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Office of Public and Intergovernmental Affairs

Remarks by Former Deputy Secretary W. Scott Gould

Institute for the Study of Public Policy Implementation
Washington, DC
June 25, 2009

Thank you, Bob, for that kind introduction.


Thank you, ladies and gentlemen.


I’m delighted to be here today and share this venue with both Bob Tobias and Kevin Mahoney.  Both are staunchly committed to public service—to President Kennedy’s timeless challenge of almost 50 years ago—‘Ask not what your country can do for you; ask what you can do for your country’—and to President Obama’s promise to redefine that call to service for our own time.  A time of new priorities and new capabilities, new challenges and new opportunities.


From a personal standpoint, there were many factors that influenced my own decision to join the President’s leadership team, but when Secretary Shinseki asked me to help him transform the Department of Veterans Affairs, I saw an opportunity to make a difference, to be a catalyst for change and progress.  And to make my own contribution to public service.  In no small part, my decision was influenced by my personal understanding of VA; my dad spent the last years of his life being cared for in a VA facility.  


Like his predecessor in the 1960s, President Obama wants to engage a new generation of Americans to consider committing themselves to either government service, military service, or community service.  His management agenda is clear—to build a ‘high-performing government’—results-oriented and forward-looking.  


Good government is a reflection of the almost two million people who make it that way, and their dedication and leadership have been essential to fulfilling the contract between government and the governed for 233 years.  Because of that fact, human capital, in my view, ranks as government’s most important resource.  And we need to treat that National resource as we would any other—as a vital strategic asset worthy of our ongoing investment.


In my remarks this morning I will make three main points: 


That there is a link between investment in human capital and improvement in government performance.  That the new Administration is serious about improving performance and, consequently, is committed to improving strategic human capital as a means to improve the quality of execution.  And that the combination of increased pressure on performance and an understanding of the central role of strategic human capital in achieving results will require Chief Human Capital Officers (CHCOs) to think, plan, and act differently than they have in the past.

The link between investment in people and organizational performance, in my view, is well documented.  Facts support investment in people.  A study of private sector firms in several industries, performed in the 1990s by my colleague, Linda Bilmes, found about a 24% premium in total shareholder value for firms that invested in its people.  Standing in the way of investment in people in government is an old, legacy problem—an outdated, process-driven, user-‘unfriendly’ personnel system.  A 20th century system ill-suited to the demands of the 21st century.  


It’s not the model we want in place if we are to attract the ‘best and the brightest’ to government service.  And in fact, surveys of college juniors and seniors report that today only one-third of respondents would even consider government employment. 


Why?  We all know the answers:

  • A top-down bureaucracy that discourages autonomy.
  • Lack of transparency in locating and applying for positions.
  • Lengthy hiring times.  The average hiring time in government is 82 days—twice as slow as the slowest companies in the private sector.
  • Rigid, inflexible rules that inhibit initiative.
  • Fixed job categories and responsibilities.
  • Little investment in training and development.
  • Compensation system that, for the most part, is tied to time-in-service, not quality of performance, initiative or ideas.
  • Close supervision; layer upon layer of stove-piped management.
  • Management practices that don’t reflect ‘best practices’ or emerging trends in private industry or NGOs.  And the list goes on.

Because of these, and other, long-standing systemic problems, workforce transformation is a high-priority on the President’s ‘To Do’ list, one that calls for major changes across a range of areas—from recruitment, through retention, to retirement. 


The goal is to develop a framework that synchronizes current human resources theory with accepted, successful management practices; that executes progressive policies from both the public and private sectors; and that incorporates the ‘people factor’ in the way we manage.  I’m talking about a people-focused culture where employees are valued; and where there’s a commitment to performance and initiative. 


Our counterparts in industry have been thinking about the people factor for a long time.  And so have managers in government.  They know there’s a direct link between an organization’s investment in its employees and that organization’s performance.  How you treat your people correlates to how well your customers are served … and that directly impacts the bottom line. 


Government may not be concerned about quarterly P/L statements or dividends, but it also has a ‘bottom line.’  Instead of shareholders, our customers are American taxpayers.  And instead of high profits, our ‘corporate’ goal is to enhance the value of government’s contribution to the security and welfare of all Americans.

To help meet that goal, the President has brought Jeffrey Zients onto his team as Chief Performance Officer. 


In addition to streamlining government operations and improving value to taxpayers, Mr. Zients’ mandate is to lead the creation of a new performance management system.  It is no small task.  The Executive Order for Performance Improvement is in place, and an OMB team is on-the-job collecting information, conducting diagnostics, and developing an initial plan as a springboard to an overarching performance management model. 


Whatever approach is ultimately hammered out to define what agencies must do to achieve superior results, much of Jeffrey Zients’ work will involve people. 


