Archive

Creating Quality Leadership and Management

Recommendations and Actions

QUAL01: Provide Improved Leadership and Managementof the Executive Branch

Background

More than 80 percent of American adults believe that fundamental change is needed for the federal government to be responsive to people's needs.(1) Congressional reports and studies document "a decade of decline" for an executive branch that lacks effective leadership and is poorly managed.(2) The House Committee on Government Operations observed in its 1992 report that the cause of management problems in the executive branch is "first and foremost . . . the lack of leadership."(3)

Leadership and management are crucial functions for any organization.(4) The concept of "quality" leadership and management brings a focus to leadership and management of meeting and exceeding customer expectations and continuing productivity and quality improvement.(5) Sound leadership develops vision, values, and policy agendas and prioritizes competing demands. Strategic management aligns programs and management systems (e.g., personnel, budgeting, procurement) to support the vision, agendas, and priorities while simultaneously ensuring continuous improvement in programs and systems to give better value to taxpayers. The outcome of effective management is "predictability and order." Effective leadership "produces change" that is often "dramatic. . . and extremely useful."(6) Effective leadership and management must exist at all levels of an organization; however, this report gives particular attention to top-level leadership and management.

Steps to Improve Management

Traditionally the executive and legislative branches have "corrected" poor leadership and mismanagement by extending and tightening oversight, regulation, compliance, clearance, and review mechanisms of agencies and managers. These processes foster staff-directed management through rules and regulations. These tools and levers have created a culture of tight control. However, they also create gridlock in programs and organizations. They are not mechanisms for action, accomplishment, or empowerment. These staff-driven rules wrap managers in layers of control, oversight, and red tape; obscure responsibility and accountability; and shift management's focus to compliance with rules--and away from achieving results and satisfying customers. Based on the public's opinion of government, this approach has not worked. But it stubbornly persists throughout the federal government.

Incoming presidents and senior political appointees are traditionally warned to resist the temptation to manage the executive branch and are instead encouraged to accomplish a few significant political changes that define the incumbent administration. One conventional point of view is that, as the chief political officer, the President's principal task is to lead the federal government, not to manage it.

The President, department secretaries, and agency heads are responsible for providing political and policy leadership. However, they are also key to providing overall leadership for effective management of the executive branch and for initiating cultural changes.(7) Without an adequate focus on management, an Administration can be undermined and derailed by political crises ensuing from lack of effective executive branch leadership and management.(8) As Elliot Richardson, an illustrious former secretary of several departments, observes:

The really hard problems of government start with choosing goals, setting priorities, making choices, and formulating plans for fulfilling those chosen objectives. . . . Whether or not an administration succeeds or fails depends on how clearly, forcefully, and persuasively it defines its goals and creates the understanding of the necessity for sacrificing desirable ends that do not have sufficient priority to claim a share of the available resources.(9)

Strong executive branch leadership can only come from the President and cabinet secretaries, who have "line" leadership responsibilities. Staff organizations cannot begin to fill these roles, yet these organizations currently dominate the operations of government. As a result, responsibility for executive branch management must shift from staff organizations and their use of controls over "inputs"-- such as staffing levels and budget line items--to line organizations and line managers, who will then be held accountable for achieving agreed-upon results.

Need for Change

Effective executive branch leadership can flourish only in a radically different organizational culture. Existing staff oversight systems designed to ensure accountability for the use of resources must be ultimately replaced with quasi-market tools, such as incentives and competition. These new accountability tools more directly assess accountability and results. However, to do this means staff offices must relinquish their traditional controls and give line managers true authority to use resources. At the same time, line managers must be held accountable for achieving results. While some traditional staff oversight systems will continue to be necessary to discourage fraud and waste, a large share of existing resources used in these functions could be shifted from non-value-added oversight to program and service delivery.

Other countries and some American state and local governments now operate according to the management approach of "managing for results."(10) This new approach represents a shift from public management theories favoring rules and controls over the use of inputs--dollars, staff years, etc.--to an executive branch management philosophy of:

Sharpening and clarifying responsibilities and accountability for leadership in management of the executive branch by top "line" executives, such as cabinet secretaries and agency heads;

Building capacity and support for effective leadership;

Giving organizations and managers greater flexibility in their use of inputs in exchange for greater accountability for results;

Shifting from an emphasis on input controls to accountability for results; and

Improving cooperation between the executive and legislative branches.

