BUILDING THE ENTERPRISETHE ENTERPRISE Nine Strategies for a More Integrated, Effective Government

AUGUST 2013

BUILDING THE ENTERPRISE a The Partnership for Public Service is a nonpartisan, nonprofit organization that works to revitalize the federal government by inspiring a new generation to serve and by transforming the way government works.

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hen we launched this project one year ago, our the same or similar outcomes—a hindrance for both the goal was to define and articulate a set of re- employees who must perform government missions and W forms that would help guide the presidential functions, as well as for those who depend on them. management agenda. We started by interviewing some So the recommendations in this report focus on a of the smartest public management experts we know— central premise: Our government must take a more coor- seasoned practitioners and policy makers who have con- dinated, multiagency, whole-of-government approach— ceived and implemented government reforms, scholars in other words, an enterprise approach—to the nation’s who have studied and documented reform efforts for most difficult and enduring challenges. years, and executives who are driving management inno- In times of crisis, Americans are very good at rally- vation in the public and private sectors. ing around a desired outcome once it has been clearly It was immediately obvious that the task was going defined. Defeat the Nazis. Make sure war-torn Japan and to be complicated. Many good ideas were tested during Europe survive as democratic societies. Win the race to the past two decades by the Clinton and Bush administra- the moon. Take care of the elderly. Clean the polluted air tions. The Obama administration abandoned some and and water. Fight terrorism. Crises focus us and unify our adopted others in whole or part, and in July 2013 recom- government. Agencies collaborate and act as one. Govern- mitted to strengthening three pillars of its management ment’s resources are marshaled and applied. But in the agenda—improved service delivery, reducing waste and absence of obvious, pressing crises, this unity of purpose saving money, and increasing the transparency of govern- and action is the exception rather than the rule. Given ment data. the nature of the challenges that our government and na- While our experts offered a wide range of differing tion face, that must change. Our bottom line is that gov- proposals for improving government operations, consen- ernment must approach its work as an enterprise every sus emerged around two basic themes: one, that fiscal con- day to tackle today’s critical challenges. Spur economic straints provide both incentive and opportunity to find growth. Reduce joblessness. Fix education. Safeguard smarter ways of doing the people’s business; two, that the food. Halt nuclear proliferation. Secure cyberspace. problems our nation faces—from national security to the By taking a multiagency enterprise approach to those economy to health care—are growing increasingly com- challenges, we can build on the progress of the past two plex and cannot be solved by any individual agency. Most decades, improve the overall performance of the federal challenges today require the collective action of several government and, in so doing, restore the American pub- agencies and, in many instances, the engagement of local, lic’s trust and confidence in it. state and international partners in the public and private The outcome we seek is a federal government that sectors. The problem is that our government is not set up acts as a single, integrated enterprise—not a set of discon- to easily achieve such unity of effort and often has mul- nected agencies and programs—in taking on its biggest tiple agencies and programs acting separately to achieve problems.

Max Stier Lloyd W. Howell Jr. President and CEO Executive Vice President Partnership for Public Service Booz Allen Hamilton

BUILDING THE ENTERPRISE 1 2 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON THE CASE FOR ENTERPRISE

hen Superstorm Sandy wreaked havoc in the separate, largely independent agencies that do not inte- mid-Atlantic region during the fall of 2012, the grate and leverage their resources and expertise toward W Federal Emergency Management Agency co- a common end. ordinated a massive federal response, drawing life-saving Examples of such fragmentation are numerous. The support services from the Department of Defense (DOD), Government Accountability Office’s (GAO) 2013 update help for utilities from the Department of Energy (DOE), of government operations that are considered to be high housing assistance from the Department of Housing and risk cited the 15 agencies that have overlapping respon- Urban Development (HUD), medical teams from the sibility for administering our nation’s food safety laws.1 Department of Health and Human Services (HHS) and All have different officials in charge, different chains of much more. command, different budgets and different overseers in The response to the destructive hurricane demon- both the executive and legislative branches, despite their strated how government can and must act collectively shared, common mission. It is a testament to their com- during a crisis and incorporated the lessons learned from mitment to that mission that it is performed so well, but missteps seven years earlier during Hurricane Katrina. imagine how much more efficiently and effectively it Perhaps the most important of those lessons was the could be accomplished (and how much safer our food need for a comprehensive management framework to supply would be) if the efforts of those 15 agencies were unify federal, state, local and nongovernmental disaster more integrated and unified. response efforts. That framework was put in place, and it The GAO also reported that HUD, the Departments proved its worth in the aftermath of Sandy. of Commerce and Agriculture, and the Small Business But coming together as an enterprise only during Administration operate 53 different economic develop- a crisis is not sufficient. Increasingly, the problems our ment programs for businesses in poor and disadvan- government faces require that same sort of collective ac- taged areas. Yet these separate training, counseling, grant tion day in and day out. In other words, the remarkable and loan programs seldom work in tandem to meet the interagency collaboration we saw during Sandy must needs of entrepreneurs or taxpayers. These departments become the rule rather than the exception. However, it and agencies are attuned to their own missions, budgets, takes more than just a declaration to that effect. As we programs and different congressional authorization and learned in the aftermath of Katrina, it takes management appropriations committees even though they all have a rules, procedures and leadership to enable federal agen- stake in a common goal.2 cies to work in a more unified and coordinated manner. Overlap and redundancy are by no means limited to Historically, the federal government has been struc- tured with each department and agency having its own 1 Government Accountability Office, High Risk Series, an Update, Feb. mission. Today’s challenges rarely fit into nice, neat bu- 2013, 196–201. reaucratic boxes. By virtue of its very structure, the fed- 2 Government Accountability Office, 2012 Annual Report: Opportuni- eral government does not often act as a single enterprise ties to Reduce Duplication, Overlap and Fragmentation, Achieve Savings but typically performs just the way it is organized—as and Enhance Revenue, Feb. 2012, 52–61.

BUILDING THE ENTERPRISE 3 cross-cutting mission areas. They also occur with mission-support functions, such as purchasing goods and services and cutting payroll checks. Suboptimal performance, When we say“ that the federal duplication of effort, inefficiency government should act more and wasted resources are the result. like an enterprise, we mean For example, agencies regularly pay too much for commodity pur- that it should better integrate chases because they fail to leverage and unify the efforts of the the combined buying power of the federal enterprise. Thus, while many executive departments, agencies, such as the Department of agencies, bureaus and offices Commerce, have consolidated IT to achieve cross-cutting goals, hardware and software purchases within their own ranks to save mil- missions and functions that lions of dollars, this same approach individual agencies cannot applied across government could save hundreds of millions of dollars. effectively tackle on their own. Needless duplication and overlap also abound in the government’s handling of security clearance back- ground investigations to determine suitability for federal hiring. Mul- tiple agencies have made separate ” and costly investments in electronic case management and adjudication systems for background investiga- focus specifically on the operation of ible as the challenges it is designed tions instead of working together to the executive branch of the federal to overcome. create and use a shared system, ac- government. However, the enter- The enterprise model described cording to the GAO.3 prise approach we advocate is just throughout this roadmap meets this The president and the executive as necessary in tackling intergovern- objective. Unlike past management branch must redouble their efforts mental and international challenges, reforms, it minimizes the need for to take a more holistic, enterprise and just as applicable. legislation or wholesale restructur- approach to the multiagency mis- Taking the enterprise approach ing. However, it does require more sions and functions of government. does not mean that government mis- than interagency committees, coun- When we say that the federal gov- sions and functions must be cen- cils and task forces—the traditional ernment should act more like an en- tralized. That approach has its own approach when agencies are forced terprise, we mean that it should bet- set of bureaucratic problems. Nor to work together. It will require cul- ter integrate and unify the efforts of are we suggesting that current de- ture change and commitment by se- the executive departments, agencies, partmental and agency missions be nior leaders, as well as investment in bureaus and offices to achieve cross- eliminated or that government be management infrastructure. cutting goals, missions and functions massively reorganized. History has The president and the executive that individual agencies cannot effec- shown that restructuring govern- branch can employ this new model tively tackle on their own. ment is a politically charged, expen- to address national public policy While fully recognizing that sive and time-consuming process goals and cross-cutting federal mis- many challenges require the par- that often has unintended conse- sions, such as securing our nation ticipation of state, county and local quences. It typically fails to attack and its borders, protecting our in- governments as well as private orga- the root causes of a particular issue terests abroad, ensuring food safety, nizations and institutions and inter- and, most importantly, diverts at- sustaining economic growth and de- national partners, we have chosen to tention from solving problems that velopment, assuring a well-trained limit the boundaries of this report to now mutate faster than any reorga- and educated workforce, fostering nization can match. We need an ap- public health, facilitating interna- 3 Ibid. 79–83. proach that is as adaptive and flex- tional trade and delivering social

