3.2: Results-Oriented Transformation

Support the Transformation to Results-Oriented, High-Performing Government

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The overarching trends and long-term fiscal challenges facing the nation drive the need to change how the government does business in the 21st century. To become high-performing organizations, agencies must transform their cultures to respond to the transition that is taking place in the federal government’s role. By building fundamental management capacity, the federal government can improve its performance and deliver economical, efficient, and effective programs and services that the American people need in a cost-effective and fiscally sustainable manner. Focusing on accountable, results-oriented management can help the federal government better position itself to meet the new challenges and opportunities of this century. As part of its transformation efforts, the federal government needs to create a culture that moves from outputs to results, stovepipes to matrixes, hierarchical to more horizontal structures, an inward to an external focus, micromanagement to employee empowerment, reactive behavior to proactive approaches, avoiding new technologies to embracing and leveraging them, hoarding knowledge to sharing knowledge, avoiding risk to managing risk, and protecting "turf" to forming partnerships. People are an organization’s most important asset, and strategic human capital management should be the centerpiece of any effort to transform the cultures of government agencies. A focus on results, not just of the organization but of its contribution to national goals, is essential. In establishing a results-oriented culture that can reach its full potential, the organization and its leaders need to carefully select the best solution for the organization in terms of structure, systems, and processes. Information is an important asset that needs to be managed appropriately and effectively. Vital to successful transformation will be building the management capacity of federal agencies to support new ways of doing business—including human capital, financial, IT, and acquisition management. Though progress is being made on many fronts, much remains to be done. Today’s federal human capital strategies are not suited to meet current and emerging 21st century challenges or to drive needed transformation across the federal government. The federal government must have the capacity to plan more strategically, react more expeditiously, and focus on achieving results. Critical to the success of this transformation are the people who carry out the government’s business. Traditionally, this work was performed largely by permanent, career civil servants. Increasingly, however, nonpermanent federal employees, as well as contractors and other third parties, are playing a bigger role in carrying out agencies’ missions. We designated strategic human capital management as a governmentwide high-risk area, and it is one of the President’s governmentwide management reform initiatives. The area remains high risk because the federal personnel system is clearly broken in critical respects—designed for a time and workforce of an earlier era and not able to meet the needs and challenges of a rapidly changing and knowledge-based environment. While more progress in addressing human capital challenges has been made in the last few years than in the previous 25, improvements are needed in such areas as succession planning, knowledge transfer, pay and reward systems, recruitment and retention programs, and managing the multisector and blended workforce. As new agency-specific authorities and flexibilities are provided, it will be vital to have the institutional infrastructure in place to use them effectively. Critical institutional infrastructure includes agencies’ human capital planning capabilities; the ability of their management teams to use flexibilities effectively; and the presence of modern, effective, and credible performance management systems with appropriate safeguards. Agencies are confronted with long-standing and substantial challenges to becoming more results oriented. Since the 1990s, the Congress sought to instill a greater focus on results and accountability by enacting a statutory framework with the Government Performance and Results Act of 1993 as its centerpiece. Our work has shown significant growth in the number and types of results-oriented performance measures called for in the act. Managers’ perceptions of being held accountable for results also have grown. On the other hand, progress in building organizational cultures to create and sustain a focus on results has been uneven. To help agencies effectively manage their resources and link resource decisions to results, agencies and the Congress need credible, rigorous evaluations to assess whether current programs and policies remain relevant, appropriate, and effective. It will also be important for the Congress to take full advantage of the benefits arising from the reform agenda under way in the executive branch; to do so, the government must find ways to foster accountability in ways the Congress considers appropriate for meeting its role, responsibilities, and interests. Successfully transforming how the government does business depends on building high-performing organizations that network with key partners, both across and outside the government. Improved performance has been a primary goal of several recent restructurings, such as forming DHS, reorganizing the Federal Bureau of Investigation, and creating the National Intelligence Directorate. DOD is in the process of transforming its business operations, and the U.S. Postal Service faces the challenge of transforming its business model for the 21st century. However, government experience in reorganization has yielded mixed results. Future success will depend on identifying and implementing best practices of high-performing organizations operating in a complex, networked environment. Critical organization elements—structure, systems, and practices—must support achieving high performance. Leadership must set the direction, pace, and tone for the transformation and should provide sustained and focused attention over the long term. Establishing a chief operating officer position or chief management officer position with term appointments at selected agencies could help to (1) elevate attention on management issues and transformational change, (2) integrate various key management and transformation efforts, and (3) institutionalize accountability for addressing these issues and leading this change.Information is a vital resource that needs to be properly managed. The growth in electronic information as well as new security threats facing the nation highlight challenges to effectively collecting and disseminating information that agencies need to take into account in developing new programs. While it is important to enhance the government’s use of new technologies to improve collecting and disseminating government information, it is also important that this information—especially that collected for statistical purposes—meets the current needs of federal programs, policymakers, and the public. In areas in which the U.S. economic and social structure is undergoing major change, statistical agencies need to respond to these changes with relevant data on a timely basis. Timely, accurate, and useful financial information is essential for making operating decisions day to day; supporting results-oriented management approaches; and managing the government’s operations more efficiently, effectively, and economically. Yet the federal government’s financial management has suffered from neglect, and financial systems have serious shortcomings. IT is a key element of management reform efforts that can dramatically reshape government to improve performance and reduce costs. However, numerous poorly managed IT systems have produced multimillion-dollar cost overruns, schedule slippages, and poor results. Further, poor information security remains a high-risk area across the federal government with potentially devastating consequences. Electronic government offers many opportunities to better serve the public and reduce costs, but the federal government has not reached its full potential in this area. Effective acquisition management plays a key role in creating and sustaining high-performing organizations. Despite reforms to transform the federal acquisition process, the government still does not have a world-class purchasing system. All too often, many of the products and services the government buys cost more than expected, are delivered late, or fail to perform as anticipated. Encouragement of strategic contracting approaches that seek greater efficiencies as well as improvements in management and accountability are needed to produce better outcomes. Agencies are considering other approaches for achieving greater efficiency and effectiveness in their operations, including appropriate use of contracts with the private sector. After a yearlong study, the Commercial Activities Panel developed a set of principles to be used in addressing sourcing decisions and recommended that the public and private sectors compete for the opportunity to perform commercial functions. Competitions can be based on the established framework of the Federal Acquisition Regulation. Changes published by the Office of Management and Budget in its Circular No. A-76, Performance of Commercial Activities, are generally consistent with the panel’s recommendations. However, this competitive sourcing initiative is a major change in the way government agencies operate, and successfully implementing the circular’s provisions will require that adequate support be available to federal agencies and employees. We will follow developments in this area closely.

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