The Coast Guard Signs On to the Management Revolution
VADM James M. Loy, USCG and CDR Mark Blace, USCG Background - The Challenge We Face. All managers are well aware of the talk around Washington these days about "Results" when discussions focus on Federal agencies. We have also heard ongoing discussions about eliminating redundancy in the services government provides and ongoing Congressional and Administration-directed streamlining and reinvention initiatives. On the surface, little of this sounds new. Pundits have opined that the National Performance Review (NPR), Government Performance and Results Act (GPRA, a.k.a. the "Results Act"), the Clinger-Cohen Act, the Chief Financial Officers Act, the Government Management Reform Act (GMRA) and many other initiatives, new policies and directives issued in the last few years seem like a continuation of "business as usual" inside the Washington beltway. After all, PPBS of the McNamara era, ZBB and MBO of the Carter era, and other "popular" methods of building budgets and managing government have come and gone.
But this type of assessment is at best misleading and at worst portends doom for agencies that do not take notice. The management gauntlet has been thrown down, and unless agencies actively and aggressively move toward the end state described and required by these laws and executive directives, they risk not only public embarrassment as a result of intense scrutiny -- they risk losing their support base for continuing operations and may face deep cuts, both in terms of workforce and budget. The authors are of the mind that there is nothing short of a revolution occurring in the management structures of the Federal government
Adding to the urgency of this challenge is the agreement between the President and Congress to balance the budget by 2002 and tax relief legislation, which when combined will result in REAL reductions of up to 30 per cent or more in funds available for government operations over the next five years, particularly if the economy does not remain as robust as it is today. Faced with cuts of this magnitude, Congress must adopt a significantly different approach to funding agencies. Across-the-board cuts cannot work for a reduction this large. The alternative...targeted cuts. These will have to be done in a manner that yields maximum effectiveness for each dollar spent. American taxpayers expect service levels to be maintained despite deep cuts in budgets. While this appears to be a daunting task, Congress has given itself the tool to carry out their new mandate - the Results Act.
The Results Act. Passed as a further step toward reducing waste and mismanagement in government, the Results Act has also raised the bar in terms of internal management challenges within Federal agencies. Federal executives, and the organizations they manage, will now be held accountable for the overall performance of the agency measured against outcome goals, not just activity. The essence of the Results Act (Public Law 103-62, August 1993) is that Federal agencies exist to meet national interests, and that the activities an agency conducts and assets it employs are funded not as an end in themselves, but to produce outcomes. Further, the Act requires agencies to systematically examine their mandates, identify desired outcomes, and develop strategic plans that lay out how the agency will achieve its outcomes. The recognition that activity is not the goal -- that results are why Federal agencies exist -- may not seem very profound. However, upon deeper examination of the law and comparison to the way most agencies have been managed in the past, a significant shift in the way Congress will be looking at what the Executive Branch does becomes apparent. The final caveat in the Results Act is that the agency must link the activities it carries out in producing results to the budget it receives for operating expenses and for capital assets. The implication is that agencies that fail to link performance to budgets, fail to meet performance expectations, or provide similar services less efficiently than other agencies will face significant cuts or possibly even elimination.
The Coast Guard "Signs On". The Coast Guard has learned a great deal as it has moved toward compliance with these new management and planning requirements at the same time that it has streamlined and reorganized.
Coast Guard foresight and corporate willingness to be good citizens in government has served it well. Shortly after the passage of the Results Act in 1993, the Coast Guard's Marine Safety and Environmental Protection directorate volunteered as a pilot for developing a performance plan, designed to link their headquarters planning and program management to activities in the field so as to produce the outcomes the American public expects from the Coast Guard. For the planners and managers in the directorate, it was a challenging but rewarding undertaking. Their efforts to date have resulted in a well integrated, forward-looking and innovative business plan that introduces a set of new business initiatives designed to enhance the performance of the Marine Safety and Environmental Protection programs. They did this while successfully streamlining the organization, partnering with customers and stakeholders, and cutting bureaucracy. Several of their successes are being widely cited by experts on GPRA as examples of how improved program focus, strategy development and measures can lead to better performance and, more importantly, achievement of outcome goals. This was demonstrated in the dramatic reductions of deaths and injuries in the marine towing industry following incorporation of that goal in 1995 and the Coast Guard's partnering with industry to tackle the problem.