4 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON services. Further, applying an enter- clear they wanted their staffs to col- against them, and report their prog- prise approach will increase savings, laborate and sustained their com- ress to Congress. It also required the result in substantial efficiencies and mitment to dealing in an integrated Office of Management and Budget improve outcomes in cross-govern- way with multiple issues affecting (OMB) to craft a government-wide mental administrative functions veterans. The administration report- performance plan to provide a per- such as the management of finances, ed that the program has resulted in spective across agencies. OMB did human capital, information technol- a 17.2 percent decline in veterans so, issuing plans in 1998 and 1999 as ogy, procurement and real property. homelessness from January 2009 part of the federal budget process, For example, HUD and the De- through January 2012, even in the but the initiative was subsequently partment of Veterans Affairs (VA) face of difficult economic conditions abandoned. As one government ex- have collaborated successfully on a and a growing veterans population. pert noted, the government-wide goal of ending homelessness among We need to institutionalize this plan was “a document in search of veterans by 2015. Under the direc- approach as a way of doing business an audience” because “no one felt tion of the departmental secretaries, and make sure it is sustained and not ownership” in the executive branch teams have coordinated the use of dependent on the personality and or in Congress. HUD vouchers for veterans to rent goodwill of Cabinet secretaries, who Times have changed. GPRAMA privately owned housing and target- after several years may depart and laid the foundation for an enter- ed VA services such as health care, leave cross-agency initiatives with- prise approach to government by mental health and substance abuse out a champion. requiring the White House to iden- treatment, vocational assistance, and What we propose is not without tify and establish a small number of job development and placement. An precedent or foundation. The seeds high-priority cross-agency policy interagency team of executives from of an enterprise approach to gov- and management goals (see follow- VA and HUD leads the effort in tan- ernment can be found in the Gov- ing page) and to name goal leaders dem, providing the two departments ernment Performance and Results to coordinate the activities of the with weekly updates on voucher use, Act of 1993 (GPRA) and its progeny, multiple programs and agencies that along with detailed reports on the the Government Performance and must work together to achieve com- status and recent activity of every Results Modernization Act of 2010 mon objectives. veteran in the program. Both depart- (GPRAMA). Together, these statutes The good news is that agencies ments have cooperated to ensure provide a basis for agencies to work and programs have set targets to that resources are being properly together in a more coordinated and meet the overall cross-agency poli- deployed and goals are being met. cross-cutting way. cy goals. These goals have included The homelessness initiative GPRA is a watershed law that for energy efficiency, job training and came about because of the personal the first time required agencies to set veterans’ career readiness, as well as commitment of two Cabinet sec- concrete performance goals, devel- management initiatives such as re- retaries, who sent a strong signal op strategic plans to achieve those ducing overpayments and strategic that the issue was important, made goals, measure their performance sourcing. While progress has been made, initial outcomes have been spotty. High-level administration at- tention has been missing, and absent the necessary infrastructure to oper- ationalize and sustain that attention, the stove-piped nature of govern- ment has remained fully intact. The administration now has a We need an“ approach that great opportunity. Without the need is as adaptive and flexible for additional legislation, it can make enterprise government a reality by as the challenges it is expanding and institutionalizing it, designed to overcome. giving it teeth through strong senior leadership engagement and commit- ment, and creating a management ” infrastructure.

BUILDING THE ENTERPRISE 5 The Obama administration’s cross-agency priority goals

As required by the Government Performance and Results Modernization Act of 2010 (GPRAMA), the Obama administration established 14 cross-agency priority goals requiring collaboration across government. Nine deal with policy initiatives and five center on administrative and management issues.

Exports Entrepreneurship and Small Business Broadband Double U.S exports by the end of 2014. Increase federal services to entrepreneurs As part of expanding all broadband and small businesses with an emphasis on capabilities, ensure 4G broadband coverage start-ups, growing firms and small markets. for 98 percent of Americans by 2016.

Energy Efficiency Reduce energy demand. Veterans Career Readiness Science, Technology, Engineering, Improve career readiness of veterans. and Math (STEM) Education By September 30, 2013, increase the In support of the president’s goal that the percentage of eligible service members U.S. have the highest proportion of college who will be served by career readiness graduates in the world by 2020, the federal and preparedness programs from 50 government will work with education Job Training to 90 percent in order to improve their partners to improve the quality of STEM Ensure our country has one of the most competitiveness in the job market. education at all levels to help increase the skilled workforces in the world by preparing number of well-prepared graduates with two million workers with skills training STEM degrees by one-third over the next 10 by 2015 and improving the coordination years, resulting in an additional one million and delivery of job training services. graduates with degrees in STEM subjects.

Cybersecurity Executive branch departments and agencies will achieve 95 percent implementation of the administration’s Real Property priority cybersecurity capabilities by the Sustainability The federal government will manage real end of fiscal 2014. These capabilities include The federal government will reduce its property effectively to generate $3 billion strong authentication, trusted Internet direct greenhouse gas emissions by in cost savings by the end of 2012. connections and continuous monitoring. 28 percent and will reduce its indirect greenhouse gas emissions by 13 percent by 2020 from a 2008 baseline.

Closing Skills Gaps Improper Payments Close critical skills gaps in the The federal government will achieve federal workforce to improve mission a payment accuracy rate of 97 Data Center Consolidation performance. By September 30, 2013, percent by the end of 2016. Improve information-technology service reduce by 50 percent the gaps for delivery, reduce waste and save $3 billion three to five critical federal government in taxpayer dollars by closing at least occupations or competencies, and close 1,200 data centers by fiscal 2015. additional agency-specific high-risk occupation and competency gaps.

Strategic Sourcing Reduce the costs of acquiring common products and services by agencies’ strategic sourcing of at least two new commodities or services in both 2013 and 2014 that yield a savings of at least 10 percent.

6 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON BUILDING THE ENTERPRISE 7 ENTERPRISE STRATEGIES TO MAKE OUR GOVERNMENT MORE EFFICIENT AND EFFECTIVE

dopting an enterprise framework will allow and expanded. Our recommendations largely focus on our government to achieve the results that what can be done by the executive branch without ac- the American people demand and position tion by Congress, although there are legislative changes it to tackle the major challenges facing the that could improve the effectiveness of the enterprise ap- nation. It also will enable government to proach and that will be needed to make improvements in Abetter husband its resources and reduce programmatic the civil service. fragmentation and overlap. To that end, we have identi- As one former federal leader bluntly stated, “No agen- fied nine overarching strategies that will provide the in- cy can solve a complex problem by itself anymore. We’ve frastructure and impetus to take the enterprise approach moved into a new era.” The Obama administration has to scale and ensure that it is not seen or treated as the pet taken a first step toward enterprise government by estab- project of one administration and thus become the first lishing a limited number of interim cross-agency priority victim of the next. goals as directed by Congress under GPRAMA. The law In proposing these strategies, the Partnership for requires the administration to update these goals when it Public Service and Booz Allen Hamilton consulted with submits its 2015 federal budget. However, we believe the more than 50 current and former public officials, busi- White House should extend the enterprise approach to ness and labor leaders and academic experts to identify a broader array of cross-agency goals, missions and ad- those areas in most urgent need of reform. We built on ministrative functions, and invest in the infrastructure management initiatives of the current and past adminis- necessary to ensure that this approach becomes the ac- trations that are working well and should be continued cepted norm.

8 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON STRATEGY 6 Manage information technology as a true enterprise resource

STRATEGY 5 STRATEGY 2 Establish an Build portfolios of independent office programs aligned of evaluation to against the enterprise assess enterprise plan’s goals performance

STRATEGY 9 STRATEGY 1 STRATEGY 7 Build an Develop an enterprise performance plan Take shared enterprise civil with senior-level commitment to drive services to service system cross-agency goals and missions scale

STRATEGY 4 STRATEGY 3 Develop career Designate and enterprise executives empower enterprise to lead cross-cutting goal leaders missions and functions

