Steve Kelman


By Steve Kelman

Government contests come of age

Shutterstock image: illuminated light bulb signifying an innovative idea.

When I first started writing about using contests as an innovative way to procure some products or services, some 10 years ago, they were largely unknown in government. The Defense Advanced Research Projects Agency was the early adopter -- plowing the ground, literally and figuratively, by organizing a contest where people could enter all-terrain vehicles that would have to navigate a desert obstacle course. The first to do so won the contest, and a prize.

As an ultimate form of pay-for-success contracting, and (as it developed) as a way to encourage non-traditional players into working to meet government needs, contests -- I am about to give in to government-ese, and call these “challenges” -- have immense virtues for meeting certain kinds of public purposes.

I knew challenges were spreading, a fact recognized by the Harvard Kennedy School giving its Innovation in American Government award to, the GSA contest site. But I had no idea just how big these have become until I read, in a recent Deloitte report called The Craft of Incentive Prize Design, that the U.S. federal government alone has organized some 350 challenges -- and hundreds more have been organized by state/local governments and by philanthropic foundations.

This may be one of the single largest changes in government management in the last decade. (My nominations for the others would be increased use of performance measurement and government's use of social media.)

We now have enough accumulated knowledge about specifics for how best to manage challenges to justify this quite meaty, very useful 52-page (excluding appendixes) Deloitte tome. The report notes that agencies use challenges for different purposes: Mired in the original DARPA example, my own mental model was contests used to develop innovative products or apps, physical things. However, as the report notes, this is only one use of contests. Challenges can also be used to develop ads or slogans for campaigns to raise awareness of public problems, to develop new ideas for policy approaches to problems, or to develop skills one would like to see spread more in the population.

The Deloitte guide is filled with very practical, very operational advice, including:

  1. Consider dividing a big challenge into a number of smaller contests, which will attract a wider range of participants and a wider skillset;
  2. With the increasing number of challenges, be sure to have a marketing campaign to publicize awareness of the challenge, because otherwise there is a danger of getting lost in the clutter;
  3. Adapt the nature of prizes to what the challenge involves – for some kinds of challenges, ownership of intellectual property is important, or introductions to venture capitalists, while for others, public publicity and praise is crucial;
  4. Think about who will do the judging in advance, and be sure to resource judging sufficiently.

These are just a few, almost random, examples from the report. Deloitte has performed a real public service by releasing this, and I urge anyone in the challenge business, or considering dipping your feet into it for the first time, to read carefully.

Posted on Jul 11, 2014 at 12:02 PM0 comments

Thoughts coming off the 4th of July

steve kelman

As some of my Facebook friends are aware, I try to be conscientious about remembering the religious holidays and national days of places and faiths where I have a significant number of Facebook connections. So on the morning of the Fourth of July, not surprisingly, I posted a status update sending U.S. Facebook friends best wishes for the holiday. But I decided to add an additional twist, partly to see what kind of reaction, if any, it would get.

I posted that I was "wishing U.S. Facebook friends best wishes for the Fourth of July. Hope that non-U.S. Facebook friends will join Americans in celebrating: for all our (many) faults, the U.S. represents values of respect for people, freedom, democracy and opportunity that are important for people everywhere."

The post got a pretty large reaction, 89 likes. But what was more interesting, I think, was who liked the post:

  • 44 Americans
  • 41 non-Americans
  • 4 non-Americans currently living/studying/working in the U.S.

Think about this for a second. If I post a Facebook greeting for the national days of China, Mexico, Taiwan or Sweden, it is overwhelmingly Chinese, Mexicans, Taiwanese, or Swedes who "like" the greeting. Few Swedes like a post about China's national day, or vice versa. But it's not just us Americans who (not surprisingly) like ourselves. Others, or at least some others, like us too.

It's not too hard to find reasons why people from other countries might not like us. People in the United States are killed in mass shootings with horrible frequency. Our political system is mired in gridlock. We get involved in a lot of wars. And, of course, we are rich and powerful, which can evoke jealousy.

But we have something going for us, which is an idea. As one of the "likers" of my Facebook greeting, a Mexican, wrote: "I congratulate all the American friends, and generally to modern democracies, inspired by the independence of the United States of America (the independence of 1776, the foundation of freedoms in the world); these countries have promoted development of freedom, equality and democracy. Congratulations on the 4th of July."

I'm going to put it very abstractly -- the American idea is about respect for the worth of people, the idea that all are precious and all should have a chance to make something of ourselves. It is an idea that is very far from realization in many, many parts of the world -- and indeed, it is realized imperfectly here inside the U.S. as well. But it is still an idea that inspires and that lies behind the many around the world who wish us, and the United States, well.

My Facebook post, and the reaction to it, reminded me.

Posted on Jul 07, 2014 at 6:48 AM3 comments

Hate 'the' VA, love 'my' VA

steve kelman

Veteran Jack Chisholm said he has "nothing but praise" for VA hospitals. "My appointments over there were on time. I always saw the doctor, and I never had to wait." Procedures "were done promptly. [People] were friendly."

"I've seen the highs and lows, and right now it's at its peak," said Bill McCarthy, a VA patient since 1969.

Do those quotes predate the recent VA scandal? Where do they come from?

The answer is that they appeared this week in a front-page article in the Concord Journal, the weekly newspaper of my hometown in Massachusetts. The story explains how veterans swarming into Sunbelt cities such as Phoenix have created problems that don't exist in Massachusetts.

The quotes and the article illustrate a general principle of social and political life.

As political scientists have long noted, Americans hate Congress but love their congressmen. According to the latest polls, about 8 percent of Americans think Congress is doing a good or excellent job. Yet year after year, 90 percent of incumbents are re-elected. This year, of 293 members who faced primary battles, only two lost.

That gap between institution and individual goes far beyond Congress. People are very dissatisfied with the health care system but like their own doctors, for example. It also applies to government: A study from the 1970s called "Bureaucratic Encounters" found that people had poor opinions of most government agencies but positive views of their personal encounters with them.

What is going on here, and how should government agencies react?

Partly, this reflects media coverage in the way I discussed in a recent blog post on media life and real life. People's opinions of institutions are influenced by what they read in the media, which is often negative, while their opinions of the individuals at the institutions are more often based on personal experience.

But I think there's more to it than that.

Discussions of institutions in general are colored by populism and people's distrust of big, powerful forces, while discussions of individuals involve people more like us. That in turn helps drive the difference in the national and local media, which cover institutions versus local individuals, respectively.

What are the implications of this difference?

For one thing, realizing that this is the case should -- and (conceivably) might -- reduce the hyperventilation at agency headquarters in Washington every time one of these scandals breaks by providing a bit of a reality check.

Practically, for agencies lucky enough to have a field structure that has some interface with the public -- something that by no means applies to every federal agency but probably more than you would imagine -- this suggests cultivating a local-office focus for building support. Agencies might have local allies of whom they are insufficiently aware.

Posted on Jul 01, 2014 at 1:42 PM0 comments

This could be the start of something big

Shutterstock image.

When it comes to future performance, how important are the early managerial choices made by leaders of a new organization -- or by leaders of a new cross-organizational collaborative enterprise or new unit within an organization?

I would guess that many of us suspect these early choices are often important. And there is a whole strand of social science research, called "path dependence theory," that argues that people, organizations, and even countries can early on start on a path, maybe even by chance, that gets reinforced over time: The classic example from the literature is the QWERTY keyboard system, which was originally developed to slow people down using a typewriter because the keys would jam if pounded too quickly, but remained in the age of electric typewriters and then computers because people had invested in learning the old system.

I often discuss the research of other scholars in this blog, and, prompted by the spread of online transmission of academic papers, I have now decided briefly to discuss some research of mine (together with Sounman Hong of Yonsei University in Korea), which has just been published online at the Journal of Public Administration Research and Theory.

I have been studying a cross-agency anti-crime collaboration in British local government called Crime and Disorder Partnerships, whose mission has been to promote collaboration across agencies to fight crime. Established in 1998 in local governments throughout England, these partnerships involve the police, probation, youth social workers, the fire department and local city service organizations such as lighting.

It is possible to measure their success by looking at differences across the local partnerships in changes in crime rates over the following decade. I undertook a survey of the relatively modest number of first leaders of these partnerships I was able to locate, and asked them a bunch of questions, including asking them to rank the importance of different management priorities that could be used to get the organization off to a good start. Those priorities ranged from working to create trust among partners to promoting a common vision for the partnership to establishing a performance measurement system and following up as a leader to make sure partners kept the commitments they made.

What I found in the paper is that these early choices actually did have an impact on crime a decade later! Partnerships whose leaders got them off to a good start through some kinds of choices had better crime performance than those who made different choices.

So what kinds of early choices worked and what kinds didn't?

This will obviously depend on the type of organization and the situation they face. But these partnerships needed to bring about an organizational change in the participating organizations, which were not used to collaboration and often had mutually suspicious cultures (for example, police and social workers).

I divided up the management approaches into those that tried to initiate change by changing first the attitudes of participants (e.g. trust building) versus those that tried to start by changing behaviors (e.g. getting partners to share information). The results showed that prioritizing measures to change attitudes first did not reduce crime a decade later, while choices that prioritized changing behavior first did improve crime performance.

That's a lesson with general significance for getting organizational change started.

Posted on Jun 26, 2014 at 7:51 AM3 comments

Pinocchio, George Washington and the challenge of promoting honesty

An advance online copy of the latest issue of the highly regarded journal Psychological Science recently appeared, and it contains an article that caught my eye: "Can Classic Moral Stories Promote Honesty in Children?" by a team of Canadian psychology professors headed by Kang Lee of the University of Toronto.

The article reports on lab experiments involving three- to seven-year-old children. In the experiment, the children sat at a table with their back to the experimenter, who explained to the kids that she was putting an object (like a rubber duck) on the table and would let the child hear a sound associated with the object (e.g. quacking). The child had to guess what the object was, based on the sound. At one point during the experiment, the researcher stated she had to leave the room briefly because she had forgotten the story book she had promised to read the child after the experiment. She told the children not to turn around to look at the object while she was gone. Then, while she was away, a hidden camera recorded whether the child turned around to look -- which most did.

The stories she then read the children were randomly varied (that's what you do in an experiment). Some heard "The Tortoise and the Hare" -- this was a "control" condition, a story whose moral message was not relevant to the question at hand. Some heard "Pinocchio," in which Pinocchio is punished with a nose growing longer every time he tells a lie. Some heard "George Washington and the Cherry Tree," where Washington told his father that he couldn't lie and had chopped down the tree, after which his father praised him for his honesty and didn't punish him.

After reading the stories, the experimenter, for the Pinocchio story, said the following to the children: "I'm going to ask you a question, and I don't want you to be like Pinocchio. I want you to tell me the truth, OK?" After the participant agreed to tell the experimenter the truth, she asked, "Did you turn around and peek at the toy when I left the room?" For those hearing the George Washington story, the wording was slightly different: the experimenter told the children, "I want you to be like George Washington in the story."

What the experiment then measured was the percentage of children in each of the experimental conditions who told the truth that they had peeked.

The results? Exposing the children to the story of the punished Pinocchio did not increase the percentage of children who told the truth about peeking (this was about 30 percent) compared with the control group. But exposing the children to the George Washington positive role model did -- about half told the truth.

To confirm the findings, the experimenters afterward read a group of children a negative version of the George Washington story, where he tells a lie, his father discovers the lie, and the young Washington is punished by having his axe taken away. When the punishment version of the story was read, the children were as likely to lie as those who heard the Pinocchio story.

I found these results fascinating. I believe they have implications for managers, and also for the way we typically approach "accountability" in government.

It's of course not straightforward to extrapolate from kids to adults, or to extrapolate from lying to other kinds of ethical behavior in the workplace (or workplace performance more generally). But modeling positive role models in the workplace is relatively easy for a manager to do -- it is a workplace performance-improvement technique managers can use without any legal or regulatory changes in their authority. (These are always the kinds of techniques government managers should look to first, given that formal managerial authority is likely to be less in government than in private organizations.)

Equally important is that the example of punishment didn't seem to help. Much of our "accountability" rhetoric -- where "accountability" is as much a nicer way to say "punishment" as it is anything else -- is based on the argument that the fear of punishment will promote good workplace behavior. Maybe not.

Posted on Jun 20, 2014 at 10:35 AM4 comments

A U.S.-China high-tech trade war?

U.S.-China conversation.  Shutterstock image.

In the wake of the U.S. government indictments of Chinese army officers said to be part of a cyber-hacking, there are warning signs that the Chinese government may be creating problems for U.S. high-tech firms selling in China, which if it continues risks a nasty trade war.

There is a perfect storm of factors that makes the Chinese government suspicious of U.S. IT. The first is that it can give Chinese people access to foreign information and communication channels. Both Google and Gmail, which operate out of Hong Kong after the company left mainland China to protest website blocking, have been periodically unstable and/or unavailable inside China. In the weeks before the 25th anniversary of the Tiananmen Square massacre in early June, the two sites became just about completely unavailable. As of this writing, two weeks after the anniversary, both are still unavailable, except for Gmail accounts set up as a smartphone app.

Second, of course, the Chinese government would like to foster development of their domestic IT industry, with national champions replacing foreign (read U.S.) firms.

Third is the Chinese anger over the U.S. indictments, and worry about U.S. cyber-espionage in China in the wake of the Edward Snowden revelations.

Since the indictments, statements or rumors about Chinese restrictions on U.S. tech firms have multiplied. So far the only officially announced restriction has been a clause in an obscure Chinese government procurement spec for energy-saving PCs and laptops, which stated that “all computer products are not allowed to install Windows 8 operating system.” (The link to this slightly weird announcement is -- it is in Chinese, but GoogleTranslate will translate for you.)

However, there have been rumors, discussed in a detailed New York Times article, about restrictions on purchases of IBM servers by (state-owned) Chinese banks, on government purchases of Cisco equipment, and even on government agency use of Western consulting firms. (All these actions or rumored actions involve only government agencies and maybe state-owned companies, but it is assumed that large private companies would follow the government’s lead if asked, unless there are strong technical or quality reasons not to.)

During a recent trip to China, I had a conversation about this with a U.S.-educated Chinese entrepreneur who also is a senior advisor to the government on tech issues. He presented the only issue as being Chinese worries about the security of U.S. products and the danger of U.S. spying -- arguing the risk was high that U.S.-manufactured products would have back doors allowing access to internal data.

This was, of course, the worry Americans have had about Huawei tech gear in the United States, which has led to that firm being excluded from U.S. government business. The worries seem more justified on our end, frankly, because Chinese firms, even private ones such as Huawei, are under much more government influence and direction. I stated to my friend that even if the U.S. government asked Microsoft to routinely install back doors in Windows8, the company would likely protest and resist -- if for no other reason to reduce the risk of lost sales if such back doors were revealed. (Microsoft and some other U.S. tech firms make source code available to customers who want to check for back doors.)

He then retreated to a different argument: that Windows8, installed in Chinese machines, would automatically send back information to Microsoft in the United States, where the U.S. government could then access it. This accusation also appeared on a Chinese TV report on Windows8. I am not a techie, but I don’t understand what useful data would be available to Microsoft from Windows8 users unless the data were stored on a Microsoft cloud, which is a separate issue.

I hope the Chinese government will reconsider steps that could easily produce a trade war, since the ability to export high tech is very important to the United States. I spoke with a U.S. tech industry official very knowledgeable about U.S.-China tech issues, and he said that he believed Chinese anger over the cyberspying indictments was a very important part of the reactions that have recently taken place. If so, that is actually good news: tempers can cool, but a policy aimed at keeping U.S. companies out of the Chinese market for reasons of economic advantage is harder to reverse.

Stay tuned.

Posted on Jun 17, 2014 at 6:55 AM1 comments

A story that makes federal IT look good

Shutterstock image.

(Image: Shutterstock)

A recent issue of BloombergBusinessWeek had a cover story on problems at IBM. The story as a whole was an interesting one, but what caught my eye, and the reason I discuss it here, was the story's leadoff, which featured the contest between IBM and Amazon for the big CIA cloud computing contract. (A story, incidentally, that was first broken by FCW.)

Basically, the first three paragraphs of the BusinessWeek story were filled with praise and recognition for federal IT. The author made two relevant points. The first was that winning the CIA contract would give the winner major bragging rights: "Whoever won…could boast that its technology met the highest standards, with the tightest security, at the most competitive prices, at a time when customers of all kinds were beginning to spend more on data and analytics."

The second was that the CIA did not make the easy choice, but really seemed to care about best value. IBM "would have been a logical, even obvious, choice. Big Blue had a decades-long history of contracting with the federal government, and many of the breakthroughs in distributed computing can be traced to its labs." Amazon was actually more expensive than IBM, but the government was not convinced that IBM's solution would work, calling it "uncompetitive."

Let me draw some larger points from the article. The first is that the government, I think, tends to underestimate its clout in the marketplace -- a point I made in a different context last week. The story notes that winning this CIA contract would help a commercial IT firm in the commercial marketplace. Obviously, not all agencies are the CIA, and (no offense intended) a victory on an analogous contract for the Department of Agriculture would not give the winner the same boost. But there are niche commercial markets where even less-prestigious government agencies may have cachet.

The government needs to be more sensitive than it is to the influence its contract award and contract management decisions can have in the commercial marketplace. (The flip side, of course, is that when commercial firms are working on government contracts that go badly south, this will often produce negative media that will hurt the firm's image in the commercial marketplace.) I think that agencies are often not demanding enough of their contractors, and that understanding government's marketplace clout is important to improving the government's backbone, especially during contract performance.

One implication of this line of argument is that it is another reason for government to prefer vendors with a significant presence in the commercial marketplace over those that focus primarily or exclusively on government-unique. This source of government clout applies most strongly to firms competing in the commercial marketplace, where reputation plays a stronger role than in government procurement. (As a technical matter of the procurement rules, if the government wants to give some evaluation preference to vendors with significant commercial marketplace presence, it needs to state this in the RFP, and explain why this preference has a reasonable basis.)

The second point I got out of the BloombergBusinessweek kudos was that the government did not take the easy, cautious way out; CIA contracting officers actually used their judgment. There are lots of incentives for caution in government, and certainly (too many) cautious procurement source-selection decisions, but this behavior by the CIA -- like the GSA's decision to look for a radically different way to use the government's building assets that I discussed last week -- is more common than cynics believe. It should be cherished.

Posted on Jun 13, 2014 at 9:29 AM0 comments

Can social media make every civil servant an innovator?

Social Media Tree

(Image: Shutterstock)

Innovation, particularly in government, can be very hard. Lots of signoffs, lots of naysayers. For many, it's probably not worth the hassle.

Yet all sorts of examples are surfacing about ways civil servants, non-profits, startups and researchers have thought to use social media -- or data mining of government information -- to get information that can either help citizens directly or help agencies serve citizens. I want to call attention to examples that I've seen just in the past few weeks -- partly to recognize the creative people who have come up with these ideas, but partly to make a point about the relationship between these ideas and the general issue of innovation in government. I think that these social media and data-driven experiments are often a much simpler way for civil servants to innovate than many of the changes we typically think of under the heading "innovation in government." They open the possibility to make innovation in government an activity for the civil service masses.

One example that was reported in The New York Times was about a pilot project at the New York City Department of Health and Mental Hygiene to do rapid keyword searches with phrases such as "vomit" and "diarrhea" associated with 294,000 Yelp restaurant reviews in New York City. The city is using a software program developed at Columbia University. They have now expended the monitoring to occur daily, to get quick information on possible problems at specific restaurants or with specific kinds of food.

A second example, reported in BloombergBusinessWeek, involved -- perhaps not surprisingly, given the publication -- an Israeli startup called Treato that is applying a similar idea to ferretting out adverse drug reactions before they come in through FDA studies and other systems. The founders are cooperating with researchers at Harvard Medical School and FDA officials, among others. Their software looks through Twitter and Facebook, along with a large number of patient forum sites, to cull out from all the reports of illnesses the incidents that may well reflect an unusual presence of adverse drug reactions.

These examples are fascinating in themselves. But one thing that caught my eye about both is that each seems high on the creativity dimension and low on the need-to-overcome-bureaucracy dimension. Both ideas reflect new and improved ways to do what these organizations do anyway, which is gather information to help inform regulatory and health decisions by government. Neither requires any upheaval in an agency's existing culture, or steps on somebody's turf in any serious way. Introducing the changes doesn't require major changes in an agency's internal procedures. Compared to many innovations in government, these are easy ones to make happen. (They do all need some funds, however.)

What I hope is that the information woven into social media will unlock a new era of innovation inside government. The limits of innovation are much less determined by difficult-to-change bureaucratic processes and can be much more responsive to an individual civil servant's creativity.

Civil servants, particularly young ones, go forth!

PS: I was also interested to see, while recently in China for a few days, a lead story in China Daily about the Chinese Center for Disease Control and Prevention exploring using big data web searches for help on early detection of flu outbreak!

Posted on Jun 11, 2014 at 8:39 AM0 comments

2 1/2 cheers for GSA, Donald Trump and the Old Post Office

Donald Trump plans to convert the historic Old Post Office building on Pennsylvania Avenue into a luxury hotel.

A long story in The New York Times business section just recently got around to informing non-Washingtonians such as me that the Old Post Office on Pennsylvania Avenue is passing into the control of Donald Trump. The real estate mogul is planning to build a luxury hotel on the property, which he says will be ready in time for the Inaugural Parade in 2017.

My immediate reaction as an outsider who adores the Old Post Office was joy about what was going to happen to it. Its recent mixed use, with restaurants and federal offices, hasn't worked -- largely because government building security checks make it unattractive for the general public to go inside.

But as I thought about the story, I also started contemplating the things it says about American government and society that have nothing specifically to do with the Old Post Office. And most of them reflect well on our country.

The first thing I thought about was that the government had given the contract to develop the property to Trump. (Eighty firms had originally showed interest, and 10 had submitted bids to the General Services Administration.)

Wait a minute! This is the same Donald Trump who tried to run against Barack Obama for president and who was the highest-profile figure associated with the "birther" suggestion that Obama was not born in the United States. Yet the fact Trump had won a high-visibility government contract to develop an iconic building in the middle of Washington passed without notice.

In many, many countries around the world it would be unthinkable for a prominent opponent of the government to win a contract such as this -- or any government contract, for that matter. And this feature of our government is not only great from a perspective of public ethics, but also great in terms of long-term economic growth and prosperity for our country. The bestselling book, “Why Nations Fail,” by MIT economist Daren Acemoglu and Harvard political scientist James Robinson, argues that the ability to do well without having political connections is a crucial determinant of incentives for individuals to succeed through innovation and entrepreneurship rather than though obtaining government favors.

The second notable feature of this deal was that GSA innovated to find a new future for the Old Post Office. Dan Tangerlini, GSA's dynamic chief, is quoted in the Times as saying, "It's a beautiful, historic, iconic building, right on America's Main Street. But the truth is, it's not useful as an office building in the 21st century. It was best to find a private-sector partner to redevelop and put it to better economic use."

GSA, of course, has traditionally been in the business of managing government-owned building stock for government use. It's not easy, cognitively or culturally, to think a bit outside the box to develop a completely different approach to using this asset.

A third thing that caught my eye was Trump's confident statement the building would be ready for guests in time for the 2017 inauguration. Here my observation was less flattering to government. Almost 20 years ago, New York City handed over renovation of an iconic skating rink in Central Park to Trump after various delays in the city's own procurement process. It was noted at the time that Trump had a powerful weapon to keep the contractors he hired on schedule -- the threat to cut them off from other business his empire did with them.

Today the federal procurement process works better than in the past, and it is conceivable a government-managed procurement could also meet this 2017 deadline. But I wouldn't bet the farm on it. Government needs to learn that it too is a big customer, and it too should use its clout more aggressively than it does to get contractors to perform well.

Posted on Jun 06, 2014 at 1:01 PM3 comments

Media life and real life

Shutterstock image.

Last week on CNN, I saw a story about a special late-night House hearing that had been held the evening before to grill Veterans Affairs Department managers about the Inspector General report on wait list problems at the VA Phoenix (and perhaps other) hospitals. Members were unable to contain anger and emotion. The gruesome drumbeat that Secretary Shinseki's "head" would have to "roll" -- which culminated in his May 30 resignation -- grew louder.

I worked at home that morning, because I had on my calendar to attend the citizenship ceremony in Boston's historic Faneuil Hall for the Peruvian-born wife (of four years) of a former student of mine at the Kennedy School with whom I've remained friends.

To get to Faneuil Hall, I needed to take my commuter rail train, run by the regional public transportation system, all the way into the last stop, North Station, rather than getting off in Cambridge as I usually do. That was fortuitous, because I was going to need to stop at the lost and found at North Station to check if by any chance the briefcase I had left on a bench at the Cambridge station the night before was there. I had been carrying both my gym bag (which I often do) and a big bag of bagels I had just bought (which I seldom do) as well as my briefcase, and almost at my stop, I noticed there was no briefcase next to me at my seat. (If faithful readers recall earlier blogs about lost items, the answer is, "Yes, I am a very absent-minded professor.")

The conductor helped me look around the train (I had changed seats after getting on), and then, shortly after I was to get off, I realized perhaps I had left the briefcase at the Cambridge station. The conductor thought for a second and then said, "You know, I think I saw a bag on the bench in Cambridge."

Was he going back to Boston on the same train once it had reached its destination, I quickly asked him? Yes, he replied. The train was about to leave my stop, but he quickly said: "Let me check on the bench when I come back to Cambridge. If I find it, I will deliver it to the lost and found at North Station."

No time to get a name or number.

So when I arrived the next morning at North Station, I was slightly nervous. But sure enough, the bag was in the lost and found.

I asked the woman at lost and found whether the conductor had left a name, and told her the train I had been on. He had not. By coincidence, though, another conductor interrupted and said he worked that same train. I gave him a description of the man, my business card, and a request for him to contact me. I would like to invite him for lunch or something at the Harvard Faculty Club.

Then I went to the citizenship ceremony, where my friend's wife and 277 other new Americans were naturalized. (Coincidentally, the conductor who helped me, judging by his accent, was an African immigrant.) As it happens, the former student, Ned Shamon, works for the Veterans Health Administration on hospital cost accounting and management improvement. I asked him (and his boss, who was also there) if people were talking much about the scandal, and whether it was affecting their jobs.

"No, not really," Ned answered. "We just need to go about our work and do everything we can to improve the system, just like we were doing before." His boss told me something about the eight different priority groups for veterans being served at VA hospitals, down to priority 8 (the classification he was in), which were veterans without any injury either service or non-service related, who could get free care at VA hospitals if there was space for them. Many, he said, used the hospitals just to get the very inexpensive prescription medications veterans can get. It sounded like the situation was slightly more complicated than the media accounts suggest.

I tell these stories of media life and real life not to bash the media. Their watchdog role is invaluable, and it is good they are on the lookout for misdeeds and shortcomings. I agree with those who say that media coverage is often unbalanced -- all the evidence of areas where the veterans hospital system is considered a model for healthcare, ahead of many private hospitals, gets completely forgotten in the white heat of scandal and the hunt for retribution -- but that's just the way things are, and not much can be done about it.

But my two experiences last week reminded me that we need to balance the media's laser focus on scandal and misdeed with the experiences of real life. A public servant again went out of his way to help a customer in need. Ned and his colleagues at the Veterans Health Administration in Bedford, Mass., are trying to do a good job helping veterans. As we watch media life, let's also remember real life.

Posted on Jun 02, 2014 at 9:37 AM5 comments

What's so scary about performance ratings?

man graphs performance

A May 26 front-page article in The New York Times, with the scary title "Colleges Rattled as Obama Seeks Rating System," began by stating that college presidents are "appalled" by an Obama administration plan that "would compare schools on factors like how many of their students graduate, how much debt their students accumulate and how much money their students earn after graduating."

I am a professor, working at a university. I am also an advocate of using performance measurement to improve organizational performance. Should I feel "rattled" by the administration's effort?

The basic worries the college presidents expressed in the article were that the measurements could have perverse effects. (Sound familiar?)

Two in particular were cited in the article. The first was that measures of how much students on average earn after they graduate would penalize schools that trained more students in liberal arts, where salaries are lower compared to those for students with degrees in finance, and those that prepared students for poorly paid public-service careers such as social work or even teaching. A focus on post-graduation income would distort the behavior of universities towards a more-narrow view of their mission.

The second worry cited was that comparisons of debt load, or the measures of graduation rates and even post-graduation income, would discourage universities from taking a risk on students from disadvantaged backgrounds.

Do I share these worries?

I think the bottom line is that neither worry need argue against a performance rating system, if the system is designed correctly. A number of states, in looking at public school test scores, already perform what are called "value added" adjustments. The basic idea is that the scores are adjusted to account for factors that can produce differences in test scores that have nothing to do with the quality of the school. So, for example, schools where most of the kids come from poor families are going to have a harder time showing the same test scores as schools where the students' families are all rich. But the first school may actually be doing a better job –- adding more value -– than the second, and that's the difference we want to measure. Because these techniques often use a kind of statistical analysis that allows controlling for the impact of these irrelevant variables, I have often reminded my students, "This is why God invented multiple regression."

So in the case of the college ratings, if the scores are adjusted to control for percentage of liberal arts majors, emphasis on public service jobs and the economic backgrounds of the students, then the scores we see will come much closer to measuring their intended purpose –- which is to show differences in school teaching quality that influence graduation rates, students indebtedness and so forth. These performance measures can the play the role they are supposed to play for organizations, which is to spur performance improvements. (The administration has, in my view, over-emphasized the politically appealing punitive language about reducing federal funds to low performers, which puts the cart before the horse. Let's get a system working before we start playing around with financial penalties.)

There is, of course, a risk that the government will not introduce a value-added system, in which case the numbers might indeed create the problems about which presidents are worrying and warning. But I am sad that the universities seem to be looking for reasons this system might not work rather than embracing the performance improvement potential ratings can bring. Doctors have done the same thing over the years to try to prevent publication of hospital performance information. Unfortunately, both these efforts smell of special interest, and, although I'm at a university, I cannot endorse them.

Posted on May 27, 2014 at 8:16 AM4 comments

Benevolent government data mining, or Big Brother?

data door

The New York Times recently ran a fascinating story called, "U.S. mines personal health data to find the vulnerable in emergencies." It raises provocative issues that will become more and more relevant over time, as technology allows for ever-improving data mining and data analytics.

Here are the facts of the story:

There are a growing number of local programs that use government data sources, such as Medicare insurance claims, to locate people who are especially vulnerable to problems during emergencies such as hurricanes, and then to contact them to make them aware of problems they could face. Examples include people on kidney dialysis who might be advised to seek early treatment because a natural disaster would close dialysis centers, or people using electronic breathing devices who lack battery backups and could run into a huge problem if power goes out.

Good idea or not? As government becomes more sophisticated about how to mine and analyze large databases, this issue will start coming up more and more, limited only by the ingenuity and creativity of dedicated civil servants. (Or contractors trying to sell an app!)

"There are a lot of sensitivities involved here," the article quotes Kristen Finne of the Health and Human Services Department as stating. "When we started this idea, there was a lot of 'are you crazy'?"

The sensitivities are obvious in a privacy-obsessed U.S. society -- particularly in the wake of the revelations regarding the National Security Agency's capture of communications long assumed to be private. So let me give my opinion, but then ask blog readers to weigh in on this.

I would rank myself as below average in sensitivity to privacy. (My wife notes that, to her shock, the bathroom doors in my parents' home were typically left open, so this relative indifference may run in my family.) I would also definitely rank myself as way below average in paranoia about government abuses, at least in the United States and other robust democracies. While of course we must always remain vigilant about abuses, I am about as far from the psychology of the black-helicopter conspiracy crowd about government as you can get.

So my intuitive reaction to these examples is basically, "What's the problem?" Intelligent people should be able to make a distinction between activities safely on this side of abuse -- such as these disaster assistance examples – and illegitimate government snooping on individuals. (It should be noted, of course, that people are free to say "no thank you" to information or heads-ups they may get.)

That said, let me cite two other examples from the article that are at least somewhat more problematic. One -- the less-troublesome of the two -- involves sending people whose kids have not been vaccinated an email message pointing this out and urging them to do so. The second, and more worrisome, involves informing insurance carriers of patients who make unusually large use of ambulance services paid for by Medicare.

The first example has more of a ring of paternalism than the problems with dialysis and batteries, which people are unlikely to have thought about. Vaccinations are something most parents know about, or should be expected to, and some deliberately choose to opt out. In the other example, the use of the data mining is not to help the individual but rather as a control function.

Having said this, however, I guess I would argue that such interventions are justified -- even the second one, where the government has a legitimate interest in reducing unnecessary taxpayer funded spending.

But I would love to hear how readers react to these interventions. We're going to be seeing more and more of these proposed as time goes by.

Let me also take my hat off to the civil servants at HHS who thought somewhat out of the box on this, looking for ways better to serve customers and taxpayers. I hope, whether or not we like these ideas, we can cherish the interest in innovation they represent.

Posted on May 23, 2014 at 9:03 AM4 comments

VA waiting lists and performance measurement

Accusations that a Department of Veterans Affairs hospital in Phoenix, and perhaps others, created artificially positive wait-time statistics by hiding the names of veterans who were waiting a long time for appointments on a secret list have been all over the print and television media. A Google search with the keywords "Veterans Affairs Phoenix" yielded over 19 million hits.

As a balanced Associated Press article in the Washington Post makes clear, at this point the accusations have not been proven and VA hospital officials in Phoenix have denied them. But let's assume for a moment that they are true, which is not impossible or even implausible. If so, it would not be the first time that people fudged or cheated when reporting performance information to overseers. Think of the various scandals in which teachers changed student test results or, to take a very dramatic corporate example, the accounting manipulation at Enron.

The VA's cheating, if it occurred, happened in the context of the department's performance measurement system, which collects data about various aspects of the performance of VA hospitals for the purpose of using it to improve how well the hospitals serve patients. What are the implications, then, of cheating for how we look at the increasingly widespread use of performance measurement to manage in government?

The strongest critics -- and they are not a tiny group -- would argue that situations like this show that government should not be using performance measures at all.

That argument does not make any more sense than it would to argue that Enron or any other accounting scandal meant profit should no longer be used as a performance measure for businesses. The ability of profit to drive the improved performance of companies means that a world without profit as a performance measure might not have Enron, but it would likely have lots of East Germanies.

Indeed, the allegation that VA patients died because of waiting-list falsification can be made only in the context of noting that a genuine, non-falsified system of performance measurement saves lives. In a system with no performance measures for wait times, those on the secret list would not have gotten treated any faster than they did. Indeed, in that world, everyone seeking treatment would in effect be part of a secret list.

Furthermore, the suggestion that people might have died because of the falsification makes sense only if we assume that correct performance information about wait times (as opposed to eliminating those waiting a long time from the numbers) would generate information about deficiencies that then would encourage corrective action.

So if we should be tracking the VA's performance measures, what should we do to reduce the risk of cheating? As Shelley Metzenbaum, president of the Volcker Alliance, said, the first line of defense is to integrate performance measurement into the organization's IT system for processing customers. If every patient who seeks an appointment at a VA hospital is immediately entered into an IT database and that database is used to develop the performance information on the hospital's wait times, it would not be possible to create a secret list that removes the patient from the system, especially if the system were configured to make it impossible to remove a name once entered. Frankly, I would be a little surprised if VA hospitals did not already have such a system, which makes me slightly skeptical of these allegations in the first place. (Full disclosure: Metzenbaum is a former Office of Management and Budget and Environmental Protection Agency official, a 2011 Federal 100 winner, and my wife.)

Beyond that, we should return to the Enron accounting example I mentioned earlier. The most widely used performance measure in the world is the profit measure for private firms. Given the large amounts of money at stake for financial markets and individual company executives, that measure creates enormous incentives for cheating and gaming. That is why more than a hundred years ago an accounting industry developed to audit the accuracy of companies' financial performance information. That system is not perfect, but it is hard to imagine that capitalism could function without auditors keeping the level of fraud low for performance measures.

As government becomes more serious about performance measurement, the danger of falsification will increase. In some sense, this is a good sign that measurement is being taken seriously. And falsification is not bad just in itself; it is bad because it hurts the ability of those measures to improve performance. It would be good, in my view, if inspectors general diverted energy from some low value-added, grandstanding activities in which they are currently engaged to taking on the role of an agency's auditors of performance measures.

Posted on May 19, 2014 at 10:37 AM8 comments

Mixing business with a procurement law degree

Complexity (Shutterstock image)

Many people -- and I count myself as one of them -- have long argued that government contracting professionals should in the first instance provide advice to program customers about the business elements of the contracting relationship. That would require skills such as knowledge of the marketplace for the product or service being bought (to help structure the contracting strategy and request for proposals), negotiating ability, understanding of contractual incentives, team management and performance monitoring. Program managers cannot be expected to have business expertise, and if contracting people don't provide it, it is likely to be absent altogether, creating problems for the government in getting a good deal from contracting.

Those of us who favor that underlying approach cannot fail to be happy that George Washington University has established a master of science degree in government contracting that requires students to take courses from both the GWU School of Business and the university's government procurement law program. I've been taking a closer look at the program, which began to admit students in August 2012, in the context of my nascent effort to develop a course in procurement management at the Kennedy School, a topic I have blogged about recently.

Like many university programs in the Washington area, GWU's is almost exclusively a part-time program of night classes for people who are already working. About 40 percent of participants work in government, with most of the rest in industry, and the average age is 36. The degree requires four semesters' worth of courses. As I think about it, that makes sense because, given the realities of entry-level jobs in government and industry, having a two-year master's degree would probably make the person overeducated for the available jobs. However, it would be nice if more of the participants were three to five years into their careers rather than 10 years.

The program is expected to have 75 enrollees by this fall, which strikes me as a significant number, but because the students take courses at different paces, it is not a cohort the way it would be in a full-time program.

There are no dedicated courses developed especially for the program. Instead, students take courses from the MBA and procurement law programs together with other students in those programs. It's probably a good idea to expose people working in government contracting to a general business school environment rather than a hothouse that is unique to government contracting.

The selection of business school courses the students take is a work in progress. Up until now, students were required to take large swaths of the MBA core curriculum, including courses of questionable relevance to a contracting professional such as "Financial Markets" -- which is about how companies should issue equity and debt, along with options and derivatives -- and "Microeconomics for the World Economy."

The required MBA courses are being cut back from eight to four, with more electives. Students are required to take an MBA course (not in the MBA core curriculum) called "Introduction to Project and Program Management," which is good, but the redesign has unfortunately eliminated the required course in "Organizations and Leadership," which would hopefully provide some training in team management and motivation, both of which are important skills.

No course on negotiations is mentioned in the curriculum materials I have seen, which is also too bad. And it would be nice if the university developed a new course centering on the economics-based research that exists on the make/buy decision, how to design incentives and how to establish performance metrics for contracts, among other topics. I definitely plan to include some of that material in any course I develop.

But the basic thrust of GWU's effort is great. It sends a signal about what contracting professionals should be doing, and it will certainly provide those in the field with concrete skills that will help them do a better job on behalf of the taxpayer.

However, fewer than half of the government participants in the program are receiving any support from their agencies to attend, and virtually none (the program director knows of two students) are being fully supported by their agencies. What if agencies had a competition for the most outstanding young contracting professional -- say, five years of work experience or less -- and fully supported the winner's tuition?

Posted on May 14, 2014 at 1:18 PM3 comments

Developing a course on procurement management -- seeking advice!

Complexity (Shutterstock image)

Given that it accounts for more than 40 percent of the U.S. federal government budget (and similar fractions in many state and local governments), procurement receives rather little attention, in terms of either teaching or research, even in public administration or public policy programs at U.S. universities. There are procurement-law related courses at a number of law schools, and Florida Atlantic University offers an online "executive certificate" in public procurement. But relatively few public administration programs, and to my knowledge no public policy program, offer even one course in government procurement.

The most interesting academic work that relates to procurement is research by the Nobel Prize-winning economist Oliver Williamson that is very relevant to the make-buy decision, and by extension somewhat relevant to procurement management. (For a good introduction, see his book Markets and Hierarchies.)

Basically, Williamson argues that when it is hard to specify exactly what the customer wants, and where producers and/or users undertake specialized investments to produce the product or service in question, the market is likely to be a poor way to organize production, and instead production is likely best handled in-house. Of course, readers will recognize that important parts of what government buys -- weapons systems obviously, and many complex IT systems -- are of exactly the sort Williamson argues are less appropriate for contracting in the first place. We should not, therefore, be surprised that contracting for such products and services is difficult, though Williamson also discusses some ways to manage relationships when customers do buy from the outside.

There are also some public administration scholars who work on contracting, but by and large they have not gone much beyond Williamson's framework. Interestingly, one sees among these scholars the same kind of debates about trust and control one sees in practical government procurement policy debates. Perhaps the best book by public-administration academics on government contracting is Trevor Brown, Matt Potoski, and Dave Van Slyke's book on the Coast Guard Deepwater project, Complex Contracting.

At any rate ... as I indicated in my last blog post, I am in the very early stages of delving into these academic waters, starting to think about preparing a course, or a short course (we call it a module), for the Harvard Kennedy School on managing procurement. I will keep blog readers posted as I proceed.

Meanwhile, I would like to solicit suggestions -- from practitioners (contracting and program management), academics and others -- about what I should include in this course. Where does the government most need to get better? What would you yourself like to know more about? What should a newbie learn? Are there case studies you would recommend, both good and bad? All suggestions welcomed!

Posted on May 09, 2014 at 10:27 AM17 comments

FAR Part 1: 'If it's not prohibited, it's allowed'

steve kelman

The May issue of Contract Management magazine, the publication of the National Contract Management Association, featured an article called “Secrets of Superstar Contracting Professionals.” The article (which unfortunately is not available online to non-NCMA members) is by Christoph Minarchik, a lawyer in the Office of the Secretary of Defense, and offers a quick guide to overall skills and competencies that freshly minted contracting professionals need to become outstanding in their profession.

I was happy (and, I will confess, flattered) to see, in a section of the article called “Innovation and Risk-Taking,” a short quote from Part 1.102(d) of the Federal Acquisition Regulation, reading in its entirety as follows:

“In exercising initiative, Government members of the Acquisition Team may assume if a specific strategy, practice, policy or procedure is in the best interests of the Government and is not addressed in the FAR, nor prohibited by law (statute or case law), Executive order or other regulation, that the strategy, practice, policy or procedure is a permissible exercise of authority.”

The author went on to state that these words have “reached a near-legendary status in the contracting community,” and that “hushed whispers of it echo through acquisition program offices, [where] grizzled contracting officers vigorously defend it as they pound the table to bolster their case.”

The happiness in reading this reference came because this language – which I believe is unique to all the collections of internal government regulatory guidance in areas ranging from HR to financial management, though it could usefully appear in all of them – is indeed very important guidance to federal contracting officials in doing their jobs, especially appearing where it does at the very beginning of the regulations. The pride came because I actually played a fairly important role in getting this language into the regulations at the beginning of my service in government during the Clinton administration.

The language reflected an effort to deal with various conflicting forces in government procurement policy at the time. When Vice President Al Gore’s reinventing government program got started, there were demands -- both from program people who were frustrated in their dealings with the procurement system and from outside consultants working on the reinvention project -- to essentially jettison the FAR entirely and replace it with 10 pages or so of guidance.

Coming in from Harvard to take the job of administrator of the Office of Federal Procurement Policy, I soon realized this was not only unrealistic but foolish. However, I appreciated the criticism that the regulations could be a straightjacket. In particular, we were hearing from a lot of progressive contracting professionals in the government that many frontline contracting people believed, or even had been taught, that if something wasn’t allowed by the regulations, it was prohibited.

So some of us came up with the idea, not to eliminate the regulations, but to add a clear statement contradicting that particular myth – if something was not prohibited by the regs, and was in the interest of government and taxpayers, contracting people should assume the practice or policy was allowed.

A year or so later, the provision entered the FAR. The most-recent example of use of this provision to authorize an innovative, valuable procurement practice is the spread of use of contests as a procurement tool – a tool not mentioned one way or another in the FAR, but which violates no policy and is in the government’s interest.

Nonetheless, I wonder whether Minarchik was being a tad sanguine in writing about this provision’s “near-legendary” status in the world of government contracting – though I hope he is right. With the downplaying of innovation and the renewed push for control that began to characterize the procurement system during the first decade of this century, only very partly reversed during the Obama administration, I had sort of feared that this language in FAR Part 1 had become close to a forgotten dead letter, kept alive from total extinction by a chosen few.

I hope I’m wrong.

Actually, I am in the very early stages of developing a course on managing procurement for the Harvard Kennedy School. I plan to include at least some discussion of this passage from FAR Part 1 in my course materials. So I would be grateful for any stories from contracting professionals and program managers about successes (or failures) in using this language to influence the course of an acquisition in which you’ve been involved.

Posted on May 06, 2014 at 12:50 PM4 comments

Civil service needs stories of everyday heroes

elements of customer satisfaction

Many years ago, I read something about how a private-sector firm worked to create a service-oriented culture by sharing stories of employees who went above and beyond their job descriptions to help a customer. I don't recall the exact details, but I think the example given was a customer who needed something in a hurry, maybe a ticket or something (this was before everything was computerized) and the employee left work personally to bring it to him.

I thought of this, dredged out of half-forgotten memory, when I had an experience in Singapore last week (I'm now back in the United States) involving my passport. I had it in my back pocket one day to use at the Ministry of Manpower to get my temporary work permit for a few weeks of teaching at the Lee Kuan Yew Public Policy School. Apparently it fell out of my pocket while I was having dinner with some Chinese students studying in Singapore, and one of them found it and brought it in to the local police station. The next morning, before I even knew the passport was gone, I had received an email from a professor saying the passport was found and available at the police station.

However, when I arrived at the police station early evening the next day to pick it up, I discovered that turned-in property was forwarded to a central police office if not picked up within a day. (Nobody had told me this.) It was 5:30 pm, and when the police station called the lost property office, it was just about to close. The office was in another part of Singapore, easily 30 minutes away by car. I was leaving the next afternoon, and mentioned my problem.

At this point the civil servant at the other end of the line said he was about to leave work and would drive my passport over to the local police station before going home.

I immediately thought of what I had read about in a private company so many years ago.

When he arrived, I got his name -- Mr. Hamdi. The next morning I wrote a letter describing my experience to the local Straits Times, which published it.

On returning back to the United States, I reflected on this in the context of Public Service Recognition Week. Private firms honor the everyday heroes who exemplify outstanding customer service. Do we do that often enough in government?

As I was preparing to write this blog, by amazing coincidence something similar happened to me. I arrived home early so I could go food shopping (no fresh produce after being away for two weeks) and, as I was walking up the driveway of my house, a car turned into the driveway. It turned out it was my mailman, Rob Rabello, whom I had never truly met before. He said that he had been holding an iPod Shuffle that he'd found near my mailbox and wondered whether it was mine. He had never seen me around the house when he was in the neighborhood, so he hadn't had a chance to ask.

This was indeed a Shuffle that had disappeared a while ago -- it must have fallen out of a pocket when I was picking up the mail.

Tomorrow I will call his supervisor to thank him for his kindness and consideration. Another everyday hero of a public servant, going beyond the job requirement to help a customer.

Meanwhile, next week is Public Service Recognition Week. The government is filled with everyday heroes who go above and beyond to serve. We need in each of our government organizations to be telling these stories about fellow-employees, for they are role models -- and their value inside the organization, to build the right culture, is at least as valuable as the external PR. Perhaps organizations should plan an activity next week to discover and share such stories as their way to honor public service.

Posted on Apr 29, 2014 at 8:35 AM8 comments

Another amazing crowdsourcing app shakes up the world

steve kelman

The Economist has run an article called "Pennies from Heaven" about an amazing app called GiveDirectly, which allows people to make donations that go directly to individuals in the developing world. The app involves an amazing mix of new technologies, and it is turning out to work better than many expected (or feared).

GiveDirectly uses technology to locate poor people in Kenya and Uganda in Africa (the countries where the organization currently operates) who are likely to be good targets for assistance. 

It does data crunching using statistical databases to locate especially poor areas. It then uses Google Maps to locate, for example, which houses in these villages have thatched rather than tin roofs, suggesting that the people in the houses are especially poor. Work scanning the maps is done by freelance employees hired on the cheap through the AmazonTurk odd-task service. 

Once the appropriate houses are located, workers visit the villages to find the people who live in them. Donors can give online to help people in these villages, and the organization suddenly shows up with cash. This reminds me of a TV show called "The Millionaire" that I watched as a kid, where a millionaire chose a down-and-out person each week to receive an enormous cash windfall -- distributed through a local money transfer service.

Many skeptics thought initially that simply showing up with cash on the doorsteps of poor people in these villages was a terrible idea -- that many would spend the windfall on alcohol or bangles. ("They thought I was smoking crack," GiveDirectly founder Michael Faye has stated.) However, there have now been studies showing that the vast majority of recipients put their windfalls to good use -- for example, buying better roofs for their huts. And the method has far lower distribution and monitoring costs than other forms of aid.

What is the relevance of the development of this app to government? 

Obviously, the specifics of the app don’t seem to be particularly applicable, though one could imagine USAID distributing some aid money this way.

But the real relevance, I think, is in two things. 

The first is the mix-and-match use of various technologies and modern organizational practices these technologies enable, from mapping to use of freelancers working over the Internet.  (By the way, is there any reason the government couldn’t use AmazonTurk as a way to save money on relatively low-skill, low-sensitivity tasks?) 

The second is just the creative spirit, the idea of trying to come up with new approaches to old problems and using technology to facilitate. 

Government may never have a GiveDirectly app. But creative government people should embody the GiveDirectly spirit of seeing how technology can open up new vistas for making the world a better place.

Posted on Apr 24, 2014 at 8:08 AM4 comments

Managing (and working) in a global context

Global Dexterity

Many who work in the federal government, or who are contractors working with it, probably think their jobs are insulated from the globalization that has been hitting big U.S. companies like a tsunami. A moment's reflection, of course, will remind us there are many exceptions to that ability to be insular -- military stationed abroad, the State Department and USAID, contractors selling to foreign governments using American personnel and foreign military sales, not to speak of FDA inspectors stationed in China or Justice Department attorneys gathering evidence abroad. And this trend is certain to expand with each passing year; I have been amazed to see what percentage of my twenty-something American students have had experience working in international settings.

Yet for people in and around government -- for whom globalization is not the kind of existential fact that it is in much of the private sector -- dealing with different cultural traditions about how to behave in organizations is something that is not considered enough. Consider:

  • In Indian and some other Asian cultures where the boss is a much-more authoritarian figure than in U.S. culture, there is no tradition of the boss asking employees for suggestions or ideas; indeed, doing so is considered a sign of weakness in the boss;
  • German culture is more direct than ours. If you run into somebody and they casually invite you on the spot to lunch, Americans would usually look for a polite way to say no, while Germans would be likely to answer something like, "No, I want to go to the gym instead."
  • In Russian culture, it is considered impolite for a subordinate to look a superior in the eye. Russians being interviewed for jobs typically stare down at their shoes.
  • In many cultures outside the United States, there is no tradition of "small talk."

All these examples come from a helpful new book, Global Dexterity, by a Brandeis University professor named Andy Molinsky. It's a book I recommend highly, particularly to people who are put in non-U.S. cultural situations but have not yet put much thought into the implications.

The basic dilemma Molinsky points out is that it is not enough to realize intellectually that these differences across cultures exist. The problem is that often, if we try to "imitate" the foreign culture on the principle of "when in Rome, do as the Romans do," we feel inauthentic and untrue to our own values and personalities. We feel like we are acting, that we are not being ourselves. This produces both psychological distress and also inhibits our ability actually to adapt our behavior.

So, Molinksy argues, the ability to be globally dexterous depends crucially on a negotiation with ourselves about what we feel comfortable doing and what we don't. He suggests dividing the culturally different behaviors into those we feel more and less comfortable adopting, and that we think about how to do things that will help the organization (e.g. get employee ideas and feedback) without offending too much against the other culture's norms. He notes that sometimes people working in other cultures need to make decisions about whether some kinds of behaviors common in those cultures -- the most obvious is corruption, but there are others -- are simply unacceptable and that we therefore should choose not to adopt, even at some personal and organizational cost.

This is a short book, but it's worth reading and pondering.

Posted on Apr 18, 2014 at 5:35 AM2 comments

How can we improve the use of past performance in contracting?

man graphs performance

Jaime Gracia, CEO of Seville Government Consulting, is one of the most thoughtful commenters around on government contracting issues as seen from a progressive contractor perspective -- i.e., one that is also mindful of the interests of the government and the taxpayer. I don't always agree with everything he writes, but I always take his views very seriously.

Jaime and I also share an interest in making government past performance evaluations a more meaningful part of the contracting process. Speaking for myself, I remain convinced that there is no single step the government could take to improve the performance of the contracting system than to make past performance an effective differentiator between excellent, acceptable and poor performance. We should penalize poor performers but also, importantly, reward the good ones. Customer decisions about whom to do business with based on a supplier's past performance are absolutely essential in the commercial market to making the free market work to satisfy customers.

Jaime has written an interesting FCW op-ed called "Why past performance must be part of acquisition reform," and I urge all blog readers to take a look.

Let me start with the parts of Jaime's column with which I agree. He urges that past performance evaluations to the extent possible be based on objective data about cost, schedule and performance rather than the subjective judgments of government officials. I strongly agree with this in general, though I assume Jaime would agree there are limits. There are situations where it is difficult to develop good objective measures at all (particularly of performance), and also those where changes in the original baseline make the evaluation of even objective performance information more subjective. At a minimum, we should recognize the validity of "inter-subjective data" -- the subjective judgments of a larger number of people, e.g. customer satisfaction surveys -- in judging past performance.

I also thought Jamie made a very interesting suggestion about greater public disclosure of project management information already provided the government. I would love to hear the reaction of both government people and contractors to this suggestion. Perhaps this at least could be done on a voluntary basis by the government -- with an agency disclosing its intention to do so in an RFP? How often would such information be considered proprietary?

However, Jaime and I continue to differ somewhat on the justification of the current level of "due process" protections for contractors in the past performance system. He is concerned about subjective or ill-willed negative judgments by government officials, particularly in the current "lowest price technically acceptable" contracting environment. My own reaction is that the bigger danger in the system is grade inflation, not unjustified dinging of contractors.

To some extent, this is an objectively testable proposition -- have we seen an increase in negative past performance ratings in recent LPTA years? (Of course, even if the answer is yes, this may be because performance has gotten worse. Though Jaime would counter, probably correctly, that this is the government's own fault. But if negative ratings aren't going up, this would argue that the system definitely suffers from grade inflation.)

At any rate, I continue to believe that the ability of contractor to contest ratings drives grade inflation, and that a sufficient due process protection is to allow the contractor to put their version of events in the past performance file.

Jaime -- and others -- let's continue this dialogue. I would love to see our community make improving the past performance system a high priority.

Posted on Apr 15, 2014 at 10:45 AM4 comments

Taxes and software, take two

tax form and keyboard

Those with good memories may remember my blog post from a year ago about my terrible experiences as a first-time user of H&R Block tax software. Due to a software glitch, I spent hours in live chat with a company representative, finally unable to get the problem solved and being forced to paper file because of overrides I had to do on their forms to make my return correct.

Guess what?

The same thing has happened to me again this year.

This year involved different glitches from last year, but otherwise the story was the same -- although I fortunately was able to e-file my federal return, I ended up having to file paper state returns for both Massachusetts and New York.

On the New York state return, the problem did not appear until the "verification" function at the end of the return, which is the last step before the return is ready to file. (H&R Block software includes both "errors," which must be corrected before the return can be filed, and "verifications," which they ask you to check to make sure your entry is correct, but which ostensibly do not have to be changed in order to file your return.) My return, however, would not continue without addressing the "verification" issue, even though the form being verified was in fact there and completed.

After nearly three hours of chatting with (and waiting for) technical support, I was told that the support personnel had no idea of why my problem was occurring, and that I would need to paper file.

My problem on my Massachusetts return was more straightforward, and took "only" 25 minutes to resolve. However, the resolution was that I discovered an uncommon but required form for my return was not available on the H&R Block software -- which again precluded me from e-filing an accurate state return.

These problems are eerily reminiscent -- actually worse -- than those I experienced last year. Fool me once shame on you, fool me twice shame on me. So I will switch to TurboTax next year, which a number of Facebook friends recommended when I did a brief post about my problem.

And there is a larger public management point in this tale of consumer woe. The virtue of H&R Block being a private company with competitors is that when I have this terrible experience, I can switch suppliers. A citizen who has a bad experience with a government agency does not normally have that option.