The vision of the new "managing for results" approach is to provide a well-managed and effective executive branch that:

Empowers line agencies, managers, and employees to meet and exceed customer expectations;

Results in continuous quality and productivity improvement; and

Provides clear accountability for results.

Shifting Roles.

To implement the philosophy of "managing for results," major organizational changes are needed to improve performance in the public's eye. For example, the responsibility for managing within the executive branch must be shifted from staff organizations to line organizations and line managers. Accountability must shift from a focus on accounting for the use of inputs to accounting for results. Controls must shift from a preoccupation with compliance with process and rules to a focus on service, customers, and results.

The current emphasis on the use of executive branch management controls via staff offices as a means of ensuring accountability has fostered a culture of dominance, compliance, helplessness, and dependency.(11) Recasting the system to one focused on accountability for results would promote a culture shift to a focus on partnership, responsibility, and customer service.(12) The key to "managing for results" is the empowerment of line agencies, managers, and employees.(13) In this new approach:

Line agencies, such as the Departments of Agriculture and Health and Human Services, would be empowered by shifting power from external staff agencies, such as the Office of Personnel Management, to line managers and focusing line decisions on mission and results, rather than controls via the use of inputs.

Line managers would be empowered by shifting authority and responsibility from departmental staff offices to line managers and field staffs through decentralization, delayering, and reductions in the size of staff offices.

Employees would be empowered by the delegation of authority and responsibility; greater use of self-managed work teams; use of cross- functional, cross-unit teams; and encouragement of employee diversity.

Creating an Institutional Framework.

Introducing "managing for results" in the executive branch will require an appropriate organizational framework for its effective implementation. Similar efforts in Australia, Oregon, and Florida found that creating a new institutional framework was an important first step.(14) The federal governmental can begin by refining existing organizational mechanisms for culture change and, where needed, advocating new ones. For example, the Federal Quality Institute (FQI), established in 1988 to promote quality management, can be a key resource to help foster the cultural changes needed to manage for results. The experience of other governments also suggests the need for a top-level council to lead and coordinate the changes.

However, culture changes cannot be relegated to staff agencies. The President and his cabinet must personally articulate the vision and champion the changes. Together, the President and his cabinet members are responsible for (1) developing a unifying purpose or mission for the executive branch as a whole; (2) setting policy and associated program agendas, including making the hard choices among many competing priorities and claims from assorted constituents and stakeholders; (3) developing and communicating values; and (4) creating a shared vision of what government should become in the future.

Major changes in large systems like the executive branch cannot happen without leadership, direction, and a long-term commitment from top leaders. Their continual reinforcement of their vision is needed on an ongoing basis to cement cultural changes.

Actions

1. Provide governmentwide leadership, direction, and commitment for effective management of the executive branch. (2)

The President should publicly articulate his vision and support for the concepts embodied in "managing for results" and the recommendations of the National Performance Review (NPR). This statement of commitment would:

Express the administration's vision for 21st century government based on the philosophy of "managing for results," the recommendations of the NPR, and the principles of strategic and quality management required for the "Presidential Award for Quality," and

Direct agencies to commit to full implementation of NPR's recommendations.(15)

This commitment would supersede Executive Order 12637 of April 27, 1988, "Productivity Improvement Program in the Federal Government," which the President should revoke by separate Executive Order.(16)

2. Direct department and agency heads to designate chief operating officers. (2)

To apply the principles of strategic and quality management and to lead the way to the President's vision of 21st century government, the President should direct department and agency heads to designate chief operating officers (COO) for their organizations.(17) The chief operating officer would be second-in-command to the agency head or chief executive officer (CEO) and would report directly to the agency CEO. It would be an additional responsibility for an existing position. This would be either the deputy secretary or undersecretary with agencywide management authority. The COO would have explicit line authority and accountability for managing executive branch agencies. The responsibility would not be assigned to someone in a staff role, such as the chief-of-staff or assistant secretary for administrative management. The COO would be responsible for:

Implementing the President's and agency head's goals and the agency's mission;

Providing overall organization management to improve agency performance;

Assisting the agency head in promoting ongoing quality improvement, strategic plans, and measuring results;

Overseeing agency-specific application of performance measures, procurement reforms, personnel reductions, financial management improvements, telecommunications and information technology policies, and other governmentwide systems reforms adopted as a result of the NPR recommendations;

Directing ongoing reengineering of the agency's administrative processes; and

Reforming the agency's management practices by incorporating NPR principles into day-to-day management.