STRATEGY 8 Adopt an enterprise approach to the acquisition of goods and services

BUILDING THE ENTERPRISE 9 STRATEGY 1 tivities and, more importantly, serve as a blueprint for more effective DEVELOP AN ENTERPRISE cross-agency collaboration on those PERFORMANCE PLAN WITH challenges that are truly enterprise in nature. SENIOR-LEVEL COMMITMENT The strategic enterprise per- TO DRIVE CROSS-AGENCY formance plan must be owned by the president and the Cabinet, with GOALS AND MISSIONS the specifics of its development and implementation a natural job for the Now that the administration has pi- require presidential attention to en- President’s Management Council loted the initial set of cross-agency sure success or necessarily change (PMC). And as a public expression priority goals required by GPRAMA, along with administrations. of commitment, the enterprise plan it is time for the president to insti- Each enterprise goal should should be included in the presi- tutionalize the enterprise model and have a balanced scorecard of quan- dent’s annual budget submission. In take it to scale. titative and qualitative performance the budget, the enterprise perfor- We recommend that he start by objectives that commit the agencies mance plan will orient the executive developing—and, more importantly, involved to tangible individual and branch, Congress and the public to publicly committing to—a strategic enterprise outputs and outcomes. an approach that better connects enterprise performance plan. This And each goal and set of perfor- agency and government-wide costs comprehensive, government-wide mance objectives should be specific, to enterprise results. blueprint will identify the broad measurable, assignable, realistic and The PMC, chaired by OMB’s array of missions and functions (in- time limited. Here again, the admin- deputy director for management, cluding the top presidential priori- istration has laid a solid foundation comprises the chief operating of- ties) that can best be achieved by the for what we propose: It already posts ficers of the executive departments whole-of-government enterprise. It the current GPRAMA cross-agency and agencies (typically deputy sec- will set outcome- and time-based policy and management goals on the retaries and deputy administrators), goals for enterprise missions and Performance.gov website. plus the heads of central manage- functions. As discussed in strate- Many experts we consulted ar- ment agencies, such as the Office of gies 2 and 3, it will put the necessary gued that the president’s budget Personnel Management (OPM) and infrastructure and accountability already serves as the primary blue- the General Services Administra- mechanisms in place to increase the print for administration priorities, tion (GSA). First established in the likelihood those targets are achieved. eliminating the need for a strategic Clinton administration, the PMC As noted earlier, this won’t be enterprise performance plan. How- traditionally has served as a coor- the first time a strategic enterprise ever, the budget is and always will dinating body, undertaking rela- performance plan has been at- be organized by department and tively few government-wide initia- tempted. The first attempt in 1998 agency—in other words, according tives. It works with other councils, under GPRA got good marks from to the government’s stovepipes—and such as the Chief Financial Officers GAO, but nonetheless failed in part doesn’t effectively communicate Council and the Performance Im- because there was no presidential presidential priorities to stakehold- provement Council, and oversees commitment and no one was in ers. Agency-specific performance the President’s Management Advi- charge of making sure the plan was plans won’t do the trick, either, sory Board, a group of private-sector implemented. though they have matured during chief executive officers appointed by The plan should be organized the two decades since GPRA became the president to recommend strate- around enterprise goals to include law. Neither addresses cross-agency gies for implementing best business the program and policy priorities of missions and functions and there- practices in government. the president, such as reducing the fore cannot substitute for an enter- The time has come for the PMC unemployment rate of veterans. It prise performance plan focusing on to take more visible charge of the en- also should include enduring mis- matters requiring collective agency terprise. It is ideally suited to develop sions and functions, such as assuring activity, and clarifying each actor’s the enterprise performance plan, sup- the safety of the nation’s food sup- role in the achievement of the goals. ported by staff, and to propose its goals, ply, that are no less important but This approach will begin to address outcomes and timetables to the Cabi- that have come to be expected by the fragmentation, overlap and du- net and, ultimately, to the president, the American people and should not plication of federal programs and ac- for ratification and endorsement.

10 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON approach to each enterprise goal should take those inventories to the next level, setting the stage for true integration. The relative resource in- The strategic“ enterprise vestments, risks and results of each performance plan must be of the various programs in a portfolio owned by the president should be considered and analyzed together, and compared in terms of and the Cabinet, with the their respective contribution to the specifics of its development enterprise goal and its qualitative and quantitative outcome measures. and implementation a natural Each portfolio should spell out the job for the President’s common responsibilities of the Management Council. agencies and departments involved and include the personnel and other resources needed to achieve the out- comes of the enterprise goal. Some programs will be more costly than others, but their individual results may contribute more to the larger ” goal. Other programs may be more efficient, achieving better value for the dollar, but their impact on the In addition, the PMC must play bring an enterprise focus. larger goal may be far less apparent. a central role in the plan’s execu- By taking this approach, the The portfolio approach will il- tion. It must hold officials, including White House, the PMC and OMB luminate the strengths and weak- some in its own ranks, accountable will send an unmistakable signal nesses of existing programs and for turning the various components that interagency collaboration on identify duplication as well as gaps. into reality through regular and rig- enterprise goals must become stan- Portfolios of programs, not individ- orous performance reviews for each dard operating procedure and that ual programs, will become the orga- cross-agency priority, mission and agencies will be held accountable nizational approach to collectively management function. Today agen- for acting in the interests of the larg- achieve enterprise results. cies contributing to the president’s er federal enterprise. What’s needed The state of Maryland is us- cross-agency priority goals are pri- is complete buy-in from top federal ing this approach to tackle the goal marily focused on their own pro- political and career leadership, not of reducing pollution in the Chesa- grams and initiatives. The plan, with just a directive from the manage- peake Bay, an effort that involves re- the PMC as the executing entity, can ment wing of OMB. • sponsibilities from multiple depart- ments, agencies and programs. The tasks, roles, accomplishments and STRATEGY 2 shortcomings of each of the agencies and programs are grouped together BUILD PORTFOLIOS OF PROGRAMS on Maryland BayStat, a website that provides for the assessment, coordi- ALIGNED AGAINST THE nation and reporting of the restora- ENTERPRISE PLAN’S GOALS tion effort. Each month, the gover- nor and the various departmental The PMC’s strategic enterprise per- es. Thus, the portfolio approach will and agency heads meet to assess formance plan must align and inte- unify the efforts of all the agencies progress and chart their next steps. grate all of the programs that con- that own those programs. For a portfolio-based approach tribute to a particular goal, taking a This involves more than just to be effective, the officials who are portfolio approach to that alignment. inventorying the contributing pro- being held accountable for achiev- Such an approach forces a holistic grams, as is being done today with ing enterprise goals must be able and view of the goal’s constituent pro- each of the administration’s cross- willing to independently assess the grams and their associated resourc- agency priority goals. A portfolio programs and resources available to

BUILDING THE ENTERPRISE 11 implement them, they’re not going to get done.” Executive leadership is crucial and, with rare exception, it must The portfolio“ approach will be focused and full time. The ad- illuminate the strengths ministration’s recent effort to better and weaknesses of existing integrate the various agencies over- seeing the export of sensitive tech- programs and identify nologies provides an object lesson in duplication as well as gaps. this regard. Despite an initial push from several Cabinet secretaries and commitment from the White House, the effort has floundered. While initial steps were taken to improve oversight and streamline the inter- agency process, the status quo re- ” mains firmly in place, and the system is still plagued by poor coordination achieve it, determine their effective- of integration and alignment.4 and inefficiencies. The GAO con- ness, and be empowered to recom- Drug prevention and treatment cluded that the agencies involved mend changes to the PMC, OMB and are supposed to be coordinated by did not work collectively in a uni- the White House (see Strategy 3). the Office of National Drug Control fied way, and it faulted the Obama Those leaders, in turn, must be will- Policy (ONDCP) and could serve as administration for not assigning re- ing to back the integration of pro- a model of the enterprise approach. sponsibility to one agency or leader grams and help in overcoming insti- But the GAO observed that ONDCP for addressing the challenges of the tutional and jurisdictional barriers has not conducted a systematic as- entire portfolio of export control and other vested interests to further sessment of prevention and treat- programs. the common mission objectives. ment programs to determine the Enterprise goal leaders must Here’s an example of an enter- extent to which they overlap and have the skills and savvy—as well prise goal and its accompanying where opportunities exist to pursue as the gravitas—to lead multia- program portfolio, drawn from the coordination strategies to more ef- gency initiatives or missions and GAO’s March 2013 list of duplica- ficiently use limited resources. Thus, coordinate interagency teams. Our tive and overlapping programs. The while a portfolio-based approach is recommendation builds upon the goal—reducing the scourge of ille- necessary to executing the enter- current GPRAMA construct. Under gal drugs—is supported by a host of prise performance plan, it is not suf- that framework, the president has federal drug abuse prevention and ficient. It also takes leadership.• designated goal leaders for each of treatment programs fragmented the cross-agency priority goals, and across 15 federal agencies. Of the 76 4 Government Accountability Office,Office those goal leaders are responsible programs, 59 showed evidence of of National Drug Control Policy: Office Could for establishing governance councils Better Identify Opportunities to Increase Pro- and reporting on progress. How- overlap. Even more telling is the lack gram Coordination, March 2013. ever, we would go further, providing goal leaders with sufficient bureau- cratic muscle over their program STRATEGY 3 portfolios. DESIGNATE AND EMPOWER Specifically, enterprise goal leaders must be expected and en- ENTERPRISE GOAL LEADERS couraged to take a holistic view of their portfolios, independently as- Performance plans and portfolios pends on the designation of expe- sess the portfolio’s constituent pro- are important tools to define en- rienced senior officials to serve as grams and provide hard-hitting, terprise objectives, but it is strong enterprise goal leaders. As a former honest-broker recommendations leadership that will truly move the Cabinet member told us, “There are through the PMC to OMB and, in enterprise. Successful execution of a lot of great plans out there, but if some cases, to the president on an enterprise performance plan de- you don’t have the right people to which programs should be contin-

