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After a series of long meetings in which everyone said their peace but no decision could be made, Marver -- I quote one of his friends -- "looked out his office window at the plaza and bubbling fountain down below and said wistfully, "When I was a student at Wisconsin, I was an activist, too. But we were organized."

Marver Bernstein was not only interested in organization. He studied it in the organized way that characterized his life Today, in this inaugural lecture in the memory of Professor Bernstein, I am reminded of his 1958 book, "The Job of the Federal Executive," which was based on a round table discussion series held at the Brookings Institution. What's interesting about Professor Bernstein's book -- even though it was written 36 years ago -- is how recognizable some of his descriptions of the federal executive are today, whether it is the difficulties facing executives that move from business to government; the role of Congress in agency management; or the importance of serving the public and being accountable for one's actions.

But there have been significant changes in what the federal executive does and how he or she does it. Today, I'd like to discuss why and how these changes came about. Two relatively recent developments have dramatically shifted the premises on which traditional public and private sector management theory has been based: first, a new understanding of how to best employ human capacity; and second, the new role of information technology in transforming the manager's job.

First, let me talk about the shift in our understanding of human capacity. In the early 1900s, Frederick Taylor -- the father of work measurement -- advocated the use of hierarchies and the specialization of functions as the path to high productivity and efficiency. Similarly, organizational theorist Chester Barnard defined the role of the executive in the 1930s as being the central coordinator of an organization.

Yet, in today's environment these approaches now seem to limit productivity rather than promote it. Today we recognize that Taylor's theories about "scientific management" are no longer applicable in the information age, and that Chester Barnard's definition of the role of the executive is likewise outdated.

Were they wrong -- the way alchemists were wrong to think lead could be turned into gold? I don't think so. In fact, you could argue that they were right for their time. In the 1930s, it would have been difficult for executives -- whether President Franklin Roosevelt, or the CEO of General Motors -- to influence what was going on in their organizations without using a hierarchical approach.

The old hierarchies were based in part on a sharp division between those who worked with their heads by thinking and those who worked with their muscles. But before very long, the best managers came to realize that the single most valuable asset in their organizations was the unused brain power and creativity of the men and women who were being asked only to use their muscles.

And so, today, we have developed different ideas about human capacity. We have discovered that even when people work primarily with their hands, they're capable of paying attention and having new ideas. Individuals within every organization are capable of producing much more than had been previously been thought possible by those who assumed that the division between thinking and muscle work was the basis for organization.

I remember at a meeting last November on the National Performance Review, a big man got up to speak who was a line worker at Corning Glass. His name was Dick Allen. In the old days, he told me, when something went wrong with his machine, two engineers would come onto the factory floor and look into it. He knew they were engineers for two reasons, he said. First, they wore ties, and second, they never talked to him. Well, a lot of times he knew what was wrong. "I can remember," he said, "going home nearly every evening -- or morning, depending on what shift I was on -- and describing to my wife all the things that were wrong with Corning and all of my brilliant ideas of how to fix it. But I had no way at the factory to deliver those ideas." Well, the culture of the times dictated that he keep his thoughts to himself and let the "men with ties" work it out.

Then Corning changed its philosophy. Now the engineers still come onto the factory floor, but the very first thing they do is ask Dick Allen what's wrong. They've found out that if anyone knows, it's likely to be him, especially if the problem involves the machine that he's been working with and paying careful attention to and attuning himself to. And of course the engineers are right. But, this requires an entirely new model of leadership that is based on the notion that workers can make major, positive contributions to improving the understanding of the work place and the understanding of how to enhance productivity.

Secondly, the information age has brought about a second development that has caused revolutionary changes in management theory. Information technology gives the new manager a set of tools that simply did not exist in 1958 when Professor Bernstein penned his observations, for example; he anticipated them. But now computers, and their interconnection through telecommunications, have made possible flatter organizations, wider spans of control and much faster information sharing.

