Executive Branch Redesign by Systems Approach

Redesign the existing set of control mechanisms for the executive
branch, using a systems design approach. (2)

The President's Management Council (PMC) should create a streamlined and
cost-effective management control system for the federal government. It
should begin by documenting the existing system of requirements for
control (laws, regulations, rules), classifying the types of methods
used (audit, reviews, evaluation), and identifying who does them. It
should then assess alternative approaches to use as benchmarks and
design a new vision of management control. The PMC should then use this
information to design a new, more cost-effective system on behalf of the
American taxpayers.

The new management control system should reflect four characteristics:

1.     It should be based on systems thinking. Subsystems, such as
audits, inspections, investigations, reviews, appraisals, and
evaluations, are part of the overall management system. These subsystems
must be better defined and their interrelationships better understood in
order to eliminate costly redundancy and confusion over accountability.

2. Line managers must be accountable for, and have authority over,
management processes and systems. While this is an axiom in high-
performing organizations, it is uncharacteristic of today's federal
government. The new management control system would:

--- Have line management primarily responsible for management control
and be given the necessary resources to accomplish this (e.g., program
evaluation staff).

--- Have staff organizations performing a secondary support role for
management control. Staff oversight would be minimized, though
sufficient to ensure that line managers perform their control functions
(i.e., by reviewing their control and improvement systems).  Staff
should not normally perform control functions for line managers (unless
fraudulent activity is suspected).

--- Shift the emphasis from compliance audits, performed by external
staff organizations, to ongoing reviews and monitoring performed by line
management. Oversight activities must be integral to line management's
overall management control system.

3.     It should be based on trust, not mistrust. The current approach
to management control and staff oversight emphasizes the negative,
causing employees to resist management controls rather than use them as
guides for improving. Management in high-performing organizations
assumes that most people, under most circumstances, are honest,
well-intentioned, and eager to contribute to the organization's goals.
The small minority who are not well-intentioned should be dealt with
accordingly. The government's current approach implies that all
employees are suspect; this does not create an atmosphere for
constructive improvement.

4.     It should be based on measurement and feedback. According to
private sector quality management experts, "The right measures are
critical to the effective management of work process. If you cannot
measure your results, then you cannot control your process and improve
your performance."(5) A key principle of measurement and feedback is
that people respond to what is measured. Redirecting government from an
emphasis on input measurement toward measurement of outcomes, results,
and customer satisfaction will be a major step toward this objective.

A second private sector measurement principle is based on the fact that
there is variation in all processes. As a result, managers must properly
analyze and interpret the meaning of their production data.(6)

The final measurement principle recognizes that waste is present in all
processes to varying degrees, but management and employees must
continually reduce waste.(7) Some Baldrige Quality Award winners have
succeeded in greatly reducing waste. For example, thanks to its "Six
Sigma Program," Motorola now has some manufacturing processes that
produce less than 3.2 defects per million potential defects.