12 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON ued, expanded, curtailed or elimi- nated. Obviously, programs have their own constituencies within departments and outside of govern- There are a lot of great ment, and Congress plays a critical “ role and can reject administration plans out there, but if you recommendations to eliminate or don’t have the right people change programs. As the enter- to implement them, they’re prise’s board of directors, the PMC should assist goal leaders in man- not going to get done. aging risk, allocating or realigning resources, pushing cross-functional integration and providing the po- litical backing to ensure that each of the portfolios within the enterprise performance plan are meeting their ” objectives. In order for the PMC to 5 fulfill these responsibilities, it must pay appointments. leadership skills are not commonly We do not recommend that en- developed in political or career gov- be supported by full-time staff pro- terprise goal leaders be given formal, ernment executives, so it will take vided from departments and agen- chain-of-command authority over deliberate effort to prepare a cadre cies for extended periods and placed the programs and agencies in their of leaders with these enterprise under the administrative control of respective portfolios. That would skills if this approach is to succeed the PMC chairman. engender massive reorganization, (see Strategy 4). To assure their independence, require controversial legislation and Even though we do not recom- we recommend that all enterprise elicit overt and covert resistance mend giving enterprise goal leaders goal leaders be appointed by the from government officials and legis- formal authority over the programs president. Presidential backing mat- lators who would view it as a threat and the agencies in their portfolios, ters, no matter how symbolic, and to the status quo. we would provide them with other comes with considerable informal So how are enterprise goal lead- powerful but more nuanced levers of authority. An enterprise goal lead- ers to be held accountable for a set bureaucratic power. To start, the fact that they have a direct reporting line er’s clout may vary depending on the of programs without having formal to the PMC and the president will individual’s stature and the nature authority over them? How can an enterprise goal leader expect to get give them considerable sway, and of the enterprise goal. For example, anything done? Enterprise goal lead- their role as honest brokers for the the enterprise performance plan’s ers will have to demonstrate special PMC and OMB will add to that influ- presidential priorities may be led by enterprise leadership6 skills that ence. We would go further by giving Cabinet secretaries, while a cross- include the ability to lead without them an opportunity to recommend cutting mission area or support formal authority, build and leverage modifications to budget submissions function may be led by a sub-Cabi- interorganizational networks and of the programs in their portfolio, as net appointee or a senior career ex- social capital to exercise informal well as any major program-related ecutive specially appointed for this influence, and facilitate interagen- regulations those agencies propose. purpose. Regardless of rank, all goal cy collaboration through a shared To avoid duplication, we also would leaders would have a performance sense of mission. These interagency have them approve major IT sys- tems their programs propose to ac- contract with the president or the quire. Finally, we would give them PMC tied directly to the execution 5 The Internal Revenue Service was given authority for 50 of these critical pay positions, the right to provide input to the per- of the enterprise performance plan. each with a five-year term and pay up to an formance evaluations of the agency amount equivalent to the vice president. Non-political executives—those executives in charge of their constit- drawn from the career SES as well 6 Jackson Nickerson and Ronald Sanders, uent programs. as those recruited from outside the Tackling Wicked Government Problems: A It also is critical to provide goal Practical Guide for Enterprise Leaders (Brook- federal government—would serve ings Institution Press, 2013). Ed note: Sanders leaders with full-time staff. As one under special five-year-term critical is a contributor to this report. OMB official told us, many of today’s

BUILDING THE ENTERPRISE 13 cross-agency goal leaders have man- aged to make progress even though they have other major responsibili- ties and no staff support. We can’t Senior career executives change the fact that some enterprise “ goal leaders will have other jobs, but must be developed with an they can be allocated staff to oversee enterprise perspective and and coordinate the portfolio, includ- ing senior career executives to serve the ability to demonstrate the as their deputies. Without staff sup- enterprise leadership skills. port, goal leaders will be at the mercy of the programs they oversee. That said, we do not advocate the allocation of new staff resources to support goal leaders. Rather, staff would be drawn from the manage- ” ment of the portfolio’s constituent programs. mented in a written memorandum ment-wide focus, are exactly what These levers notwithstand- of understanding signed by the two had been envisioned when the fed- ing, enterprise goal leaders still will Cabinet secretaries, with each de- eral Senior Executive Service (SES) need to build consensus among the partment’s role, responsibilities was created 35 years ago. However, agency and program executives in and obligations spelled out in detail. that vision has never become a re- their portfolios, as well as other key Agreeing on mutual expectations, as ality. With few exceptions, today’s stakeholders, on common objectives, well as setting ground rules for mak- senior executives are agency-centric strategies, performance and out- ing and enforcing decisions and re- in experience and orientation, as or- come metrics. HUD and DOE took solving disputes, preempts conflict ganizationally stovepiped as the gov- that approach in 2009, agreeing on and makes interagency collabora- ernment they serve. Most have re- how they would jointly coordinate tion far more likely. As one federal mained in the same agency for their the use of stimulus funding to im- official said, it is critical to set up a entire careers, promoted for their prove energy efficiency of existing system to “communicate, coordinate technical skills and never moved across or out of that organization to homes. That agreement was docu- and compromise.” • broaden their experience or exper- tise. The result: Few are equipped to lead the enterprise. STRATEGY 4 This must change if the concept of enterprise is to succeed. Senior DEVELOP CAREER ENTERPRISE career executives must be devel- EXECUTIVES TO LEAD CROSS- oped with an enterprise perspective CUTTING MISSIONS AND FUNCTIONS and the ability to demonstrate the enterprise leadership skills enumer- ated earlier. This development must The successful federal enterprise executives will have to be utilized. begin before senior executive status cannot depend on just Cabinet and Some may be called upon to serve is awarded. The intelligence agen- sub-Cabinet appointees to lead it. as the day-to-day deputies of Cabi- cies offer an example. Following the To be sure, we expect that the presi- net-level goal leaders, whose official tragedy of 9/11 and revelations about dent will appoint his most trusted responsibilities preclude full-time the lack of communication among Cabinet secretaries and sub-Cabinet focus. Other career executives may the intelligence agencies, the com- officials to lead presidential priori- be asked to do even more, taking di- munity now requires all executive ties included in the enterprise per- rect charge of cross-cutting mission candidates to complete one or more formance plan. However, there are areas and support functions. interagency assignments of at least a only so many of those appointees to Are today’s career executives year in duration, as well as specific go around. If the concept of enter- up to it? Enterprise executives, with training in interagency leadership prise is ever to get to scale, career interagency experience and govern- before they can be promoted to se-

14 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON evaluate and assign a select number of career SES members for enter- prise posts, such as deputies to Cabi- net- or sub-Cabinet-level enterprise It’s very difficult“ to deal with goal leaders, or goal leaders in their the problems if you don’t know own right. Not every SES member which programs are working would qualify—the elite pool man- aged by the EERB would be limited well and which ones are not. to those with interagency experi- ence and demonstrated enterprise leadership skills. Those in the pool would compete for prestigious en- terprise leadership positions. Enterprise executives drawn ” from career SES ranks, as well as those selected from outside govern- ment, would serve five-year-term nior ranks. In effect, the intelligence veloping and selecting SES members presidential appointments, be com- agencies require a sixth enterprise and assigning them to key agency pensated at critical pay levels and leadership Executive Core Quali- leadership positions. Given the have performance contracts with fication, in addition to the five now agency-centric focus of ERBs, it’s no the PMC. At the conclusion of their mandated by OPM for promotion wonder there is no interagency ex- terms, enterprise executives with into the SES. ecutive mobility. The only enterprise career SES status could remain in We believe OPM should make element of the current senior execu- their current enterprise executive interagency or intergovernmental tive development and selection pro- positions, be assigned to other such experience and enterprise leader- cess is an OPM qualifications review positions or return to career SES po- ship competencies mandatory in of all new SES members to ensure sitions in their home agencies. All order to be selected for the SES. they meet the five mandatory core of these actions would be overseen Doing so will take more than just a qualifications. by the EERB, but administered by policy declaration. This will require The executive resources board OPM executive resources staff. The an enabling infrastructure to bro- model can be applied at the enter- EERB also would monitor the bench ker interagency assignments. It also prise level. The White House should of enterprise-qualified senior ex- will require an enterprise executive establish an EERB chaired by OMB’s ecutives and even aspiring SES can- performance appraisal system to deputy director for management, didates (GS-14s and -15s) to ensure ensure consistent treatment of can- comprising PMC members, OPM’s that there is an adequate pipeline of didates as they move from agency to director and some of government’s talent to fill enterprise positions as agency, a policy OPM has just insti- most respected former career exec- they turn over. • tuted for all of government. In ad- utives. Their job would be to identify, dition, SES candidate development programs need to be far more robust and far more enterprise-focused STRATEGY 5 than today. Perhaps the most important ESTABLISH AN INDEPENDENT enabling mechanism would be the establishment of an Enterprise Ex- OFFICE OF EVALUATION TO ASSESS ecutive Resources Board (EERB) to ENTERPRISE PERFORMANCE develop and manage government’s most senior leadership talent. Today Goal leaders and enterprise execu- to measure program performance. every agency has its own Executive tives must be able to rigorously eval- Government programs and govern- Resources Board (ERB) chaired by a uate their portfolios of programs, ment officials tend to focus on the senior appointee such as the deputy determining which ones are work- budget or the numbers of people secretary or equivalent, comprising ing and which are not. However, two served, but they are much less likely the agency’s top political and career decades after the advent of GPRA, to try to link those measures to real- executives and responsible for de- the federal government is struggling world outcomes.

