnyvale, California, managers can earn bonuses of up to 10 percent if their agencies exceed performance targets.

Action: The President should develop written performance agreements with department and agency heads.23

Past efforts to institute management by objectives have collapsed under the weight of too many objectives and too much reporting. The President should craft agreements with cabinet secretaries and agency heads to focus on the administration's strategy and policy objectives. These agreements should not "micro-manage" the work of the agency heads. They do not row the boat. They should set a course.

These agreements will begin with the top 24 agency heads. In fact, Secretaries Mike Espy at the Agriculture Department and Henry Cisneros at the Department of Housing and Urban Development, as well as Roger Johnson at the General Services Administration (GSA), and Administrator J. Brian Atwood of the Agency for International Development are already working with their top managers on agreements.

Not everyone will welcome outcome measures. People will have trouble developing them. Public employees generally don't focus on the outcomes of their work. For one thing, they've been conditioned to think about process; for another, measures aren't always easy to develop. Consequently, they tend to measure their work volume, not their results. If they are working hard, they believe they are doing all they can. Public organizations will need the several years envisioned under the Government Performance and Results Act to develop useful outcome measures and outcome reporting.

Outcome-based management is new in the public sector. Some U.S. cities have developed it over the past two decades; some states are beginning to; and foreign countries such as Great Britain, Australia, and New Zealand are on their way. Sunnyvale, California, a city of 120,000 in the heart of the Silicon Valley, began the experiment 20 years ago. In each policy area, the city defines sets of "goals," "community condition indicators," "objectives," and "performance indicators." "In a normal political process, most decisionmakers never spend much time talking about the results they want from the money they spend," says City Manager Tom Lewcock. "With this system, for the first time they understand what the money is actually buying, and they can say yes or no."24
Sunnyvale measures performance to reward successful managers. If a program exceeds its objectives for quality and productivity, its manager can receive a bonus of up to 10 percent. This generates pressure for ever-higher productivity. The result: average annual productivity increases of four percent. From 1985 to 1990, the city's average cost of service dropped 20 percent, in
inflation-adjusted dollars. According to a 1990 comparison, Sunnyvale used 35 to 45 percent fewer people to deliver more services than other cities of similar size and type. At least a half-dozen states hope to follow in Sunnyvale's footsteps. Oregon has gone farthest. In the late 1980s, Governor Neil Goldschmidt developed long term goals, with significant citizen input. He set up the Oregon Progress Board, comprising public and private leaders, to manage the process. The board developed goals and benchmarks through 12 statewide meetings and written materials from over 200 groups and organizations. "Oregon," the board stated, "will have the best chance of achieving an attractive future if Oregonians agree clearly on where we want to go and then join together to accomplish those goals."25
The legislature approved the board's recommended 160 benchmarks, measuring how Oregon is faring on three general goals: exceptional individuals; outstanding quality of life; and a diverse, robust economy. Seventeen measures are deemed short-term "lead"
benchmarks, related to urgent problems on which the board seeks progress within 5 years. They include reducing the teen pregnancy rates, enrolling people in vocational programs, expanding access to basic health care, and cutting worker compensation costs. Another 13 benchmarks are listed as "key"--fundamental, enduring measures of Oregon's vitality and health. These include improving basic student skills, reducing the crime rate, and raising Oregon's per capita income as a percentage of the U.S. average. Barbara Roberts, today's governor, has translated the broad goals and benchmarks into specific objectives for each agency. This year, for the first time, objectives were integrated into the budget--giving Oregon the first performance-based budget among the states. Great Britain has instituted performance measurement throughout its national government. In addition, the government has begun writing 3-year performance contracts, called "Framework Agreements," with about half its agencies. These agencies are run by chief executive officers, many from the private sector, who are hired in
competitive searches and then negotiate agreements specifying objectives and performance measures. If they don't reach their objectives, the CEOs are told, their agencies' services may be competitively bid after the 3 years.

Ultimately, no one can generate results without knowing how the "bottom line" is defined. Without a performance target, managers manage blindly, employees have no guidance, policymakers don't know what's working, and customers have no idea where they may be served best. If, for example, jobless people know how well graduates of local training programs fare when looking for work, they can better choose which new careers and programs offer the best prospects. Informed consumers are the strongest enforcers of accountability in government.

Action: The administration will issue one set of Baldrige Awards for quality in the federal government.26

For years, the executive branch has taken steps to recognize and support good performance. In typical fashion, however, we have created three different award systems, each administered by a different organization. The Federal Quality Institute (FQI) administers the Presidential Award for Quality; the President's Council on Management Improvement administers the Award for Management Excellence; and the Office of Personnel Management awards the Presidential Quality and Management Improvement Awards for tangible savings to the government of more than $250,000.

The administration will issue one set of presidential awards for quality. The Baldrige Award Office of the National Institute for Standards and Technology will combine the existing awards into a new set of Baldrige Awards for public service--to go along with its private sector award. The new award will recognize agency and work unit quality initiatives and ideas, based on program
performance, cost savings, innovation, and customer satisfaction.