This suggests that, where possible -- and occasionally it is! -- citizens should have a choice of government providers, just like agency procurement customers can choose to use the General Services Administration, competing governmentwide contracts, their own agency's existing contracts, or do a new procurement themselves. And it also reminds us of the crucial importance of government's alternative to marketplace choices, which is communications from disgruntled citizens to members of Congress, for whom such "casework" is an important job for them and for better public management.

Posted on Apr 11, 2014 at 3:20 PM3 comments

China dispatch: Students, trade and technology parks

U.S.-China conversation.  Shutterstock image.

Here’s a trio of Chinese miscellany gathered on my recent trip:

A new silicon city. Perhaps the most interesting thing the group of Kennedy School students I was chaperoning saw was in the southwestern Chinese city of Chengdu (home of China’s pandas, which were a close runner-up). A massive technology manufacturing and R&D center has been built as a southward extension of the existing city, completely transforming Chengdu.

The Chinese, who love stereotypes (there’s a stereotype!) will virtually always tell you that Chengdu people are relaxed and laid-back to the point of laziness, and that they have the prettiest women in China. Western China is generally poorer than the eastern coast, and the development of this enormous new city represents a decision by the central government to invest in Chengdu as a center for economic development of this region of China. So within a few years, on what had been mostly farmland, an enormous jungle of skyscrapers and factories has grown up to attract technology companies.

Microsoft, IBM, and other U.S. companies have already located R&D here (no Apple, though), and Foxconn, the Taiwanese contract manufacture that employs hundreds of thousands of Chinese making computer and phone components, has moved a major part of its manufacturing to Changdu. This is enormous investment, appearing in what by historical standards is an instant. And it is certainly not a masterpiece of charm or human scale. We’ll see if it works.

Another big export. We hear a lot about the enormous influx of Chinese students into the United States. It turns out, though, that China itself has raced ahead of other foreign-student leaders such as Australia and France, and now has more foreign students than any country but the United States and United Kingdom.

Ranking the trade. Speaking of ranking tables, here are two other factoids I saw in the Chinese media: Last year China overtook France and Italy to become the largest global market for wine. (Eighty percent of it is produced domestically, and the answer to your question is, “Terrible.”)

Also last year, South Korea became the world’s biggest source of imports to China, surpassing Japan. The United States is the third-largest source of imports to China, and China is also the third-largest export market for the U.S.

Posted on Apr 09, 2014 at 2:20 PM0 comments

Debacle or triumph: The deciding factors

Complexity (Shutterstock image)

Ever since the Obama Administration's health care websites crashed last fall, Washington has been trying to figure out what's wrong with the federal government's ability to do large-scale IT projects. Last week's story about the cave in Pennsylvania where federal retiree applications are processed manually, as reported in The Washington Post, only added to the overall impression that when it comes to information technology the federal government is the gang that can't shoot straight.

But if you think about it for a moment the government often achieves results ranging from credible to spectacular through contracting, including for IT. Just to take another story very much in the news — NSA snooping and hacking of electronic communications — the criticism against the agency is hardly that it haplessly lacks the capabilities to do its mission. On the contrary, its technological innovations and successes are the driving force behind the public outcry. Ditto with the drones developed for the Department of Defense. The Defense Advanced Research Projects Agency (DARPA) has, over the years, signed contracts with researchers doing both basic research but also development that have played central, and sometimes the total, roles in developing the Internet, GPS technology, and Siri voice recognition software now used on smartphones. NASA has deployed a succession of amazing technologies over the decades — think of the moon mission and space walks.

There are even some pretty solid achievements among civilian agencies. The VA developed for its hospital system (in-house actually) an IT application that, as a patient is about to receive a drug, scans the patient's wristband and the drug container to make sure the drug is the one actually prescribed by the doctor and to check for interactions with other drugs. The CDC's National Healthcare Safety Network provides real-time data to hospitals, and to policymakers, about trends in hospital-acquired infections, so hospitals can compare their situation with other hospitals as well as with their own history. We may note, furthermore, essentially all other back-office HR systems in the government are automated and function fine — for example, Social Security records and payments, a far bigger system than OPM's retirement system for federal employees.

So this leads us to the following question: can we make any generalizations about government contracting successes versus debacles? A few thoughts:

1. The "coolness" factor

A common factor in many successes is that the agency mission, or the specific program being supported by contracting, is itself attractive and even cool. NASA regularly scores at the top of the "best places to work in the federal government" listing published by the Partnership for Public Service, as do agencies in the intelligence community. VA hospitals and the CDC save lives. This probably means that, on the whole, these agencies attract more talented and committed employees, who do a better job figuring out what the organization needs when it contracts and do a better job managing the contract (and the government's interaction with the contractor). It probably also means that the most talented contractor employees tend to get assigned to projects at these organizations. Contrast this with just how inspiring it is to work on OPM's mandate, the government's incredibly bureaucratic and uncreative personnel system. So probably the simplest answer is that these contracts — and probably government more generally — has an easier time succeeding the more attractive the mission and, hence, the better the employees.

2. Multiple agencies

One common feature of the two most-recent high-profile failures and the OPM retirement processing system is that both require coordination across many agencies, to deal with input into a central system that exists in non-standardized databases and uses different technologies., despite the popular perception it was a mere website, actually had to bring together huge databases from the IRS, 50 states, and other organizations. OPM has to deal with multiple formats of data about employees who are retiring that different agencies compile. It is difficult for one agency, particularly a relatively weak one such as OPM or the Center for Medicare and Medicaid Services, to get all these other agencies to collaborate. (Two giants, DoD and the Department of Veterans Affairs, have feuded for decades about whose system should form the basis for a unified health record that would transition a soldier from active duty to veteran status.) Success stories are pretty much always done in just one agency.

3. Dysfunctional procurement practices

The whole government — the successes as well as the failures — also lumbers with a ball and chain around its neck in the form of some dysfunctional procurement practices, which makes success more difficult for everyone. (Note that the intelligence community and DARPA are not subject to these rules.) The most strategically damaging of these is the overly bureaucratic way the government evaluates vendor past performance in making contract awards. In the private sector, probably the key incentive for vendors to serve their customers is a brutal system of past performance — if the customer is dissatisfied, the vendor is history. Prior to the Clinton administration, a misguided fear of giving government officials an ability to exercise discretion prevented any use of past performance in making new contract awards at all. Happily, this is no longer the case. But the system is far more bureaucratic than the brutal past performance system that is applied in the commercial world. An exaggerated notion of due process protections for contractors means that the regulations allow them to contest unfavorable ratings to the superior of the rater; this means that for a rating official, giving a contractor a bad report card is an invitation to spend countless hours defending one's judgment. The system has also suffered from a lack of senior management attention, despite its centrality as a lever dramatically to improve contractor performance, allowing excessive caution by most contracting officials to rule. The result has been a situation where most past performance ratings are plain vanilla, making it hard to use them as a differentiator in awarding contracts.

4. Big bang procurements

Many of the government's IT projects — including OPM's benefits automation — fail because the government believes it needs to specify all the features of the new system at the beginning of the procurement, rather than developing projects with incremental functionality that improves over time. The arcane and multiple rules (for different employees) federal pension system is hard to modernize in one fell swoop, but that's what OPM tried. This occurs for two reasons. One relates to the absence of a robust past performance system: deprived of a powerful past performance incentive, the government feels, in order to avoid being ripped off, it must overly specify every feature of an IT project A second problem is that the government has trouble complying with statutory requirements for competition among suppliers that would normally exist between increments; the more that is specified upfront at the time of competition for the original contract, the less the need to re-compete each stage of the process. There are ways to deal with this second problem, but they require creativity that the government has often been unwilling to apply.

Reforming the contracting system

What remedies does this analysis suggest for improving the value the government gets from contracting? The first is a management challenge for the agencies with less-glamorous missions, to nonetheless enthuse employees about their missions the way, say, Lay's potato chips manages to do for its (at least) equally mundane product. Unfortunately, inspiring management is not necessarily something for which the government is famous.

Can we do anything to give more powerful incentives to contractors to perform well? Transforming the government's paper tiger past performance system into a real tiger should be a priority for anyone who cares about the performance of the contracting system. A simple regulatory change (or legislation if the regulators won't act) could eliminate the excessive privilege awarded contractors to contest past performance ratings, and replace it with simply the ability of the contractor to enter their own version of events into the contract file.

Also, there are various experiments going on in government for "pay for success" or "share in savings" contracting, which should be extended. The growth of this kind of contracting has been stymied by some arcane budgeting rules, which should be waved by statute for these kinds of contracts on an experimental basis. There has also been objection to potential excess contractor profits achieved by the generation of very large savings, from those who would apparently rather see a contract fail than have the contractor make too much money. These contracts are also complicated to negotiate, and the government needs special expertise (including perhaps outside experts) to help.

In the most-positive news in the procurement system in recent years, the government has begun to use procurement contests, where the agency says what it wants and gives a pre-determined monetary prize to whomever comes up with the first, or best, solution. If no solution is developed, the government pays nothing.Not surprisingly, DARPA pioneered this technique with a contest a number of years ago to develop an all-terrestrial vehicle that could successfully navigate a desert obstacle course on Mars. Contests mean the government pays only for success. Contests also avoid many of the arcane features of the conventional procurement process. And they encourage the entry of non-traditional, garage-type players into the system, rather than just the usual suspects: lots of amateur teams entered the DARPA contest, and a Federal Trade Commission contest to develop an application to screen robocalls was won by a high school student. GSA's contest website, which makes it easier for agencies to organize procurement contests, won the Ford Foundation/Kennedy School Innovations in American Government award this year.

Contracting success is not impossible. Even in this era of highly publicized failures, success exists. But to make it more likely, we need to pay more attention to management and to remove some of the millstones around the government's neck.

Note: This piece also appeared on the Brooking Institution's FixGov blog

Posted on Apr 01, 2014 at 2:23 PM3 comments

Don't call it derivative!

U.S.-China conversation.  Shutterstock image.

I got a real laugh out of a story appearing recently in China’s English-language China Daily. Entitled “Twist of Fortune,” it is about a restaurant two Americans have started in Shanghai, China, called “Fortune Cookie,” whose menu consists of U.S. versions of Chinese food.

Chinese who have visited or lived in the United States frequently comment, often with a smile, that the Chinese cuisine served in American Chinese restaurants is typically only vaguely related to Chinese cuisine served in China. Aside from often being more salty and less spicy, there are entire dishes – ranging from beef with broccoli to General Tso’s chicken to fortune cookies – that do not exist in China. (The biggest difference between Chinese food in the United States and in China, of which most Chinese are not aware, is the absence of dishes based on body parts Americans generally find unattractive, such as beef hearts, pig ears, duck tongues or chicken feet. Most Chinese cannot understand why Americans object to such food.)

“We regard our food as authentic American Chinese food that appeals to American palates,” one of the co-founders of the restaurant stated. Not only does Fortune Cookie include “genuine” American Chinese recipes, they even provide the fold packs with steel handles and a red pagoda that are used for takeout from Chinese restaurants in the United States. (China is one of the few other countries in the world with a doggie bag tradition, but Chinese don’t use the American-style boxes.)

Amazingly, the article reports that a third of the diners are Chinese rather than Americans!

Posted on Mar 28, 2014 at 7:50 AM0 comments

The latest in Chinese IT

U.S.-China conversation.  Shutterstock image.

When most people think of Chinese IT applications, they think – as is the case for Chinese products in many areas – of knockoffs. Baidu is a Chinese knockoff of Google. Renren is a knockoff of Facebook, and Taobao a knockoff of Ebay. For years, about the closest Chinese apps have come to something vaguely original has been with games, which is where many IT startups in China focus.

This has begun to change, however, in terms of both actual technology and the role homegrown tech is playing in society and everyday life in China.

The way was paved by weibo -- the term means "micro-blog" in Chinese -- which offered by one of the IT Chinese app conglomerates, (In the great tradition of finding creative ways to move between English and Chinese brand names -- immortalized by the Chinese word for "BMW," the similar-sounding moniker bao ma, which means "treasure horse" – the Chinese name for Sina is xin lan, meaning "great wave," but pronounced in Chinese very close to "Sina.")

In terms of its technology, weibo is basically a pure knockoff of Twitter, a site that is blocked in China. Even the look and feel are the same. But in terms of its social role, weibo created a near-revolution in Chinese society.

A precondition was that 140 characters in Chinese allows one to say a lot more than 140 letters in English. Chinese words generally consist of 1-3 characters, so posts could have some significant content.

The weibo service, along with many specific posts on it, went viral in China and became, about three years ago, an outlet for popular commentary, much of it quite outspoken, on problems in Chinese government and society, and for publishing pictures showing corrupt officials wearing $10,000 watches or cavorting with prostitutes. The government has employed an army of people to monitor weibo posts and remove ones that go over the line (as well as enlisting Sina in censorship efforts). But this is difficult to do effectively because censors rely heavily on searching for sensitive words, and Chinese find ways around these with circumlocutions. China post-weibo will never be the same.

More recently, Chinese IT has provided technological as well as social innovation. The best example is the messaging app WeChat (called in Chinese, again hononymically, wei xin or "micro message"), a product of the Internet giant Tencent that may sometime soon be headed for an IPO. Although loosely modeled on WhatsApp, the messaging app bought recently by Facebook, WeChat has an audio feature that WhatsApp doesn't, allowing people to send voice messages as part of a conversation. It is sort of like an old walkie-talky, but one that can instantly go from the United States to China. And it is less demanding than getting on a Skype call, and thus more appealing to multitaskers, as an alternative to text messaging. (WeChat also supports text messages.)

WeChat also allows you to use the barcode embedded into your account to order taxis, pay bills and purchase other services; the barcode feature also allows people who meet each other instantly to sign up as WeChat friends by having their bar codes sort of "kiss" each other. While weibo is a broadcasting service, WeChat is a friend-to-friend service.

In the last year, the government has tried to clamp down on weibo. Some bloggers with huge followers were arrested, and in a few cases made humiliating self-criticisms on TV that reminded one of the Stalinist era in Russia. A law was passed making it illegal to repost "rumors" that later were "determined" to be untrue. Both because of this and because of the growing popularity of WeChat, weibo use in the last year has plummeted; at a recent dinner with four students, I learned all four had either stopped looking at weibo altogether or dramatically reduced their usage. (Weibo has announced an IPO in the United States, so investors beware.)

The growth of WeChat may be seen as a victory for the government, since the service makes it harder for messages to go viral, but some people are suggesting that the greater ability to communicate privately might facilitate political organization among friends.

The last innovation is a financial services product introduced only last year, called in Chinese Yu'e bao ("surplus treasure," this one has no English homonym yet). Yu'e bao is a product of the biggest Internet company in China, Alibaba, which has recently announced a Facebook-magnitude IPO. This is an online money market fund that takes advantage of government-imposed caps on interest rates in banks, which are almost all state-owned, by offering higher-than-bank rates to small savers. In a few months, it has become wildly popular, draining funds from banks.

Essentially, the Yu'e bao business model is to arbitrage by loaning money to banks that are losing individual deposits to the online upstart, lowering bank profits by reducing the spread between capped individual savings account rates and market lending rates. Given the possible fragility of the Chinese banking system, this could become a real problem for Chinese banks, but probably –- as with the old U.S. telephone battles that MCI's entrance into the market brought about decades ago -- the end result will be a policy change to remove deposit interest caps. Meanwhile, the service also functions as a debit card to pay for transactions in real time, and is being expanded into other apps.

In a recent trip to China, I saw government officials dressed in suits and white shirts, and IT techies dressed in blue jeans. Some things are the same in both countries.

Posted on Mar 26, 2014 at 5:36 AM2 comments

A somewhat revealing rubber stamp

U.S.-China conversation.  Shutterstock image.

Serious U.S. media devote a lot of attention these days to covering China. Rarely a day goes by, for example, that the New York Times doesn't have at least one story about China. Yet recently, what in China was considered a major political event occurred and got no coverage at all in the US press.

I am referring to the annual meeting of what the Chinese call the "two sessions" -- meetings of the National People's Congress, China's version of a legislature, and the Chinese People's Political Consultative Conference. Even in China, attention this year was attenuated because of two breaking-news events: the killing of almost 30 people by knife-wielding assailants in Kunming, and the saga of the missing Malaysia Airlines flight to Beijing with mostly Chinese on board. Yet the two sessions were still a big story day after day.

In the United States, the National People's Congress is usually called a "rubber stamp legislature, and the events are dismissed as a meaningless show. Yet while the two sessions are hardly gatherings marked by dramatic confrontations between legislators, or where the government risks rejection of its policies, the two sessions actually do tell us some interesting things about the Chinese political system -- both its characteristics and its evolution.

My favorite, actually, is the People's Political Consultative Conference. This body has about 2,000 delegates. Fascinatingly, they include movie stars, billionaire businessmen, and even overseas Chinese who may have lived all their lives abroad (at least one delegate was a Chinese-American). In a somewhat bizarre choice, China Daily featured a whole page of interviews with billionaire delegates. (About 2 percent of delegates are billionaires in at least Chinese currency, representing a minimum net worth about $160 million.)

This body is not even claimed to have a legislative role, as the name "consultative" implies. Many of its members come to promote single-issue causes such as wildlife protection, reminding one of Hollywood stars who testify before Congress. The presence of many well-connected people in this body shows both the cachet that comes from connections with a powerful government and the need of even private businessmen to be on the government's good side.

As for the "legislature" itself, political scientists have noted that the body has over time slowly increased its influence. The media, and supposedly the government, pay attention to the frequency with which different topics are the subjects of resolutions the delegates present. This year, for example, there were an unusual number of resolutions urging the government to take more aggressive steps to combat pollution.

Occasionally, there can be a significant number of votes – "significant" here means 5 percent -- against a government minister, and these too will often be noted in the media. The National People's Congress has also played an ongoing role in asking for, and so far to a limited extent obtaining, more transparency about what is in the government budget, which has generally been kept secret.

In all, this is still probably closer to a rubber stamp than an aggressive independent legislature, but a number of my politically interested Chinese friends said they follow "two session" proceedings. Admittedly, that is often because the proceedings are used to announce important decisions already made, rather than actually making decisions.

For me, it will be interesting to follow each year whether "two session" proceedings' independence grows or not – in particular by looking at whether something we take for granted in the West, namely an enumeration of what specifically is in the government's budget, comes to China.

Posted on Mar 21, 2014 at 12:41 PM1 comments

What McCaskill is missing about past performance data

steve kelman

Last week Senator Claire McCaskill (D-Mo.) held a hearing to complain about the lack of negative information about contractors in the government’s past performance database, citing specifically that there were no negative reports about BP – the company responsible for the huge Deepwater Horizon oil spill – and that CGI’s most-recent past performance rating before its role in was exceptional.  You could learn more about a company by Googling it, she complained, than by consulting the government’s past performance information.

As somebody who basically cut his teeth in government contracting on an effort to allow the government to use past performance in making source selection decisions – until the 1990s, it was not allowed! – I will confess to reacting to McCaskill’s point of view with mixed feelings. On the one hand, I definitely agree with her that the problem is rooted in agencies' reluctance to flag poor performance. "It’s almost like if a contracting evaluator gives negative information, they know they are going to get blowback from the contractor, right?" the senator said. “We let things slide because it’s too hard to fight it.’” This is indeed the biggest single problem with the past performance system as it currently operates.

I also like her reference to getting information on companies by Googling them. I am guessing that it would be legal now for the government to use information from a Google search in making past performance evaluations as long as the government states in the RFP that it intends to do Google searches and might use the information in source selection. I actually think Google searches might sometimes bring useful information into the process.

However, I take issue with the tone of McCaskill’s approach, which on the whole is very punitive.

The purpose of past performance evaluation, in her view, is to track down and weed out bad actors. Yes, that is part of the purpose. But the goal of the system should also be to reward good contractors, and in particular to give an opportunity to recognize work that goes above and beyond minimum contract requirements in seeking to help the government customer. The punishment-only approach is bad psychology and bad management, even if it may be good politics.

We should also note that negative information in past performance reports involves only a specific government contract, so it’s not surprising that BP’s Deepwater Horizon debacle was not there. And it’s also unclear from what McCaskill said whether she was talking only about one CGI past performance report, on the firm’s then-most-recent contract.

I applaud the senator's interest in this important issue, and there is something practical she could do about it. The Federal Acquisition Regulation currently allows contractors who do not like their evaluations to complain one level above in the system. This provision – which I signed off on against my better judgment in 1994 as Office of Federal Procurement Policy Administrator – should be eliminated, and replaced by a simple opportunity for the contractor to put their version of events into the file. This would go a long way toward reducing the problem that is troubling McCaskill.

Note: This article was updated on March 17 to correct Sen. McCaskill's first name.

Posted on Mar 13, 2014 at 5:27 AM9 comments

'Evidence-based government' and the FY 2015 budget

man studying data

As best I can tell from word searches on the Washington Post and New York Times websites, my favorite part of the President's budget did not make the mainstream media's near-exhaustive coverage at all.

The overlooked gem is the discussion of how the budget is seeking both to increase funding for new program efforts where there is actual good evidence, based on rigorous research, that they work -- and also to provide more funding for efforts to use social science research to find out whether programs work. Together, this approach goes under the moniker "evidence-based government." This section of the budget reflects what grew out of a call in instructions to agencies for this year's budget to include evidence-based initiatives in their submissions to OMB.

So the budget proposes funds for experiments to test the effectiveness of various potentially promising interventions to keep people with disabilities in the labor force or to improve the quality of college education while reducing costs. For some programs where there already exists evidence of success, the budget recommends funding increases. The budget also recommends increased funding for so-called "pay for success" programs in various policy areas, including interventions designed to reduce costs. (In the contracting area, this has been called "share-in-savings" contracting, to which the budget has therefore given a boost.)

However, one thing is sadly missing from the discussion: examples of programs being cut back because of evidence they don't work.

There is a certain bipartisan wonk coalition that gets excited about this. I have blogged in support of this approach. My Republican friend Robert Shea, who was in charge of performance measurement in the Bush administration, enthused on his Facebook page that this was "what playing Moneyball in Government looks like."

But there is also a bipartisan coalition that does not like this. Some Democrats are worried that if you establish the outrageous criterion that we should be hesitant about funding programs that don't work, government will get smaller. Some Republicans are worried about handing too much influence over policy formation to pointy-headed professors who do research. There is a huge know-nothing constituency in Washington that wrongly believes (based on many of the egregious products that partisan think tanks or paid-for consultants put out) there is no such thing as genuine scholarly research following accepted methodological standards. And evidence-based government does not get the ideological or combative juices of either side flowing.

Evidence can't answer all questions, such as how to deal with a program that does achieve benefits, but costs a lot per amount of benefit delivered, or how to deal with programs that benefit different groups differentially. In politics, there will always be a role for values as well as evidence. But surely an additional dose of evidence in political debates would be a good thing for our decision-making processes.

So I would say that if you are inclined to see problems with evidence-based government, I ask you to consider the alternatives.

Posted on Mar 07, 2014 at 5:18 AM9 comments

This week in online disintermediation: Charities

transferring funds

One of the most pervasive phenomena of the Internet age has been disintermediation -- threats to established brokers or middlemen between consumers and service providers. This has very much hit the media, of course. With the rise of massive open online courses, it is starting to hit higher education. And now, according to a fascinating article in The New York Times, it is touching traditional nonprofits such as the United Way or Save the Children.

Nonprofits traditionally have acted as middlemen between people who want to contribute money to help a cause and the beneficiaries of said giving. The nonprofits help in choosing the appropriate beneficiaries to help, monitoring the giving, and often even deliver the service to beneficiaries as well. As the article notes, some charities have traditionally tried to create a personal connection between the giver and the beneficiary, as in the theme in Save the Children ads that you would "adopt" a specific child, but in reality these connections were never that direct.

Now, however, we are seeing the growth of firms (often for-profit) that advertise a whole list of very specific beneficiaries -- for example, "a young girl who needs a stem-cell treatment," "a woman who wants money to adopt a child" or "a classroom of low-income students who want to visit Washington." The firm then invites people to contribute specifically to whichever of these causes is most appealing.

What they are doing, basically, is crowdsourcing charity. Crowdfunding still constitutes only about 1 percent of charitable contributions, but while charitable contributions in general are stagnant, crowdfunding is growing rapidly.

As with other examples of crowdfunding, there is much to like in this model. By providing new, attractive options to people, it may increase the total pool of donations, not necessarily eating into traditional charities but providing net new resources to the charitable world. And it provides a democratic, market test of whether a cause is attractive to people, rather than bundling a huge range of causes, some of which a donor may like less or not at all.

Nonetheless, as with other examples of disintermediation that have arisen in the Internet age, there are also grounds for concern. "Legacy" charities have built up expert capacity for vetting (and monitoring) causes, and if this were to disappear or become severely threatened by a crowdfunding model, we might on balance end up with a poorer group of causes that get supported. Legacy charities are also a social, and even political, force for the very idea of giving, which would be much harder for the decentralized crowdfunding initiatives to match. So in a world without strong "legacy" charities, the idea of the importance of giving would probably get less attention in society.

This is why people say the Internet is disruptive. And the disruption has costs as well as benefits.

The article suggests a possible middle ground that is being pursued by some charities, which is to offer crowdfunding options along with general donations as part of their own activities. This might work, but it will require some education by the charities on the expert role they play and why not every one of their donors will want to choose individual projects. I suspect that as more and more Internet disruptions continue, various kinds of adaptations of this sort that blend the new and the "legacy" institutions will become increasingly common.

Posted on Mar 04, 2014 at 10:09 AM0 comments

Why Hong Kong is worth watching

U.S.-China conversation.  Shutterstock image.

Last week, while the world's attention was focused on violence and human rights issues in Ukraine, I was in Hong Kong to give some lectures for the public administration program at the City University of Hong Kong. During the week I was there, increasing tensions between Hong Kong and mainland China were very much in the news, culminating in a Sunday demonstration sponsored by the Hong Kong Journalists Association protesting threats to press freedom from China.

Then, on Monday night Hong Kong time, just after I returned to the United States, these problems dramatically escalated after a gangland-style knife attack on the recently deposed editor of Hong Kong's leading independent newspaper, which left the journalist in critical condition. The story was quickly taken up on The New York Times website. Because of Hong Kong's very longstanding freedoms that now seem to be in question -- unlike Ukraine, Hong Kong has a long tradition of political freedom and the rule of law -- and because of what it says about how China is behaving in the world, these developments should worry people in the West, even though Hong Kong is a small and faraway place.

A little background is in order. In 1997, Great Britain handed control of Hong Kong to China. For China, this meant overcoming a potent symbol of foreign control on Chinese soil. Many Hong Kong residents also felt happy to become part of China, but there were also great concerns because of Hong Kong's freewheeling culture, rule of law, lack of corruption and large numbers of refugees from communism -- all of which made many people nervous about the handover. To allay these fears, China promised Hong Kong that it could for 50 years live under a policy of "one country, two systems," where it was a Special Administrative District that got to keep its own laws and practices.

Today, however, one country, two systems seems under threat. Culturally, there has been a huge influx of mainland tourists coming mostly to shop at huge luxury stores or buy milk powder or other food products where they doubt the safety of Chinese brands. Hong Kong now receives about 70 million mainland tourists a year, in a city of 7 million, and they have annoyed many with poor manners and the crowding of streets and subways their presence has produced. Politically, the Chinese government has stated that, though the city's chief executive will for the first time be elected by universal suffrage in 2017, the mainland reserves the right to prohibit candidates they dislike from running. And there have been increasing worries about threats to press freedom: the editor of the leading independent Chinese-language newspaper was recently fired and replaced by a pliant Malaysian Chinese, and the editor of Hong Kong's English-language paper the South China Morning Post was replaced by a mainlander. Additionally, a popular radio commentator often critical of the mainland was fired.

Last year there were two armed assaults on independent editors and owners. And now we have this latest, and most serious, attack on the former editor by two men who attacked him from a motorcycle and sped away.

This is not just about Hong Kong. China has made similar "one country, two systems" promises to Taiwan, which now are likely to be greeted with even-greater skepticism. Those worried about China bullying its neighbors are likely to become more worried. And this is not good for constructive relations with the United States either. Time for a Chinese reset?

Posted on Feb 26, 2014 at 7:44 AM6 comments

ABBA, taxes and unintended consequences

ABBA album cover

To the occasional amazement or even consternation of friends and family, I am a huge fan of the seventies pop band ABBA. This partly reflects my taste for pop music over genres such as heavy metal or rap, and partly my long-time association with Sweden, ABBA’s home country. (As a sidebar, ABBA aficionados among this blog's readers -- if any -- should listen closely to ABBA songs such as Dancing Queen, where they make the extremely common pronunciation mistake by Swedes of pronouncing the “s” in music to sound like “sick,” because there is no “z” sound in Swedish, or the song Money, Money, where they say “money must be funny,” reflecting the fact that in Swedish the word for “fun” and “funny” are the same.)

At any rate, I recently saw a bizarre ABBA story reposted on Facebook from the London daily The Guardian, about the loud and mismatched costumes ABBA wore when they performed. The article quotes one of the group members as follows: "In my honest opinion we looked like nuts in those years. Nobody can have been as badly dressed on stage as we were."

It turns out there is a government-related story behind this! Swedish tax law allows work clothing to be tax deductible if it cannot be worn outside the job. In the seventies, the marginal income tax rate in Sweden on high incomes like those of ABBA members was around 80 percent (it is lower today). ABBA apparently deducted their stage outfits with the argument that they would never wear such outrageous stuff off the stage.

This is a funny story, but as a student of organizations and management, I noted a serious issue the story raises -- about how we think about the unintended and effects of rules that are adopted by government. The often-strange consequences can effect both ordinary citizens and those inside government organizations themselves.

The rule that clothing is tax deductible only if it exclusively for work is a sensible one. (I believe the IRS has the same rule.) Or at least it certainly sounds like one, right? The problem is that even rules that are generally sensible often do not make sense in specific circumstances or, as in the case of ABBA’s outfits, can create strange or unproductive behavior distortions.

So how should governments, or organizations, decide when it is appropriate to regulate behavior by rules, and when not? (The alternative is to decide things on a case-by-case basis, and give government officials, managers or frontline employees the authority to make such decisions as needed.)

This is of course one of the classic questions for organizational design -- discussed by organization scholars as far back as Max Weber a hundred years ago -- and I am obviously not going to resolve it in a single blog post. To the extent possible, people thinking about which approach to use should try as best they can to make judgments in advance about how frequently a rule will produce stupid or distorted behavior -- and how important those distortions will be. Rule-makers should also be open to evidence after a rule is developed that stupid or bizarre results are occurring more often than expected.

Rules simplify an organization’s job -- the areas covered by taxation are so many that an IRS that made most decisions on a case-by-case basis would soon have as many employees as the rest of the government. And in situations where corruption is a significant problem, using rules to determine behavior reduces the scope for bribery.

But as the ABBA example indicates, there is also a guffaw factor, which should not be ignored by government. I am guessing that many people who read the ABBA story reacted with, "Here was stupid government at it again, creating bizarre and dysfunctional behavior." Many media stories on the theme of “there they go again, stupid government” involve situations where a rule has stupid consequences in an individual case.

Posted on Feb 21, 2014 at 12:13 PM2 comments

New Zealand civil service: A land without turkey farms

cartoon man and turkey

During my recent trip to New Zealand (I blogged last week about my general impressions of the country), I had a chance to meet with the head of the New Zealand civil service -- which, as in the United Kingdom, is a formal governmentwide position -- together with HR people from some of the New Zealand ministries. It was a wide-ranging conversation, but two snippets of it caught my attention more than anything on our official agenda.

In the course of our discussion, it came out that neither "retired in place" nor "turkey farm" had equivalent terms in the New Zealand public sector. Indeed, there were some chuckles around the room when I explained what each of these phrases meant.

(For non-U.S. readers, and perhaps some Americans unfamiliar with federal jargon, "retired in place" refers to a longtime employee who has psychologically tuned out, and is doing the bare minimum on the job while waiting for retirement. A "turkey farm," meanwhile, is a small office where managers park all the incompetent employees whom they can't get rid of because of civil service protections, creating a separate non-producing unit to prevent the turkeys from interfering with and demoralizing the productive employees.)

When I discussed turkey farms, one of the New Zealand managers declared, "we're too short-handed to be able to afford having something like that."

I'm not sure we are so overstaffed in U.S. agencies that we can afford it either, frankly, but the manager's response does raise an important question: How has New Zealand avoided these problems in their government workforce?

Any answer is speculative, because we only have what social scientists call "an N of one" -- i.e. only one case with which to contrast ourselves, and a wide range of potential explanations. But let me speculate.

One difference between the United States and New Zealand is that New Zealand has for the last 20 years or so had a government HR system that is quite similar to that existing in the private sector. As I understand it, government organizations are given a considerable amount of freedom to craft hiring procedures that they find appropriate to the kinds of people they need to hire, and the rules for dismissing poorly performing employees are similar to those in the private sector. (Though New Zealand's rules still offer greater protections to workers than do those in the U.S. private sector).

A second difference is that government service in New Zealand is still held in relatively high regard, and is competitive in attracting very talented young people. That competitiveness is undoubtedly made easier by New Zealand's lack of a major finance sector, which in the United States distorts the entire labor market with its outsized salaries.

The second problem is hard for us in the United States to do much about, but the first is self-inflicted. I agree with U.S. public employee unions in trying to explain the contributions and raise the status of public employees, but their conservatism in opposing modernization of our civil service system is destructive and, in the long run, self-destructive.

To be sure, these U.S. expressions reflect an aspiration for government performance that hardly even exists in many nations' governments. There are plenty of countries around the world with parasitic government organizations filled with employees who are living high off of bloated salaries and corruption, where everyone behaves at best according to the U.S. concept of retired in place, and every office is a turkey farm. So at least we expect better, recognize that not everybody is like that, and enjoy a culture where these phrases reflect derision. That's a good start. But we can and should do better.

I would be curious to get reactions about "retired in place" and "turkey farms," particularly from non-U.S. readers -- including anyone reading this blog in New Zealand. And U.S. readers' thoughts are of course welcome as well.

PS. I forgot to note in my previous New Zealand blog that Wellington, the capital, is quite neatly divided into a government building district, next to a commercial district, next to an arts and nightlife district. The skyline of the commercial district is dominated by the logos of U.S. firms -- Deloitte, SAS Institute, and IBM -- that sell to the New Zealand government. A sort of Wellington version of the Dulles corridor….

Posted on Feb 18, 2014 at 12:19 PM8 comments

Lessons from the French invasion of Silicon Valley

Map of Silicon Valley (PR Newswire/

Source: PRNewswire/

I noticed essentially no attention in the media to the visit by French President Francois Hollande to the Silicon Valley during his current U.S. visit. Interestingly, however, there was a fascinating article in the London-based Financial Times on the topic. It turns out there are about 60,000 French citizens living in California, one of the biggest French communities in the world outside France. And many of them are in the Silicon Valley doing startups.

Hollande would like to attract many of them back to France, but before he is able to do so, he needs to understand the reasons given in the article for why they came in the first place. (Hint: it’s not the architecture, and it’s not the food.)

The answer seems to be a mixture of attitudes towards startups in French society and some government policies that try to protect legacy businesses from competition. It is hard to find a landlord willing to rent to a small company, for example. There is much less private cash available to start up new ventures. And nationalism and protectionism hurt too.

The government has tried to shield bookstores by prohibiting Amazon from offering free shipping. It has even tried to protect the existing taxi industry by requiring the likes of Uber to wait 15 minutes before picking up passengers! It has refused to approve takeovers by large foreign companies of successful French small tech companies. (Interestingly, the article did not mention the higher taxes in France compared with the United States as a problem.)

There is a lesson here, both for the United States and for France. For the U.S., it reminds us of our continuing sources of strength in terms of fostering the innovation that is so essential to the ability of an advanced economy to survive in a world of low-wage competition. We have a culture more accepting of risk, institutions that make it easier for new firms to raise capital more easily, and a government that by and large does not try to hinder innovation. As long as we have all this, the United States is likely to continue to be in good shape in the new world in which we need to compete.

For countries such as France, it reminds them that success is not simply a matter of doing the kinds of things to encourage innovation that come easiest to them, such as establishing lavish “science parks” to serve as places where talent can be near other talent or to fund basic research. It goes deeper into a country’s DNA.

Posted on Feb 14, 2014 at 9:05 AM0 comments

Greetings from New Zealand

steve kelman

I arrived for the first time in the Auckland, New Zealand, airport after a 13-hour flight from Los Angeles -- to give some lectures at Victoria University in Wellington -- and switched over to the domestic terminal for a short commuter flight to the tourist resort town of Rotorua (pronounced, weirdly for an American, something like "Roto Rooter," the clogged-drain company). Having arrived from the United States early, I was able at the last moment to switch to an earlier flight. I took my mostly full bottle of water, which I had been planning to drink on the wait for my connecting flight, and threw it in a garbage pail before entering the departure area -- only to discover there was no security checkpoint at all to get on the flight. It was an out-of-body experience. Just get on the plane.

I later discovered that several years ago Prime Minister Helen Clark eliminated security checks on domestic flights where the planes have fewer than 80 seats. Seems a bit risky to me -- couldn't New Zealand become a sort of hijacker magnet? -- but so far, no problems. (I was also told that on Australian domestic flights one may bring bottles of water aboard.)

So this place is different. First, it is very small, with a population only a bit over 4 million. Second, it is far away -- some 1300 miles from the eastern coast of Australia, not to speak of other places. (If you look at the map, you will be surprised to see that it is at almost the same longitude as Hawaii.) Third, the whole country is along major earthquake faults, which is obvious just looking at the many hills and outcroppings formed by seismic activity long ago, but also visible in thermal pools -- literally smoking, bubbling, and smelling of hydrogen sulfide from activity just under the earth's surface -- in places such as Rotorua.

When you're so far away and so small, how do you support yourself where transport costs for trade are high and you don't have enough of a population to reach effective scale domestically for a lot of production? If you're New Zealand, you get a lot of tourists to observe your natural beauty and partake of your emptiness. (Today, more Chinese visitors, for whom the emptiness is a real attraction from their crowded country, come to New Zealand than do Americans.) And you develop niche export industries, traditionally lamb and wool, but now increasingly replaced by cow production for dairy, to sell infant milk powder to China, to parents who prefer powder produced in a place with clean air and strong regulations missing in China.

You also need to prepare to adapt. One of New Zealand's first major tourist attractions, in the late 1800's, was beautiful silica steps in a beautiful pink and white color, formed by a lake through millennia of water and sediment movement. The steps, though, were destroyed when a 1886 volcano eruption covered them. The area proceeded to reinvent itself as a spa location, taking advantage of the thermal pools and mineral-filled waters.

More recently, New Zealand, traditionally almost more English than England, has transitioned to a self-image as a bicultural nation with a large Maori Polynesian minority, a group much larger than aborigines in Australia and much more present in society, including with government buildings that display signs in Maori as well as English.

In all, this place is far away, but it's delightful.

Posted on Feb 12, 2014 at 12:53 PM4 comments

Business grads, vets and workforce diversity: Who should be on your team?

Org Chart Stock Art - Shutterstock

In my last blog post, I discussed some insights that surfaced at the most recent meeting of the Veterans Administration Acquisition Academy, on whose advisory board I sit. This time I want to discuss an issue that one of the board members raised.

The Defense Department, unlike civilian agencies, requires that new hires in contracting have significant prior coursework in business administration. This person said that, in her experience, there were very good young people being hired in civilian agencies who had been liberal arts majors in college, who would have been screened out by the Defense Department.

Somewhat later in the discussion, it was noted that almost half of new government hires right now are veterans, thanks to veteran preferences in the federal government personnel system. (This figure is of course considerably higher than that in the VA). Veterans, the person noting this pointed out, have been socialized into a very structured and hierarchical environment.

Both these observations got me thinking about the academic literature on team diversity. When you think about it for a second, the most-important reason for creating teams -- especially when the team’s work product is a decision or approach to a problem -- is to bring more diversity into the ideas considered for a decision. Diversity adds to the information and to the perspectives available for decisions.

Particularly with demographic diversity (gender, race, age), sometimes this advantage can be offset by the in-group/out-group tensions that often appear in demographically diverse teams. But, especially with sources of diversity that do not create these kinds of fault lines (such as diversity of college major), the benefits for a team of diverse composition are clear.

I thought about these remarks about business majors and veterans in that context. I fully understand the reason for the business requirements DOD officials have introduced for new contracting hires -- they want to get away from seeing contracting as a clerical, administrative function and make it into a business advisor function.

Nonetheless, I wonder if the rigidity of “shall” is appropriate here, rather than a weaker approach such as giving some sort of preference to people with business courses. Can liberal arts majors bring some interesting new perspectives -- not to speak of writing skills that are often otherwise sorely lacking -- to a contracting team?

The same question applies for veterans. The fact that they make up 45 percent of new hires does not yet mean that workplaces will be dominated only by a veteran’s perspective, especially since there is also a stock of people already at the workplace who don’t share that same background. But it is something for managers to keep an eye on when team assignments are given. Indeed, as a general matter, research suggests that decisions about team composition -- are the right people selected for a team in the first place? -- often determine how successful the team is even before the first team meeting.

Posted on Feb 06, 2014 at 7:59 AM2 comments

Listening to some of the smartest government procurement people around

man graphs performance

It is a real pleasure for me to sit on the Board of Advisors for the Veterans Administration Acquisition Academy (VAAA), whose orientation towards teaching business skills and mission support – as well as its attention to teaching program management -- makes it a model for acquisition training efforts in the government. The board includes some very distinguished names in federal contracting, most (though not all) now retired from the government yet still very active. One of the things I get out of our occasional meetings is an opportunity to listen to what’s on the minds of some of the best minds in the field.

We spent most of the last meeting discussing “what is hot” and “what should be keeping you awake at night.” Here’s a report on some of what came out of the discussion:

  1. We spoke a fair bit about the idea of transferring more big IT acquisition projects to a few “centers of excellence.” Generally, the sentiment in the room was for caution about this idea. While this might be a good plan for small agencies who do only very occasional IT projects, the group worried that the more “centers of excellence” loomed as a central location for IT procurements, the more a vicious circle would be created. Agencies would have an even harder time attracting and retaining talent, with all IT talent being siphoned off to these (probably higher-graded) positions. The centers of excellence would lack agency-specific knowledge, and relationships inside the agency, that are so important for successful project management. With inside-the-agency talent drained away, this could make successful IT project management more difficult, not less.

  2. A number of people around the table thought that one of the highest priorities for training the contracting workforce was training more people to be experts in one line of business – such as IT contracting, professional services contracting, facilities contracting and so forth. Shockingly few of the government’s contracting officials are line-of-business specialists; most might be buying property management one day and website development the next. Line-of-business specialists are in a much better position to help the program customers with better knowledge of pricing, marketplace conditions and other special contracting issues.

  3. A number of participants also wanted to see a move, for ongoing training that contracting people receive, towards having a group of people at an office attend the same training at the same time. This has apparently begun happening at the Defense Acquisition University. There is evidence that, when people from the same office are trained together, the impact of the training on what actually occurs at the office increases. Although we did not discuss this, one might be able to adopt this group approach to online training, giving it a group in-office perspective to complement the individual online part.

In my next post, I will discuss some interesting thoughts that came up regarding business majors, liberal arts majors, veterans and the issue of diversity in government teams.

Posted on Feb 03, 2014 at 6:50 AM2 comments

Procurement contests get their due

compass innovation

A nice email came into my mailbox the other morning from the Kennedy School media person, announcing that the General Services Administration had won the annual Innovations in American Government award co-sponsored by Harvard Kennedy School and the Ford Foundation, for its contest site. was the only federal winner this year. is GSA’s version of a platform for enabling procurement contests – an innovation pioneered a number of years ago by DARPA where the government outlines a performance challenge and promises a prize (usually money plus publicity) for the first entrant who successfully solves it. I have written a number of blog posts over the years advocating use of this idea in the procurement system. In fact, I’ve written about this so much that I got an email shortly after the announcement came out, from a federal contracting lawyer, asking whether I was behind the award to GSA. (Actually, for better or worse, I had nothing to do with it.)

The GSA press release highlighted two examples of use of contests as a procurement tool, one by the FTC for developing an application that would screen out annoying “robocalls” that plague people (often at dinnertime), the other to develop apps that would help disabled people apply for jobs.

The FTC Robocall challenge got almost 800 entries. “If there is public engagement about the topic of the challenge, you will find a lot of people come out of the woodwork to enter,” GSA’s Tammi Marcoullier told me. Two winners tied, and received $25,000 each. Google was also a winner in a separate entry category for large organizations, which had no monetary prize associated with it. One winner is called “Nomorobo,” developed by a young

New York techie named Aaron Foss, and at this point available to the public for free. The way it works is described as follows:

Nomorobo uses an existing feature of the current phone system along with the power of cloud computing to fight back against illegal robocallers. By using simultaneous ringing, the call is split and routed to the Nomorobo server as well as the user’s phone. Instantly, Nomorobo analyzes the call and determines the threat level by using machine learning to identify and adapt to new robocallers based on their calling patterns. Nomorobo inspects the CallerID header, analyzes the frequency of every call, and compares this data to its real-time black and white lists. Potential robocallers are presented with an audio CAPTCHA for final verification while legal robocallers have their phone numbers whitelisted to guarantee message delivery. If it’s an unknown robocall, Nomorobo answers and immediately hangs up. If no threat is detected, Nomorobo does nothing and the call goes through like normal. All of this happens instantly, before the consumer’s phone begins to ring.

The Labor Department made three awards – with cash prizes of $5,000, $3,000, and $2,000 – for its disability employment challenge, two chosen by a panel of judges headed by the Secretary of Labor, and a “people’s choice” award selected by public voting. The people’s choice award involved an Android app called “Speak as you think!” that allows the voices of people with speech impediments to express themselves more understandably in their speech.

GSA’s Marcoullier also told me about a contest by the Mint for designing a new coin. Compared to their normal stable of a dozen designers, the Mint got hundreds of entries in its contest, and got connected with talented designers they didn’t know about before. This is consistent with research by Karim Lakhani of Harvard Business School, which I discussed in a column some time ago, finding that contest winners in the corporate world are frequently small businesses the customer knew nothing about before.

Contests are probably the most-interesting governmentwide innovation out there in the last five years, so this idea certainly deserved the prize it won. It is heartening how widely this is spreading. If your agency hasn’t tried this yet, at this point you don’t have to worry if you don’t want to be an early adopter. Non-U.S. blog readers, any use of this in your country – and if not, could/should there be?

Posted on Jan 27, 2014 at 9:54 AM5 comments

What makes Chinese students optimistic (and pessimistic) about the future of China?

U.S.-China conversation.  Shutterstock image.

As regular blog readers know, I meet a few times a year with Chinese college students visiting the United States in connection with a program called China Future Leaders. I typically as part of meeting with them take their temperature on some issue involving China, or China and the United States. This time I asked them the question: "What is one thing that makes you optimistic about the future of China for the next 15 years? What is one thing that makes you pessimistic?" I then allowed five students each to nominate something, and then the whole group -- about 60 or so -- were allowed to vote for one or two things each that made them most optimistic or most pessimistic.

For what made them most optimistic, the categories divided into those about the development of the Chinese economy ("economic growth" and "economic opportunities to bring new products and services to China") and those involving China's internationalization ("China's increasing status in the world" and "increasing numbers of Chinese going abroad and learning ideas from the world"). Also nominated was "good relationship between the United States and China."

A "good relationship between the United States and China" got only two votes. However, the other international categories beat out the economic categories but a narrow but decisive margin. The thing that made them most-optimistic about the future of China was the increasing number of Chinese getting international exposure. "For many years," one student said, "China cut itself off from the world. That's not true anymore." China's increasing international status came in second place in terms of numbers of votes.

What made them most-pessimistic? Nominations included pollution, unsafe food, violence by the government against the people, and bad relations with other countries in Asia

Here is very clear "loser" was pollution. For well over half the group (the largest number of votes any of the optimistic and pessimistic alternatives received) pollution was one of two things that made them pessimistic about China. In second place came poor relations with other Asian countries. (Poor relations with the United States was not nominated.)

Interestingly, one nomination for something making the studentspessimistic about the future of China was the Chinese education system -- the worry that it did little to encourage creativity. This choice was not among the things that worried the students the most, but it got a moderate number of votes. This is particularly noteworthy given breast-beating in the United States about the supposed superiority of Chinese schools.

During the question period, a girl studying to be a diplomat asked me a question about whether I agreed with the many Chinese people who, she said, believed that the Chinese government was far too weak and accommodating in its relationship with other countries, not standing up for China's interests enough. (She noted that a Chinese critic had mailed the foreign minister a nutritional supplement to eat so he could become stronger.)

I am suspecting that many American blog readers were surprised at her question, and are worried instead about Chinese foreign policy being too aggressive. I pointed out to her that U.S. observers, not to speak of China's Asian neighbors such as the Phillipines or Japan, hardly regard Chinese foreign policy in the region as weak. I used this as an opportunity to appeal to her as a diplomat, and to the Chinese students (I would have said the same to American students were I speaking to them) that it is a very common human trait to think our opponents are powerful and malevolent, while we ourselves are weak but virtuous. The different perspectives inside and outside China about the foreign policy stance of the Chinese government reflect that. (I bet if you asked Americans whether the U.S. government is too accommodating to China, many if not most would say yes, while Chinese would think the United States was too aggressive and hostile.)

Never too young, or too old, to learn about how people elsewhere look at things, and about putting yourself in the shoes of others.

Posted on Jan 22, 2014 at 1:32 PM5 comments

Corruption and bureaucratic rigidity

steve kelman

I saw a small story recently in the China-based Beijing Review that translated an article from the official Communist Party People’s Daily about a college admission reform that had been abandoned by one of China’s leading universities, Renmin University in Beijing. The article suggests a very interesting story about the relationship between the extent of corruption in a government and the degree of bureaucratic rigidity required in managing the public sector. It is a story with relevance to the United States as well. 

University admissions in China are based strictly on test scores in a college entrance examination run by each province . It is a very cut-and-dried, rigid system. No points are deducted for being a boring grind who does nothing but study for exams, no consideration of having been under the weather the day of the exam, no points added for creativity, community service, or for acting, musical or athletic ability. 

Ten years ago, at a small number of elite universities, a program was introduced allowing the schools to admit a select group of students on the basis of criteria other than the national entrance exam score. The idea was that this flexibility would allow the universities to admit outstanding students whose qualities did not fully come forth on the entrance exam.

 That system was suspended last November following the arrest of Renmin's head of admissions for taking bribes from parents to secure admission to their children under the flexible admissions program. 

When I read the article, I immediately thought about college admissions systems at American universities, which frequently use a number of criteria – grades, SAT scores, extracurricular activities, leadership, community service and so forth – in making admissions decisions. These systems have existed for a hundred years, and they continue to exist. They can continue to exist in the United States because it is virtually unheard of to bribe an admissions director to get a kid admitted. 

Notice the correlation. When there is a high level of corruption in an institution or a society, pressures arise not to allow discretion in making decisions, because such discretion provides opportunity for the decision-maker to be bribed. But that creates an inflexible, bureaucratic system that does not allow for the richness and nuance of judgment in making decisions.

It would have been nice for Renmin University not to be shackled to using only test scores to admit students, because that would mean they would be making offers to students it would be good for them to have. But in a corrupt environment, Renmin may have no choice.

One of the (many) prices organizations -- and governments -- pay for corruption is that it shackles them to rigid decision-making systems that often fail to produce the most-appropriate decisions or solutions. The flip side is that if your organization or government is lucky enough to have a low level of corruption, you have more room to develop more flexible decision-making systems -- and to allow for better decisions. 

Let’s apply this to the United States. The recent high-profile cases of procurement corruption notwithstanding, the federal procurement system -- and decision-making in U.S. executive-branch agencies more generally -- is remarkably uncorrupt. We are very lucky. (When I tell Mexicans that no American police officer has ever requested a bribe from me in my life, they stare with incredulity.) Yet the degree of rigidity in our procurement, human resources, and other government management systems is too high for our low level of corruption.

To be sure, sometimes the argument for rigidity is not to avoid corruption but to avoid “arbitrary” decisions. This has a lot of merit for issues of rights and obligations, but is less relevant to discretionary government decisions such as those involving awarding a procurement contract. As a general matter, I think we want transparency, and an explanation for why decisions came out as they did. Neither of those needs, however, are inconsistent with more flexibility. 

We are not Nigeria or Venezuela or China. We don’t need to be so rigid, and that is a good thing. But sometimes we seem to be too afraid to take advantage of our advantage. Imagine if Harvard or Columbia adopted an exam-score-only admissions system because Renmin University in China has had a corruption problem! More flexibility in U.S. public management is in order.

Posted on Jan 17, 2014 at 8:39 AM9 comments

Infrastructure in shambles? Contracting to the rescue?


In looking over my Facebook news feed a few days ago, I noticed that two different American Facebook friends had independently posted disparaging comments about American airports. One showed a dangling wire and frayed carpeting at a gate at Dulles Airport in Washington, the other commented how depressed they were to return from a trip abroad to JFK Airport in New York after having passed through spanking-new airports abroad. Both, independently, used the word “infrastructure” in their posts and made the point that America’s infrastructure is falling behind.

Infrastructure is a good solid second-tier issue in American politics, around all the time but never quite making it to the first level of the political agenda.

Should it be higher on our national agenda? For me – and I consider myself a fairly well-informed citizen, but hardly an expert on the country’s infrastructure needs – the answer is a resounding, “I’m not sure.”

Simply to note the gleaming, ultra-modern airports in places such as Beijing, Singapore, or Dubai hardly makes a case by itself. The rapid rate of economic growth in these countries in recent years means that they are dramatically expanding their infrastructure out of necessity. And, obviously, when a city they builds new, it gets the latest and greatest in a way that New York City, which has had a lot of air travel for a long time, would be less likely to have.

And many touted infrastructure projects do not come cheap, to put it mildly. I was amazed to learn that the (doubtless optimistic) cost estimate for building a Los Angeles to San Francisco high-speed rail being promoted by California government Jerry Brown is an absolutely staggering $70 billion dollars -- an investment that it is absolutely impossible for me to imagine can ever be economically justified.

So what infrastructure projects can be justified? Which investments actually will produce a return on the money, as many suggest that a number of port deepening activities to accommodate larger ships will do? Add to the mix that there are construction companies and construction worker unions that would love to see big spending on infrastructure, and it becomes hard for even an informed citizen to have an opinion on this. To me, though, it’s a big enough question to get higher on the political agenda, so people like me can actually hear the different sides present evidence.

So how does this relate to federal IT? For starters, if infrastructure spending dramatically expands, new procurement techniques are likely to get much-needed attention. And that will require a better-trained acquisition workforce.

Many are promoting the idea of having private companies design, build and operate revenue-generating infrastructure (such as roads or ports) under long-term contracts, with no upfront cost to the government and contractors being paid through project revenues once the project is in use.

These are often called Public-Private Partnerships or PPPs, with capital letters to distinguish them from generic kinds of public-private cooperation in general. PPPs are quite common in parts of Europe, especially the United Kingdom, and in Asia. They are rarer in the United States, perhaps surprisingly given our greater propensity to use the private sector rather than having services built and delivered inside government. An important reason for the less-frequent use of PPPs in the United Sates is the tax-free status of state and local debt, which makes private borrowing for these projects uneconomic compared with government borrowing. However, if PPPs are a good idea, then the law should be changed to allow use of taxi-free local debt for these public purposes.

In theory, and sometimes in practice, PPPs are a good idea. The private sector has an incentive to keep construction costs down and to get the project up and running (thus generating revenue) fast. They may have better management and customer service skills. However, the international experience with PPPs has been very mixed.

These are very long-term contracts, and clearly many changes in scope and cost take place during them, so governance structures for contract changes are necessary. They are also extremely complex contracts, and government has not always had, or hired, the skill to allow it to negotiate on equal terms with private vendors. There also has been a depressing tendencies for PPPs to be one-way bets, with companies doing well when the project does well and getting bailed out if cost or revenue assumptions turn out wrong.

PPPs are yet another example of the increasing demands that are being placed on government’s ability to contract well in situations involving complex contracts. We see this of course in the IT area as well. Yet we still don’t have much evidence that senior political or executive leaders prioritize improving the government’s ability to contract as a key public management skill for the twenty-first century.

Posted on Jan 15, 2014 at 6:27 AM3 comments

Political leaders take on ideology and special interests -- in Mexico

Don't be a cog in the machine

I have been spending a few days in Mexico City preparing for an executive education program for Mexican government officials (and others) that will be taught at the Kennedy School next week. I have been asking people here about some of the striking political events that have taken place during the first year of the six-year presidential term (with no re-election allowed) of Mexico's president, Enrique Pena Nieto. Pena has gotten the Mexican legislature to accept a significant number of wide-ranging political changes involving taxes and education. But the most dramatic reform, passed just a few months ago, involves allowing foreign participation in oil exploration and drilling, especially deepwater activities, in the state-owned Mexican oil monopoly Pemex.