He will be looking for buy-in among many stakeholders that range from the Congress, to unions, to the taxpayer and to an array of agencies whose scope and scale can rival the world’s largest corporations.  For example, if my department, VA, were a Fortune 500 company, it would rank at about #12 with over $112 billion in annual taxpayer-provided revenues. 


Transformations, of any size or scope, are challenging, and they require all the initiative, critical-thinking skills, and decision-making abilities that are a manager’s stock-in-trade.  The nation’s new CPO will be looking to agency leaders whose understanding of their mission, customers, and workforce gives them a grass-roots ability to lay the bedrock for implementing change and leveraging progress. 


My colleague, Director John Berry at OPM, is focused on making changes to the strategic human capital system.  John has already issued a new series of requirements to improve the way we hire talent in government.  A broad set of reforms are expected shortly. 


Finally, Pete Orszag issued several personnel-related requirements as an integral part of the FY 2011 budget process.


Our new Administration is serious about performance and human capital.  The implications for CHCOs are significant.  The Administration will be asking CHCOs and HR managers to do new things to participate in C-suite decision-making responsibility for execution.  


To better support agency goals, HR principals will need to collaborate and sometimes lead in transformation initiatives.  They will be charged with translating strategy into operations, and policy into measurable results.  Within their departments, CHCOs will be catalysts to build the processes and environment conducive to high performance.  


They will be answering agency-specific questions in response to Federal-wide plans and blueprints: 

How should the agency staff to meet its mission?  What is the strategy?


What skills are required—in what amount and at which locations—to meet operating requirements?


What is the optimal structure that would best fit the requirements of transformation?  


What is required to implement a performance improvement plan?


What data-gathering and transformation capabilities need to be created?  


CHCOs will have to assume a strategic role among agency top leadership.  This means new knowledge, skills, and abilities and a very high level of functioning.  CHCOs will need to take on a more meaningful role in all aspects of people issues.  Simply put, CHCOs will have to possess new job skills to be able to thrive in this new environment.  As an agency COO, here is my top list of skills and competencies:


In leadership—Setting their agency’s transformation vision and values;

delivering communications consistently and continuously to support the transformation message; and engaging the workforce and creating a focus for action to improve performance and achieve goals.


In strategic planning—Developing processes to include identifying key process

steps and participants; executing transformation through clear action plans; and setting performance projections with benchmarks, goals, past performance.


In customer focus—Analyzing and using customer data to build a more customer-focused employee culture and identifying organizational opportunities for innovation.


In measurements, analysis, and knowledge management—First, in performance measurement:  selecting, collecting, aligning, integrating data/information to track daily operations and overall organizational performance, including progress toward objectives.


Next, in performance analysis and review:  using available tools to review all organizational performance and capabilities data.


Also performance improvement:  translating performance review findings into priorities for improvement and opportunities for innovation.

In data, information, and knowledge management:  Ensuring its accuracy, integrity, reliability, timeliness, security, confidentiality and accessibility to workforce, partners, collaborators; and managing information resources and technology that support access to data and information.


In workforce focus—Building an environment conducive to high performance; engaging the workforce through enrichment and leader development; and creating a workforce environment that supports employee capability and a positive workforce climate.


In process management:  Designing work systems and key work processes that capitalize on core competencies, meet key requirements, and incorporate technology, organizational knowledge, and the potential need for organizational agility; managing work processes and obtaining input from workforce, customers, suppliers, partners and other collaborators; and improving work processes to achieve better performance, reduce variability, improve products, and keep processes current with business needs.


And last, in results, across many dimensions.  Specifically in terms of product and service performance; customer-focused performance; financial and marketplace performance; workforce-focused performance; process effectiveness results; and leadership results


People are pivotal, and we need to make a commitment in concrete terms. 


CHCOs will need to be quicker and more agile in helping their organizations accomplish their mission.  As an agency COO, I am also looking for a CHCO who is a problem-solver, innovative, quick to meet customer needs, collaborative, and ready to work with unions, front line employees, and middle management to accomplish the mission.


Over the coming months and years, as Government goes about the business of improving performance, it will have to transform its way of managing human capital.  We would do well to consider and adopt promising practices across sectors, where it makes sense to do so. 


I’m confident that if we work hard enough and smart enough, we can realize the performance management and transformation goals we’ve set for ourselves.  I believe we can restore the uplifting meaning to the old saying, ‘Good enough for Government work.’ 


Today, as we all know too well, it alludes to the notion that ‘Government work’ is done just well enough to get by, and with neither care nor pride. 


At the turn of the 20th century, however, ‘Good enough for Government work’ was a phrase used to measure work against the highest of standards.  It referred to Government construction standards.  And it meant the best. 

In this Information Age, when the American public thinks that that phrase again means the very best, it will undoubtedly mean that we have stopped treating our people as a cost, and started thinking of them as an investment.


Bob, thank you, again, for inviting me here today.  And now, if you have any questions or comments, I’d be happy to take them.