Step 3: --Giving Federal Workers the Tools They Need to do Their--Jobs

Americans today demand a more responsive, more humane government that costs less. Their expectations are neither irrational nor whimsical. Over the past 20 years, the entire way we do things, make things, even contact one another, has changed around us. Businesses have no guarantees, no captive markets. To compete, they must make things and deliver service better and faster, and get their message out sooner. No one benefits more than customers. It's no wonder these same people now turn to government and ask, "Why can't you do things better too?"

Transforming our federal government to do better will mean recasting what people do as they work. They will turn from bosses into coaches, from directors into negotiators, from employees into thinkers and doers. Government has access to the same tools that have helped business make this transformation; it's just been slower to acquire and use them. We must change that. We must give workers the tools they need to get results-- then make sure they use them.

Employee Training

After two decades of organizing for quality, business knows one thing for sure: Empowered people need new skills--to work as teams, use new computer software, interpret financial and statistical information, cooperate with and manage other people, and adapt. Indeed, business talks about a new breed of "knowledge worker"--people who understand that, throughout their careers, their most important task is to continue learning and applying new knowledge to the challenge at hand. Knowledgeable workers are our most important source of progress. They are, quite simply, the currency of 21st century commerce.

Business teaches us that ongoing training for every worker is essential for organizations to work well. Not surprisingly, the federal government under-spends on training and education, just as it does on most other productivity-enhancing investments. In 1989, the National Commission on the Public Service, headed by Paul Volcker, estimated that while leading private firms spend 3 to 5 percent of their budgets on training, retraining, and upgrading employee skills, the federal government spends less than one percent.27

And the little we do spend is not always allocated wisely. A well-promoted 4-day training seminar packaged to appeal to federal agency managers may seem like a good deal. It is not, however, always what the agency needs. The Volcker Commission concluded:

Federal training is suffering from an identity crisis. Agencies are not sure what they should train for (short term or long term), who should get the lion's share of resources (entry level or senior level)...and whether mid-career education is of value...Career paths are poorly designed, executive succession is accidental and unplanned, and real-time training for pressured managers is virtually non-existent. At both the career and presidential level, training is all-too-often ad hoc and self-initiated.28

Perhaps most striking is the paucity of career training for people on the lowest rungs of the civil service ladder, or for people without the leg-up of university degrees. These valued employees may have the most tenure in an office. They may see and know everything. Frequently, they are indispensable, because only they know how the system works--and how to work the system. Unfortunately, their abilities are rarely rewarded, despite their desire to advance.

One staffer in the Justice Department's Civil Division alerted Vice President Gore to her quandary:

I'm watching the role of our legal secretaries change. Less and less of the typical secretarial duties are being performed, simply because the attorneys do a lot of their own drafting of documents... However, for a secretary to start to move into a legal assistant position... or into a paralegal role, is frowned upon... As far as training goes it's impossible... That prevents a lot of people from...moving into new jobs that are going to be of more benefit to the department...We've lost a good number of secretaries who have moved elsewhere, because they cannot go any further here.29

Employees at the top rung, too, must keep learning. Managers and executives face the same hurdles in keeping up with technology as do front-line workers. Technicians must stay up to date with system advances and new techniques. The growing band of federal export and trade personnel must learn more than foreign languages--they need to master the language of negotiation as well. Indeed, employees in the Office of the U.S. Trade Representative currently receive no systematic training in negotiation skills or the cross-cultural styles and patterns they are likely to encounter in their work--a situation the office is now planning to correct.30

Perhaps most important, training is the key that unlocks the power of bottom-up decisionmaking. At the Reinventing Government Summit, General Electric Executive Vice President Frank Doyle detailed the GE experience: "We had to educate our entire workforce to give them the tools to become meaningfully involved in all aspects of work. Empowerment...is a disorderly and almost meaningless gesture unless people doing the actual work are given the tools and knowledge that self-direction demands."31

During the National Performance Review process, almost every one of the agency teams identified a specific learning need critical to their agency's quality improvement and mission. In addition, several common training concerns demand governmentwide action.

Action: The administration will grant agencies the flexibility to finance training needs.32

Leading corporations view training as a strategic resource, an investment. Federal managers tend to view it as a cost. So in government, worker training isn't even included in most budget estimates for new systems or programs. This is puzzling and quite short-sighted, since new workplace innovations, like advanced software, won't transform employee productivity unless those employees know how to use them. Although training may be the best and least costly way to improve worker performance, government executives view it as a "quick fix," unworthy of any planning effort.

Perceptions are changing, however. Today's management literature is full of talk about the value of on-the-job-training, computer-based instruction, expert systems, work exchange, mentors and other tools for learning. Since 1992, OPM has been steering agencies toward more comprehensive training initiatives.

