COMMENTARY

5 top management priorities for 2011

Steve Kelman is professor of public management at Harvard University’s Kennedy School of Government and former administrator of the Office of Federal Procurement Policy.

Here’s a list of the Obama administration’s best options for improving the management of government programs and operations. With one exception (see item no. 1), they aren’t new. But the 2010 elections highlighted the role and performance of government, and perhaps will provide an opportunity to move some oldies-but-goodies along.

1. Adopt the recommendations of the Bowles-Simpson deficit commission. I disagree with some aspects of the plan, as others probably do, too. But everyone knows the deficit is unsustainable in the long term, and if everybody supports only the particular mix of program cuts, entitlement changes and tax increases most compatible with their ideology, we will remain deadlocked. Although some would say the recommendations are a matter of policy and not management, I would suggest there is nothing better we could do to improve the standing of government in the minds of Americans than to make a serious effort to reduce the deficit.

2. Focus on high-priority goals. Using metrics is the government’s version of using profit to improve business performance. The Obama administration has taken a decisive step by changing the focus of measurement from a compliance exercise driven by the Office of Management and Budget to a tool for agency managers to use to improve — and not just report on — performance. In addition, each Cabinet agency has adopted five or so high-priority goals, with targets for improvement in the next two years. Information about the goals, including who has ownership of them, and quarterly progress reports will start appearing on the Web soon. Full disclosure: My wife, Shelley Metzenbaum, is in charge of this effort at OMB.

3. Get serious about incremental development on IT projects. The old way of developing major applications in one fell swoop has produced many disasters. Introducing new systems in quick increments gives users a chance to react to them and suggest changes, thereby reducing rework down the road. That approach also provides momentum for projects that have good chances of success while allowing exits from bad projects before too much money is spent. Finally, project increments align better with the short time horizons of political executives, increasing the chances that those leaders will take an interest in moving the systems forward.

4. Move contracting resources to the front end and back end. The acquisition workforce needs to be beefed up, but in a time of resource scarcity, we must also find ways to redirect existing capacity. Source selection is the most bureaucratic and lawyer-intensive stage of the process and generally adds the least value. I recommend relentlessly pursuing the changes of the 1990s that streamlined source selection and redirecting resources to higher-value areas: working on requirements, contract type and incentives upfront before the solicitation comes out and managing the contract for results after it has been signed.

5. Give agencies incentives to cut costs and be more efficient. Agencies typically find that savings are subject, in effect, to a 100 percent tax rate, with all the money being taken away by OMB and Congress. Not surprisingly, that discourages agencies from seeking savings, especially because it is often painful to do so. We need to experiment with alternatives for allowing agencies or contractors to keep a portion of the savings they generate. For example, we could pay a portion of demonstrated savings to employees or establish a fund for future program use. On the contracting side, I recommend reviving share-in-savings contracting, the best management improvement idea that has been abandoned in the past decade.

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Reader comments

Sun, Dec 12, 2010 Robert Knisely Annapolis MD

Steve (and RT!): Our debt is caused by the regressive nature our taxation. The BS Commission is guilty of this as well. See the GAO study (2004) showing that most US corporations only pay taxes of about 3 - 5%. Also, we will need to REDESIGN governmental interventions. Why pay MSHA in DOL to regulate coal mining when a requirement that mine owners pay the estates of dead miners say, $10m, would align the interests of the mine owners and their insurance companies to reduce injuries and deaths?

Fri, Dec 10, 2010 Dave K

No matter how good the performance of government, if it's performing roles outside of it's legitimate concern, we will have increasing debt.

Thu, Dec 9, 2010 Steve Kelman

Thanks, RT. I think the incremental approach is already used successfully throughout industry and sometimes in government. The current issue of Information Age magazine actually has an article on introducing agile software development in GE Healthcare. There is actually a Kennedy School case on the Army's use of an incremental approach successfully to develop their IT recruiting solution for the AVA as long ago as the 1980's!

Thu, Dec 9, 2010 RT

In the 'incremental' approach - why is it that you can never provide even a imaginary example of what would work? An incremental approach is workable if you have a mature enterprise architecture - please give some examples of problems that can be solved in in an incremenal approach. mostly that seems like bulltwinkie to me. OK, so the big project solution is also bulltwinkie. Lets just pack up and go home. sigh.

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