Five Lessons I've Learned From Government Agencies
Transforming Banks for a Digital Future: The Winners, The Losers, and the Strategies to Beat the Odds
Government agencies underperform for a handful of key reasons, including poor incentives, faulty hiring practices and shortsighted approaches to solving problems.
By Eric Thomas
As a career consultant, I've had the opportunity to look under the hood and see the inner workings of many different types of organizations—from the largest publicly traded corporations to the one-person startup. Recently, I have been diagnosing and solving problems for project managers, CFOs and, most often, CIOs at U.S. government agencies. Of course, every organization, every agency, and every problem is slightly different with its own nuances, but most of the challenges fall into these five areas:
Poor incentives produce poor results. Seemingly every administration wants to save money and reduce waste by eliminating duplicative services, reducing overhead, streamlining operations and so on. But as the administration and Congress look to enact these cost-saving measures, nothing is being done to undo the incentives that have contributed to the fiscal waste in the first place. Why? Surprisingly, federal agencies are not rewarded for saving money. In fact, many agencies lose funding in subsequent years if they don't spend their entire appropriation in the current year. As a result, agencies embark on potentially wasteful spending sprees at the end of the fiscal year, which are commonly known as "use it or lose it" time. Last year a Washington Post article reported that nearly 10 percent of all federal spending occurs in the last week of September.
When you're big, it's difficult to be nimble. When a startup has a bad idea, the lessons learned are documented, but the idea is scrapped. When a consulting company identifies a poor performer, he or she is "counseled out." In the federal government, however, necessary personnel changes can be hampered by bureaucracy and office politics. The poorly performing employee may have passed his or her probationary period and can then be nearly impossible to dismiss. And the under-performing employee's latest bad idea may become the pet project of a key influencer—and therefore untouchable.
Transparency comes with a price tag. Usaspending.gov and itdashboard.gov are great Websites that provide insight into federal procurement practices and IT projects, respectively. However, the data used to compile these sites requires an additional reporting burden for federal agencies. Without the staff to handle these additional compliance responsibilities, agencies often turn to contractors, who serve as expensive staff augmenters. These efforts would be justified if the added transparency led to improved management, but so far the results have been mixed.
Change is often a challenge. Each new administration brings a new approach to governing, with approximately 300 political appointees to help instill it. There are nearly 3 million federal employees, however, and communicating and managing the change through all levels of government can be difficult. This is not to say the federal workforce is unwilling or unable to change. The issue is that invariably the new mandates and directives are not customized for the issues specific to each agency, let alone to each department. Also, it can be difficult for workers to be completely vested in the new approach when, after a prolonged analysis and implementation phase, a new administration or political appointee might want to do something entirely different.
First, fix the process. Every organization has opportunities for improvement, but more technology and or more resources are rarely the solution. Whether in the private sector or the public sector, decision-makers often make the mistake of not first diagnosing the root causes of a problem. Too many times I have seen agencies pursue financial management systems without first understanding how to fix the budget management and acquisition process. Or they invest in a portfolio management solution without knowing how they want to prioritize investments. Without this key information, more people, more money or the fancy new IT system will not necessarily solve the problem.
About the Author
Eric Thomas is the founder and the managing partner at Vergys LLC, which provides strategic management consulting services to federal, public and private sector organizations. He has trained and consulted on the business of IT for nearly 14 years on topics including portfolio management, capital planning, project management and strategic planning.
To read his previous CIO Insight article, "Project Management Lessons From HealthCare.Gov," click here.
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