We will grant agencies a substantial portion of the savings they realize from decentralizing staff and reducing operating costs (see chapter 1) to invest in worker training, performance measurement, and benchmarking.

Budget directives further complicate an agency's ability to train workers effectively, particularly when its own budget office, OMB, or Congress cut line items for employee training. Such over-specified reductions deny employees the access to skills they need to be productive, to advance in their careers, and to adapt to new technology.

Action: The federal government will upgrade information technology training for all employees.33

Every year, more and more federal workers must use computer-based information technology in their jobs. If business is any guide, our government reinvention efforts will only quicken the trend. Pen and paper exercises keep moving to the screen. Lateral files now form database records. Video- and computer-based courses make learning possible anytime, anywhere. Money no longer changes hands; it's transmitted digitally. People not only talk, they "message." A meeting of the minds can take place without the bodies present.

Other chapters discuss how we will speed the procurement process for technology and how we will deploy technology to alter what we do and how well we do it. Here, we want to stress that much of the federal workforce lacks the training and background to use advanced information technologies.

Compared to the private sector, the federal government invests few dollars and scant time in technology training.34 Federal agencies provide insufficient incentives to motivate their workforce to seek technology training, scarce opportunities to obtain training--even when it's desired and necessary--and rarely incorporate technology training in the strategic planning process. The longer we wait, the farther behind we fall.

This foot-dragging costs the taxpayer dearly. We do things the old way, not the cheaper, more efficient way. Or we start doing things the new way, but we don't go far enough: We buy computers for our workers, but not the training to use them properly, so the software and hardware investments are wasted. We invest in new systems, and our people can't make them work.

Training should begin with top nontechnical managers, to help them focus on uses, management, planning, and acquisition of state-of-the-art information technology. By May 1994, OPM and GSA will jointly develop and administer information technology training for non-technical managers and presidential appointees. The New York City Department of Personnel, already in the technology training business, offers a useful model of monthly half-day sessions for executives covering ten topics: strategic planning, reengineering, implementing systems, electronic mail, video conferencing, voice-enhanced technologies, geographic information systems, database management, imaging, and multi-agency complaints and inspection systems. Our effort will help every senior manager earn a certificate that signifies his or her level of technology competency. Parallel training and certification efforts will target Senior Executive Service members and information resource managers.

Anyone who has grappled with computers--from the basics of word processing to the complexity of expert systems--knows that we often learn best how to use software by finding a technology "pal": someone who knows the ins and outs of a particular software application and is willing to share that knowledge. To spread information technology training and use in the entire federal workforce, the existing Federal Information Resources Management Policy Council will help motivated agencies set up a program of collegial assistance for a wide range of technology applications. We will tap the cadre of techno-proficient individuals spread across the federal government to provide occasional on-line help or personal assistance on demand to their struggling colleagues.

Finally, starting late in 1993, new contracts for technology acquisition--or those in early stages--must include a provision for training. If agencies work together, they can cut such training costs dramatically. When Texas contracted with four statewide technology training firms to train state employees, it cut the price to $60 to $110 a day per worker for a wide range of skills. An even larger customer, the federal government should be able to land an even better bargain.

Action: Eliminate narrow restrictions on employee training to help develop a multiskilled workforce.35

The Government Employees Training Act (GETA), which authorizes agencies to manage and determine their training needs, defines training as a tool for "increasing economy and efficiency in government." The rules written behind this 1958 wording severely limit how agencies can use training today. Training too often is ad hoc and seldom linked to strategic or human resource planning. Managers generally are not able to get the information to determine the return on their training investment. Even worse, existing restrictions dictate that any training be related to an employee's official duties--thus ensuring that our Justice Department secretary does not become a paralegal. These rules keep federal employees single-skilled in a multi-skilled world.

By early 1994, OPM will draft legislation to amend GETA on three fronts. OPM will redefine the objective of federal training as the "improvement of individual and organizational performance." It will relate the use of training to achieving an agency's mission and performance goals, not to a worker's official duties. And OPM will seek to end the distinction between government and
nongovernment training, giving public employees access to the best training services available, no matter who provides them.

Clarifying the purpose of training in GETA will reinforce the need to use training to improve performance and produce results. Removing the distinction between government and non-government training will deregulate the in-government training monopoly, introducing competition that will improve the quality of learning opportunities for federal employees. And linking training to an agency's mission will ease employees' efforts to become adept at all the skills they need as empowered workers. We urge Congress to join in the quality effort by passing these important amendments early in 1994.

Management Information Systems

Management isn't about guessing, it's about knowing. Those in positions of responsibility must have the information they need to make good decisions. Good managers have the right information at their fingertips. Poor managers don't.

Good information comes from good information systems. Management information systems have improved in lockstep with every advance in the telecommunications revolution. New management information systems are transforming government, just as they have business, in two ways. They can make government more productive--the benefit we discuss in this chapter--and let us deliver services to customers in new ways, which we take on in chapter 4. Indeed, today's systems have enabled businesses to slim down data processing staffs, while giving more employees access to more accurate data. This shows up on the bottom line. If federal decisionmakers are given the same type of financial and performance information that private managers use, it too will show up on the bottom line--and cut the cost of government.