A little background will explain why this change is so significant and politically difficult.

The Mexican government nationalized the (largely American-owned) oil industry in 1938. This move had enormous emotional and cultural significance in a country haunted by the specter of U.S. domination. Mexico has never fully recovered from the humiliation of defeat in the Mexican-American War, where, as is noted to this day in Mexican accounts, the country lost half its territory to the United States. (There is an annual holiday in Mexico remembering "the boy heroes," a group of teenage soldiers who died in the defense of the presidential palace against US troops.) The slogan "the oil is ours" resonates deeply as a statement of Mexican pride and self-respect.

Loosening up the Pemex monopoly also required confronting special interest power. Pemex employees are organized in a powerful union, and receive (by Mexican standards) very high wages. Pemex is dramatically overmanned, and many of its employees cannot be accused of having overly demanding jobs.

Add onto all this that the nationalization in 1938 was undertaken by an iconic leader of Mexico's Party of the Institutional Revolution (PRI), Lezaro Cardenas. The oil workers union is closely aligned with the same PRI – and President Pena represents that party.

Yet Pena decided to support allowing foreign participation, through exploration and production contracts that will give oil companies a share of the profits, in the Mexican oil industry (though not ownership). And he got the change through, even though polls showed 60 percent of Mexicans opposed allowing in the foreigners.

Pena had a good substantive argument to make on the merits. Pemex lacks the ability to do complex deepwater exploration and drilling. Allowing foreign participation should significantly increase government revenues, which can be used for social programs to help the poor. Increased production may also lower the prices Mexican consumers pay for oil. So he had a good case.

And that's the point. Pena was willing to do something that would help the country, even though doing so was politically difficult.

And this of course brings us back to the United States. Our political leaders seem utterly unable to do something like what Pena has done – to take on his own supporters' ideology and the power of his own party's interest groups to do something important that makes sense. Just think about the inability of Democrats and Republicans to reach a reasonable compromise on the country's long-term fiscal problems.

Sort of depressing that President Pena can do what our leaders can't.

* * *

On a lighter note, two random observations from Mexico City:

First (and tied in with the problem of U.S. domination of Mexico), I was surprised to see that Tostitos, made by Frito-Lay as an American knockoff on Mexican tortilla chips, are widely sold in Mexico itself (along with Doritos). Talk about bringing coal to Newcastle!

Second, Mexico City is filled with neighborhoods whose streets are named after foreign cities or famous personalities. One section of towns has European street names like Hamburg and Verona, other with names of people such as Czech President Thomas Masaryk and French novelist Anatole France. And there is a neighborhood with streets named for U.S. states – such as Wisconsin, Indiana, Illinois and Carolina!

Posted on Jan 10, 2014 at 12:27 PM2 comments

More stuff that's not around any more

Wang 2200 - Image via

Just before Christmas, I wrote a blog about phrases that may have disappeared from everyday language, which I encountered reading a 1961 novel about suburban life in the fifties called Revolutionary Road. I invited blog readers to ask friends, and in particular young people, which of these phrases they knew. I tried this myself with college-age students I met over the holidays, and discovered a mixed bag. Many of the young people had heard many of these expressions – such as “crummy,” “dopey,” or “loot” – but only through hearing parents, or even grandparents, use them. I was informed that “dope” as an adjective – as in the phrase “this is dope” – now can be used to mean great or cool, almost the opposite of its old meaning.

Well, also over the holidays I read a column in my local newspaper – I don’t even mean The Boston Globe, I mean the Concord Journal – discussing a topic very relevant to winter, certainly in Boston. The article pointed out that you never see kids come around anymore after a snowstorm who want to be hired to shovel your driveway or sidewalk. I had forgotten all about that: when I was young, I did this myself, and there were always a lot of kids doing this. You never see it anymore, or at least we don’t in Boston.

This got me suggesting to myself another party game, about parts of everyday life that have disappeared. I immediately thought about an incident that took me aback in my management class for Kennedy School master’s students a year ago. I was teaching a case from the early 1990’s on a customer service initiative in the New York City subway system. The specific problem in the case involved somebody who had been named “station manager,” the person in charge of the overall customer experience at one of the subway stops – and was trying to get an additional turnstile installed to reduce lines and fare evasion. When I casually used the word “token” in class – a word also frequently appearing in the case – a student raised her hand and politely asked, “Professor Kelman, what’s a token?” I was blown away that twenty-somethings didn’t even know about that old subway technology. (For the benefit of young blog readers, a subway token is a little coin-like thing used to pay fares.)

A third example that comes to mind as I write this post has larger social significance. Thirty or 40 years ago it was fairly common for workers, say in the auto or steel industries, or subway employees (which is what got me thinking about this) to go on strike. Strikes would sometimes last for tens and tens of days, with workers carrying picket signs outside factories or offices. These days, of course, strikes have not disappeared entirely, but they are drastically less a part of our lives than they were before.

To think about stuff that isn’t around anymore in IT is far too easy an exercise, given the pace of technological change. But it is interesting to think of some of the unlamented features of buying IT in the government that are not around anymore. Before the government credit card became common in the 1990s, it would often take several months to receive a desktop computer or even some computer peripheral. The order had to go through the procurement shop, where it stayed in somebody’s inbox until processed, and the delivery time under the government contract was often several weeks. (A political appointee I knew at the beginning of the Clinton administration in 1993 waited three months to get a $40 dictaphone.)

For some kinds of purchases, you could use something called the “imprest fund,” which was actually cash kept in a box somewhere for emergency purchases. Major IT systems (in those days inside the government it was called by the government-unique acronyms “ADP” or “IRM,” which stood for “information resources management”) had to be approved by GSA before an agency could begin to buy them, even after the spending had budget approval. GSA looked to make sure you were following the procurement rules, a process that added several months or more to the procurement cycle.

So while today's IT acquisition is far from perfect, we've come a long way. And I'd welcome reader thoughts about other blasts from the past.

Posted on Jan 08, 2014 at 10:34 AM10 comments

A fun party game for the holidays?

Steve Kelman

I recently finished a really interesting novel about suburban life in the 1950s called Revolutionary Road by Richard Yates. Published in 1961, it was made into a movie starring Leonardo DiCaprio and Kate Winslet (no, it is not Titanic) in 2008. 

I liked this book just as a book, but it was especially appealing because it was written around the time the story was set. When I watch the depictions of the early sixties in, say, Mad Men, I can’t help but wonder whether they are superimposing 2010 stereotypes – smoking and treatment of women, for example – on the early sixties. What is very nice about this novel is that it was actually written at the time, so it’s not presenting our stereotypes of today about another era. 

So, for example, it is quite amazing that the main character – in 1955 – is convinced that computers are the next big thing (this phrase didn’t really exist in 1955, and the character doesn’t use it). It is also interesting that the book includes an abortion, which again might have been thought presaging the liberalization of abortion law in the early 1970s. 

I take up Revolutionary Road is this blog, however, for a related but slightly different reason. While reading the book, I came across a number of words, phrases, and idiomatic expressions that, I believe, are no longer used in conversational English. I recognized all of them, because that era is not so far removed from my own childhood. But I noted to myself as I came across these phrases that I didn’t think they are used any more – and started to wonder whether teenagers or twenty-something of today would know the phrases at all. 

So just before Christmas I want to present an idea for a party game or at least discussion topic around a table of family or friends. How many around the table have heard these expressions? What are the ages of those who’ve heard of them, and those who haven’t? Are some better-known among younger people than others? 

Here’s my list from the novel: 

--  Dopey (“a dopey salesman,” as in stupid)

--  Headshrinker

--  “When a man really blows his top”

--  “Right-hand man”

--  “Pocketfuls of loot”

--  “Hamburger joint”

--  “Just moping around home”

--  “Sort of crummy” 

Do these phrases all still exist or have some, or most, disappeared?  I’d be curious to know what blog readers say – write in and tell us what your friends and family say over the holidays. 

Meanwhile, a peaceful holiday season to all. 

Posted on Dec 23, 2013 at 7:42 PM2 comments

Take the pledge: 'I will care about management!'

pledge_man with hand over heart

Two presidents in a row have had their administrations badly wounded by problems with government management: George W. Bush with Hurricane Katrina and Barack Obama with the rollout.

Those fiascos are not just bad for presidents, they are bad for America. Only extremist anti-government ideologues can welcome the humiliation our country suffers because of those failures.

There are many talented political executives and senior civil service managers in the federal government who are improving the performance of their agencies. But those efforts are mercilessly swept away like a child's sand castle overwhelmed by a giant wave.

Even important government performance improvements, such as the reduction of backlogs at the U.S. Patent and Trademark Office or the progress many agencies have made in reducing improper payments, leave no trace in the public consciousness.

Management is boring, especially for politicians for whom focusing on reports about operational tests for a technology application -- even one as important to Obama as the website -- is an unnatural act.

Now, however, we might need to demand that politicians be saved from themselves.

Obviously, presidents cannot and should not manage the entire government. But there is a chasm between that extreme and the current situation. What can Obama proactively do now, and what should his successors do in the future?

I think presidents should have a list, which would obviously change over time, of five hot-button issues for which successful management is important to political and substantive success and that have a high risk of creating big problems for the president.

It is impossible, of course, to predict perfectly which problems will gain media and public traction. But it is a good guess that one issue on any president's list should be the Federal Emergency Management Agency because of the guaranteed high visibility of major natural disasters that are mishandled. And given the importance of health care reform to both Obama and his opponents, it should hardly have taken a rocket scientist to see that management issues with the rollout would be on that list as well.

For those key projects, a president should get regular briefings -- maybe once a month or more often if needed -- on overall status, trouble spots and decision alternatives. I feel confident that developing and following up on such a list would reduce the number of government management fiascos.

What else could Obama do? His administration already has a list of high-priority performance goals, with several for each Cabinet department. Those goals are being tracked by departmental deputy secretaries and the Office of Management and Budget, and key officials get together on a regular basis to discuss progress, obstacles and lessons learned.

It would be a powerful statement of concern about improving the performance of the federal government for the president to choose two or three of those priority goals and become directly involved in the ongoing conversation.

The next election is three years away. A group of distinguished citizens who care about the country and the performance of the government -- some corporate CEOs, university presidents and retired senior journalists perhaps -- could get together to formally focus on that issue. They could ask each of the candidates to take a pledge to pay attention to the management of the federal government and explain how, as president, he or she would demonstrate that concern.

That would be one way to improve the country on which both parties could agree.

Posted on Dec 20, 2013 at 1:26 PM1 comments

Reverse auctions grow up


You know that a new practice has "arrived" in government when it becomes the subject of its very own GAO report. This is now the case for the use of reverse auctions in contracting, which was illegal until the Federal Acquisition Regulation was changed in 1997 and now has become an accepted part of the federal contracting environment. (According to GAO, at the four agencies they examined, there was a 175 percent increase in the use of reverse auctions between 2008 and 2012.)

The title of the GAO report -- Reverse Auctions: Guidance is Needed to Maximize Competition and Achieve Cost Savings -- is a bit of a parody of itself; along with "Progress Made, Problems Remain," GAO reports love to call for more regulatory guidance. However, the report is generally a balanced one, clearly recognizing the positive role reverse auctions play as a cost-savings driver in the federal procurement environment but also making suggestions for improvement. (Full disclosure: I am on the board of advisors of Fedbid, the leading reverse-auction provider to the government.)

One noteworthy element of the report was the information, which I don't think has been published before, that roughly a quarter of reverse auctions attract only one bidder. It is really not possible to imagine this is the fault of the procurement method, which widely advertises the availability of bidding opportunities and typically attracts many bidders. My guess is that these situations are produced by very restrictive specs, perhaps combined with set-asides, or  sometimes by excessively low government target prices (maybe contingent on funding availability). However, this question deserves further research. As with the data generated by government credit card transactions, the procurement method does not create problems so much as it creates transparency that sheds light on problems that existed all along.

Similarly, the report notes that savings numbers are hard to specify because they depend on the government cost estimate, which may be too high (or too low, again perhaps because of funding limits). This is a problem, but it is not unique to reverse auctions.

As for the report's request for "guidance," I guess on balance I think some FAR language would be a good idea -- not the least for those very conservative contracting officials who, despite the language in FAR Part 1 clearly stating that a practice is allowed if it is in the government's interest and is not forbidden, believe that if a practice is not explicitly authorized in the FAR, you can't use it. However, I would urge that the language be as unrestrictive as possible. It should cover only the most-important issues, and emphasize use of "may" rather than "shall."

For example, I disagree with the report's suggestion that reverse auctions be limited to buys under $150,000 or to "simple" services. One could imagine a larger price-driven buy that would be appropriate for reverse auctioning; indeed, guidance from the Defense Logistics Agency recommends use of this technique mostly for buys over $150,000. Also, I believe that in the future we will and should see the use of reverse auctions among shortlisted bidders on large-dollar  best-value contracts, which might involve very complex services, to determine the price part of a bid. That pricing could then be placed into a larger evaluation including other factors. So we don't want "guidance" to be unnecessarily restrictive. 

Reverse auctions continue to have real potential for the government. To the extent that GAO's suggestions add to the attractiveness of this technique for government customers, that is good for everybody.

Posted on Dec 13, 2013 at 6:55 AM8 comments

A U.S. decline?

U.S.-China conversation.  Shutterstock image.

While in Sweden during the government shutdown/debt ceiling fiasco, I blogged asking whether Americans realized the huge damage such events do to America's reputation abroad. I also noted  that, while some Americans react by saying "who cares?" they ignore two important facts.

First, that America's soft power -- the attractiveness of our society and culture -- is one of our big economic and security advantages. And second, that the dollar's status as a reserve currency -- and the willingness of foreigners to hold dollars -- dramatically eases our economic situation. 

Recently in Singapore for a few days teaching change management to senior government civil servants, I had the chance to dine with a very wise Singaporean observer of the international scene -- and someone who feels the United States is in significant decline in the world, with Asia (particularly China) rising. 

He began our discussion of this topic by noting that the United States invented globalization, but that our attitudes are far less global than those in many other countries. That will inevitably hurt our ability to compete in a global economy, he argued. He believes that leaders in Asian countries are looking with distress at many events in the United States, and asking themselves whether they should be continuing to hold so many U.S. assets. 

"The Chinese have a very long-term perspective," he added. "You see that each year they are slightly reducing their exposure to the U.S. dollar. Watch -- it will go down each year, and suddenly Americans will notice that Chinese are hardly holding any dollars any more." (He added that the Chinese renminbi has now catapulted to second place in the world as a currency used in world trade, up several places in just two years.)

He followed with a clincher: "America is going in the direction of Brazil." A big country, not unimportant, but marginal in the big scheme of things. 

At this point, I objected. The United States still retains an enormous mind share in the world. I don't understand very much when I watch Chinese (or Chinese-language Hong Kong) TV, but I can understand enough to hear how often in daily news broadcasts the word "America" is used. Despite increasing interest in China in the United States, I would estimate the word "America" appears easily 10 times as often on Chinese TV news as "China" does on U.S. news. Partly this may reflect my friend's point about Americans' insufficiently global thinking, but mostly it reflects the reality of U.S. influence on the world stage. Let's just say you don't hear the word "Brazil" very often on Chinese television. 

After we had dinner, I was watching Chinese-language TV from Hong Kong in my Singapore hotel room shortly after the death of Nelson Mandela. I was struck by how quickly the station went to Washington for President Barack Obama's statement on Mandela's death.  That segment was broadcast before any reactions from China. And on the plane coming home from Singapore, I read in Hong Kong's South China Morning Post a story about 10,000 Chinese high school students trekking to Hong Kong to take the Scholastic Aptitude Test so they could apply to U.S. universities.  The article noted that at the most-prestigious high schools in Beijing, a third of the students take SATs.  

I still fear we are screwing up these advantages by some of our behavior. But for now, they still exist -- and Americans need to understand that if we squander our many advantages as a force in the world, it will be a self-inflicted wound.

Posted on Dec 10, 2013 at 7:25 AM3 comments

Three more China observations

steve kelman

I am back in China for a few days to teach executive education, and, as always, there are interesting things to observe:

1) One of my former students, Eugene Wang, now a dear friend and a property developer in Shanghai, hosted a dinner for me with Kennedy School alumni in Shanghai. The conversation in general was fascinating, but one discussion towards the end of the evening made a really big impression on me.

Most of those around the dinner table were extremely distrustful of and even hostile towards Japan, and one thought that war between the two countries was very possible. The issue goes back 70 years to Japan's behavior during World War II, when it brutally invaded China and massacred many civilians. The more nationalistic Japanese government under Prime Minister Abe has re-ignited old hostilities (also between Japan and Korea), centering around Japan's insufficient apologies for its behavior many decades ago.

As an American, my reaction tended to be that this was a long time ago and that the nations should just try to get along, but the Chinese would have none of this. "What if somebody killed your mother and raped your sister, and never apologized for what they had done," one of the Chinese said to me. Everyone around the table compared the behavior of Japan with the apologies and memorials the Germans have done over the years.

I will say that the vehemence of the views around the table took me aback, not the least considering that these are Westernized and very well educated Chinese. This does not bode well for a peaceful situation in the area, with historic tensions re-fueled by the old territorial dispute between the two countries around some uninhabited islands.

2) Over the weekend there was an oil pipeline explosion in the northern Chinese rust-belt city of Qingdao (home of Qingdao beer), with at least 52 dead and hundreds injured. I had originally thought that there was an explosion at a petrochemical factory that killed plant workers, but it turns out that a pipeline placed underground in a residential neighborhood leaked and then exploded under houses and roads.

What is noteworthy is the huge coverage of this event on official television and the media. Twenty years ago publishing news of such an accident would have been illegal -- the accidents were state secrets. This time, Chinese President Xi Jinping visited the hospital to comfort victims, like an American politician.

Equally interesting, a headline in China Daily described the area as a "ticking time bomb" because of the pipeline in the middle of a residential area. Officials noted that when the pipeline was built, the area above was empty fields. But that was not a satisfactory explanation for the China Daily editorialist, which argued that officials must have known about the pipeline when housing was later built in the area. The editorial also questioned the local government's failure to warn people to evacuate despite several hours of warning about the leak. Soon after, in Chinese tradition, several factory officials were arrested.

3) I learned an interesting linguistic fact I had not known before -- the Chinese words for "country" and "state" (as in "the national state") are the same: guojia, which literally means "national family." As an American China expert I asked about this noted, this linguistic confluence suggests a lack of conceptual gap between nation and state/government. It is hard for a Chinese to say they are opposed to the state without in effect saying they are against the country, that they are not patriotic. Interesting....

Posted on Dec 03, 2013 at 7:55 AM2 comments

IT procurement and Searching for scapegoats?

contract signing

President Barack Obama has now raised the allegedly backward nature of the federal procurement system as a presidential concern. Speaking to a business audience about the failures of, he stated that what the government needed to do is to "blow up how we procure for IT." FCW has just asked on its cover, "Can IT Procurement Be Saved?"

I'm not sure we yet completely know the whole story of the problems with, but to me at this point it looks like there were two big problems with the system's development. One was the constantly changing requirements, a bane in federal IT development. In this case, new regulations were regularly coming down the pike as the system was being developed, creating an ever-moving target that receded each time code writers tried to catch up. The second was the failure to assign a systems integrator to be in charge of all of the many moving parts of this very complex system. That reflects a philosophy that began to spread in reaction to problems with giving systems integrators too much power in projects such as the Coast Guard's Deepwater boat development.

Perhaps the biggest problem was a political one. Not unusually for federal IT (and, to be fair much of commercial IT systems development as well), the system was behind schedule.  But this system had a deadline, the Oct. 1 launch of the new healthcare insurance marketplaces. A decision was made -- to my knowledge, we don't exactly know how or by whom -- to go ahead with the launch. How much those making the decision knew about how far from ready it was is, to me at any rate, unclear.

None of this, however, sounds very much like problems with the procurement system.

I am willing to believe that problems with the procurement system itself bear some significant responsibility for the failure of I promise to join with anyone making a good case that the procurement system bears a notable part of the blame in working for good suggestions to fix problems.

But I have not heard many specifics.

For example, I don't think it has been claimed that delays in awarding the task orders to develop the system were of any consequence in the system's unreadiness on Oct. 1.

FCW's recent cover story is generally a balanced piece of work, and it uses the phrase "procurement system" broadly to include poorly developed requirements, technical difficulties merging legacy systems, and a lot of other general features of government IT.

The one element of the procurement system proper the story criticizes, however -- doing the contract using task orders rather than an integrated contract -- doesn't warrant the criticism, I don't think. Task orders are not inconsistent with having an integrator, or even with having only one contractor rather than several. They would be the appropriate contract form to do agile development. (I was surprised to see Trey Hodgkins, whom I respect, quoted as stating that the system should have been developed as a single contract using full and open competition -- a "back to the future" approach that harks back to the 1980s.)

As a general matter, it is probably true that many of the special social requirements the government puts on contractors (which do not exist for companies not doing business with the government) discourage commercial firms from bidding for government work, especially small firms. However, Obama has often supported expansion of such requirements. 

The reputational risk that a mistake on a government contract can cause for a commercial company is also a problem, but that reputational risk is caused by media coverage, and it's hard to see a solution. (Overzealous auditors might increase the risk by turning small mistakes into apparent crimes.) These issues are likely not relevant to, however.

Furthermore, the government's past performance system is too kludgy and riddled with excessive "due process" to be the kind of sharp weapon it often is in commercial IT procurement.

But some of the comments, frankly, have an air of looking for scapegoats for the failure.

Again, I by no means see myself as somebody with a stake in defending the procurement system status quo. I have constantly promoted innovative procurement methods, such as contests and share-in-savings contracting -- which are both allowed by the current system. If readers want to make some specific suggestions about problems in the procurement system that bear a noticeable responsibility for the fiasco, please put them in the "Comment" section of this blog. I'm all ears.


Posted on Nov 22, 2013 at 7:21 AM11 comments

Own a Picasso for $150 -- another interesting public-private partnership

Picasso Man with Opera Hat

This Picasso could be yours -- and you'd be funding reconstruction of the ancient Phoenican city of Tyre in the process.

This is another of my promised blog posts discussing interesting and innovative public-private partnerships that are emerging in the United States and around the world.

This one involves a Picasso painting called "Man with Opera Hat," worth about a million dollars. Want a chance to own it for 100 euros (about 150)? Buy a raffle ticket before the Dec. 17 drawing in Paris from the Pavillion of Art and Design. If you win, you will get the work.

A strange way to sell art, you might think, but there is a method to the madness. This raffle is a collaboration between Sotheby's auction house and a non-profit called the International Association to Save Tyre. Tyre is an ancient Phoenican city with many classical treasures that was significantly damaged in the Lebanese civil war of the 1980s, and has been waiting since then for governments to come in and provide reconstruction money. But government money never came in.

Enter this non-profit and a private for-profit company. Add an innovative idea. The result is an innovative way to raise money for a public purpose. (It is a bit like the kind of live auctions many voluntary organizations conduct, but on steroids, with the other difference that the funds go not to the organization itself but to some other public purpose.)

I bring up this example partly to tell blog readers about it in case you want to buy a raffle ticket -- I plan to buy one. But I mostly bring it up to get people's innovation juices flowing. Who is going to come up with yet another innovative way for cooperation between private organizations, for-profit and non-profit, and governments in meeting public purposes? This is going to become more and more important, both because of tight government budgets and because of growing civic engagement.

Posted on Nov 20, 2013 at 12:39 PM0 comments

The pitfalls of public-private partnerships


I promised in a recent post that I would write a few blogs about potentials and pitfalls in different kinds of public-private partnership, and here's the first.

There was a fascinating story recently in Beijing Review about an effort by a newly established not-for-profit to organize carpools in one district of the city in an attempt to contribute to  efforts to ease traffic congestion.  Anyone who has spent time in Beijing is certainly aware of the city's traffic nightmare – endless bumper-to-bumper car traffic and subway trains that (at virtually all hours of the day, not just rush hour) would probably make the animals in cattle cars feel like they have plenty of breathing space. Cars are also the second-largest source of the air pollution that is making residents' lives miserable and almost certainly killing large numbers of them prematurely.

A citizen named Yong Wang started a non-profit called the Free Ride Charity Foundation to pay the highway toll (a little less than a dollar) of cars that take two riders. He raised money to pay the tolls and to erect 10 billboards about the program. He also recruited volunteers to distribute leaflets and to stand at highway entrances. In a country where for a long time people were encouraged to rely on the government to deal with problems, and where the government itself is somewhat suspicious of citizen organization efforts outside of official structures, The Free Ride Foundation represents an interesting kind of public-private partnership.

The article reported that the effort has met with some success, but has also encountered problems involving lack of citizen social trust and government over-regulation. When volunteers first started handing out flyers advertising the program, many drivers scorned them, thinking they were yet another one of the ubiquitous commercial leaflet distributors trying to push some product. Many people worry about their personal safety when riding with strangers. In terms of laws and regulations, the legal liability of the driver in case of an accident is unclear, and it is possible that the driver might have to compensate a passenger injured through the driver's fault, even if the passenger was participating in this free ride program. And a city official was quoted in the article about the possibility that the carpoolers might be running an illegal taxi service.

This experience shows elements of both the potentials and pitfalls of this kind of public-private partnership. The civic engagement in public problems that the Free Ride Foundation represents is really attractive – especially in a country such as China, where these traditions have been weak or weakened for a long time. And the effort, if successful, could even make a contribution to the lack of social trust that is one of the barriers to getting more take-up. But those seeking to begin such innovative efforts need to pay the same kind of attention to issues of management and implementation that (as illustrated by my recent blog post on Obamacare) often get ignored in government as well.

Posted on Nov 13, 2013 at 5:18 AM3 comments

What's happening with Obamacare?

health insurance form

I have just returned from a month in Sweden, during which I have been following--albeit incompletely and at a distance--the issues surrounding the difficult rollout of the website and the more recent stories about people losing insurance coverage because their existing plans don't meet the minimum standards of the 2010 overhaul.

I try to keep partisan politics out of this blog, but both of these fiascos seem to me to illustrate the problems that can arise when political leaders (or their advisors) fail to think sufficiently about management and implementation issues involved in government programs.

As I understand it from the limited accounts I have seen, there were a number of warnings before the website was launched that it had not been sufficiently tested and that launching it was very high risk. (As a sidebar, it should be noted that people who asked why it should be so complicated or expensive for the government to "put up a website" misunderstand what had to do – link hundreds of technologically diverse databases from different insurance providers and government organizations, quite a complex task. This was nothing like some startup company establishing a webpage to tell customers about what the company does.)

The question is whether and when President Barack Obama or his senior staff were informed of these problems. If they were not, why not? If they were, did they make a conscious decision to take the risk and let the site go live on the original date, comparing the risks of various courses in light of the politically charged debate about Obamacare? If Obama knew the risks, and if he explicitly decided they were worth taking, then the Oct. 1 launch was defensible, though probably in retrospect a bad decision. (When you take a risk, it is possible to have what decision theorists call "good decision, bad outcome.") Otherwise, though, what happened reflects the president's failure to sufficiently consider management issues with the execution of the program.

The problems that have arisen about cancelled plans, given that Obama promised during the debate over the law that anyone who was happy with their current plan could keep it, seems – unless there is something relevant that I haven't seen – to be a clear case of not paying enough attention in a timely way to implementation issues for new legislation. It would seem that if the bill contained minimum standards for health insurance plans, there was a very high probability that some, or even many, existing plans might not meet the minimum standards; indeed, if every plan met the standards, why bother to legislate it?

Given that some plans would not meet the standards, it is also a wise assumption that some insurance companies would choose to cancel plans not meeting the standards, rather than upgrading the coverage, and that this would mean some people would lose existing coverage. Here, it seems as if there was a failure to think through implementation issues in the legislation. The result is last week's fiasco number two for Obamacare.

The lesson for all politicians: You ignore management and implementation at your peril.

As I said, I've been away for a month. Have I missed something here?

Posted on Nov 05, 2013 at 9:41 AM10 comments

Swedes debate procurement, competition and public services

man graphs performance

As many Americans are aware, Sweden has an extensive welfare state, with child-care centers, home health care for the elderly and nursing homes paid for with public funds. As fewer Americans are aware, in the past 20 years, Sweden has moved dramatically -- often more so than the United States -- toward allowing private producers, including for-profit firms, to compete with local government for such services.

In the early 1990s, Sweden introduced the world's most comprehensive school voucher system for elementary and secondary education. Swedish parents are given a voucher that can be used at any school, public or private (including religious schools). For-profit schools are not only allowed, they dominate the non-government sector.

Similarly, for social services such as child care or nursing homes, many local governments have allowed private firms (and some non-profits) to compete with government, either through contracting or vouchers.

During the month I have been in Sweden, the status and fate of both vouchers and contracting for these services has been a major topic of public debate.

I have been reading the large number of Swedish studies on quality differences between private and government sectors in areas such as schools, nursing homes and employment services (which in Sweden have traditionally been a government monopoly). There also are extensive studies of price differences between contracted and voucher services in the private sector.

I think the overall message of these studies is that the differences are modest, favoring neither government nor the private sector, though a fair summary of the studies would note that the differences that exist mostly show slightly higher quality -- and more frequently somewhat lower cost -- for private compared with government provision.

There is a general agreement that markets cannot work without a good procurement system in the case of contracting and a good set of rules for vouchers.

Last year, there was a big government report on procurement reform titled "In Search of a Good Deal." I read the report in order to participate in a panel discussion with the report committee's chairman, and I was amazed at the similarities of the problems the Swedish and American procurement systems face. There was significant concern about insufficient contract management, without which, the report argues, private providers can't be expected to do a good job. There was concern about inadequate specs in contracts, particularly lack of performance specs. There was concern about training for the procurement workforce. And there was even concern about excessive bid protests, a disease Europe seems to have caught from the U.S.

There has been major media coverage in Sweden of scandals involving for-profit schools, following a similar rash of stories more than a year ago about a for-profit nursing home in Stockholm.

The largest television network, in its weekly investigative journalism show, sent reporters with hidden cameras and tape recorders (this is apparently allowed on Swedish television) to pose as parents seeking to get their children into for-profit schools or seeking a job there. The basic message of these hidden camera exposes was that some for-profit schools were letting kids in based on whether they were likely to be "easy" students to deal with, as opposed to kids who had poor grades in their current school, had ADHD or came from immigrant families.

This is in violation of Swedish law, which says that except for students in the school's neighborhood or those with siblings already in the school, students in schools with more demand than supply can be admitted based only on how long they have been on a waiting list. The for-profit schools stood accused of trying to increase their earnings by giving their schools lower-cost children and making the schools more attractive to potential students.

It is interesting to see contracting and other public management issues have so high a profile in political debate and to see Sweden grappling with some of the same problems that we are.

Posted on Nov 01, 2013 at 10:24 AM1 comments

A public/private partnership that is saving lives

Nokia Windows Phone

Mobile phones are key to Stockholm's innovative system for saving cardiac arrest victims by adding ordinary citizens to the emergency-response mix.

While spending time in Stockholm recently, I read an amazing, inspiring article in Sweden's leading newspaper, Dagens Nyheter, about an app that teams the public with health professionals to save the lives of people who fall victim to sudden cardiac arrest.

When a person goes into cardiac arrest, the survival rate decreases by 10 percent for each minute the person is not treated. Statistically, most cases of arrest occur in crowded places.

The cardiac arrest team at Sodersjukhuset, one of Stockholm's largest hospitals, decided to get the public involved in treating these cases. Volunteers can get trained in quick interventions for cardiac arrest (they sign up for training online). Once trained, volunteers are tied into the city's GIS-based system that alerts police, fire and ambulance units about the presence of any nearby cardiac arrest patient.

What this system does is include the real-time locations of all volunteers, based on information from their smart phones, so that the volunteer nearest to where the cardiac arrest occurs is also informed, by text message, of the victim's location. Because help can come from nearby volunteers as well as from police or emergency responders who might be farther away, it becomes more likely that the victim will be reached in time.

Ten years ago, Stockholm's survival rate for cardiac arrest patients was 3 percent. Last year, it was up to 10.9 percent.

The system is an example of the public/private cooperation of the future. A government-run alarm system is at the core, along with government police and firefighters, but individual members of the public have the opportunity -- in a very dramatic way -- to participate directly in a public purpose.

The idea came from doctors at the government-run hospital, and developing the system (and training volunteers) is supported by the Stockholm County Council (which runs the health care system), the Swedish Heart-Lung Foundation (a private charity) and companies that manufacture heart-restarter machines. A huge-hats off to Dr. Marten Rosenqvist of Sodersjukhuset, one of the leaders who developed this idea. He will never need to wonder what he accomplished in his life.

And for the rest of us, the challenge is to develop more approaches that use government resources in combination with individual or private-organization initiatives. I will be writing about both the potentials and the pitfalls of public/private partnerships in some upcoming posts.

Posted on Oct 24, 2013 at 2:19 PM1 comments

Start-ups: Can there be too much of a good thing?

a group of young adults

Encouraging young people to take risks is well and good, but efforts to persuade students to skip college in favor of start-up work may go too far. (Stock image)

I was taken aback recently by a story in the Boston Globe with the provocative headline, "At MIT Event, Group Entices Students to Ditch School." The article discussed a visit to the MIT campus organized by the Thiel Fellowship,  which offers 20 bright students each year $100,000 to drop out of school and come to San Francisco to work on getting a start-up company off the ground. The Thiel Fellowship representative stated in an interview for the article that you don't necessarily have to go through these traditional gatekeepers to change the world. All you need to do is build it. (PayPal co-founder Peter Thiel, who holds degrees in law and philosophy from Stanford, created the foundation.)

One of the most vital features of American society and economy is the strong role of start-ups, which is the envy of the world. New businesses provide a key source of dynamism and innovation. Think of how successive generations of IT have each generated new firms to take technology to its next level – from IBM in mainframes, to DEC in minicomputers, to Apple in microcomputers, to Microsoft for PC software, Netscape for the Internet,  Google, Facebook, and who knows what next.

I think, though, that, just as in every other area of life, at some point more is not necessarily better. There can be too much of a good thing. A few months ago, I wrote a blog post about Kennedy School students losing interest in working for large organizations of any sort (including, but not just, government), in favor of starting their own nonprofit social enterprises (or just regular enterprises). Since that post, I learned from a friend that his son, who just graduated from a top university, had turned down a job at Google because he was concerned the company was too big and bureaucratic. Also, Stanford recently announced that it was going to start investing in start-ups founded by undergraduates there, putting a further seal of approval on start-ups as the cool thing to do. Now this – encouraging smart kids to drop out of school entirely to rush into the start-up world.

Why can there be too much of a good thing? First, I don't think I need to make a case that existing large organizations need to get their share of talented people. They are serving many people, and the quality and cost of what they do is important. Innovation is clearly crucial for a successful economy, but competent production of what we have now – even assuming (incorrectly of course) that no innovation comes from large organizations – is very important as well. This applies to the need for talent in government, and in large private or nonprofit organizations. Second, most start-ups fail, and people are differentially talented at starting new ventures. The more signals young people get from society that what any kid worth his or her salt does is to start a new venture, the more that people not suited for this kind of activity will choose to give it a try anyway. For these new people attracted at the margin to starting something new, it may well be that the social costs of their failed, wasted efforts are greater than the benefits of the few successes they generate.

The Thiel Fellowship effort to encourage talented students to drop out of school is particularly pernicious in my view. A good college is not just a place to learn job-related skills, but to be exposed to elements of civilization that one would otherwise likely ignore – for the future tech or biotech entrepreneur, history or literature for example. And even in the area of job-related skills, good universities have incredibly smart professors in the area where the student is thinking of becoming engaged who just about certainly have relevant knowledge to offer. To think anything else is arrogant, and encourages an unhealthy arrogance among young people. The failed dropout entrepreneur will later either decide to return to school, at a time when he or she is less likely to enjoy the educational experience, or remain excessively ignorant for life, neither of which is a good outcome.

Maybe it's time to put a bit of a break on the start-up hysteria?

Posted on Oct 17, 2013 at 12:03 PM2 comments

World to US: You are destroying yourself!

capitol dome and bills

It is a common psychological phenomenon that when you are outside your own country, you are inclined to defend your country more than you would at home. I am in Sweden as the U.S. may be on the brink of going over the debt cliff, and I have to say that this nightmare has challenged my own adherence to this phenomenon more than anything else of the many times I have traveled abroad. There's not much I can say to all those outside the United States who are watching this spectacle with amazement and horror other than that I share those reactions.

The 7 a.m. segment of the TV news on one of the three main channels was completely devoted today to America's debt ceiling crisis, featuring an interview with Sweden's Conservative Minister of Finance Anders Borg. "The U.S. economy is in the process of healing itself," he told viewers. "That makes all this even more unnecessary." He added that, even if a temporary stopgap agreement is reached at the last moment, "It is completely unacceptable for the world economy that these crises return every other year."

Borg – and again I note he represents the Swedish Conservative Party – was very clear about what he thought the problem was. "People in the U.S. realize this is serious. There are many responsible people in the U.S. In Sweden, we have Conservatives and Social Democrats on opposite sides. But people have a sense of responsibility for our country. In the U.S., there is an irrational and weird group, and I'm not sure the responsible people can control them."

Americans should pause for a minute and think about how this spectacle looks to anyone outside our country. Some may say they don't care, but in a globalized world, that is madness. Admiration for our culture – the so-called "soft power" of the U.S. – is one source of both our economic strength, because people are attracted to our products, and of our political strength. It's hard to feel admiration when reading today's headlines. We enjoy considerably lower interest rates, and hence a better economy, because of the U.S. dollar's status as a reserve currency and the attractiveness of our government debt. You can be sure that foreigners (the Chinese have said as much) are now actively looking for alternative ways to invest their cash.

The world looks at this, and it makes them think more and more of a declining nation that is eating itself up from within. It's bad enough to shoot yourself in the foot. Here, we seem to be coming closer to shooting ourselves in the heart.

Posted on Oct 16, 2013 at 8:11 AM7 comments

How agency heads are measuring to manage

measurement tool

In my last blog post, I reported on some results of research that I and Ron Sanders, the former long-time senior civil servant now at Booz Allen Hamilton, have been conducting. Booz Allen is sponsoring our work.

We have interviewed 20 Obama-era agency heads, 10 chosen by good-government experts as examples of outstanding leaders, and 10 more picked at random. In my last post I discussed what we discovered about how these executives approach decision-making.

We also asked them about their personal involvement in efforts to improve performance using performance measures, and in efforts to find efficiency savings in tight budget times. As with the decision-making questions, we didn't want to ask vague questions that would elicit predictable, socially-acceptable responses. We wanted to get to the details. So we asked them, for example, to name specific performance measures they personally followed, or to describe what happened at their most recent meeting to follow up on performance measures in their organizations (if they have such meetings at all).

The answers of both groups – which we also presented recently at Brookings -- showed many similarities, though with some differences. All 10 of the outstanding executives, and nine of the randomly selected ones, could name at least one specific performance measure they followed – though the outstanding ones were able to name a good deal more (an average of more than six for the outstanding executives, compared to only three for the controls). It may be noted, though, that for both groups, most of the measures they named were input or output measures; few were true outcome measures.

All of the outstanding executives and six of the randomly selected ones held meetings at least quarterly to go over the status and discuss ways to move forward on agency performance measures. Four of them held such meetings monthly. Everybody who held such meetings was able to describe in some detail what went on at the most recent such meeting.

Similarly, all 20 of our subjects were able to mention at least one specific example of something they had done to achieve efficiency savings – but again, the average total number of actions cited was greater for outstanding executives than for their randomly chosen colleagues (4.4 vs. 2.6). Most of the areas where these executives sought efficiency savings came out of OMB's standard playbook – such as travel and strategic sourcing – but the outstanding executives were noticeably more likely to choose efficiency savings tailored to the specifics of their agency's mission.

What conclusions do we draw from this? One is that, after surviving as an initiative through three administrations, the use of performance measurement to improve agency performance seems finally to be becoming institutionalized as part of the way senior agency executives do business. The second is that despite the common belief that agency heads are too involved with politics, policymaking, and media to actively manage their agencies, these executives seem, as a group, very much involved in management. Given how depressing politics is these days, that is probably a good way for them to use their time.

Posted on Oct 09, 2013 at 6:48 AM0 comments

Why are hard decisions hard? Complexity vs. courage.

man on tightrope over sharks

At the Brookings Institution last week, Ron Sanders – the longtime senior federal career manager now at Booz Allen – joined me in presenting results of research that I had conducted with his firm's support.

The research involved 20 subcabinet agency heads serving in the Obama administration, 10 selected by good-government experts as ones who had done an outstanding job improving their agency's performance, another 10 chosen at random. I interviewed each, using the same set of questions, for several hours.

One group of questions concerned decision-making style. In formulating our questions, we were guided by the large body of academic literature on where decisions by government leaders can go wrong. Difficult decisions, the literature suggests, are typically very complex, with many facts and values at stake. Decision-making groups can, in theory, improve on individual decision-making by bringing forth a wider variety of knowledge and of points of view. However, decision-making groups are often prone to "groupthink" – situations where the group leader in effect stifles dissent, disregards the breadth of information and range of values, and the group reaches a decision too quickly, without considering alternatives and problems with the chosen course.

The remedy for groupthink is to encourage dissent, debate and sharing of new information and viewpoints. We wanted to see to what extent these agency leaders had wide-ranging sources of advice and information. We did this through a series of questions, avoiding obvious formulas such as "do you have a wide source of information?" or "do you encourage dissent?" Instead, we asked for facts and examples, such as what kinds of people they typically consulted for important decisions or to cite specific examples of situations where they had changed their minds about what to do in the course of making a decision or executing it.

On this dimension, our results were fairly encouraging. Though there were some differences between our two groups of executives, most in both groups had wide sources of information. One noteworthy finding was that a majority of these executives' personal staff and direct reports were career civil servants, something that provides a source of diversity because of the different perspectives career people bring to the decision-making of political appointees.

But our most surprising finding was along a different dimension. We asked each respondent to name their single most difficult decision and to discuss how they made it. We asked this question to find out more about how these executives thought through complex problems. However, it turned out that all 10 of the most difficult decisions cited by the outstanding executives, and six of 10 of the control group's, were difficult not because they were technically complex, but because doing what the executive perceived as the right thing required courage; the decision was politically unpopular or personally wrenching.

We are fascinated by this finding, not the least because it suggests a limitation to the conventional wisdom in the literature about a good decision-making process encouraging dissent and questioning. What these leaders needed from their decision-making group was not so much more information or points of view as moral support and backup to help them make a painful but correct choice. Thus, good decision processes for technically complex decisions and those requiring character and courage may, we think, be different.

In my next post I will discuss the other series of questions we asked, and what we found.

Posted on Oct 03, 2013 at 11:40 AM4 comments

Watching the drama from Sweden

locked doors

After waking up my first morning on a visit to Sweden, I was greeted with news of the government shutdown in the United States, the lead story on both the major local channels.

 The first words of the morning news anchor on Sweden's TV4 were: "'They did it,' says Barack Obama on his Twitter page." On TV1, the first words: "Now it's a fact – the U.S. has fallen off the budget cliff." (This beat out a story about a new international study which found that Sweden is the best country in which to be old.)  Since it is six hours later in Sweden than the United States, these 6:30 a.m. (Swedish time) broadcasts were 12:30 a.m. eastern time, only 30 minutes after the shutdown officially began. Both networks had live reports from their Washington correspondents reporting in the night darkness, with the Capitol in the background.

Interestingly, both networks emphasized the effect of the shutdown on government employees who would be laid off. The TV1 reporter noted that he had interviewed civil servants earlier in the day outside the Capitol, and they had (surprise!) told him how angry they were that they were being made into political pawns. TV4 had an interview on the 6:30 am news with a Wall Street trader (in English) saying that this was no big deal for the markets or the economy. However, by the 8 a.m. broadcast, this had been replaced with an interview with a Swedish trader (in Swedish) saying that if this lasted for more than a few days, it would be a big problem for the stock market. This was followed by a reminder about the debt ceiling debate coming in only a few weeks.

The largest serious newspaper in Sweden, the liberal Dagens Nyheter, ran an analysis by their Washington correspondent that took President Obama's side. "The main responsibility lies with the Republican faction that aggressively has put its political prestige on stepping all out on the gas pedal," the analysis says. In connection with the debt ceiling, the article continued, "The more radical Tea Party Republicans will probably demand new 'negotiations' about President Obama's healthcare reform, a law that has already been adopted and examined by the courts." 

Interestingly, the other major serious newspaper, the more conservative Svenska Dagbladet, had no shutdown-related article – their lead foreign news story was "Historic government in Norway" -- though they did have a small piece headlined, "Netanyahu presses Obama."

I will continue to follow all this from Sweden.

Posted on Oct 01, 2013 at 6:12 AM1 comments

Crowdfunding investigative journalism -- in China


I saw an amazing story in Global Times, the English-language edition of a Chinese paper and one of two nationwide English-language newspapers in China (China Daily is the other). Called "Journalist for Hire," it was about a Chinese journalist named Yin Yusheng, who was looking to raise money from the public to fund freelance research and writing for ideas he had for investigative journalism stories.

"I'm a senior reporter with extensive experience, and I'm not frightened by powerful people or violence," he wrote in his weibo (microblog) account and in an entry on an Ebay-like Chinese marketplace. "I will be an independent investigative reporter, not attached to any media agency."

He then described two specific ideas he had for stories he wanted to investigate – one of them about police officers who have been making corruption allegations against a local district attorney's office officials for several years – and invited the public to donate to support one or both of them. He said he would accept donations as low as 10 and as high as 1000 RMB (around $1.75 to $175) – he didn't want anything higher,  so that nobody could try to influence the content of his story – and would stop collecting donations for an article when they totaled 5000 RMB. As of the time the Global Times article was written, Yin had apparently reached that mark.

Yin became famous in China after he broke a story a few years ago about the son of a local senior police official, who ran over two college students in his fancy car and then, when the police came to investigate, told them they didn't dare arrest him, because "My father is Li Gang." After the report, Yin was fired.

I found this article really amazing for two reasons. First, it was published in a Chinese newspaper, at least in the English-language edition. While all newspapers in China are in some sense government-owned, and all receive censorship "guidance" from Communist Party officials, Global Times is actually published by the same company as publishes the Communist Party's own flagship paper, People's Daily. It has a reputation for being nationalistic and somewhat anti-Western. While English-language papers have somewhat more freedom than Chinese-language ones (and I'd bet this article did not appear in the Chinese-language edition), nonetheless I think it is truly extraordinary that a Communist Party newspaper has published a sort of paean to an independent journalist, not working for an established media outlet, and raising money from the public rather than official funds.

Second, as best as I can tell, Yin may actually be the first person to try this idea. I asked a longtime U.S. journalist, now at a foundation involved in journalism, whether he knew of anyone ever doing this in the U.S., and he said no. I checked out "crowdfunding investigative reporting" on Google, and found that there is a new platform, called Newsfreed, that intends to allow journalists to suggest stories. When I checked out the site, it appeared as if they had raised some money, but didn't have specific stories they had raised it for.

This is yet another sign of a lot of interesting stuff going on in that land of contradictions that is China.

Posted on Sep 26, 2013 at 10:02 AM2 comments

Christianity grows in China

St. Ignatius Shanghai via wikipedia

St. Ignatius Cathedral in Shanghai, China. (Photo from Wikimedia)

There was a fascinating article – in of all places China Daily, the closest one comes to an "official" English-language newspaper in China – about the leader of the officially sanctioned Protestant churches in China calling for tailoring sermons for Chinese Christians based on their various personal backgrounds. 

Traditionally, many Christians in China, as in other Asian countries, have been highly educated, Westernized people, and Christians have often been associated with movements for political democratization and educational enlightenment. However, the article points out that in recent years, many new converts to Christianity in China have been underprivileged and often poorly educated migrant workers in big Chinese cities. According to one religious leader quoted in the article, the traditional Christians "go to church mostly for 'a lofty spiritual need,' [while] migrant workers are seeking advice and comfort on everyday difficulties of life. … [They] are under great pressure, and they especially lack family warmth and help." 

Another religious leader stated that these workers "consider themselves at the bottom of society… [and] are treated as outcasts."  So Chinese Christians are thinking about how to minister to this new community of believers. But, the article says, the church needs to find a new way to relate to them.

I found this article fascinating not only for its content but for the fact that this newspaper was interested in discussing internal issues of how Christians could be most effective.

Christianity is certainly something of a presence in China. One occasionally comes upon young people wearing crosses (although those wearing t-shirts with American flags are more common). Millions of Christians are part of the state-recognized churches, and there are also unofficial Christian churches that live a sometimes-tolerated, sometimes-persecuted existence.

While in Shanghai, I visited the Shanghai Catholic Cathedral (St. Ignatius Church), built in 1904, along with some other Catholic-related buildings. It sits in an area outside the center of town now dominated by some of the city's most gargantuan shopping malls. There were about 200 people at a late Sunday-afternoon mass, almost all Chinese (though a few Westerners), about 80 percent women and about 70 percent young or fairly young. It was a strange experience to see Chinese Christians entering the church, taking holy water, and crossing themselves.

P.S. My flight from China arrived back on the evening (U.S. time) of Mid-Autumn Moon Festival,  a major holiday in Chinese culture that features people eating something called "mooncakes," jelly and/or whole cooked egg yolk-filled round sweets. The customs inspection people were ready, because mooncakes with whole egg yolks can apparently not be brought into the United States because of bird flu fears. Along with others on the China flight, I was whisked off to secondary inspection, and the various boxes with mooncake gifts I had received checked out for egg yolks. Three of my gifts survived (jelly only) but one didn't. A big waste bin included lots of mooncake boxes and tins.

Posted on Sep 20, 2013 at 10:27 AM4 comments

Talent vs. grit

men talking

Adam Grant, a young tenured professor at the Wharton School at the University of Pennsylvania, may be the best new researcher studying organizations in many years. I have written columns in the past on some of Grant's work on prosocial motivation, which is potentially very relevant to motivating employees in government, and I plan to write a column about his new book, Give and Take, once I've finished reading it (I'm about two-thirds through now). 

This post concerns one brief discussion he has, less related to the main theme of the book, that I think is relevant to anybody leading employees.

The book details evidence suggesting that people who turn out to be outstanding in endeavors such as music or tennis (and presumably in other ones as well) are distinguished less by extraordinary talent than by extraordinary motivation. Looking at the early experiences of concert pianists who were finalists in a prestigious international competition, researchers "discovered an unexpected absence of raw talent."  These eventual bloomers did not win many of their early, local competitions. They also typically had piano teachers from their neighborhoods rather than experts.

What distinguished these outstanding pianists from others was that they practiced much more than did their peers, the researchers found.

When researchers interviewed top tennis players, they found that their first coaches "were not exceptional coaches. …What this first coach provided was motivation for the child to become interested in tennis and to spend time practicing."

There are two lessons here, one for individuals and the other for managers, supervisors and leaders. For individuals, there's a nice lesson that Edison was right about genius being 1 percent inspiration and 99 percent perspiration. For managers, there is a lesson about how to improve employee performance. It's not (mostly) about finding geniuses, but about motivating employees in general. "Persistence is incredibly important," Grant quotes Tom Kolditz, a one-star general and head of the leadership faculty at West Point. Another professor, who has gotten outstanding performance from ordinary students in accounting classes, says, "setting high expectations is so important. You have to push people, make them stretch and do more than they think possible." 

Do you have suggestions for making federal managers and supervisors better at this?

Posted on Sep 12, 2013 at 10:52 AM3 comments

More Florentine observations

statue in florence

A statue in Florence, Italy. Photo via Wikimedia by By MarcusObal [CC-BY-SA-3.0 (License.)

The center of Florence is completely dominated by tourists in a way one seldom sees.  Imagine if the only people walking on Pennsylvania Avenue in Washington, Fifth Avenue in New York, or even the heavily-touristed Champs-Elysees in Paris were tourists, with few residents. That's what the center of Florence is like: Wall-to-wall tourists, many of them in tour groups, led by guides speaking a bewildering collection of languages (I even heard Swedish), most with little flags with a group number on the top. As a single tourist, I got accosted outside the Cathedral by two people offering to be my personal tour guide.

The architectural style through much of the city is relatively similar – sepia stucco three-story houses with green shutters to keep out the sun (which weirdly do not, at least at the hotel and conference center, seem to open. At least, I couldn't figure out how to open them). It is old and charming, though not particularly fancy -- compared, say, with Paris. At the end of the 19th century, the Piazza della Republica, in the center of the city on the site of the old Roman Forum--a rundown area that was also the site of the city's Jewish ghetto for many centuries--was razed and replaced with vaguely imposing neoclassical buildings, whose style is not as grandiose as the inscription on the biggest of them: "From long-time squalor to a new life." As I looked at the inscription, I wondered if Italy's clock was being run backwards, from a new life back to squalor. The Renaissance-era square right near the Uffuzi art museum was the site of the "bonfire of the vanities," a burning of ostentatious possessions encouraged by the late 15th-century religious reformer Savonarola. The name of this practice  – I hadn't known this – gave Tom Wolfe the title for his novel about Wall Street in the 80s.

The food and wine are, frankly, magnificent. I have never had such tasty institutional food as at the university conference location outside Siena where I have been – yummy penne pasta with a duck ragout, very thinly sliced, tender chicken breast with a brown sauce. And a lot of local Chianti red wine, which is one of my favorites.

Flying back home via Frankfurt, Germany, I saw an interesting sight at the airport. In many European airports, the area leading to the plane is bedecked with ads, typically for big international banks such as Citibank, HSBC, or Deutsche Bank. In Frankfurt, I saw a whole bunch of ads for a new player – ICBC. That's the Industrial and Commercial Bank of China, one of China's largest (state-owned) banks. Part of our new world.

Posted on Sep 10, 2013 at 2:42 PM0 comments

In Florence, Italy (for the first time)

florence cathedral

Cathedral in Florence, Italy.

I have traveled relatively little in Italy, mostly because I prefer to visit countries where I speak the language-- or at least am studying it--and I speak no Italian. But on my way to a recent conference, I spent some time in one of the premier tourist locations in the world: Florence, home of the Medicis and of major collections of Italian Renaissance art.

It is a rather small city, overwhelmingly dominated by tourists, and there has been essentially no new construction in the last century or more. Several blocks from my hotel, the city suddenly comes to an end, in a way I have never seen anywhere before – the old houses along the river suddenly stop, and, rather than being replaced by more spread-out, newer construction, the city simply runs out, replaced by woods. It looks really unusual. The same is the case at the other end of the city.

Within minutes of arriving at my hotel, I got a feel for the pessimism, if not self-deprecation, characterizing today's crisis-afflicted Italy. When I was checking in, the front-desk employee asked me to sign a number of weird statements about things I would or would not do while a tourist in Italy. (The only good news was that these statements appeared on a modern touch screen, allowing me to x the boxes and sign the statements easily.) 

When I asked what this was, the response was:  "We have so much bureaucracy in Italy, so much worse than America."  I then proceeded over to the concierge desk to request help buying advance tickets to the major Florentine Renaissance art museum, since my guidebook highly recommended advance purchase as an alternative to waiting in long lines. The concierge asked me what time I wanted the reservations for, and I asked whether one was allowed to come in before lunch, go out for lunch, and then return to the museum on the same ticket. "Yes, I did this when I visited the Metropolitan Museum of Art in New York," came the response. "But this is not possible in Italy."

On a sadder note, Florence is filled with beggars – I haven't seen so many in any developed country to which I have traveled in recent memory.

More on my experiences in my next blog post.

Posted on Sep 06, 2013 at 2:42 PM4 comments

Are government-focused small businesses innovating?

light bulb

I recently was reading two magazines at around the same time. One was a hard-copy issue of FCW, and the other a recent issue of Boston magazine, our local city magazine, analogous to The Washingtonian in DC. (Yes, I still read hard copy magazines, and yes I am a notorious multitasker, always reading several different things at one time.)

FCW featured the annual "Fast 50," the 50 fastest-growing federal government contractors. (Actually, the list is produced by FCW's sister publication Washington Technology, and the weblink is at their site.) Boston had two articles that caught my eye. One was about a small organization in the Office of the Mayor called the Mayor's Office of New Urban Mechanics, which works on citizen-centered IT applications. The other, perhaps seemingly even more far afield, was an article on the burgeoning trend of new IT applications that involve people sharing their possessions with others for a fee. A company called Airbnb, which allows people to rent out rooms in their homes on a periodic basis,  apparently led this trend.

What common thread struck me as I was reading about the Fast 50, the Boston New Mechanics, and Airbnb?

Washington Technology ran stories about three of the Fast 50 winners -- Markon, DRT, and OBX. All three companies are, broadly speaking, in the program management/IT infrastructure management/IT services space.  Reading their stories, you have to assume that they have grown because they do a good job serving their government customers and meeting their needs. (I hope that, as small firms with less overhead, they are less expensive than the large-business competitors who seem to do the same things they do.)