BUILDING THE ENTERPRISE 15 For example, it is easy to docu- deal with the problems if you don’t the Performance.gov website, unless ment how much money is budgeted know which programs are working classified or containing personally for a particular job training program, well and which ones are not.” identifiable information. The mis- how many training classes that mon- The evaluation office should be sion of the assessment office won’t ey buys, the number of people who positioned, staffed and funded to be easy. One interviewee noted that apply for and complete classes and take full advantage of today’s revo- assessing and measuring whether even the number who get jobs. How- lution of big data, with access to the programs are producing results will ever, it is difficult to determine cause government’s vast data resources take “relentless, sometimes even and effect, that is whether trainees and an analytic staff of the best and ruthless, follow-through.” got jobs as a result of the program. brightest evaluators. To get the attention of depart- We recommend the establish- The office must be positioned ment and agency officials account- ment of an Office of Evaluation, -in to evaluate the portfolios of related able for programs, the evaluation dependent of agencies, within the programs, rather than just one or office should issue program score- Executive Office of the President or two in isolation, and make judg- cards to make the results of the OMB, to conduct rigorous perfor- ments on how they contribute col- evaluations clear and impactful. The mance assessments that will deter- lectively and separately to a particu- George W. Bush administration used mine if programs are meeting their lar outcome to provide goal leaders a scorecard to measure agency prog- goals. This information will assist with informed assessments. ress and effectiveness in each of its enterprise goal leaders, the PMC Since evaluation of government five management reform areas. One and OMB in making judgments on programs can easily become en- interviewee noted that President program effectiveness and on ways snared in politics, the office must be Bush regularly asked Cabinet mem- to make improvements. As one gov- led by a respected career executive bers about their red, green or yel- ernment official observed, “What on a seven-year term and admin- low status on the scorecard. “I don’t has struck me is how few program istratively firewalled from outside know how much he knew about evaluations are really done. There influence. Only then can it help goal it, or how much the Cabinet heads are 47 employment training pro- leaders make hard calls. knew about it, but they knew they grams and only four have had any In keeping with objectives of didn’t want to be red or yellow. It got evaluations. There are some 18 food transparency and public account- people’s attention.” The system used and nutrition programs and only ability, the office should provide easily understood stoplight ratings— three of them have had any substan- access to full performance data on green for success, yellow for mixed tive evaluations. It’s very difficult to portfolios and their programs on results and red for unsatisfactory. •

The five strategies recommended so far focus on improv- rather than agency property, the enterprise approach ing the effectiveness of departments and agencies as will accelerate nascent efforts to reduce duplication. The they confront today’s cross-cutting mission challenges. enterprise will leverage economies of scale and provide or procure better, cheaper common goods and services The enterprise approach also will produce order-of-mag- ranging from email and data storage to personnel and nitude improvements in efficiency by compelling agen- payroll support, and almost everything in between. The cies to integrate across the resource base of the gov- approach also will rebuild the civil service as a more co- ernment as a whole. By treating commonly purchased hesive and agile corps. The following are strategies to ac- goods and services as elements of a federal commons, complish these goals.

16 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON STRATEGY 6 rather than standing up or continu- ing agency-specific systems. MANAGE INFORMATION TECHNOLOGY This plan for cross-agency AS A TRUE ENTERPRISE RESOURCE shared IT services is a move in the right direction, but it needs to be Information technology services are poorly and eliminate those that are more aggressively pursued. The among the most common services in duplicative or not well aligned with focus on enhancing IT capability government. Every agency provides agency missions or business func- should be expanded into a portfolio a range of them, from email and data tions. The process was designed to approach to all IT resources across storage to desktop support and serv- achieve a savings of 10 percent in IT the federal enterprise, not just with- er farms. Most recently, agencies costs for each agency, 5 percent of in agencies. have begun deploying cloud-based which could be given back to agen- We recommend that the federal applications to support everything cies to reinvest in citizen-facing, chief information officer and the from time-keeping to supply-chain cybersecurity or employee engage- CIO Council give more power and management. With few exceptions, ment projects, according to Federal cohesion to these cross-agency ef- these services follow the traditional CIO Steven VanRoekel. forts by leading the development stovepiped model of government, The administration’s shared and execution of a true enterprise with each agency approaching and services strategy directs agencies information technology strategy as duplicating them separately. This to begin by consolidating commod- an initiative under the enterprise situation represents a perfect op- ity IT services such as help desks, performance plan described in Strat- portunity to achieve real efficiencies email, print and website manage- egy 1. This strategy should bundle by taking an interagency, enterprise ment, online collaboration and mo- IT shared services into portfolios approach to common IT services. bile/wireless services, and provid- (for example, an email portfolio or a Today the government spends ing them as shared services within cloud portfolio) and designate goal roughly $80 billion annually on IT— agencies. Then, agencies are to ex- leaders to maximize each portfolio’s $55 billion of it on operating and pand the shared-first approach from enterprise value, functionality, effi- maintaining existing systems, the commodity IT to mission-support ciency and effectiveness. rest on buying and developing sys- IT used in government-wide func- This does not necessarily re- tems. Duplication is rampant and tions, such as financial and records quire a monolithic approach. But it opportunities for enterprise savings management. When a business case, does mean that IT, including physi- are huge. including a cost comparison, shows cal assets such as data centers and The Obama administration has it makes sense to outsource to a server farms, will be considered directed all federal chief information cross-agency IT shared service pro- enterprise or whole-government as- officers to take a shared approach vider, agencies are expected to do so sets, not the property of individual to providing IT resources. The CIO Council’s Federal Information Tech- nology Shared Service Strategy, is- sued May 2, 2012, directs agencies to “move from independent silos of ca- pability (some of which are duplica- tive) toward an integrated matrix of shared services that provide IT ca- pabilities across the entire agency.”7 This [administration’s]“ plan The administration also has direct- ed agency chief operating officers for cross-agency shared IT to lead annual IT portfolio reviews, services is a move in the right known as “PortfolioStats,” to shore up or end those that are performing direction, but it needs to be more aggressively pursued. 7 Executive Office of the President, Fed- eral Information Technology Shared Services Strategy (Washington, DC, May 2, 2012); http://whitehouse.gov/sites/default/files/ omb/assets/egov_docs/shared_services_ strategy.pdf. Last accessed Jul. 26, 2013. ”

BUILDING THE ENTERPRISE 17 agencies. Such enterprise IT ser- ternet, known as cloud computing. dundant acquisition, operations and vices could be supported by a multi- But as with data centers, the focus maintenance costs. year funding mechanism to ensure has involved individual agencies Under the central coordination that agency customers have a voice moving information to the cloud of the Office of the Director of Na- and a choice in the services and pro- rather than multiple agencies shar- tional Intelligence, the intelligence viders available. ing the same cloud computing re- community also deployed a com- The advantages of an enterprise sources. The enterprise potential of mon, classified email system across IT approach are especially appar- cloud computing is significant. 17 agencies and six Cabinet depart- ent when it comes to data centers For example, the 17 agencies ments. Similar interagency enter- and the cloud. Faced with a prolif- of the intelligence community are prise approaches are not just pos- eration of underutilized agency data considering ways to break their IT sible, but imperative, for many if not centers, the administration in 2010 silos and operate a single, ultra-se- most common IT services. announced a Federal Data Center cure cloud for the entire community, We applaud and support ad- Consolidation Initiative calling for with CIA and the National Security ministration initiatives so far to closure of 1,200, or 40 percent, of Agency (NSA) as central providers. consolidate IT within agencies. But the federal government’s 3,133 data The National Geospatial—Intelli- these initiatives need coherence centers by the end of 2015. The ini- gence Agency and the Defense Intel- and greater emphasis to expand to tiative directed agencies to increase ligence Agency are expected to pro- an interagency approach. With the utilization to 60 percent in the cen- vide desktop services, while the NSA right platform, management struc- ters that remain. By the end of fiscal is expected to be a central repository ture and funding, the services and 2012, 500 centers had been closed. for computing applications. This functions included in the adminis- Even more savings and efficiencies interagency initiative, if embraced tration’s efforts be could be provided could be achieved by consolidating by the community, could reduce IT across agencies. • data center capacity and increasing spending through elimination of re- utilization across the federal enter- prise, not just within agencies. An enterprise approach to cloud STRATEGY 7 computing also can yield compara- ble efficiencies. In 2010, the White TAKE SHARED SERVICES TO SCALE House required agencies to adopt a cloud-first policy when considering While an enterprise approach to IT er mission-support services. This new information technology acqui- services is a positive step in and of enables the expansion of shared sitions. It required agencies to move itself, it has the added advantage of services from purely back-office IT data storage and applications providing the interagency IT infra- transaction processing to more so- from their local servers to networks structure to support shared person- phisticated services. In so doing, the of remote servers hosted on the In- nel, financial management and oth- federal government could finally re- alize the full potential of the Bush administration’s functional Lines of Business (LoB) initiative, under which federal organizations provide administrative services for a fee to other agencies. The first sets of LoBs were es- tablished by OMB in 2004, focusing The original promise“ of shared on business systems common to all services providers has not agencies, such as payroll, person- nel action processing and basic ac- been met … Now it is time counting. OMB required agencies to realize that promise. to conduct a cost-benefit analysis of their various support functions. If it showed that outsourcing a support function to one of the interagency shared services providers was cost- ” effective, then the agency was ex-