Sheer size alone would make the federal government difficult to manage, even under the best of conditions. Unfortunately, federal employees don't work under the best of conditions. Indeed, when it comes to financial information, many are flying blind. It's not for lack of staffing: Some 120,000 workers--almost 6 percent of non-postal service civilian employees--perform budget, accounting, auditing, and financial management tasks.36 But when OMB surveyed agency financial reporting systems last year, it found that one-third were more than a decade old, and only 6 percent were less than 2 years old. One-third failed to meet Treasury and OMB reporting standards. Two-fifths did not meet their own in-house reporting standards--meaning they did not provide the information managers wanted. And more than half simply lacked the computer power to process the data being entered.37

We all know the potential costs of lagging systems: They contributed to the $300 billion savings and loan bailout,38 $47 billion in nontax delinquent debt, $3.6 billion in student loan defaults, and so on.

Fortunately, the process of updating our management information systems has begun. In 1990, Congress passed the Chief Financial Officers (CFO) Act.39 It designated an OMB deputy director as the federal government's chief financial management officer. The Office of Federal Financial Management was charged with establishing financial management policies across the government and monitoring agency audits. The act also created chief financial officers in 23 agencies. The OMB deputy chairs a CFO Council to deal with improving financial management across government.

But we need to do more--and quickly.

Action: The executive branch will create a coherent financial management system, clarify responsibilities, and raise the standards for financial officers.40

Vastly improved financial management is critical to the overall effort to reform government. First, it will save taxpayers money. Trillions of dollars flow through the federal government in any year; even a small improvement in managing those funds could recover billions. Second, we need accurate and timely financial information if managers are to have greater authority to run federal agencies, and decisionmaking moves to the front lines. Greater responsibility requires greater accountability, or the best-intentioned reforms will only create new problems. Finally, better financial management will present a more accurate picture of the federal budget, enabling the President, Congress, and agency leaders to make better policy decisions.

By the end of 1993, OMB and Treasury will sign a formal agreement to clarify their respective policymaking and implementation roles, to eliminate regulatory confusion and overlap for their governmental customers. OMB, working with Treasury and the CFO Council, will charter a governmentwide Budget and Financial Information Steering Group to oversee the stewardship of financial planning and management data for the federal government. In addition, by Spring, 1994, OMB will work with the existing Joint Financial Management Improvement Program, which currently develops and publishes financial system requirements, and consult with Treasury and the agencies to define exactly what constitutes an integrated budget and financial system. At the same time, working with Treasury and the CFO Council, OMB will develop a long-range strategic plan for linking broad budget and financial information needs to the work of agency managers and achieving performance goals.

Finally, we will insist on higher qualifications for chief financial officers. After all, many federal agencies are larger than Fortune 500 companies. Americans deserve financial officers with qualifications that match those in our best companies. By March 1994, working with accounting and banking groups, the CFO Council will create a continuing education program for federal financial managers. At the same time, OMB guidelines will clarify the precise financial functions the CFO should oversee, trimming responsibilities like personnel or facilities management that lie outside the CFO's main mission.

Action: Within 18 months the Federal Accounting Standards Advisory Board will issue a comprehensive set of credible accounting standards for the federal government. 41

A recent GAO audit of the Internal Revenue Service unearthed $500,000 of overpayments to vendors in just 280 transactions and a video display terminal that cost only $752 listed at $5.6 million on the IRS books. Other GAO efforts found the Army and Air Force guilty of $200 billion in accounting mistakes, NASA of $500 million, and widespread recordkeeping problems across government.42 In 1990, Congress concluded that "current financial reporting standards of the federal government do not accurately disclose the current and probable future cost of operating and investment decisions including the future needs for cash and other resources." In other words, if a publicly-traded corporation kept its books the way the federal government does, the Securities and Exchange Commission would close it down immediately.

It's not that we have no accounting procedures and standards. It's that we have too many, and too many of them conflict. Even worse, some budget and accounting practices obscure the amount and type of resources managers might leverage to produce savings and increase productivity.

We must agree on stricter accounting standards for the federal books. We require corporations to meet strict standards of financial management before their stocks can be publicly traded. They must fully disclose their financial condition, operating results, cash flows, long-term obligations, and contingent liabilities. Independent certified public accountants audit their accounts. But we exempt the $1.5 trillion federal government from comparable standards.

Currently, the Federal Accounting Standards Advisory Board (FASAB), established in October 1990, develops and recommends federal accounting standards for OMB, Treasury, and GAO--which together must approve them. Although we need almost a dozen sets of standards, only one has been approved using this process in more than two and a half years. We need to quicken the pace.