There was, however, no evidence that any of these companies have innovated. Yet the great American small business success story, at least in the private sector, is the entrepreneur who builds a "better mousetrap," or – even more dramatically – builds a brand new way of dealing with the mouse problem altogether.  This is why success stories such as Apple and Google are so iconic in American culture.

Compare this with the two articles in Boston. The "rent out your possessions" founders came up with a whole new business idea. Even the new firms discussed in the article that in some sense are the spiritual children of Airbnb – such as RelayRides (which allows people to rent privately owned cars convenient to where the user lives) or ParkatmyHouse (which allows people to rent parking spaces in a person's driveway) – have thought up something new, even if not quite as dramatically new as the original idea. This is an industry based on new ideas.

Even the government office in the city of Boston, frankly, seems to be doing better in terms of innovation. Doing some work in-house and some collaborating with the private-sector creativity experts Ideo (and with Innocentive, the Massachusetts company that is the market leader in procurement contests), they have developed creative new applications that include an ability to download photos of public hazards or eyesores to an app that will automatically locate the picture using GIS technology so city offices can act, and another app that will automatically send in information about potholes a car has encountered on the road.

I think the small-business community in government contracting has to challenge itself to do better. A danger with a set-aside environment, just like any tariff protection, is that it allows companies to succeed without being fully competitive. Government contracting small businesses bask in some of the glow attaching to Apple or Google even if no Apple or Google-like contributions are occurring.

Clearly, there are some areas – I am guessing cybersecurity – where innovative new ideas are coming from small firms. And of course not every small business in corporate America is Apple. Nonetheless, I believe there are differences in the pattern, and I believe this is an issue that the government contractor small business community and its friends need squarely to confront.

Posted on Sep 03, 2013 at 12:16 PM5 comments

The Air Force launches a 'collaboratory'

Air Force Collaboratory

The Air Force recently launched a website called "The Air Force Collaboratory," which entices young people to participate in an online dialogue and share ideas for solving (initially) three unclassified research projects in which the Air Force is engaged.  None of the projects is directly (or at least exclusively) military in nature.  One involves developing technology to allow the Air Force quickly to determine the location of survivors of building collapses; a second focuses on a new kind of robot with various search and rescue capabilities; and a third involves determining the proper point in space to which a new GPS satellite should be launched.

The first-level purpose of the site is to involve young people, in a collaborative way, in dealing with a tough technical challenge for the government.  This is not a contest; there are no prizes.  Instead, the site appeals both to a desire to excel and a desire to serve, both important themes for the Air Force.

"I hope you're up to this," a voice says about the GPS project. "Your idea will save lives," reads a computer-generated text for the collapsed building project.  It is nice to involve young people in something bigger than themselves, and it also sends a good message about the ability of the government to innovate that the Air Force is trying out a new way to get technical input on important projects.

But information about the site's backstory tells you its other purpose.  According to a New York Times article, the site was developed by GSD&M in Austin, Texas.  That would be the same agency that holds the Air Force's recruitment advertising contract.  The site is also a way to encourage kids interested in technology to consider joining the Air Force. 

So there is also sort of a contracting story here – an example of what the government wants from a good vendor, which is original and innovative ideas that can be used to help further the organization's mission.

All in all, an interesting effort.  Check out the site – it's hardly an example of stodgy government in action.  The Air Force Collaboratory  has been up for about a month now.  I'd be curious to know what kind of response it's getting, either in terms of generating ideas or in terms of whetting the appetites of potential recruits.

Posted on Aug 27, 2013 at 2:06 PM0 comments

Meeting again with Chinese students in Boston

Edward Snowden

Most Chinese students recognize Edward Snowden on sight, Steve Kelman finds, and their opinions on his actions are as divided as Americans'. (Photo by The Guardian newspaper.)

Despite the economic slowdown in China, the number of student delegations coming to Boston from the Beijing-based China Future Leaders organization continues to rise -- two groups have come in the last month, and another group will come at the end of September. I enjoy meeting with these students and taking their pulse a little bit on issues involving how they see their society and relations between China and the United States.

During these last two visits, toward the beginning of my presentation I flashed a picture of Edward Snowden on a screen and asked if they knew who this was. Both times, rustles of nervous laughter and other sounds arose from the group; by show of hands, most everybody recognized him.

When I asked what they thought about him, a number of girls in the first group immediately reacted by saying, "He's cute." But most of both groups admired him for doing something he believed in, and/or for standing up for privacy in the Internet age. In my recent group, three or four of the 50 or so in the crowd stated that posts they'd put up on China's wildly popular Twitter-like site, China Weibo, had been taken down. (In one case, a post taken down seemed especially innocuous -- it was a comment about Chinese leader Xi Jinping's taste in food.) In the previous group, no students had heard about U.S. accusations against the Chinese army for organized economic espionage against U.S. company websites, though they all knew the word "cybersecurity."

There was a minority in both groups who called Snowden a "traitor." I was impressed -- independent of my own opinion on the matter -- by two students who said something to the effect of, "If I put myself into the shoes of an American and don't think like a Chinese, I would think he was a traitor." I think it was impressive that these students, though quite young, were able mentally to put themselves in the shoes of others. A good life skill.

I always ask the group -- the vast majority of whom are visiting the United States for the first time -- one thing they like and one thing they don't like about this nation. The consistency of responses over time is impressive. The students like "freedom," "democracy," and "innovation." Some say they like the rule of law.

Given these views -- and given the number of Chinese leaders who choose to send their children to the West for higher education (and even high school) -- it is hard to imagine China moving back inward toward itself, away from being influenced by the West. Indeed, Chinese leaders, not surprisingly from their point of view, seem to be much more worried about the opposite, judging from an Aug. 20 New York Times article discussing a secret directive from the country's party leadership warning against the influence of Western ideas such as constitutionalism, multi-party democracy and media freedom.

(By the way, over time the most common thing the students say they don't like about the United States is our food -- to my surprise, most students state they don't like McDonald's or KFC, the biggest Western fast food brands in China.)

The degree of knowledge many of these students display about the United States is impressive -- one even knew about some fairly obscure details of the immigration reform debate. A student from Tsinghua University, the MIT of China, notably knew the story of the foundation of Tsinghua at the turn of the last century: After Western residents in China were killed during an anti-Western uprising, the Chinese government was forced to pay reparations to Western countries whose nationals had been murdered, but the United States (alone among reparations recipients) returned the money to China and had it used to establish a university.

These students are a cause for optimism that there can be a constructive U.S.-Chinese relationship.

Posted on Aug 21, 2013 at 5:23 AM3 comments

Better service, one smile at a time

While on the way to the United States from Australia, I got off my plane in Singapore and promptly repaired to the men's room. On leaving, I noticed a TV-size screen inviting me to rate the facilities by touching the screen – with five options, ranging from a super-smile to a super-frown. (No words were used.) 

I then went over to the airport information counter to ask where to meet my connecting flight. Again, next to each of the two customer services representatives was a screen with the five faces.

In times of tight budgets, some government employees may become more inclined to ask why any of their agency's resources are being spent measuring their performance rather than on performing. Performance measurement is important whether budgets are scant or generous because it can improve performance. Nonetheless, in tight budget times it becomes imperative to look for ways to develop lower-cost metrics.

This is why the smiley faces are such a great idea that we should really be looking to adopt. They are far easier to complete than long customer satisfaction surveys. They cost very little for the government. And, in addition to providing managers with good performance information, they are a visible statement to the public that government cares about how well it treats people in interactions with them.

There are many places where this technology could be used in the federal government, not to speak of local governments. Think of national parks, public restrooms in federal buildings, and offices (such as Social Security) where government employees interact person-to-person with people. Think of adaptations of this approach to quick ratings for features of government websites. And of course for passport control, the original application for which this was developed in Singapore.

By providing trend information, these ratings can be a warning signal to managers about deteriorating service, or a way to track the effect of service improvement initiatives. Where a number of employees are interacting with the public, the ratings, used judiciously, can provide comparisons among employees. I would be disinclined to use any but the worst ratings as grounds for punishment or dismissal, but I would like the idea of friendly competitions and of interviewing the best employees and the middling ones to see if there are differences between how they interact with customers that could provide the basis for changed training or standard operating procedures.

These smiley face ratings systems have become common in Asia. Why are we allowing ourselves to fall behind?

Posted on Aug 13, 2013 at 12:16 PM5 comments

How to measure training effectiveness

measurement tool

Training, always an appealing target for cuts in tight budget times, has also come under a further cloud in the wake of the government's conference hysteria, since there is sometimes an overlap between the two. Many believe that training is a crucial part of obtaining good employee performance, but others argue that a lot of training provided by government agencies or by vendors under contract to government, is rote and not engaging.

This cries out for performance measurement, to develop information about which training providers are doing a better or worse job, and to provide a series of natural experiments that could produce improvements in training offerings. If some ways of training on similar topics produce better results than others, we need to learn what distinguishes success from failure so we can spread good practice.

Having said that, we haven't gotten very far in developing performance measures for training programs, except for the student satisfaction ratings many of these courses use. (Those are not useless, but they are hardly dispositive.) We have talked somewhat about this at the Kennedy School with regard to our executive education programs. We have toyed with the idea of doing some before and after interviews of the direct supervisor of a sample of our participants, to see whether, and how, their job performance has improved after being exposed to our programs. I am embarrassed to say, however, that this effort has so far stayed at the discussion stage, and we are still limiting ourselves to the classic approach of asking students to rate the professors and the program.

Because of this, some efforts under way at the always magnificent Veterans Administration Acquisition Academy are noteworthy. (Full disclosure:  I am on the advisory board of the Academy, an unpaid position, and learned about this effort at an advisory board meeting.)  They have introduced a low-cost way of getting feedback from the supervisors of participants in their training course for VA program managers. In addition to surveys of participants about knowledge and knowledge utilization improvements (the results of which are almost certainly biased way upward), they have also done a simple survey of supervisors with questions such as whether there were "positive and noticeable changes in their staff members' project management behavior" and whether the supervisor believed that "cost, schedule, and/or performance improved as a result of training."  While these responses are also probably subject to exaggeration (especially since the supervisor might feel that if the program was a bust, it would reflect badly on them for sending the participant there), results are likely more accurate than participant self-reports, and the specific questions do deal with outcomes of the training.

Incidentally, for what it's worth, on average 71 percent of supervisors report that participant behavior improved and 74 percent said cost, schedule and performance had improved. Even if those figures are double the real numbers, getting improvements from even a third of training participants isn't bad. In addition, I hope that over time the Acquisition Academy will develop enough of a database on supervisor reports so it can analyze differences among programs and faculty members in producing performance improvements.

All in all, the VA Acquisition Academy has developed an important innovation for improving the value the government gets from training programs. There are a lot of program management courses out there. How about the Acquisition Academy trying to work with the Defense Acquisition University, the Chief Acquisition Officers Council and relevant others to get a standard set of simple questions to ask supervisors so we can develop more data on the effectiveness of training programs in this area?

Posted on Aug 08, 2013 at 12:34 PM6 comments

OMB's evidence memo deserves praise

analytics concept art

By coincidence, only a few days before I wrote my most recent blog post on use of evidence to improve outcomes in emergency rooms after the Boston Marathon bombings and to reduce binge drinking at Dartmouth College, a memo came out from OMB Director Sylvia Mathews Burwell and three others in the White House about next steps in the evidence and innovation agenda. (Raise your hand if you didn't know there was an evidence agenda.)

Regardless of whether the "evidence agenda" in the White House is well-known, this memo is good news, in two respects. First, evidence is a good thing to help us make decisions. This statement is not necessarily as uncontroversial as it might sound. In political debates, Republicans have often been averse to evidence about phenomena in the natural world (climate change or evolution), while Democrats have often been averse to evidence about government programs, out of a worry that gathering evidence might show a lack of impact.

There is a second piece of good news in the memo as well. Traditionally, those promoting the use of evidence in government have often insisted somewhat dogmatically on what are often very expensive, long-duration, hard-to-execute randomized controlled trials to test the impact of government programs. (In such a trial, program results for people who are randomly assigned to receive a certain government intervention are compared with those who do not. In another form, people who planned to participate but didn't are compared with those who planned to participate and did.) 

The new memo, though it still seems to assign special status to such forms of evidence, also notes that companies are increasingly using "quick experiments" that in a fast and inexpensive way test much smaller interventions – the classic example would be different wordings on websites or in letters to people to see which produce a better response. These are particularly suitable for management interventions in workplace practices. They use the same principle of random assignment, but at less cost and time.

But econometric analyses, which use existing data rather than organizing new experiments, can also provide valuable evidence, though they are subject to more methodological worries than random experiments and hence their results are more subject to debate among researchers. Even the kinds of benchmarking studies used by organizations can be helpful, though often a smaller sample size and difficulty in drawing good conclusions about what makes one unit a good performer and another a bad one make conclusions from benchmarking more uncertain.

People who don't like the conclusions that evidence-based studies reach often prefer to shoot the messenger. Yes, there are poorly designed studies sponsored by advocates, intended to produce an outcome favorable to the product or idea being promoted.  Yes, there are often disagreements even among scholars about conclusions from studies, though these occur less often with experimental studies, whether random controlled trials or quick experiments. Yes, sometimes it is hard to gather data. And of course there are still values questions left in policy and management choices – is a program with a small impact for a fairly large cost worth it or not?

But surely using data to help inform these decisions is better than the alternatives, which dominate our political and governmental choices. So the OMB memo is to be welcomed.


Posted on Aug 02, 2013 at 1:47 PM3 comments

Making better use of evidence

open eye and data

The front page of Sunday's Boston Globe had two articles (of a total of five on the front page) about efforts to improve social outcomes by gathering evidence about what works and what doesn't. The top article on the front page was headlined "Hospitals size up the lessons of Marathon attacks." Trauma care for Marathon bombing victims was, on the whole, magnificent – not a single person who arrived in an emergency room alive died in the hospital – but nonetheless the receiving hospitals are now in the process of after-action reviews looking through the details of what happened, which will produce reports that will be shared with hospitals around the country.

At this point, it looks like the main recommendations will involve quicker use of social media as an early warning system (perhaps by the police), improvements in how off-duty employees who simply show up to help can be better deployed, and improvements in the process for identifying victims who arrive at the hospital with no ID.

There was also an article on the front page called "Dartmouth tackles binge drinking culture," about efforts at the college in an isolated New Hampshire town with freezing winters to reduce the binge drinking that made the school the inspiration for the movie "Animal House."  The basic method they are using is to try a lot of small changes – various kinds of meetings with at-risk students, for example -- and track results to see what works and what doesn't. Some of the ideas stem from tactics that former Dartmouth President Jim Young Kim, a public health expert who is now head of the World Bank, had seen show promise in slowing the spread of AIDS or tuberculosis in developing countries. In the last two years, the number of students admitted to local hospitals with alcohol overdoses has declined from 80 to 31.

"Evidence" in government was once limited to partisan-sponsored studies that coincidentally supported the preferred conclusions of the interest group sponsoring them, or very lengthy and expensive randomized controlled trials to determine the impact of various government programs. In recent years, the range of techniques available to gather evidence has dramatically expanded to include quick experiments about practical short-term interventions, or even less rigorous but still potentially helpful methods of gathering evidence (such as benchmarking across different government offices). The arrival of more social psychologists, trained in experimental methods, into public policy and administration programs – and even government organizations such as the Behavioral Insight Unit in the UK government – means that this approach will become more and more the future.

As these articles suggest, this approach is becoming common in efforts to deal with social problems outside government. Sure beats a lot of the other alternative approaches for deciding on policy and management approaches. This needs to become a normal part of the toolkit for public policy and management.

Posted on Jul 30, 2013 at 8:04 AM3 comments

OFPP administrator hones in on past performance

man graphs performance

The leadoff presentation at the National Contract Management Association today was Joe Jordan, the administrator of the Office of Federal Procurement Policy. At the beginning of his remarks, he spoke about the use of past performance in government contracting. To put it mildly, his approach was an enormous breath of fresh air.

His first step, he told us, was to get past-performance report cards submitted more reliably. But he also clearly recognized that upping the quantity of these reports is only a start. The next step is to improve the quality of these report cards, so they can actually be used as differentiators in source selection decisions.

He illustrated the problem by talking about looking for a bed-and-breakfast place during a recent vacation. Like most people, he went onto Trip Advisor and Yelp to check customer reviews of B&B’s. He could see positive and negative reviews. When there were negative reviews, sometimes the B&B responded, explaining corrective actions they had taken or sometimes giving their own version of events. As a consumer, he could judge the balance of these reviews, and the plusses and minuses they showed, including which criteria for evaluating the B&B were most important to he and his wife.

How does this differ from government past-performance report cards, he asked? If there was a negative review of a B&B, the firm had no opportunity to sue the reviewer to try to get the review taken down. The review could be put up right away, not after a 30-day comment period. The B&B could give its own version of events if it chose to, and the customer evaluated the reports taken as a whole.

The simple fact is that what is inhibiting the ability of past-performance report cards to improve incentives for good vendor performance is a lack of variation. If all the report cards are plain vanilla, they won’t be source selection differentiators. When they are not differentiators, doing the report cards becomes a compliance drill. You get a downward spiral for the system. The most strategic step OFPP could take to turn past performance around is to eliminate the ability contractors currently have to complain about a report they don’t like to someone at a higher level in the system, a policy that strongly discourages contracting professionals from writing honest reports.

I complained in a recent blog post about a recent GAO report on past-performance report cards that emphasized only quantity, not quality, and that repeatedly used the word "compliance" to refer to the goal of the exercise. Jordan’s approach, by contrast, is a really hopeful signal that an improvement is on the way. He said that he intends to devote significant effort to reinventing past performance over the next year, making it more closely resemble how the idea works in corporate America and in individual consumer buying decisions. I would urge the community to work with Jordan to make this happen.

Posted on Jul 23, 2013 at 8:52 AM8 comments

Live blogging from the National Contract Management Association World Congress

The Gaylord Opryland Hotel and Convention Center, site of the World Congress of the National Contract Management Association.

I am at the Opryland Convention Center, in a very rainy Nashville, Tenn., for the World Congress of the National Contract Management Association (NCMA) – the association for government contracting professionals in government and companies.

I arrived late Sunday and quickly proceeded to a barbeque dinner just off-site. I immediately noticed just how little the restaurant patrons "looked like America" – it was pretty much a sea of middle-aged white faces, with no blacks, and I did not see any Latinos. The only Asian-Americans were at my table. So it seems country music still attracts only a limited constituency.

The conference is huge (a wild guess from a plenary this morning is perhaps 700 folks, though I don't regard myself as an estimation expert), but government attendance is way down – 75 percent from last year, according to some of the government employees in attendance. They told me that their attendance needed to be approved by the agency head or another high person in the organization as being "mission-critical." I have run into three government people so far who are paying their own way to be here!

Beyond the conference hysteria, another government attendee told me he felt very stressed because he felt attending the conference was very important for doing his job better, but he felt guilty that the few thousand bucks the conference cost could have gone into a pot to reduce furloughs at his agency. This is the sad reality for civil servants in the sequestration world.

Two interesting things I learned this morning:

First, during a plenary session on selling to governments outside the United States, Steve Schooner, the George Washington Law School procurement professor and panel chair, asked the audience whether NCMA should itself encourage participation and membership from non-U.S. government contracting professionals. As of now, the so-called "World Congress" is like our baseball "World Series," an essentially all-American event. Only a few said NCMA should not do this at all; the rest were about equally divided between "yes, but cautiously" and "yes, aggressively." (As a sidebar, this probably reflects the personality split among government contracting professionals about how they in general approach life.)

Listening to Schooner, I became an instant convert to "aggressively." Ten years ago, the meetings of the academic associations for professors studying management in general and public management in particular were nearly 100 percent Americans. Now they are about a quarter non-Americans, with that share split almost equally between Europeans and Asians. The simple reason is that U.S. universities and U.S. research in the social sciences are generally regarded as the best in the world, and non-Americans want to learn from the research and research environment of America's universities.

Similarly, for all our problems, the U.S. government's procurement system may be the best in the world – and certainly is one of the best. Many countries trying to improve their systems, particularly in developing countries, have a dramatic shortage of trained and qualified contracting professionals. It would be a real win-win for NCMA to open itself up to more international participation. A win for NCMA because this could be a source of additional revenue. A win for international participants because these conferences focus on training in contracting best practices. NCMA, go for it!

Second, I had a conversation with a former military officer who has been working for a company that provides big-ticket subsystems for weapons platforms. One of the subsystems they sell is exactly the same item as the company also sells to commercial customers in the commercial marketplace. When they sell this item to the government, they face competition from other firms providing the same type of items, and the item is sold at a fixed price. He told me that they are continuing to sell this item under Part 12 of the Federal Acquisition Regulation, governing commercial items, which precludes gathering government-unique cost information and somewhat simplifies the contract.

However, he said, the contracting officer more and more feels he is going out on a limb to buy this item as a commercial item, even though it is off the shelf. The mood in the Defense Department has shifted back towards acquiring using old-fashioned, highly regulated procedures that make it very unattractive for commercial vendors to sell to the government, which is bad for the government and for taxpayers.

He also told me that his company had started in 1998 by converting a bunch of contracts for aerospace spare parts that were identical to parts widely sold in the commercial marketplace, and had not been developed at government expense, into one commercial contract. Prices went down, lower every year to follow price declines in their commercial sales, and contract administration was much easier for the government. But a few years ago the government customer converted the contract away from a commercial contract to a government-unique contract, again due to pressure against commercial item acquisitions.

There were certainly some abuses in overly wide definitions of "commercial items" in the late 90's, but this does not justify the Defense Department's dramatic swing in the other direction now. One thing that OFPP could do about this is finally to implement the provisions of the Federal Acquisition Reform Act of 1997 removing special provisions for commercial off the shelf items, commercial items that are identical to those sold in the commercial marketplace, so that at least straight off-the-shelf items are protected from the bad environment currently existing in DOD.

Posted on Jul 22, 2013 at 3:34 PM1 comments

The story of Carl S. English Jr.

gardens brochure

I have been visiting the Pacific Northwest to give a speech at a government conference – the weather is comfortably in the high 70s ' (for non-US readers, that's about 25 C.), with low humidity and blue skies. It is nice to be here in Seattle rather than the hot and humid East.

I have taken advantage of my trip to visit the Army Corps of Engineers canal lock system at the entrance to Seattle on Puget Sound, which is open to the public. The lock system itself is a great example of a modest government infrastructure investment that has created enormous economic benefits: the port of Seattle is very important to trade between the US and Asia.

However, I'm not writing about my visit because of the lock itself. We learned during the interpretive tour of the lock that the site is the only Corps of Engineers location in the country that also includes a botanical garden, the Carl S. English Jr. Botanical Garden. (Here is a link to a Youtube video about the garden.)

And we learned about Carl S. English Jr., after whom the garden was named.

Carl S. English Jr. was a young botanist who was hired by the locks during the Great Depression to tend the grounds. In keeping with Army aesthetics, the grounds were set up as a field where soldiers could muster or march for public events, but in reality it was not being used at all. There was no budget available to plant flowers, which English thought would really beautify the area. On his own time, when he travelled to various places, he bought himself seeds for his own garden, and planted some of them on the grounds of the locks. But that only provided a limited variety of flower varieties. Still with no budget, he traded seeds he had gathered for seeds for other flower varieties. Over several decades – English spent 43 years tending the grounds -- the flowers grew, and now include some 1,500 varieties.

I was moved by English's story, and I thought about its significance for civil servants today. First, English saw some unused space, came up with an idea for using it better, and took the initiative to make an improvement. Some would argue he should have gone through the chain of command with formal requests to initiate his innovation, but of course Corps officials must have frequently visited the site and could have told him to stop if the results of his initiative were bad. As our guide said, "He followed the idea that it's better to ask for forgiveness than to ask for permission." To me, the bottom line is that he cared about and was engaged in what he was doing, and tried to improve the value the government was delivering the public.

Second, he did all this with no budget. This obviously caught my eye in today's tight fiscal environment. I do not think we should be asking federal employees to donate their own resources to provide office supplies or other things an organization needs to do its job – though we do frequently hear stories about school teachers buying classroom supplies from their own pockets when budgets are tight. But I do think that public servants should be trying to think about creative ways to help their organizations deliver mission to the public in a budget environment that inevitably will be constrained for years to come.

Carl S. English Jr. didn't complain or moan. He believed in serving the public, and in walking through the beautiful garden he created, I honor him.

Posted on Jul 18, 2013 at 6:48 AM1 comments

What to make of GSA's reverse auction play

GSA's reverse auctions won't have an auctioneer with a gavel, but Steve Kelman wonders if they'll even be fair to other players. (Stock image)

As FCW has reported, GSA launched a reverse auction site last week. As many blog readers are aware, I sit on the Board of Advisors of FedBid, the commercial company that has introduced reverse auctions to many government agencies and is the leading reverse auction services provider in this market. I have been asked, not surprisingly, what my reaction is to GSA’s new site, which appears to have been developed to compete with FedBid and other commercial reverse auction providers. (Let me note that I speak only for myself here, not FedBid.)

As a general matter, competition is a good thing for any market, including the market for reverse auction services. Like any other market, as demand for reverse auctioning in government grows, it will inevitably create more and stronger competition. On the other hand, there could be intellectual property issues with GSA’s tool (I claim no expertise in IP law), and there also is a philosophical issue about whether it is appropriate to use government funds to develop an application that is already commercially available, which will then compete with private companies while charging government customers nothing.

The bottom line, I think, is that from the perspective of government agencies, competition for reverse auction services is good, just as it is for other products or services. It is a good thing for two reasons. First, the GSA imprimatur adds a new level of legitimacy and visibility to reverse auctions as one of the techniques, in these tight budget times, for government to save money.

If reverse auctioning is a good thing at all, anything that helps it spread beyond where it is used now is good for agencies and taxpayers alike. It is very possible that an expansion of reverse auctioning as a technique will expand the market for commercial reverse auction providers as well as for GSA. I also expect that the presence of another significant player in the federal reverse auction market will encourage further improvement and innovation in the industry. That’s a good thing.

There is a source of worry, however. GSA plans to limit its reverse auction vendor base to GSA Schedule contract holders. I am somewhat concerned that GSA may favor its own site as a place for schedule vendors to participate in reverse auctions or, in the extreme, forbid schedule holders to use any other site. It is even possible that GSA might seek to require agencies to get approval from them before using any other than GSA’s reverse auction site.

These are not far-fetched possibilities: GSA unfortunately has a history of efforts to establish itself as the monopoly source of supply, including in the recent past trying to strangle inside-the-government competing GWAC contracts. This should be the last thing that agencies will want, since the danger would be to make them dependent on an inferior government supplier for reverse auction services. Hopefully, GSA will take this opportunity publicly to make it crystal-clear that reverse auction competition will occur on a level playing field.

Posted on Jul 16, 2013 at 1:24 PM11 comments

Why a GAO report documenting improvement is not good news

man graphs performance

The Government Accountability Office recently issued a new report called "DOD Acts to Improve the Reporting of Past Performance Information", documenting progress the Defense Department has made getting past-performance report cards on contractors submitted into DOD's past-performance database on time. Now 74 percent of reports are being submitted on time, compared to 56 percent two years ago.

Sounds like a good news story, right?

I'm not so sure.

Done right – and the government currently is a long ways from doing it right, unfortunately – past-performance report cards are one of the most powerful tools in the government's toolkit to incentivize better vendor performance. Everybody knows that considering the past performance of people from whom we buy is one of the most powerful tools customers have to make the market system work better – suppliers treat us right in the hope of getting our repeat business.

There are serious problems with the current operation of the past-performance system in the government, as I have frequently written. The biggest problem is insufficient honesty in reports, so they don't differentiate enough between good performance that should be rewarded and bad performance that should be punished. I have frequently argued that the government should eliminate the contractor's ability to challenge a past performance evaluation they don't like, because it disincentivizes government honesty. Putting their own version of events into the system should be all contractors are entitled to.

Homeowners who have used the Angie's List service will know what I'm talking about. People who have had experiences with service companies post reviews about them on the website. The companies may post responses to the reviews, but have no power to have them changed or removed.

There is also an attitude by many, including the punishment-first caucus on the Hill and some so-called "watchdog" groups, that past performance should be used only to punish the bad, not to reward the good.

Unfortunately, the GAO report -- despite what I am sure are good intentions, and a title that sounds promising -- doesn't really help. In fact, it may hurt the important effort to improve the government's past-performance system.


What the GAO report discusses is the extent of compliance with the requirement to submit past-performance report cards, and they praise DOD because “compliance” has increased. The report repeatedly uses the word "compliance" with regard to past-performance report cards, sometimes several times in one paragraph. But when government people hear the word "compliance," most think about something unpleasant but (probably or at least possibly) necessary. It's not something we want to do, but a bitter pill that must be swallowed for the greater good.

The second problem is the performance measure the report uses to measure compliance. Although GAO itself has in the past complained about inadequate content in the report cards that do appear in the system, in particular with regard to descriptive narrative (they should also complain about the lack of differentiation in grades), there is none of that in this report. All they measure is the input of how many reports get submitted on time, not about whether they are any good or whether anyone is using them.

Between the emphasis on compliance and the use of a poor, input-style performance measure, the GAO report sends a dismal signal about what past performance report cards are about – they are a "drill," a "data call," imposed by "them" for their purposes, not for us on the front lines of the contracting system. If we fill in these report cards, the only reason is to tick a box. This is not for us, it is for them.

But the past-performance system absolutely should be for "us" – for the customers of the contracting system -- as a tool for getting better contracting performance on our contracts. Clearly, there will be a "free rider" problem – even in a system with honest, valuable report cards, most users of the procurement system would prefer that everyone else fill out their report cards while neglecting to complete their own. A procurement system that took past performance seriously would look for ways to deal with the free rider problem, perhaps with a feedback system similar to that consulting firms use for the lessons-learned reports consultants file for use by other consultants, perhaps including some kind of rewards for the reports that the most users say influenced their contract award decision.

My point is that we need some serious thinking (and action) about improving the way the past-performance system works. I don't think this GAO report helps.

A job for OFPP?

Posted on Jul 11, 2013 at 2:10 PM5 comments

How good government made airline seats safer

Asiana air crash

The wreckage of an Asiana Air jetliner rests on the ground where it crashed at the San Francisco airport. (AP photo)

There have been many comments about the mercifully modest – though of course still very sad – number of casualties in the crash landing of Asiana flight 214 in San Francisco over the weekend. A report on the NBC Nightly News Sunday evening noted that this was the latest in a series of crash landings over the past few years where the death toll was noticeably lower than used to be common.

There was a report on CNN that I have not seen taken up anywhere else regarding the development of secure airplane seats that hold up to crash shock better. The design reduces the chance that the seats will fly off their moorings, taking the passengers with them, and hitting walls, ceilings and each other at high force. There was also a story in the Huffington Post about improvements in airplane design that have made planes safer.

These new seat safety requirements apparently were mandated by the federal government sometime in the 1980s, based on investigations by the National Transportation Safety Board (NTSB) of causes of death in earlier plane accidents. They found that seats that became unhinged during crashes were a significant cause of deaths in crash landings, and a regulation was then developed to address this problem. We saw the results in the aftermath of the San Francisco tragedy.

People often talk these days about "evidence-based government." This is a phrase that was not really around when the NTSB did this work, but they were practicing the principle without using the word. The idea is to use information to pinpoint problems, try a possible solution and get feedback to see if it reduces or eliminates the problem. (Interestingly, the National Highway Traffic Safety Administration, also a transportation safety unit in the Department of Transportation, is another pioneer in using accident data to pinpoint problems with roads, cars or drivers that might be addressed by appropriate government action.) It is similar to the idea being discussed today of using agency performance metrics to improve organizational performance.

I bring up this ripped-from-the-headlines example for two reasons. One is to make a pitch for the virtues of evidence-based government. While hardly a cure-all, it sure beats the alternatives. The second is communicated by the title of this post. All too often, when government screws up (either allegedly or in reality), the intuitive reaction of the media, and of a large number of citizens, is to say something like: "government, there you go again." (Notice the TV news features commonly ironically labeled something like "Your Tax Dollars at Work.")

When government does something right, it is seldom noted that the entity that has helped out is the government. Indeed, sometimes people do not even associate the positive things with being part of government at all – a lot of people, I think, somehow regard the military or even the police or fire departments as not being part of "the government." So let's remember that "the government" helped save lives in San Francisco over the weekend.

Posted on Jul 08, 2013 at 10:19 AM2 comments

Acquisition lessons from the private sector

man graphs performance

It is common knowledge that the government buys a lot of services – over $300 billion worth last year – and that it's often an area particularly ripe for improvement. The Government Accountability Office recently issued what I thought was a genuinely helpful report, called, "Leading Commercial Practices Can Help Federal Agencies Increase Savings When Acquiring Services."

The report is about things the government might learn from looking at the practices of large commercial firms in buying services.

The first thing to note is that savings opportunities are far from trivial. Dell achieved 23 percent savings in its services purchases in the first year that it put an emphasis on improving services procurement, and has been saving an additional 10 percent a year since.

Of the many approaches that the large commercial companies practiced in their own operations, two in particular caught my attention.

For one, there was an effort to find out what different divisions of the company were paying for similar services from the same vendors. As in government, when companies first go through this effort, they typically discover wide variations. This becomes low-hanging fruit for strategic sourcing-type negotiations with the company's main services vendors. These companies also typically enforce, with more heft than government agencies do, presumptions that customers will buy off these contracts and get the good pricing the contracts create. This extends the strategic sourcing idea from products into services.

A second lesson from these companies is that "complexity drives cost." Commercial firms try to get better at seeing what the cost drivers are in terms of requirements. That is, what are the things the customer might request that add a lot to the cost without adding much value. They are often willing to accept a "90 percent solution" to keep costs down.

I suggested in a recent blog post that individual contracting professionals, and buying offices, should consider personal pledges to choose a specific contract where the individual or team promises to improve the way they buy during this upcoming fiscal year. A few commenters felt I was suggesting that contracting professionals are not doing a good job already. The fact is, there is overwhelming research supporting the proposition that setting a specific goal increases the chances of reaching it. And in the sequestration environment, just from a mental health perspective, civil servants need to take their destiny in their own hands and not see themselves as passive victims.

My feeling is that, armed with this GAO report, there are some real pledge opportunities throughout the government. Let's go for it.

Posted on Jul 02, 2013 at 1:27 PM4 comments

Scandalous overrreaction?

risk management

The various scandals over spending on government conferences, and other problems within the IRS, have put a spotlight on an important question: Does the attention given such happenings affect the quality of government management?

For the inspectors general whose reports typically follow these scandals and, I dare say, for the public, the answer is clear: Exposing scandal raises the price for wrongdoing and incompetence, and if you raise the price of something, you get less of it. Exposure of scandals is thus good for government management. QED.

Yet I am guessing that many government managers themselves – and, perhaps more importantly, outside experts on government management – are not so sure.

The downside of scandal was illustrated in concrete terms in a recent op-ed by Defense Logistics Agency manager Joe Bednar, entitled "Enough Bureaucracy Already," appearing in Federal Times. Bednar notes that in his agency, routine actions to complete a financial obligation went through 12 reviews as of 2010. To an outsider, that sounds like a lot. Obviously, there need to be checks and balances on dispersing money – but are 12 approvals really needed?

Wait… that was 2010. Now the number is more than 40!

In 2011, agency financial transactions procedures were revised – with the regulations increasing from 300 pages to 6,000.

A "simple letter to assign specific oversight responsibilities" used to require only one signature – now it requires three signatures, several certifications and reporting responsibilities.

We know where all this comes from. Scandals occur, and either Congress demands or agencies proactively impose new controls – that is, more approvals, documentation and so forth. After the GSA conference scandal last year, bills were introduced in Congress that would actually require the head of an agency to approve personally all conference spending. Though this never passed, the restrictions agencies have implemented on their own are onerous enough.

Maybe one way to answer whether this is too much is if I posed the following hypothetical: if an agency currently requires only two signatures on a financial obligation document, would it be a good idea to double it?

If the document currently requires four signatures, would it be a good idea to double it to eight?

Or if it currently requires 12 signatures – to take the real story from the Bednar column – would it be a good idea to increase it to 40?

The point of all this is that it is always easy to ask for more controls, but at some point this starts adding only marginal additional protection, while costing the organization more and more staff time, slowed decision-making, and staff demoralization. Indeed, when you get to these huge numbers of signatures, the actual control level is likely to be lower than with few signatures – due to the famous "diffusion of responsibility" effect, studied in social psychology. Simply put, people reduce their vigilance when a larger number of people are responsible for some outcome, each one assuming that the others will take a closer look.

Time to say it: Requiring anything even close to 40 reviews for approving a payment is absurd. Will anyone dare call a stop to this?

Posted on Jun 27, 2013 at 1:34 PM8 comments

Who will take the pledge?

hand in pledge position

I was speaking with a group of contracting professionals earlier this week when one of them, describing a successful effort to turn around a problem contract, mentioned that he set himself a series of goals for improvement to encourage himself to strive higher.

His discussion took me back a long time ago to my work as administrator of the Office of Federal Procurement Policy. Part of my philosophy then was that if you wanted change and improvement, you could not be content to just talk about it. You had to get started actually doing something. Shortly after I became administrator, I worked with agency procurement executives to sign public pledges. There were two: for the signatory's agency to double use of the purchase card in a year, and to make past performance a significant source selection factor for some specific named procurements that were coming up.

Some thought the word "pledge" was hokey, but looking back on it, the idea of getting started by acting, not studying, was just what was needed to jumpstart the procurement reform efforts of the Clinton administration.

Fast forward to now. I have been gingerly promoting, from my outsider perch in academia, an idea for a new version of "taking the pledge," more individually oriented. The idea is that each contracting professional in the office chooses a contract through which he or she will be buying something over the next year that is the same or similar to something bought in the past. They make themselves a personal pledge – like the goals regarding the contract this contracting professional at the meeting spoke about – to find at least one way to improve the process and (hopefully) the results of the buy the next time it is done. Each employee would make his or her own pledge, and maybe write it down. (Writing down a goal has been proven to improve the chances it will be achieved.)

In the sequestration environment, it is easy for people to see themselves as passive victims, unable to influence their fates. Taking the pledge would not just be good for procurement results in government, it would also be good for the psyches of federal employees.

What do you think? Are there some buying offices – or even entire agencies? – that want to try this?

Posted on Jun 21, 2013 at 9:50 AM8 comments

Taking the pulse of contracting professionals at the Bureau of Prisons


A common theme in contracting experiences both good and bad: Writing an accurate set of requirements, so that the product or service meets the agency's expectations, is tough.

I just had a chance to speak at the annual procurement training meeting of the Bureau of Prisons, the part of the Department of Justice that runs the federal prison system. The overwhelming majority of the contracting officials in the audience reported that they had started their careers as corrections officers, and many of them still have "other duties as assigned" at the prisons at which they work – ranging from being one of those present keeping an eye on prisoners while they eat meals to accompanying foreign prisoners on flights from prisons in their own countries to ones in the United States. How many other contracting officials may be required to carry a weapon as part of their work duties?

After some light remarks about the federal environment currently surrounding such meetings – I asked them how they enjoyed their accommodations, per new agency guidelines, at local homeless shelters – I told them that based on my experience as a teacher, people learn better when they're engaged in the event, including laughter and lighter moments. That runs counter to the new sourpuss, "be sure to have a terrible time" culture of federal conferences. But I promised I wouldn't lead them in any dance videos.

For me the most interesting part of the presentation was at the end, when I got the least experienced (two years or less) and the most experienced (25 years or more) people in the audience to talk about their most rewarding experience from the last few months, their most frustrating experience, and advice they would give one another. There were similar patterns for both groups.

The most rewarding experiences all involved successfully awarding a good contract. One person spoke about a food service contract that had been troubled in the past, but where the award this time went much better. Another spoke about a facilities contract where the government was saving almost 20 percent compared with the last time the contract was bid. A new employee talked about his first experience being in charge of an award "from beginning to end" for a complex piece of equipment, and seeing the award go smoothly, getting a good price and a satisfied customer.

So, one more time: good, meaningful work makes people proud and motivated.

One common theme in these stories – and in the frustrating incidents as well – was problems in getting good statements of requirements for what the government wanted to buy. One of the new contracting professionals spoke of being frustrated when the customer complained about a product that showed up, which met the requirement as written but wasn't what the customer wanted. The person speaking about the previously troubled food service contract noted that the main reason the contract was more successful this time was that the requirement had been stated better.

This theme -- that one of the biggest problems is getting good requirements from customer/users who often find the process unpleasant or even bureaucratic – comes up virtually every time I talk with contracting professionals.

I asked the audience for suggestions about how to deal with this situation, and the common theme was communication. On the improved food service contract, the contracting professional stated that significantly more attention was paid to discussing the requirement than in previous iterations. Somebody mentioned that a benefit of getting industry comments is to surface unclear language in a draft requirement; I suggested that when the government puts out a draft for industry comment, it should specifically ask industry whether there is language that is unclear or ambiguous. Another participant suggested that a priority for the contracting professional's use of time should be to look at the requirement, do market research, and have a dialogue with the user to improve what the requirement asks.

I am reminded of something I frequently said while in government: An important reason to streamline the actual process of contract award is to allow more time and resources for the often under-resourced activities of requirements development/contracting strategy up front, and contract management later on.

The two newbies in the group both also stated that they wanted their supervisors to give them more rather than less freedom and responsibility. And one stressed that supervisors should be open to the idea that new employees may not want to do things exactly as they have been done so far.

Posted on Jun 19, 2013 at 9:29 AM0 comments

The challenge for bosses: Learning from dissent


Managers do not always take disagreement well, research finds. (Stock image)

A lab experiment conducted by Ethan Burris, an assistant professor at the University of Texas at Austin McCombs School of Business, and published in a recent issue of the Academy of Management Journal indicates that leaders often react negatively to suggestions that their favored course of action might have problems. In the experiment, teams of four students were asked to solve a business problem involving a supply-chain decision. All the team members were given a set of facts that suggested a certain approach was best. One member of the team was given additional facts that, if explored properly, would clearly show that a different approach would work better. That member was also instructed to make his or her views known during the group discussion.

The discussion was recorded and coded for the number of statements that supported and the number that challenged the apparently (but not in reality) better course of action. The teams’ leaders gave performance ratings to each member after the discussion and an evaluation of how valuable the member’s comments were. What did the experimenters find? The more challenging statements a team member made, the lower his or her performance rating tended to be and the less likely the leader was to find that person’s comments valuable. The more often a team member made statements supportive of the initial majority position, the higher the performance rating and the more his or her comments were seen as valuable.

In another feature of the experiment, half of those given the extra information were identified to other team members in a way that suggested they had special expertise. The comments of expert members were more likely to be seen as valuable, but expertise did not mitigate the negative impact of making a larger number of challenging statements compared to the non-expert challengers.

An experiment in the 1950s among Navy bombing crew members suggests that groups pay even less attention to challenges from less powerful members. In the experiment, a group was less likely to accept the (correct) view of a lower-ranked person than that same view expressed by a higher-ranked one. When the pilot knew the correct answer, 94 percent of the group accepted it, compared to 80 percent when it was the navigator and only 63 percent when it was the gunner.

Although many subordinates are unlikely to find these results surprising, they are troubling. Challenges to leaders or to a group consensus by a member of the group are, of course, not always on the mark. Whistle-blowers or habitual dissenters might be motivated by animus or negativism, and some people might have habitually poor judgment. I don’t want to glorify contrarianism nor do I want to encourage paranoia about the boss, which is all too common these days. But in these experiments, a member of the group did have valuable information that would have helped the group make a better decision, yet the person’s intervention was not fully appreciated.

The results have implications for the everyday functioning of workgroups and for decision-making on important issues of national or even international importance by senior teams in government. A fair amount of academic research, mostly related to foreign policy decision-making, suggests there is a relationship between the quality of a decision-making process — particularly the openness to a variety of ideas — and the quality of the decisions.

These experiments suggest that the odds might, unfortunately, be stacked against the success of these processes, and leaders need to work hard to counteract the way most of us seem to react to being challenged.

Posted on Jun 17, 2013 at 11:55 AM2 comments

Unintended benefits

NOAA storm imagery

Weather data from government agencies such as the National Oceanic and Atmospheric Administration is but one example of federal spending that can be put to good commercial use. (NOAA photo)

The cover story in the June 1 issue of CIO magazine is called "Big Data from Above." The article is filled with fascinating examples of the various ways companies are using weather data to help conduct business – to time retail promotions, to direct stock to one region of the country rather than another or to plan for changes in demand. The manufacturer of Claritin, for example, used mid-range weather information to predict increased demand for allergy products.

There is even an example of an insurance company using weather information to detect fraud in insurance claims for hail damage.

From the point of view of the editors of CIO, I'm sure, the main point of the story was about progress in analyzing big data for business purposes. But from my own perspectives and, some might say, biases, I saw it as an account of some unexpected ways that government information is helping our society and economy.

Social scientists, and some critics, like to talk about the "unintended consequences of purposive action," by which they usually mean unintended negative side effects. The examples given in this story involve unintended positive side effects – benefits from weather data that go well beyond the most obvious use of the data for the local weather forecast.

The generation and provision of raw, widely sought-after information to the public is a function for government that is well-recognized in conventional economic theory. The basic idea is that once you've produced information, the cost of getting that information to an additional person is essentially zero.

So it doesn't make sense to charge for basic data that's in wide demand. Instead, government should produce it and make it available for free. Then private companies can use the data, add value to it through analysis, and make it available for a fee to a more narrow range of specialized users, or individual firms can spend the money themselves for value-added analysis they want for their own company's restricted use. (Since the government's budget for information-provision is obviously not unlimited, decisions need to be made about how widespread the demand is for certain information, what it costs to produce, and how valuable it might be to users before deciding what information to produce.)

The point is, sometimes government helps in ways we never think about. As an online commentator on the article sarcastically stated: "Weather is critical to just about all businesses as well as agriculture. So let's chop the NOAA budget and slash research funding. It all makes sense, doesn't it?

By the way, the 800-pound gorilla of unintended positive side effects of government action, of course, is the military research on creating a computer network resilient to enemy attack, which led to the Internet. Since by definition unintended consequences are things people originally couldn't be aware of, it is fruitless to try to know exactly which government actions might produce the most unintended positive side effects (and which the most negative ones). However, if we got even just a little better at making such guesses, it would improve the value government delivers people. A task for researchers?

Posted on Jun 14, 2013 at 12:09 PM0 comments

Can feds harness the global workforce?


The rise of a global marketplace may make services much less expensive. Steve Kelman wonders if government can take advantage. (Stock image)

Last week's Economist tells a story, in an article entitled "The Workforce of the Cloud," about a private company that needed to hire somebody to translate a video.

"For translating a 22-minute video from English into Spanish at short notice, 7Brands Global Content, a professional translation firm based in New York, quoted 'approximately $1,500,'" a fee the article states is in line with the going rate for established translation companies.

The customer then decided to try two online "talent exchanges," and (the largest of the firms in this space) Both companies have a large stable of freelancers available to bid on various kinds of tasks (Elance has 2.5 million people registered, about a third in the United States and the rest abroad). The customer screened the bids to weed out those with little or no experience or without good customer ratings, and found quoted prices of as low as $22. (That's $22 as a fixed price for the whole job, not per hour.)

$1,500 vs. $22? Does that get your attention in these tight budget times, government agencies?

These new online marketplaces are taking advantage of the spread of freelance work, by part-timers and young people, and the rise of a global marketplace (finalists on the bid in the article were from Argentina, Brazil, Indonesia, Mexico and the Philippines). As the article notes, as these markets mature, and good freelancers start getting a lot of work, the rates for reliable people are likely to rise – but there's a lot of room between $22 and $1,500 for customers to benefit.

These online markets have customer rating schemes and manage the payment process for the buyer. also has a method for monitoring whether work is being done when it is claimed to be done for those working on hourly rates (by taking pictures of workers at their screens at random intervals).

The federal government buys hundreds of billions of dollars of services a year. Clearly, this kind of marketplace for freelancers is inappropriate for the vast majority of these buys. But if the government can get these kinds of savings on even a tiny, tiny fraction of services purchases, this can add up. There must be fairly routine, low-security, non-mission critical, low-dollar buys (perhaps many of them under the $3,000 micropurchase threshold where customers could simply use this service directly, with no further ado) where the government should try this method.

If I were an agency, I would start very small, see if this works, and go back to people who have done a good job the first time. (We call it "past performance.") Translations – the first example cited in the article in The Economist – come to mind, but there must be other kinds of clerical work for which this would be good as well. And if an agency only wants to use U.S. labor, there's of course nothing to prevent considering bids only from Americans.

This is an example of innovations out there in the commercial marketplace that the government – especially in these tough times – should be exploring. Who wants to try?

Posted on Jun 11, 2013 at 12:09 PM1 comments

Does government reward innovation?

compass innovation

The culture of government in China, like the culture of that society in general, is quite punitive. "Punishment" is a common word. When something goes wrong, the instinct is often to arrest somebody first and ask questions later. Subordinates fear and bow to bosses in a way that reminds one of Western organizations from a century ago or more.

So it was with considerable surprise that I read an article in Hong Kong's South China Morning Post while in China recently, discussing newly announced efforts in Shanghai – a previous pacemaker in China whose local economy is now somewhat faltering – to encourage reforms in local government policy and management by stopping the punishment of well-intentioned innovations that fail.

According to the article, the city government, in announcing plans "to encourage local officials to 'reform and innovate,'" stated that it "promised not to punish those who dare to try new ideas but may not achieve their objectives – so long as their efforts are made in good faith and don't lead to windfall gains for those officials." (The latter caveat takes into account China's huge corruption problem.) The policy also said that "the city will reward officials at various levels who show initiative for innovative ideas even if their reforms fail to meet targets."

Innovation is important for government. Government often underperforms. If that's true, then we can't continue to do business the same way – we need innovations to improve performance. And valuable innovations often yield huge performance or cost savings returns.

Yet that doesn't mean anything labeled "innovation" is a good idea. Indeed, most innovations fail. It is often hard to predict which innovations are going to work, so in practice if you want successes, you must be willing to tolerate failures.

But that creates the problem for government. Ideally, you want to make it easy to try out an innovation on a small scale, stop it quickly if it's not working, and scale up if it does work. However, if people get slapped in the face every time an innovative idea fails, they are going to get slapped a lot – a problem that becomes even worse when there are few rewards for success. Government folks quickly get the message: Innovations will bring you trouble when they fail , and don't get you anything when they succeed. The Shanghai city government policy is thus designed partly to counteract one of the great impediments to innovation in government.

Needless to say, the problem is also one we also very much have in the United States. It's embarrassing that this is coming from a large local government in China rather than the U.S. government.

It is really a challenge to bring about a culture change here. How does one avoid feeding media stories about government officials being praised or rewarded for failing? One can almost hear the cries of "where's the accountability?" And, from a managerial perspective, how does one balance the desire to make room for innovations and their potential for failure with an expectation for high performance?

But the right answer can't be the dramatic underproduction of innovations that the current incentive structure in government produces. That's why the Shanghai effort should be welcomed – it will be interesting to see if anything comes of it.

Posted on Jun 07, 2013 at 12:09 PM4 comments

Why the IRS dance video shouldn't be a scandal

IRS dance vid

IRS employees learn to line-dance in a video that has created a new controversy for the agency. Is it another example of wasteful spending?

As of early Monday morning, a Google search of "IRS dance video" yielded over 64 million hits, not bad for a story that only broke over the weekend. At the risk of unleashing a torrent of abuse, may I ask why?

This video lacks some of the features that gave legs to last year's GSA conference scandal. The GSA conference took place in Las Vegas (known for its glitz and excess, even though it's really an inexpensive place to hold conferences). There were photos of the offending GSA regional administrator lolling in a huge hot tub, and videos shown on TV appeared to show employees advocating being lazy or wasting money (though both videos were parodies).

The IRS video, on the other hand, features a group of nerdy and uncoordinated IRS employees trying to loosen up by doing the "cupid shuffle" (I will confess that I – perhaps like some boring IRS employees -- am such a nerd that I had never heard of this dance before).

Frankly, the political and public reactions to this video are depressing, not because of what it says about the IRS but because of what it says about expectations of how government organizations should be managed and how government people should behave. (Forbes published one such reaction.)

Modern organizations often produce their products or services in groups. To be more productive, organizations therefore have an interest in employees feeling good about each other, making it easier for them to work together effectively. They also recognize that productivity is generally enhanced when people feel good about their work environment. For that reason, modern organizations typically invest in trying to get employees to move beyond only formal interactions so that they may feel good about each other. That includes jokes and spoofs. "Work hard, play hard" is a common view. A Google search of the phrase "team building conference" yields more than 1 billion hits.

Instead, the view about government, rather than the view about managing in the private sector, seems more akin to what might be called the Gradgrind school of management, which was prominent in the early years of the industrial revolution. (Gradgrind is the name of the main character in Charles Dickens' novel Hard Times, a school headmaster who was cold and heartless to his young charges. The word today, according to Wikipedia, is "used generically to refer to someone who is hard and only concerned with cold facts and numbers.")

In this mentality, interactions should only be formal. People shouldn't feel any emotional ties to each other. And of course they should never laugh.

Government is usually not the most fun-loving, informal work environment, in touch with its feelings and with high bonds among teams. The IRS dance spoofs were efforts to try to counteract those problems. The reaction, unfortunately, gives government a really strong message: bureaucrats need to act like bureaucrats. Don't get out of your boring lane.

Gee, sounds like just the kind of organization a normal person should be attracted to, right?

Posted on Jun 03, 2013 at 12:09 PM10 comments

Strangling Google in China?

china cyber

While in China recently, I tried Googling a name I wanted to learn more about. Google is not blocked in China, but it has had a very poor relationship with the Chinese government, and it has moved its server to Hong Kong. Gradually, Google's Chinese market share has gotten smaller and smaller, and it is totally dominated by its home-grown competitor Baidu – though I know a number of Chinese students who want better access to American material who use Google. (China is, I believe, the only country in the world where Google doesn't have the leading market share in search.)

The words I searched were in no way politically sensitive, and more than a million hits came up. I then tried to click through to some of the articles and ... nothing happened. I didn't get the "Internet Explorer Cannot Display This Webpage" screen that typically occurs when one tries to access a blocked website, such as Facebook or a forbidden word search. I double-clicked, the entry highlighted itself, and then nothing came up – I just stayed on the Google page.

Frustrated by this experience, I asked a group of Harvard alumni at a dinner sponsored by my wonderful former student Eugene Wang about what I had experienced, wondering whether it was some problem with my computer.

No, I was told – this is part of the Google user experience in China. Not all the time, but on a random basis, users have trouble connecting to some or all of the hits that come up on Google searches. Everyone in the group had experienced these problems.

The inhibited access tends to be worse around sensitive events (such as the annual meeting of the National People's Congress this last March) or their anniversaries, somebody told me.

(I tried the same search again just before writing this blog post. Some links came through – bizarrely, links to books on the Amazon website – while others had the same no-reaction I had experienced earlier. And others, not politically sensitive I wouldn't think, were greeted with "Internet Explorer Cannot Display This Webpage.")

So what seems to be going on is that, rather than just blocking Google in China, the authorities are making it so annoying and unreliable to use that people will just stop using it altogether, and it will die on the vine.

This seems to be another version of the humiliation Apple Computer was put through a few months ago after being raked over the coals on the annual television World Consumer Day gala for trivial consumer-protection infractions in a country where thousands of dead pigs are found in the river outside Shanghai and people are dying of cadmium poisoning in rice. (I blogged about this at the time.) Eventually, Apple President Tim Cook felt it necessary to issue a public apology for the company's behavior, an incident reported in Western media at the time as reflecting an effort to make clear that Apple existed in China, a crucial market for the company, only at the government's sufferance.

Chinese blog readers, thoughts or reactions?

Posted on May 30, 2013 at 12:09 PM4 comments

Keeping time (and tune) with students in Shanghai

karaoke sign

Karaoke – called "KTV" in the Chinese-speaking world– is a staple of university-student entertainment in China. The karaoke venues are (at least in China) big, modern locations with bright and often pulsating lights in the public area, and then divided up into small rooms where groups from two to maybe eight can sit in front of a biggish-size TV screen. A computer offers a wide variety of popular songs. Guests choose songs, and the songs then appear on the TV screen: Music, a visual (sometimes the artist singing the song, sometimes actors who look sort of like castoffs from TV ad casting calls), and the lyrics, with a moving ball telling the viewer when to sing each word.

There are usually two microphones in the room, and anyone who wants to can sing along, with the microphone somehow mysteriously improving the quality of the voice of the person singing into it.