Management Changes. Following streamlining and headquarters reorganization last summer, the Coast Guard was left with an organization that was neatly divided into three main elements - Senior Management (responsible for managing Service-wide performance and policy), Operations (the combination of all operating programs into two directorates at headquarters with the field operating commands and units aligned below) and Support (the combination of all support programs into two directorates, with the field support infrastructure aligned below). In order to integrate these elements into a management structure that optimizes the roles of each relative to planning and management, a "Family of Plans" concept has evolved that reflects both the structure and business relationships within the service, supported by the sum total of the service's planning and management efforts. It frames, within a service-wide structure, an integrated family of operating and support plans and processes that allows the organization to deliver the highest level of performance at lowest cost. The model is not perfect, but the concept is in line with the philosophy of the Results Act and the Malcom Baldrige National Quality Award Criteria. It is also well served by the lessons learned through the Coast Guard's Total Quality Management experiences.
Allowing form to follow function, the headquarters senior management team designed a standard business plan format for all headquarters directorates to follow, using the Results Act and Baldrige criteria as framing guidance. The business plans differentiate the roles of the two main elements of the Service. The operating directorates plan and manage Coast Guard operations aimed at meeting public expectations, which is the Service's mandate. The support directorates provide the people, skills and assets required to carry out missions and efficiently manage the Service. Below the headquarters level, operating units conduct activities focused on producing service outcomes, and support units assist the operating units to manage and maintain their skills and assets. Building on this foundation, several specific issues have emerged that must be addressed.
Fixing SPPBEEs. The Coast Guard's overall planning process, used primarily to manage resources and the annual budget cycle, is entitled the "Strategic Planning, Long Range Planning, Programming, Budgeting, Execution and Evaluation System", or SPPBEEs. It is comprehensively described in the Headquarters Planning and Programming Manual. The planning process spans the continuum of events that take place for each annual budget, and covers a diverse and complex array of activities that are continuous and cover several budget years simultaneously. In response to widespread criticism from both field and headquarters managers that there were serious problems with management and execution of the elements of the process, the senior management team committed to "fixing SPPBEEs". After a year's hard work, it became apparent that planning process is not really broken. It is complex, and has suffered from lack of awareness and discipline, but as a management process it is not only structurally sound, it has served the Coast Guard well over time.
The fix is to better define the roles of resource managers and planners, standardize work processes, improve field access to the process, and get everyone speaking the same language. This should be characterized as system discipline, and the senior management team sees resource management, business planning and continuing quality initiatives as the means to instill the necessary discipline. A letter was recently sent by the Chief of Staff to each Coast Guard flag officer and senior executive service member, asking them to personally emphasize to their resource, management and program staffs the need to be thoroughly familiar with the performance and business planning processes. They were directed to focus their efforts on achieving operational or support outcomes, and to talk with each other, across program lines, to ensure consistency of effort and quality of results. It is clear that this system requires active management by everyone involved in the resource management and planning process -- it's not automatic! In a recent article in the Wall Street Journal (3 July 1997, Page A11), John Koskinen, former deputy director of the Office of Management and Budget (OMB), noted that change of this nature requires "top-notch managers dedicated not only to change but to constant communication." The authors could not agree more.
The Performance Plan and Business Planning. The Results Act requires all federal agencies to submit annual performance plans beginning with the FY1999 budget. The Coast Guard, as a GPRA pilot, developed a performance plan in 1998 that pioneered and tested many concepts that are now being incorporated into both performance planning and business planning. These concepts include analytical models that lay out:
The performance plan aggregates the Coast Guard's performance goals and strategies developed in the business planning process into a single, overall instrument focused purely on Coast Guard outcomes, and links those outcomes to the annual budget. The directorate business plans, developed by the assistant commandants, focus organizational effort on more specific program-level requirements, strategies, performance standards and activities. The standard format developed by the senior management team guarantees standardization and coordination among the assistant commandants, and allows for meaningful field input to the business planning process, both as plans are developed and during the execution of activities.