The administration will give the Federal Accounting Standards Advisory Board an 18-month deadline to release and get approval of all 11 sets of standards. If it fails, the administration will replace it with a new, independent board with greater powers.
Action: The Administration should issue an Annual Accountability Report to the Citizens.43

The ultimate consumer of information about the performance of federal organizations should be the American public. As agencies develop output and outcome measures, they should publish them. The customer service standards required by the President's directive on improving customer service, outlined in chapter 2, will be a first step.

A second step will be a new report card on the financial condition of the federal government. For the last 20 years, our government has issued "prototype" financial statements, but no one can assure their accuracy. Put simply, they would never pass an audit. We believe Americans deserve numbers they can trust. By 1997, we will require the Department of the Treasury to provide an audited consolidated annual report on federal finances--including tax expenditures, hidden subsidies, and hidden contingent
liabilities such as trust funds and government-sponsored enterprises.44

The Treasury and OMB will develop a simplified version of the government's financial condition, to be published for public consumption in 1995. Rather than a detailed, unreadable financial account, it will be a straightforward description of the money spent and its effects on achieving goals. We will call this the Annual Accountability Report to the Citizens.

Information Technology

A few years ago in Massachusetts, a disabled veterans caseworker who worked to match veterans with available jobs took some initiative. He decided to abandon his sole reliance on the state's central office mainframe computer and take his personal laptop, loaded with readily available software, on the road. Suddenly, he was able to check a database, make a match, and print a resume all during his first contact with an employer. Quickly, he started beating the mainframe. His state administrator took notice, and managed to squeak through a request to the Department of Labor's Veterans Employment and Training Service for grant funding and permission to reprogram dollars in the fall of 1990. Soon after, 40 Massachusetts caseworkers were working with laptops. In just one year, Massachusetts jumped from 47th in the nation for its veterans job placement rate to 23rd.

Although this story screams success, it is unfortunately the exception, not the rule. Normally, the Labor Department has to approve the purchase of something as small as a $30 modem in the field. Massachusetts got the funding only because it was the end of the fiscal year and money had to be spent.45

The point stands: When workers have current and flexible technology to do their jobs, they improve performance. We need to get more computers off the shelf and into the hands of federal employees.

Action: The administration will develop a strategic plan for using information technology throughout the federal government.46

Transforming the federal government is an enormous, complex undertaking that begins with leadership, not technology. Yet, in helping to break down organizational boundaries and speed service delivery, information technology can be a powerful tool for reinvention. To use that tool, government employees must have a clear vision of its benefits and a commitment to its use.

Washington's attempts to integrate information technology into the business of government have produced some successes but many costly failures. Many federal executives continue to overlook information technology's strategic role in reengineering agency practices. Agency information resource management plans aren't integrated, and their managers often aren't brought into the top realm of agency decisionmaking. Modernization programs tend to degenerate into loose collections of independent systems solving unique problems. Or they simply automate, instead of improve, how we do business.

The President should expand the work of the existing Information Infrastructure Task Force to include a Government Information Technology Services Working Group. This working group will develop a strategic vision for using government information services and propose strategies to improve information resource management. Also beginning in October 1993, OMB will convene interagency teams to share information and solve common information technology problems. In addition, OMB will work with each agency to develop strategic plans and performance measures that tie
technology use to the agency's mission and budget.

Step 4: --Enhancing the Quality of Worklife

When it comes to the quality of worklife, as measured by employee pay, benefits, schedule flexibility, and working conditions, the federal government usually gets good marks. Uncle Sam is a family-friendly employer, offering plenty of options that help employees balance their life and work responsibilities. Flextime, part-time, leave-sharing, and unpaid family and medical leave are all available. Pilot projects in telecommuting allow some workers who travel long distances to work at locations closer to home.

The federal government would be smart to keep abreast of workplace trends. Our increasingly diverse workforce struggles to manage child care, elder care, family emergencies, and other personal commitments, while working conditions become ever more important. Recent studies suggest that our ability to recruit and retain the best employees--and motivate them to be productive--depends on our ability to create a satisfying work environment. Johnson & Johnson, for example, reported that its employees who used flextime and family leave were absent 50 percent fewer days than its regular workforce. Moreover, 71 percent of those workers using benefits said that the policies were "very important" to their decision to stay with the company, as compared to 58 percent of the employees overall.46

The federal government must maintain its "model employer" status and keep the workplace a humane and healthy place. It must also ensure that, as we move toward improving performance and begin to rely on every worker for valuable ideas, we create a workplace culture in which employees are trusted to do their best.

Action: The federal government will update and expand family-friendly workplace options.47

Even under current workplace policies, federal workers still encounter some problems. Many agencies do not fully advocate or implement flexible work policies. For example, only 53 percent of our employees with dependent care needs believe their agencies understand and support family issues, according to OPM. Thirty-eight percent indicated that their agencies do not provide the full range of dependent-care services available. As one example, OPM concluded that "...certain agencies may have internal barriers that make supervisors reluctant to approve employee requests to work part-time."48

The President should issue a directive requiring that all agencies adopt compressed/flexible time, part-time, and job-sharing work schedules. Agencies will also be asked to implement flexiplace and telecommuting policies, where appropriate. Starting next year, we will allow federal employees to use accrued sick leave to care for sick or elderly dependents or for adoptions.49 We will also give credit for all sick leave to employees who have been separated from and then rejoin federal employment, no matter how long they were out of government service.

