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The Culture Change Speech
Remarks by Bob Stone
Student Financial Assistance Customer Service Task Force
Department of Education
Washington, DC
February 19, 1999

I've been in the situation you're in now. Six years ago Vice President Gore gave me and 200 other career federal employees the chance to figure out what was wrong with the federal government and what to do about it. For us it was the chance of a lifetime, a chance to use our talents to the fullest, to let us take charge of our part of the world, to change the very culture of government, to change our work so that it would be admired and appreciated by the American people.

One of the changes we proposed was the creation of performance-based organizations. And it finally happened. There's now one PBO: Yours. The Student Financial Assistance Office. And now you have the chance to figure out what a PBO means, what a totally reinvented government organization is, the chance to create an organization with a new culture, an organization that is recognized as the best by the huge segment of the American people whose lives you touch so profoundly.

So I want to talk to you today about culture change. I'm an expert in culture change. Six years with Al Gore at the forefront of reinventing government -- which is nothing if not culture change. Picked for that job in the first place because of my culture-changing work at the Pentagon -- changing a system that was designed to produce the "minimum essential" when it came to buildings and services for the troops -- changing it to one striving to produce excellence.

A complete culture change. It's not just me saying that. Tom Peters said so. David Osborne said so. In best selling books. I'm a Certified Public Culture Changer.

But if the CPCC Guild heard what I'm going to tell you, they'd revoke my certification. Pull my ticket. Because here is the experts' dogma - their articles of faith:

• First: Government culture is too risk-adverse. (Lurking behind that is the belief that government workers themselves are not risk-takers, or else they'd be out trying to make more money in the rough-and-tumble private sector.)
• Second: To improve government, we have to be more willing to take chances.

In fact, it's just the opposite. Some of the most insightful literature on the topic was written as the scripts for a BBC television series called "Yes, Minister." Whenever the political Minister proposed some new program, his crafty, career civil-service counterpart, Sir Humphrey, would nip it in the bud simply by saying, "Why Minister, how courageous of you." The hint that the Minister was about to do something risky stopped him in his tracks.

It's funny because it's true. But not true just of people in government. We're all like that. All but the foolhardy. Government workers are no more timid than normal people. I'd go so far as to say we are normal people.

Sensible people. And normal, sensible people don't walk around with their necks sticking out. Nature's last experiment with bold, risk-loving animals fell off a cliff into a volcano billions of years ago. Government and private sector people alike are a more modern, more successful species.

And the government's culture is no different from the private sector's, either. If you doubt that for an instant, just read Dilbert. It's not even about the government. It's about the private sector.

But it is so much on the mark for government that there are Dilbert cartoons on the wall of just about every government office I've been into - and so much on the mark for government that Vice President Gore prevailed on Scott Adams to let Dilbert appear in last year's annual report on reinvention.

So, based on my own credentials as a culture changer, and on the infallible authority of "Yes, Minister" and Dilbert, I can confidently contradict the other experts and say this about government: we may be risk adverse, but we're no worse than anybody else.

Now what about the experts' advice that, if an outfit like SFA wants to improve, it has to learn to take more chances? I say pish-tosh. That's right, all you Certified Public Culture Change Consultants. Pish-tosh.

America's great philosopher, Yogi Berra, once commented during a slump in major league attendance, "If people don't want to come to the ballpark, nobody's gonna stop 'em." Well, if people don't want to take risks - and most don't - nobody's gonna stop 'em.

Trying to get normal, sensible people to take more chances is like the old saw about trying to teach a pig to sing. It's a waste of time, and it annoys the pig.

You can get a lot farther -- and more important, you can get where SFA needs to go -- by taking advantage of the bone-deep, genetically-imprinted inclination of normal, sensible people to reduce risk.

I know that reducing risk doesn't sound very exciting. Not the sort of thing that would have inspired you to sign up for this task force in the first place. Imagine the recruiting bulletin:

"Calling all cowards. Help make sure nothing goes wrong and nobody gets into trouble."

You probably wouldn't have answered that ad.

You joined up to change things! To improve customer service. To make SFA equal the best in business.

You can do all of that through risk reduction.

