Improve Leadership and Management of Executive Branch

Provide Improved Leadership and Management of the Executive
Branch

Background

More than 80 percent of American adults believe that fundamental change
is needed for the federal government to be responsive to people's
needs.(1) Congressional reports and studies document "a decade of
decline" for an executive branch that lacks effective leadership and is
poorly managed.(2) The House Committee on Government Operations observed
in its 1992 report that the cause of management problems in the
executive branch is "first and foremost .  . . the lack of
leadership."(3)

Leadership and management are crucial functions for any organization.(4)
The concept of "quality" leadership and management brings a focus to
leadership and management of meeting and exceeding customer expectations
and continuing productivity and quality improvement.(5) Sound leadership
develops vision, values, and policy agendas and prioritizes competing
demands. Strategic management aligns programs and management systems
(e.g., personnel, budgeting, procurement) to support the vision,
agendas, and priorities while simultaneously ensuring continuous
improvement in programs and systems to give better value to taxpayers.
The outcome of effective management is "predictability and order."
Effective leadership "produces change" that is often "dramatic. . . and
extremely useful."(6) Effective leadership and management must exist at
all levels of an organization; however, this report gives particular
attention to top-level leadership and management.

Steps to Improve Management

Traditionally the executive and legislative branches have "corrected"
poor leadership and mismanagement by extending and tightening oversight,
regulation, compliance, clearance, and review mechanisms of agencies and
managers. These processes foster staff-directed management through rules
and regulations. These tools and levers have created a culture of tight
control. However, they also create gridlock in programs and
organizations. They are not mechanisms for action, accomplishment, or
empowerment. These staff-driven rules wrap managers in layers of
control, oversight, and red tape; obscure responsibility and
accountability; and shift management's focus to compliance with
rules--and away from achieving results and satisfying customers. Based
on the public's opinion of government, this approach has not worked. But
it stubbornly persists throughout the federal government.

Incoming presidents and senior political appointees are traditionally
warned to resist the temptation to manage the executive branch and are
instead encouraged to accomplish a few significant political changes
that define the incumbent administration. One conventional point of view
is that, as the chief political officer, the President's principal task
is to lead the federal government, not to manage it.

The President, department secretaries, and agency heads are responsible
for providing political and policy leadership. However, they are also
key to providing overall leadership for effective management of the
executive branch and for initiating cultural changes.(7) Without an
adequate focus on management, an Administration can be undermined and
derailed by political crises ensuing from lack of effective executive
branch leadership and management.(8) As Elliot Richardson, an
illustrious former secretary of several departments, observes:

The really hard problems of government start with choosing goals,
setting priorities, making choices, and formulating plans for fulfilling
those chosen objectives. . . . Whether or not an administration succeeds
or fails depends on how clearly, forcefully, and persuasively it defines
its goals and creates the understanding of the necessity for sacrificing
desirable ends that do not have sufficient priority to claim a share of
the available resources.(9)

Strong executive branch leadership can only come from the President and
cabinet secretaries, who have "line" leadership responsibilities.  Staff
organizations cannot begin to fill these roles, yet these organizations
currently dominate the operations of government. As a result,
responsibility for executive branch management must shift from staff
organizations and their use of controls over "inputs"-- such as staffing
levels and budget line items--to line organizations and line managers,
who will then be held accountable for achieving agreed-upon results.

Need for Change

Effective executive branch leadership can flourish only in a radically
different organizational culture. Existing staff oversight systems
designed to ensure accountability for the use of resources must be
ultimately replaced with quasi-market tools, such as incentives and
competition. These new accountability tools more directly assess
accountability and results. However, to do this means staff offices must
relinquish their traditional controls and give line managers true
authority to use resources. At the same time, line managers must be held
accountable for achieving results. While some traditional staff
oversight systems will continue to be necessary to discourage fraud and
waste, a large share of existing resources used in these functions could
be shifted from non-value-added oversight to program and service
delivery.

Other countries and some American state and local governments now
operate according to the management approach of "managing for
results."(10) This new approach represents a shift from public
management theories favoring rules and controls over the use of
inputs--dollars, staff years, etc.--to an executive branch management
philosophy of:

Sharpening and clarifying responsibilities and accountability for
leadership in management of the executive branch by top "line"
executives, such as cabinet secretaries and agency heads;

Building capacity and support for effective leadership;

Giving organizations and managers greater flexibility in their use of
inputs in exchange for greater accountability for results;

Shifting from an emphasis on input controls to accountability for
results; and

Improving cooperation between the executive and legislative branches.

The vision of the new "managing for results" approach is to provide a
well-managed and effective executive branch that:

Empowers line agencies, managers, and employees to meet and exceed
customer expectations;

Results in continuous quality and productivity improvement; and

Provides clear accountability for results.