Congress has written into law some barriers to improving the federal workplace. It should lift them. By January 1994, OPM will submit legislation to remove limitations on dependent-care programs and give agencies more authority to craft employee-friendly programs, such as employee benefit packages. By March 1994, OPM and GSA will propose legislation to enable flexiplace and telecommuting arrangements.

Finally, we urge Congress to reauthorize the Federal Employees Leave Sharing Act which expires October 31, 1993 with a few changes to improve program operations and allow interagency transfers of annual leave. Voluntary leave enables employees with family medical emergencies, who have exhausted all their available annual leave, to receive donated annual leave from their fellow federal workers. In just the last two years, voluntary leave served more than 23,000 federal employees with more than 3,742,600 hours of donated annual leave. The dependent-care needs of more than 96 percent of federal employees are met by the leave-sharing program.50

Rosetta Riley
Director of Customer Satisfaction
General Motors

Action: The executive branch will abolish employee time sheets and time cards for the standard work week.51

In a productive workplace, where employees clearly understand their agency's mission, how they fit into it, and what they must accomplish to fulfill it, everyone is a professional. The work culture must send this message in every way possible. One easy way is to put an end--once and for all--to meaningless employee sign-ins and sign-outs on time sheets.

Many may consider this a trivial matter. But consider the salaried Health and Human Services (HHS) employee who must still sign in at a central location in her office every morning--and sign out exactly 81/2 hours later. She must do this no matter how many more hours she really works, and every employee in her branch must sign the same list, in order of appearance.

Occasionally, when she gets caught up in a meeting or lost in concentration at her desk, she forgets to sign the book at her appointed hour. Supervisors have "guided" her to avoid this problem. She tells her supervisor, who agrees that the practice is senseless, that it discourages her from working longer hours. "What about us overachievers?" she asks him. "You lose," he answers.

The truth is, we all lose. Yet HHS continues to spend dollars training timekeepers.52

The Department of Labor, by contrast, listened to complaints from its employees about the needless paper-pushing and use of administrative time that repetitive timekeeping required. Under the leadership of Secretary Robert Reich, and with full backing of union presidents who represent department employees, Labor has begun to dump the standard time card. After realizing that nearly 14,000 of its 18,000 employees work a standard 40-hour week, department leaders decided to trust their workers to report only exceptions, such as overtime and sick and annual leave. Since only one third of Labor's workforce reports any exception in the average week, the department is already saving paper and time--and money. Standard time records are now submitted electronically, without bothering employees.56

The President should encourage all departments and agencies to follow the Department of Labor's lead. The new policy will allow for exceptions--for example, when labor contracts or matters of public safety require them. But if we truly seek the highest productivity from our workers, we must treat them like responsible adults. In today's work environment, time cards are a useless annoyance.

Action: The President should issue a directive committing the administration to greater equal opportunity and diversity in the federal workforce.54

President Clinton launched his administration by appointing cabinet and senior officials who, in his words, "look like America." In doing so, he sent a clear message: A government that strives for the best must continue to break down stubborn barriers that too often keep us from employing, training, or promoting the best people.

While the President has set the stage, the current federal workforce does not reflect the nation's diverse working population. Overall, the federal government has yet to successfully eliminate some discriminatory barriers to attracting and retaining
underrepresented groups at every civil service grade level, or advancing them into senior positions. A glass ceiling still hangs over the employment and career prospects for women, minorities and people with disabilities who work in the federal service. Women account for only 12 percent of the top tier of the federal employment ladder--the Senior Executive Service--and minorities, nine percent.55 Serious disparity persists for both in promotion rates to professional and administrative levels that serve as the gateway to further advancement. The numbers for Americans with disabilities are even worse.

Much can be done to make equal opportunity an integral part of each agency's mission and strategic plan. The President should issue a directive in 1993, committing the administration to attaining a diverse federal workforce and increasing the representation of qualified minorities, women, and people with disabilities at all career levels. The order should instruct agency heads to build equal employment opportunity and affirmative employment elements into their agency strategic plans and
performance agreements. In turn, agency leaders should require managers and teams throughout their agencies to build the same goals into their own performance plans--and should publicly recognize those who succeed.

Step 5: --Forming a Labor-Management Partnership

The federal workforce is changing. While the number of employees has remained constant for a decade, the workforce is much more diverse, with more minorities and women. It is better educated and more mobile. And more employees work in professional,
scientific, and highly technical jobs than ever before.

