Tag Archives: Trump

Hiring Freeze, Hiring Thaw, Hiring Freeze? What OMB’s April 12 Memo Really Says

Last week, OMB Director Mick Mulvaney published a new memo (OMB M-17-22) to agency heads titled “Comprehensive Plan for Reforming the Federal Government and Reducing the Federal Civilian Workforce.” When people read the memo, the lede was something along the lines of “Trump lifts hiring freeze.” Later, folks started noticing other parts of the memo, including its focus on dealing with poor performers. There is actually a lot of news in the memo’s 14 pages, so let’s break it down and see what it really says.

“Begin taking immediate actions to achieve near-term workforce reductions and cost savings, including planning for funding levels in the President’s Fiscal Year (FY) 2018 Budget Blueprint”

The key word here is “begin.” Later in the memo (page 10) it says “To support the goals of the FY 2018 President’s Budget Proposal, OMB directs agencies to identify workforce reductions over a four-year period (FY 2018 through 2022) consistent with discretionary outyear levels included in the FY 2018 Budget this spring and forthcoming OMB guidance on FY2019 Budget submissions. Agencies should begin planning for these reductions now, as achieving associated personnel reductions takes time to implement and realize savings.”  Even though the president’s “skinny budget” proposed large reductions in employees in Fiscal 2018, the new memo appears to recognize that it is too late to do widespread reductions in force this year or next. An agency running a RIF would need to get people off the payroll very early in the fiscal year to have any chance of realizing savings from the RIF. The longer they wait, the less likely they are to save anything. In fact, running a RIF later than the first quarter of the fiscal year would likely cost an agency more than it would save by getting the employees off the payroll. That is due to the costs of severance pay, buyouts and lump-sum annual leave payments. Spreading the reductions over several fiscal years is more prudent and could be accomplished with far less disruption.

“To facilitate any necessary reductions, OPM will provide streamlined templates to agencies for requesting approval to offer Voluntary Early Retirement Authority and Voluntary Separation Incentive Payments (VERA/VSIP) and OPM will provide expedited reviews for most requests within 30 days. However, eliminating unnecessary vacant positions can begin immediately” (emphasis added). There are two key points here. First, there is clearly an intent to use early retirement and buyouts to mitigate the effects of reductions. That is good news. Second, the administration expects agencies to start reducing now. That means an agency that is projected to have large reductions is going to be expected to show results in this fiscal year. For those agencies, the hiring thaw is going to revert right back to a hiring freeze of some sort. We have a already seen that in State and other agencies. I know some folks believe the agencies should wait until the budget is passed before they start making cuts. However, if they keep hiring until they have a firm budget, they are likely to find themselves in a deeper hole.

“Develop a long-term workforce reduction plan.” Again we see the emphasis on “long term.” The memo requires agencies to determine what the right numbers and grades of employees should be, rather than simply looking at previous budgets. It directs agencies to revise their organizations, delayer them, and pay particular attention to “deputy positions, lower level chief of staff positions, special projects, and management analysts that may duplicate the work performed in such areas as procurement, human resources, and senior management.”  This section was written by someone who has worked in the federal government. That last section was a direct swipe at the “shadow” staff in many agencies that act as go-betweens between managers and service providers. The Trump administration is not the first to try to solve the “shadow office” problems. My guess is they will not be the last. Playing whack-a-mole with shadow staffs is bureaucratic game that is rarely satisfying to any of the participants.

Shared services also get a mention in the memo. As I have written before, there is a good case to be made that the government buys the same services far too many times. Agencies are encouraged to look at “alternative service delivery models” and to “streamline mission support functions.” There is nothing new in that recommendation, but the memo does encourage use of outsourcing, insourcing and other options that would provide “greater efficiency while maintaining or improving quality.” The nod to insourcing is a bit of a surprise, but given that some of the better shared services organizations are in government agencies, it is a good idea. The overall move to more shared services is sound, and is a good example of using a business-like approach that can work effectively. The memo also encourages use of “Best in Class” contract vehicles. It avoids the false binary choice between insourcing and outsourcing and recognizes that there are many ways to deliver shared services effectively. Those who argue such work should always be done in-house may be unhappy, as might a handful of large companies that advocate for outsourcing everything to them. All told, this section of the memo is a common sense approach that should not draw too much criticism.

“Streamline policy creation by eliminating the common tendency to recraft/restate policy for a component or regional office.” Another provision written by someone with experience in government, this one is addressing the all too common tendency of people at every level of an agency to create “policy” documents that are not policy are rarely necessary. It is a good way to eliminate unnecessary work.