It is now possible for a President -- whether of a company or a country -- to decentralize, yet at the same time keep field operations accountable for results. It is this concept -- accountability -- that links the federal manager of the Eisenhower era with the federal manager of the Clinton era. They are both accountable -- to the law, to the Congress, to the President, and to the public. But the information age demands that the new federal manager innovate. And information technology allows this to be done without sacrificing accountability.

These two new developments have combined to transform the job of the federal executive. It is now possible to transform the nature of management in the Federal Government. What is the new job of the federal executive?

Well, first, In the old way of doing things, federal executives were expected to know best, and they often created special offices at the top of their organizational charts to manage change and create innovation in an isolated way. They would call it "The Office of Strategic Planning," for example. In the new way, federal executives need to involve all employees in developing a clear vision and a shared sense of mission.

In this Administration, we want managers and employees to work together to paint a clear vision and articulate a compelling mission supplemented with clearly understood goals and shared values upon which anyone in the organization from top to bottom can base an intelligent decision. This approach results in the empowerment of all employees -- managers as well as workers -- to innovate and ensure a high level of performance.

It insures that everyone "buys into" the vision and is part of the process for creating it, so that goals can be developed together. I've seen this in action. A couple of weeks ago, for example, I visited the Department of Veterans Affairs. I met Joe Thompson, the New York Regional Office Director. He described how he helped create a vision with his staff.

He took his benefit determination staff to nearby Veterans' hospitals and let them meet actual customers face to face. As a team, these employees then developed a vision of how they wanted to change the process from a 23-step sequential process to one that was run by a set of small teams serving specific beneficiaries. This new eight-step process has resulted in savings of 20 percent in processing costs and has cut waiting time for veterans who want to see a claims counselor from 30 minutes to three minutes. The veterans like it a lot better because they deal with a recognizable familiar human being from the beginning of the process to the end of the process. And the employees like it a lot better because they are able to see their work from the beginning to the end, not as an isolated fragment in a disconnected whole.

Second. In the old way, federal executives were expected to keep staff working within organizational boundaries. In the new way, federal executives will need to help staff cross boundaries to work effectively with other organizations. The federal executive of the Eisenhower era found, according to Professor Bernstein, that "much of his work is designed to protect his agency and the integrity of its programs."

This can no longer be seen as the path to success. As Organizational theorists Gifford and Elizabeth Pinchot have observed, teamwork is now often the hallmark of success. "Bureaucracy keeps teams isolated, focused on their task assigned from above." In intelligent organizations, teams and their members must reach out through voluntary collaboration to create a more integrated organization. This Administration is committed to doing just that. For example, the fiscal year 1995 budget creates a government-wide approach to job training, a cross-agency attack on homelessness, an innovative approach to ecosystem management, a government-wide approach to implementing new Information Technology, just to take a few examples.

Third. In the old way, federal executives were expected to circumscribe discretion with rules because employees were not to be trusted. In the new way, federal executives must empower their employees to achieve the goals of the organization, within statutory constrains and the agreed upon vision of the organization.

Recently, I had the privilege of introducing a woman named Joan Hyatt to President Clinton. She and some of the field staff at the Occupational Safety and Health Administration, or OSHA, proposed cutting its 400-page field manual down to 93 pages. She told the President how the old 400 page manual not only spelled out things that needed to be spelled out, but also in her words, "told them how to put one foot in front of the other as they walked down the aisle of the work place." The new manual, which is less than a quarter in length and size, is designed to allow the work place inspectors to spend more of their time assuring American work places are safe and much less of their time doing paperwork. OSHA found -- like many of America's most successful corporations have found -- that those who are closest to the problem are often in the best position to make dramatic improvements.

Fourth. In the old way, federal executives were expected to protect and enlarge their operations and to satisfy higher levels of management. In the new way, federal executives will need to work to satisfy their customers. In the past, federal executives were presumed to know what the citizen wanted. The idea of a customer survey would have seemed ridiculous to federal executives. Moreover, if you saw one customer, you could safely assume that you had seen them all, and rules were standardized to ensure uniformity and equality. This rigid approach was nominally intended to provide quality service, but it simply did not because it failed to keep up with customers' evolving needs.

