Federal Agencies Need a New Management Model
Practices are dangerously out of sync with those proven to support successful, high performance work environments.
Government’s performance problems are getting progressively more serious. The problem is attributable to the shared mindset and culture created by the civil service system, the reliance on badly outdated policies and practices, and the aging workforce. It will take both leadership and time to address the challenges, but success stories confirm that significantly better performance is possible.
The barriers to change are several: the law, the contentious political climate and the unions. At a high level government should be run like a business—efficient and accountable—but the dynamics of markets and the importance of continued profitability dictate a different approach to strategic decisions. The so-called “business model” involves identifying the products or services offered, the target market, and needed financial support. These are uniquely business strategy issues. A similar model is important in the healthcare sector.
The closest equivalent in government might be called the “public service model”—what agencies are working to achieve, the segment of society targeted, and the groups that are the key to continued support. Those issues are central to the political debate.
A separate but related discussion focuses on how the work of management gets done—how goals are defined and performance tracked, how operations are organized and staffed, the direction and monitoring of employees, and resources allocated. The answers to those questions define an organization’s management model. The business model is the “what” and the management model is the “how.”
Simply stated, the government’s management model is dangerously out of sync with the practices proven to support successful, high performance work environments. Significantly, the model is also at variance with a work environment that attracts and retains highly qualified talent.
The issues encompassed in the management model are essentially the same in every large organization. To quote management expert Harold Koontz:
“Management is an art of getting things done through and with the people in formally organized groups. It is an art of creating an environment in which people can perform and individuals can co-operate towards attainment of group goals.”
That is true in a federal agency, a hospital or a supermarket. In every sector, management is accountable for poor performance as well as credited with creating a high performance work environment. The management model is a key to building a highly engaged and fully productive workforce.
The problems are broad, deeply entrenched and involve several loosely related practices. The “solution” will require rethinking three areas:
1) the selection and training of supervisors, managers and executives;
2) the policies and practices managers used in managing government’s operations and workforce;
3) the need to shift from the ‘culture of compliance’ to one that emphasizes performance.
That will require several years; the first step is building agreement on the needed changes.
Government’s performance problems, along with the reasons for the problems, have been discussed in a long list of reports. There is a common theme: Agencies are “making progress” but performance needs to improve. There are also reports like the one that triggered this column, “Preparing the Next Generation of Federal Leaders: Agency-Based Leadership Development Programs,” a study funded by the IBM Center for the Business of Government. The criticism is subtle but the theme again is improvement is needed. A search on the Government Accountability Office website produced over 75,000 documents on agency performance, but when the search is narrowed to “high performance” the report titles include phrases like “action needed,” “do more to foster” and “strengthen performance.”
The urgency of addressing the problems is heightened by the aging workforce, the unusually tight labor market, broad demographic trends, the preference of young workers for urban job opportunities, noncompetitive starting salaries, and government’s brand or reputation as an employer. The loss of talent to retirement is inevitable and agencies need to prepare for replacements. Agencies only disclose aggregate staffing data but when problems like Epstein’s prison suicide or the long wait times in VA hospitals are reported, vacancies are often mentioned as a contributing factor. Until change is implemented the vacancies are very likely to increase.
As urgent as it is to begin the steps to transform the management model, it is equally important to rely on a planning process that concludes with each agency’s executives and managers committed to making it a success. In the end, they need to accept and be comfortable using new management practices.
To make it clear, the goal is not to scrap and replace the civil service system. However, the research and the mushrooming literature make it clear that leaders, supported by executives and managers, are responsible for creating high performance organizations. Gallup, as one of the thought leaders, narrowly focuses its 12-question engagement questionnaire (the Q12) on the role of managers in building employee engagement. The goal in rethinking the model is improved agency management.
Here perhaps the most important point is that the evidence from the many reports and from the Federal Employee Viewpoint Survey makes it clear that: 1) there is broad recognition change is needed; and 2) everyone would take pride in improving their agency’s performance. The conclusions and recommendations in the report, “Preparing the Next Generation of Federal Leaders,” make that very clear.
The report also highlights a common complication in gaining and sustaining the support of elected leaders and their appointees. Few have meaningful experience managing large employee groups. Their focus is public policy issues, not organization management. The authors make the point that “political appointees come and go, on average, every 2.6 years.” They found “senior leadership buy-in” important in each of their case studies. Obviously their buy-in is essential for financial support.
The few true success stories confirm the importance of elected or appointed leaders making the change initiative a priority. The state of Tennessee and Governor Bill Haslam offers a recent case study. He was previously a corporate executive and previously the Mayor of Knoxville. The state invested three years in transitioning to a performance management approach based on cascading individual goals. The National Geospatial-Intelligence Agency offers another case study. Following its formation in the 1990s, leaders undertook a broad transformation starting with focus groups and the adoption of practices proven to support high performance. The Government Accountability Office under David Walker is another good case study.
NGA is smaller than many federal agencies; its strategy would not be right for every agency. Tennessee had a very different strategy. Each member of the governor’s cabinet was asked to conduct a top to bottom review of their agency, asking if services were provided effectively and efficiently. Additionally, the deputy governor and commissioner of human resources went on a listening tour to discuss what was needed. Prior to Haslam’s election Tennessee was seen as a laggard in the field of public administration; today, it’s a leader.
In every agency managers and employees know what’s working and what’s not. The initial step to both gain support and develop a game plan that focuses on existing problems should be to solicit input from managers and employees. Their continued support and cooperation is essential and that makes it important to keep them informed. They need to know what to expect and understand how it will affect them. Frequent communication is a critical element of a change management strategy.
One outcome should be revised management tools—the policies and practices for planning and monitoring performance and for leading employees. Managers need to be involved in developing their tools. Changing behavior is never easy. That’s one of the reasons Tennessee invested three years in preparing managers. The state also shifted to pay for performance to reinforce the new goal-based approach to performance management.
An important caveat to traditional thinking is that federal agencies are very different in mission, size, occupational configuration, and geographic dispersion. That has important implications for the approach to management. Managers and supervisors in a prison clearly need a different skill set and supervisory style than those in a research facility or a national park. Whatever changes are eventually adopted need adequate flexibility to be effective in getting the best out of people.
At some point, agencies should consider another idea recommended by McKinsey—organizing agency operations under a chief operating officer. Ideally it should be a former corporate executive. Someone needs to lead the transformation and following the practice in business, hold regular meetings to review progress and discuss problems. In a typical business, those sessions are held monthly. Similar meetings should be held at each level of management.
Major change initiatives normally do not start in the last year of an administration, but rethinking the management model involves backroom discussions. There is also no need for special funding. Starting in 2020 would set the stage for broad support after the election.
There is an old saying about the shoemaker’s children going without shoes. For over 30 years the National Institute of Standards and Technology has been promoting better management. Its Baldrige Award Program has recognized role-model businesses, established criteria for evaluating improvement efforts, and promoted best practices. The original business model was extended to health care and education organizations in 1999 and to nonprofit/government organizations in 2007. Tennessee now relies on the program’s framework and criteria for performance excellence. The framework is fully appropriate for government organizations but strangely it's been ignored by federal agencies. It would be a good starting point.