The AGA Weblog

Cheering on Obama as He Cuts Spending, Stimulates Economy

By: Anna Lafferre

Anna Lafferre is the director of the Center for Government Performance at the Performance Institute.

Much like Jefferson Smith in Frank Capra’s Mr. Smith Goes to Washington, President-elect Barack Obama quit his life in his hometown to move to Washington this week. One can only imagine what was running through his mind when he landed at Andrews Air Force Base, prepared to begin his life as the world’s most powerful man.

Even though he is not president yet, we’ve heard a lot of his opinions: everything from the government needing to use technology more effectively to college football needing to change to a playoff system.

Arguably one of his most important decisions is the budget cuts and program reviews he has promised to make to improve the federal government by rooting out wasteful programs. Obama named Nancy Killefer as Chief Performance Officer (CPO) Wednesday, a new position he outlined in his performance plan, which he released last fall. The CPO will report directly to the president and will also be responsible for leading a White House “SWAT Team” composed of top-performing and highly trained government professionals to set tough performance targets and hold managers responsible for progress. However, complicating the matter is the fact that many things in the federal budget just cannot be cut—either because it is a necessity (Homeland Security) or because cutting it would mean political suicide (health care).

Simply put, cutting spending from the federal budget is not as easy as clipping coupons for Saturday’s trip to Super Wal-Mart.

The Associated Press reported that a member of the transition team, speaking on condition of anonymity, said that nothing will be considered off the table, at least for discussion, when considering budget cuts.

The annual federal budget is $3 trillion, and it will take a lot of work to discover which programs funded by this budget can go. But it’s a necessary step in curbing federal spending and making government more efficient.

As Obama said, “We will go though our federal budget—page by page, line by line—eliminating those programs we don’t need and insisting that those we do operate in a sensible, cost-effective way.”

Like Jefferson Smith’s plan to introduce a bill in his first month in Congress, Obama has been preparing his economic stimulus plan that will soon become a bill before Congress. The plan, which is expected to cost at least $775 billion, is intended to boost America’s troubled economy, the Associated Press reports. Not only will this plan help turn the economy around, but Obama also promises it will set a "new higher standard of accountability, transparency and oversight.” It is likely that Congress will approve a version of this bill within the next few weeks, as Democrats control both the House and Senate. With this promise of an economic stimulus, Obama also warns, however, that the nation is facing a deficit (currently at around $1 trillion) for years to come.

Whether you voted for Obama or not, it is clear that the United States is facing some large issues: defense, the economy and homeland security to name a few. While it may be easier to cheer on fictional Jefferson Smith as he navigates his way through the Capitol, it is just as necessary to cheer Obama on as well, in hopes that he and his appointees can cross party lines and get things done.

Do you think this economic stimulus package will succeed in fulfilling its mission to set a "new higher standard of accountability, transparency and oversight” in the federal government?

The New Federal CFO Roadmap

By: Vincent Dennis

Vincent Dennis is the former deputy director of the National Reconnaissance Office for Business Plans and Operations. He is now a managing director with BearingPoint Public Services and a CFO SAGE (Strategic Advisors to Government Executives), a group of current and former federal CFOs convened by the Council for Excellence in Government to exchange thought leadership and strategic advice within federal financial management.

The incoming Obama administration should look to the Chief Financial Officers Act to effectively confront the historic and unprecedented financial challenges facing the country today. The leadership contribution of federal CFOs must be enhanced and maximized. The Council for Excellence in Government’s Federal CFO Roadmap has identified some objectives to help make this happen:

• Improving investment decision-making and enterprise risk management through tighter coupling of strategic planning, program analysis and evaluation and performance budgeting.
• Improving strategic (and operational) collaboration with agency and department leaders.
• Enhancing agility of CFO organization to more responsively support program priorities.
• Forecasting future program performance through enhanced financial, performance and risk information analysis.
• Enabling standardized, properly controlled enterprise business management processes through integrated business systems.
• Expanding aperture of auditable financial statement process to encompass improvements in managerial cost accounting and program-enhancing management decision information.

The unifying theme is the seminal role for the CFO in shaping, supporting and prosecuting an agency’s or department’s mission at every level through enhanced decision-making. While these objectives are directionally aligned with the path most federal CFOs are currently taking, their attainment requires overcoming a number of hurdles.  