Last September, President Clinton signed a customer service executive order that creates an entirely new relationship between the Federal Government and its customers. It calls on agencies to set and publicly post standards so that people can know exactly what they should expect.

For example, the Miami Customs and Service Office has now set standards for clearing shipments into the United States. It made major shippers, like American Airlines, full partners in its enforcement strategy. It showed shippers how to conduct self-enforcement and customs is now able in Miami to focus on high risk targets and spot check others. As a result, customers are no longer inconvenienced by delays, and cargo moves much more quickly through the port and interdiction is up, because the law enforcement effort is now targeted much more appropriately where it needs to be targeted.

Fifth. In the old way, federal executives were expected to communicate one level up and one level down. In the new way, federal executives will need to communicate through every layer in their agencies. As organizations added layers and as work became more specialized, in the past, the old communications channels and approach became ineffective and executives became disconnected from front line workers, insulated by all of the layers in between. Craziness crept into the systems -- like the military specifications for chocolate chip cookies at the Department of Defense, which you may have seen, or like the 23-step process for determining a veterans' eligibility for benefits that I referred to earlier-- and the executives all of a sudden seemed powerless to re-establish a sense of coherence within the organization and to ensure a focus on the mission.

In the new way, executives will need to communicate directly to front line employees to find out what they are really doing, then the executives will need to broadcast throughout the organization clear vision statements, and accept responsibility as executives for maintaining a high level of awareness -- on the part of every employee -- of the vision, the goals, and the values upon which the organization is based.

Sixth. In the old way, federal executives were expected to tell their subordinates what the executive needed. In the new way, the federal executive will need to ask subordinates what they need to get their job done. How do we change these things? Well, one way is to do more of what Secretary of Education Dick Riley is doing. He hands out "reinvention permission slips" to every single employee in his department. This slip, which is a wallet sized card, says, in part, "Ask yourself: one, is it good for my customers? Two, is it legal and ethical? Three, is it something I am willing to be accountable for? If the answer to these questions are yes, don't ask permission. You already have it. Just do it!" That's a pretty powerful message from the Secretary of a department to front line employees who deal directly with the public.

Similarly, Bureau of Reclamation Commissioner Dan Beard has handed out to his managers what he calls "forgiveness coupons" designed to encourage them to take risks -- and they can redeem them if necessary, and it is sometimes necessary. But the point is to encourage them to try something new. To innovate. To take some chances, to try to change and evolve with the new circumstances they confront. Mistakes are then recognized as opportunities to learn. Organizations that don't learn, don't change. Organizations that don't change eventually don't work, because the world changes; change is a fact of life. And the best way for organizations to change is to learn about the change to which they must adapt.

How do organizations learn? I have, in the past, used a computer metaphor. There are two major architectures for computers. The large central processing unit that characterize most mainframe computers was an approach that sent out to the field of memory surrounding the processor for bits of information and then brought it back to the center to process it, and when the work was done, the answer was then parcelled back out to the memory. That took a lot of time to go back and forth three times. It also generated a lot of energy.

The new architecture, called Massively Parallel Computing, took a different approach. It broke up the processing power into lots of tiny processing units and distributed them throughout the memory field, so that when a task had to be performed, the work was done simultaneously in little bits throughout the memory field and then the answer was assembled at the center. It is a much more powerful approach.

Some of you may have noticed last week that a well-known puzzle in the field of mathematics was about to be solved. Some scientists had published a complex formula for encryption that involved two very large prime numbers multiplied against each other and they confidently predicted that the best scientists using the most powerful computers would require four quadrillion years to break this formula. This was taken as a challenge and the problem was broken down into little pieces and distributed on the Internet to thousands of small personal computers. They now expect the problem to be solved in a matter of weeks and they can use the four quadrillion years for something else (Laughter).