The Marine Safety and Operations plans elaborate on the organizational goals, strategies and activities that deliver what the American public and Congress expect of the Service. Given the Results Act's framing guidance, they focus on Coast Guard outcomes, and what must be done to achieve those outcomes These goals and strategies inform all levels of the Service of the year's priorities, and help the field coordinate and align their efforts with senior management's expectations. Operating program business plans also articulate basic requirements for capabilities and workforce skills necessary to carry out Coast Guard missions.
Support program business plans focus on developing goals, strategies and activities to provide the assets, capabilities and workforce skills that the operating programs employ to accomplish Coast Guard missions and that are needde to effectively manage the Service. The outcomes that the support programs concentrate on are related to the operator's ability to execute missions, and to the Coast Guard's ability to manage itself (using the tools provided by the support programs). Following the performance management section of each business plan is a set of appendices, intended to feed specialized, service-wide resource plans.
These include the Human Resource Management Plan, the Agency Capital Plan, the Information Technology Plan, the Research and Development Plan, and the annual budget. Additionally, a comprehensive annual performance evaluation is done to assess the operational and financial effectiveness of each directorate relative to performance goals, and to guide changes or formulation of new goals, strategies and performance standards.
Part of each directorate business plan describes general support and management requirements. These, along with the appendices mentioned above, serve as entering arguments for the development of the support program's business plans. But these are only part of the raw material from which the support business plans will be built. The most important part of the input to all of the support business plans will be derived from direct interaction between the support programs and their customers throughout the Service (including the field), a process that will succeed only if the support programs actively engage in an outreach effort to the Service as partners and consultants in translating raw requirements into meaningful, sustainable resource plans. Lastly, these business plans represent built-in performance contracts between the assistant commandants and senior management.
What the Future Holds. The Coast Guard's efforts as a Results Act pilot, and the results that have been achieved, have received widespread praise in both political and government management circles. The Coast Guard is regarded by the Department of Transportation, academicians and political analysts as a leader in performance planning, management flexibility and responsiveness, and in coming to grips with the Results Act and other requirements. Recent General Accounting Office audits that looked at the Service's efforts at complying with requirements of the Act have been very favorable. The Coast Guard is working hard to capitalize on this goodwill, and to maintain the momentum that has been established. The Service's managers recognize that it is their collective obligation to take these early successes and translate them into permanent improvements in the way the service is planned and managed.
Being regarded as a leader in good government management has the potential reward of Congressional favor in the budget process. Because the Coast Guard needs to recapitalize a large portion of its capital plant over the next decade, demonstrating to Congress that it is a well managed agency of significant value to the American public will increase the probability of succeeding when seeking the funding needed. The key to future success is systematically focusing on business plans as the linkage between budget requests and demonstrated connections to organizational outcome goals outlined in submitted GPRA performance plans. Only by integrating the work of each element of the service into a well managed whole will the agencies' collective efforts yield the desired results.
Conclusion. The Results Act has ushered in a period of potentially sweeping changes in the way Congress funds agencies and in the way agencies must manage in order to provide acceptable levels of performance despite shrinking budgets. The Coast Guard has long been an agency that provides superior return on investment in terms of the services it provide to the public, with outcomes whose values far exceeds the investment made in the Service through the budget. Despite past successes and excellent reputation, the Coast Guard face a challenging future as it works to meet the requirements of GPRA.
Success will be built on the bedrock of an integrated business planning and resource management process, and will be supported by performance goals and policies that clearly lay out both customer's and leader's expectations. Throughout the Coast Guard, these changes signal a paradigm shift in the way it is organized, in the way it manages, and in the way it relates to the American public. Every member of Team Coast Guard must make a special effort to ensure that they are all aligned in their expectations, and that every individual is working toward the mission accomplishment reflected in organizational performance and support goals.
Patricia O. Miller
Deputy Chief, USCG Public Affairs
(202) 267-1587, Fax (202) 267-4307