PMA yields turnaround at mismanaged agencies

Labor, once at the back of the pack, becomes the first agency to go all-green

Hate it or love it, the President’s Management Agenda is changing the way the government works.

Don’t think so? Check out the Labor Department or the Energy or State departments. They, according to long-time federal experts, were among the most mismanaged agencies in all of government four years ago. Now, they are among the shining stars of the Bush administration’s five-point improvement plan.

Labor became an example of success in the mid-year PMA scorecard, which the Office of Management and Budget released earlier this month. It’s the first agency to earn green scores in all five PMA areas—budget and performance integration, competitive sourcing, e-government, financial performance and human capital. This is the third full year in which the administration has issued evaluations.

“A lot of this agenda was cleaning up the chronic management programs that have been on the high-risk list for years,” said Jonathan Breul, former senior adviser to OMB’s deputy director for management and currently a senior fellow at IBM’s Center for the Business of Government. “Before the PMA, Labor, State, Energy and even Interior were not known for their good management or program performance.”

But through the PMA, these and other agencies have focused on long-neglected management issues. Along with Labor’s success, State and Energy earned four greens and one yellow, and Interior has one green, three yellows and one red.

“We’ve seen the improvements in our every-day processes,” said Bruce Carnes, Energy associate deputy secretary. “I’ve been here for five years, and the day-to-day change has been incremental. But if you step back and look at where we were and where we are now, I get a better sense of what we have achieved.”

Tough questions

The PMA—even with the grade-school simplicity of its red, yellow and green scoring system, and the controversy over pushing agencies to compete federal jobs with the private sector under OMB Circular A-76—has forced agencies to answer tough questions.

“The PMA brought together a larger effort at getting better value to the taxpayer,” Breul said. “The PMA is having an impact in a cultural way. It is not diverting attention from the agency’s mission, but they understand they need to do their mission in a more businesslike manner.”

Each quarter, the administration scores agencies on their efforts to meet the goals of the five agenda items.

Green means an agency has met all the standards for success, yellow means it has met some but not all, and red indicates serious problems. OMB grades each agency on its overall status and on its progress toward implementing the agenda items.

“The Department of Labor is the leader, the best, per the PMA scorecard,” said OMB deputy director for management Clay Johnson III. “They are the first and only department ... to have installed all the management disciplines and habits which the president established as priorities back in 2001.”

Overall, scorecard progress continues to be mixed, with most agencies still earning a yellow in most categories and the number of green scores dropping to 33 from 41 over the last three months.

“Yellow and green agencies are dramatically different than they were four years ago,” Johnson said. “We have taken the average agency to a different level of operation.”

In the e-government category, for instance, two agencies—the Office of Personnel Management and the Social Security Administration—dropped from green to yellow. On the other hand, two other agencies—the Housing and Urban Development Department and OMB—moved up to yellow from red.

Overall in e-government, agencies earned seven green, 13 yellow and six red scores.

Agencies earned the most green scores, 11, in the human capital category and are struggling the most with improving their financial performance, receiving 17 red marks.

Labor earned its final green score in competitive sourcing by holding 12 A-76 competitions.

“We tried to sequence things so we were running a competition well before or after [an OMB] Performance and Assessment Ratings Tool evaluation or technology refreshment,” said Patrick Pizzella, Labor assistant secretary for management and CIO. “We got to green on human capital first and the rest just fell into place. Human capital impacts every other agenda item, and you can connect the dots.”

Johnson said Labor secretary Elaine Chao made it a priority to get to green in all five categories and had tremendous follow-through with her deputy and assistant secretaries.

Pizzella said Chao held monthly meetings on nothing but management issues. In four years, she missed only one meeting—on Sept. 11, 2001.

Continuity counts

Pizzella said the consistency and experience of the management staff played a big role. Pizzella and chief financial officer Sam Mok have been there since 2001 as have Chao and other senior managers, and the department has had only two deputy secretaries.

Energy’s Carnes said his department also developed a monthly management council meeting that focused on PMA issues. And maybe more important, he said Energy found success because career employees were put in charge of executing the initiatives.

Breul said the next step for Labor and others that are close to getting all green scores—such as Energy and State—is to set performance goals that are based not on previous years’ accomplishments but on what is theoretically possible.

“This is not gradual improvement but achieving whole new levels of performance,” he said. “It requires a new set of tools and mind set that you can only have once you disassociate yourself from today’s processes and focus on what you really want to look like as an organization.”

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