Archive
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Document Name: Chapter 3 -- Empowering Employees to Get Results Part I
Date: 09/07/94
Owner: National Performance Review
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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
entrepreneurship.
****************************
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
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 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
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.
****************************
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
better.
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
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.
****************************
What you do thunders so loudly, I cannot hear what you say to the
contrary.
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.
****************************
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
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.
***************************
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,
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.