Today, more than 125 federal unions represent about 60 percent of the federal workforce. That's 1.3 million civilian, non-postal employees, or 80 percent of the workforce eligible to participate in federal unions. The three largest federal employee unions are the American Federation of Government Employees (AFGE), the National Treasury Employees Union (NTEU), and the National Federation of Federal Employees (NFFE).

Federal employees and their unions are as aware of the quality revolution as are federal managers. Consistent with the quality push, federal employees want to participate in decisions that affect their work. Indeed, GAO estimates that 13 percent of federal workers already are involved in formal quality management processes.56 At the IRS, for example, a Joint Quality Improvement Process with the NTEU has spread throughout the agency--saving money, producing better service, and improving labor-management relations.

Corporate executives from unionized firms declare this truth from experience: No move to reorganize for quality can succeed without the full and equal participation of workers and their unions. Indeed, a unionized workplace can provide a leg up because forums already exist for labor and management exchange. The primary barrier that unions and employers must surmount is the adversarial relationship that binds them to noncooperation. Based on mistrust, traditional union-employer relations are not well-suited to handle a culture change that asks workers and managers to think first about the customer and to work hand-in-hand to improve quality.

The current context for federal labor-management relations, title VII of the 1978 Civil Service Reform Act, presents such a barrier. In 1991, the GAO concluded after an exhaustive survey of union leaders, government managers, federal employees and neutral experts, that the federal labor-management relations program embodied in title VII "is not working well." GAO characterized the existing bargaining processes as too adversarial, bogged down by litigation over minute details, plagued by slow and lengthy dispute resolution, and weakened by poor management. One expert interviewed by GAO summed up the prevailing view: "We have never had so many people and agencies spend so much time, blood, sweat, and tears on so little. In other words, I am saying I think it is an awful waste of time and money on very little results." Indeed, the cost of handling unfair labor practice disputes using this system runs into tens of millions of dollars every year.57

We can only transform government if we transform the adversarial relationship that dominates federal union-management interaction into a partnership for reinvention and change. Action: The President should issue a directive that establishes labor-management partnership as an executive branch goal and establishes a National Partnership Council to help implement it.58

The President's executive order will articulate a new vision of labor-management relations. It will outline the roles of managers and unions in creating a high-performance, high-quality government. It will call for systematic training in alternative dispute resolution and other joint problem-solving approaches for managers, supervisors and union officials. And it will call for agencies to form their own internal councils.

By October, 1993, the President should appoint the National Partnership Council and charge it with the task of championing these efforts and developing the next steps. The council will include appropriate federal cabinet secretaries, deputy secretaries, and agency directors; the presidents of AFGE, NTEU, and NFFE; and a representative of the Public Employee Department of the AFL-CIO. Federal agencies and unions will assign existing personnel to staff the council.

Action: The National Partnership Council will propose the statutory changes needed to make labor-management partnership a reality.59

GAO cited the need for a new labor-management relations framework that "motivates labor and management to form productive relationships to improve the public service."60 The Federal Labor Relations Authority, The Federal Mediation and Conciliation Service, and several agencies have been encouraging and facilitating new labor-management cooperation efforts. However, their efforts are being hampered by legal restrictions that focus on the traditional adversarial models. The council will recommend legislation to the President to create a better framework.

Step 6: Exerting Leadership

Despite the federal government's solid core of capable employees, it lacks effective leadership and management strategies. In 1992, GAO delivered a stark diagnosis of the situation. Our government, GAO reported, lacks the "processes and systems fundamental to a well-run organization. Most agencies have not created a vision of their futures, most lack good systems to collect and use financial information or to gauge operational success and accountability, and many people do not have the skills to accomplish their missions." This situation, GAO concluded in a burst of understatement, was "not good."61

The sweeping change in work culture that quality government promises won't happen by itself. Power won't decentralize of its own accord. It must be pushed and pulled out of the hands of the people who have wielded it for so long. It will be a struggle.

We must look to the nation's top leaders and managers to break new ground. The President, the Vice President, cabinet secretaries, and agency heads are pivotal to bringing about governmentwide change. It is they who must lead the charge. Under President Clinton's leadership they are determined to make it happen.

If we want to make the federal government a better place, our current leadership must make it clear by what we do that, when we offer change, we mean business. That is a promise we must make to the entire community of hardworking, committed federal workers. It is a promise we must keep.

Action: The President should issue a directive detailing his vision, plan, and commitment to creating quality government.62

Graham Scott, who as Secretary of Treasury for New Zealand helped shepherd reinvention of that country's government, cautioned Vice President Gore, "Our experience is that government won't change unless the chief executive is absolutely 100 percent committed to making it change."63 CEOs of corporations the world over echo Scott's call.

The first directive issued along with this report will clarify the President's vision of a quality federal government. It will commit the administration to the principles of reinventing government, quality management, and perpetual reengineering, as well as the National Performance Review's other recommendations. In addition, it will detail the strategic leadership roles of the cabinet and agencies in implementing them.