18 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON pected to take that step.8 tions, automated voice-response proach. The Obama administration By 2009, almost all federal systems and live personnel special- has issued a shared-first policy for payroll services were consolidat- ists to provide near full-time cover- financial services information tech- ed among four government-wide age for the department’s worldwide nology systems. On March 25, 2013, shared services providers, and OPM force of nearly 500,000. former OMB Comptroller Danny named five interagency providers The Internal Revenue Service’s Werfel directed all agencies to use for personnel services. Today OMB- Agency Wide Shared Services orga- one of the approved shared services approved interagency shared ser- nization provides similar consolidat- financial management providers to vices providers include the Interior ed personnel services, such as staff- modernize their core accounting Department’s Business Center, the ing, labor and employee relations, for systems. Agriculture Department’s National its nationally deployed workforce of According to Werfel, “the cost, Finance Center and seven others. more than 100,000. If such services quality and performance of federal These providers offer shared ser- can be provided on this scale within financial systems can be improved by vices for budget formulation and complex, diverse and geographically focusing government resources on execution, geospatial data, informa- dispersed agencies, they can be pro- fewer, more standardized solutions tion systems security and financial vided as an enterprise portfolio to all that are implemented and operated and grants management, in addition agencies. by more experienced staff.” Shared to personnel and payroll services. The DOD’s more than three mil- services provided using standard- For the most part, LoB shared lion military and civilian personnel ized financial systems will reduce services providers have focused on are paid through a single integrated the risks of large, lengthy financial leveraging common business sys- payroll system. Its 800,000 civil- management system implementa- tems such as human resources and ians are covered by a single human tions and make federal finances financial management to provide resources information system.9 Yet more accurate and more transpar- interagency customers with back-of- civilian employees still are served ent, Werfel said. OMB also plans to fice and transaction-processing sup- by more than 100 separate person- ensure that financial shared services port. This includes such core admin- nel offices, each providing similar centers use common standards and istrative services as cutting payroll services under almost the same per- requirements so agencies retain checks and processing promotion sonnel rules using a common hu- the flexibility to migrate among actions, posting debits and credits man resources information system. providers. to an agency’s operating ledger and This situation is ripe for consolida- This is exactly the sort of enter- tracking procurement contracts. tion. And the Pentagon could offer prise approach to shared services The original promise of shared the service on an enterprise basis to that is needed—leveraging common services providers has not been met. other agencies. functional requirements, business The vision was that they would as- The other HR shared services systems and IT infrastructure to sume even more of the government’s providers, such as the Treasury De- provide mission support in mul- common administrative workload, partment and the National Finance tiple agencies. Indeed, these efforts including labor-intensive functions Center, can and should follow this should be expanded under the aus- such as the interaction between a same path. They already provide pices of an enterprise goal leader manager and a personnel specialist transaction-level support to mul- for each of the LoB portfolios, with before a promotion decision is made tiple agencies and could build upon those goal leaders charged to take and processed. Now it is time to real- that success to offer additional per- them to the next level of enterprise ize that promise. sonnel services to their interagency efficiency and effectiveness.• Additional enterprise efficien- customers at significant savings, cies are possible. For example, the such as drafting job applications. Air Force has consolidated many of Personnel services are not the its personnel support services for only area ripe for an enterprise ap- active-duty and reserve military members as well as civilian employ- 9 Department of Defense, Fiscal 2013 Bud- ees, using a sophisticated combina- get Estimates, Defense Human Resources Ac- tion of online self-service applica- tivity (Washington, D.C., Feb. 2012), http:// comptroller.defense.gov/defbudget/fy2013/ budget_justification/pdfs/01_Operation_and_ 8 CIO Council, Federal Shared Services Im- Maintenance/O_M_VOL_1_PARTS/O_M_ plementation Guide (Washington, DC, April 16, VOL_1_BASE_PARTS/DHRA_OP-5.pdf. Last 2013). accessed Jul. 26, 2013.

BUILDING THE ENTERPRISE 19 STRATEGY 8 strategic sourcing from being a best practice to a mandate, the president ADOPT AN ENTERPRISE should designate the head of OFPP APPROACH TO THE ACQUISITION as the federal chief acquisition of- OF GOODS AND SERVICES ficer (CAO) with administrative au- thority equivalent to the federal CIO. The federal CAO should develop and Historically, the federal government Federal Strategic Sourcing Initiative. execute a comprehensive enterprise has taken a decentralized, agency- It currently covers four categories acquisition strategy. That strategy centric approach to buying goods of common products and services: should include goals for responsibly that practically every organization office supplies, domestic parcel de- expanding enterprise-wide strategic needs. In short, the government has livery, print management and wire- sourcing for common goods and ser- not taken full advantage of its collec- less telecommunications services. vices, consolidating multiple-award tive purchasing power to get the best Through the initiative, agencies contracts, making prices transparent deal for the taxpayer. have saved more than $200 million and increasing share-in-savings con- Here’s a graphic example: Buy- on office supplies since July 2010. In tracting where appropriate. Achiev- ing individually, agencies spend fiscal 2011, the domestic parcel de- ing these goals will drive down the more than $500 million a year on livery services program saved more prices and improve the quality of the cleaning products through nearly than $31 million over what agencies myriad goods and services the gov- 4,000 contracts with 1,200 different were paying separately for the same ernment buys. The EERB, in con- vendors. One agency paid $32 for a services. sultation with the CAO, also should case of paper towels, while another GSA plans to add 10 strategic designate enterprise goal leaders for paid $61 for the exact same product.10 sourcing categories through 2015. each of these initiatives. Why shouldn’t every agency know To give this effort even more impe- The enterprise acquisition strat- about and take advantage of the tus, OMB last year created a leader- egy should greatly enhance the fed- lower price? This is what enterprise ship council to expand the initiative eral government’s enormous buying strategic sourcing is all about—agen- and directed each agency to name a power. It should consolidate the gov- cies using their collective buying strategic sourcing official and source ernment’s demand for commodities, power to drive down the prices they at least two new products a year in such as cleaning products, to obtain pay for common goods and services. 2013 and 2014. This council has been massive quantity discounts. Here, too, there is good news. charged with identifying five new For goods and services that Beginning with the Bush adminis- commodities and services a year aren’t amenable to strategic sourc- tration and continuing under Presi- through fiscal 2014, along with exec- ing, government still can take an dent Obama, the federal government utive agents to develop the contracts. enterprise approach by making the has begun to take a more strategic This is fine as far as it goes, but results of all transactions available approach to sourcing. However, it it is a cautious approach. To move to all government buyers and sellers. has focused on consolidating acqui- sition strategies and contracts at the department level, rather than across the federal enterprise. We advocate the latter. The government, under the leadership of the Office of Fed- eral Procurement Policy (OFPP) and GSA, should rapidly expand the scope of enterprise strategic sourc- The government“ has not taken ing, employing goal leaders, portfo- full advantage of its collective lios and cross-cutting accountability. Already, GSA has implemented a purchasing power to get the best deal for the taxpayer. 10 Dan Tangherlini, “GSA to Launch 10 Strategic Sourcing Initiatives,” GSA Blog, Jan. 10, 2013, http://gsablogs.gsa.gov/ gsablog/2013/01/10/gsa-to-launch-10- strategic-sourcing-initiatives. Last accessed Jul. 26, 2013. ”