Here's an example: When you're trying to improve customer service, the riskiest way is to figure it out for yourself - that is, don't ask the customer. I'm sure Greg's told you some of the stories about taking that risk:

• The IRS figured out for themselves that good service meant mailing everyone a tax booklet right after Christmas. But, when asked, their customers said the thing they wanted most was "minimal contact" with the IRS.
• The Oregon DMV figured that people who were renewing their drivers license wanted the line to move faster. But what the people really wanted was a more flattering photo.
• Even Disney - one of the best in the customer service business - figured that people would enjoy seeing Mickey and Goofy and the others wandering around Epcot Center occasionally - only to find out that parents wanted them to stay put in the Magic Kingdom, all in one place, so they'd be easy to find.

Here's another example of the magic of risk reduction: SFA regulates schools that want to offer federal loans and grants to their students. Ideally, a school that can't comply - or doesn't understand how to comply with the rules should call SFA for help.

Of course, they won't call if it's too risky - if they're going to get advice and punishment, too. If it's less risky to hide their problems, they'll try that instead.

I know that SFA understands the value of reducing that particular risk - because you have already reinvented IPOS along those lines. And some of you have told me that this risk has been reduced. But I bet if you talked to some schools, they might be able to tell you how to reduce the risk further. You won't know you have it right until the results prove you do.

Results like another regulatory agency - a much scarier one - got when they reduced the risk of contact with them.

You may have heard of OSHA and its Maine 200 program. Bill Freeman, the OSHA director in Maine, saw that worker injuries were persistently high, even though his office had been winning all sorts of awards from OSHA headquarters for most citations and most fines. So Bill went out and talked to management and labor at the 200 biggest and most dangerous workplaces in the state. He reduced the risk of cooperating with OSHA, and injury rates fell by over 40 per cent.

Now you might be thinking, "Bill Freeman may have reduced the risk for companies and workers in Maine, but what about the risks for him? He took a big chance by trying something so new and different."

Yes, he did take a big chance. Not that worker safety might decline - it would have been hard to make that much worse. Bill took the risk that keeps many federal employees from trying anything new - or even mentioning anything new - the risk that their boss won't like it.

I used to be a boss like that. In fact the NPR staff insisted that our Dilbert book include the cartoon on page 29 which shows Dilbert's pointy haired boss turning the fire hose on a new employee who had an idea. Wally says, "The urge eventually goes away." Hmmmm, I wonder if the staff intended that as a message to me??

Now I see my job as boss in a different light. It's captured on my business card, where my title is listed "Energizer-in-Chief." But you can't let the transformation of SFA depend solely on the courageous actions of exceptional individuals like Bill Freeman - or on enlightened and benevolent bosses like me. They may not be around when you need them.

You need to do something to change the risk for normal, sensible people who work for regular bosses. Other agencies are trying a variety of schemes:

• There's the so-called 360 degree evaluation - including customers, subordinates, and peers - so that everything isn't completely up to the boss.
• There's something we call the "balanced scorecard" - that rates an organization on customer satisfaction, employee satisfaction, and financial performance. I know Greg wants to use the balanced scorecard for SFA as a whole. It might be applicable to some parts, too.
• And of course, management training can be useful in getting bosses to do less judging and more energizing.

Look at what's working in other organizations that are good at innovation and customer service. Reduce your risk of failure by stealing their ideas.

That's what Greg Woods does.

You might have heard that last week Greg distributed some "Forgiveness Coupons" which entitle the bearer to get off scot-free if he or she is trying to improve customer service and fouls it up. Greg stole that idea from Dan Beard who reinvented the Bureau of Reclamation a few years ago. Dan gave forgiveness coupons to all his field office managers to encourage them to use newly-delegated authority - they had grown accustomed to letting headquarters make all their decisions. Dan's coupons had serial numbers - to cut down on black marketeering - and expiration dates - so Dan's managers had to try enough things to make a mistake quickly.

Greg has understood that same principle of risk management for a long time. Back when he was a private sector CEO in New Mexico, he gave one of his department heads this critical element: screw up at least three things in the next year. That counter-balanced the man's fear of making mistakes. And it increased the risk of doing nothing - also a good idea.

By the way, the risk in question might be for high stakes - like future employment - or for low stakes - nothing more than a boss's scowl. It doesn't matter. People just don't like it and they'll try to avoid it. So, to change the culture in SFA, reduce risk.

• Reduce the risk of giving your customers what they don't want.
• Reduce the risk your partners take when they ask you for help.
• Reduce the risk employees take when they try something new, make a mistake, or otherwise irritate the boss.

Arrange things so that normal, sensible people can do what comes natural. Let them follow the low-risk path. But make sure the path leads to innovation and world-class service. All you have to do is open the path for them. Here's your chance.

Thank you.