When karaoke first came to a liberalizing China, it was very associated with prostitution, but that seems largely to have disappeared, certainly for the young crowds who dominate many, though not all, of the karaoke venues.

While in Shanghai for a conference and some lectures, I had the time of my life attending a karaoke place with a group of students. Listening to the songs they requested and how they reacted to them gave me a feel for the pulse of China's new generation.

The largest two groups of songs the students requested – in about equal numbers – were Chinese and American pop. The Chinese pop was all over the map, everything from soupy ballads (for which I confess a weakness) to Chinese rap and techno. But their knowledge of American pop – their selections were on the softer side, including old stuff such as the Carpenters' "We've Only Just Begun" -- was surprisingly good. One boy was skillfully able to sing the words, with a quite good accent, of pretty much every American pop song requested. Most of the students seemed at least somewhat familiar with the songs, and happy to sing along.

A unique feature of karaoke in China, of which I had not been aware earlier, is the presence in the music selections of so-called "red songs" (hong ge), the bizarre Mao-era musical depictions of brave soldiers and virtuous peasants set to martial-style music, of China defeating American imperialism, that have in certain circles undergone something of a nostalgic revival recently. These students also generally learned many of these red songs as children. Two red songs were requested during the evening, including the iconic Mao-era classic "The East is Red." They were, however, sung to boisterous laughter and turned off about a third of the way through.

There was something patriotic that was taken seriously, however. The students requested "Beijing Welcomes You" (Beijing huan ying ni), the theme song of the 2008 Beijing Olympics. All the students sung along, very enthusiastically and with obvious joy.

Another interesting feature: there are a range of drinks, from fruit juice to harder stuff, available at these places. The students in my group all drank bottled water.

Posted on May 28, 2013 at 12:09 PM7 comments

How the IRS scandal is like ethnic profiling

TSA agent

One might not think that questions of airport security and IRS scrutiny would be connected, but Steve Kelman finds a link. (Stock image)

In following the IRS Tea Party scandal, I've been struck by an analogy. The targeting of Tea Party applications for tax-exempt status and debates about whether, say, young male Muslims should be targeted for extra scrutiny at airports raise the same set of issues.

It is simply a fact that most terrorists threatening the United States, Europe or Israel are young male Muslims. A strong argument could be made that random extra scrutiny of airport passengers is highly inefficient – producing bizarre anomalies such as heightened scrutiny for 85 year-old grandmothers – and that ethnic profiling would increase the chance of catching a terrorist. Indeed, this has been Israel's strategy at airports.

Similarly, it is simply a fact that a group such as the Tea Party that is fundamentally a political organization is more likely to violate the (apparently very expansive) rules limiting political activity for social welfare organizations than is a Knights of Columbus chapter that might do a small amount of political activity on issues such as abortion. To treat both organizations the same way is inefficient. Indeed, if one wanted to use more dramatic language, one could say that treating both kinds of organizations in the same way would be an example of government waste.

If anything, targeting young male Muslims is more problematic than targeting local Tea Party organizations. Although most terrorists are young male Muslims, the vast majority of young male Muslims are not terrorists, so in targeting them, the government would be overwhelmingly targeting innocent people. By contrast, the chances that a local Tea Party organization would be engaged in political activity that would produce a failure to qualify for tax-exempt status would seem to be much larger. (To be fair, though, the downside of failure to pick out a terrorist is much greater than the downside of failure to catch an organization that shouldn't be getting tax-exempt status.)

But the demands for ethnic profiling at airports (which were rejected in the United States, even in the height of post-9/11 anxieties) and the IRS profiling of Tea Party organizations both remind us of the old saw that government is not just about efficiency. We are, and should be, willing to sacrifice some degree of efficient performance in government for protection and fair treatment of innocent individuals or groups.

There is an irony here, though, which is that I am guessing that Tea Party supporters and Republican conservatives are more likely than most to have supported ethnic profiling of potential terrorists. There is a second irony, which is that an important mission of the congressional government affairs oversight committees is to promote efficiency in government.

While I definitely agree – as illustrated by the IRS and ethnic profiling cases -- that efficiency is not the only goal in government management, it certainly should be an important goal. Too often in government, the correct statement that government cannot care only about efficiency morphs into a philosophy that efficiency is not important at all – a philosophy that then causes the same oversight committees to rail against government waste. And certainly the efforts to criminalize bad judgment by IRS civil servants here are unlikely to foster a mentality inside government that one should aggressively be looking for ways to be more efficient.

Posted on May 23, 2013 at 12:09 PM7 comments

The Air Force goes to the front lines for cost-savings ideas

illustration dollar sign in vise

The Air Force's "Every Dollar Counts" campaign intends to put the squeeze on costs. (Stock image)

My friend Jim Tisdale at Los Angeles Air Force Base has called to my attention a campaign that is going on this month (it started May 1 and goes through May 30) to involve frontline uniformed and civilian Air Force people in efforts to save money in a tight budget environment where the Air Force has taken $11 billion in sequestration cuts. Jim is a dedicated contracting professional who takes seriously the cost-savings mission of contracting.

The campaign is called "Every Dollar Counts," and you can learn more about it by going to the Air Force home page. There you will see the campaign as the "featured link" in the top left corner of the site (just above the second featured link, on Sexual Assault Awareness and Prevention). If you click through, you will see an interview with Gen. Larry Spencer, vice chief of staff of the Air Force, a place to submit suggestions, and a listing of some suggestions that have been accepted so far.

There are several things I like about how this has been set up. First, the Air Force promises to quickly look at and respond to each suggestion – using a team of reviewers – so suggestions don't just disappear into a black hole. Second, they say that if a good suggestion requires a regulatory change that is within the service's authority, the Air Force will pursue it. Third, it is time-limited – unlike a classical "suggestion box" -- and doesn't drag on forever, increasing the incentive to act while the window is open.

Most importantly, this involves the frontline folks. This is good because the people doing the work are likely to be good sources of ideas, and also because it is really important in the sequestration environment than public servants don't get into a destructive -- and self-destructive -- mode of seeing themselves as victims.

I like the fact that the website gives examples of suggestions that have been acted on, together with names and pictures of those who made them. In a separate document Jim Tisdale sent me, these included efforts such as finding cell phones the service was paying for that no one was using; moving some training to a commercial wind tunnel at a fraction of the cost; and finding equipment missing from an inventory list so new equipment didn't need to be ordered.

I am hoping that other military services and civilian agencies will pick up on the Air Force's idea.

Posted on May 16, 2013 at 12:09 PM4 comments

The power of slow thinking

book cover

In 2011, Daniel Kahneman published a book called "Thinking, Fast and Slow," which was a non-fiction bestseller. I write about it now because it just came out in paperback. It is a great read, and I guarantee it will teach you a great deal.

Kahneman is an emeritus professor at Princeton University's Woodrow Wilson School of Public and International Affairs and the first non-economist by profession to win the Nobel Prize in Economics. In his book, he tells us that our minds have two systems for making decisions, which he straightforwardly calls System 1 and System 2.

System 1 has arisen from millennia of human evolution and from repeated experiences people have over the course of their lives. System 1 is fast. It provides intuitive reactions to what we should do. System 2 is methodical and deliberative thinking, when we ponder evidence and weigh pros and cons. It is much slower, and it takes mental effort and energy. Often, Kahneman notes, System 2 acts as a check on System 1.

Academics like me and Kahneman are unsurprisingly (dare I say instinctively?) System 2 believers, though a minority of scholars who study decisions argue that such expertise has become largely intuitive.

Here's what Kahneman says: For many situations in which our reactions are governed by System 1, speed is essential. We are extremely sensitive to danger, quickly noticing and reacting to it because a microsecond advantage could determine whether our pre-human ancestors were eaten or not. Furthermore, in situations in which people have frequent experience — say, in playing basketball or diagnosing disease — and where feedback about the result of a decision is quick and unambiguous, the mind eventually develops good intuition that often cannot be expressed in words.

However, System 1 often does not provide an intuitive answer. To cite an example Kahneman provides, there is no System 1 answer to the question "How much is 49 times 27?" We need to develop and use System 2 to help us.

Beyond that, though, System 1 answers are sometimes just wrong. Our instincts lead us in a direction that generally makes sense but produces absurd results. These are the kinds of situations Kahneman became famous for studying. People will prefer being subjected to 10 minutes of severe pain followed by 5 minutes of mild pain rather than only 10 minutes of severe pain, though a moment's thought tells us this is irrational. Many experiments show that people are dramatically overconfident about how much they know or how successful their efforts are likely to be. And in situations in which there is not frequent, unambiguous feedback, expert intuitions have a poor record of success.

So, true to his status as a professor, Kahneman wants to see more System 2 in our decisions. But System 2 takes effort, and our minds prefer to be lazy. And often the times we most need System 2 as a check are those when we least realize we need it because System 1's message is so unequivocal.

At the end of the book, Kahneman extends his analysis from the individual to the organization.

"Organizations are better than individuals when it comes to avoiding errors because they naturally think more slowly and have the power to impose orderly procedures.… Whatever else it produces, an organization is a factory that manufactures judgments and decisions. Every factory must have ways to ensure the quality of its products in the initial design, in fabrication and in final inspections."

Sounds like a topic for another book.

Posted on May 09, 2013 at 12:09 PM1 comments

GSA is saying what?

OASIS logo

Stan Soloway, head of the Professional Services Council and about the most-enlightened government contracting trade association executive out there, wrote a column recently in Washington Technology (subscription required) discussing the widely watched GSA OASIS procurement, which will be a crucial GSA multiple-award vehicle for IT-related professional services.
Soloway is effusive in his praise for the pre-solicitation communication with industry about the content of the RFP. As he notes, in an environment where many inside the government are not taking advantage of the opportunity for the government to improve an RFP based on industry comments, this is good news.
But as he also notes, there is also something very disturbing about the draft RFP:  it states that past-performance information from government projects will be counted more heavily than information from work that contractors have done for private-sector customers.
This is really not a good idea.
One of the problems with the government's procurement system is that government-unique regulations create a barrier to commercial, predominantly private-sector oriented companies doing more business in the government marketplace. This is a problem because -- like any tariff barrier -- it creates a hothouse environment where competition is lower and insiders can gain business based on mastery of procurement rules more than satisfying their customers. And the commercial environment is one where performance is strongly prioritized, and failure to perform is punished more swiftly than in a government environment. It's good for the government to hire firms that are used to such an environment.
Some government folks feel more comfortable with government-unique contractors who know the government's environment better. But if I were in the government and wanted to put a premium on performance, I would want to be sure I had access to predominantly commercial firms. At a minimum, such firms should be in a multiple-award mix, to increase the range of options available to government customers.
GSA is arguing that it's easier to evaluate past performance on government business. I don't buy this -- if anything, the opposite may be true. The RFP should require bidders wishing to give commercial references to list their last five jobs over a certain dollar amount, and government people should just call references and briefly interview them. The information -- unfortunately -- might actually be better than much of the material in the government's past-performance databases.
The good news is that, with the consultation they are doing, the OASIS program still has time to rectify this mistake.

P.S. I participated in the Walk for Hunger over the weekend. Through my blog, I would like to thank Fedbid and ASI Government for sponsoring me, also my colleagues Todd Rogers, Jack Donahue, Jennifer Lerner, and Linda Bilmes, my family Leora Kelman, Jody Kelman, Ellen Kelman, and Susan Hyatt; also Nick Economou, retired from GSA.

Posted on May 08, 2013 at 12:09 PM10 comments

What happens when the kids go for startups?

young people working

A growing interest among graduating students in starting their own businesses could become another obstacle for federal recruiting efforts, Steve Kelman fears. (Stock image)

For the last 20 years or so, it has been an ongoing struggle at the Kennedy School to keep up the numbers in terms of our master's graduates going into the public or nonprofit sectors for their first jobs. The salary gap between working at a private-sector firm and working for government or most nonprofits grows by the year. The prestige of government employment continues to take a beating. And, as if all of that isn't enough, government proceeds to shoot itself in the foot with an employment system that keeps applicants waiting for offers months longer than they do with leading private employers. Government also often fails to provide young people exciting first jobs.

Since we are a school for public service, we have taken proactive steps against these trends, including loan forgiveness for students taking low-salary jobs, scholarships tied to public service and efforts by the school leadership to promote a culture of public service (we have a public service day shortly after students arrive, and all the entrances to the School, as well as our website, feature the quote from John F. Kennedy "ask what you can do.") Depending on the year, we often succeed fairly well, all things considered – a clear majority of our master's of public policy graduates take their first jobs in government or a non-profit.

I have noticed, however, an interesting trend among my students in recent years that has now been discussed in a Boston Globe article called "Launching startups while the ink on their diplomas dries." (The article unfortunately is not available online.) The story presented a survey that found "millenials" are more than twice as likely to start their own business immediately on graduation than any previous generation surveyed.

"I absolutely think it's true that there are more people wanting to start companies right out of school," a local venture capitalist was quoted as saying. "The Facebook phenomenon has fueled that."

During the past few years, I have noticed that my students are less and less inclined to want to work for any big organization at all, government or not. Courses on "social enterprises" are flourishing, and more students are entering the Harvard Business School startup contests. Some of the startups students have in mind are businesses that would be supported by revenues, while others might be startups trying to deal with some social problem.

The nice way to look at this – and I typically try to see the nice side of things, especially where our students are concerned – is that this is just a new way for students to show their social engagement. Having said that, though, there's no denying that this trend is yet another roadblock government faces in trying to attract smart young people. I don't have a solution for this, but it is yet another problem – assuming you believe, as I do, that it is important for government to successfully attract a solid share of the most talented young people into its ranks.

This trend also creates a challenge for the way we teach management, not only at public policy or public administration schools but also at most business schools. We have adapted our management curriculum somewhat with courses on social enterprises and nonprofit management. But our central courses still are focused on large organizations. This is increasingly creating relevance problems for our students – even though I think the reality remains that most will end up in large organizations.

One may also ask about this trend from a societal point of view. Our entrepreneurship tradition is one of the U.S. economy's great strengths. The vast majority of startups fail, but we accept a lot of failure because it is voluntarily assumed and because society reaps enormous benefits from the few successes.

However, one may question whether this cost-benefit ratio applies without end. At some point, the likelihood of failure – and thus of wasted resources – may become so high that it would be better for society to have a lower rate of entrepreneurship. I don't know if we're there yet, but I do know that other institutions in society besides startups need smart young people to join them.

Posted on Apr 30, 2013 at 12:09 PM1 comments

Police technology improves

police car

The investigation of the Boston Marathon bombings showed how police work is being changed by technology. What's interesting about that is that police hardly fit the stereotype of the tech-literate, and also that police organizations are often seen as being difficult to change.

By amazing coincidence, in the week before the bombings, The New York Times and The Boston Globe each ran articles on how police were using IT to help deal with potential crimes and fight crime.

The article in the Times was about police using smartphones to find information about residents of a given address. The databases linked together on the smartphone screen provide the officer with "access to the names of every resident with an open warrant, arrest record or previous police summons; each apartment with a prior domestic incident report; all residents with orders of protection against them; registered gun owners; and the arrest photographs of every parolee in the building." If the police are called for a domestic dispute, they can immediately see whether the person involved has previous arrests or convictions for domestic violence.

The Globe story, run a few days earlier on the front page, was about high-speed license plate-reading technology mounted on police vehicles that can scan 1,800 license plates per minute on passing cars, and share with police information related to the plates in real time. A simple use of this technology is to locate uninsured, unregistered, or stolen cars. The scans also record the location of the vehicle when the scan was taken, often allowing more information about where a car was that can be used in a legal case or, sometimes, to track down a suspect. In one instance, the license plate number of a man suspected of exposing himself was known, the number entered into the system, and the police alerted when the car drove past a scanner.

These are interesting examples of technology-driven change that help explain why it appears the police may be getting better at solving crimes. From an IT change management perspective, they provide a clear, if intuitive, lesson: people, even arguably change-resistant cultures such as the police, don't just "resist change" because they're ornery. If people believe a new technology will help them do their jobs better, they may well embrace it.

Both articles discuss worries of privacy and civil liberties groups about intrusions from government use of these data. I thought both articles dealt with these questions in a balanced way, and both articles, I thought (see if you agree), made the crime-fighting advantages of these new technologies clear.

Actually, even the head of the New York Civil Liberties Union, quoted in the Times article, did not have a knee-jerk reaction, stating that the technology had "enormous promise to improve policing and public safety," even though she was worried about "whether it will become a vehicle to round up the usual suspects, to harass people" based on information in the databases.

Both articles exhibited balanced reporting that gave those readers willing to see a picture of improvements in public management that perhaps should make the police successes after the Boston bombings less surprising. (See my previous blog entry for a discussion of willingness to see.)

PS: I am participating in the Walk for Hunger in Boston on Sunday May 5 – the city's first big street event since the bombings -- and am looking for sponsors. Any blog reader who would like to sponsor me should send a tax-deductible check payable to Walk for Hunger to me at: Harvard University, JFK School of Government, 79 JFK Street, Cambridge, MA 02138. I will mention the names of sponsors in a subsequent blog. Thank you in advance.

Posted on Apr 26, 2013 at 12:09 PM0 comments

Terrorism, the government and bias

marathon probe

Investigators looking for clues and evidence after the bombing at the Boston Marathon. (AP photo)

Everyone knows the phrase "seeing is believing." It suggests a nice, comforting relationship between data and conclusions. We look at the data, and then draw conclusions.

But the distinguished organizational studies scholar Karl Weick has suggested that people's minds often don't work that way. Instead, our minds often work the opposite way – "believing is seeing." If we believe something is true, we notice evidence for it; if we don't, we don't notice the same evidence.

There's a classic lab study in social psychology where one group of college males is shown the picture of an attractive woman, the other group a picture of an unattractive woman. Both groups then listen to a recorded interview with a woman's voice and are told the interview is with the woman whose picture they have seen. Both groups hear the identical recording. However, the students who have seen a picture of an attractive woman rate the interview content as friendlier, more intelligent, and the woman as having a nicer voice than the other students who heard the exact same interview.

I believe this applies very much to our reactions to information about government. I blogged recently about a failed IT project cancelled by a private company. Most people believe IT projects are generally successful in the private sector, and go bust in government. So I'm guessing that most people don't hear the story of the failed private IT project and say "typical for companies." But most do, I suspect, hear a story of a failed government IT project and sigh, "typical for government." Believing is seeing.

I think something similar applies to how many people reacted to the quick apprehension of the Boston Marathon terrorist suspects. With the help of social media, government investigators were able within less than three days to publish high-quality images of the pair that turn out to (apparently) have committed the bombings. As in the London subway bombings from a few years ago, people were caught very quickly.

How do people react to this, given that most people believe "government" is incompetent? Some might not even notice that the police successfully moved very fast on this case. I suspect, though, what is more common is that few people assimilate this success into the category of "government" – that is, "here is government being competent." That category hardly exists for many. So they don't see it. And that is too bad.

I should note that different beliefs produce different things you notice. A day after the bombings I got a note from a friend in Singapore, a country where people generally believe that government is highly competent. The note asked impatiently why the terrorists hadn't been caught yet.

Incidentally, I was amazed and pleased to see that Yael Bar-Tur, a student of mine who graduated from the Kennedy School only last year, has a blog and a consulting business on how the police can better use social media.

Posted on Apr 23, 2013 at 12:09 PM1 comments

A (possibly) narrow-minded northeasterner visits Kentucky

Lexington Ky.

Yes, it's (possibly) true. Many who like me have lived more or less our whole lives in the large cities of the Northeast feel we are sophisticated and global, but sometimes we may know and understand London, Paris, or even Beijing better than we understand parts of our own country outside the coasts.

I have been reminded of this inconvenient truth the last few days visiting the Martin School (public administration and public policy program) at the University of Kentucky, in Lexington. I realized that this is only the second time I have ever visited Kentucky at all –- I was in Louisville once around 25 years ago to look at the GE Appliances customer call center -– and that my knowledge of Kentucky culture or traditions is minimal. The University of Kentucky is an important part of the city, but this is not a university town –- its population is around 300,000 (three times the population of Cambridge, Massachusetts).

I guess a lot of my impressions fall under the rubric of seeing that many of the elements of coastal "sophisticated" urban culture have made their way to a mid-size city with a substantial base of highly educated people that is in Kentucky, not on the coasts. Two dinners to which I was invited by faculty colleagues at the Martin School were truly superb. One was at a wine bar outside the city that served its own local wine, where the rare duck was actually some of the most tender and flavorful I've ever had. (I will confess that the wine was only a good try, but still.) The other was at a bistro downtown, quite crowded on a weeknight, where I ate -– again superb -– seared tuna with a chile plum sauce. In addition to that, the downtown and campus areas had at least one Thai and at least one Mexican restaurant.

So what else? Longtime faculty members told me that over the past 25 years the regional accents of their Kentucky students (half the class) had softened noticeably. The public administration program is now filled with Asian students, mostly from China and Korea, and the university now does a training program for Korean mid-level government officials. I was surprised to see the airport gift shop prominently advertise their selection of New York Times Bestsellers, with the Times logo. A last surprising similarity with my own area of the country was that housing prices were not cheap, perhaps only 20 percent (if that) below those in the nice Boston suburbs.

So is anything different? Yes. There are horse farms everywhere. The most famous house in the city is owned by the university basketball coach. The downtown -- Lexington is a very old city -- had a strange feel to me, with old buildings (both commercial and residential) that were neither renovated and yuppified, the way similar buildings often are in old midsize northeastern cities, nor dilapidated and collapsing, like so many urban cores 30 years ago. They were somewhere in the middle, and downtown did not hang together but rather seemed more like a collection of random structures. (It didn't help there was a grassy empty area in the center of town, the result of some historic buildings having been torn down for construction of a Marriott Hotel, which then got waylayed by the 2008 economic crisis.)

And -- on the nice side -- it seems as if the large majority of public administration students go to work for government or nonprofits. Often to the state government, but sometimes to federal agencies where the school has connections (mostly GAO it seems).

Oh, and by the way, I felt a lump in my heart when I saw flags at half-staff at the entrance to the university, and even at a local McDonald's, in honor of the Boston victims. Yes, we are one country.

Posted on Apr 19, 2013 at 12:09 PM1 comments

The contributions of immigrants -- it's not just high tech

concept art innovation

Whether it's Silicon Valley or a New York yogurt factory, the vitality and energy immigrants bring to the U.S. economy are tremendous assets.

Many, especially in the tech world, are familiar with the contributions of immigrants to high-tech business in the United States -- according to some estimates, some 40 percent of NASDAQ-listed tech firms were founded by people not born in the United States. But a fascinating and inspiring article recently appearing in the Financial Times of London about Hamdi Ulukaya, the Turkish immigrant who brought Greek-style yogurt to America, reminds us that these contributions to our country are not limited to the high-tech sphere.

Ulukaya came to the United States in 1994 to study English, started working on a farm in upstate New York, and in 2002 opened a small plant making a Turkish-style cheese. He started his yogurt company, Chobani, in 2007 when he bought a yogurt plant that had been shut down by Kraft Food. His idea was to bring a more-natural, less-sugared yogurt onto the market. (And it's worth noting that he got a $1 million loan from the Small Business Administration to buy the plant.)

Several years later, Chobani yoghurt sells a billion dollars a year of product, and the company employs 2,000 people. It all started by getting one supermarket on Long Island to sell his yogurt.

There is an important message here, which seems to be becoming more and more accepted in political debate: Immigrants are a source of amazing vitality and energy in the U.S. economy. We should be lucky they want to come here.

With the sad news coming from my hometown of Boston this week, Ulukaya's story is something to cheer us up about the human spirit and about the United States.

(By the way, I'd like to thank all the friends, former students, and others who contacted me either on Facebook or by email to express sympathies for our loss here in Boston.)

Posted on Apr 17, 2013 at 12:09 PM2 comments

A media double standard?

tax form and keyboard

Like other procrastinating Americans, I have been working the last few days trying to finish up my taxes. (Although unlike many Americans, I tend to be in the "taxes are the price we pay for civilization" camp.) I use H&R Block software to do my taxes, and as I was checking the 1040 that emerged from my efforts to answer the various questions the software prompts, I noticed something strange.

I own a number of stocks in foreign companies, where the government of the country deducts local income taxes on the company's stock dividends. In such cases, U.S. tax law allows taxpayers to take a tax credit corresponding to the taxes deducted by the foreign government. So, for example, if the foreign government deducts $100 in taxes, the taxpayer can take a $100 credit on his or her own taxes. (The taxpayer reports the dividend payment as income and pays U.S. taxes on it.)

The foreign tax credits are entered in the H&R Block interview system where you give the various items on 1099 forms for dividend payments. I dutifully entered these where relevant, on the line labeled "foreign tax paid."

However, at the end of the process I discovered to my surprise that the H&R Block system hadn't transferred these credits from the interview form to line 47 on the 1040, which shows foreign taxes paid, so they can be credited. My 1040 showed foreign tax credits of zero dollars.

So I called the company's customer service. To make a long story short – and this was a very long story, as I was on the phone probably for 45 minutes about this one problem, and I felt like I was educating the customer service representative on U.S. tax law as I was going along – there was a problem with the H&R Block software. They said they would share my problem with their tech team, but it would likely not be fixed for several weeks (well after April 15). I could bring in their live tax-filing helpers, but that service cost money. Also, they told me that if I changed any of the forms myself from what came out of the interview process, I wouldn't be able to e-file.

I have written before about problems that exist in the private sector as well as government but often get more attention when they are created by government. Frankly, I think a lot of people notice them more when they occur in the context of a government experience, because they correspond to the preconceptions most people have of what service from government vs. the private sector is like. Once that perception gets established, it gets confirmed by selective attention.

And that perception in turn is influenced by media coverage. This is another example of a problem that, had it occurred in government, would get covered by the media.

To be fair to H&R Block, there was one difference: the customer service rep told me that next year I could provide my call reference number, and H&R Block would provide me with next year's tax prep package for free.

Posted on Apr 11, 2013 at 12:09 PM5 comments

Behavioral approaches to contract negotiations

the brain

A course title – with the word NEW! emblazoned in capital letters and orange type (everything else in the brochure was blue and black) – appeared in a flyer I recently got in the mail from Federal Publications Seminars.

The flyer was advertising a four-day training conference on government contracting, and the flashy course title caught my eye. Amidst traditional-sounding training sessions, with titles such as "A Practical Guide to the Incurred Cost Submission" and "Rights in Technical Data and Computer Software," the NEW! course was called, "Behavioral Aspects of Government Contract Negotiations."

The instructor is Joe Mason, a technical guy working for a Colorado-based government contractor who also teaches government contract negotiations at a local university and proposed this course to the seminar company last year. After beta testing it last year with only six attendees, this year 29 have already signed up, with the training vendor expecting 40 attendees when the 12-hour, 2-day session is delivered in May.

This new course reflects a positive turn in how participants in government contracting – especially, hopefully, the government – think about the negotiation process, which should be a central factor. (Negotiations are critical to getting taxpayers a good deal, and also important from a job satisfaction perspective for contracting officials, because negotiating, for many, is intrinsically interesting work).

Traditionally, government thought about negotiations in a very formalistic sense. In "negotiating" over proposals that vendors gave the government, government traditionally did not actually even speak with the bidders at all (something considered to be at the heart of negotiating in the normal meaning of the word) – the government sent written communications telling bidders how they were deficient, asking them to revise their proposals, and also requesting a lower price. After the contract was signed, "negotiations" to the government often meant discussion around questions of what rights the contract terms gave the parties.

This is beginning to change, and this new course is one sign of the shift. By "behavioral" features of negotiations, Mason means teaching people to understand and "read" the personalities and agendas of the people with whom you are negotiating, and then how to use that understanding in face-to-face negotiations with others. He means providing hints about how to use one's understanding of the other party to reach a better deal for your own side -- and to develop a solution that is acceptable to all.

The new perspective in this course is, probably, only scratching the surface of a behavioral approach to negotiations. When I first saw the course blurb, I assumed the course was actually including what academics would mean by the term: an approach to negotiations that takes into account the various ways the human mind works (ways that sometimes depart from what most would consider to be rationality.) Thus, academics studying negotiations, for example, apply something called the "anchoring bias" – the fact that people tend to propose solutions around an anchor that gets established in their minds, however arbitrarily, which means that a first offer can influence a negotiation outcome.

In the classic studies of anchoring, two groups of people are asked to estimate the incidence of serious corporate fraud. They ask one group whether the incidence is more or less than 200 firms out of a thousand, and the other whether it is more or less than 20 firms out of a thousand. Although these numbers are chosen totally arbitrary, they serve as anchors in the minds of the test subjects, so that the group asked to consider 200 cases as the benchmark usually estimates a much higher incidence of fraud than the group given the lower number. Mason's course doesn't get into that level of behavioral insight.

I am very happy that courses such as Mason's are being offered now; they are a real step forward. But I also am thinking that a lot of a behavioral approach to negotiations is hardly limited to negotiating over government contracts. Perhaps a better solution, rather than having people take government-contracting unique negotiation training, is for people, including government officials (OK, I am speaking about a world in which training dollars return), to take general courses in negotiations open to the whole world, not just courses designed for the special, closed world of government contracts. Doing that would be to take an even bolder step towards improving the value the government gets from contracting.

Posted on Apr 09, 2013 at 12:09 PM3 comments

Reminder: Corporate IT projects can also crash and burn

annual report

As my blog readers who own stock are probably aware, this is corporate annual report season. My mailbox has been filled with thick annual reports, 10-K statements, and notices of annual meetings. (I still get this stuff in hard copy.)

Reading one of these annual reports on a smallish-sized company that will remain nameless, I saw, buried on page 17 under the rubric "Other," the following disclosure:

"On February 7, 2013 the Board of Directors of the Company approved a change in the Company's IT software and systems strategy. The Company changed its IT... strategy from a previous project, involving an ERP reimplementation, to a project involving an ERP upgrade and some additional applications software. ... This new approach is expected to be completed by the Company, at a lower cost, in a shorter time frame, and with less overall business risk. The Company determined that continuing with the original project would result in increases in estimated costs and a significant extension in the time expected to complete the project.

"As a result of this change in IT strategy, the Company recorded a $1.8 million asset impairment charge in the quarter ended December 31, 2012. The original project costs were deemed to have no future fair value."

There are two lessons I think it is appropriate to draw from this incident, and two I don't mean to draw.

Lesson One: Many problems that agencies encounter in making IT investments work are not just problems for government. Getting returns from these investments can be challenging wherever they are undertaken. We sometimes have a tendency in government to dump on ourselves, to see only the bad side of things, and the public is seems to totally buy into a "waste, fraud, and abuse" narrative of government performance. These stories about the private sector provide a balance to the tendency to wallow in supposed, or supposedly unique, government incompetence.

Lesson Two explains why such perceptions about the government, particularly on the part of the public, develop. The fact is that problems, whether involving IT or other organizational issues, are much easier to keep from the public eye in private business than they are in government. Though there is now more investigative business reporting than before, companies are still more of a black box, with no inspectors general running around inside the organizations looking for scandal and no Freedom of Information Act that applies to companies.

It would be tempting to also conclude that this kind of problem is as prevalent in the private sector as in government. Maybe these problems happen once in a blue moon in companies (though I doubt it), and constantly in government. This one example won't answer that question. More importantly -- the second conclusion I do not want to draw -- just because failures are not limited to government doesn't mean that we should exempt ourselves from being concerned with the many federal IT implementation failures and feel a sense of urgency about increasing our success rate. The efforts at better program management, including agile development, should – urgently – continue. But let's not wallow.

P.S. The April 2 New York Times has an article on Apple's iPhone problems in China with allegations of poor warranty service, which led to an apology yesterday from Apple CEO Tim Cook. The article discusses the Chinese government television show on the topic, the controversy over cooked Chinese twitter posts by celebrities endorsing the criticism, and suggestions the attack on Apple is part of a larger political issue between the US and China – all of which I discussed in a blog post almost two weeks ago. Blog readers, you read it first here. :)

Posted on Apr 02, 2013 at 12:09 PM1 comments

China vignettes: Techies in politics, Starbucks saturation and panda porn

Panda at the National Zoo

A pastiche of vignettes from my latest trip to China:

1) China Daily ran a story called "Web bosses go into politics" about Internet entrepreneurs who had become delegates to recent meetings of China's legislature (the National People's Congress) and another non-legislative body that discusses various issues facing society, both of which meet for a few weeks each year. Superficially this might seem like American IT entrepreneurs becoming involved in politics either to promote an industry-related IT agenda (e.g. more visas for tech workers) or because they believe in a cause such as gay marriage. However, I'm suspecting that what's behind this entrepreneurial entry into politics is more a recognition of the need to have government connections and government blessings if one is to succeed in business, even private business. To the extent this is what is going on, it may be a pessimistic sign about the high-tech industry in China, with entrepreneurs succeeding based on connections more than the quality of what they do.

2) While in Shanghai, I wandered around a pedestrian street in the middle of town (Nanjing Road) and People's Square, which abuts it. I saw four different Starbucks outlets within perhaps a quarter-mile of one other. One was so crowded that it was actually difficult to move around. If you ever visit a Starbucks in China, check out how the menu is set up. Actual coffee (what they called an "Americano" or espresso) has a modest place in a bottom corner of the menu, which is dominated by various frappachinos and other sweetened drinks. Most Chinese don't like the actual taste of coffee, and Starbucks' success has been based on a lifestyle appeal more than anything. Chinese Starbucks prices in absolute terms -- forgetting even the lower wage levels in China -- are about 25 percent higher than prices for the same items in the United States. (By the way, next to one of the Starbucks there was a large Hershey's chocolate outlet -- which I had never seen before in China -- where Chinese could buy Reese's peanut butter cups and other delicacies.)

3) Although the Western media gives attention mostly to McDonald's, KFC, and Starbucks as western food attractions, I've been noticing a lot of pastry and sandwich outlets -- a style of cuisine not particularly closer to traditional Chinese eating habits (where the concept of a sweet dessert at the end of a meal doesn't really exist). Breadtalk, a Singapore company, is in a lot of food courts in malls, selling both French bread and lots of sweet pastries. I've been noticing more and more outlets of a company called French Baguette, which is, perhaps incongruously, Korean-owned.

4) Checking out an upscale shopping mall, I noticed an enormous disparity in relative prices of U.S. clothing and packaged food. American menswear brands were typically priced far above U.S. prices, often five times as expensive as stateside. But packaged foods (Pringles, tomato sauce, even -- somewhat bizarrely, since China doesn't lack for hot sauces -- Tabasco) are priced only slightly above American prices. Surprisingly as well, a moderate amount of the processed food is not just American brands, but actually manufactured in the United States.

5) Finally, I can report a small item in one day's English-language edition of the Global Times, which is actually published by the Communist Party and has something of a nationalistic reputation. Entitled "Panda porn helps female get in the mood for love," the article reported that "after several failed attempts to get it on, a pair of pandas in Chengdu were able to successfully mate after watching a specially tailored 'adult video' or panda porn."

Posted on Mar 27, 2013 at 12:09 PM0 comments

Stirrings of freedom rustle in China

china flag

Pluralism, and with it, freedom of expression, seems to be on the rise in China. (Stock image)

I have written in past blog posts that anybody who thinks China is a semi-totalitarian society where anything but official opinions are suppressed does not understand the country's growing pluralism.

True, it is something of a fine art to figure out what is allowed and what isn't, but I think most Americans would be surprised at the range of publicly expressed opinions. The pluralism has been dramatically increased by social media, which are creating a small revolution in Chinese society and politics through the spread of "microblogs" (weibo) that are filled with non-official information.

As I mentioned in my recent blog post from Hong Kong, anger at unsafe food and unsafe products has been rising in China. (Indeed, the recently concluded session of China's National People's Congress, the country's quasi-legislature, approved an upgrading of the status of the food safety regulatory agency.) Observers have noted that CCTV, the government TV broadcaster, along with some media, frequently emphasize food or product safety issues involving foreign multinationals (such as McDonald's, KFC, the Japanese noodle chain Ajisen, and Walmart), though these firms' products are certainly much safer than those produced by many Chinese companies.

Recently, CCTV had its annual consumer protection gala tied to the annual World Consumer Rights Day, where it exposed various product and food safety scandals. As frequently occurs, foreign brands were disproportionately represented in the gala – this year Apple was attacked for refusing to replace broken back covers of iPhones in order not to extend the warranty period, and Volkswagen was criticized for some defective gearboxes that could cause vehicle acceleration.

What was interesting was not so much these somewhat-trivial attacks on foreign brands, but the reaction in the weibo and even the print media. Shortly after the program was broadcast, many of the most popular microbloggers in China published, at around the same time, statements on their microblogs attacking Apple and praising the CCTV program.

However, the weibo world quickly noticed a line at the end of one of the posts, published by the movie star Peter Ho (with 5.4 million followers): "To publish at about 8:20 pm." Quickly, the incident went viral: weibo lit up with accusations that these comments were planted by CCTV. Within a few hours, many of the celebrities had deleted their posts. It is unclear what happened – the celebrities claim that the posts were put on their sites without their knowledge, while others suspect (and some have publicly stated) that CCTV, a powerful media outlet and representative of the government, leaned on them to publish the "recommended" remarks.

As noteworthy as the spread of all this on weibo, though, is that it was picked up by at least the English-language Chinese media. (This seems to have been in the Chinese-language media as well, because a Chinese friend I asked knew about the story.) Shanghai News, in a typical headline, headlined their story: "Comments 'At about 8:20' Put CCTV in the Firing Line."

The next day, the Global Times ran a story subtitled: "Public outcry as CCTV gala expose chooses 'wrong targets.'" In addition to discussing the celebrity comments on the CCTV Apple story (including providing a quote from one of those involved stating that "CCTV has invited influential Internet figures to comment in accordance with a certain event,") the Global Times story stated that the problems unearthed in the CCTV show were trivial. The article ended with a quote from a public management professor at Renmin University: "People are increasingly disappointed with environmental pollution and food safety issues. The fact that these issues were not addressed and the knowledge that CCTV was trying to control public opinion rather than embrace it is going to hurt the authority of CCTV and create a crisis of confidence."

Speaking of the environment, the Chinese media also reported that almost a quarter of the delegates to the National People's Congress voted against a list of candidates presented for the body's environmental protection committee, as a protest against insufficient efforts to fight pollution. An American asked me whether the local media has been mentioning the dead pigs found recently in waters near downtown Shanghai, which has gotten significant attention in the US media. The answer is yes – as the article "Floating Carcasses Prompt Safety Concerns" from China Daily illustrates.

Posted on Mar 22, 2013 at 12:09 PM1 comments

China's problems spill over into Hong Kong

Hong Kong

Hong Kong (Wikimedia photo)

Since 1997, Hong Kong has been part of China. One can see the acceptance of this in the terminology used by the Chinese media. For example, in an article about the new Chinese government cabinet, the South China Morning Post referred to the "nation's" new cabinet. The same newspaper referred to Hong Kong's chief executive visiting the "capital" in reporting on his trip to Beijing. The Chinese flag flies in Hong Kong, higher than Hong Kong's own local flag, which features a stylized five-petal orchid flower on a red background. The Chinese government, not Hong Kongers, designed and adopted this flag.

However, there are some big buts...

One thing I have noticed during this visit to Hong Kong is that so few flags are on display – far fewer hotels or buildings feature flags than is the case in China itself (or in the flag-waving United States). It almost seems that rather than displaying the Chinese flags, many just choose to show no flag at all.

In recent years, it appears as if Hong Kong's sense of cultural independence from the mainland has increased, not – as one might have expected with the passage of time and the greater distance from the British colonial era – decreased. There is a lot of talk about Hong Kong "core values" of clean government and integrity, reflecting pride in Hong Kong's highly successful efforts reduce corruption and a not-so-implicit comparison with the high level of corruption in China.

While I have been in Hong Kong, there has been a flap about a Hong Kong TV journalist roughed up in Beijing when he tried to visit the home of the wife of Chinese dissident Nobel Prize winner Liu Xiaobao, who is under house arrest.

Recent sources of tension between Hong Kongers and Mainlanders have involved Chinese problems spilling over to the island. The most dramatic involves purchases of packaged food – especially infant formula -- by Chinese visitors to Hong Kong who don't trust the safety of Chinese food and want to bring safer food back to China. With Hong Kong food shelves regularly denuded of supplies of such items, the Hong Kong government recently took the dramatic step of limiting purchases by Chinese visitors to two tins of infant formula. (I have not been able to get a good explanation for why the multinationals such as Nestle's that sell these products in Hong Kong cannot just direct larger supplies to Hong Kong to meet the demand. The products are produced elsewhere in Asia anyway, and it the total demand increase coming from the Chinese tourists must be relatively modest.)

More generally, Chinese tourists – and small-business traders – buy everyday-use products in Hong Kong, take them back to China, and sell them at a profit (because of higher taxes and less competitive prices in China). I took the subway to a suburb on the Chinese border which is a center of such purchases – Chinese tourists are walking around with big roller suitcases and buying products from what was formerly an anonymous local shopping mall, and Hong Kong police monitor the subway stop headed one stop further to the Chinese border, under big signs stating that Chinese may not take with them more than 45 pounds of products.

A second problem spilling over from China involves many Chinese parents who come to Hong Kong to give birth to a child. This reflects a mix of Mainland concerns. Some are hoping to circumvent China's one-child limitation. Some believe the quality of hospital care is better. Some want their children to be born in Hong Kong and receive Hong Kong residency, an insurance policy against a deteriorating situation in China. Meanwhile, Hong Kongers are not happy about the strain this has created in the hospital system.

As with much of politics involving China, there is real irony in the sources of support on Hong Kong for the Mainland. Despite China's communist past, the most reliable supporters of the Chinese government are the super-rich, who have investments in China and find keeping in the good graces of the authorities far more important than ideology. Indeed, added to the irony is that to some extent growing anti-Mainland sentiment in Hong Kong reflects a sort of populism of the ""99 percent" upset by the power of the rich on the island.

Posted on Mar 19, 2013 at 12:09 PM0 comments

Could Hong Kong's subway provide sequestration inspiration?

MTR car

Hong Kong's public rail system is rare in that it's a money-maker. Steve Kelman explains how. (Wikimedia photo)

While visiting Hong Kong for a conference, I had a chance to have lunch with a former colleague, Jay Walder, who is now the CEO of the Hong Kong subway system MTR. To my surprise, he told me about a unique business model for the Hong Kong subway that might – like the idea of “social impact bonds” I discussed in my last blog post – have some implications in terms of creative ways to fund government activities in tight times.

Everybody knows that mass transit systems lose money, often a lot of money.Indeed, at the federal level, the Urban Mass Transit Administration has traditionally financed some of these losses. However, mass transit typically raises property values, especially in areas near stations, because having mass transit nearby is attractive to some people, and can also be a good location for retail outlets. (When the subway was extended in Cambridge a number of years ago, neighborhoods near new stations experienced a renaissance.)

Government gets some benefit from rising property values through increased real estate taxes, but subway systems themselves have not participated in these rising values.

That’s where the Hong Kong model is unique. MTR – which is now a privatized, stock market-listed, profitable company in Hong Kong – is also in the property business, especially in areas where new stations are being built, often on reclaimed land. Typically, MTR develops both residential and commercial property around stations. It gains revenues from rising property values.

That means the business model of the Hong Kong subway company is to engage in its core activity – running a mass transit system – while also benefiting from some of the wealth that activity creates. And thus the Hong MTR is not a money-losing enterprise that needs to be supported by public funds, but makes a profit.

I bring this up not necessarily to suggest that we should repeat this specific model in the United States – I don’t know enough to have an opinion on that. My point is that government activities often create substantial private benefits, and that government should perhaps consider participating in those benefits more directly, especially in tough economic times.

Consider how often government-supported research leads to patents. (I say this at the risk of wading into a very controversial area, but I tried out this idea on one of the country’s leading experts on intellectual property, I was told that it might have merit.)Federally funded research produces patents with enormous economic benefits to the parties that received government money. Why shouldn’t the government receive some modest percentage of royalty revenues such patents generate? I am guessing that if we put our minds to it, other examples will come to mind.

Again, tight budget times demand some creativity. Thoughts?

Posted on Mar 14, 2013 at 12:09 PM0 comments

Could an idea imported from Britain help feds through tight financial times?

Jeff Liebman

Harvard Professor Jeffrey Liebman says "social impact bonds" are actually strict performance-based contracts with a twist.

My colleague Jeff Liebman – a Kennedy School economist who had a senior position in the Office of Management and Budget for the first few years of the Obama administration – gave an interesting faculty seminar recently on work he has been doing on what are called (somewhat misleadingly in his view) "social impact bonds." This idea originated in the United Kingdom and has begun to spread to state governments in the US. I am wondering whether it conceivably might have some applicability in the federal government.

As Jeff pointed out in his presentation, "social impact bonds" are actually strict performance-based contracts with a twist. A contractor signs up for some performance objective over a period of years. If they achieve the performance objective, they are paid at a rate that will provide them a decent, but not huge, return on their investment. If they don’t achieve the objective, they are not paid.

So far, these contracts have been used almost exclusively for hard-to-solve social problems, such as reducing criminal recidivism or finding jobs for the hard-to-employ. So a contractor taking one of these jobs is signing up for a big risk of not getting paid.

Why would any contractor (mostly, in these cases, not-for-profits) sign up for this, given the risk and the relatively small profits even if successful?

This is the twist in "social impact bonds," and the reason for its name. Contractors do not take most of the risk themselves. Instead, the contractor's expenses, and a modest profit, are funded by foundations that are interested in solving the social problem the contract seeks to address. (The contractor is in effect borrowing money from the foundation and issuing a "bond.") The contractor typically gets some additional profit from the foundation if the performance objectives are met. For the foundation, this is an alternative to giving the non-profit a grant, which is unlikely to be as strongly performance-based. If the contractor fails, the foundation takes the loss.

The pool of capital for these efforts has more recently been expanded in two ways. Some private companies (such as Goldman Sachs) are investing in these as a pro bono investment that they at best hope maybe to break even on. More importantly, there are beginning to appear in the private market "shares" in these social impact bonds that wealthy people who would like to do some socially responsible investing are buying. (For states working on this arrangement for social programs, Jeff has set up a Harvard-based group that provides technical assistance to states and nonprofits going down this road.)

Like share-in-savings contracting, social impact bonds can be an especially attractive form of funding for organizations in tight budget times. (Share-in-savings can work in the absence of socially responsible investors because private firms receive a higher profit in exchange for the greater risk they take.) Listening to Jeff’s presentation, I wondered whether this could be used in the federal government.

I think most (but maybe not all) direct-delivery social programs are delivered by state and local government, not the federal government – though the Bureau of Prisons presumably also worries about re-offending, at least to some extent. But I was wondering whether there might be at least some situations where foundations or socially responsible investors might be willing to lend money to organizations that take on these challenges. One thought that came to mind might be wealthy immigrants who might be interested in investing in an IT application for Citizenship and Immigration Services at DHS.

Might there be some wealthy ex-military personnel (or just people who enthusiastically support national defense) who would be willing to invest in a risky Defense Department mission-related application? And how about using this for some performance-based research funding for the National Institutes of Health? (One thing to keep in mind is that these "bonds" are going to involve relatively limited amounts of money – don’t expect billion-dollar projects to be funded this way.)

Just some thoughts. In tight budget times, we need to become more creative. Reactions?

Posted on Mar 12, 2013 at 12:09 PM3 comments

Good customer service ideas can be free

TSA agent

An encounter with a helpful TSA agent -- though not this unidentified one -- inspired some thoughts on customer service for Steve Kelman. (Stock photo by Carolina K. Smith MD)

I had a great customer service experience with the Transportation Security Administration at Logan Airport in Boston recently. While I was going through my ticket and driver’s license check, the screener said to me, "Don’t forget about renewing your license – Massachusetts doesn’t send reminders." (My license expires in a few months.) I didn’t know Massachusetts doesn’t send reminders, so I’ve now put it on my calendar to make sure I take care of it in time.

I tell this story for several reasons. First, I want to acknowledge the good customer service from the oft-reviled TSA. My own experience as a very frequent traveler is that this is far, far closer to the norm than the stories about grannies or three-year olds getting aggressively searched that the public often hears. Second, I want to point out that this experience took place the very day that sequestration took effect. Here was an employee who did not allow herself to wallow in a sequestration funk, but instead continued to serve the public in a way that went beyond her job description. This should be a model for how civil servants in general react to sequestration, in my view – try to avoid getting into a passive victim mode.

There is a third lesson in this story that applies all the time, sequestration or not. It is that there are many ways to improve customer service – or an organization’s performance more generally – that cost nothing, but simply require employees and managers to think creatively. I suspect that for virtually every job any government employee performs, there is a cost-free way to do the job better, waiting for the employee to realize the opportunity that’s there. Add up a lot of those individual ideas, and suddenly there’s a noticeable improvement in customer service or some other aspect of organizational performance.

For that to be realized, of course, what is required is not just individual creativity – though that’s an important part of it – but also managers willing to take the ideas beyond the employee’s own individual way of doing his or her job. So in the Massachusetts driver’s license example, I’d love to see TSA at Logan turn this individual employee’s smart idea into a standard operating procedure for screeners checking driver’s licenses.

Maybe a good way for feds to avoid sequestration funk is to show that even in tough times, feds can and will continue to be creative, and continue to serve the public – just like my TSA screener did.

Posted on Mar 05, 2013 at 12:09 PM1 comments

Making the best of sequestration

man planning layoffs

In order to maintain agency work during sequestration, managers need to be empowered to deal with poor performing employees, Steve Kelman writes. (Stock image)

Over the past few weeks, I have periodically felt slightly weird in writing my blog posts. Here I was continuing to write my normal posts about how to improve organizational performance and management, as if the situation in agencies was just proceeding as normal, while many of my readers were focused on the possibility of furloughs and the other disruptions of an increasingly certain sequestration.

So the first thing I want to do in this post is to say to my readers in and around government that, as one taxpayer, I am grateful for what you do and saddened that you are about to be run over by a rogue bus. As I say to my executive education classes, there is no group for whom the gap between what people are actually achieving and accomplishing, and what folks out there think you are achieving and accomplishing, is so great as for most U.S. civil servants. I’m not sure what my sympathy will buy – especially for those employees who really can’t afford furlough-induced pay cuts. But I want to express it anyway.

At the same time, this wouldn’t be my blog, and Steve wouldn’t be Steve, if I didn’t also discuss this in a managerial challenge context. I think agencies need to be ready for the likelihood that sequestration itself will last for a while, and that, even more importantly, tight agency budgets will last for a very long time even after the sequester is "fixed."

In this situation, as far as personnel expenses (S&E in government budget lingo) are concerned, agencies simply must look for alternatives to furloughs for wide swaths of staff. Organizations, and managers, will need to start – and should be starting now, on the assumption this fiscal environment is not going away – thinking more strategically about how to bring down personnel costs.

For managers and the human resources system, this means becoming more serious about taking on poor performers. For organizations, this means making tough choices about units that need to downsize or even be eliminated.

Most federal managers will say that they could absorb a 10 percent personnel cost cutback without too much impact, if they could choose how to take it – that is, by getting rid of poor performers. Needless to say, in the real world of federal personnel law, this is incredibly easier to say than to do. In this environment, some federal managers will be willing to endure the hassle, but probably some system changes are needed to help managers who would like to act.

With hiring declining in this environment, shouldn’t there be some HR staff resources that can be freed up to help managers with the process of getting poor performers to shape up or ship out? Isn’t this a time for OPM to examine its regulations in this area to see how much the process can be streamlined and deregulated without statutory change?

The bottom line is that the alternative to dealing with poor performers is to have the brunt of the cutbacks fall on good performers. This is wrong morally, and it increases the organizational performance penalty from the cutbacks.

A second alternative to furloughing a lot of people is a smaller number of Reductions in Force. RIFs reflect the reality of a permanently tighter budget environment. The heads of units need to start looking for ways to re-engineer business processes to reduce unnecessary steps or in other ways take out staff requirements. Higher-level managers need to ask whether there are whole units that, in this environment, simply can’t be justified and should be eliminated. Again, keep in mind that the alternative is worse: an unfair, impossible world of furloughs.

Posted on Feb 28, 2013 at 12:09 PM4 comments

Yahoo bans telework. What do you think?

teleworker at laundromat

On Feb. 26, the New York Times reported in a front-page story that the new Yahoo CEO Marissa Mayer had issued a memo rescinding the company’s policy on telework (which the article quaintly calls “telecommuting”) and ordering workers back to the office. Given the expansion of telework in the federal government, and the suggestion that this is a wave of the future that only trogdolyte managers resist, the story is an interesting one.

What is going on?

The basic story behind Yahoo’s decision is that the company believes that having workers interact with each other face to face promotes both collaboration and innovation, two features Yahoo wants to see in its workplace as the company tries to turn itself around. (The article notes that the new Yahoo policy is simply a more extreme version of a Google company policy that discourages telework.)

The argument makes sense. We can communicate better with others when we see facial expressions, body language, and when we can have the banter that comes naturally to face-to-face communication. We build social ties and learn a lot at the water cooler. And innovation is often born when ideas and thoughts confront each other in real time, with real-time reactions, and that is also done best face to face.

But telework has advantages too from an organizational perspective. Research shows, as the article notes, that telework is often worse for innovation, but better for productivity at fixed jobs. Organizations get to downsize their real estate portfolios (a hot theme in government that will become hotter with tight budget times), and productive work is not lost to commuting time.

Telework is hard when there are no metrics to judge an employee’s work. These are the situations – probably often unnecessarily used as a crutch in government organizations – where a supervisor will want to keep an eye on employees to make sure they’re not loafing. The flip side is that the better the metrics the less need for the supervisor’s watchful eye on the employee’s body – the supervisor can look at the employee’s work product or output.

From an employee satisfaction perspective, having a telework option is nice, even if a given employee chooses never or seldom to use it. (To be frank, many professors frequently do what we call “working from home,” aka telework, although I personally like to go into the office when I’m in Boston.)

The bottom line, in my view, is that there is not a telework one-size-fits-all. If Yahoo really wants collaboration and innovation, maybe it should prohibit telework, at least for the employees it wants to be collaborative and innovative. But other organizations, or jobs within organizations, will likely benefit from telework.

Readers, what do you think? What have been your organizational experiences with telework?

Posted on Feb 27, 2013 at 12:09 PM7 comments

The larger message in social media metrics

Justin Herman

Justin Herman, new media manager at the GSA’s Center for Excellence in Digital Government, shown speaking at GSA's Social Media Week in February. (FCW photo by Frank Konkel)

FCW reporter Frank Konkel wrote an interesting article on on efforts growing out of a working group inside the General Services Administration to develop performance measures for government social media sites.

I found the article fascinating from two perspectives. First, the metrics themselves look sensible. For example, they suggest tracking "conversions" (when people click through from the post to additional linked content), "loyalty" (when first-time visitors return), and "customer service" (timeliness in responding to requests). I am guessing many of these metrics grow out of private-sector practice in tracking social media effectiveness; and I say this as a kudos for learning from others, not a knock for lack of originality. There are too many home-grown approaches in government to issues that have perfectly good private-sector counterparts. I am also hoping that the data to track many of the metrics presented is generated either free or at very low cost.

These metrics also lend themselves to performance improvement – figuring out how to do a better job. Companies are already frequently running quick experiments for their webpages or social media offerings, randomly exposing visitors to different versions of a message, or positioning a message at different parts of a screen, in order to see, for example, which produces more click-throughs. Government needs to start doing these kinds of experiments (in a scientific sense – two different treatments to randomly chosen groups, to look to see whether the result is different) in a lot of areas, and experiments involving social media effectiveness is a good place to start.

But this article is significant even for people who are not involved at all in social media. It is a sign that performance measurement – in this year, the twentieth anniversary of the passage of the Government Performance and Results Act in 1993 – is now becoming taken for granted as a way to do business in government. I recently interviewed a subcabinet agency head, and he noted that he thought his agency had now gotten to the point where briefings for new leaders would include the organization’s major performance measures, the targets for performance improvement in those measures, and the historical performance over the last few years. This is a revolution in government, and a good one. Performance measurement has progressed during one Republican presidential administration and two Democratic ones, suggesting that management reform really benefits from bipartisan support.

As we approach sequestration, it is a fair question to ask whether agencies can afford to spend any of their scarce resources on measuring their performance, rather than just performing. My answer would be that in tight budget times, performance measurement is more necessary than ever, because we have to try to get better at what we do not just by throwing additional dollars around, but by improving efficiency and effectiveness. By helping organizations learn how to do a better job, by focusing them on the most-important activities, and by motivating people to try harder, performance measurement is a powerful tool for lean times.