20 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON And it’s not just pricing information already has been, or is in the pro- and govern every federal agency. that is valuable. cess of being, procured by another The system should be based on For many years, agencies only agency. state-of-the-art human capital prac- had access to other agencies’ pro- These improvements are mov- tices, with a market-sensitive com- curement data through the Fed- ing in the right direction, but they pensation system, recruiting and eral Procurement Data System and could be driven faster and more hiring practices in line with today’s USASpending.gov. They can find comprehensively under the direc- career patterns and a reward system only high-level information, such tion of an enterprise goal leader and that reinforces high performance. as total amounts spent on contracts, team charged with lifting the veil on The current system, codified in contract type, the name and loca- prices, costs, successful negotiation Title 5 of the U.S. Code, is federal in tion of vendors and ordering officers. strategies and other procurement name only. As it has aged, agencies More granular information, such as techniques across all agencies. both large and small have broken the labor costs embedded in a par- Strategic sourcing, expanded from its ranks, cutting their own ticular service contract, is far more use of multiple-award contracts, deals with Congress for personnel useful but difficult to find. Agencies procurement and pricing transpar- flexibilities to further their unique rarely share the details beyond what ency all can be applied at the depart- missions. The list is long, ranging is publicly available so that others ment or agency level for positive from DOD and the Department of can take advantage of their lessons effect. But for tens of thousands of Homeland Security—which have learned. Though some of the infor- commonly purchased goods and ser- not fully used the flexibilities they mation is proprietary, much can be vices, they work best and save more were given—to the Internal Revenue shared. money when they are applied across Service, the 17-agency intelligence For example, GSA could create a the enterprise. Without a govern- community and the agencies that government-wide collaboration site ment-wide CAO and enterprise goal oversee the banking and financial identifying upcoming solicitations leaders to drive these strategies, they services industries. The result is a and existing agency blanket pur- are not likely to happen rapidly or balkanized system of “haves”—agen- chase agreements so other agencies comprehensively. • cies whose human capital systems could see whether an item or service have been exempted from general civil service rules—and “have-nots,” those still mired in laws and rules first established in 1949. Employees STRATEGY 9 working in “have-not” agencies can- not transfer to “have” agencies with- BUILD AN ENTERPRISE out competing, even at the senior CIVIL SERVICE SYSTEM executive level. Significant changes are needed The proposals outlined thus far re- today reflects the needs and charac- if we expect the federal government volve around a common theme: lead- teristics of the last century’s govern- to act as an enterprise. This doesn’t ing and managing the whole of gov- ment work and workforce, not those mean a system that mandates one- ernment as an integrated enterprise required for today’s complex, inter- size-fits-all rules or forces the “have” with a cross-cutting strategy, man- agency challenges. agencies back in the box. Rather, it agement infrastructure and leader- A revitalized and revamped civil means taking advantage of the les- ship. But none of these strategies service system should ensure that sons learned by agencies that have will be successful without also tak- federal agencies can attract, moti- broken free from Title 5 to develop ing an enterprise approach to man- vate and retain skilled, energized a civil service system up to the chal- aging government’s most important and engaged employees who can be lenges of 21st-century government. resource—its people. This requires deployed where needed to support The Partnership for Public Ser- the federal civil service to be rebuilt, the enterprise without compromis- vice and Booz Allen Hamilton will modernized and better integrated to ing core civil service principles that release a detailed framework for confront cross-agency program and have defined the American civil ser- this new enterprise civil service policy priorities. vice since its inception—merit, polit- system later this year, but given its Today’s federal civil service sys- ical neutrality, veterans preference, importance to our overall enterprise tem is obsolete. Its major compo- due process, collective bargaining strategy, its basic architecture and nents were last retooled more than and non-discrimination. These val- approach are worth describing here. four decades ago. The civil service ues are inviolable and should guide Upon adopting the core anchor-

BUILDING THE ENTERPRISE 21 ing principles, we would construct true to the system’s foundational el- since the last time the civil service a set of common policies and prac- ements and parameters. system was modernized, it is the im- tices that are so fundamental that For example, we would permit portance of strategic human capital they, too, should cover every federal agencies to customize salary rates planning. agency, regardless of mission or cir- for mission-critical occupations, Thus, OPM should devise an cumstance—for example, a common promotion and career patterns, per- enterprise strategic human capital but modernized job classification formance management policies and plan with consultation from enter- system to ensure generally equal pay a host of other workplace practices. prise goal leaders and ratified by the for equal work across agencies and Consistent with today’s demon- PMC. The plan would have two pri- a common, market-based compen- stration authority, we would afford mary purposes. First, it would look sation regime tied to that classifica- agencies the authority to customize into the near- and medium-term fu- tion structure to ensure parity with even components that are intended ture to address critical, cross-cutting the U.S. labor market. A common to be common across the enterprise, human capital challenges affecting senior executive corps—today there subject to collective bargaining most agencies—for example, recruit- as many as seven—would foster in- where required. An agency would ing and retaining talent in cyberse- teragency mobility and the develop- earn approval to operate a custom- curity and science, technology, engi- ment and deployment of the cadre ized system by demonstrating high neering and math. of leaders so critical to enterprise mission performance, including The second purpose would be to government. employee engagement and high in- continuously assess the enterprise The enterprise civil service sys- ternal integrity, as well as by show- efficacy of human capital policies tem we propose is not rigid. There is ing that it has the human capital and and strategies. This rarely is done too much variety—in statutory base, leadership capacity necessary to op- today. size and scope, mission, constitu- erate responsibly outside the lines. OPM evaluates individual de- ency and budget—across the federal This autonomy would have to be pe- partments and agencies, mostly from enterprise to force lockstep unifor- riodically reexamined and renewed. a compliance standpoint. But it has mity. Instead, it would balance com- Such a civil service system not stepped back to evaluate from monality at the core with built-in would improve the ability of the a whole-of-government perspec- agency flexibility. Thus, agencies enterprise to recruit and retain our tive regarding how well the Gen- would be given considerable discre- nation’s best and brightest talent. eral Schedule classification system tion—more so than today’s rules al- Nonetheless, much would depend stacks up against state-of-the-art low—to tailor elements of the com- on the substance of the human capi- private-sector practices, the effects mon structure to meet their own tal policies. And if there is one lesson of pay freezes on retention or the unique needs so long as they stay we have learned over the decades value of tuition loan repayment on recruiting talent. Such comparisons largely have been left to the GAO or the Merit Systems Protection Board. Both do a credible job, but their stud- ies rarely translate into action. This would change under an enterprise strategic human capi- tal planning process that regularly The civil service“ today reflects considers such issues, assesses their the needs and characteristics of impact on the ability of agencies and enterprise goal leaders to recruit the last century’s government and retain talent, and proposes and work and workforce, not those puts into effect medium- and long- required for today’s complex, term steps to address human capital needs. • interagency challenges. ”

22 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON CONCLUSION

n July 8, 2013, President Obama told his Cabinet What remains is to join these disparate efforts into the to develop an “aggressive management agenda aggressive agenda the president seeks and to drive them O … that delivers a smarter, more innovative and to full-scale execution. President Obama and his man- more accountable government for its citizens.” agement team can accomplish this by making enterprise The president said he wants this agenda to build on government the focal point of management reform. This his first-term objectives: the delivery of services that citi- will take sustained attention, enthusiastic evangelism, zens expect in smarter, faster and better ways; identifi- powerful leadership and unity of purpose. Though much cation of new ways to reduce waste and save taxpayers’ of what we recommend is within the power of the execu- money; and an increase in transparency by opening huge tive branch to attain, truly achieving enterprise govern- amounts of government data to the American people. ment will take coordination and consultation with those We wholeheartedly agree with these goals, but be- members of Congress who value and support improved lieve the administration has the opportunity to go even government performance and some legislative changes. further by embracing the strategies in this report. The The success of this management agenda depends on president could accomplish all he has outlined and a great the care, dedication, talent, expertise and evidence em- deal more by taking a coordinated enterprise-wide ap- ployed in crafting the enterprise performance plan that proach to managing government missions and internal is at its core. Drafting it must be the top priority of the operations rather than relying on the narrow program- President’s Management Council and a key accomplish- and agency-centric framework now in place. ment of the Cabinet and White House staff. Enterprise In fact, the Obama administration is pursuing many government cannot endure unless the president and the elements of it already. The Government Performance and management council name a cadre of excellent, capable Results Modernization Act of 2010 provided a foundation and intrepid goal leaders. And they cannot overcome the for moving government in this direction, and the admin- stovepipes of current agency structure without a willing, istration has named goal leaders who are implementing a well-prepared, mobile and modernized civil service. series of cross-agency priority goals. OMB and GSA are These are not small changes. They will not be spearheading an expansion of strategic sourcing, and the achieved without collaboration and contention. Yet they federal CIO and CIO Council are helping agencies find are unavoidably necessary lest we fail in effectively per- economies and efficiencies through shared services and forming government’s critical missions. No single agency resources. can accomplish any one of them alone, especially in this era of austerity.

BUILDING THE ENTERPRISE 23 APPENDIX A SAMPLE PORTFOLIO: FEDERAL DRUG TREATMENT AND PREVENTION PROGRAMS

The table below offers a look at just a portion of what would be included in an enterprise portfolio—in this case, a listing of the multiple departments, agencies, programs and their roles in federal drug treatment and prevention programs. As reported by the GAO in March 2013, federal drug abuse prevention and treatment programs are fragmented across 15 federal agencies that administer 76 programs that are all or in part intended to prevent or treat illicit drug abuse. Of the 76 programs, 59 had evidence of overlap.