Some agencies might find other approaches more appropriate for designating a Chief Operating Officer:

An executive team as COO. COO responsibilities can be assigned to an executive team reporting to the CEO. "An executive team is a group of people who collectively take on the role of providing strategic, operational, and institutional leadership for the organization."(18) Members of the executive team are responsible for management of their own units and for the organization as a whole. In this case the deputy secretary or deputy agency head could serve as the executive team's chairperson.

Two executives can share the COO role. A military officer and civilian executive effectively exercised COO responsibilities (though without the title) in the Naval Material Command, because of the civilian and military composition of the workforce.(19) A shared COO responsibility between a political appointee and a career executive might mitigate agency anxieties that career executives should supervise political appointees.

The agency head as CEO and COO. In small agencies, the CEO could also act as the agency's COO.

3. Establish a President's Management Council. (2)

The President should establish a President's Management Council (PMC) to ensure that the reforms adopted as a result of the NPR are implemented throughout the executive branch in order to improve overall executive branch management.(20) The PMC would operate within the strategic framework of the vision, goals, and priorities established by the President and Cabinet to set policy and serve as change agents in the executive branch. The PMC's progress would be specifically overseen by the Vice President.

The new PMC would be the President's chief instrument for ensuring that strategic and quality management principles, reengineering of administrative processes, and NPR's other recommendations are implemented throughout the executive branch. The PMC would coordinate management-related reinvention efforts by the Executive Office of the President (EOP), the departments and agencies, the Office of Personnel Management (OPM), and the General Services Administration (GSA). It would also identify and resolve inter-agency management problems, provide continual improvement of management systems, and spearhead the cultural change necessary for introducing "managing for results" throughout the executive branch.

The PMC would be an interagency team with COO responsibilities for executive branch management.(21) PMC members would be responsible for management of their own organizations and, collectively, for advising the President and Vice President on the management of the entire executive branch. The President should appoint the OMB Deputy Director for Management as the PMC chairperson. The PMC would have 22 regular members: the OMB Deputy Director for Management; designated chief operating officers from the 14 cabinet departments, the Environmental Protection Agency, and three other agencies (designated by the chairperson); the heads of OPM and GSA; and the Secretary of the Cabinet. Other officials of executive departments and agencies would be appointed to the PMC as decided by the President.

The PMC's work would be conducted through PMC committees, working groups, commissions, and forums. It should solicit feedback from customers and government employees. It might also profit from the advice of successful nonprofit organizations, government unions, and state and local governments.

The PMC would establish its own work agenda consisting of activities and decisions addressing overall executive branch and inter-agency processes and issues within the strategic framework established by the President. Examples of PMC agenda items and activities could include:

Improve overall executive branch management, including reform of governmentwide systems, such as management controls, financial management, personnel, budgeting, and procurement.

Coordinate management-related efforts to improve government throughout the executive branch and resolve specific inter-agency management issues.

Ensure adoption of new management practices in executive branch agencies.

Identify examples of, and provide mechanisms for inter-agency exchange of information and support of "best management practices."

The PMC's work would receive staff support from a small team in the Executive Office of the President (EOP) composed of current EOP staff. The FQI Director should participate as a member of the EOP- based PMC support team and provide a direct link between the PMC and FQI. This would provide additional support for implementing NPR's recommendation for creating a quality management culture in the executive branch.

4. Update and refocus the Executive Order establishing the President's Council on Management Improvement. (2)

The President should revise the role and change the name of the President Council on Management Improvement (PCMI) to reflect the changed role of the council and its members in relation to the new PMC.

The PCMI, established in 1992 by Executive Order 12816, needs to focus its work on improving administration, consistent with the overall management responsibility of the President's Management Council.(22)

The PCMI is a large advisory body chaired by OMB's Deputy Director for Management and composed of at least 44 members from executive branch administrative-management staff organizations. Its members are responsible for a variety of staff activities in their agencies concerned with administrative matters (e.g., food service, security, motor pools, building maintenance), personnel, budget, procurement, information resource management, and other administrative management issues corresponding to the compliance, clearance, and review responsibilities of OMB, OPM, and GSA.

PCMI's name and some of its functions broadly focus on overall management of the federal government. For example, the executive order authorizes the PCMI to recommend "improvements in Government management and operations . . . and . . . the development, review, revision, and implementation of Government-wide policies in support of the central management agencies of the federal government."(23) However, PCMI activities are primarily focused on administrative management concerns and not the implementation of broad management policies and programs. Nevertheless, these activities are important to the continuous improvement of government operations.