CFOs cannot allow themselves or their organizations to be captured by any single initiative, objective, priority or responsibility. To the extent pressures to balance and prioritize are not countervailing, CFOs must continue to do both. An implementation of a new financial management system doesn’t elicit a pass on producing program-relevant decision information. This is but one example of the balancing act CFOs must confront in executing their broad responsibilities. 

Some CFOs new to the federal government have tended to try and drive their organizations to be more like commercial enterprises. Parallels of course do exist but the differences are stark and must be respected. What needs to be encouraged and harnessed, however, is the flow of ideas, perspectives and talents from both sides of that divide. 

Based on my experience as a CFO, the surest way to align strategy to execution is to elevate the agency or departmental CFO to a position in the leadership mirroring that afforded to their commercial counterparts. Commercially, CEOs and their CFOs are paired in every strategic dimension. The commercial CFO is central to the development, communication and execution of an organization’s objectives. This is not yet the norm in the federal government. One way to bake-in this role is for the administration to select cabinet secretaries or agency directors and their CFOs (political or careerist) in tandem—a package deal of sorts—to improve performance in the critical first year.

CFOs must lower internal barriers to cooperation, by fiat or by outreach. Adopting an enterprise-wide approach—to unify efforts across the organization—is essential. CFO responsibilities cannot be neatly siloed from those of the chief procurement officer, the chief administrative officer, chief information officer and other mission roles. Achieving the objectives reflected in the Federal CFO Roadmap is an enterprise-wide responsibility. Few activities are purely the province of any one element and parsing them into planning, finance or mission buckets guarantees sub-optimal decision-making. An agency that collaborates across functions is especially essential in investment planning and risk management.

The statutes, regulations and managerial expectations defining the federal CFO have enduring relevance. They support an evolving interpretation of the federal CFO role and serve as a means for improving the business of government. If in the next two years the new administration can achieve most or all of the Federal CFO Roadmap objectives, it would present all of us with a major reason to celebrate the CFO Act on its platinum anniversary.

What are your thoughts on: the biggest challenges for federal CFOs in getting beyond accountability and transparency to mission-based insight, and why this is so critical for new federal CFOs in the upcoming transition?

Preparing for the Transition

By: Michael J. Hettinger

Michael J. Hettinger is director, Practice Planning and Marketing, Grant Thornton LLP.

Regardless of who wins today’s election, the president-elect will have to be prepared to hit the ground running. With so many important national issues taking center stage in this election from the Iraq War to the current economic crisis, management issues for the most part have taken a back seat. As the next president prepares to take office on Jan. 20, those issues will begin to take on increasing importance. 

Immediately following the election, transition teams will be formed to take on the massive task of turning campaign promises into policy and identifying key individuals who can carry out that policy. There are 77 days between the election and the inauguration of the next president and while there will be no shortage of advice, there are a couple of specific areas that I believe the next Administration should be thinking about.

Finding leaders:  According to the Brookings Institution, it took an average of 8.7 months for the Bush Administration to move an appointee through the Senate confirmation process in 2001. This is a long time for agencies wait for their senior leadership. From the standpoint of management, this means the many agencies will have to operate with acting career officials in key positions such as Chief Financial Officers. Assuming the early focus of appointees will rightfully be on Defense, Homeland Security and Treasury appointees, this situation may persist for many months. The individuals appointed to these acting positions need to step up and play an active role working with the new president’s team to ensure a seamless transition as well as provide effective leadership in the transition.

Defining the management agenda:  We have heard a lot from the campaign trail about going through the federal budget line-by-line, reducing earmarks, making government programs work more effectively and eliminating under-performing programs. If this sounds familiar it is because the Bush Administration invested a significant amount of time, through the PMA, in these issues. As a result, there is a wealth of public information about the effectiveness of just about every government program. The next administration can build on that information, adding its own ideas. The beauty of the PMA is its simplicity. The next president can learn from that approach and while one can disagree with some of the results, it is clear that agency officials—political and career—knew what was expected. By defining a simple management agenda, with clear goals and making sure that information is transparent, the next administration can build on the success of the PMA.

Working with Congress:  To be successful in moving appointees through the confirmation process and in implementing its policies, the next administration must recognize Congress as a partner and a co-equal branch of the government. From the standpoint of eliminating ineffective programs and reducing budgets it is of little use for the next administration to go it alone, only to have Congress overturn those decisions through the annual appropriations process. Time and again over the last eight years we have seen numerous policies and budget-cutting proposals overridden by congressional directives, in many cases simply because Congress was not informed of the intent behind the proposals and in other cases because there was a compelling policy or political reason to disagree. Remember, Congress created most of these programs through legislation and they have a sincere interest in seeing them function as intended. Since both major party candidates are sitting U.S. senators, I am hopeful they understand the need to work with Congress if they truly want to implement what they have proposed.