AGENCY AND SUBAGENCY NAME OF PROGRAM PROGRAM TYPE

Department of Defense Drug Demand Reduction Program N/A

DOD civilian agencies Civilian Employee Drug-Free Workplace Program Prevention

National Guard Bureau National Guard Bureau Prevention, Treatment and Outreach Program Prevention

U.S. Air Force Air Force Drug Demand Reduction Prevention

U.S. Army Army Substance Abuse Program Prevention and treatment

U.S. Marine Corps Marine Corps Community Services Substance Abuse Program Prevention

U.S. Navy Navy Alcohol and Drug Abuse Prevention Prevention

Substance Abuse Rehabilitation Program Treatment

Department of Justice

Bureau of Prisons Community Transitional Drug Abuse Treatment Treatment

Drug Abuse Education Prevention and treatment

Non-Residential Drug Abuse Treatment Treatment

Residential Drug Abuse Treatment Treatment

Drug Enforcement Administration Demand Reduction Program N/A

Office of Justice Programs Drug Courts Treatment

Enforcing Underage Drinking Laws Prevention

Justice and Mental Health Collaboration Program N/A

Residential Substance Abuse Treatment Treatment

Second Chance Act Adult Offenders with Co-Occurring Treatment Substance Abuse and Mental Health Disorders

Second Chance Act Family-Based Adult Offender Substance Abuse Treatment Treatment Program, Planning, and Demonstration Projects

Department of Transportation

Federal Aviation Administration Employee Drug and Alcohol Testing Program N/A

Flight Attendant Drug and Alcohol Program N/A

Human Intervention Motivation Study N/A

National Highway Traffic Drug Impaired Driving Program N/A Safety Administration

24 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON AGENCY AND SUBAGENCY NAME OF PROGRAM PROGRAM TYPE

Department of Education 21st Century Community Learning Centers N/A

Safe and Supportive Schools N/A

Save Schools/Healthy Students Prevention

Executive Office of the President

Office of National Drug Control Policy Anti-Doping Activities Prevention

High Intensity Drug Trafficking Areas N/A

Youth Drug Prevention Media Program Prevention

Federal Judiciary

Administrative Office of the U.S. Courts Court Ordered Substance Abuse Testing and Treatment Treatment

Department of Health and Human Services

Health Resources and Health Center Program N/A Services Administration Ryan White HIV/AIDS N/A

Indian Health Service Urban Indian Health Program Title V 4-in-1 grants Prevention and treatment

Alcohol and Substance Abuse Self Determination Contracts Prevention and treatment

Methamphetamine and Suicide Prevention Initiative Prevention and treatment

Youth Regional Treatment Centers Prevention and treatment

Tele-Behavioral Health Activities Prevention and treatment

Substance Abuse and Mental Health Access to Recovery Treatment Services Administration (SAMHSA) Assertive Adolescent and Family Treatment Prevention and treatment

Capacity Building Initiative Prevention

Center for the Application of Prevention Technologies Prevention

Community-Based Coalition Enhancement Grants Prevention

Drug Free Communities Mentoring Program Prevention

Drug Free Communities Support Program Prevention

Ex-Offender Reentry Treatment

Fetal Alcohol Spectrum Disorders Centers for Excellence Prevention

Grants to Serve Young Children and Families Prevention and treatment Affected by Methamphetamine

Historically Black Colleges and Universities Grant N/A

Homeless Grants for the Benefit of Homeless Individuals Treatment

Minority AIDS Initiative Targeted Capacity Expansion Prevention and treatment

Minority HIV Prevention Prevention

National Adult Oriented Media Public Service Campaign Prevention

Native American Center for Excellence Prevention

BUILDING THE ENTERPRISE 25 AGENCY AND SUBAGENCY NAME OF PROGRAM PROGRAM TYPE

SAMHSA (cont.) Partnership for Success Prevention

Physician Clinical Support System Project-Buprenorphine N/A

Physician Clinical Support System Project-Opioid N/A

Residential Treatment for Pregnant and Post-Partum Women Prevention and treatment

Ready to Respond Prevention

Recovery Community Services Program Treatment

Screening, Brief Intervention and Referral to N/A Treatment-Medical Schools/Residency

State Screening, Brief Intervention and Referral to Treatment Prevention and treatment

Strategic Prevention Framework State Incentive Grants Prevention

Substance Abuse Prevention and Treatment Block Grant Prevention and treatment

Targeted Capacity Expansion General Grants to Expand Care N/A Coordination Using Health Information Technology

Targeted Capacity Expansion General Technology Assisted Care Treatment

Treatment Drug Courts-Adults Treatment

Treatment Drug Courts-Juvenile Treatment

Treatment Drug Courts-Adult (Joint with the Treatment Bureau of Justice Assistance)

Treatment Drug Courts-Juvenile (Joint with the Office Treatment of Juvenile Justice and Delinquency Prevention)

Underage Drinking Prevention Education Initiative Prevention

Department of Housing and Emergency Solutions Grants N/A Urban Development Supportive Housing Program N/A

Housing Opportunities for Persons with AIDS N/A

Department of Labor

Employment Training Administration Job Corps N/A

Department of Veterans Affairs

Veterans Health Administration Substance Use Disorder Outpatient Program Treatment

Substance Use Disorder Residential Program Treatment

Source: “Office of National Drug Control Policy: Office Could Better Identify Opportunities to Increase Program Coordination,” GAO-13-333, March 26, 2013, http://www.gao.gov/products/GAO-13-333. Last accessed Jul. 26, 2013.

26 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON APPENDIX B CONTRIBUTORS

Admiral Thad Allen Frank Hodsoll Executive Vice President, Booz Allen Hamilton President, Resource Center for Cultural Engagement Former Commandant, U.S. Coast Guard Former Chairman, National Endowment for the Arts

John Berry Kenneth Juster Former Director Managing Director Office of Personnel Management Warburg Pincus

Jonathan Breul Don Kettl Former Executive Director Dean, School of Public Policy IBM Center for the Business of Government University of Maryland

Lisa Brown John Koskinen Former Executive Director Director, Board of Directors, The AES Corporation Office of Management and Budget Former Non-Executive Chairman, Freddie Mac

Dustin Brown Vivek Kundra Acting Associate Director for Performance Executive Vice President of Emerging Markets, Salesforce.com, Inc. and Personnel Management Former Federal Chief Information Officer Office of Management and Budget Chris Mihm Tom Davis Managing Director for Strategic Issues Former U.S. Representative, Virginia U.S. Government Accountability Office

Ed DeSeve Elizabeth McGrath Senior Fellow, James MacGregor Burns Academy Deputy Chief Management Officer of Leadership, University of Maryland U.S. Department of Defense Former Deputy Director, Office of Management and Budget Shelley Metzenbaum Frank DiGiammarino Founding President, Volcker Alliance Director, Innovation and Global Expansion, World Former Associate Director for Performance and Personnel Wide Public Sector, Amazon.com Management, Office of Management and Budget Former Senior Advisor, Office of Strategic Engagement, White House Tom Monahan CEO Gene Dodaro Corporate Executive Board Comptroller General U.S. Government Accountability Office Sue Myrick Former U.S. Representative, North Carolina W. Scott Gould Former Deputy Secretary Sean O’Keefe U.S. Department of Veterans Affairs Chairman and Chief Executive Officer, EADS North America Former Administrator, National Aeronautics Stephen Goldsmith and Space Administration Daniel Paul Professor of Government, John F. Kennedy School of Government Paul Posner Former Mayor of Indianapolis Director, Center on the Public Service, George Mason University Former Managing Director, U.S. Government Accountability Office Todd Fisher Global Chief Administrative Officer Steven Preston KKR & Co., L.P. Former Secretary U.S. Department of Housing and Urban Development Leon Fuerth Executive Director, The Project on Forward Engagement Franklin Raines, III The George Washington University Former Chairman and CEO Fannie Mae

BUILDING THE ENTERPRISE 27 Charles Rossotti Former Commissioner Internal Revenue Service

Lynn Scarlett Visiting Scholar and Co-Director, Center for Management of Ecological Wealth, Resources for the Future Former Deputy Secretary, U.S. Department of Interior

Hannah Sistare Former Executive Director Volcker Commission

Matt Sonnesyn Director of Research Business Roundtable

Dan Tangherlini Administrator General Services Administration

David Walker President and CEO, Comeback Initiative Former Comptroller General, U.S. Government Accountability Office

Darrell West Vice President and Director, Governance Studies The Brookings Institution

Danny Werfel Acting Commissioner, Internal Revenue Service Former Controller, Office of Management and Budget

Steve VanRoekel U.S. Chief Information Officer and Administrator, Office of Electronic Government Acting Deputy Director for Management Office of Management and Budget

Booz Allen Hamilton Ron Sanders, Vice President Dave Mader, Senior Vice President Mike Isman, Vice President Gordon Heddell, Senior Executive Advisor John Cataneo, Senior Associate Chris Long, Principal

Partnership for Public Service Lara Shane, Vice President for Research and Communications Max Stier, President and CEO Sally Jaggar, Project Lead and Strategic Advisor Seth Melling, Associate Manager Bob Cohen, Writer/Editor Bevin Johnston, Creative Director Anne Laurent, Senior Program Manager

28 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON

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