The PCMI should continue in operation, but its functions should be clearly defined as improving administrative management. The responsibilities and experience of the PCMI's members position it to act as a clearinghouse, communications network, and advisory body for reviewing the appropriateness of existing and proposed administrative directives and regulations. A name such as the "President's Council on Executive Branch Administration'' might better describe the PMCI's functions.

Because of its size, the PCMI has proven to be too large and unwieldy to be effective. The PCMI's membership should be reduced to a smaller group, much like the President's Management Council.

5. Conduct periodic performance reviews to provide ongoing improvement and renewal in the executive branch. (2)

The President should ensure periodic performance reviews of the executive branch are conducted, new government reinvention and reengineering opportunities are identified, and ongoing government improvements are provided.

6. Redefine the Federal Quality Institute as an organization to support the President, Vice President, Cabinet, and PMC in the implementation of strategic and quality management throughout the federal government. (2)

The President should redefine the FQI as an organization with responsibility for fostering the implementation of strategic and quality management throughout the federal government.(24)

FQI's mission should be expanded to serve as a focal point for communications, network-building, education, and research to implement strategic and quality management throughout the federal government. To these ends, FQI should:

Provide staff support for the President, Vice President, Cabinet, and the PMC to formulate and implement those policies improving line management operations of federal agencies through the implementation of strategic and quality management.

Provide agencies with guidance and support for the implementation of the strategic and quality management approach throughout the executive branch and facilitate recognition of outstanding performance.

Develop networks and sponsor collaborative research on strategic and quality management "best practices" and theories with government agencies (e.g., OPM and DOD educational institutions and behavioral labs), government unions, universities and associations, businesses, and state, local, and foreign governments.

In conjunction with OPM and OMB, create networks of technical assistance resource centers within agencies to enable strategic planning, performance planning and measurement, and continuous management improvement.

Cooperate with OPM and other agencies to integrate corporate strategic and quality management principles into all management development programs and specific agency training programs and curricula.(25)

Collaborate with OMB, OPM, and others in providing education for all executive branch employees to implement strategic and quality management and the Government Performance and Results Act of 1993.

Cross References to Other NPR Accompanying Reports

Improving Customer Service, ICS01: Create Customer-Driven Programs in all Departments and Agencies that Provide Services Directly to the Public.

Improving Financial Management, FM06: "Franchise" Internal Services.

Mission-Driven, Results-Oriented Budgeting, BGT02: Effectively Implement the Government Performance and Results Act of 1993; BGT03: Empower Managers to Perform; and BGT05: Provide Line Managers with Greater Flexibility to Achieve Results.

Reinventing Human Resource Management, HRM09: Improve Accountability for Equal Opportunity Goals and Accomplishments; HRM11: Strengthen the Senior Executive Service so that It Becomes a Key Element in the Governmentwide Culture Change Effort; and HRM13: Form Labor- Management Partnerships for Success.

Reengineering Information Technology, IT14: Provide Training and Technical Assistance in Information Technology to Federal Employees.

Streamlining Management Control, SMC01: Implement a Systems Design Approach to Management Control; SMC02: Streamline the Internal Controls Program to Make It an Efficient and Effective Management Tool; SMC03: Change the Focus of the Inspectors General; and SMC05: Improve the Effectiveness of the General Accounting Office through Increased Customer Feedback.

Transforming Organizational Structures, ORG01: Reduce the Costs and Numbers of Positions Associated with Management Control Structures by Half; and ORG03: Establish a List of Specific Field Offices to be Closed.

Endnotes

1. See Memorandum from Carolyn Burstein, Acting Director, Federal Quality Institute, to NPR, August 2, 1993. A CBS poll taken in May 1992 found that 17 out of 20 adults said the federal government needed either "fundamental change" or a "complete rebuilding"--that its methods were totally inadequate to meet the needs of today's citizens. See also Washington Post (August 23, 1993), p. A15. In similar findings based on University of Michigan data, the number of people who "trust the federal government all or most of the time" has fallen from 76 percent in 1963 to 21 percent in 1993.

2. See U.S. General Accounting Office (GAO), Government Management Issues, GAO/OCG-93-3TR (December 1992); and U.S. Congress, House Committee on Government Operations, Managing the Federal Government: A Decade of Decline, Majority Staff Report (Washington, D.C., December 1992).