But the same improvements in efficiency, when it comes to solving problems, can be gained by an organization. If a manager assumes that his task is to reach out into the organization for little bits of information, bring them all to the center and then try to figure it all out, and parcel out the answers to the employees who are waiting for the guidance from above, it may take a long time for that organization to solve the complex new problems that are now being thrown at it. If by contrast, the manager asks all of the employees to think about the part of the problem that he or she is most familiar with, and participate collectively in an organization-wide effort to solve that problem and then assemble all of the answers to change the organization, the organization can change much more rapidly and learn much more quickly.

Seventh. In the old way, federal executives were expected to use hierarchical arrangements, with checks and controls over every input, elaborate reporting mechanisms, and extensive use of rules and regulations. In the new way, federal executives will be expected to concentrate on performance and carefully measure results -- output, not input.

Focusing on process and conformity may once have made sense, but no longer. That approach built up an ever-increasing overhead in paperwork, redundant reporting and immersion in checking details that slowed down performance and diverted professionals from the intent of the law.

President Clinton and I believe that in order to succeed we must clearly articulate our intent and continue to encourage flexibility when it comes to how our goals are achieved. For example, recently the President and five agency heads signed performance agreements. These agreements lay out, in written form, a publicly available vision of the agencies' goals and missions.

We believe that the best way for the federal executive to fulfill the traditional role of implementing the will of the President is to share those expectations explicitly, openly, and publicly with every single employee in the organization so that everyone can work simultaneously on ensuring that the job is done well. But, in order to perform their role successfully, federal executives must surmount two major hurdles. The first is cynicism -- specifically a belief that this new set of changes is not real. I know that there are some managers out there who think to themselves, "this too shall pass." But the movement to reinvent government is grounded in very big changes that are remaking all sectors of the economy. If federal executives let cynicism stand in the way of change, they will surely face more and more hostility from an ever more cynical public and from restless employees who understand why this change is good for the workforce as well as for the American people..

The second obstacle is culture. Many federal employees find security in the existing work culture. It has set forth the status and reward structure to which they have long since accommodated themselves. This structure limits individual accountability and protects against change. But because this existing culture no longer serves the public interest our challenge is to create a new one. Specifically, our challenge is to create work environments that promote and reward innovation, that preserve accountability and respect for the law, that put customers first, and provide employees with a feeling of security, recognition, and personal accomplishment.

And so, today, I offer this challenge to the federal executives in this room and throughout the federal workforce. This Administration supports the changes you have asked for. But we cannot achieve them simply by issuing a report.

This can only be done by individuals and we are relying on you to lead this charge. My report to the President last fall is a blueprint for change. But it's only a beginning. Over time, old ways of thinking will fade and will be replaced by a new culture that promotes innovation and quality. A new face of government will appear -- of leaders with vision, of employees newly empowered, and newly motivated, and of customers newly satisfied. You remember how a few decades ago the phrase "Made in Japan" was synonymous with poor quality, and now "Made in Japan" is synonymous with very high levels of quality. We want to create a future in which the phrase "Good enough for government work" is heard as, "That's good enough for government work"(Applause). It can be done. It will be done.

This new vision of a reformed national government, however, will lie fallow without the federal executive also seeing this as his or her own personal vision. Executives are the key. Professor Bernstein, in his day, tried to help federal executives see their role in the executive branch. Today, I see that as my challenge -- to help federal executives make this new vision theirs.

Just yesterday, I returned to the Pentagon to help the Secretary of Defense celebrate some heroes of reinvention. I met a woman named Wilett Bunton, a Defense Department employee who told me last summer, in an open meeting in the Pentagon courtyard, how entangled in red tape the federal travel system is. Others heard her comment last summer, and using the new empowerment that the National Performance Review recommends, they went about changing it. Wilett yesterday gave me a new insight into perhaps the most important job of a federal executive. She said that, because of the reinvention efforts underway, including the dramatic changes in the travel system that she complained about, changes being made because of her complaint, she said this: "We're not the same people we were six months ago."

The new job of a federal executive is to make federal employees believe, "We're not the same people we were six months ago" and to make the public believe we're not the same government we were either. We're not. We're going to change and we're going to be the way we should be.

Thank you very much.