Cues for Consolidators

Consolidation can bring savings, and GAO is helping managers guide the process.

The past few years have seen a renewed focus within government and from without on reducing duplicative, overlapping or fragmented areas of federal management. In some cases, this focus has meant consolidating program offices or management functions with an eye toward increasing efficiency. Managers overseeing these consolidations and the newly restructured offices that emerge rarely get concrete advice on navigating this difficult transition.

A tip of the hat to John Kamensky at the IBM Center for the Business of Government for spotting, in a somewhat obscure Government Accountability Office report, just such concrete advice. In the report, GAO lays out the key questions that agencies should consider when evaluating whether to consolidate, and the same questions also can serve as a helpful guide for managers attempting to focus the effort and to execute a smooth transition.

First, managers should determine goals. They should walk through the problems the consolidation is designed to solve and the opportunities it is intended to create. Managers also should identify any problems the consolidation could potentially create. “The key to any consolidation initiative is the identification of and agreement on specific goals, with the consolidation goals being evaluated against a realistic expectation of how they can be achieved,” the report states.

Then, the likely costs and benefits of the consolidation should be clearly laid out. Managers should determine if there is sufficiently reliable data available to support a business-case or cost-benefit analysis. While GAO frames this question in terms of deciding whether to move forward with a consolidation at all, it also could help managers determine the most effective and efficient way to launch a consolidation that already has been green lit. Not only does a thorough analysis guide the government in its consolidation efforts, but it also provides a way to show stakeholders why a particular initiative is occurring and the range of alternatives that were considered.

Next, managers should determine how to pay for upfront costs associated with the consolidation. While consolidation will save money in the long run that doesn’t mean it won’t cause funding challenges at the outset.

Managers should identify the relevant stakeholders and consider how they will be affected by the change. It is important to know how these stakeholders were involved in the decision to consolidate and whether or not they collectively understand the rationale for the action. According to GAO, stakeholders often view consolidation as being against their interest, which makes it all the more important to develop a two-way communication strategy to address concerns and convey the benefits of consolidating.

Finally, managers should determine the extent to which they will use change management to implement consolidation. Plans should include essential change management practices such as active, engaged leadership; a dedicated implementation team that is accountable for the change; and a strategy for capturing best practices, measuring progress toward the established goals, retaining key talent and assessing mitigation risk.

In the appendix of the report, GAO provides sub-questions under each of the five key questions.

“Consolidation initiatives can be immensely complex, politically charged and costly, and are not quick, easy or automatic ways of producing desired change,” the report says. It is crucial for agency decision-makers to balance the benefits of consolidation against the physical, upfront financial, bureaucratic and political costs while considering other paths to increased efficiency, GAO says.

But where there is a clear potential for cost savings and operational efficiencies through consolidation, managers must be diligent and systematic in executing these complex initiatives. GAO’s guidance is a good place to start.

Elizabeth Newell covered management, human resources and contracting at Government Executive for three years.

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