Shifting Roles.

To implement the philosophy of "managing for results," major
organizational changes are needed to improve performance in the public's
eye. For example, the responsibility for managing within the executive
branch must be shifted from staff organizations to line organizations
and line managers. Accountability must shift from a focus on accounting
for the use of inputs to accounting for results.  Controls must shift
from a preoccupation with compliance with process and rules to a focus
on service, customers, and results.

The current emphasis on the use of executive branch management controls
via staff offices as a means of ensuring accountability has fostered a
culture of dominance, compliance, helplessness, and dependency.(11)
Recasting the system to one focused on accountability for results would
promote a culture shift to a focus on partnership, responsibility, and
customer service.(12) The key to "managing for results" is the
empowerment of line agencies, managers, and employees.(13) In this new
approach:

Line agencies, such as the Departments of Agriculture and Health and
Human Services, would be empowered by shifting power from external staff
agencies, such as the Office of Personnel Management, to line managers
and focusing line decisions on mission and results, rather than controls
via the use of inputs.

Line managers would be empowered by shifting authority and
responsibility from departmental staff offices to line managers and
field staffs through decentralization, delayering, and reductions in the
size of staff offices.

Employees would be empowered by the delegation of authority and
responsibility; greater use of self-managed work teams; use of cross-
functional, cross-unit teams; and encouragement of employee diversity.

Creating an Institutional Framework.

Introducing "managing for results" in the executive branch will require
an appropriate organizational framework for its effective
implementation. Similar efforts in Australia, Oregon, and Florida found
that creating a new institutional framework was an important first
step.(14) The federal governmental can begin by refining existing
organizational mechanisms for culture change and, where needed,
advocating new ones. For example, the Federal Quality Institute (FQI),
established in 1988 to promote quality management, can be a key resource
to help foster the cultural changes needed to manage for results. The
experience of other governments also suggests the need for a top-level
council to lead and coordinate the changes.

However, culture changes cannot be relegated to staff agencies. The
President and his cabinet must personally articulate the vision and
champion the changes. Together, the President and his cabinet members
are responsible for (1) developing a unifying purpose or mission for the
executive branch as a whole; (2) setting policy and associated program
agendas, including making the hard choices among many competing
priorities and claims from assorted constituents and stakeholders; (3)
developing and communicating values; and (4) creating a shared vision of
what government should become in the future.

Major changes in large systems like the executive branch cannot happen
without leadership, direction, and a long-term commitment from top
leaders. Their continual reinforcement of their vision is needed on an
ongoing basis to cement cultural changes.

Cross References to Other NPR Accompanying Reports

Improving Customer Service, ICS01: Create Customer-Driven Programs in
all Departments and Agencies that Provide Services Directly to the
Public.

Improving Financial Management, FM06: "Franchise" Internal Services.

Mission-Driven, Results-Oriented Budgeting, BGT02: Effectively Implement
the Government Performance and Results Act of 1993; BGT03:  Empower
Managers to Perform; and BGT05: Provide Line Managers with Greater
Flexibility to Achieve Results.

Reinventing Human Resource Management, HRM09: Improve Accountability for
Equal Opportunity Goals and Accomplishments; HRM11: Strengthen the
Senior Executive Service so that It Becomes a Key Element in the
Governmentwide Culture Change Effort; and HRM13: Form Labor- Management
Partnerships for Success.

Reengineering Information Technology, IT14: Provide Training and
Technical Assistance in Information Technology to Federal Employees.

Streamlining Management Control, SMC01: Implement a Systems Design
Approach to Management Control; SMC02: Streamline the Internal Controls
Program to Make It an Efficient and Effective Management Tool; SMC03:
Change the Focus of the Inspectors General; and SMC05:  Improve the
Effectiveness of the General Accounting Office through Increased
Customer Feedback.

Transforming Organizational Structures, ORG01: Reduce the Costs and
Numbers of Positions Associated with Management Control Structures by
Half; and ORG03: Establish a List of Specific Field Offices to be
Closed.

Endnotes

1. See Memorandum from Carolyn Burstein, Acting Director, Federal
Quality Institute, to NPR, August 2, 1993. A CBS poll taken in May 1992
found that 17 out of 20 adults said the federal government needed either
"fundamental change" or a "complete rebuilding"--that its methods were
totally inadequate to meet the needs of today's citizens. See also
Washington Post (August 23, 1993), p. A15. In similar findings based on
University of Michigan data, the number of people who "trust the federal
government all or most of the time" has fallen from 76 percent in 1963
to 21 percent in 1993.

2. See U.S. General Accounting Office (GAO), Government Management
Issues, GAO/OCG-93-3TR (December 1992); and U.S. Congress, House
Committee on Government Operations, Managing the Federal Government:  A
Decade of Decline, Majority Staff Report (Washington, D.C., December
1992).