Posted on Feb 22, 2013 at 12:09 PM1 comments

Coming soon: The university of the internet

computer and books

At a recent Kennedy School faculty meeting, our dean gave a report on a meeting he had attended with other senior university administrators from the United States and abroad. The topic that attracted the most interest in the discussion was the spread of online university education via so-called “massive open online courses” (MOOCs). These are online lectures, so far mostly but not exclusively in the sciences, given by professors who are very talented as teachers. Most are open for viewing for free, but in some cases one can pay a fee in order to take an exam and get course credit. (Here’s a link to the Wikipedia entry on MOOCs.)

The dean's basic point was that administrators agree the move towards MOOCs is going much faster than anyone expected, and an upheaval in higher education may be around the corner. Universities are, the view seems to be, about to be swept up in technology-induced change in a way that first became familiar when MCI long distance challenged the old AT&T, and that we have seen more recently with newspapers and music. Rather than trying to fight this, Harvard and MIT have joined to form EdX to promote and develop MOOC’s.

Of course, nobody knows what form all of this will take, but there are a lot of fascinating questions. The more material is taught online, the less demand there will be for traditional professors. There is going to be a lot of demand for people to grade exams (except possibly in math or science, where exams can often be graded by computer). At some (or maybe many ) universities, there will be demand for on-site education to complement online lectures -- at Harvard we like to think that many students will still want the kind of in-person experience we offer – but the kind of classroom teaching will be very different from what it is today.

The price pressures that online learning produces will be welcome to all those who worry about the affordability of higher education, but one issue will be the pressures to eliminate the “cross-subsidy” of scholarly research by other revenue sources for universities, and the danger this poses for our country’s foremost position in the world as a source of research. (Somewhat relatedly, the easiest way for universities to raise money from donors is to build buildings, and the “overhead” part of the donation currently helps pay for other activities at the university – yet online education may produce a decline in demand for buildings and hence in universities’ ability to raise money from donors.)

This movement is clearly a survival threat to lower-quality universities that are charging a lot of money for lectures that probably aren’t as good as the ones online. Some will survive by offering degrees to people who can’t pass online course exams, or through the opportunity for young people to socialize or watch football – though in both cases, likely at a much lower price point. At the other end, clearly there are far more students who could pass Harvard exams than there are students who get admitted to Harvard. What will happen to the credentialing and sorting function of universities?

I will confess that my first reaction in listening to my Dean’s discussion was that maybe I should get ready to retire earlier than I expected. We’ll see. Meanwhile, watch this space for updates.

Posted on Feb 20, 2013 at 12:09 PM1 comments

How measurement motivates, part 2

measurement tool

In my last blog post, I noted that the idea of using performance measures as a way to motivate employees to meet challenging goals is the most underused performance-improvement tool federal managers have. I promised I would share some further research findings. This topic has been well researched by scholars (led by Gary Latham of the University of Toronto and Ed Locke of the University of Maryland).

So here goes:

1) Although attaching a monetary award to achievement of a goal motivates greater improvements in performance, the motivating role of a challenging goal occurs even without monetary award. This is particularly relevant in government, where the ability to give such contingent monetary rewards is often lacking.

2) The most motivating goals are neither too easy (if they are easy to achieve, they don’t motivate) nor impossible (people will give up, and not be motivated). The most effective goals are moderate “stretch goals.”

3) One exception to the rule that performance goals are the best way to motivate is if a person is trying to learn a new task they can’t already do. In such cases, learning goals (trying some number of new strategies) motivate better than performance goals for doing the task.

4) There was a debate for a number of years between two scholars about whether it was necessary for employees to participate in establishing the goals in order for them to be motivating. The scholars finally agreed on an experiment to settle the dispute, and here’s what they found: for goals to motivate, employees must buy in to them, but participation in goal-setting is only one of the ways to get employee buy-in.

All right, given we’re talking furloughs in the government, I suspect it’s not the greatest time to be discussing motivating federal employees. I am writing about this topic now only because it came up in executive education at the Kennedy School. But improving the performance of our organizations is the best contribution feds can make to reduce the likelihood of furloughs. Performance improvement, in an important sense, gets to the root of the discontent with government that ends up producing things like furloughs.

Posted on Feb 15, 2013 at 12:09 PM1 comments

How measurement motivates

men talking

When I teach about the use of performance measurement to improve government performance, one of the central ways I suggest managers and leaders use the metrics is through their ability to motivate employees to work toward a goal.

That challenging goals motivate people to perform better has been supported in hundreds of research studies. An article a number of years ago in the Academy of Management Executive showed that it's tied for the best-established research finding in the human resources literature.

Probably the most dramatic example in the history of organizations of the use of a stretch goal to motivate better organizational performance comes from government – John F. Kennedy’s 1961 speech establishing the goal of getting people to the moon and safely back, to be achieved within a decade. When Kennedy made the speech, we had launched an astronaut 115 miles above the Earth. Going to the moon meant sending astronauts 270,000 miles from home, and then bringing them back the same distance.

I have recently been involved in a research project interviewing Obama administration subcabinet agency heads, and the interview questions have included ones about how (if at all) they are using performance measurement to manage their organizations. Overall, the way that these top leaders are personally involved in performance measurement is impressive.

However, very few of the executives have spontaneously mentioned that motivating employees was one way they were using performance measurement to improve organizational performance. Even when asked specifically, many have acknowledged they haven’t done this much.

This is a low-cost way to improve agency performance that appears to be really underutilized.

This week we have a new (sequestration-anticipation diminished!) crop of senior career managers in an executive education program at the Kennedy School. I’ve been teaching them performance measurement this week, and one of the questions I asked the participants was whether any of them had used performance measures to motivate their employees. One response (from a manager at the National Oceanographic and Atmospheric Administration) was particularly interesting, so I wanted to share it with blog readers.

He said his organization had been using measuring turnaround time on processing a certain element of their workload measured in number of actions in queue – it was at the time, I believe, more than 40,000. But then somebody realized that this number was close to meaningless for frontline employees. So it was decided instead to express the same data in a very different way – how much time did it take for actions in queue to be processed. The answer was that this 40,000 backlog number translated into an average processing time of 4 years.

That was a number people could understand – and, frankly, be shocked (and goaded) by. Suddenly understanding how long the actual wait times were made the staff much more motivated to reduce backlogs, which (with the help of other business process changes) went down significantly over the next few years.

Improvements like this cost no money, only dedication, ingenuity, and – in this case – the realization that a performance metric needs to be expressed in a motivating way as part of an effort to use it to motivate.

In my next blog post I’ll write some more about what the research literature says about using challenging goals to motivate better performance.

Posted on Feb 13, 2013 at 12:09 PM2 comments

How conformists can spark creativity

Steve Kelman

In a number of columns I've written over the years, I have criticized the idea held by many non-academics that scholarly research in general — and research on organizations and management in particular — merely establishes the obvious.

I came across a paper recently in the Academy of Management Journal — the leading outlet for scholarly empirical research on organizational behavior — that would certainly fit into the category of research that does not establish the obvious.

The finding? A team's ability to innovate is enhanced by having some team members who are conformists. The paper, titled "The Effect of Conformists and Attentive-to-Detail Members on Team Innovation: Reconciling the Innovation Paradox," was written by Ella Miron-Spektor, an organizational psychologist at Bar-Ilan University in Israel, and two Israeli colleagues. It examines work teams at a large Israeli defense company — so it's not lab research using college undergrads — that are charged with developing advanced technologies in areas such as microelectronics and communications.

The authors asked members of different teams about each member's cognitive style. In particular, the researchers asked questions to tap members' creative and conformist orientations. For creativity, people were asked whether they agreed or disagreed with statements such as "I have a lot of creative ideas" and "I prefer tasks that enable me to think creatively." To measure what the authors call conformity, they asked questions such as "I try not to oppose team members" and "I adapt myself to the system."

The authors also asked group supervisors (using an established research method) to divide 100 points among four levels of innovation that their teams had attained on their projects as a whole, ranging from "duplicating existing technologies" (the lowest) to "developing breakthrough technologies based on fundamentally new concepts or principles" (the highest). Using that scale, each team received a "radical innovation" score.

Not surprisingly, the researchers found that the higher the percentage of creatives on a team, the higher the team's supervisor-designated radical innovation score. However, having a higher proportion of conformists in a group also promoted radical innovation. The effect was non-linear: Moving from a below-average percentage of conformists on a team (compared with all the teams in the sample) to an average proportion dramatically increased a team's radical innovation score. But moving from an average proportion to a significantly above-average one produced only a small further increase in radical innovation.

Read the full Executive Handbook package

Main page
How to spot a turkey farm
How to make the most of a mentor
How to share a service
How to join the Senior Executive Service
How to assess your team
How to influence policy
How to stay out of the weeds
How to learn from success
How to foster better performance

The study found evidence for two ways conformists help teams become more innovative. The more conformists on a team, the higher the team's perception of its own potency (i.e., its ability to accomplish its tasks), and team potency was associated with the ability to be innovative. And the more conformists on a team, the better the team did at implementing its creative ideas.

A general lesson in all this — and one that is associated with the work of recently deceased team management scholar Richard Hackman — is that managers tend to pay too much attention to team processes and not enough attention to setting up a team for success before it begins work, including choosing the right mix of skills and temperaments for team membership.

And specifically in this situation, it is intuitive to think that if you want a creative team, the main thing you need to do is get a lot of creative people on it. This fascinating research suggests that to keep the ship moving forward, the tempestuous seas of creativity should be tempered by the ballast of conformity.

Posted on Feb 08, 2013 at 12:09 PM2 comments

Welcome back, FAR 13.5

FAR image GSA

Simplified acquisition procedures for smaller purchases have returned to the contracting officer's toolbox. (GSA image)

One of the products of the procurement reform efforts of the 1990's was regulatory changes to streamline procedures for smaller buys and contracts for commercial items. There were two basic philosophies behind these changes:

1)  to reduce requirements on the government in awarding these contracts, speeding up the notoriously slow government procurement process;

2)  to reduce government-unique requirements for contractors, mainly to encourage commercial companies, particularly smaller firms with cutting-edge technologies, to do business with the government.

The major regulatory products of this effort were changes to Part 12 of the Federal Acquisition Regulation (FAR) – rules for buying commercial items – and to Part 13 – rules for smaller purchases under $150,000 in value.

As part of all this, in 1994 a test program was established to allow the use of the simplified procedures for smaller purchases up to a $5 million buy (later raised to $6.5 million) if the government was buying a commercial item. The test program was regularly renewed by Congress, but never made permanent. Then, in 2011 it was not renewed (stories differ about whether this was an oversight or a conscious decision). However, in this year's DOD authorization bill, the test program has been reborn (though again extended for two years, not made permanent). So now agencies once again are able to use these simplified procedures.

This may sound like a lot of regulatory gobbledygook; why should anybody care? It is true that the procedures for commercial items in Part 12 of the FAR already streamline the procurement process compared to procurements for non-commercial items. (Government newbies who fret about procurement being too slow should be aware that things used to be much worse.)

However, the smaller-purchase procedures authorized by the test program do allow the process effectively to be speeded up – as DOD noted in its request to restore the authority, including in a contingency contracting environment where speed is particularly important. Relative weights for evaluation factors (such as price and past performance) do not need to be specified in the solicitation, and evaluation itself is simplified. Past performance judgments may be based on the contracting officer's own knowledge or based on customer surveys, rather than requiring a more formal process. Some agencies – although the FAR does not specify this – started refusing to use reverse auctions for contracts over $100,000 after the test program was stopped.

There has been controversy over the years about the second strand of these 1990's-era efforts, involving reduction of requirements for contractors, particularly regarding submission of cost data. (Critics worried that many military-like products supplied by defense contractors were being classified as commercial items and that the lack of cost data made it harder for the government to get a good deal on such items.) Whatever one's views on that debate, people should be able to agree, I think, that allowing the government to move quickly and with fewer administrative resources to buy the kinds of off-the-shelf products and services that are the backbone of this regulatory authority is a good thing.

I would love to hear views from frontline buyers in the government about the practical differences between standard commercial item buying using Part 12 and the more-simplified buying now re-authorized in the FAR 13.5 test program.

Posted on Feb 05, 2013 at 12:09 PM0 comments

Hopes and fears: China edition

Beijing air pollution - photo by Alastair Thornton|@AThorntonChina

As this recent daytime photo shows, Beijing air pollution has reached extreme levels. (photo by Alastair Thornton)

During the inauguration, I blogged about the scenarios, both hopeful and pessimistic, that a number of Democratic friends attending the events had sketched for the next four years. One blog reader noted in a response that China too has new leadership -- although they are beginning a ten-year term, unmarred by any election in between -- and suggested I ask some Chinese about their hopes and worries the next time I was in China.

As luck would have it, I was about to speak to a group of Chinese university students under the auspices of the China Future Leaders program. So I did.

What did these university students say?

Generally, their answers did not surprise me. The most common two hopes the students had for China under its new leader Xi Jingping were for a reduction in inequality and a reduction in corruption. I guess I wasn't surprised because these have been two themes Xi himself has emphasized as goals for his rule -- though it is interesting that the students have basically accepted Xi's own priorities. Both are huge sources of discontent in China, and they are connected. Many senior government and party officials gain enormous wealth through corruption, and people are increasingly annoyed. Indeed, Xi, in his own version of an inaugural address, correctly noted that past Chinese dynasties have typically fallen because of corruption, and stated that if the Communist Party couldn't reduce corruption, it might fall from power as well.

The two dominant worries -- pollution and the danger of a war with Japan -- were a little more surprising. The recent pollut -- ion nightmares in Beijing -- where pollution levels were literally "off the charts," worse than the measurement system recognizes -- have finally made more Chinese realize that the disgusting, sickening pollution is not "fog." Here again, the government changed its tune and did not try to cover up the recent pollution catastrophes, going so far as to make the Beijing pollution nightmare the lead story on the evening CCTV news. (I picked up a copy of China Daily, China's quasi-official English-language newspaper, at the USAirways Club in Washington Wednesday afternoon, and the front page featured a sickening picture of the pollution in Tiananmen Square -- here's a screenshot of the story and picture -- and an editorial that called the pollution "appalling.") But this is the first time these university student groups have expressed clear concern about pollution.

The worries about war with Japan were even more surprising, because I had actually asked the student group that came last summer how many were worried about the danger of war with Japan over territorial disputes, and virtually nobody was. This time, about half the group was worried there would be a war between China and Japan over the next decade.

A few students -- but this was definitely a minority -- used the discussion to express hopes that China would become more democratic. I asked the students what their sources of information about the United States were, and one girl said she liked to read books about the U.S. constitution. Several of the students are planning to become journalists, and about three-quarters of them knew about the recent fight between journalists at the reformist Southern Weekend newspaper and the local Communist Party; one student said her hope for the next decade was elimination of censorship.

Posted on Jan 31, 2013 at 12:09 PM1 comments

Soup, a sandwich and deficit reduction

donation box

I recently saw a fascinating article in The Boston Globe that caught my eye, both on its own terms and in terms of possible implications for government.

The article was about the sandwich chain Panera Bread establishing a new "Panera Cares Café" in downtown Boston. The café, owned by the Panera Bread Foundation, looks like any other Panera Bread outlet and has the same menu. However, it has no cash registers. Instead, the menu shows suggested prices for each item. People who can afford it are asked to put that amount or more into collection baskets in the restaurant; those who cannot may eat for free or for whatever amount they feel they can pay. Panera is only asking/hoping that the café will cover its costs; there is no expectation that the outlet will make a profit for the company.

My first reaction to this story was that this is a wonderful idea, and an innovation. Some creative person thought up the idea of giving paying customers at the café the opportunity to keep the operation going for those who can’t afford to pay. This kind of approach was pioneered in India several decades ago, where the Aravind Eye Hospital in Madurai used revenues from paying eye surgery patients to fund free operations to save impoverished villagers from cataract-induced blindness.

In a strange (and not quite analogous) way, the gift shops that are now a major source of museum revenue represent a similar idea, namely getting revenue from one group of customers to fund or partly fund a nonprofit operation that otherwise would be dependent on donations.

So a shout-out to Panera Bread for doing this. (I hope it is not abused by people who could afford to pay and choose not to, or by people taking large amounts of food from the restaurant, perhaps for resale.)

I bring up this story in my blog, though, for slightly different reasons related to government management. First, to remind those in government of the power of innovative ideas. I doubt this idea was associated with profit-and-loss responsibility or financial reward. It was just thinking creatively, something that government folks should be able to do just as well.

Second (and much more speculatively – indeed, some may think I'm crazy), I wonder whether some government agencies might experiment with a version of this idea. I like to believe that there are at least some Americans who would like to make a contribution beyond their taxes, however small, to reducing the federal deficit.

People are of course in principle free to pay more taxes than they owe, but when we fork over our taxes, we are probably thinking more about how much we are paying, and not very much in the mood to help more. But what if some government agencies made available the possibility of an additional voluntary donation towards deficit reduction in the context of paying fees for various government-provided services, such as getting a passport or buying tickets to national parks?  Obviously, at best the amount of money such contributions would raise would be the tiniest of drops in the deficit ocean. But it would give citizens a chance to show patriotic engagement – and perhaps send a signal to politicians about some willingness to sacrifice in order to get our deficit down.

OK, so maybe I’m crazy. Any reactions?

Posted on Jan 29, 2013 at 12:09 PM8 comments

Are procurement contests entering the IT mainstream?

businesspeople running track

Steve Kelman is hopeful that the VA's unusual choice to host a competition for an IT system will break new ground. (Stock image)

When I posted on my Facebook page a column about contests (when they’re likely to work and when they’re a bad idea) as a procurement tool, I received a comment from my friend Roger Baker, the dynamic CIO of Veterans Affairs, about a contest the VA is running where they will pay $3 million to the winner who can develop an open-source appointment scheduling system for VA hospitals.

The contest was announced in early January, and entries are due by June 13. (For blog readers unfamiliar with the idea, a procurement contest is one where the government puts out a problem it needs to solve and announces a prize for the first or the best solution to the problem. Anyone may enter – no RFP, no long proposals, etc. Experience shows that winners are typically players the government has never dealt with before.)

The VA had earlier spent over $125 million to try to develop a customized scheduling system, and it didn’t work. This was one of the systems cancelled in a bold move by Baker when he came on board as VA CIO in 2009. I’m sure I’m missing something, but scheduling sounds to me like a fairly widespread commercial business process, and it seems weird that the VA had originally thought to grow their own. If the VA is actually now able to get an application that works for $3 million, after all they’ve spent, it would be an example of the 95 percent cost savings that come up often enough to make the contest phenomenon worthy of further attention.

At any rate, we should be really paying attention to whether the contest idea works here. It has seldom (in fact, I’m trying to be cautious – I actually can’t think of a single example) been used in government to date to try to source an IT application. In the column I wrote (based on a paper by a University of Michigan business school academic), it was argued that contests are less likely to work if the product or service cannot be fully specified and if there will need to be a lot of communication between the buyer and potential contest entrants. Since IT applications typically can’t be fully specified and do require communication, VA’s approach is risky – though hardly more risky than the original decision that led to blowing $125 million on failure going the traditional route.

So this is a project that the IT community should be watching really carefully. One way or another, there are likely to be lessons learned here, which hopefully the VA will share. If this works, it’s going to open a new chapter for IT procurement in the federal government. Hats off to Roger Baker and Peter Levin, the VA’s CTO, for giving it a try!

Posted on Jan 24, 2013 at 12:09 PM0 comments

After the inauguration, some forecasts for the next four years

crowd at inauguaration 2013

Crowds filled the National Mall during Barack Obama's inauguration ceremony on January 21. (FCW photo by Michael Hardy)

While in town for this week’s presidential inauguration, I took the opportunity to ask friends I met (all Democrats) a question about the next four years. The question was this:  “What’s the optimistic scenario for the next four years that you think has at least a 25 percent chance of happening? And what’s the pessimistic scenario that has at least a 25 percent chance of happening?”

Though not all responses were the same, there were interesting patterns. Basically, the optimistic scenarios involved the economy and the pessimistic ones involved the international scene. One person, for example, felt there was a 25 percent chance that four years from now the Democrats would be able to point to a “Morning in America” moment such as that used by Ronald Reagan in the 1984 presidential campaign – that most of the nation would feel confident that the economy had really come back strongly from the economic crisis.

The worries were international. They worried that Afghanistan and/or Pakistan might collapse in a way that creates real problems for the United States; that terrorism might resurge; that Europe’s economy could collapse; or that there might be trouble in the Middle East such as escalation of hostilities between Israel and Palestine or a revolution in Saudi Arabia).

Interestingly, nobody I asked mentioned improvements in the ability to compromise politically; nor did anyone predict progress or calamity regarding the country’s fiscal problems. I asked about whether an optimistic economic scenario would have any impact on political dysfunction, and the best response I got was one suggestion that economic growth would reduce the urgency of the budget deficit problem.

By the way, a Chinese friend sent me a screen shot of a page on Youku – China’s home-grown equivalent to YouTube – of scenes from the Obama inauguration. One picture showed the President and Michelle Obama dancing, another the inaugural address. Still others showed Jennifer Hudson, Alicia Keyes, and Kelly Clarkson singing. To be sure, these pics were hardly burning up the Chinese Internet. Twelve hours after being posted, they had only been watched 8,000 times. Nonetheless, it’s an interesting sign of the attractiveness of American society and culture in China, and elsewhere outside the United States. (I blogged a few months ago about Chinese kids wearing t-shirts with US flags or military insignia.)


Posted on Jan 22, 2013 at 12:09 PM3 comments

In Memoriam: Richard Hackman, a scholar who cared about government

Richard Hackman

Richard Hackman was known for research on managing teams.

Richard Hackman, a professor in the Department of Psychology at Harvard, died last week of lung cancer at the age of only 72. (He was a pipe smoker.) He was most known for his research on managing teams, a field that in many ways he pioneered. He was a major figure for many years in the academic study of organizational behavior, and in fact recently had received the lifetime achievement award of the organizational behavior division of the Academy of Management, the main organization of scholars who study organizations.

I bring up Hackman for readers of this blog because he was one of the few prominent organizational behavior scholars still around who was interested in government management. His last book, Collaborative Intelligence, was about how to make intelligence-analysis teams work better. Other work of his was empirically situated in government organizations, and pretty much all his work on teams was relevant to government. Although never on the Kennedy School faculty, he was always very warm and friendly to what we were trying to do as a school devoted to public service, and in the last years before he got sick he taught about teams to federal officials attending executive education classes with us.

I wrote two columns over the years about Hackman’s work. One, all the way back in 2002, was about his classic book Leading Teams, which in the column I called “the best book on teams I've ever read, with material that many FCW readers would find helpful.” And in 2011 I wrote a column about Collaborative Intelligence.

Hackman was associated with a number of provocative ideas, such as the idea that organizations tend to “over-team.” Working in teams takes time and energy, and some individuals may take a free ride (making the whole less than the sum of the parts). You shouldn’t form a team in the first place without good reason – usually the need to get diverse knowledge and/or skills from different people in order to solve a problem or do a task. Another view of Hackman’s was that people often pay excessive attention to team processes as opposed to how the team is structured even before it starts its work – has it been given a good task, does it have the right members, and so forth.

There was a time early in the history of organizational studies when many of the leading organization scholars (in political science or sociology departments) studied government organizations. One leading academic journal, the Administrative Science Quarterly, covered the government in about a third of its articles in its early years in the 1950s.

With the migration of organizational studies to business schools and the declining prestige of government, this has almost completely disappeared. Many organizational behavior scholars study questions that might interest any organization (government, nonprofit, or business), but few study the special management challenges of government – such as non-financial performance measurement or motivating without monetary incentives – and increasingly the trend is to study topics that are much more like individual psychology than anything having to do with organizations at all. To the extent organization scholars study a sector of society, it is business firms.

These trends are sad, though they do reflect trends in the larger society. And they make the premature loss of Richard Hackman all the sadder. Read obituary tributes to him here.

Posted on Jan 15, 2013 at 12:09 PM0 comments

The antisocial network?

Smartphone in hand

Expect to see today's youth thumbing buttons on this device at any time, but almost never speaking into it. (Stock image)

Will this new generation of young people, who eschew telephone conversation in favor of texts, social media and the Internet, change as they enter the workforce?  Or will they simply change professional communication as we know it?

I somewhat addressed this question last August when I discussed my decision to transition from teaching using only words to a method that includes a significant visual component -- namely, PowerPoint slides.

Everyone over a certain age has noticed how talking over the telephone – as opposed to texting – is becoming rarer and rarer. When I was in the government 15 years ago, I made and received probably 20 calls a day. Now I probably make and receive 20 calls in two weeks (and, because I’m old-fashioned, most of those are ones I make, not ones I get.)

I found some interesting evidence on this issue from an unlikely source – the weekly Chinese English-language magazine Beijing Review. This publication recently ran an article called “The Antisocial Network” on the impact of texting and social media on the behavior of young people. My guess is that work similar to that discussed in this article has also been done in the United States – and, if anything, the consistency of the findings in two very different cultures actually is quite powerful.

The article reported on a poll by a big Chinese web portal on smartphone use by people under 35. The survey found that fully half the respondents preferred communicating on texting or social media sites than talking face to face! The article cited an example, apparently widely discussed online in China (where respect for parents and grandparents has historically been very high), in which “a grandfather arranged a dinner party for two grandchildren, who spent the entire evening staring at their phones. The old man became irritated and left before the meal ended.”

Note that since these were children, they didn’t even have the excuse that they needed to deal with messages or requests from their boss or subordinates.

I think – I guess I should say I fear – that the new technology is really changing, and in partly problematic ways, the way people interact with each other. I myself value the ability social media such as Facebook give to keep in touch in a low-cost way with lots of people; for example, you can spend 20 seconds writing a birthday greeting to a Facebook friend and make that person feel really nice. This is good.

But there is a role for deeper, more personal communication, and there is a role for the emotions, feelings, depth, and nuance that comes through face-to-face verbal communication. I fear that society will be worse-off if these skills and inclinations atrophy.

This also has implications for how politics and organizations work. Traditionally, speaking ability has been an important part of political skill -- think of the “Great Communicator” Ronald Reagan. Will those skills start counting for less and, if so, what implications does this have for politics?  What happens if employees tune out verbal messages from bosses?  Organizations use a lot of low-involvement written communication, such as memos, but will supervisors and managers need to get better at high-involvement visual communication?

Thoughts anybody? Write them down. (Don’t call me. :p )

Posted on Jan 11, 2013 at 12:09 PM3 comments

Innovation at a 95-percent discount

CTO Todd Park

U.S. CTO Todd Park oversees and champions the Presidential Innovation Fellows program.

In a recent conversation with a senior administration official, I was told about an accomplishment of a program started last August called the Presidential Innovation Fellows. This effort, run out of the office U.S. Chief Technology Officer Todd Park, brings about 20 smart people from the private sector to work in the government for a 6-month stint to jump-start a specific innovation initiative in cooperation with an agency. (FCW previously covered the program here.)

One of these innovation fellows, whose normal job involves website design, has been working on an initiative called RFP-EZ, which is an application to help companies who have never done business with the government before – especially startups with innovative solutions to government problems – walk step by step through the federal procurement process.

The idea to do this is itself a great one, and I will be following with interest as this is rolled out, to see if this helps improve access for small commercial companies in the federal marketplace. However, I bring this up in this post for a different reason – the Innovation Fellow’s work to develop the application itself. The idea for doing this predated the Innovation Fellows program, and this first-round fellow was brought in to help actually develop the application. As I understand it, the agency working on scoping out the project, based on their own past experience contracting for applications such as these, thought the application would cost north of a million dollars to develop. However, based on his own experience with web design, the Innovation Fellow estimated this would involve around $50,000 of time and could be done in a very short period  – and proceeded to do exactly that (he didn’t charge the government, since he was already a fellow).

This is an example of a phenomenon that one doesn’t run into all the time, but that happens often enough to be a source of real worry and of a need to dig more deeply to draw some lessons. It is not unheard of that situations arise where people from the commercial IT industry, outside the normal world of government contracting, either actually develop, or present a case after the fact for why it would have been possible to develop, applications meeting the same specs for a tiny, tiny fraction of what the government pays – not 10 percent less or even 20 percent less, but 95 percent less.

It is of course possible that in some of these cases, there are security or other issues that are not taken into account, and I feel relatively confident that these situations are the exception, not the rule. Nonetheless, I raised this issue with a group of contracting officers with whom I had coffee before Christmas, and one person told me that at his previous organization (in the intelligence community) they actually had a little office that looked at much lower-cost alternatives to approaches the agency was planning to use for developing applications, and that this office did at times find examples of ways to get applications developed for a fraction of what the government had been assuming it would be paying.

I think we need to try to peel the onion a bit on this. We do typically have competition on developing these applications, so there should be an incentive for a vendor to bid a much lower-cost solution. Is the problem that small commercial companies which might provide dramatically cheaper alternatives don’t want to get involved in the federal marketplace?  Or what?  Perhaps a good first step would be for the Innovation Fellow involved in RFP-EZ to come forth and, in a non-threatening way, explain the differences in assumptions or mindset or whatever between him and the government/contractor folks that produced this big gap in expectations of what it would take to develop this application.

Posted on Jan 08, 2013 at 12:09 PM4 comments

China faces the Western New Year

Traffic in Beijing

Traffic in Chinese cities (this picture is from Beijing) is either jammed or reckless at any given time, Steve Kelman reports. (Wikipedia photo)

Chinese New Year (chun jie or “spring festival”) is probably the biggest holiday of the year in China, with people getting from one to two weeks off work, and a mass migration from the big cities back to hometowns all over China.  But Western New Year is also an official holiday in China, with people getting January 1 to 3 off from work as well.

China faces the New Year with tensions and challenges, and with new leadership, headed by Xi Jinping, China’s first “princeling” – child of a revolutionary hero -- ruler.  (A Chinese friend pointed out to me that with the recent elections in Japan and Korea won by children of previous rulers, the major countries in Asia – China, Japan, South Korea, and North Korea – are all ruled by “dynasties.”)

Interestingly, some of the problems are discussed, with some considerable frankness (to an extent I suspect would surprise most Americans) in Chinese media.

China Daily, an English-language publication that is in some sense China’s official voice to the outside world (it is now published daily in the US as well, and I have noticed that it is often available in piles in the USAirways Club at Reagan National Airport in DC), ran a lead article recently titled, “Economy may suffer as rich look overseas.” The article discusses a theme that has gotten a fair amount of attention in the US media, namely the worries that wealthy people have about China’s future stability, and their increasing tendency to hedge their bets by taking money out of China and trying to get legal residence outside the country. The article centers on the US government EB-5 “investment visa” program, begun in 1990 but now increasingly used by Chinese, that allows foreigners to gain a “green card” allowing them to live and work in the US if they make a $1 million or more investment in the US that is responsible for creating at least 10 jobs over two years. According to the article, 75% of those taking advantage of this program in recent years have been Chinese. As a Chinese friend mentioned to me, the fact that a very large percentage of the country’s political elite send their child (remember China’s one-child limit) to study in the US is hardly a vote of confidence in Chinese education or even society.

China Daily also recently ran an op-ed by Bai Ping, one of the newspaper’s editors, on terrible driving in China (“Why people drive as they do"). As I have written before in this blog, being driven around in China is a harrowing experience – one almost prefers the frequent traffic jams, so that drivers can’t create the risk of death simply because they are unable to drive fast enough to do serious harm.

The article, though, saw a deeper point in the unsafe driving, noting how official cars “legally” drove along the shoulder of the road or in a bicycle lane when traffic was heavy, or covered their license plates to make it impossible for witnesses to officially complain about their behavior. Unsafe driving for Chinese drivers has, in effect, been modeled by the behavior of the powerful.  We should, the article concluded, gauge “a nation’s driving behavior by its level of corruption.” Any traffic crackdown, the article stated (this in an “official” newspaper!) “would treat symptoms, not the disease, if we ignore corruption that influences law enforcement and drivers’ behaviors.” 

The New York Times had a front-page article over the holidays about the new government’s anti-corruption campaign.  I recommended it on my Facebook page, and asked for comments, especially from Chinese, about whether the campaign was serious:  with only one exception, respondents (including private emails I received) stated they thought the campaign was only a show.


Posted on Jan 02, 2013 at 12:09 PM3 comments

China wishes a Merry Christmas

china christmas

Beijing is in full Christmas mode. The Christmas trees, Santa Clauses, and “Merry Christmas” signs are not just in Western hotels like the Westin where I am staying. (By the way, no “Happy Holidays” here; American traditionalists can feel at home.) At the Beijing Airport, there is a huge Christmas tree in the main terminal, and I heard “We Wish You a Merry Christmas” and “Rudolph the Red Nosed Reindeer,” in English, over the loudspeakers.

Christmas trees abound outside shopping malls, restaurants, and some office buildings. At two restaurants where I was taken for dinner, the employees were all wearing Santa hats. The two major Christmas activities are going out with friends to dinner and exchanging presents, and the holiday is particularly popular among the young. Since the biggest holiday in China, the week-long Chinese New Year festival (this year in early February), pretty much requires people to go visit their families in their home towns, people like Christmas as a chance to socialize with friends.

My arrival in Beijing coincided with a pollution level that was the worst I have ever experienced in China, which is saying a lot. Somebody said the air smelled like smoked meat. The smell was disgusting, I started breaking out in coughing fits, and frankly I felt like I was killing myself just to be breathing. (Five-star hotels like the Westin filter the air, so the hotel was something of a respite from the sickening feel outside.)

There is now a smartphone app that allows people to get the pollution measurements put out and updated several times a day by the US Embassy; some friends even had this app fuctioning as a smartphone desktop so they could know the level whenever they were online. The Embassy now actually publishes readings for most major Chinese cities, though I don’t know where there information for cities without a US embassy or consulate are made; the US Embassy in Beijing has a pollution meter on the roof. This first day the pollution reading (particulates) was about 300, described as “hazardous”; people were advised to avoid going outside unless necessary and not to engage in strenuous activities.

Two days later, Beijing got colder and windier, and the wind drives the pollution out – the Embassy reading went down to 78 (merely “unhealthy”) and then 42 (“good”) the next day, as the wind got stronger; I had a nice walk in a windy and cold Beijing with sort of blue skies. But I have now started bringing up pollution almost every time I talk with Chinese – I have told people at universities, for example, that I would not want to spend any extended time visiting their university because I can’t stand the pollution.

Posted on Dec 23, 2012 at 12:09 PM3 comments

Some cultural observations in Mexico

Enrique Pena Nieto

Mexican President Enrique Peña Nieto, shown during a meeting with President Barack Obama. (White House photo)

This has been a fascinating trip, and, beneath our preoccupations as Americans with drug violence and immigration, this is a fascinating society.

Of many observations, I offer here two historical ones and two about current issues.

I am really struck by the huge difference in the relationship between European colonizers (Spanish) and native peoples in Mexico versus the US. In Mexican high school history books, the Spanish settlement is referred to as The Conquest (La Conquista), and the history of the period is written from the Native people point of view. Why the enormous difference with the US?  First, there were rather few Spanish settlers, and they came mostly to plunder or search for gold. They employed the natives, in semi-slave conditions, in mines and on enormous farms.

This is in stark contrast to the English settlers in North America, who were larger in number, came to work for themselves, and basically segregated themselves from Native Americans. Relatedly, almost all Spanish settlers were men, meaning there was frequent intermarriage, making most Mexicans of mixed origins. Today, there is in Mexico a pretty strong correlation between skin color and economic class, but in official discussions Mexicans seem to try to avoid discussions of race (though they do talk a lot about poverty). But it seems to me that this issue is there, somewhat strangely under the surface – a former student of mine, very white but with dark hair, told me that Mexicans with darker skins sometimes call her “blondie.”

Second, Mexico is one of the small number of countries that have peacefully and gradually transitioned from one-party rule into a functioning democracy. For decades, the PRI (Institutional Revolutionary Party), which grew out of the Mexican Revolution of 1910, ruled the country with a mixture of leftist, nationalist ideology and a practice featuring extensive corruption and close ties with the country’s economic elite. (This is very similar to the Communist Party of China.)  But, as a result of a series of economic problems and the growth of education, the PRI’s grip on the country gradually, step by step, diminished – elections and the media became freer, genuine opposition parties emerged – until the opposition came to power peacefully in 2000, was re-elected once, and then was defeated in this year’s presidential election, bringing the PRI back to power.

Move to the present. There are very important economic developments taking place in Mexico that are getting far too little attention in the US. The rise of wages in China and the closeness of Mexico to the US market are leading many large multinational companies to redirect investment from China (or elsewhere in Asia) to Mexico. The increased Mexican prosperity that is coming out of this is good for the US, both because Mexico is a large export market for us and also because it creates less desperation-driven emigration. But strategically, a new pattern is beginning – of products that are produced partly in Mexico and partly in the US, going back and forth across the border. If this trend continues, it could be a very important part of “onshoring,” the return of parts of American industry to the US. Often, total production in the US is not economical, but partial production is. With luck, we will be seeing more of this – especially if some of the cross-border trucking issues (trucks must often unload and reload into US trucks on crossing the US border) can be resolved.

The newly elected Mexican president, Enrique Peña Nieto, just took office. He has made noise about taking on some of the tough interest group challenges that face Mexico. These prominently include lack of competition in important sectors of the Mexican economy, particularly telecoms (dominated by Carlos Slim, who, depending on the year, is the richest man in the world), and a poorly functioning primary/secondary education system (dominated by a strong teachers union, which often makes hiring decisions and allows teaching jobs to be literally passed on from parents to their children). Both of these problems are inhibitors to Mexican economic development. But they both involve powerful actors who have historically been close to the PRI. Whether Peña Nieto will be able to pull off an “only Nixon can go to China” moment will be the big question mark of the next few years.

Posted on Dec 18, 2012 at 12:09 PM1 comments

First impressions of Mexico

Night view of Monterrey

Monterrey, Mexico, has a reputation for drug-related violent crime, but also an active nighttime social scene, reports Steve Kelman. (Photo: Wikipedia

Except for a half-day in Tijuana (which was part of a visit to San Diego) and a week in Cancun – neither of which really counts as spending time there -- I have never truly visited Mexico. However, I agreed recently to serve as faculty chair for an executive education program at the Harvard Kennedy School for senior Mexican career government employees.

The deciding factor, although I speak no Spanish and know little about the country, was that it would give me the opportunity to understand better this important country so close to and so closely linked (through trade and immigration) to the United States. I’ve been busily reading books about Mexico for the last six weeks, and now I have come for a brief visit, to talk with some local experts and take in a little of a feel for the country.

In my next post, I will write a bit more seriously about what I’m learning. In this one, I will give some more immediate surface impressions, with special emphasis on the security situation in the wake of the Mexican government’s aggressive anti-drug wars, whose brutal results, in terms of shootouts, innocent people caught in crossfire, and gruesome violence have gotten a lot of attention in the US.

The first thing to note is that I have never seen a place with so many police on the street as Mexico City. They swarm everywhere. (There are some soldiers on the street as well; one afternoon, on returning to my hotel, there were two soldiers with submachine guns just outside the door.)  Mexico City is particularly rich in federal police – Mexico has both local and federal police forces – who are generally regarded as better trained and less corrupt than the local officers. There are also private security guards outside of many stores – and not just the fancy branded stores such as Louis Vuitton --  and many restaurants.

The police presence seems to be producing results. My thought before I came was absolutely to stay off the streets after dark. But both Mexican contacts and personnel at my hotel (who probably have an incentive to be cautious) told me there was no problem walking to and from my hotel, in an upper-middle class area of the city called Polanco, to restaurants nearby. And indeed, when I ventured outside for dinner, I saw a significant number of single women on the streets, which to me is a sign that things are pretty safe.

After Mexico City I went to Monterrey (Mexicans told me that this is the correct Spanish spelling and that “Monterey,” the name of our California city, is spelled incorrectly). This city, two hours by car from Texas in northern Mexico and one of the centers of Mexican industry and foreign manufacturing investment, has been one of the major locales of gun battles between drug cartels fighting for turf in an environment where the government crackdown had made it harder to earn money. Here, people did tell me under no circumstances to hail a taxi on the street, but instead to use only taxi companies vetted by local hotels.

People also told me they had changed their lives in response to the violence. They don’t go outside late at night (though one father told me parents had a difficult time imposing such restrictions on their teenage children). People have hesitated about driving fancy cars, which can make them the targets of car theft or kidnapping; one person told me many people did not wash their cars so they would appear less attractive to thieves or kidnappers. Nonetheless, when returning to my hotel – in an authorized taxi! – at about 8 p.m. (early by Mexican standards to be sure, but well after dark), I saw lively street activity downtown, with lots of people lounging around on the streets.

Finally, I noticed something interesting in going through airport security inside Mexico. The security agents who check boarding passes and photo ID’s are all disabled people in wheelchairs. An interesting way to provide very useful employment for people with disabilities. Idea for TSA?

One more thing that was interesting:  many signs in Mexico are wishing people “Feliz Fiestas” (Happy Holidays) instead of “Feliz Navidad” (Merry Christmas), particularly noteworthy in a country far less multi-religious than the US and in light of the sometimes ideology-tinged debates on the proper seasonal greeting.

Posted on Dec 14, 2012 at 12:09 PM0 comments

Harnessing the energy of youth for better government

US Cyber Challenge logo

Aliya Sternstein recently wrote an interesting article in GovExec on how some associations with close ties to the government, such as the Air Force Association and the independent U.S. Cyber Challenge (led by former Federal CIO Karen Evans), were setting up various contests and training programs to involve young people in improving skills as cybersecurity defenders. The U.S. Cyber Challenge has both training and a contest whose winners can get scholarships to study cybersecurity. These and other organizations set up “hackathons” where young people compete with one another to defend targets against hacking.

There are obviously some potential concerns — of which the organizers are aware and which the article also discusses — that young people who learn cybersecurity defense through these kinds of programs will use their improved skills to become cyberattackers themselves. (Indeed, two participants in one of the programs were arrested in 2011 for hacking into Sony Pictures Entertainment.)

However, I bring up these efforts not specifically to discuss the cybersecurity context but rather to suggest that they are a model for an innovative way for government — in this case, indirectly — to interact with young people to help with the government’s missions. This kind of interaction also occurs when agencies use contests as a procurement tool because, surprisingly often, those entering these contests are young people who would otherwise have no real way to help agencies solve mission problems.

So I am urging agency managers to think about new ways to harness the energy and enthusiasm of young people to help in government missions, other than the traditional way of having them sign up as civil servants. The missions of government are, of course, so varied that the ideas will need to be tailored to each mission. In general, agencies that are able to accept volunteer services and that have a local presence — the National Park Service comes to mind — are obvious candidates for organizing volunteer activities for young people. But the specifics are not something that can be generated by the author of a blog post (though suggestions in the form of blog comments are welcome). They are ideas smart agency managers should develop.

There are at least two obvious benefits. The first is giving agencies new ideas and new energy from this kind of participation. The second is tying a new generation of Americans more closely to the government that serves them.

Posted on Dec 11, 2012 at 9:03 AM0 comments

'If this were government it would be a news story'

Magnifying glass

The media serves an important role in government oversight, argues Steve Kelman.

Last weekend in Washington, I went with my wife and some friends to see Lincoln.  The Saturday night scene at the AMC theater near Mazza Galleria was total chaos. There were several lines weaving in and out of each other, with no clear indication (such as ropes or signs) of which line was for picking up pre-purchased tickets, which for buying new tickets, and which for entering the cinema. No employee was visible to organize any of these lines or explain what was going on. There was no demarcation between the ticket/entry lines and the place for people leaving a show to exit through the lobby, so departing customers (of whom there were a significant number) had to somehow break through the various ticket customer lines.

During the chaos, one member of our party commented, “If this were government, it would be a news story.” The point was that glitches or bad performance in government is the stuff of scandal and media attention, while similar problems in the private sector may get little attention at all.

I reflected on this statement afterwards.(Actually, I told our group that I planned to blog on it immediately after the statement was made.) Here’s what I think:

The person who wants government folks to stop complaining about media coverage might note that in many ways the media (along with congressional oversight) performs a disciplining function for government that is analogous to that performed for private companies by the marketplace. It is certainly not the case that agencies are subject to strict oversight while companies get off scot-free, just because the media are more aggressive in covering government than companies – indeed, of course, many outside government complain that there is little “accountability” in government compared with business because government folks are seldom fired or go bankrupt, unlike the situation in business. In some sense, the media (along with congressional overseers and Inspectors General) act as substitutes for the marketplace as a source of discipline and control for government.

But there is a difference between media/congressional/IG oversight and marketplace oversight that does create problems for government. A crucial feature of marketplace oversight is that, while it does punish failure or incompetence, it also richly rewards performance and achievements. Some companies do go bankrupt, but others flourish. Marketplace oversight thus balances risk and reward.

However, for a whole bunch of reasons (that ultimately in some sense have to do with what citizens or politicians like to hear), the kind of oversight to which government is subject is much more focused only on criticizing the problems rather than cherishing the performers. The government equivalent of the cinema chaos does indeed get media attention, but the government equivalent of a solidly well-performing company (say a Proctor & Gamble or Wells Fargo bank) passes unnoticed, dismissed as the dog that didn’t bark.

This in turn has consequences for the way government is managed and for government performance. Government is often much more oriented towards avoiding scandals as opposed to achieving results. That is not a good thing. In movie theaters faced a similar set of incentives, the lines would probably be less chaotic, but the movies probably wouldn’t be as good.

Posted on Dec 06, 2012 at 12:09 PM3 comments

Private-sector corporate customers give their IT vendors low marks as strategic partners

Steve Kelman

IT vendors in the federal marketplace often express a wish for a greater strategic partnership with the government customers, and lament the features of the federal marketplace that make this more difficult.

The desire to get greater value from a more strategic, trusting relationship is a good one, and there are frustrating features of the government environment -- particularly the nature of media coverage and some of the "oversight" of the system -- that do make these relationships more difficult.

However, a recent survey among corporate CIOs, published in CIO magazine -- and titled "CIOs Give Vendors Low Marks" -- suggests that the problem may not just be the government environment and just government customers. Vendors also need to improve their game.

A CIO executive council that advises the magazine defined a strategic partner as an "important vendor that has gone beyond effective delivery of systems and service to become a consistency transparent, responsive and trusted collaborator." For the purposes of the survey, various vendor practices were weighted depending how important they were to CIOs. Interestingly, the most important practice defining a strategic partner for these CIOs was "joint ventures with shared risk and reward" -- sort of like share-in-savings in a government context.

The overall results weren't awful but weren't great. On the one hand, 46% of respondents perceived their major vendors to be strategic partners as defined above. That is almost certainly higher than a comparable figure would be among feds. But the average weighted score on the various specific elements of strategic partnership was only 3.2 on a scale of 1-10.

So vendors need to examine their own behavior as well. One CIO was quoted in the article as saying that "most vendors only interact with CIOs when they are trying to sell something or when there is a problem." Sound familiar?

Posted on Nov 30, 2012 at 12:09 PM0 comments

Bringing the "book group" idea to the world of charitable giving

Steve Kelman

With a season of giving approaching, I want to share a version of an idea I heard recently at a dinner for a charitable cause that seems to me to be a nice mixture of an opportunity to give, to learn and to share good times with good friends.

My host at the dinner, and one of my tablemates, are working together to establish an organization aimed at women with considerable financial resources but limited experience with philanthropy. (Readers without "considerable financial resources" -- please read on, I am going to adapt their idea to people with somewhat less money to give!) Their idea is to have, say, 100 women each give into a pot a fixed sum of money, say $5,000. This would give the group total resources of $500,000. The group would decide in advance that these funds would be dispersed in grants of $50,000 or $100,000 each to a limited number of charitable organizations, based on votes by group members. The group would then solicit various charitable organizations of its choice to apply for these grants, in paper and/or with in-person presentations.

The idea of the organizers is not only to disperse money to worthy organizations but also develop a network of women who have gotten to know each other better and to give new philanthropists greater experience in evaluating proposals for help.

As I listened to this fascinating idea, I thought of a much more modest adaptation to my own less grandiose circumstances. I am actually thinking of trying to do this, and want to put the idea out to others as well.

My modest version: Get together a group of five couples who are already friends. Each couple contributes $2,000 each year, creating a pot of $10,000. Choose five small local service organizations as possible grantees. Set up five dinners at the homes of each of the five couples, where the group hears presentations. After the five presentations, the group votes on which organization should get the $10,000. (One could alternatively imagine five larger charities about which group members could gather information on the Internet.)

I tried this out on a person at the dinner experienced in the world of local social service organizations, and he said that:

  1. There would definitely be in most large cities a number of local organizations for whom a contribution of $10,000 would be significant enough to make it worthwhile to make a presentation to a small group; and
  2. In most large cities, there would be places to go to learn about possible organizations a group would want to consider.

He added that versions of the idea I was suggesting are spreading, under the moniker "group giving." I think of it as a sort of application of the idea behind book groups -- which have become a staple of American life -- to charitable giving.

Anybody want to give it a try?

Posted on Nov 27, 2012 at 9:03 AM2 comments

Going international

world map

I have introduced two classes this year in my introductory course on management and leadership for our master’s students at the Kennedy School. They pertain to the challenges of managing teams that are from several countries and native languages, and that work in virtual (dispersed) settings rather than face-to-face.

In one class, we do a computer-based simulation, using real-time chat, of a dispersed team trying to communicate with each other in English when some members of the team have English as a native language and others don’t. In the other class, we discuss a situation where a four-nation 24-7 IT support team for multinational corporations has run into problems of inter-country hostility and finger-pointing about problems.

In connection with the second class, I did a class poll, and the results were, to me, really amazing.

I asked the students – most of them in their mid-20s and about 30 percent non-US – about their experiences at jobs before they came to Harvard (not at school) how many of them had themselves been in groups or teams that were in some or all ways like the ones we were discussing in class. Specifically, I asked them whether they had been in groups with different native languages (whether or not at the same location). Then I asked them whether they had been in virtual groups working from different locations (even inside the same country or same native language). Finally I asked them whether they had been in groups that were both multi-language and also virtual.

The answers I think will amaze anyone over 50, maybe even anyone over 30.

Of my students, a full 79 percent had worked in groups with different native languages. Seventy-three percent had worked in virtual groups. And 54 percent had worked in groups that were both virtual and also composed of people with different native languages.

I told my students that if I had asked my class this same question 30 years ago – maybe even 15 years ago – hardly a single student would have answered yes.

I am certain most people older than my students have no idea just how fast the world is globalizing for bright young people today. In some sense, this reminds me of the post-presidential election discussions about how America is changing.

This internationalization has implications for our future as a country – by and large, I think, good ones. But it also has implications for those who are going to be employing today’s 20-somethings. Actually, for parts of the government – State, USAID, Defense, the intelligence community – this may be good news. But federal managers ought to be thinking about this. Any reactions or ideas from federal managers?

Posted on Nov 14, 2012 at 12:09 PM3 comments

Improving the inspector general

Magnifying glass

With aggregated budgets of about $2 billion and a total of 12,000 employees, the Offices of the Inspector General (IGs) are not a tiny presence in government. Their amazing ability to attract media attention for various lurid exposes (even when, as is typical, on closer inspection by knowledgeable people there is less there than meets the eye) gives them influence in Washington even beyond their budgets and numbers.

IG’s certainly do good work, particularly on the criminal and fraud-detection side. Their audits of wasteful spending – the bread and butter of their media coverage – are a mixed bag, sometimes on-target and sometimes merely sensationalistic.  Many of their other audits are basically reports on agency compliance with various rules. These are again very much a mixed bag – partly, the rule violations are often trivial, and partly, obeying the rules is typically only a small part of what it means to have a good, effective program.

Now, however, voices are beginning to be raised suggesting that diversification of the IG role could increase their ability to contribute to effective and efficient government. In a recent column called "Making the IGs Part of the Solution," Gadi Dechter of the Center for American Progress – a Democratic-affiliated think tank that has shown an admirable interest in improving public management – urges that IGs should not just be exposing what doesn’t work but also what does work.

The purpose is not (certainly not just) to give a more balanced picture of government, but to point out practices being applied in one place in government that could usefully be transferred to other places in government. (Full disclosure: My wife Shelley Metzenbaum, who is in charge of federal performance measurement out of OMB, is quoted several times in the column.)

Dechter’s column cites two examples – a Commerce IG study of telework in the Patent and Trademark Office concluding that this could save money while maintaining quality, and a State Department IG study of efficient practices used at some U.S. embassies.  In both cases, the information would be valuable to other organizations, or other parts of an organization, trying to improve their own performance.

There is another way I think IGs could contribute to improved agency performance. The more performance measurement becomes part of the way the government does business, the greater the temptation to cheat on measurement reporting.  The auditing industry in the private sector (which provides a role model for IGs) grew up there to police companies on behalf of shareholders, given the incentives to game profit or other business performance measures, because those performance measures were so important. IGs should take a cue from the commercial audit industry to make auditing of the quality of government performance data an important part of their mission.

Will this ever happen?  It is sadly hard to be optimistic. Getting headlines for sensationalize waste reports is so much more fun. In Dechter’s column, the Project for Government Oversight, the interest group advocating IGs uber alles, poured cold water on his suggestion.

But I have to assume most IGs actually believe in good government. The British National Audit Office follows the kind of approach advocated here – criticizing, but also seeking to praise and spread good practice. There have to be more IGs out there who would rather be more effective at improving government, even if it meant a few fewer headlines, right?

Posted on Nov 09, 2012 at 12:09 PM1 comments

Voting as an irrational act

I Voted sticker

Photo by √oхέƒx™ on Flickr.
Used by Creative Commons license.

I needed to vote early this morning, because I’m teaching and then immediately leaving for Washington. I arrived at my small polling station in Concord, Mass., at 6:45 am, fifteen minutes before the polls opened, and there were already about 20 people in line ahead of me. I was able to vote quickly – done by 7:10 a.m. – and when I left the polling place, there were maybe 40 people waiting in line. (My younger daughter emailed me a little later in the morning that she had been waiting in line for an hour.) However, this is of course modest compared with the stories of people waiting 6 to 8 hours in line to vote early in Florida, for example. And I have already seen Facebook posts this morning about people waiting an hour in line or more.

The lines to vote are an interesting commentary – and critique – of two common and influential ideas from social science research and theory.

One is the idea of free riding. There is actually an academic literature about why it is irrational for any individual to vote. It is highly unlikely that an individual vote will determine the outcome of an election – indeed, even in the famous 2000 Florida case, there were several hundred votes separating the candidates. So, it has been noted, no individual should vote, but instead count on everyone else to vote. The paradox, of course, is that if everyone thinks this way, nobody will vote at all. We do know that people do vote, so the challenge for social science theorists has been to think about why people vote even though, from a self-interest perspective – voting has costs, especially with these long lines, and there is only an infinitesimal chance that an individual’s vote will elect their favored candidate.

The answer has to be some version of people feeling a moral obligation to vote and people feeling proud as individuals to participate in democracy. There is a larger point here. The theory that people will not vote because the self-interested costs outweigh the self-interested benefits reflects an impoverished view of what makes people tick – ignoring the role of moral obligations and attachments to a larger community. So these lines on election day actually tell us something about who we are as human beings.

The second idea that is dealt something of a blow by these voting lines is the psychological idea of habituation – put simply, the idea that everything gets old after a while. On this view, it is one thing when people in new democracies wait in line for hours to vote (I remember the footage of long lines when South Africa had its first universal suffrage election in the nineties), but after a while it loses novelty and hence attractiveness. Needless to say, Americans have been at democracy for a long time, so habituation certainly has had time to settle in. But there may be certain things we value on an ongoing basis, such that we continue to appreciate them even after a long time, sort of like a long-standing love as opposed to a first blush of attraction.

And this also may be something we want to pass on to our children: I overheard at the train station on the way to work a woman telling other commuters about how there was a first-time voter in line while she was waiting, and everybody gave her a big cheer.

Having said all this, it is of course also true that many Americans do not vote, that many feel cynical and jaded, that many are both self-interested and habituated. Today, though, let’s concentrate on those exceptions to social science theory.

Posted on Nov 06, 2012 at 12:09 PM4 comments

Lessons about managing teams

Steve Kelman

I have expanded this year the material on managing teams for my introductory management course for Kennedy School master’s students. I introduced two classes on team management two years ago, expanded it last year to three and now have raised it to five.

This is partly because the subject has a mixture of good available in-class experiential exercises and a rich scholarly literature, a nice mixture for a course. But it is mainly because teams, often cross-functional teams, are becoming more and more important for making increasingly complex organizational decisions or producing organizational products and services.

We started the five classes with an in-class exercise called Desert Survival, set up by a DVD describing a group of travelers whose light plane crashes in the Sonora Desert in Arizona and who must figure out the relative importance of various of the items they have available at the crash site for surviving in the desert. Students first solve the problem individuals and are then divided into teams of five to make the rankings as a group. Individual student and team answers are then compared with the prioritization provided by an expert on surviving in the desert.

It’s a rich exercise, but let me give four headlines.

