During his tenure, Daniels re-established OMB as the focal point of management improvement efforts in the executive branch. He started up the President's Management Agenda, a five-pronged strategy to improve federal workforce management, increase competition between federal workers and contractors, launch e-government projects, boost financial management and make programs' performance a more important factor in the budget process. He also drew the ire of federal employee unions by proposing annual pay raises for federal workers below the levels called for by statutory formulas.
Government Executive asked Daniels about his experience in dealing with management matters while at the helm of OMB.
Government Executive: What advice are you going to give your successor on the management side of things? What issues he should spend his time on? How much of his time he should spend on management?
Daniels: I'm certainly going to suggest that he discipline himself. It's very easy to get dragged away from those things, particularly by the budget side of it, occasionally on the regulatory side or simply the internal alignment in the administration-all these day-to-day problems. So I do think you have to budget some of your own time, ensure you're sitting with the people who work on that on a regular basis and don't let your attention drift.
The second thing I would say is, keep it simple and keep the agenda limited to big issues. We came down to five, and I sort of put asset management in kind of as a sixth--we're treating it as a subset of financial management. There are so many problems and so many inefficiencies you could work on, you really have to keep your teeth in the ones that matter most. We made our call very early in the administration about where we thought we could make a difference. They may not change for eight years. They're going to take relentless follow-up.
Government Executive: How would you rate agencies' progress in implementing the President's Management Agenda?
Daniels: I've been the last skeptic. Folks have been telling me encouraging things for a good while now. But even I'm beginning to believe it now. One of the most gratifying things that happens is I bump into somebody well down in an agency who says, 'Things are really different now. We're really doing stuff. You guys must be serious. Things are changing.' But it might be an eight-year slog.
That would be my other advice: Don't get tired or bored with the same few emphases. If you ever take your foot off it, things will backslide.
Government Executive: Which of the five areas have met with the most resistance from agencies?
Daniels: We've gotten the most resistance on performance integration-measuring what works and actually translating that into smarter budgets and smarter spending decisions. It's going to be a long time. We've got to get Congress as enthused about it as we are. We're making progress. I tell you, there's natural resistance. It's like so much else in life. No one wants to be measured if you can get away without it and certainly nobody wants to pay the consequence of a bad grade.
Although we haven't gotten as much resistance-people are 'amen'-ing the subject matter-on the so-called human capital side, the next year or two will tell a lot about whether we get any real change done. People are happy, maybe too much so, having seminars about the problem, but making real change in all the antiquated rules and disparate customs-that's hard.
Take our approach to pay this year. Inflation is about zero. We proposed a 2 percent pay increase but with a $500 million fund available to reward star performers, not as a bonus but as actually higher pay levels. Now that may sound like total common sense, but that's going to be hard to get done.