Dealing with the human capital crisis:  Each year Grant Thornton surveys hundreds of federal CFOs, CIOs, defense finance personnel, procurement officials and CHCOs, and each year the one issue that consistently rises to the top is human capital. Whoever wins is going to have to deal with this issue and not just the impending retirements of the baby boomers but also reforming the General Schedule, reviewing the NSPS and finding ways to attract more young people into government service.

The next president has his work cut out for him. What are your thoughts?

IBM Center Releases Transition Guides

By: John M. Kamensky

 John M. Kamensky is a Senior Fellow and Associate Partner, IBM Center for The Business of Government.

Next week, we’ll know who the next President will be. And he’ll have to hit the ground running to deal with the mega-challenges he’ll face. 

His first task will be to put in place his team of executives to run agencies that oftentimes dwarf even Fortune 50 companies. How do they get up to speed?

Incoming agency executives in the next President’s administration must focus on ensuring success in key management areas, and respond to six imperatives, in order to ensure their success, according to two new books from the IBM Center for The Business of Government.

The authors, all former career federal executives, interviewed hundreds of current and former government officials, public policy experts, academics and researchers to prepare succinct guides detailing the shift from campaigning to governing.

 Book 1: The Operator’s Manual 

The Operator's Manual for the New Administration is like a new car manual. It tells you how it works. It details critical areas of expertise—leadership, performance, people, money, contracting, technology, innovation and collaboration—along with examples of effective government management. You can also read the book online at a special website devoted to presidential transition resources.

Each critical area starts with a two-page memo to incoming agency executives with crisp explanations of what they face. For example, in the “Money” area, the memo highlights the role of agency CFOs:

“While legislation has been put into place to strengthen the role of the federal chief financial officer (CFO), there is a lack of clarity for federal CFO roles and responsibilities. Oversight responsibilities for CFOs in the federal government vary from agency to agency. While CFOs are responsible for the financial management activities of their agency, not all CFOs are responsible for budgeting and planning. Similarly, some CFOs share responsibility for implementation of financial management systems with their agency chief information officer (CIO). Moreover, in some agencies, the CFO is responsible for many other agency activities, including human resources, asset management, procurement, facilities, bankcards, and general administration in addition to financial management. In some agencies, the CFO also reports to the CIO. In other words, there are no standard practices for federal CFO responsibilities.” 

Each memo is followed by a series of questions-and-answers. In the Money section, these include questions such as: “Do you have any suggestions on how we might better control costs?” and, “Can you tell me more about the ‘cost management’ culture?” Responses are based on past IBM Center studies.

 Book 2: Getting It Done

The Getting It Done: A Guide for Government Executives is more like a map. While the Manual tells you how the car works, the Guide is more like a map on how to get somewhere. In it, the authors identify six initial imperatives for success:

• “What I meant to say was … “There is likely to be a gap in time (sometimes long) between nomination and confirmation.  During this time period, learn as much about your agency as possible.

• Get smart. While you have done your background research on your agency prior to confirmation, devote early days in office to learning more about your customers, your agency programs, and “flash points” that may cause problems down the road for an agency.

·       The urgency of now. As part of learning how your agency works, find out what needs quick action and what issues require further study.

•       It’s the vision, stupid! A vision and a focused agenda will be crucial to your success in Washington. You will need to both communicate the vision and convey a sense of urgency to get it done. 

·       Civil servants are people, too. A key ingredient to your success will be putting together a joint political/career team. Don’t view your staff as two distinct camps. Avoid “political appointees only” meetings as much as possible.

·       Likeability works. All organizations—public and private—have stakeholders and a complex environment, but many observers think that government is harder because there are so many stakeholders. The key to your success will be succeeding (to a large extent) with all of them.

In addition, Getting It Done contains 14 “primers”—written by experienced leaders—on how to work with key stakeholders such as the White House, Congress, the Office of Management & Budget, the media, etc., all of whom are key to “getting it done.”

The Washington media has showcased these two books as being useful. What do you think? What additional advice would you add to new agency leaders?