In every one of the teams in my class, the teams did better as a group solving the problem than the average individual on the team did. Those who believe that “a camel is a horse designed by a committee” are, at least sometimes, incorrect:  most individuals in the class did worse on their own than as part of a group.

Second, when I had students answer questions individually, the average of their scores was lower than the same students answering the questions in groups. So teams beat out the “wisdom of crowds,” which has been getting a lot of attention recently – the deliberative process of the team produced better results than mere averaging of the variety of individual results.

Third, greater initial opinion diversity among the individual team members produced better team results. (We measured this by plotting the standard deviation of scores of the individual members of each team – a measure of opinion diversity – against team results.)  Getting access to diverse opinions and knowledge is the central reason to make decisions as a team, and, consistent with this prediction, greater diversity of opinion improved team results.

Finally, while 100 percent of my student teams did better than the average individual in the team, this is true for a still large but noticeably smaller 81 percent of student classes that have done this exercise in the past. Since this exercise has been done almost exclusively at business schools, one way of thinking about these results – something I find appealing, though these results hardly prove it – is that public-service oriented students at the Kennedy School do better at a cooperative exercise such as working in a team than more competitive, individualistic students at business schools. Interesting if true.

Posted on Nov 01, 2012 at 12:09 PM1 comments

Accountability vs. performance

There are few words more praised in discussions about government than the word “accountability.”  Everybody is for it, nobody thinks we have enough of it. Public discussions about using performance measurement in government are commonly expressed as efforts to increase accountability; for example, the school testing movement is typically referred to as “school accountability .”

I think we need to be clear, however, about a tension between the “accountability” that everyone rushes to support and the underlying effort to improve government performance, which is supposedly one – and presumably the most important – purpose of the exercise in the first place. A recent report by Matthew Weigelt on, discussing a panel discussion on the topic of stretch goals at George Washington University, illustrates one aspect of the tension.

Fundamentally, the tension comes from the fact that the idea of accountability – where one is trying to perform well in order to please external actors – has a fundamentally punitive meaning. The popular phrase, “Where’s the accountability” is actually just a (slightly) nice way to say,  “Who are we going to fire or send to jail?”

So agency managers naturally react in several ways when, say, performance measurement is associated with “accountability.”

First, they try to keep it as far away from themselves as they can – isolating “performance measurement” into a staff function consisting of writing reports for the Office of Management and Budget or the Government Accountability Office, not a line activity used by actual managers in charge of delivering the organization’s performance.

Second, feeling no ownership of the measures, they have no compunction to game the system, staving off the external accountability without actually improving performance. A number of years ago, for example, the IBM Center for the Business of Government published a report by William & Mary professor Richard Gilmour on how federal agencies succeeded in moving their old PART scores on performance management from “red” to “green.” The report was extraordinarily depressing because it outlined a series of ways this occurred – none of which included actually improving the program’s performance.

Weigelt’s article discusses a third tension in the accountability perspective. There is overwhelming research evidence that setting concrete goals improves an individual’s performance compared to just telling the individual to “do their best.”  The evidence is also strong that, within reason, challenging “stretch goals” motivate better than less-challenging ones. But as the article noted:  “Fears of congressional appropriators or an inspector general knocking at the door can persuade some federal managers to stay in their comfort zone, to set goals they’re sure they can reach.” He went on to quote Patricia McGinnis, a professor at the Trachtenberg School of Public Policy and Public Administration at the George Washington University: “They think somebody in Congress or somebody in [the Government Accountability Office] or somebody who has an oversight responsibility is going to punish them if they don’t meet a stretch goal.”

The problem, though, is that when people set easy goals because of fear of accountability, an opportunity for greater performance improvement through setting a stretch goal is lost.

Frankly, there is too much of a hallelujah chorus around the word “accountability” and not enough appreciation for a delicate balancing act needed around this concept, so as to avoid a situation where calls for accountability actually worsen government performance, rather than improving it.

Posted on Oct 24, 2012 at 12:09 PM3 comments

Changing minds on GSA

In my last blog post, I discussed preparing a class in my introductory management and leadership course for Kennedy School master’s students on the implications of the GSA conference scandal from last spring for how government is organized and managed – in particular how problems like this, and the way the media report them, places a premium in government management on control. (A student from GSA in an executive education program post-scandal reported needing to get 10 signoffs on travel expenses to come, even after participation in the program had been approved.)

I started the class with two quick polls. First I asked those students who had followed the scandal when it broke last spring what their initial reaction had been, with the three alternatives being:

  1. This is terrible, and it’s typical for how government agencies behave;
  2. This is terrible, but it’s not typical for how government agencies behave;
  3. The media is presenting this as a much bigger problem than it really is.

I then gave them the same three alternatives for their views as of the start of the class, after taking their management course so far this semester and reading the background materials on the scandal (the IG report, television coverage, Martha Johnson’s resignation, some congressional testimony, and some “leaked” conference videos from Huffington Post).

The responses were interesting. Their reactions from last spring were:

  • 21 percent terrible and typical;
  • 61 percent terrible but not typical;
  • 18 percent media exaggerating the problem.

After taking part of the management course and reading the material, their opinions had evolved somewhat, though not dramatically:

  • 13 percent terrible and typical;
  • 69 percent terrible but not typical;
  • 19 percent media exaggeration.

To put it mildly, I make no claim that these views – especially the initial reactions from last spring – are representative of the American people. But, especially given that we see a problem of skepticism about government among our students that parallels, although at a much lower level, currents in society as a whole, it was interesting to me that only 20 percent of our students had thought these events were terrible and typical, which to me is good news.

I had the students talk among themselves about the poll results, putting one student from the media-exaggeration camp into each group, and then had the groups brief the whole class. The points the advocates of media exaggeration made that their fellow students found the most convincing were that this involved a tiny amount of money in the government’s budget, and that members of Congress who can’t agree on a deficit reduction deal should be the last to complain about waste at GSA.

We talked about media coverage. I showed them the Google hits I mentioned in my previous blog – that this scandal had gotten infinitely more media attention than the substantive issue GSA head Martha Johnson was spending her time on. One student stated that this was how the media covered business too. I noted that especially in recent years there has been far more critical and hard-hitting coverage of business, but the media still paid significant attention to reporting about quarterly earnings reports, new products, and the substance of the business, in a way that gets done less for government agencies. A student who had been a journalist argued that the media behaved this way because this was what people wanted to read or see – this was being driven by media consumers more than anything.

Finally I put this scandal into the context of what we had been studying about rules vs. empowering employees in the design of government organizations. This kind of environment – and also, as a student had noted in the previous class, the higher ethical standard to which government is held – produces a situation where control becomes a very large element of managing government organizations, and where rules and procedures are used to increase control even if they lower the ability to shine and do a good job.

How to manage in this environment, I asked the students?  A number of students were enamored of a reading I gave them by Robert Simons, writing 15 years ago in the Harvard Business Review about “management control in an age of empowerment.” Rules should set boundaries of the unethical and unacceptable, and tell people they must not go outside those boundaries, Simons argues. But inside the boundaries, give people as much room as possible. That is perhaps the wisest lesson to draw from a sad situation.

Posted on Oct 19, 2012 at 12:09 PM0 comments

The GSA scandal as a teaching tool

 A year ago, before the GSA conference scandal broke out, we introduced a new case in our introductory management and leadership course at the Kennedy School, written about the decision by the new GSA administrator, Martha Johnson, to emphasize “zero environmental footprint” as her central strategic goal. The aim of the case was to discuss whether it was a good idea to focus on a goal somewhat outside GSA’s traditional mission, and also to discuss whether Johnson should have used more of a planning process before selecting the goal. In the case, Johnson was quoted as saying: “I didn’t want to spend weeks in a conference center, talking about our mission and our goals and so on.… I was trying to give people relief from forever-and-away planning, sifting, strategizing, talking, meeting, and so on, because GSA is an organization of action, and it really simply needs a couple of big channels to work in, and then everybody will take off.”

Last year – though I actually tried to nudge them in a more questioning direction – the vast majority of the students were really enamored of what Johnson had done.

Then the GSA conference scandal hit, and Johnson resigned as GSA administrator. Originally, I wasn’t sure what to do with the case the Kennedy School had spent a lot of time and money developing, and asked myself (and our case program):  “Can we possibly teach this again?”

Finally, I decided to do the following: We would teach the original case as is, noting the scandal in the syllabus and telling the students we would have a subsequent class specifically on the GSA conference scandal. The new class – which I decided to call “Martha Johnson and GSA: The Sequel” – would appear in the part of the course dealing with “organizational design,” and specifically after a discussion of the upsides and downsides of decisions to design an organization using lots of rules to prescribe behavior versus giving frontline employees more autonomy/discretion to choose what decisions make most sense.

I checked out a few things to prepare for the class. One of the phrases that was much-ridiculed in media coverage of the GSA conference was spending money on a “team building” exercise at the conference involving assembling bicycles (the phrase was almost always put in quotation marks, so as to heighten the sense of absurdity and waste). So I decided to do a Google search under the phrase “team building conference” to see how common this kind of activity was in the world of conferences and training. The phrase yielded over one billion  Google hits, the vast majority for conferences organized for corporate customers, including one company specializing in Caribbean team building conferences for companies, which featured bathing-suited trainees on a beach.

I also looked more carefully at the videos “exposed” by the Huffington Post as “embarrassing,” some of which were played frequently on TV during the scandal. One involved, as the media reported, a clown, who, according to the Huffington Post, boasted about avoiding work. I would urge people to examine the “embarrassing” video – it is a humorous attempt (which probably could be criticized more for being heavy-handed than anything else) to make fun of an employee who doesn’t pull his weight while others are trying to. A video described by the Huffington Post as showing GSA employees “destroying government property” was actually a humorous parody on Johnson’s “zero environmental footprint” policy calling on GSA to save energy – it featured three GSA employees sleeping in one small hotel room (including in the shower), shaving together in the bathroom so as not to waste water, and so forth – the office property was an unneeded printer that wouldn’t be printing unnecessary copies of documents.

Of course, unless somebody was an expert on Johnson’s save-energy policies – which the GSA employees at the conference presumably were and which my students were since they had earlier done a case on this initiative – the point of this whole video would have been lost. Finally, I suspect most of those listening on TV to the “I Wanna Be Commissioner So Fricking Bad” parody sung by the hapless ukulele-strumming Hawaiian GSA employee were unaware of the then-current pop song “I Wanna Be a Billionnaire So Fricking Bad” that it was playing on.

Finally, I Googled “Zero Environmental Footprint GSA” and “Western Regions Conference GSA.”  Many blog readers, particularly those in government, will be unsurprised to learn that the former – which is the substantive policy Johnson had actually been spending her time on, as my students knew from the earlier case – got 16,000 hits and the latter 210,000. The first three listings for hits for the former were GSA press releases, while three of the first four for the latter were the Washington Post, Politico, and Youtube. This is how the media cover government agencies.

In my next blog I’ll report on the conversation in class with my students on the scandal and its implications for government management.

Posted on Oct 17, 2012 at 12:09 PM3 comments

Good directions for strategic sourcing

FCW’s Matthew Weigelt “obtained” (i.e. somebody leaked to him) a copy of a draft report from the Government Accountability Office about strategic sourcing, which he wrote about on, with a follow-up here.

Strategic sourcing – taking advantage of an organization’s combined buying power to get better prices and service from vendors than would be obtainable by each part of the organization buying on its own – is sort of Procurement 101, certainly in the private sector, where it is a major way that purchasing organizations justify their existence in corporate America. The basic idea is no more complicated than the observation that you pay a lower price per unit when you buy the giant economy size than when you buy single-serving containers. I preached this as far back as when I was the Office of Federal Procurement Policy Administrator 15 years ago.

Looking at progress made on strategic sourcing at the Defense Department, Veterans Affairs, Homeland Security and Energy, the GAO report concludes that the government hasn’t moved fast enough, especially compared with big private companies, which, GAO states, buy 90 percent of what they purchase using strategic sourcing, saving a whopping 10 percent to 20 percent of their total purchasing bill (which, if it could be duplicated in the federal government, would imply up to $100 billion a year of savings, a huge number).

I like the idea of comparing what big companies are doing here to what the government is doing, because procurement is a business function, and if the government isn’t doing it as well as big companies, that’s a problem. At the same time, the GAO conclusion is a little unfair, for two different reasons. First, much of what big companies buy is commodities (such as steel or component parts) that are used in the firm’s production, while a larger percentage of what the government buys is services and unique items such as weapons system. Second, strategic sourcing in the government has been politically controversial, with the very concept denounced by small business lobbyists as “bundling.” My own efforts in the government in support of strategic sourcing earned me the frenzied enmity of these lobbyists, who defended the government paying retail rather than wholesale prices.

I like two of the directions the GAO report takes in its recommendations. First, they argue more use should be made of existing strategic sourcing contracts. I agree. Although use of the General Services Administration’s office supplies strategic sourcing contract has been greater than any of the previous similar contracts – and by the way GSA has been able to include some small business suppliers on this contract – it still accounts for less than half of office supply sales to the government. In these tough budget times, why doesn’t somebody (the Office of Management and Budget perhaps?) just bite the bullet and say use of this contract should be mandatory unless there is a good reason – hopefully filled with a lot of stupid paperwork to discourage applications -- for an exemption. This is exactly what many big companies do. (There is a fair worry about prices on these big contracts deteriorating over time and not responding to spot market changes, as well as a worry about GSA gaining a procurement monopoly that will make them lazy. Partly, the multiple-award nature of these contracts counteracts that, but agencies can also do second-stage reverse auctions for larger buys under the contracts that would help keep prices low and deal with spot-market bargains or temporary discounts.)

The GAO’s other recommendation involves applying strategic sourcing more to services. As the report notes, many agencies push back that these are much harder to standardize than the commodities on strategic sourcing contracts. However, I would love to see GSA re-establish some of the earlier service-specific governmentwide contracts they once had (such as for data centers or IT recovery services) that are easier to standardize. And, as a first step, agencies should look at who their two or three biggest service contractors are, and try to manage the relationship more strategically, including obtaining quantity discounts or other favorable treatment.

Posted on Oct 12, 2012 at 12:09 PM3 comments

Taking the social-media pulse of Chinese students

Faithful blog readers will know that two or three times a year, I meet with a group of Chinese university students who are visiting the US for a few weeks with a program called China Future Leaders. I speak with them about my family (to illustrate the role of immigration in American society), about Harvard (including a topic that interests almost all of them, applying to a university in the US), and about current issues in US-Chinese relations. I also always take the opportunity of their visit to ask them some questions.

This time I mostly asked them about their use of weibo, literally “micro-blogs.” As you may be aware, Facebook, Twitter, and Youtube are all blocked in China, though most Western sites (including the New York Times, Washington Post, and this blog) are available. Each of these forms of social media, though, has a Chinese counterpart. The social medium with the most social importance in China is the Twitter-knockoff Sina Weibo (though it has some much smaller competitors with a similar format).

Over the last few years, it has grown into a huge force in Chinese society, and an outlet for information and comments that is extremely imperfectly under government control. Issues that might have been kept under wraps – such as the flight of a senior police official to the US consulate in Chengdu, China, which set in motion a huge political conflagration leading to the ousting of a major contender for national political power and the arrest of his wife for murder – have come into the public eye because of pictures taken by amateur photographers and posted on weibo. Weibo also routinely features skeptical comments by members of the public about government policy.

The government plays something of a cat-and-mouse game with weibo users, sometimes taking down individual posts or blocking all posts using certain key words, but the public reacts by starting to use homonyms or other circumlocutions for the forbidden words or names. There have also been efforts in some local jurisdictions to require “real name” registration on weibo, so people will not be able to make comments anonymously.

I asked the students about their own weibo use. About 70 percent of them reported opening up weibo at least once a day, and somewhat less than half three times or more a day. But their answers to my other two questions surprised me a bit. Only three out of the 20 or so students reported having their own personal blog on weibo – I had been under the impression that this practice was close to universal among Chinese students. Of the three who reported having a blog, one said that there had been a time when a post had been taken down.

Also, only about four out of the 20 said that they used weibo as a major source of news about what is going on in China, using instead more conventional Internet or other sources. At least among this group – and these kids are probably quite aware of the world around them compared with many – it doesn’t seem fair to claim that weibo has revolutionized their ability to get access to non-official news.

I also asked them about China-Japan relations, which have become tense in recent weeks over emotions about some uninhabited islets controlled by Japan but claimed by China. This subject has occasioned demonstrations and even Toyota burnings in China, boycotts of Japanese products, and a public statement by a military leader that the situation could lead to war. These students seemed to be fairly calm and free of extreme nationalism over these events. Only four of them said they had started to boycott Japanese products, and none of the 20 thought it was likely that there would be a war between China and Japan during the next five years.

Posted on Oct 04, 2012 at 12:09 PM2 comments

Forward with the dialogue on agile development

I want to thank the blog readers who took the time to engage in a dialogue on blog post I wrote first about agile development in general and then about contracting for agile development in particular. This was a conversation at its best, long on dialogue, substance, and listening, short on vitriol and name-calling. (If only American politics could be like this…) I also want especially to thank Mark Schwartz, the Citizenship and Immigration Services CIO about whom I wrote, for joining in the dialogue and responding to comments.

There are two issues I see coming out of the dialogue that I think continue to need discussion: They are "requirements” and “integration.”

On requirements: As a person coming out of contracting, I agree that the demand for “all requirements up front” is unrealistic, time-consuming, and ultimately fruitless since requirements will inevitably change over the life of a big project. It also fosters lengthy project development cycles to attain all these requirements, a system that has not worked well for agencies or taxpayers. So I have no problem with getting away from that.

But contracting people, not irrationally, want the contractor to know what they are expected to achieve, aka some form of “requirement.” I would have thought that one of the virtues of these really short development cycles (“sprints”) was that what you were trying to do was so controllable and short-term that it would become easier to develop something like “requirements” for the short sprint, and not have to change them (or at least very much).

In one of his comments, Schwartz wrote: “The contractor's performance can be assessed better because they frequently deliver finished product that can be assessed by the government.” I agree. But I can’t get away from the idea that to assess you need to assess against a standard or standards, and these are what “requirements” are. Brent Bushey from ICE wrote in a comment: “We agree to a fixed sprint schedule (currently adhering to 4 week sprints) and we expect our vendor to complete 80% of the story points assigned to a given sprint. Our hope is that this allows us to tie contractor performance to pay yet doesn't tie our hands on the requirements up front.” I’m possibly confused (it wouldn’t be the first time), but isn’t a “story point” some kind of requirement, though maybe not the traditional kind? And when Brent says the contractor is paid based on how much of the “story points” they achieve in a month, sounds like a kind of performance-based contracting to me.

Another issue is integration. I think, though I’m not certain, that the integration issue comes up mostly in the context of Mark Schwartz’s idea that agile sprints be done by several different contractors and that the government contract for big agile projects using a multiple-award IDIQ contract vehicle, with a small number (say 3 or 4) vendors in competition for individual modules. This approach maybe is especially suited for agile – and it has real potential virtues as a way to keep vendors on their toes and to keep pricing aggressive -- but as I understand it, agile could be done using a single vendor for all stages.

An idea developed by a number of the commentators, including Schwartz, seems to be to do integration itself on a gradual, ongoing basis, rather than some big integration activity at the end of a long development project. “The idea is to integrate frequently (preferably through continuous integration) throughout the development process, and then run a suite of automated tests ... Integration is performed by a government team (supported by a contractor) in my model, and that team can work with the contractors to solve any integration issues that arise.”

I feel slightly worried that “continuous integration” will produce a lot of rework, where integration at one stage doesn’t work when a new stage comes on, requiring the integration to start again.  However, I suspect that under the current system, big integration efforts also need to be redone (or recede into the indefinite future) as requirements change and start dates keep moving outward. I also wonder whether the government is likely to be good at taking integration responsibility, but perhaps an agency using agile could simply have an integrator on board constantly to work on these small-scale integrations.

I don’t know if I’ve summarized the discussion well or posed my questions clearly. Can we continue the dialogue? This is important stuff, and it’s great to see some dedicated civil servants engaging this.


Posted on Oct 02, 2012 at 12:09 PM19 comments

Using startups brings rewards -- and risks

The new issue of CIO magazine, a trade journal oriented mostly to private-sector CIO’s, has a fascinating article by Stephanie Overby in the new issue, called “The Risks and Rewards of Using Startups.”  This is an issue government IT managers face as well, with the added element of pressure to meet small business goals and a perception by some small-business advocates of government bias against small firms.

The CIO article is long and detailed, and, as its title suggests, presents a very balanced picture of upsides and downsides .And just about all the upsides and downsides apply to government as well.

The upsides of dealing with startups are three: price, innovativeness, and responsiveness.

The article is pretty up-front in noting that a clear advantage of dealing with startups is that they are typically considerably cheaper than larger, established firms .This is both because their costs are likely to be lower (less overhead, for example) and because they provide advantageous pricing to get their foot in the door and show what they can do. In today’s federal budget environment, that is no small advantage, and it should definitely be something very much on the government’s mind .The problem in a government context is that small startups sometimes expect to be able to charge the same prices as their big competitors, despite the challenges (noted below) of working with them .That doesn’t add up .Government should expect to get services from these firms at a lower cost, and startups should expect to charge the government ultra-competitive prices.

The second advantage is innovation and new ideas. Startups, the CIO article notes, “are answering the technology questions that older vendors won't even ask.”  This is of course also a big advantage, especially in areas such as cyber where new answers are definitely needed .One problem is that startups in the government space often are simply me-too body shops that seek to survive on set-asides, rather than the kinds of innovative Steve Jobs-in-a-garage startups that people often think about when they hear the phrase “small business startup.”

The third advantage is responsiveness. "When you're working with one of the behemoths, you might get a quarterly visit or someone asking you at the end of the fiscal year what they can do for you. That drives me crazy," one CIO quoted in the article says. "With a startup, there's a much tighter interaction. You know the engineers and the owners, and they're actively involved in how things are going."

Against these advantages must be weighed problems. Most obviously, startups can go bankrupt, leaving the government holding the bag .More generally, the private firms quoted in the article note that the organizations that “partner with them have to do a lot of hand-holding throughout the relationship.” Furthermore, as the CIO of the British National Health Service ( a government-owned entity) notes, "there is relatively little third-party validation out there that [a startup] product can deliver,"  and therefore the customer needs to do more technological validation themselves .Both of these situations may often be really serious problems for government’s ability to use startups, since deep technical talent inside the government to hold hands or do technical validation may be exactly what the government is least able to do.

The CIOs quoted in the article are, like their counterparts in government, concerned about the financial viability of startups with whom they do business .The article reports that CIOs “often have certain metrics or guidelines for assessing financial viability. Who is funding them? Are more than half of their users paying customers? How many recurring contracts do they have? How much cash flow is there? "

The CIOs mentioned in the article have different approaches to how they use startups, taking advantage of the rewards in light of the risks .One states:  "We're not [working with startups] for parts of the business that are small or insignificant. We're doing this with vendors that will have the ability to truly be transformative for us."  But another says:  "Startups are a good way to experiment at the edges of your priorities and position your company as an innovator,"

The article notes that customers often focus on the risks posed by startups, but dealing with bigger firms brings risks of a different sort.” The desire for lower risk pushed a lot of CIOs toward the bigger players with deeper pockets and more money for R&D. But they gave up one risk for another," says Christine Ferrusi Ross, research director at Forrester. "They traded the risk that a smaller, newer vendor would somehow fail for the risk that they would be held hostage to a supplier with whom they have no leverage."  On balance, as I read the article, I conclude that agencies can and should look for places to make use of startups, especially where budgets are tight or the need for innovation is great .But startups, rather than just complaining or relying on set-asides, should also be thinking about how to alleviate some of the challenges a relationship with them can create for the government customer.

Posted on Sep 27, 2012 at 12:09 PM0 comments

Unraveling the agile development knot

In my recent conversation with Mark Schwartz, CIO of Citizenship and Immigration Services, about transitioning the federal government to agile development, we also spoke about some issues for agile contracting.  It was an interesting conversation, with what I would call some good news and two challenges.

Mark is an advocate of using a multiple-award task order contact framework for contracting for agile development modules, with competition among a small group of contract holders for each module.  He agrees with the view that technical developments involving the underlying architecture for these projects makes it more possible than before to do individual agile development modules as “bolt ons” to the architecture, which undermines the traditional approach that says that you need one contractor for these projects because of the difficulty of integration.  He believes that the government should itself often be responsible for developing the architecture and for any integration issues, though when I said this might better be left in the hands of an architecture/integration contractor most of the time, he wasn’t dogmatic on the point.

This approach reflects in my view a real possibility for getting the government a better deal by keeping a small group of vendors in real-time competition for elements of an agile development.  This is also an approach that many contracting professionals in government are likely instinctively to identify with, so implementing it is mainly an educational challenge for contracting and IT folks, not a cultural challenge.

Another issue he raised is more complex.  Because requirements in agile are meant to change, and to be changed easily, Mark didn’t like the idea of putting any kinds of requirements in the task orders for agile projects, or of making the change order process complex in any way.  He also wanted the task orders to be priced on a time and materials basis.  Both, particularly the first, go against common views among contracting professionals – and to some extent of the oversight community – about having performance metrics and making sure a contract establishes what results a contractor is responsible to produce, so as to improve the likelihood that the contractor performs well.

Mark’s solution to this ties in with the ongoing competition for small task orders he envisions in the multiple-award model. The government should extensively use past performance in making future task order awards as a substitute for upfront performance or other requirements.

The problem then becomes how the government knows whether the vendor’s performance has been good or not absent performance requirements in the original task order. Mark argues that the government team will be observing the vendors as they are working on these short “sprints” and can see whether they are wasting time, or compare vendors in terms of production of usable code.

Well, maybe.  But what if the vendors are off-site with no government people present?  Or what if the sprints differ in how tough they are, so comparisons become more difficult?  I also wonder if, when what is being developed in each “sprint” is fairly small, it shouldn’t be easier to express performance requirements and whether there should need to be so many changes – indeed, isn’t one of the aims with agile to reduce changes by reducing the scope of a project?

I’m not a techie and am raising questions rather than giving answers.  I think what we really need is a dialogue among pro-agile IT people and contracting professionals about some of the ways we might deal with these issues.  Good contracting people, as they should, want performance, and that’s why they tend to want requirements – at least performance requirements.  Pro-agile IT folks want the same thing.  Is there a way to give performance requirements for an agile module?

It’s time for a collegial dialogue on these issues.  I would love to hear from blog readers about suggested approaches we could/should be trying – and I bet those working on these issues from both the IT and contracting sides would love to hear thoughts as well.

Posted on Sep 20, 2012 at 12:09 PM13 comments

The Navy's Elliott Branch: Getting a good deal for government.

Every year for the last decade – this is the tenth anniversary – the Partnership for Public Service has given annual awards for outstanding, results-oriented achievements by career civil servants. The award is officially called the “Service to America Medal,” unofficially known as the “Sammies.”

The nickname isn't just a play on the acronym of the formal name or a reference to the Oscars. It also invokes the name of Samuel J. Heyman, the deceased original founder and benefactor of the Partnership for Public Service.

Heyman, in whose honor the awards are given, had an amazing story to tell: a billionaire real estate developer and businessman, he always said his best job ever was as a junior attorney right out of law school for the Department of Justice. He left that job because his father had died, and Heyman took over the family business.

Later in his own too-short life, Heyman decided to give back by founding the Partnership, a non-profit devoted to attracting a new generation of young people to government service and to improving the quality of government management so as to create organizations for which these young people will want to work.  (Full disclosure:  I was recently selected as a participant in SAGE, a Partnership advisory board of former government officials who work to share ideas and give advice/mentorship on government management.)

The Partnership held its award dinner in Washington a few nights ago. These attract a star-studded cast and help make the Sammies at least tied for the most prestigious award given federal officials.

For the first time in several years, a career civil servant contracting professional -- Elliott Branch, currently the Deputy Assistant Secretary for Acquisition and Procurement of the Navy -- won a Sammie. I was thrilled to learn this, because Elliott is one of a handful of long-time, still-in-government outstanding career contracting professionals out there.

The thrust of what he received the award for was also interesting and sends an important signal:  saving the government money through smart contracting. In this budget environment, this traditional element of the contracting culture needs to come (back?) into its own. The award notes the savings he achieved on the Littoral combat ship contract. In the original strategy, the ships were too expensive. Branch oversaw an effort (as I understand it from the supporting material provided) to save money by separating ship construction from support electronics development, allowing a focused head-to-head competition on the ship itself that brought the price down considerably.

Branch has also pushed multiyear contracting, a win-win for the government and the contractor where the government commits (subject to annual appropriations and payment of termination liabilities if future construction is not funded) to a purchase program over several years, allowing the contractor to lower their prices because of the greater certainty about the level of demand that they will get.

In general, Branch is an advocate of having contracting people use negotiation skills, skills that both have a strong potential to help the government (and which contractor representatives are clearly trained in) but that also make the contracting professional’s job more personally and professionally satisfying.

In a video interview in connection with his award, Branch listed several skills a good contracting professional should have, including intellectual curiosity, the ability to think critically, being results-oriented and imagination. Without putting too fine a point on it, he did not include Federal Acquisition Regulation expertise in his list. We need to continue to spread the message that contracting folks of course must know something about the regs, but if that is all they know -- or all they see their jobs as involving -– they are not only never going to win an award but (I guess more importantly) never going to make a difference in creating a better-performing government.



Posted on Sep 18, 2012 at 12:09 PM1 comments

Agile development: A case in point

At a recent Kennedy School executive education program, I was lucky to have a chance to meet and talk with Mark Schwartz, CIO at the Homeland Security Department's Bureau of Citizenship and Immigration Services.

Mark has a great background, coming to government for the first time after a fascinating career in private-sector IT.  He studied computer science at Yale, he went to film school, dropped out, and worked first at a film production company, then in software consulting, then lived abroad for five years. After all this, he went back to school to get an MBA at Wharton, and then became CIO of a company called Intrax Cultural Exchange, which sets up different kinds of exchange programs, including au pair jobs for foreigners working in US families. 

 “Then,” he says, “I got this idea that it would be interesting to work for government. My organization brought 60,000 people a year to come to the US. Citizenship and Immigration Services receives seven million applications a year to come. DHS seemed to have a lot of problems – I thought maybe I could help.”

And here's something that many will regard as amazing: He applied for the CIO job on USAJobs – and eventually got it (although six months passed before the agency acknowledged his application).
Since coming to CIS, Mark’s major challenge has been to take charge of the agency’s major IT transformation effort to digitize agency benefit application processes (including for visas). The project had been going on for several years, burned through hundreds of millions of dollars, and not yet produced any capabilities – in other words, a prototypical IT program in trouble.
With his private-sector experience, Mark has chosen to see if he can turn this program around through agile software development methods – under which software is developed in very small increments by small teams, rather than having complex and detailed requirements that take years to develop, and often never get developed, with the aim of getting incremental capabilities out much faster.
To Schwartz, the potential advantages of agile were fairly clear. When the software being developed is complicated, requirements changes (inevitable in large numbers in any major project) themselves become complicated because they involve rewriting more already-developed software. When problems are discovered during an old-fashioned “gate review” after a lot of work has been done, they similarly involve huge amounts of rework of already-developed code. The long lead time before any capability actually exists delays and complicates user feedback that is so essential for a new system.
I asked Schwartz what the problems he perceived in introducing agile into government and his approaches for dealing with them. One issue, he said, was that project overseers like to see well-developed requirements, which are not available early on for an agile project. His approach has been to present high-level system capabilities rather than more detailed requirements (which, it might be added, often significantly change anyway).

A similar problem involves the way the test and evaluation/independent verification and validation community do product testing at gateway reviews, in ways that are often time-consuming and contrary to the agile spirit of getting capabilities out fast. His approach has been to involve the testers in small tests while the software is being developed, rather than waiting for a formal gate review.
What’s his most difficult challenge? Agile involves development by small teams that are empowered to make decisions and even tradeoffs to move things forward fast. In government, with many stakeholders with different interests, and often less ability to have a common metric (such as return on investment) to judge tradeoffs, it is difficult to give as much authority to a small team as an agile effort in the private sector would typically have. He doesn’t feel he has solved this problem, but is toying with the idea of getting teams empowered to make tentative decisions, that are then – like elements of a new agile release in general – submitted to reaction from users, realizing that the smaller increments mean less rework costs if something doesn't go over well.

In May the new approach bore modest fruit as CIS debuted an online visa account form. Pretty modest when you think about it for a second – my reaction was “didn’t they have this already?” – but at least that the effort seems to be turning around. Better late than never, and hopefully there will be lessons learned here for expanding the role of agile development in the government.

Posted on Sep 12, 2012 at 12:09 PM12 comments

The greatest immigrant generation

My mom, Sylvia Kelman, died on Sept. 1, just a few weeks before her 92nd birthday. The last few years have been sad in many ways, with her health and cognition deteriorating badly. It is painful to have those last memories of her. But our whole family will cherish the memories of a very strong and devoted woman, very smart, very loving, and very caring both for family and for others in the world.

 I bring up my mom not just to remember her for herself, but because she beautifully represented one of the most amazing groups of immigrants ever to grace our country’s shores – the Eastern European Jewish immigrants who came to the US from around 1890 through 1910, fleeing poverty and anti-Semitism in their home countries. 

My mom, born in 1920, was a child of two such immigrants. Her parents had hardly any formal schooling – her dad was a garment worker, her mom ran a tiny bakery. She was able to attend university thanks to the free public New York city college system (she attended Hunter College, at that time all-women), a system that produced a generation of Nobel Prize winners and world-renowned academics.  After graduating, she went to work in the War Department during World War II, as a GS-3 (I believe) classification specialist. She raised three baby-boom children (born between 1948 and 1954), volunteered in local politics and the Parent-Teacher Association, and then returned to school to get a law degree after her children became teenagers. One of her kids is a Harvard professor, a second a Stanford professor, a third a union-side labor lawyer.

What is amazing about this immigrant saga is not so much the story of upward mobility, which has characterized many immigrant groups. What is very special about these turn-of-the-previous century Jewish immigrants and their children is the sense of commitment to causes larger than themselves personally or even their own ethnic group. Like many of these children of immigrants, my mom was very conscious of her Jewish identity, but she was also very conscious of not being limited to it.

She was concerned with victims of oppression from any country, race, or nationality. She cared about what she would have called – to use an expression that has largely disappeared from our contemporary vocabulary – the “underdogs” of our society, and by no means just the Jewish ones. And in these concerns, she was not alone. These values were very much the values of a significant part of this greatest generation of immigrants. These values surely grew out of a history of discrimination and ill-treatment, but, mixed with a tradition of learning and questioning, and an idealistic faith in the values of their new country, they went beyond that personal history to embody something larger.

In remembering my mom, I also want to remember those values, and hope that they do not disappear as subsequent generations become more and more distant from these immigrant roots.

Posted on Sep 05, 2012 at 12:09 PM2 comments

Meeting the first dean of China's first business school

During my recent visit to the Jiaotong University Management School in Xi’an, China, I had a chance to meet and talk with Professor Yingluo Wang. Now in his eighties, Professor Wang has sparkling eyes and smile, and still comes every day into his spacious office, marked by traditional Chinese wood furniture and a modest number of photos of him with various Chinese luminaries. From our conversation, I learned features of the history of business school education in contemporary China that still have an impact on these schools today.

Not surprisingly, China’s business schools are a product of the country’s transition in the 1980s from Maoism and central planning into a more Western-oriented and more (though far from completely) market-oriented economy. What I hadn’t realized was how great a role the US itself had played in getting these institutions off the ground. In 1979, only one year after the Chinese government’s course reversal to a “reform and opening” policy, the government sent a delegation of professors and government officials, including Wang (at that time a professor of industrial engineering at Xi’an Jiaotong University), to the US to learn about how management was taught here.

One of the strongest impressions Wang gained from the trip was how management education had changed in the US over the years, to include strategy, systems engineering, organizational behavior, and public management, as well as the traditional, more numbers-oriented management sciences. This was one of the main themes of the report written after the trip.

After the group returned from the US, Wang was made chair of a committee to plan the introduction of management education in China, which began with 10 pilot programs in 1984. A lot of the curricular material came straight from US business schools. In the early 1990’s the first MBA program was established in China, at Xi’an Jiaotong University, in a cooperative effort between China’s Ministry of Commerce and the US Department of Commerce.

The other thing I learned from our conversation was that Chinese business school education is still very influenced by its origins in engineering, computer science, math, economics, and industrial engineering. At the beginning, professors at the new business schools were just brought in from these other departments, and had no training in a business school environment or any real experience of business school education. (Xi’an Jiaotong University is basically an engineering school.) There were no faculty members whose background was in human resources management, organization studies, or accounting.

These features of the history of management education in China continue to make their mark today. Business school education is still very US-influenced in its orientation and aspirations. But the quality of teaching and especially research is still held back by the somewhat random early recruitment of faculty who had no real background in management teaching or research. This is now being gradually remedied by large numbers of students sent abroad, especially to the US, to get PhD’s, who are being trained in modern research methods. This process started earlier in sending people abroad for PhD’s in business management compared with public management, and today one sees a higher quality of research coming out of Chinese business schools than public administration programs. (Another reason is that getting access to government organizations in China for research purposes is more difficult than getting access to private companies.) Chinese management schools are still heavily recruiting foreign, including US, faculty.

I saw a number of Western students enrolled in the Xi’an MBA program, and at some MBA programs in China, such as the one at Tsinghua in Beijing (often called China’s MIT and the place where most of China’s top political leadership was educated), foreigners account for about half of the student body. However, this is still the case not in the first instance because of the attractiveness of the teaching and research at these schools, but because of the attractiveness of China’s economy and the interest of many young Westerners in having work experience there. Perhaps – I think it is still too early to tell – these universities will move in quality significantly up the value chain, just as China’s firms are trying to do.

Posted on Aug 30, 2012 at 12:09 PM2 comments

Mass consumption in China

My hotel in Xi’an China – the historic capital that is home of the terracotta warriors and where I have been giving some lectures at Xi’an Jiaotong University – is in the middle of a newly developed mall/tourism area encompassing a large swath of land not too far from downtown. (Given the size of the redeveloped area and the tendency in China to displace large numbers of people for new construction with hardly the bat of an eye, I asked what was in this area before its recent redevelopment, and was told it was “villages,” which seems slightly implausible given how urban the surrounding area is.)

The theme of the whole complex is the Tang Dynasty, with faux (though to my eyes attractive) old Chinese-style architecture, statues of ancient figures lining the middle of the widest boulevard in the area, and a Tang Dynasty theme park near the shopping areas. In all, the feel reflects the interest in China in ancient dynasties – the Tang were about a thousand years ago – rather than a modern Chinese history featuring first decline and humiliation by the West, and then the years of Communism.
The blocks of stores that dominate the area give an interesting insight into Chinese mass middle class consumption. There is no Gucci or Louis Vuitton here, though the manager at my hotel noted with some satisfaction that Xi’an’s first Rolls-Royce dealership lies next to the hotel. Instead, there is a lot of American fast food (Pizza Hut, KFC, Subway, and Dairy Queen all within 100 feet of each other), along with Japanese noodles (Ajisen) and some Chinese food as well.
I spent a while in a mid-market, Chinese brand department store outlet called Vanguard, which had a range of items such as clothing and electronics but compared to an American counterpart was more dominated by food and personal care items. Both its similarities and its differences with counterparts in the West are noteworthy. For somebody raised on images (and personal experiences, at least as a visitor) of Eastern European communism – where the arrival of a supply of over-ripe bananas could generate lines stretching a city block – the most striking similarity with US stores was the mounds of fruits and vegetables piled high and bountifully plentiful. Some of the items on display were different from those you’d see in an American supermarket, but the overall effect of abundance and prosperity was similar. Prices were about 60 percent of what they would be in the US,  though with Chinese wages, the items were more expensive relatively.
A second similarity was the dominance of Western brands – Colgate, Olay, L’Oreal – in the personal care section. I don’t suspect any of these products are actually made in the US (the packages were pretty much entirely in Chinese, and I don’t know if there are country of origin labels; I would guess a lot of these items were made in China, Thailand, or Malaysia). But Western brands were definitely holding their own. In other parts of the store I saw a huge barrel filled with Snickers bars, and a detergent section with endless variants on Tide detergent.
Perhaps the biggest difference between this store and a counterpart in the US was the large number of sales staff, several milling around in each section, not just in consumer electronics or fruits and vegetables but in personal care and packaged foods sections. There were a fairly significant number of product demonstrations going on around the store, and I was approached several times by staff, asking me if I needed help. This suggests a role in educating new consumers about what’s out there.
At the risk of appearing either naive or of embracing a crude economic determinism, I did think as I wandered through this temple to popular consumption that it was hard to imagine Americans and Chinese being different enough or hostile enough to each other ever to get into a bad fight.

PS.  Some China miscellany: A major bridge collapsed early in the morning – when there wasn’t even much traffic on it -- in the northeastern city of Harbin, killing three people. This was the sixth bridge collapse in the last year in China, “renewing worries over the quality of Chinese infrastructure amid a construction boom across the nation,” as the China Daily put it. Also, there has been a fair amount of publicity in China around a slightly weird adaptation of ancient Confucian principles of respect for parents issued by the “Office of the National Committee for Senior Citizen Affairs,” providing 24 examples of how children can show “filial piety” in today’s world, including teaching one’s parents to use the Internet and phoning them at least once a week.

Posted on Aug 28, 2012 at 12:09 PM1 comments

A clue to keep employees happier during budget-cut times

I recently attended the annual meeting of the Academy of Management, the association of professors (mostly at business schools) who study organizations. I heard an interesting paper which, although the data comes from the UK national government, is quite relevant to people thinking about how US federal employees will deal with the looming tight budget environment in government.

The authors – Tina Kiefer and Jean Hartley of the Warwick Business School, Neal Conway of Birkbeck College, and Rob Briner of the University of Bath –conducted a survey of various elements of job satisfaction, employee engagement, and how oriented the employee is to providing good service. By coincidence, in the middle of conducting the survey the new British Conservative government announced budget cuts averaging 25 percent over four years. (Remember that in Britain’s parliamentary government, when the Prime Minister announces a policy like this, it is pretty much automatically passed by the majority in Parliament, which is always the same political party or coalition as the Prime Minister.) This coincidence about the announcement allowed them to compare the attitudes of respondents who answered the survey before the budget cut announcements and afterwards, which is neat. With the announcement, they decided also to conduct a follow-up survey 6 months later asking many of the same questions, allowing some comparisons after the budget cut announcements had sunk in and begun to be implemented.

Some of the findings in the study will hardly come as a surprise to federal employees or managers, but one particular revelation might. And it has practical implications for managing in tough budget times.

The employees who answered the survey after the government announcement showed lower job satisfaction than those answering before the announcement (though there were no differences in engagement or service delivery attitudes.)

What was especially interesting in the paper, though, was another set of questions that asked respondents, both in the original survey and six months later, about the presence at their workplace of various kinds of change initiatives. In categorizing the 25-odd change initiatives they asked about, the authors distinguish between efficiency-related changes (which they define as those “with a main focus on reducing costs or restructuring processes”) and innovation-related changes (which they define as those “introducing new practices or processes”). They then compared the change in the presence of these change initiatives over the six-month period with changes in employee attitudes over the same time. They found that when efficiency-type changes went up over the period, employee job satisfaction, employee engagement and service delivery attitudes all declined. A closer look suggests that this was not so surprising, because most of the reported changes characterized as “efficiency” changes involved increases in voluntary or compulsory staff cutbacks and service delivery cutbacks.

However, the authors also found that increases in innovation-related changes were accompanied by increases over the six-month period in job satisfaction and employee engagement (though not in service delivery attitudes). This despite the general negative climate the budget cuts created.

This is a fascinating research finding and suggests a path forward for federal managers during a period of tight budgets. I would add that the innovation-related changes government organizations can carry out may also decrease costs and thus improve efficiency (bang for the budgetary buck) – indeed, one criticism I have of the paper is the use of the phrase “efficiency changes” to describe what in fact is just simple cost cutting without any real changes at all, such as getting rid of staff or cutting back services. The real distinction should not be between “efficiency” and “innovation” but between changes that actually seek to help government work better and cost less on the one hand, and the simple meat cleaver of staff or service cutbacks on the other.


Posted on Aug 23, 2012 at 12:09 PM1 comments

Think the government is bureaucratic? Read on.

As regular readers of this blog know, one topic that I frequently teach about is the proliferation of rules in government organizations. It was my view while working on contracting issues while in government – and it is my view as a scholar and teacher about management – that, while rules often serve valuable functions in organizations, government organizations are frequently too rule-bound, creating problems both for customer satisfaction and for performance.
In class, I often discuss what features of a government environment – in particular media and political scrutiny that put more emphasis on avoiding scandal than on achieving great success – tend to make government more rule-bound than private companies. In executive education, managers frequently discuss ways to reduce the negative effect of rules, such as being aggressive about using exception authorities when the rule doesn’t fit.
But I also always teach that many of the problems we see in managing government organizations often exist in the private sector as well, so we in government should not flagellate ourselves too much.
I have recently experienced a dramatic example of the truth of this observation as a customer of Sovereign Bank. It would give the worst of government bureaucracy and inflexibility a run for its money.
I have kept most of my money-market cash and certificates of deposit in the Harvard Square branch of Sovereign Bank for a while. Last year, the bank manager suggested I start using Sovereign for my checking, and for a number of reasons, I was tempted by his suggestion. However, I did have a worry, which was that I wanted funds to be transferred directly from my money market account to any new checking account whenever money was needed to cover a check, and I was concerned that regulations limited the number of withdrawals I could make each month. However, the manager assured me this would not create a problem, so I proceeded to spend a fair amount of time transferring a large number of automatic payments (e.g. credit card and utility bills) to the new checking account.
Soon the previous Harvard Square manager left, and soon I began receiving notices that I had made too many withdrawals a month from my money market fund, and that this wasn’t allowed. I explained to the new manager what I had been told and the amount of time I had spent transferring automatic payments out of the account (he already knew I was quite a good customer). I suggested the following solution: I would transfer a sum from money market into checking at the beginning of each month that would pay most or all of my checks, and they would give my checking account the same rate of interest as the money market, so I could just leave funds lying there for a while.
Some time later the manager got back to me and said my request had been turned down by a regional manager – Sovereign’s rule was not to offer interest on checking accounts.
I said to the branch manager to ask the regional manager to go up further in the bank to the level of somebody authorized to make an exception to the rule. The rule is not a law of nature or a government regulation. Somewhere within Sovereign Bank there was somebody authorized to make an exception. If it had to go to the CEO, take it there, I added -- somewhat rhetorically.
Well, I’ve now heard back from the regional manager. Sovereign has no interest-paying checking account “product,” he told me, so my request couldn’t be granted, no matter how good a customer I was. Yes, I understood they had no such “product,” that was why I was asking them to make an exception to their rule; if they had an interest-bearing “product,” there would be no need to make an exception. We went back and forth with him repeating “no product” in a way reminding one of the worst stereotype of an unresponsive bureaucrat.
I finally said that if he could not authorize an exception to their rule about no interest, I was asking him to take the decision up to a higher level of Sovereign Bank, where somebody was authorized to make an exception. He was authorized to make an exception, he said, but he chose not to do so. Why did he choose not to do so, I asked? Because Sovereign Bank had no interest-bearing “product.”

Ugh, he can’t make an exception to the rule because doing so would violate the rule! I blurted out, “I understand!  That’s why I am asking for an exception to your rule.”
Quickly I realized we were in a do-loop; the regional manager started repeating something about wanting to send me a communication that put our conversation in writing, so he could “memorialize” that we had had a conversation, again a behavior more bureaucratic than most government bureaucrats.
This actually reminded me of an experience I once had while in government. I was chairing a meeting of the FAR (Federal Acquisition Regulation) Council that was discussing rewriting Part 15 of the regulation. As I led a discussion of a certain possible change, I could watch a particularly conservative Defense Department staffer becoming more and more agitated, redder and redder in the face, until finally he blurted out, “You can’t make that change! It’s contrary to the FAR!” As calmly as I could, I responded: “What we are doing now is rewriting the FAR.”
Our goal in government should be to be better than my Sovereign Bank regional manager. But then again, I fear this is far, far too low a standard.

Posted on Aug 14, 2012 at 9:03 AM7 comments

Confessions of a PowerPoint convert

I have been a relatively late adopter of Microsoft’s PowerPoint. This is partly out of a general technoconservatism (perhaps a particularly inappropriate attitude for an FCW blogger, but whatever) and partly out of a view that slides interfere with communication between a speaker and the audience by directing the audience’s attention away from the speaker.

But a few years ago, I did make the switch, though reluctantly. More recently, I had three epiphanies that made me change my attitude very dramatically.

The first was seeing how grad students on the PhD job market making presentations at the Kennedy School had greatly improved the visual content and appeal of slides, replacing busy text-filled slides featuring thick black lettering with pictures, colors and animation, going light on text. I realized that I as a presentation participant found the slides engaging and helpful to my own retention of the messages.

Second, I had an interesting reaction attending the job talk presentation of a PhD student in history who had no slides at all but presented his material the way everyone used to present it – as a lecture, half-read from sheets of note paper. My reaction was that this presentation seemed incredibly old-fashioned and dinosauric, very uninteresting – and this reaction coming from a dinosaur.

Lastly, I have been increasingly noticing in the last two years that my own younger students, products of the text-message age, have had an increasingly difficult time being able to relate to material that isn’t put down in written, visual form.

As a result of all this, I introduced slides for the first time in my executive education teaching this last spring. I had always been extremely hesitant to use slides in a discussion class, on the view that If you summarized material that was being discussed in slides, it signaled to participants that you knew what you wanted to come out in class discussion before the discussion took place. But I decided to try it.

I tried to follow the best practices I observed among grad student presentations. I made them text-light, with quick bullet points rather than lengthy disquisitions, with different colors and animation (zooming, shimmying, sentences appearing from the right side of the screen) for the words. I extensively used visuals (for example, to illustrate a point about how long it takes to learn better surgery techniques, I showed a visual of an operating room) and quotes (which I previously would have read to the class out loud). I did not put discussion conclusions on slides, but instead used the slides to list topic areas or themes (rather than spending class time to elicit these themes) and, as part of the conclusions, to list points, often coming from academic research, that I knew from past experience seldom got raised in class.

I saw the first results while I was teaching, which was a dramatic increase in the amount of student notetaking. But I just got more detailed results -- my students’ evaluations of the first classes where I used the PowerPoint presentations. My overall teaching ratings went up. But there was a very dramatic increase in one specific area: “Clarity of the main ideas presented in class.” With the slides, participants were able to absorb main points and themes better.

This has been a real eye-opener. I know some people believe slides inhibit learning. I am now inclined to think that, used well, they really do help learning. And this is with executives who are not part of the videogame, text-message generation. I haven’t even tried this yet on my twenty-something master’s students; this will happen when the semester starts in a few weeks. There is something here, I think, not just for professors, but for managers or anybody else trying to get messages across.


Posted on Aug 09, 2012 at 12:09 PM7 comments

To learn more, keep quiet

In the globalized world in which we live, it becomes more and more important for all of us to learn more about the ways people in other cultures think. The benefits of doing so are both practical (ranging from being in a better position to sell others the products or services we make to avoiding international misunderstandings that can produce tensions or conflicts) and spiritual (simply appreciating better the diversity of human life and experience). Traditionally separated from Europe, Asia, and Africa by huge oceans and blessed with English, the world’s language, as our mother tongue, Americans haven’t always been great at such learning – we would do well to perform the thought experiment of asking ourselves how people in other countries were likely to react when prominent Americans suggested that Made in China Olympic uniforms be burned.

I am in Singapore for a few days, giving a keynote address at a conference discussing a report developed by the Asian Competitiveness Institute at the Lee Kuan Yew Public Policy School on the comparative competitiveness of 33 Indonesian provinces (my expertise here is on using performance measures such as these to improve government performance). I am the only non-Asian at the conference, so nothing said here is designed for American ears, and I know very little about Indonesia, so my ears have been especially open. (With the participants mostly Indonesians but a number of Singaporeans and some from other countries, the conference language is English, with Indonesian language interpretation – so one sees Indonesians addressing other Indonesians in English, a somewhat strange phenomenon that is actually more common in international settings than you might imagine.)

So what have I learned by listening (and watching)? A lot – here are a few examples just to illustrate:

1) The conference is taking place during Ramadan, and most Indonesians are Muslims. People fast from something like 5 a.m. to a little after 7 p.m., which means most of the Indonesians at the conference are fasting while the conference is taking place. People generally in the Muslim world, it seems, do go to work during Ramadan, though I am told productivity is down. While the conference lunch speaker was speaking yesterday, no food was served, in respect to his observance of Ramadan. An appetizer was served before he arrived, and then the main course after he finished. Somebody told me there has been discussion in the Muslim world about the problems for Muslim athletes of the Olympics taking place during Ramadan.

2) Also on the subject of religious sensitivities, only water was served with conference meals, no wine. I asked a Singaporean whether wine would have been served at a similar conference in Singapore that was not for Indonesians or Malaysians (Singapore’s two predominantly Muslim nearest neighbors), and the answer was yes, wine would have been served. The Singaporean, a senior civil servant, mentioned to me that government officials from these two countries were always very insistent that no wine be served at events in Singapore where they were the guests, but that they were not nearly as insistent when they travelled to the West. Being shown respect by the predominantly Chinese Singaporeans was a very sensitive issue for them, I was told.

3) There were frequent mentions of the European economic crisis by people at the conference, and also clearly a good deal of respect for America’s continuing economic standing in the world – with references such as that “even” the US has been damaged by the worldwide economic crisis (perhaps too kind to us, since the crisis actually began in the US). One speaker, however, did ironically note that after the 1997 Asian financial crisis, the West “lectured” Asia about better governance, but now was suffering from similar problems.

4) I learned a fascinating thing that tells you a lot about policymaking and government in Singapore – apparently the Singaporean government is beginning intently to think about the implications of a possible opening up of Arctic trade routes (due to global-warming induced melting of Arctic ice masses) – at the other end of the world from tropical Singapore – on Singapore. The worry is that this may lead to changes in world trading patterns in a direction away from Singapore, and hurt Singapore’s status as a trade transshipment center. Talk about thinking about the future…..


Posted on Jul 31, 2012 at 12:09 PM2 comments

Of bureaucracy and Betty Crocker

A theme always on the agenda in one of the classes I teach in executive education programs here at Harvard is the virtues and drawbacks of rules as a way to design organizations. We walk through the good, the bad, the ugly, and the management challenges of managing in a rules-bound organizational environment.
One point that always comes out in discussion is that rules and procedures can help employees figure out how to do their jobs well by reflecting knowledge and lessons learned from experience or from research. If we know that doing A, B, and C will almost always produce a good result, why keep A, B, and C secret from employees?
I illustrate this by showing a visual of a box of Betty Crocker brownie mix. Betty Crocker doesn’t just give you the mix and leave it to you to figure out how to make good brownies. Based on research at the Betty Crocker kitchens, they tell you to add an egg, a half cup of water, preheat the oven to 375, and bake for 8 minutes. Why should we ask people to re-invent the wheel?

The example is meant to start a discussion, and this year it started a very interesting one among a group of Senior Executive Service civil servants, general officers, and about half the class from outside the US. The instructions on the mix are a good starting point, one participant (who is, by coincidence, a senior contracting official in a major contracting organization) noted. But a good cook will use this as a baseline, a minimal level of quality, and adapt based on their own initiative to improve the brownies from there – adding coconut or other flavorings, experimenting with softness or hardness levels, and so forth. Another participant noted that a good company may give several alternative recipes for different tastes, and allow the user to choose among them.
Needless to say, this conversation was not really about making brownies. The challenge for rule-bound government organizations is that, as the management professor Henry Mintzberg has noted, in a rule-bound organization, rules set up to establish a minimum standard of performance often come to be seen by employees as the only things they need to do to do their job – that nothing more is expected. This same official said the challenge for government managers is to encourage employees to use the rules as a base, but use their heads to figure out how they should be supplemented in particular cases. She noted that often she tries to upset people’s mindsets by asking “why are we doing this,” and not accepting “we’ve always done it this way” as an answer.
It is also useful to draw a distinction, as a number of participants did, between rules that set the outer boundaries of acceptable behavior – integrity, ethical, legal, or safety issues – versus those that are giving advice about how to do a job better.  In my view, the former need to be compulsory. An employee has no discretion to decide they would like to take a bribe. The latter generally should be guidance only, with a cultural expectation that they should be used when helpful, otherwise not necessarily.