Plan to maximize employee performance. This section focuses on steps agencies can take to increase performance, with the emphasis very heavily on dealing with poor performers. Among other things, it requires agencies to update their policies on dealing with poor performance and conduct, limiting the use of administrative leave, providing transparency in the performance improvement plan (PIP) process, training managers and supervisors, building accountability in manager performance plans, and establishing “real-time manager support mechanisms.” All of those are reasonable proposals, but that last part is the most significant. One of the biggest problems with dealing with poor performance and misconduct is that managers often get no support when they try to do it. Senior political appointees often want no controversy, so they want problems to just go away. Lawyers often want to settle every case. Every step of the way, there is another hurdle. It is no wonder that dealing with poor performers is a perennial issue in the Federal Employee Viewpoint Survey. These support mechanisms have a good chance of making a difference and are an excellent idea.

While dealing with poor performers is a great idea and would probably win praise from a wide range of people, what was missing from the memo is dealing with good performers. The percentage of federal employees who should be fired because of their conduct or performance is most likely small. Even if we take a huge percentage – say 10% – that are problem employees, then deal with them effectively, we are left with the remaining 90%. Those are the folks who get the government’s work done. How they are doing, and how they are treated, is more likely to have a significant impact on government performance. Even if you take into account the demotivating effect of poor performers, the fact is that the good employees do the work. They need good training. They need recognition when they do a great job. They need to be treated as the valuable contributors that they are. Good employers in the private sector recognize that an act accordingly. Let’s hope there is more to come on this issue.

 

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President Trump’s Office of American Innovation – A Big Deal or Not?

I asked my ICF colleague Michael (Whit) Whitaker to co-author this post with me. I spent 33 years in government, living through the initiatives of 6 presidents and Whit is an expert in innovation.

On March 27, President Trump announced a new Office of American Innovation and appointed Jared Kushner to lead it. Critics have focused on the “make government operate like a business” aspects of the new office, and point out previous presidential initiatives that failed to dramatically transform government operations.

It’s true that every president since Reagan has tried to do something similar. It is also true that they had mixed results. President Reagan’s Private Sector Survey on Cost Control in the Federal Government, commonly referred to as the Grace Commission, made 2,478 recommendations that it claimed would save $424 billion when fully implemented over three years. The Congressional Budget Office and Government Accounting Office (its name at the time) concluded the savings were overstated and few of the recommendations were adopted.

President Clinton had better luck with the National Performance Review (later renamed the National Partnership for Reinventing Government). The NPR made hundreds of recommendations that were implemented and there were real savings. On the other hand, the government is still feeling the effects of the large reductions in HR and Procurement specialists that resulted from the NPR.

President George W. Bush also saw some successes with his President’s Management Agenda and particularly with the Program Assessment Review Tool (PART) that was intended to measure the effectiveness of federal programs. President Obama also had some success with the creation of a Chief Performance Officer and initiatives such as “Cloud First” for information technology.

Even though prior efforts have not be completely successful in transforming government operations, it is clear that both republican and democratic presidents have seen a need to make government more efficient and effective. They have tried slightly different approaches, but the “make government operate like a business” theme is usually part of it.

The government is not a business and it is not going to operate like US Gov, Inc. The fundamentals of running a business are not the same as running a government. Businesses exist to return value to their owners. They choose the markets where they want to compete. Good businesses want to serve their customers to grow and build the value of the company. They make decisions based upon what furthers their interests. There is nothing wrong with that. Good businesses are the engine of our economy and a little enlightened self-interest is an important part of that.

Government, unlike businesses, has to serve everyone. It has a public trust because it belongs to the people and it also has substantial coercive power to get what it wants. We can go to jail if we don’t pay our taxes or violate some other criminal statutes. We cannot have a government that decides it will not serve the part of the population that isn’t profitable or that doesn’t pay for services. We do not want a government that sees growing itself as part of its mission. Growth drives businesses to learn, innovate and become more efficient – to find new lines of business, new products, untapped markets, and new goods and services and ways to deliver them. It is a powerful force that drives the best (and sometimes the worst) of businesses.

What can and should happen is that government can learn from business. Government will not have the same drivers, but it certainly can learn, innovate, and become more efficient. In fact, innovation is essential if we want to make the government work better.  Identifying specific government problems where innovative solutions are needed is only one part of the equation that may have limited long term impact.  The most successful businesses avoid the temptation to focus only on big bang, high profile innovation success stories and instead commit substantial effort and sustained resources to building their organizations’ underlying capacity to innovate over the long term.  Government can take lessons from the most innovative businesses by focusing on innovation capacity building and agile culture change in two primary areas:

  • Making innovation more relevant to the day-to-day jobs of more employees
  • Building targeted innovation skills at depth across the organization

Let’s briefly explore some strategies in these areas along with examples of how parts of government are already applying these lessons.

