Reforming Agencies to be Ready for the Future
Former Comptroller General David Walker makes a strong case for transforming federal personnel systems to stress values of accountability, integrity and reliability.
Government reform initiatives have largely failed. Countless commissions and reports going back decades have focused on the need for reform but the dominant management paradigm has not seen meaningful change for decades. Now Brookings and Paul Light are posting a blog series at FixGov making the case “for a fix-government-fast reform agenda.”
Light should look to the Government Accountability Office and its successful transformation. It’s been rated as a “best place to work” since 2005. Its 2019 rating places it third on the list of midsize agencies and better than all the 17 large agencies. David Walker initiated the planning to reform the agency shortly after he was confirmed as Comptroller General of the United States in 1998. The agency’s first strategic plan followed in 2000 and triggered the agency’s transformation.
The enduring success of GAO’s transformation stands in contrast to the failed National Security Personnel System reform initiated by the Defense Department in 2004. It’s been forgotten, but the Homeland Security Department also initiated reform and failed in the post 9/11 years.
GAO’s transformation is summarized in Walker’s new book, America in 2040: Still A Superpower? It was the chapter “Reforming Government” that prompted the interview with Walker that follows.
How would you define the role of agency leaders in transforming agencies to be ready for the future?
Transformation starts at the top. The CEO needs to build a burning platform, provide a call to action, and show a way forward. The CEO needs to be supported by top executives—the related transformational changes tend to be resisted the most by people who are closest to retirement. Addressing these three key dimensions requires an active and ongoing communications strategy. The third element also requires extensive outreach activities and concerted efforts to seek and seriously consider input from employees, clients and other key stakeholders. The change effort starts with strategic planning and then involves a range of activities relating to people, process, technology and cultural transformation. In the final analysis, it is a multi-year effort that involves patience, persistence, perseverance and pain before you prevail.
When you led GAO’s transformation, you emphasized three core values: Accountability, integrity and reliability. Of the three, accountability seems to be the most elusive in government management. How would you recommend agencies increase individual accountability?
It is critical to link the agency’s strategic plan, core values, and desired outcomes to the performance management systems for both organizational units and individuals. At GAO, we redesigned our performance appraisal system to address grade inflation, focus on core competencies, and support the desired outcomes in our strategic and performance plans.
In order to achieve sustainable success and promote continuous improvement, you need to have properly designed incentives, adequate transparency, and appropriate accountability mechanisms. This includes modernizing performance appraisal systems to address grade inflation and achieve a meaningful dispersion of individual performance ratings. Most performance management systems in the government fail these basic tests.
You write that “the most valuable asset any organization has is its people.” The evidence suggests that is far from true in most federal agencies. What policies did you institute to send that message to GAO employees?
The GAO is only as good as the people who comprise it. After all, the GAO is a professional services organization that supports the Congress and serves the American people in a professional, objective, fact-based, non-partisan, and non-ideological manner.
Given the above, we made our people priority one. To do so, we enhanced or recruiting practices, inventoried the skills and knowledge of our staff, expanded our training and development programs, implemented a new Office of Opportunity and Inclusiveness, modernized our performance management systems, implemented an employee suggestion program, and actively engaged with our employees through a diverse and representative Employee Advisory Council. All of these and other actions resulted in GAO achieving the needed transformation in a manner that resulted in the agency more than doubling its productivity, more than tripling its financial outcomes, and being rated the second best place to work in the federal government by our employees.
GAO reports and supporting analyses are produced by front line employees. In your answer to the previous question, you referred to the Office of Opportunity and Inclusiveness and the Employee Advisory Council. Why are those important?
I am a strong believer in employee engagement and empowerment. During my tenure as Comptroller General, we undertook numerous initiatives in this regard. While top leadership must take the lead in making major change happen, it is critically important to actively engage employees and seriously consider their views and capabilities. In the end, the CEO needs to make the final decisions and explain them. In doing so, while some will not agree with the related decisions, it is important that they feel that their views were heard and seriously considered. The process employed in undertaking transformational change can make the difference between success and failure.
The National Security Personnel System was terminated largely because of opposition to the switch to pay for performance. But GAO made the transition successfully. What steps did GAO take to gain acceptance for the change?
We made a relatively modest change in connection with pay for performance. Under the GAO system, individuals who performed at an acceptable level received an inflation based increase. Any additional increase was based on their performance relative to others at their level. Ideally, we would have liked to have done more but I felt it was prudent to take more modest steps given the significant cultural change involved.
GAO’s work involves the preparation of reports based largely on analysts’ judgment. That shifts the focus of an employee’s performance to their knowledge and competence. How is that reflected in annual performance ratings? What steps were taken to secure employee buy-in?
Our revised performance appraisal system was based primarily on core competencies, core values, and desired outcomes consistent with GAO’s strategic and performance plans. We engaged an outside contractor to help engage our employees and develop the related competencies and other evaluation criteria. The resulting factors were then validated by a significant majority of our employees before they were adopted.
The Partnership’s reporting of the “Best Places” survey data shows GAO is highly rated by all demographic groups. You mentioned a “long standing pay equity issue” in your book. What steps did you initiate to address discrimination claims?
The most controversial change that I made at GAO was the splitting of the then Band II level into two separate Bands IIA and IIB. When GAO went to a broad-banded system in the 1980s it should have adopted four rather than three bands below the SES level. The failure to do so resulted in many Band II individuals, who were good employees but who had significantly less responsibility, making more money than people at the Band III level. In my view, this violated the pay equity principle and should not be allowed to continue, especially given increasing budget pressures. This resulted in significant concerns among the staff, especially from people close to retirement. However, discrimination was not an issue that I recall being raised as a part of this process since it was based in actual performance from a validated system irrespective of a person’s age, gender, race, ethnic origin, sexual preference, etc.
Candidly, I made this change quicker than I wanted to due to an expected change of control in the House. While GAO stuck with the Band II split, I agreed to provide more transition relief relating to this action before I left GAO. Gene Dodaro, my then No. 2 and successor as Comptroller General, implemented the agreement.
You make the point that reform will take years. You may be aware that the state of Tennessee invested three years preparing managers for their role in managing a new performance pay policy. How does that compare with GAO’s experience? Is it consistent with your thinking?
Making major transformational change happen takes years to be able to achieve in a successful and sustainable manner. This is especially true in government given the fact that it is a monopoly and generally has a risk averse culture. With regard to human capital reforms, they take time to effectively implement given the three key dimensions of transformation that were discussed previously. The actual amount of time will vary based on the size and complexity of the organization and the commitment and capability of its leadership.
You state in your book that America is at a critical crossroads and that our future is at risk. What do you mean by that?
America has strayed from the principles and values on which it was founded and that made us a great nation. In addition, we are not learning from history. Looking forward, the United States faces a range of serious economic (e.g., fiscal and monetary), national security (e.g., China, changing alliances, additional threat domains), domestic tranquility (e.g., growing income gaps and tensions in society), and other challenges. My book discusses all of these and more. Importantly, it also includes a range of prudent solutions, including policy and management reforms, to ensure that America remains a great nation.