3. U.S. Congress, House Committee on Government Operations, p. v.

4. Kotter, John P., A Force for Change: How Leadership Differs from
Management (New York: The Press, 1990), pp. 3-18. In this book, John
Kotter distinguishes between leadership and management. Kotter defines
"leadership" as establishing direction, aligning people, and motivating
and inspiring people. "Management," on the other hand, is planning and
budgeting, organizing and staffing, and controlling and problem solving.
Management and leadership tasks also can be categorized as management of
inputs (people, buildings, materials, equipment), management of
processes, and management of results (outcomes, outputs, performance).
Leadership and management systems encompass those people, processes,
systems, groups, and organizations that carry out the tasks of managing
the executive branch of the federal government.

5. Specific issues concerning quality leadership and management are
listed in Federal Quality Institute, Presidential Award for Quality:
1994 Criteria (Washington, D.C.: Federal Quality Institute, June 1993).

6. Kotter, p. 6.

7. Carolyn Burstein, Federal Quality Institute, informed NPR on August
2, 1993, that a study by Kotter and Husked in Corporate Culture and
Performance "examined over 200 corporations [and] concluded that the
single most visible factor that distinguishes successful major cultural
change from change efforts that failed is strong support from top
leaders."

8. Ibid., GAO, p. 5.

9. Memorandum from Elliot Richardson, July 29, 1993.

10. Government of Australia, Department of Finance, Resource
Management--The Framework: An Overview of How Resources Are Managed in
the Australian Public Service (Australia, December 1992); Oregon
Progress Board, Oregon Benchmarks: Standards for Measuring Statewide
Progress and Government Performance, Report to the 1993 Legislature
(December 1992), pp. 1-6; and Florida Governor's Commission for
Government by the People, Final Report (1991).

11. Block, Peter, Stewardship: Choosing Service over Self-Interest (San
Francisco: Barrett-Koehler Publishers, 1993), pp. 3-22.

12. Ibid.

13. Empowerment undergirds diversity and social justice, two principles
necessary for successful implementation of "managing for results."
Diversity is simply differences among humans like gender, race, class,
and sexual orientation. Social justice is the ability to fully
participate in government programs as employees and customers.
Australia defined social justice in its Financial Management Improvement
Program as "equity, equality, and access and participation in government
programs." See Parliament of the Commonwealth of Australia, House
Standing Committee on Finance and Public Administration, Not Dollars
Alone: Review of the Financial Management Improvement Program (1990), p.
9. Government organizations that introduce a "managing for results"
culture but ignore diversity and social justice undermine their efforts
to become more effective and responsive to customers.

14. Government of Australia. See also Parliament of the Commonwealth of
Australia, House Standing Committee on Finance and Public
Administration; Oregon Progress Board; and Florida Governor's Commission
for Government by the People.

15. These criteria are consistent with the principles underlying
"managing for results." They are described in Federal Quality Institute,
Presidential Award for Quality: 1994 Criteria. The criteria are
discussed further in QUAL02: Improve Government Performance Through
Strategic and Quality Management.

16. The purpose of the Productivity Improvement Program (PIP) was ''to
improve the quality, timeliness, and efficiency of services provided by
the federal government." Unfortunately, the program experienced
fundamental conceptual and implementation problems.  Accordingly, OMB
now considers PIP "inoperative."

17. The term "agency" is used throughout this report to refer to
organizations reporting directly to the President, including cabinet-
level departments (e.g., Labor and Commerce) as well as independent
agencies (e.g., Environmental Protection Agency).

18. Lipnack, Jessica P., and Jeffrey S. Stamps, The TeamNet Factor
(Essex Junction, VT: Oliver Wight Publications, Inc., 1993), p. 96.

19. Interview with James Colvard, former Deputy Commander, Naval
Material Command, and former Deputy Director, Office of Personnel
Management, August 1, 1993.

20. The process of organizing a network like the executive branch into a
well-managed and effective organizational network is well known. Lipnack
and Stamps define an organizational network as having "independent
members with multiple leaders, a unifying purpose with lots of voluntary
links, and interacting levels." See Lipnack and Stamps, pp. 29-52.

21. Ibid., p. 96.

22. Executive Order 12816, Management Improvement in the Federal
Government, October 15, 1992.

23. Ibid., p. 3.

24. The Federal Quality Institute is currently part of the Office of
Personnel Management.

25. These would include, for example, the Federal Executive Institute,
the Federal Executive Development Centers, National Defense University
(and other professional military education institutions), Defense
Systems Management College, the GSA Interagency Training Center, and the
Department of Agriculture Graduate School.