Making Innovation More Relevant to More Employees

One challenge for government as it seeks to innovate is that many of its programs involve the delivery of services and not the invention of new products or capabilities.  Employees may fail to see how they can innovate without inventing new things. However, innovation frameworks like the three box solution that have been successfully applied at businesses like General Electric, Hasbro, Caterpillar, and Pepsi can be equally helpful in making innovation more relevant and tangible within services organizations.  Government can benefit from adopting such an innovation framework that enables broader understanding and engagement by senior, mid, and junior level employees across the organization:

  • Box 1 calls for optimizing the present – doing what you do now incrementally better. Box 1 innovations are the most likely to be accessible to junior and mid-level employees. In business, this may be a call for driving more profit from existing business lines while in government, the key performance indicators may be more directly tied to the delivery of citizen services given a defined budget. Government employees can start to feel more connected to innovation if they believe that the organization values continuous improvement as a type of innovation.  To build capacity and consistency at depth in the organization, innovation opportunity assessments should be built into existing processes that are core to operations such as program management reviews.
  • Box 2 requires selectively forgetting the past – identifying and breaking the artificial chains restricting more efficient operations while protecting the root processes that are required to fulfill the organization’s mission. The most innovative businesses excel at questioning whether the structures, incentives, and processes they have in place add value or create inefficiencies. Whether in private or public sector organizations, Box 2 is a fruitful place to conduct the difficult conversations between pioneers and guardians that must be navigated to unlock innovation.
  • Box 3 is the flashier side of innovation –envisioning and creating a future that leverages emerging technologies and fundamentally new approaches to delivering value. When employees hear “innovation”, many will jump to Box 3 as it most closely approaches invention and is being pursued widely across the public and private sector with research and development organizations, innovation labs, and open innovation challenges.  The most innovative businesses extend Box 3 thinking beyond dedicated innovation initiatives by challenging employees at multiple levels to sense and respond to emerging opportunities and to think beyond the daily fire drills of execution to envision a future with non-linear leaps in value delivery.

Building Targeted Innovation Skills at Depth

Innovation always sounds great in concept but is far more difficult to execute in practice.  Most employees in the public and private sector are trained and incentivized for execution, not innovation.  Successful businesses realize that execution is paramount – if you don’t take care of the health of the core business, innovation isn’t possible.  Not every employee in a business can or should be trained in a full suite of innovation skills.  However, the most innovative organizations identify key internal barriers to innovation and train employees with very specific innovation skills to extend their existing capabilities and overcome the challenges most relevant to their day-to-day jobs.  For example, businesses may train project managers who are primarily responsible for execution, delivery, and financial management to have conversations with clients that uncover opportunities for innovation that extend beyond the current engagement.  However, they may not be asked to then take that creative idea and to drive a process that ultimately delivers a finished solution.  Instead, they may be trained to tap into human-centered design experts in the organization to further develop the opportunity while they return to their core responsibility of execution.  By giving the employee a tangible and realistic pathway to contribute to innovation without requiring full training in a new skillset, the organization efficiently extends opportunity identification and innovation engagement to more employees without having to turn everyone into “innovators”.  There are many lessons from innovative businesses on how to do this well, but there are also an increasing number of successful adaptations from local, state and federal government programs that can be replicated or expanded. For example:

  • The Department of Veterans’ Affairs has a Center for Innovation with core staff fully trained in the process of innovation from concept creation to solution delivery. To build organizational capacity, they run boot camps that help creative employees understand how to get their innovative ideas developed and deployed broadly.  The boot camps help to build a deeper network of employees who can extend their existing management skills to help identify, promote, and progress promising innovations that can succeed in a complex and challenging environment.
  • Procurement and contracting are often cited as organizational barriers to innovation. The Office of Management and Budget (OMB) attempted to address this barrier by running a challenge to train acquisition specialists in how to take more innovative approaches to procuring digital services.  The Dynamic Learning Platform that was developed used a highly adaptive approach to extend the knowledge and skills of the acquisition professionals to overcome specific barriers to procuring more innovative digital services.  The OMB program identified a specific barrier to innovation and focused on the cohort of employees who could best overcome the challenge.  It then delivered targeted and agile learning content to build the incremental innovation skills those employees required to enable greater innovation.  By extension, when those acquisition specialists returned to their organizations, they were empowered with the knowledge and skills to further build and sustain innovation capacity.

If it follows the path of trying to make government operate like a business, this effort is likely to be an exercise in frustration and futility. However, if the Office of American Innovation focuses on just that – innovation – and enabling the hard and sustained work it takes to build targeted innovation capacity at depth across organizations, it may make a difference and that could be a very big deal.

 

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