Posted on Jul 27, 2012 at 12:09 PM1 comments

How to think about new policy proposals – feedback on my feedback

In recent blogs, I have suggested a number of ideas for specific ways to improve the procurement system – one is a way to encourage small businesses who currently don’t sell to government to enter the federal marketplace and the other is a way to encourage contractors on fixed-priced contracts to share some of their cost savings on those contracts with the government. I made these two suggestions in fairly rapid succession partly because I actually think that both are, on balance, good ideas that would improve the procurement system – but also as a way to encourage others in the system to get their thinking caps on and come up with ideas of their own. With the importance of government contracting, and the current budget environment, the procurement system can use good ideas for improvement.
The reaction to both suggestions from blog commenters was mixed. Fine. However, I would like in a generic way to respond to at least some of the comments by the critics, because I believe my perspective provides some guidelines for how we ought to think about new policy ideas in general.
First, and most importantly, when evaluating a new idea, the standard against which it should be judged is not nirvana – few ideas have no disadvantages or downsides – but in comparison with problems the status quo creates. The correct question is always, “Compared to what?” If an idea has problems, tote these up against problems with the way things work now.
Second, Teresa Amabile at Harvard Business School did some fascinating research a number of years ago where she presented different groups of experimental subjects a book review. The versions were almost identical, but one group got a version with critical or negative adjectives, while the other read a version using favorable or positive adjectives. She found that subjects who read the version with critical words rated the review as more insightful and the reviewer smarter than did the subjects who read the same review with favorable words. She labeled what she discovered as “negativity bias,” and it may be hard-wired in people. People may feel smarter if they can come up with criticisms.

It was interesting to see that one critic of my ideas on the use of past performance for cost savings on fixed-price contracts idea rejected the proposal arguing that it would have no effect on contractor behavior, while another rejected it believing it would terrify contractors into submission to the government. Maybe those reading the comments think those writers are smart, but obviously that doesn’t necessarily produce useful policy or management dialogue.

Lastly, although I recognize the blogosphere is not known as a font of gentle or respectful language, some of the expressions used in some of the comments were, I think, problematic. I am a big boy: I can take it when a commenter writes “a three percent 'kickback' for future work sounds a bit like payola to me” or “I cannot tell you how awful I think the ‘fee’ return idea is. Truly awful.”

But this kind of language can bully or intimidate people from presenting new ideas, particularly if those with the new ideas are young or in a junior position compared to the person using words such as these.  This kind of language in organizations or teams is an enemy of useful deliberation about ideas, and it is an excellent way to discourage new ideas from being presented in the first place. Younger or lower-ranking people, in a world of this kind of rhetoric, are likely just to say to themselves, “Why bother?” and return to their cubbyholes. This is exactly what government does not need.

Posted on Jul 17, 2012 at 12:09 PM9 comments

Leveraging buying power: A lesson from the private sector

The front page of the business section of today’s New York Times  (yes, Washington Post readers, the Times has a standalone business section that is several pages long) featured an article called “16 Million Reams of Paper, Please,” about how private equity firms such as the Blackstone Group have banded together to negotiate better pricing on common items such as office supplies, overnight packaging, and commodity IT for the companies they own in their portfolios.

“We have incredible leverage,” a senior Blackstone executive was quoted in the article as saying, “The more volume we have, the lower our prices go.” The purchasing entity, called CoreTrust, uses both pre-negotiated contracts and reverse auctions to bring prices down. They basically demand that their vendors give the purchasing entity the lowest price that has been negotiated by any of the companies owned by the private equity group. (The example given in the article was that the largest firm in the group was paying $6.95 for an overnight package shipment, while the smallest was paying $9.95 – CoreTrust negotiated a $6.95 price for all the companies in the group.)

One thing that is interesting about this article is that this purchasing alliance consists of a large number of different companies owned by several different private equity firms – it is not just inside one company. This makes it more analogous to governmentwide leveraging of buying power across federal agencies, if anything even more difficult. It is also interesting that the private equity companies have developed this new model in response to changes in the economic environment – they are having to hold the companies they buy for a longer period of time because of the slowing economy, and they are reacting to that economic change by changing the way they do business. A lesson for government in the tight budget environment.

There was another interesting quote in the article, where the same Blackstone executive, referring to trying to get lower prices from suppliers, stated, “We negotiate them to the wall.” As I have noted in other blogs and columns, there is sometimes an attitude around Washington that if the government negotiates vigorously on behalf of its interests, it is “anti-contractor” or against partnership. This is no more true than to state that if contractors negotiate vigorously with the government – which they do – they are “anti- agency.”

I believe that the interests of the government and of well-performing contractors are mostly the same, but they are clearly not always identical, and price is often an example of this. To be sure, there are sometimes tradeoffs that need to be managed – indeed, the Times article notes there are some worries in some of the companies the private equity firms own that this approach will hurt supplier relationships. There is no one size fits all management approach here, and it should be noted that a company that receives a lot of business from these deals is likely actually to treat the customer better, because the business relationship has become more important to it.

Posted on Jul 12, 2012 at 12:09 PM8 comments

A new way to use past performance in contracting

I have, more or less forever (actually, since I published a book on government information technology procurement back in 1990), argued that consideration of vendor past performance in the award of new contracts has the potential, if used well, to dramatically improve the quality of vendor performance. It’s common sense – a key way any market economy works is that if you have a good experience with a product or service, you go back for more. If you don’t, you don’t.

I do believe that introducing consideration of past performance in government procurement in the 1990s improved the process, though I have also extensively written about problems and shortcomings in the system as used in the real world of government contracting.

At any rate, I also believe there are lots of ways to use past performance to improve various intractable, or hard to get a handle on, elements of the procurement process. I wrote recently on that theme in a column on making better use of past performance evaluations in sole-source spare parts pricing. Today I want to suggest another idea – using past performance evaluations to encourage vendors to share cost savings on fixed price contracts.

What’s the issue here? There is an increasing emphasis in the government on using fixed-priced contracts for service contracting, a trend that on balance in my view is a good thing (though I am aware of the criticisms and downsides). One virtue of fixed-price contracting is that it encourages vendors to come up with lower-cost ways to meet contractual requirements, since the contractor’s payment is independent of their costs, and if they can lower their costs, their profits will go up.

At the same time, though, currently there is no way for the government to get any of the benefits of such contractor cost reductions. Since the contractor is entitled to receive the full fixed price agreed to as long as the contract requirements are met, there is no sharing of cost-savings benefits as with an incentive fee or share-in-savings contract.

Here’s my proposal: if a contractor, at the end of the contract where performance has met requirements, returns 3 percent of the fee on a fixed-price contract to the government customer (maybe make it 5 percent for a contract under $500,000), the contractor will automatically be given the highest-possible rating on the cost control element of the past performance evaluation, with an explanation in the evaluation of why the rating was received. With the increased attention these days to cost control, this may be a valuable incentive for contractors to return money (to which, it should be remembered, they are entitled to by the contract) to the government

A few points: First, I suggest a specific percentage return, rather than “at least,” because you want to tell the contractor in advance exactly what will earn them the highest possible rating. (I realize that no contractor is likely ever to return more than the 3 percent or 5 percent, even if they had saved 30 percent.) Second, one thing I like about this approach is that it recognizes the idea of rewarding a contractor who goes “above and beyond” contract requirements, rather than expressing the view one hears sometimes that contractors should do only what the contract specifically says, nothing more.

Note that an agency, or even an individual office working on an individual contract, could implement my proposal with absolutely no statutory or Federal Acquisition Regulation changes – although I think if an agency plans to do this, it should announce the policy in its solicitation. But this will be more powerful if adopted as a policy at an agency or even a government level. Maybe an Office of Federal Procurement Policy letter or something on this? This certainly would tie in with the administration’s emphasis on cost savings from contracting, as well as being a complement to the administration’s effort for more fixed-price contracting.

I raise this proposal partly because I think it’s a good idea, and partly to get others to think about other good ideas for how to improve the way we use the procurement system to deliver value to the government.




Posted on Jul 09, 2012 at 12:09 PM11 comments

Visiting Frank Gehry’s Guggenheim museum in Spain

I am back in San Sebastian, a seaside town in the Basque country of northern Spain, for a brief visit to lecture to an adult education week, apparently an old Spanish tradition organized by universities in a number of cities. (Careful blog readers will note this is my third trip to Spain this year, especially amazing given that I had never visited Spain before this year – my academic research on organizational change is obviously in demand in this crisis-ridden country.)
My lecture done, I took a bus about an hour today to go to the biggest city of the Basque country, Bilbao, home of the world-renowned Guggenheim Museum Bilbao, the branch of New York’s Guggenheim opened in 1997 and the iconic work of the architect Frank Gehry. The museum is often presented as the most significant example ever of culture being used to turn a city around – making backwater Bilbao an instant hit on the tourist and economic development circuit.
In a number of ways, what I saw was not exactly what I had expected. Accounts I had read depicted Bilbao as a sort of Spanish Newark, a declining industrial city totally lacking in esthetic appeal till the museum came and transformed an awful area along the river into something completely different. I am sure the city has improved a lot since the museum came. But, for example, the area on the other side of the narrow Bilbao River from the museum has a number of quite attractive older buildings (I would guess late nineteenth century), which may well have been in poor shape before – I don’t know – but that were not the kind of warehouses or factory shells I imagined from the accounts to exist in the area near the museum.

The old town, the old heart of the city, also has nice architecture and ambiance, which again I am sure looks much nicer today than in 1997, but which certainly even then would have had potential. I guess my point is that a project such as this can help turn around a place with potential due to a nice architectural stock or other advantages, but not every place can assume that a project, no matter how wonderful, can rescue them.
The building itself is actually tamer than I had imagined – curvy, but, as the audio guide noted, very much designed to remind the viewer of a boat, consistent with Bilbao’s strong maritime past.  The curves, and the coloring of the facade (pretty much all a brownish-gold titanium), are far less bold than the other Frank Gehry building I know well, the student center at MIT in Cambridge.
Speaking of rescue, I have seen more crisis signs here than in Barcelona. Very large numbers of stores are advertising sales with discounts as much as half off, sometimes on everything in the store. I’ve seen a few stores with going out of business sales. A tapas place strongly recommended in my guidebook has closed.
One thing I frankly don’t understand is why more Spaniards are not withdrawing their savings from Spanish banks and sending them to Germany, which I believe they are completely free to do under the EU single market. If Spain were to leave the euro, I am assuming that people’s euro deposits would be converted into devalued pesetas, and they should be able to avoid this by putting money in banks in Germany. It is my impression, though, that this so far has been happening only to a very limited extent. I did see a sign in the window of a large Deutsche Bank branch near my hotel urging people to “trust your savings to the largest bank in Germany,” but I don’t think that putting one’s funds in a Spanish branch of a German bank would save people from conversion of their euros into peseta if Spain leaves the euro.
Any readers have any insight on this?

Posted on Jun 29, 2012 at 12:09 PM0 comments

How to make a win/win for agencies and small business

One of the things I liked about meeting new Office of Federal Procurement Policy head Joe Jordan recently was that he is a taxpayer advocate and a small-business advocate at the same time. That’s good, because the two unfortunately don’t always mix. Of course, the government should make maximum use of entrepreneurial, innovative and nimble small businesses. In addition to that list of qualities, such firms are also often less expensive (because of lower overhead, among other things).

But the government small-business contractor lobby, which is dominated by firms that primarily or exclusively serve the government market rather than commercial small businesses, often seems interested mostly in asking the government to use small businesses even if they are more expensive and they are merely providing me-too body shop or reseller work that is pretty far from the image of Steve Jobs in a garage innovating the economy’s next direction.

I was inspired by the meeting with Jordan to think in his spirit about things the government could do to help both small businesses and agency missions.

Here’s my idea: raise the micropurchase threshold to $250,000 for the first five contracts a new small-business entrant into the federal marketplace has with federal customers.

Why the micropurchase threshold? Purchases below the micropurchase threshold are not subject to any government-unique requirements of the kind that often scare commercial businesses from entering the federal marketplace. The government can make a decision to go with a vendor without any complex requests for proposals or proposals of the kind that also often scare small new businesses off from federal work.

If you allowed a new small business entrant to the federal marketplace to get five contracts without special federal requirements, they could both establish good past performance to help them get larger contracts and maybe encourage many of them to take the bigger step of doing the necessary adaptations for the federal marketplace after the first five contracts. I predict that the government will get lower prices and more innovation from these businesses than they do from many of the government-only small businesses already in the federal marketplace.

There are a few implementation issues that would have to be worked out. How soon would these jobs get onto the Federal Procurement Data System so agencies could figure out whether a new contractor was up to five contracts yet? You would also need some simple certification to prevent a situation where a business got five contracts, declared itself bankrupt, re-appeared in a different name, and sought to receive five more (and so on).

This would require a statutory change, though the statutory language would be easy. Congressional small business committees, congressional procurement committees, OFPP – anybody interested?

Posted on Jun 26, 2012 at 12:09 PM11 comments

Meeting Joe Jordan

I recently had a chance to meet for the first time Joe Jordan, the newly Senate-confirmed administrator of the Office of Federal Procurement Policy. I had read media accounts about him that emphasized his previous job as head of small-business contracting at the Small Business Administration, which frankly made me a little worried Jordan might pursue a narrow agenda as OFPP administrator.

I was definitely wrong. I came away from meeting Jordan extremely impressed – and I predict the contracting community will, as people get to know him, be impressed as well. For starters, he is a genuinely nice, regular guy, unassuming, not full of himself, almost always a smile on his face. He’s the kind of person you’d like to spend time with at a backyard barbecue, not just at a meeting of the Chief Acquisition Officers Council.

Second, although Jordan doesn’t have the depth of expertise about government contracting Dan Gordon did (who does?), he has what in my view is the next-best thing: a business background working at McKinsey & Company for several years on organizational management improvements, with some emphasis on procurement savings, including working on a project with the State of Maine that cut almost 10 percent from its procurement costs.

Ask me to choose between an expert on the Federal Acquisition Regulation and an expert on procurement as a business process and on how to manage procurement to save money and create customer value, and I will, frankly, choose the latter. In my view, Jordan has a great background for the job. Furthermore, he has a Boy Scoutish enthusiasm for trying to improve things – and for working with the career civil service – that I think is really refreshing. He is the opposite of old, tired and cynical.

Third, he is not a partisan guy. He didn’t work on an election campaign. He didn’t aggressively seek to lave McKinsey; the head of the Maine Governor’s Council on Competitiveness, who was involved in his procurement work at McKinsey, was tapped by President Obama to head SBA. He has a straightforward, good government agenda.

(That Jordan could win Senate confirmation in a presidential election year is a sign he is not a partisan guy, and also a hopeful signal from Congress that procurement is not a partisan issue, at least for the moment.)

Jordan can speak for himself about his agenda, but I think it’s safe to say with his management perspective, he will be a fan of looking for innovative ways to save the government money during these tight budget times and to improve the ability of the procurement system to serve government missions.

Finally, he’s from the Boston area – what more could you ask for?

(Full disclosure: My wife works at OMB and is a colleague of Jordan’s, though not in the same office.)

Posted on Jun 21, 2012 at 12:09 PM2 comments

A young fed speaks

I had an interesting lunch today with a former fed who (in my humble view) is in a happy situation –- a child has followed his footsteps and entered government service, working in contracting and program management for a major federal agency.  The good news is that the son likes his job a lot. But the bigger story -– gleaned through several father-son conversations -- is more complicated.

Perhaps the two most important reasons the son likes his job are first, that he is constantly challenged to develop his skills, given assignments that in some sense are over his head, but that he loves to have the opportunity to learn and second, that the mission and what is being bought are both intrinsically interesting and substantively important for the nation.

The downside is that, according to the son, a main reason he is given so many challenging assignments is that the GS-15’s and even SES’ers above him are older people whom he describes as basically all being “retired in place.” They are willing to give the new recruit challenging work so they don’t have to do it themselves. This hardly bodes well for my friend’s son being able to gain the advantages of mentoring and dealing with a challenging assignment as part of a team including more experienced people.

A second point that his son raised is that he really feels the government is outgunned by the contractors they deal with at the negotiating table. The contractor personnel he deals with are of the age and experience level of his bosses, but they are not retired in place by any means. This puts the government at a disadvantage.

Finally -- and perhaps this won’t be surprising given the earlier points -- he and the other 150 or so young people working in his organization are overwhelmingly big fans of pay for performance, and don’t like the traditional GS system. They want to work hard, to achieve, and to be recognized for their achievements.

With the disappearance of the National Security Personnel System, which tried to bring pay for performance into the Defense Department, these young people are under a similar system in the Acquisition Workforce personnel demonstration program. I have written a number of times in earlier blogs about how my master’s students at Harvard have a similar view; they believe that the impression that achievement is not rewarded in government is a very big downside of going to work for government. These posts in the past have often been greeted with skeptical responses from some feds, who have referred to “Harvard brats” or “the elite.” However, my friend’s son went to a middle-tier state university, and none of his fellow new hires are from the Ivy League. They just want excellence to be respected and rewarded.

Posted on Jun 19, 2012 at 12:09 PM7 comments

Dispatches from China

Here’s a collection of brief dispatches from a land of conspicuous consumption:

I had read an article somewhere in the Western media to the effect that sales in most luxury emporia in China – the often-enormous outlets for Louis Vuitton, Hermes, Cartier, etc. – were pretty small, because a lot of wealthy Chinese used the Chinese stores just to look, and waited to buy until they were traveling abroad, where prices for the luxury items were considerably lower than in China. I raised this with a Chinese friend in the luxury industry, asking whether these stores in China would be able to survive. No problem, she replied. First, the luxury companies were aware that their Chinese outlets functioned significantly just as shopping windows, but regarded the investment in Chinese stores as essential for maintaining their brands, so Chinese would buy them abroad. Second, many mall owners gave these luxury stores free rent, because their presence raised the mall’s stature and allowed them to get higher rents from other tenants.

A number of American brands are becoming increasingly dependent on China – Coke is putting literally billions into investments in Chinese production capacity, and if you read the annual report of Yum Brands, which owns KFC, you would conclude the company is all about China, where it leads McDonald’s in market share. So it is interesting that a significant number of the Chinese students I have asked about this say they don’t go to KFC or McDonald’s, and don’t drink Coke. Not out of anti-Americanism, but for reasons Americans would recognize – the food is fattening and unhealthy. These students aren’t necessarily typical, but they may be harbingers. If I were these companies, I’d be slightly worried.

Wine is slowly becoming the tipple of choice for an element of the chic and the wealthy, though it is far from displacing China’s famous (I would prefer to say “notorious”) baijiu grain alcohol, especially among government and Communist Party officials, for whom no banquet would be a banquet without it. With their passion for brand names, Chinese have become big buyers of high-end French wine. But I was interested to see in visiting an upscale Chinese supermarket a wine section, dominated by mid-range French wines, but also featuring some American, Chilean, and Australian varieties. China is itself now the sixth largest producer (by volume) of wine in the world, just behind Argentina and ahead of Chile. (The US is fourth.) 

Macy’s is setting up a Chinese website to sell their products, both branded and store brand, to Chinese.  China Daily reported, to my surprise, that “the retailer is a household name in China, largely thanks to the Macy’s Thanksgiving Day Parade, which is broadcast internationally each November, and the holiday movie Miracle on 34th Street, which was set at the company’s Herald Square store.”

The latest trend among graduating college students, according to another article in China Daily, is  to wear formal wear popular during the Republican period (1911-49), such as the high-collared suits worn by Sun Yat-sen for guys or qipao (often called “cheongam” in the West) for girls, rather than Western-style caps and gowns. This is an interesting fashion statement, indicating independence both from excessive Westernization and from the styles of the Communist era.

Posted on Jun 14, 2012 at 12:09 PM0 comments

Who are China's Americaphiles?

It is virtually impossible to get a reliable answer to a really important question about the US-China relationship: To what extent do the Chinese people admire and respect the US, and to what extent do they see themselves as our adversary, rising while we are declining? How many seek friendship, how many want superiority?

The most obvious reason it is so difficult to answer this question is that there are no opinion polls or independent research to consult. But a second reason is that, unless you speak good Chinese, the people with whom Americans associate in China are inevitably a biased sample of the population – people who speak good enough English to have a real conversation with Americans, and who are sympathetic enough to the US to wish to do so. Americans who are interested in China but don’t speak the language are frequently reminded of a “nationalist” current on the Chinese Internet that accuses the Chinese government of being too “soft” on America, and seeks more belligerent government responses to issues ranging from holdings of US dollar-denominated debt to efforts by the Philippines to claim South China Sea islands that China claims for itself.

I do not have an answer to the question of which group is larger. But I do want to assert a more limited claim: there are definitely real Americaphiles in China. It is hard to know what percentage they are of the population, but there are enough of them, and many of them are in elite enough positions, that in my view it would be politically difficult for the Chinese government to adopt a stance of thorough hostility to the US.

I thought about this as I was listening recently to a Chinese student telling me, “As long as we don’t have freedom in China, we will be poor no matter how much money we have.” That’s a very “American” thought, and this student associates the thought with American society and with the desire that China become more like the US. There are many Chinese students, professors, and professionals who fervently espouse ideas such as the “rule of law” and who agree that the Chinese economy will lack significant innovation without political, cultural, and Internet freedom.

Then add the cultural attractiveness. The other day at a local KFC outlet, I noticed a little boy, with his parents, who was wearing an Annapolis t-shirt emblazoned NAVY. Others wear t-shirts with American flags. Add to this the dreams of hoards of Chinese young people, and their parents, to study in the US – not to speak of houses and other property the Chinese elite are buying here.

Do these currents represent a significant or fairly small part of the Chinese reality? I really don’t know, and I don’t think anybody does. They do reflect an ongoing debate about globalization versus nativism that is important in China just as it is important in the US itself. Recently the English-language Beijing Review featured a debate about whether China should adopt its own Mother’s Day, perhaps to be celebrated on the birthday of the ancient Chinese philosopher Mencius, who had a particularly devoted mother. The article noted that many Chinese are now celebrating American Mother’s Day, along with Christmas and Thanksgiving (something I discovered a few years ago when I started getting Thanksgiving greetings from Chinese friends). Supporters of a China-unique Mother’s Day said China needed to guard its Chineseness, while opponents said it was important for China to be international.

In terms of US-China relations, I think the message is this: there is an articulate group of Americaphiles in China, not the least among the well-educated, and a Chinese government ignores their sentiments at its peril.

Posted on Jun 12, 2012 at 12:09 PM7 comments

How IBM supports academic research on the business of government

I was very happy to see in a recent post on by Matthew Weigelt that Dan Chenok will be succeeding the equally capable Jonathan Breul (who is retiring) as head of the IBM Center for the Business of Government. I am especially pleased because Dan was a student (and course assistant) of mine when he was studying for his Master of Public Policy degree at the Harvard Kennedy School in the late 1980’s, and because I had the pleasure of working with him when he was a civil servant working on IT policy at the Office of Management and Budget while I was administrator of the Office of Federal Procurement Policy in the mid-1990’s.

Dan served in government for, I believe, 12 years after the Kennedy School, and rose either to a GS-15 or Senior Executive Service position from an entry-level job, and I know from dealing with him that even a decade after leaving government, he remains extraordinarily devoted to good government and naturally takes a fed’s-eye perspective.

The transition at the IBM Center provides a good occasion to call attention to the excellent work of this organization in promoting academic research on public administration. The Center provides a significant number of grants each year, in the $25,000 or so range (which for an academic is a nice sum of money), to support research with a prescriptive bent on improving government performance.

Over the years, a significant number of both established and younger public administration scholars have received support for their research from the IBM Center. (My own research has not been supported by the Center, though I once wrote a think piece for them.) The research is published in working papers that IBM makes available. Generally, the quality of these papers is higher than would typically be the case for the in-house “research” reports consulting firms often produce, though they do not typically possess an academic rigor sufficient to allow them to be published in scholarly journals. Over the years, the IBM Center has produced extremely helpful and practical work on subjects such as collaboration across organizational boundaries, performance measurement, business process re-engineering, and reverse auctions.
I wish that other consulting firms that are big in the federal market would put some funds into efforts analogous to that of IBM, although IBM probably now controls the niche for the kind of work they support – i.e. work by academics that is scholarly but somewhat popularized. Accenture has had an Institute for Health and Public Sector Value, though it has a low profile and mostly sponsors in-house research.  It also for a number of years supported a “best article” prize in the academic International Public Management Journal. (Full disclosure: I am editor of this journal. I also do some consulting work for Accenture.)
We have a real need for more and better scholarship about public sector performance, and there are more and more good young public administration scholars.  But it’s hard for them to get funding.  Social science funding from the National Science Foundation goes overwhelmingly to established disciplines. Almost none of the major foundations support public administration research, with a number (such as Pew and Smith Richardson) having in recent years withdrawn earlier support for such research. The federal marketplace supports a number of large consulting and IT contractors, and in my view they should fill in the breach by finding a niche for research support on public sector performance improvement. Since IBM has its niche, I think another firm might want to specialize in a smaller number of larger grants to support empirical research (where data-gathering can often be expensive) of a standard of rigor sufficient for academic publication, but always having a practical aim and application. A firm might want to specialize in supporting a specific kind of research, such as on using IT in government or on performance measurement.
Any company willing to step up to this?

Posted on Jun 07, 2012 at 12:09 PM0 comments

Kelman gets schooled in China

I have been lucky enough to have an opportunity to visit a Chinese high school, the High School Affiliated With Renmin University (RDFZ). It is considered to be one of the best high schools in China, so not a typical one, but nonetheless my visit taught me a lot. I sat in on English and Chinese literature classes for 15-year-olds, spoke with some of the English and American faculty at the school, and ate lunch with some of the students.

One of the interesting things about the school is that it is actually divided into two programs. The larger regular program has a Chinese national curriculum, but there is also a smaller program (which is the one I visited) that is specifically designed to prepare students for applying to universities in the US and the UK. Indeed, these students do not take the Chinese national college entrance exam (their curriculum doesn’t fully prepare them for it), so they are not even able to attend a Chinese university after graduation. On the wall of the entrance to the section of the school for this program are listed the names of the previous year's graduating students and the American or British schools to which they were admitted. I noticed admissions to Boston College, Boston University, and Brandeis.
Fees for this program are high – about 100,000 RMB (over $15,000) a year – much higher than for the regular program, although the school is a public (government) school. Parents are told they should have a million RMB in the bank to send a child into the program, since the parents will need to pay American college tuition, with few scholarship prospects. I was told that when school is over, many parents pick children up in fancy cars. When I made a reference to people picking up kids with Audi 4s, I was told that parents who have an Audi 4 -- the car China provides for lower-ranking government officials -- don't earn  enough to afford the program – they would need enough income for an Audi 6 or an Audi 8.
The existence of this program shows the real attractiveness of Western education (and more broadly of the West) for many Chinese. One of the students with whom I ate lunch told me that she had spent a year attending fifth grade at a school in Buffalo, New York, and her parents accompanied her from China for the whole time to establish their residency and allow her to attend the school. 
Attending the classes was fascinating. The classroom was spartan, brightened up mainly by English-language sayings written in colored chalk on the back blackboard, such as “Never underestimate your power to change yourself” and “Four short words sum up what has lifted more successful individuals above the crowd:  never never give up.”

In the English-language class, I was very impressed by the English-language skills of these young students. The passages they were reading included quite complicated words and concepts. There was, however, a lot of emphasis on recitation and memorization. Students were asked to repeat long paragraphs from a reading, which they seem to have memorized, and repeated without much emotion. On the other hand, I liked that both teachers at various points during the class had smaller groups of students discuss a topic among themselves. This is a technique we're starting to use to encourage more students to take part in discussions. The girl who had spent a year in the fifth-grade class told me she felt American schools encouraged creativity more than Chinese ones.
The students are worked very hard. Class goes on to 4:30, followed by extra-curricular activities (which are especially important for these students because they are applying to US schools, which pay much more attention to these), and summer vacation is only from the second week in July to the end of August. I observed the same mixture of students looking engaged and not as I suspect I would see in a suburban US high school.

Posted on Jun 01, 2012 at 12:09 PM3 comments

China patterns: Universities, government and the Internet

I am back in China to attend an academic public management research conference and to give some lectures at two Chinese universities. (The Chinese academic year doesn't end until the end of June.)

The conference was interesting, and the quality of public administration research in China is definitely improving, though from a very low level. A real problem for Chinese public administration programs -- actually, this is probably an issue generally at Chinese universities -- is that the younger generation of scholars is much, much stronger than their elders, who often were appointed at a time when universities, much more than today, were politicized institutions that were arms of the state, and where scholars had little contact with researchers in the West.

In a Confucian society like China, where younger people are supposed to respect elders, this is an especially big problem. My impression is that the younger scholars attempt to deal with this situation partly by banding together with each other and partly by looking outwards towards the West. Chinese public administration research faces an additional problem, of course, which is that the institution they wish to study -- the Chinese government -- is secretive and generally not open to researchers. (A talented young Chinese public administration scholar I know with a PhD from an American university has spent years studying local government in the US, of all things, though he would bring incredible advantages to doing research about China, because he has not been able to get access to do research inside the Chinese government, although now he is finally trying.)

Americans who think that Harvard is an outpost of radicalism will be interested to learn that the Chinese government thinks the same about the best university in China, which the Chinese call "Beida" (short for Beijing Daxue or Beijing University, but often still rendered into English as Peking University, using the city's old English name). A student at Beida had once told me that there were Internet curbs on the Beida campus that went beyond the curbs existing generally in China -- so, for example, I have never had any problem in China accessing the New York Times website, but this student told me he couldn't access it on his computer on campus, though he could at home.

I was told this wasn't the case at other Chinese universities, the reason being that the Chinese authorities were much more worried about protests and unrest from Beida students than they were about protests from students at other universities -- Beida was, for example, the center of the 1989 Tiananmen protests. It shouldn't be surprising, perhaps, that just like universities in the US, those in China have different images associated with them. Tsinghua, often called the "MIT of China," is strong in engineering and produces a lot of senior party officials and government managers, in a country whose political leadership is as dominated by engineers as ours is by lawyers. And even today, Renmin (People's) University, one of the top-ranking universities in China, originally founded as a university for the Communist Party, still has close ties to the government, though the faculty I know there seem no different to me from those at other top universities, and I know a few students from there who are quite oppositional.

Posted on May 30, 2012 at 12:09 PM3 comments

Evidence-based budgeting: Everything old is new again

FCW recently ran an article about a new OMB memo regarding the use of program effectiveness evidence in connection with agency submissions for the FY14 budget. The article topped the list of FCW most-read articles for a while, showing there is interest in this topic.
“Evidence-based government” is not a new idea. The “planning-programming budgeting system” of the 1960’s and the “zero-based budgeting” idea in the 1970’s were both outgrowths of the idea that budget allocations should be based on evidence about program effectiveness. (These decades also saw a number of very expensive experiments testing the impact of a number of anti-poverty interventions, many of which came up dry, showing the programs didn’t help very much against poverty.) The idea of “performance-based budgeting,” promoted by the Bush administration, was similar. Pretty much any time an administration proposes cutting back or eliminating a program, the proposal is based on evidence the program doesn’t work.
The basic idea behind evidence-based government was expressed in a comment attributed to John Maynard Keynes, to the effect that “when the facts change, I change my opinion – what do you do, sir?” And the basic problem with evidence-based government is that there is a lot of evidence for a psychological mechanism whereby most people don’t behave the way Keynes said he behaved: When contrary facts come in, most people who don’t like them don’t change their opinion. Instead they challenge the facts.

That is certainly a way of life in Washington, augmented by the fact that each side often has its own studies coming to opposite conclusions. Many in Washington are cynical about evidence.
This cynicism goes too far. Academics who are trained in research methods are constantly vetting academic studies, and there frequently emerge something close to a consensus about what conclusions are well-supported (or not) by evidence. Just calling something a “study” doesn’t make it so, and, if people in Washington were willing to place some trust in conclusions about different studies drawn by the scholarly community, the status of evidence for and against different programs, where it exists, would be better-established than the cynical story has it. 
Probably the best we can hope for, in Washington’s political world, is for evidence to be an input, and the scholarly community that seeks to develop evidence be an accepted participant, in policy debates. And that, I actually think, is the case now.
Since the idea of evidence-based government is not new, there is in a sense less to the OMB memo than meets the eye. Actually, its contributions are two. First, the memo actually is less about the use of evidence in backing up budget requests than it is about agencies using more resources, even in tight budget times, to gather evidence about programs. The memo rightly points out that new methods have been developed since the costly studies of the 1970’s to gather evidence about programs at much lower cost – including the overlap between performance information agencies gather for performance improvement purposes and the world of evidence-based government.

Second, ever since the often-negative results produced by the program evaluations of the 1970’s, Democrats – who otherwise often denounce Republicans for opposition to science and to reason – have often been uneasy about the idea of evidence-based government, fearing it will lead to program cuts. So it is good to see a Democratic administration sign on to this idea.

Posted on May 25, 2012 at 12:09 PM1 comments

A frontline dispatch from Spain, a country in crisis

I have been in Barcelona for a few days at an academic conference, just as Spain is in the daily headlines with new crisis stories about possible bank runs, bailouts, and the collapse of the euro. I don’t want to say that the streets of the city show no evidence that the place is in the middle of a crisis, but you do have to look and ask to find the signs.

The banks are all open, with no lines or visible signs of panic. Despite a 25 percent unemployment rate, there are traffic jams at rush hour on the highways. There are some musicians asking for money in subway stations and on the trains themselves, but not noticeably more than in New York, and almost no beggars on the streets.

In Catalonia (of which Barcelona is the capital), the regional government has imposed a 5 percent wage cut for all civil servants, which includes professors at the (mostly public) universities, though this has not yet occurred at the national level or in many other regional governments. At a private business school where a friend teaches, the signs of crisis are more subtle: the faculty has been told to take economy class on the high-speed rail instead of first class, and the university has seen a dramatic improvement in the quality of people applying for junior-level positions as research assistants (that means lots of overqualified unemployed people are applying). Most people with jobs have received no pay increase for several years.

People I asked all said they had at least one, and sometimes several, friends who were unemployed, though with two-career couples, there was usually still one income. Somebody told me they were surprised recently to see a middle-aged person doing a pizza home delivery, rather than a teenager as would typically have been the case. Restaurant prices are noticeably lower than in sky-high London and Paris, with lots of meal combo specials at quite reasonable prices, and again apparently have stayed stable for several years; at the airport, I was surprised at the number of discounted items in the duty free stores (lots and lots of 20 percent off specials).

I guess one way of thinking about this is that standards of living have gotten high enough in rich countries that a fairly substantial belt-tightening can occur before the average person starts significantly suffering. It is still surprising that the level of unrest is, in spite of everything, so low with so many people unemployed.

Of course, the crisis could get much worse – say, if the Spanish government is shut off from debt markets or if the Euro collapses. What we see now might then be mild compared to that possible future.

In my free time, I have been looking a lot at the work of one of the most amazing architects ever, Antoni Gaudi. I am still amazed at how his mind conceived the concoction of strange shapes, wild colors, and asymmetries his architecture represents – there is nothing like this anywhere in the world. Here’s a link to some pictures of his work. Perhaps as amazing is that many of his buildings were private homes built for rich businessmen. My initial reaction was to wonder how these staid wealthy textile barons supported such unconventional architecture, but I got it when somebody said to me it was a way for the ultra-rich of Barcelona to show off.

Gaudi was very religious, and I spent an afternoon at his unfinished masterpiece the Sagrada Familia church, his take on Gothic. I knew the church was unfinished, and the derricks around it make clear that an attempt is underway almost a century later to complete it (using private contributions). But I was surprised at just how unfinished Sagrada Familia was at the time of Gaudi’s death in 1926. He had been working on it for 42 years; for the last 12 years of his life, it was the only project he was working on. Gaudi was a master of the change order -- I had assumed “unfinished” meant a few touches left to go, but in fact the building was about 10 percent complete when he died. They are estimating the church will be completed in 2035!

In short, a project management disaster…

In the square around the church there are a Burger King, KFC, Subway, and Starbucks.

Posted on May 21, 2012 at 12:09 PM1 comments

Is the government getting aggressive on vendor prices? (Round Two)

During the economic crisis of 2008-2009, I wrote a number of blogs and columns (and also discussed at speaking engagements) the need to urge the government to seek price reductions in existing contracts and to be more aggressive about seeking discounts when new contracts were awarded. In one column, that I must admit went over like a lead balloon, (one commenter asked what I had been drinking when I wrote it), I urged defense contractors to accept a temporary 1 percent reduction in prices for weapons in production and 10 percent for spare parts. In general, I think the government response to this suggestion was underwhelming.

Look, what I was proposing was exactly what was happening at the time in the commercial world, in deals between private buyers and sellers.  A good Washington friend had commented to me that bids for renovating his apartment declined noticeably after the economic crisis set in.  The media at the time was filled with stories about big companies seeking to re-open lease rental rates and other prices. I remember myself at the depths of the crisis going from counter to counter at an airport rental car center seeking discounts off best published rates – and ended up getting discounts negotiated on the spot. This is not “anti-vendor,” or anti-good relations between government and industry, it is part of how the world works. (When the economy is tight, do vendors hold back from being aggressive on price in the name of industry-government cooperation?)

At any rate, I see from a story in this week’s Federal Times, with the in-your-face title “Agencies Press Vendors to Cut Prices – Or Else,” that this issue has re-emerged, now in the context of the budget deficit and shrinking agency budgets. The article began with the brief anecdote:  The Equal Employment Opportunity Commission had been paying $800,000 last year for hundreds of BlackBerry smart phones. Then the commission’s IT budget was cut by almost 15 percent. The agency pressed Verizon for some concessions it needed to maintain the service, and the company agreed to bundle cell phone minutes, scrapped underutilized phones from the plan, and moved employees to voice and data plans that would accommodate their phone use.  The EEOC cut its costs by $240,000 for this fiscal year.

The article goes on to cite other examples, all driven by budget cutbacks where the agency simply doesn’t have the money any more to buy what it was buying at the same prices, of mid-contract renegotiations and greater aggressiveness on re-competes.

Of course this isn’t pleasant. In some situations, industry profit margins are already cut to the bone, so, like everything else, this shouldn’t be one size fits all. (My guess is that hourly labor rates for some labor categories may be a fairly ripe target for discounting, especially since the discounting off of General Services Administration schedule rates or Indefinite Delivery, Indefinite Quantity contracts can be temporary.) If agencies do this, they should also be giving significant past performance credit to vendors who are willing to understand the government’s situation and step up to the plate – this shouldn’t be punitive, and should provide an opportunity for vendors to show their support for their government customers.

The bottom line is that this is something contracting offices should be looking at aggressively.

Posted on May 16, 2012 at 12:09 PM2 comments

Help for contract requirements

If you talk with contracting people, there is probably no theme that comes up more often than the challenges of working with program people to develop statements of requirements (hopefully performance-based as much as possible) for what they buy. Many program people don't know how to do this, and often they resist doing so -- seeing it as a bunch of bureaucracy imposed on them by contracting weenies.

While not denying that contracting people are capable of imposing valueless bureaucratic requirements on program folks -- sometimes because they just want to, though often because they are required by law -- in this case I think program people should reconsider any instinctive hostility. If you can't put down on paper what you want out of a contract, it is much more likely that the contractor won't give you what you need to get your program to work well, or that you will get overcharged due to rework and wheel-spinning.

Yes, requirements typically change over time, and it is often difficult to know exactly what you want when you are starting buying something new, but it is really in the program's interest -- and not just a bureaucratic requirement -- for program folks to do their best.

There is some good news here. Internet-based tools now exist to walk program people through the development of requirements, taking the contracting jargon out of the process and not demanding that the program folks be walking FAR-ites.

One tool, called Automated Requirements Roadmap Tool (ARRT) and developed for the Defense Acquisition University, basically uses a TurboTax-type interview approach, which is a really good idea. Just as TurboTax doesn't require you understand the tax forms and just asks you a bunch of interview questions -- and then reformats the answers to correspond to the tax forms -- ARRT does the same thing. It asks the program person a number of questions, and then creates a requirements document. ARRT is designed to help develop requirements for buying services, which are often the hardest for program people to do. The program person still needs to know what they want -- no tool can solve that problem -- but the tool basically takes a lot of the bureaucracy out of the process. This tool is available free; all you need to do is register. Thanks to the Defense Acquisition University for making this available.

A second tool, part of the Tailored Acquisition Portal developed by the company ASI Government, is similar in that it allows the program person to sidestep bureaucracy and stay focused on the task at hand. It uses a somewhat different approach to development of the actual requirements, however, focusing more on recurring requirements (for services or products) and centered around the use of templates that fill in most of the features of a requirement. Hence this tool is adapted to specific customers and their specific recurring requirements.

A tool ASI has developed for the Army Medical Command allows, for example, quick development of a requirement to buy contracted nursing services -- most of the elements of the requirement are in the template, and the customer fills in such supporting data as how many nurses are needed, for what period of time, and where, along with details of the source selection criteria (such as whether price or past performance is more important.) ASI is a for-profit company, and they charge customers for their tool, including tailoring the tool to the specific recurring requirements the organization wishes to cover. (Full disclosure: I have no financial connection with ASI Government, but I have spoken at a number of ASI conferences over the years, and received modest speaking fees.)

These great tools, as noted, don't do all the work for the program people. Program people should still consult with a good contracting person in their organization who can help them think through how to express requirements in words (I always like starting with the question: "How will you know if this contract has succeeded after it's done?"). I also am pleased that a number of contracting organizations, and some program organizations, are using actual boundary-spanners expert in both the program (engineering, IT) and contracting worlds to help the two cultures communicate for the purposes of developing better requirements.

Posted on May 10, 2012 at 12:09 PM2 comments

Crafting better jobs for young contracting professionals


I recently participated in a panel at the annual conference ASI Government holds for their government subscribers, mostly contracting folks – and a “gov-only” crowd – on improving the acquisition workforce. (The overall theme of the conference was bridging communications gaps between contracting and program folks, and between government and vendors.) The conference was on a non-attribution basis, so I feel comfortable discussing only what I said myself, which I am sharing in this post.

I began by noting that, while the government has been hiring a lot of entry-level contracting professionals, I am very worried that unless we create interesting, challenging jobs for them, many will quickly leave.

Here’s the dilemma. When I have asked groups of young contracting professionals which kind of job situation they would prefer – one where they were so challenged that they often felt over their heads and not sure if they were doing the right thing or one where they were underchallenged with undemanding, too-simple work – 80% regularly say they’d prefer the first. Yet when older managers hear about young people wanting to be in over their heads, they worry the new hires will make mistakes and thereby create problems for the organization, so they segregate them into overly simple tasks.

I asked whether there were assignments managers could give the young hires that would be challenging while not upping the riskometer too high. I presented some (hopefully) practical suggestions:

  1. Put the new hires on teams dealing with complex procurements: They don’t need to make decisions on these complex procurements themselves, but give them a chance to be exposed to these kinds of challenging buys.
  2. Give the new hires special assignments involving office initiatives such as recommending areas for cost savings or improved procedures. They can provide a fresh eye to such projects and notice things those who’ve been around for a long time won’t. (There’s an old saying: “A fish will never discover water.”)
  3. Encourage them to become subject-matter experts in important areas the agency buys – especially IT (where they have a leg up already on the older folks). Procurement shops need more subject-matter experts anyway, and the young people have skills from college in doing the kind of research required to start becoming a subject-matter expert.
  4. If they are going to be doing simple buys, do something to make the job more interesting. Set up a contest on repetitive buys to see who can get the greatest price improvements over the last time the item was bought. Set a goal to buy 95 percent of items at a price below the lowest price available for the item on the Internet.

Do blog readers, particularly young readers, like these thoughts? Any others?

By the way, while I think agencies should be trying to reduce disenchantment and quick turnover, few of today’s young people have any intention of staying in the same organization their whole careers, the way their parents hoped. The government’s model is still too tied to the old idea of hiring at the entry level and keeping somebody for life.

The government hasn’t adapted to the fact that most young people don’t intend to stay at any job their entire career. The government should take advantage of this by looking to recruit young people who may have been in industry for a few years, and who have more experience and knowledge, for mid-level positions in the government, say at the GS12 or 13 level. The government has been so fixated on the old model of people starting as entry-level employees and staying an entire career that it has only been losing out on increased job mobility among young people, not also gaining from mobile people coming in from other organizations.

Posted on May 03, 2012 at 12:09 PM8 comments

Spare parts pricing -- still crazy after all these years

I recently had an interesting conversation with a GS-15 contracting officer participating in a Kennedy School executive education program. She is involved in buying spare parts for weapons systems for one of the military services, and she wanted to talk with me about ongoing issues her organization is having with getting decent prices for parts. It sheds light on what may be a real target of opportunity for cost savings from contracting in this tight budget environment – if Defense Department contracting leadership will pay attention.

Needless to say, this issue has been around more or less forever. It first came to public attention with the spare parts horror stories of the 1980s (the infamous, but mythical, $600 hammer). The specifics of these stories were generally either wildly exaggerated or even completely false, but it is true that there were problems with poor pricing for sole-source parts (parts where the contractor developed the part and owned the data rights, so competition was not possible). In those days, the government got data for production costs for those parts, but problems frequently arose anyway, whether because the contractor’s monopoly position allowed them to insist on high prices though profits were way outside the government’s guidelines or because there were so many thousands of parts that it was impossible for the government to pay attention to prices for all of them (or a mixture of both).

The efforts in the 90’s to encourage commercial firms to do business with the government by reducing demands for intrusive cost data for commercial items (including commercial spares) probably went overboard in eliminating cost data requirements for these sole-source buys from defense contractors, but this has swung back in recent years. The issue this contracting officer was raising was somewhat different. She was buying commercial spare parts that were also sold to non-government customers. However, industry has a different spare parts pricing model for government versus commercial sales. For government sales, the government pays the development costs for the underlying platform (for example, a military jet), while for commercial sales, the company pays development costs. On the commercial side, then, vendors follow a version of a “razor and blade” model, where they price spares high as a way to recoup their investment on development of the original equipment.

A problem then arises if a vendor says to the government “you need to pay my commercial prices.” Even if these are the genuine commercial prices, they have been developed in an environment that is not analogous to the government one – if the government pays both development costs and high spares costs, it is in effect paying twice.

The contracting officer who brought this issue up with me said she really wanted senior contracting leadership, either in her military service or in the Acquisition, Technology and Logistics, to pay attention to this issue on a Defense Department corporate basis. She felt she lacked bargaining power with the contractor working on her specific weapons system.

As I said, this issue has been around for really a long time. I am guessing it is not rocket science to make some noticeable progress here, though I’m sure it’s hard to solve this problem completely. And given the budget pressures on the Defense Department, this would appear to be a target of opportunity. This isn’t exactly my area, but a few thoughts:

1) I agree with this contracting officer that this issue needs to be managed to a greater extent than currently at a higher level. The Defense Department has started talking about managing the relationship with large IT contractors as a corporate issue as well as an individual contract issue, and this approach is probably even more appropriate here. The Department will have more leverage if these issues are handled corporately. I have long advocated the idea that the key spares buyers be included in the process of assigning a past performance score to weapons vendors. When the government is caught in a sole-source environment, a past performance evaluation of the quality of contractor attention to the government’s interest in pricing and delivering spares is one of the few levers the government has available. This will be more-effective if the evaluation is done at a higher level.

2) Another advantage of a more corporate approach is a smaller set of negotiations, though of course only big issues – such as overall discount levels for the large bulk of parts – are likely to be appropriate for central negotiations. What about a detailed study, perhaps centrally at the military service or ATL level, of a few high-volume commercial parts for each major vendor, using cost and pricing data for those few parts, to serve as a basis for negotiations on a uniform discount on a vendor’s total commercial spares inventory sold to a military department or to the government? The goal here would be to establish a standard discount off of commercial prices for a vendor’s government spares sales.

3) Let’s apply the 80-20 rule here. There are so many spare parts out there that we can be sure the government will at least occasionally overpay. Let’s not let the unattainable perfect solution to this issue be an excuse for doing nothing. We should look at some of the big volume buys and try to get better deals there.

Remember the DOD budget environment. This is the time to do something about this issue.


Posted on Apr 30, 2012 at 12:09 PM3 comments

Korea copes with multiculturalism

I am in Korea for a few days of lectures, and I arrived in the middle of a national discussion involving the first naturalized Korean citizen ever elected to the Korean National Assembly, in the national congressional elections a few weeks ago. Her name is Jasmine Lee, a Filipina who became a Korean citizen after marrying her Korean husband.

This is a big deal because Korea, like Japan, has for thousands of years been an ethnically homogeneous nation, with great importance traditionally given to ethnic purity and bloodlines. (This is an even more important part of the ideology of the ruling Communist party in North Korea, which portrays South Korea as having been betrayed to American foreigners.) Korea and Japan, unique among the world’s nations to my knowledge, pay a lot of attention to blood types, believing that blood type influences personality and also compatibility between men and women – many Koreans put their blood type in the “About me” section of their Facebook page. (I have been pleased to learn, I guess, that my blood type, O, is considered a very good one for a male.)

However, Koreans are now realizing that their reality is different from their ethnically homogeneous self-image. There are a million foreign workers in Korea (out of a population of 50 million), mostly coming from poorer Asian countries and working in menial tasks. However, these people may only stay for a limited time and cannot seek citizenship, so it’s easy for Koreans to think of them as not “really” being part of Korea. However, Korea also has one of the largest rates of intermarriage with foreigners of any country in the world. Male Korean villagers find it easier to find foreign brides than Korean ones – many rural Korean women are moving to cities, and even those who don’t are less interested in getting married because of the subservience that marriage often produces in the country. The children of these marriages – like the newly elected member of the National Assembly – are Korean citizens, and Korea can’t avoid recognizing they are part of Korean society.

South Korea has advanced since 1960 from one of the poorest countries in the world – with a per capita income below that in many African nations – to a country with four times the per capita income of China, and is predicted to reach the per capita income of Japan by 2030. Adapting to a globalized, multicultural world seems to be the next step for Korean development.

A few other Korea impressions:

1) The U.S. Embassy in Seoul occupies an enormous swath of land, behind barbed wire, right in the middle of the city, near the old emperor’s palace and the offices of the President of Korea. This is a legacy from the Korean War period, and, frankly, if I were a Korean, I would resent this foreign presence in the middle of my capital. I know of no U.S. embassy anywhere else in the world that is so centrally located. Our government is moving our military base in Seoul outside the city (creating Chinese anger because it’s going to be closer to China). My unsolicited advice is that the US should donate our Embassy’s land to the city government for a park and move our embassy to another part of the city.

2) On the facades of the apartment high rises everywhere in the city is a logo of the construction company that built them. I was told that, since each construction company has a reputation for building a certain price range of housing, this was a way to signal how fancy a building is.

3) Once a tea-drinking nation, Korea – at least Seoul – is enveloped in coffee. There are coffee shops everywhere; I don’t think I have ever seen a place with such a coffee shop density. In addition to the American chains The Coffee Bean and Starbucks (which is present but by no means dominant here), there are an enormous number of local chains, including a knockoff called The Coffee Bene (which I have a hard time resisting giving an Italian pronunciation).

4) Lady Gaga will be giving a concert in Seoul soon as part of an Asian tour, but the government has decreed, to some ridicule here, that it will be X rated – people under 18 will not be allowed to attend. A Christian student group, Student Alliance for Safeguarding Korean Culture, has announced they will protest at the Lady Gaga consert against her “abnormal, obscene” performances.


Posted on Apr 27, 2012 at 12:09 PM8 comments

Must civil servants be boring?

There may be nothing more useful to say at this point about the GSA conference scandal. Yes, the San Francisco regional leadership made some appalling, wasteful choices about conferences. And no, problems such as these are not why we have a budget deficit, though many would like to think otherwise.

There is, though, one feature of the media and public reaction to all this that deserves note for its implications about the recruitment into and management of federal agencies. Two of the most arresting and oft-shown videos growing out of the notorious Western Regions Conference showed a clown, in bright red and other clown-typical colors, appearing at the conference and a GSA employee performing in a rap video about being commissioner for a day.

On the one hand, an important part of the ghoulish attraction to these videos involves the belief that the taxpayer was paying for the clown and that the rapper would waste money on big-screen televisions if he were commissioner for a day. However, my guess is that another part of the attraction of these videos is simply the fact of a clown at this conference and the fact that an employee was rapping.

I have heard the suggestion that the clown was in fact a government employee and therefore didn’t cost the government money (except for the costume), and that the clown was being used at the conference to make some points about management in a humorous way. I do not know if these claims are true. But I am guessing that even if they were, many would still rail at having a clown appear at a government conference. I am guessing as well that many see something scandalous in civil servants doing rap videos, regardless of the content.

What I fear is that part of the message that will come out of the GSA scandal is that civil servants need to stick to being boring. No clowning, no rapping. At all.

Now, compare this with the variety of the over-the-top features available for employees at Google headquarters. These are generally presented in the media as more than just employee perks – they are presented as a reason it is so cool to work for Google, that they do all these creative things at their office, which in turn encourage employees to be whimsical, creative, and motivated to work hard.

Federal workplaces already have a reputation among young people for having a colorless, drab, conformist, and boring culture. I fear that a lesson learned from the GSA scandal – especially since it is typical for government organizations to over-interpret lessons from problems such as these – will be that government people should stick to dark suits and to listening to boring presentations. This is not exactly a way to make federal employment attractive for a new generation of young people, or to get the  creative young people who may be exactly the kind that many agencies need.

Posted on Apr 24, 2012 at 12:09 PM9 comments

Are contractors taking government to the cleaners?

When I returned home from traveling abroad a few days ago, a pile of annual reports of companies whose shares I own were waiting in a pile of mail. This is company annual report season. There was something in one report I read that caught my eye because of its association with longstanding debates about government contracting.

 The report was from a company called Oceaneering International, a provider of oil exploration equipment. (I actually bought 300 shares of this stock in 1981, over 30 years ago, when a stockbroker said I had no energy stocks in my portfolio and ought to have at least one. Over the 30 years, the value of my investment has gone from $3600 to $62,000 – I wish all my investments had done that well, but that’s another story.)

 It turns out that about 10 percent of Oceaneering’s business – called their Advanced Technologies segment – is with the U.S. government, selling engineering services to the Navy and some special-made equipment to NASA and the Defense Department. (I like the fact that they call this “advanced technologies,” as opposed to their other businesses, which are hardly low-tech. More importantly, I think it is good for government contracting to have successful private firms doing a modest portion of their business with the government, rather than leaving the government market for such services and products to government-unique defense contractors or other government contractors who have no experience competing in the hard commercial world.)

At the end of the report, there is data about the operating income as a percentage of sales for the company’s different businesses.  The bottom line?  Oceaneering’s oil and gas commercial business has an operating income of 22 percent of sales, while its government business’ operating income is 7 percent of sales.
If you look at the annual reports of publicly traded companies that have significant commercial and government business, and that report operating income on both groups of businesses – such as many of the IT consulting companies – you will almost always see a similar pattern.  Government business is less profitable in terms of operating income as a percent of sales than commercial business.
This fact, of course, gets little attention in debates about government contracting, which often suggest that contractors make huge profits ripping off the government. In fact, a mixture of often intense price competition and cost-based contracts with controls on markups over cost mean that the popular impression in the debate is inaccurate.
There is a more subtle way the government might get hurt, to be sure.  If on cost-based contracts there is insufficient attention to cost controls, the number of hours of contractor effort may be higher than really needed, and that will raise overall contractor profits, even though the return on each hour of work may be modest. This is a reason for favoring, when possible, fixed-price contracts or incentive-fee contracts with a cost savings line, or share-in-savings contracting; cost-based service contracting in the commercial world has some of the same problems. But, even if this is a problem, it is not the problem that the popular myths about contractors taking the government to the cleaners suggest.

Posted on Apr 19, 2012 at 9:03 AM5 comments

Eurozone crisis, luxury consumption

Shortly before resigning in disgrace as the Italian prime minister, Silvio Berlusconi famously made a remark that there didn’t seem to be any crisis in Italy, because the restaurants were filled. This does not seem fully to apply to Spain, with its 23 percent unemployment, or even to France, which I am also visiting and which is in better shape than Spain. One of the restaurants I had hoped to eat at while in Barcelona, recommended by the 2009 edition of my Fodor’s guidebook, had closed. A tapas place in Madrid, about which the same guide had said come early or you won’t be able to get a seat for lunch, was largely empty even at 1:30, by which time even the Spanish have begun to sit down for lunch. At 6:30 a Saturday morning, a taxi driver was waiting outside my hotel on the outskirts of Barcelona, patiently hoping for a fare. Nonetheless, luxury consumption is not dead, even in a crisis-hit Eurozone.

Nestle, the Swiss food giant, has in recent years developed a new coffee offering to supplement its longtime megabrand Nescafe, now going downscale and tired except in some developing countries. Called Nespresso, it is a single-serve upscale coffee pouch coming in endless flavors – some of which actually have vintages (!) indicating what year’s coffee crop they come from -- and brewed in striking modernistic for-the-home coffee machines, sold in special stores dev