 

The Future of Excellence in Government

By: Patricia McGinnis

Patricia McGinnis is the President and CEO of The Council for Excellence in Government.

If “change” is the theme for 2008, even the most pioneering observers must be surprised by the twists and turns of the Presidential race and many dimensions of our economic ups and downs. In times of uncertainty, government of, by and for the people takes on new meaning as public leaders and the people they serve sort out priorities and take critical actions they believe to be in the short- and long-term interest of the public.

Leadership, innovation, public participation and results really matter. We remind ourselves and each other that public service is a public trust—whether you are running for President, leading the Fed, managing a public program or voting in a primary election. At the Council, our 2008 agenda is designed to promote constructive change in government, with a sharp focus on transitions—not only the historic Presidential Transition, but also the transition in public service on the horizon.

With respect to the Presidential Transition, the Council will address the most immediate and urgent challenge of the new administration: selecting top appointees for critical leadership and management posts in the federal government. These top jobs include agency and program heads in areas such as Social Security, Medicare and FEMA, as well as COOs, CFOs, CIOs, CHCOs and CAOs. Presidential appointments are often called “plum” jobs, but the Council refers to these tough management jobs as “Prunes”—which in our lexicon, are “plums seasoned by wisdom and experience, with a much thicker skin.” Prune jobs are the most critical to government achieving results for the public, often in partnership with other levels of government and the private sector.

For nearly two decades, the Council has produced The Prune Book, with profiles of these top management posts, from the perspective of past incumbents, coworkers, stakeholders and others. We have also been developed leadership/orientation programs for top Presidential appointees at the request of both the Bush and Clinton administrations.

As we approach a new administration in 2009, the Council plans to take the Prune concept from book form to a major web presence (Prunes 2.0) and to expand its value and reach as an ongoing resource for top government managers. Not only will we profile the jobs, but we are also going to explicitly point to the management qualifications and attributes that the President and Senate should consider for these appointments. We will select and highlight the top 25 Prune Jobs and also provide information about other appointed positions, using the Plum Book and other sources. We will organize dynamic online Communities of Practice for top managers (appointed and career) to share insights and information about how to succeed, best practices and lessons learned. The Council will manage the sharing of information, blogs, case studies and other resources both online and in selected face-to-face meetings for new appointees and career managers as well as overseers, stakeholders and the media—all designed to help improve the performance of critical government functions and programs.

The Presidential Transition will take place in the context of a larger and equally important transition in public service at the federal, state and local levels. In the next few years, 60 percent of the federal government’s work force and 90 percent of senior executives will be eligible to retire. As the Baby Boomers leave the work force, big questions arise about who will be the next generation of public servants, what will appeal to them and how to attract and retain the talent required for excellence in government.

Recently, the Council released a new report, “The Appeal of Public Service: Who…What…and How?”, based on survey research conducted by Gallup, made possible by a grant from Accenture. This report explores the views of 19-29-year-olds—Millennials—on politics, government and public service, in comparison to their over 30 elders.

Despite generational differences in priorities, information sources and modes of communication, a majority of Americans now say that a job in public service would be appealing. Yet, 60 percent of those under age thirty say they have never been asked to consider a job in government. However, if asked by their parents (33 percent) or the newly elected President in 2008 (29 percent), a significant share of Millennials say they would give such a request a great deal of consideration. In fact, the newly elected President in 2008 tops the list of motivators for those over thirty, with 30 percent saying they would give a great deal of consideration to this “ask.”

Note to presidential candidates: This is a great opportunity to attract the best and brightest to government at the very time large numbers of Baby Boomers are beginning to retire from government. During this election year, with change as a major theme, strong majorities of Millennials and their elders are paying attention to the campaigns and engaging in one or more political activities.

Note to all of us who are parents or friends of Millennials: Ask a young person to consider government service. Encourage them to step up to lead and change government, their way. Our future depends on them.

As Yogi Berra once said, “the future is inevitable,” so I would like to challenge the readers of the AGA blog to join us at the Council in imagining what the future of excellence in government could look like. What will it take to attract and orient well-qualified appointees, who can make a difference in top political posts? What will it take to attracted talented young people to government service? Most important, what can you do and what can we do together to make excellence in government a reality and shape the future we want for ourselves and future generations?

MONDAY: Thad Juszczak, senior manager with Grant Thornton LLP, a retired federal budget officer and AGA National Treasurer-Elect, on "Baby Boomers and Accountability"

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