Action: Every federal department and agency will designate a chief operating officer.64

Transforming federal management systems and spreading the culture of quality throughout the federal government is no small task. To accomplish it, at least one senior official with agencywide management authority from every agency will be needed to make it happen.

Every cabinet-level department and federal agency will designate a chief operating officer (COO). In addition to ensuring that the President's and agency heads' priorities are implemented, COOs will be responsible for applying quality principles in transforming the agencies' day-to-day management cultures, for improving performance to achieve agencies' goals, for reengineering administrative processes, and for implementing other National Performance Review recommendations.

The COO will not add an additional position in the secretary's or director's staff. Secretaries and agency directors should designate the deputy secretary or under secretary with agencywide authority as the COO. The COO will report directly to the agency's top official.

Action: The President should appoint a President's Management Council to lead the quality revolution and ensure the implementation of National Performance Review plans.65

A new President's Management Council (PMC) will be the President's chief instrument to retool management systems throughout the executive branch. It will act as the institutional lever to drive management and cultural changes throughout the bureaucracy. The PMC will ensure that quality management principles are adopted, processes are reengineered, performance is assessed, and other National Performance Review recommendations are
implemented.

The President should appoint the Deputy Director for Management of OMB to chair the PMC, and its progress will be overseen by the Vice President. The council will include the COOs from 15 major agencies and three other agencies designated by the chairperson, the heads of GSA and OPM, and the President's Director of Cabinet Affairs (ex officio). Its agenda will include setting priorities, identifying and resolving cross-agency management issues; establishing interagency task forces to transform governmentwide systems such as personnel, budget, procurement, and information technology; and soliciting feedback from the public and government employees. It will secure assistance from the CEOs, officials and consultants who have helped transform major American corporations, states and local governments, and non-profit organizations. In addition, the PMC will conduct an annual performance review of the federal government and issue an annual report to the public on its findings.

Working together, the President, Vice President, PMC and every agency head will carry the quality message into the sleepiest corners of the bureaucracy. Successful and innovative agencies will be cheered; slower moving organizations will be prodded and encouraged until change occurs.

Action: The President's Management Council will launch quality management "basic training" for all employees, starting with top officials and cascading through the entire executive branch.66

However pressing the need, we cannot expect leaders, managers and employees caught up in old ways to change overnight. To nurture a quality culture within government, we must help the entire workforce understand the President's vision. Unless we train everyone in the new skills they need--and help them understand the new roles they are expected to play--they can, through passive or active resistance, frustrate well-intentioned attempts to progress. So first and foremost, everyone will need to learn what working and managing for quality is all about.

The President and agency heads must send a clear message about their commitment by becoming directly involved in the design and delivery of quality training in their agencies. Therefore, the PMC, working with the Federal Quality Institute, will begin quality training with the cabinet secretaries and agency heads. Training sessions will focus on defining a shared vision, developing a strategy to embed that vision in the each department, committing participants to lead and be responsible for change, and
establishing a process for training the next level of management.

Even as agencies reorganize around quality and customers, their staff may need training to fulfill expanded job responsibilities. Line staff may need to learn budget and procurement processes. Managers may need help in becoming coaches rather than commanders. We will pursue the goal of reaching the entire federal workforce with quality training.

It is worth noting that some cabinet secretaries already are up on the quality learning curve. During the past few months, more than 60 top field managers, contract lab directors, and assistant secretaries have joined Energy Secretary Hazel O'Leary for 6 days of total quality management training at Motorola University in Chicago. They've agreed on a mission statement, set the
department's core values, and put strategic planning in motion. In the process, skeptics have become energized, egos have been subsumed, hidden agendas unearthed and dispensed. In the words of one participant, "Everyone is working as a team. We're incredibly excited about doing better. In just 6 days of quality training, we have moved from 'I' to 'we'."67

Other departments are hot on Energy's heels. Such agency leadership is pivotal to moving quality forward. As quality innovator Dr. Joseph Juran told Vice President Gore, "As we go at it energetically in the federal government... we're still going to see some of the agencies step out in front and everybody else is going to watch. And as they get results and nobody's hurt in the process, others will be stimulated to do the same thing."68

Conclusion

To change the employee culture in government, to bring about a democracy of leadership within our bureaucracies, we need more than a leap of faith. We need a leap of practice. We must move from control to collaboration, from headquarters to every quarter. We must allow the people who face decisions to make decisions. We must do everything we can to make sure that when our federal workers exercise their judgment, they are prepared with the best information, the best analysis, and the best tools we have to offer. We must then trust that they will do their best--and measure the results.

Indeed, we must let our managers and workers fail, rather than hold them up to public ridicule when they do. Only if they fail from time to time on their way to success will we be sure they are even trying to succeed. Someone once asked an old man known for his wisdom why he was so smart. "Good judgment comes from experience," he said. And experience? "Well, that comes from bad judgment."

To transform the culture of our government, we must learn to let go. When we do, we will release the same kind of creativity, energy, productivity, and performance in government service that was unleashed 200 years ago, and that continues to guide us today.