Document Name: Chapter 3 -- Empowering Employees to Get Results Part I
Date: 09/07/94
Owner: National Performance Review
Title:Chapter 3 -- Empowering Employees to Get Results

Author: Vice President Albert Gore's National Performance Review

Date:7 September 1993 10:00:00 EST

Content-Type: text/ascii charset=US ASCII

Content-Length: 92972

Chapter 3

Empowering Employees to Get Results


Take two managers and give to each the same number of laborers

and let those laborers be equal in all respects. Let both

managers rise equally early, go equally late to rest, be equally

active, sober, and industrious, and yet, in the course of the

year, one of them, without pushing the hands that are under him

more than the other, shall have performed infinitely more work.

George Washington

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



Our long-term goal is to change the very culture of the federal

government... A government that puts people first, puts its

employees first, too. It empowers them, freeing them from

mind-numbing rules and regulations. It delegates authority and

responsibility. And it provides for them a clear sense of

mission. Vice President Al Gore

Speech to National Performance Review members

May 24, 1993


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


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 Federal Quality Imperative

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


-- 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



Our bedrock premise is that ineffective government is not the

fault of people in it. Our government is full of

well-intentioned, hard-working, intelligent people--managers and

staff. We intend to let our workers pursue excellence.

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


I had seven teams of people each restructure our business...

After the third presentation, my executive assistant...said to

me, "Bill, this stuff is fabulous. In fact, we never would have

thought of these things.

But you've got to trust. People don't come to work with the

intent of screwing it up every day. They come here to make it


Bill Goins, President

Xerox Integrated Systems Operations,

Reinventing Government Summit, June 25, 1993


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.


Roam on the Range

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


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.


What you do thunders so loudly, I cannot hear what you say to the


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


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.


It may seem amazing to say, but like many big organizations, ours

is primarily dominated by considerations of input--how much money

do we spend on a program, how many people do you have on the

staff, what kind of regulations and rules are going to govern it;

and much less by output--does this work, is it changing people's

lives for the better?

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


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


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


ineffective. OMB will negotiate stronger goals for agencies that

set their sights too low or perform poorly against their


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


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


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.


Measuring Outcomes

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,


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


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


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.

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