3. U.S. Congress, House Committee on Government Operations, p. v.

4. Kotter, John P., A Force for Change: How Leadership Differs from Management (New York: The Press, 1990), pp. 3-18. In this book, John Kotter distinguishes between leadership and management. Kotter defines "leadership" as establishing direction, aligning people, and motivating and inspiring people. "Management," on the other hand, is planning and budgeting, organizing and staffing, and controlling and problem solving. Management and leadership tasks also can be categorized as management of inputs (people, buildings, materials, equipment), management of processes, and management of results (outcomes, outputs, performance). Leadership and management systems encompass those people, processes, systems, groups, and organizations that carry out the tasks of managing the executive branch of the federal government.

5. Specific issues concerning quality leadership and management are listed in Federal Quality Institute, Presidential Award for Quality: 1994 Criteria (Washington, D.C.: Federal Quality Institute, June 1993).

6. Kotter, p. 6.

7. Carolyn Burstein, Federal Quality Institute, informed NPR on August 2, 1993, that a study by Kotter and Husked in Corporate Culture and Performance "examined over 200 corporations [and] concluded that the single most visible factor that distinguishes successful major cultural change from change efforts that failed is strong support from top leaders."

8. Ibid., GAO, p. 5.

9. Memorandum from Elliot Richardson, July 29, 1993.

10. Government of Australia, Department of Finance, Resource Management--The Framework: An Overview of How Resources Are Managed in the Australian Public Service (Australia, December 1992); Oregon Progress Board, Oregon Benchmarks: Standards for Measuring Statewide Progress and Government Performance, Report to the 1993 Legislature (December 1992), pp. 1-6; and Florida Governor's Commission for Government by the People, Final Report (1991).

11. Block, Peter, Stewardship: Choosing Service over Self-Interest (San Francisco: Barrett-Koehler Publishers, 1993), pp. 3-22.

12. Ibid.

13. Empowerment undergirds diversity and social justice, two principles necessary for successful implementation of "managing for results." Diversity is simply differences among humans like gender, race, class, and sexual orientation. Social justice is the ability to fully participate in government programs as employees and customers. Australia defined social justice in its Financial Management Improvement Program as "equity, equality, and access and participation in government programs." See Parliament of the Commonwealth of Australia, House Standing Committee on Finance and Public Administration, Not Dollars Alone: Review of the Financial Management Improvement Program (1990), p. 9. Government organizations that introduce a "managing for results" culture but ignore diversity and social justice undermine their efforts to become more effective and responsive to customers.

14. Government of Australia. See also Parliament of the Commonwealth of Australia, House Standing Committee on Finance and Public Administration; Oregon Progress Board; and Florida Governor's Commission for Government by the People.

15. These criteria are consistent with the principles underlying "managing for results." They are described in Federal Quality Institute, Presidential Award for Quality: 1994 Criteria. The criteria are discussed further in QUAL02: Improve Government Performance Through Strategic and Quality Management.

16. The purpose of the Productivity Improvement Program (PIP) was ''to improve the quality, timeliness, and efficiency of services provided by the federal government." Unfortunately, the program experienced fundamental conceptual and implementation problems. Accordingly, OMB now considers PIP "inoperative."

17. The term "agency" is used throughout this report to refer to organizations reporting directly to the President, including cabinet- level departments (e.g., Labor and Commerce) as well as independent agencies (e.g., Environmental Protection Agency).

18. Lipnack, Jessica P., and Jeffrey S. Stamps, The TeamNet Factor (Essex Junction, VT: Oliver Wight Publications, Inc., 1993), p. 96.

19. Interview with James Colvard, former Deputy Commander, Naval Material Command, and former Deputy Director, Office of Personnel Management, August 1, 1993.

20. The process of organizing a network like the executive branch into a well-managed and effective organizational network is well known. Lipnack and Stamps define an organizational network as having "independent members with multiple leaders, a unifying purpose with lots of voluntary links, and interacting levels." See Lipnack and Stamps, pp. 29-52.

21. Ibid., p. 96.

22. Executive Order 12816, Management Improvement in the Federal Government, October 15, 1992.

23. Ibid., p. 3.

24. The Federal Quality Institute is currently part of the Office of Personnel Management.

25. These would include, for example, the Federal Executive Institute, the Federal Executive Development Centers, National Defense University (and other professional military education institutions), Defense Systems Management College, the GSA Interagency Training Center, and the Department of Agriculture Graduate School.

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