Daniel Hertzberg

Shrinking budgets and political polarization among hurdles for next four years

Executives also face a looming retirement wave and must improve job performance measures.

Dear Deputy Secretary:

Congratulations on your recent appointment to the department’s No. 2 slot. As you prepare in the coming months for what might—through no fault of yours—prove a contentious confirmation hearing, you may wish to study the following urgent challenges facing the federal family in 2013. As many highly placed executives have learned, if a problem were easy, it would have been solved before it reached your desk. Your loyal staff has picked four trends you couldn’t avoid addressing even if you wanted to.

 Trend 1: Shrinking Budgets 

Washington’s deep budget stalemate—no matter who gains the upper hand in the coming eventful months—likely will provide only one guarantee: that the substantial budget cuts assigned to our agency during the past two cycles is now the new normal. This is bound to be true regardless of whether the two parties get serious about reducing the nation’s streak of trillion-dollar-plus deficits. 

Multiyear planning is out of the question, useful as it would be. More likely you’ll be forced to improvise while leading a team of employees whose pay is frozen, whose health insurance premiums are rising, and whose travel and conference budgets are curtailed.

To make do with less, you have to understand what things cost. “It’s very difficult to navigate in tight budgets without insight into your cost drivers,” says Robert Shea, a principal with Grant Thornton LLP and associate director at the Office of Management and Budget under President George W. Bush. “You need some evidentiary basis for deciding where to invest your resources.”

The trend toward outsourcing during the Clinton and Bush administrations is less of an option now. Agency chief human capital officers responding to a survey the nonprofit Partnership for Public Service and Grant Thornton released in August said contractors are simply less viable. So agencies must be creative in enhancing the capabilities of in-house staff.

One area ripe for reforms—one that would go over well with the White House—is reorganization of offices and programs to curb duplication. Easier said than done, given that much of the overlap involves other agencies and the pet projects of influential lawmakers. But the Government Accountability Office in a 2011 report identified 34 areas where programs were duplicative or fragmented. It’s possible some of our training efforts, for example, could piggyback onto another department’s.

We live in “an enormously challenging environment for the country and for government as a tool for addressing issues collectively,” says Max Stier, president and chief executive officer of the Partnership. “Things are more complicated because many of the issues are organized horizontally while the government is organized vertically.” Food safety, for example, cuts across 15 agencies as well as different levels and sectors, while cybersecurity ropes in the Defense Department and the nation’s financial infrastructure. “Virtually nothing we do nowadays involves no cyber contact,” Stier adds. “No single agency has the resources to address these complicated, globalized problems. Government is a holding company rather than an enterprise.”  

Dan Blair, president and CEO of the National Academy of Public Administration, contends that some of the “belt and suspenders” duplication is needed, but should be done intentionally. “Often it can’t be stopped because one arm of Congress isn’t aware of what the other is doing,” he says.

To do more with less, you’ll have to enlist cooperation at all levels of the org chart—and don’t neglect labor-management partnerships, which can motivate employees unnerved by change. And it will be a fight to preserve adequate funds for training against pressure to impose cuts that appear penny-wise to the public but pound-foolish to agency insiders.

You will have heard much about this year’s scandal surrounding the extravagant Las Vegas training conference gifted to the whole federal workforce by a group within the General Services Administration. After that harsh spotlight, directives came swiftly requiring agencies to cut back on conferences and make future gatherings more businesslike. “In the context of today’s budget, this is common sense. Federal employees have no right, no entitlement to go to conferences,” Blair says. “There is excellent training at some conferences.” But, he adds, “in the world we live in, you must take a second or third look before you go down to Key West in January.”

Others believe GSA and OMB over-reacted with sweeping restrictions. “I hope this hysteria will recede and we go back to some sort of normalcy on the idea of professional development as a worthy investment,” Shea says. “Conferences allow you access to good intelligence on what is going on in your world, but also allow you to network, meet others and gauge your organization’s performance. You don’t want federal employees cloistered but out and about, getting smarter about doing their jobs.”

 Click here to read about the three other major challenges federal managers face in the next four years.

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