Friday August 2, 2002
Mr. Lawrence: Welcome to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and the co-chair of The Endowment for the Business of Government. We created The Endowment in 1998 to encourage discussion and research into new approaches to approving government effectiveness. Find out more about The Endowment by visiting us on the web at endowment.pwcglobal.com.
The Business of Government Hour feature a conversation about management with a government executive who is changing the way government does business. Our conversation this morning is with Bill Leidinger, assistant secretary for management at the U.S. Department of Education.
>Good morning, Bill.
Mr. Leidinger: Good morning.
Mr. Lawrence: Joining us in our conversation is another PwC partner, Debra Cammer.
Good morning, Debra.
Ms. Cammer: Good morning, Paul.
Mr. Lawrence: Bill, let's start by talking about the Department. Could you give us an overview of the Department and its functions?
Mr. Leidinger: The Department is one of the smaller if not the smallest of Cabinet agencies, and its principal purpose is to improve education in the United States for both children and adults. The Department has approximately 4,800 full-time employees, but we have 1-1/2 contract employees for each permanent employee that we have.
Our principal lines of business are grant making, principally to states and educational institutions, student lending, educational research, educational policy, offering assistance to states and school districts with respect to certain aspects of civil rights laws which relate to education, and then a variety of other stuff intended to support those principal lines of businesses and make us function a little better.
Mr. Lawrence: What type of employees work there to carry out these different functions? What are their skills?
Mr. Leidinger: A variety of skills, but as you might expect, since it is the Department of Education, there are a large number of people there who not only are actual educators, but also who have training, experience, degrees in a variety of highly specialized educational fields. The particular skills they have are fairly well aligned with our principal lines of business. You might expect people who are skilled in student lending and our student lending systems; both business processes as well as the IT systems know the student lending business very well. So again, the skills follow basically the lines of business, but many folks there, many, as you might expect, either come from a direct educational background or they have a background specialty in something related very closely with education.
Ms. Cammer: Bill, your title is the assistant secretary for management. Could you tell us about the specific roles and responsibilities that you have?
Mr. Leidinger: I spend probably 25 to 30 percent of my time doing things that I guess my job description would say that the assistant secretary for management does, that's the HR and facilities and things like that, all the support activities. I spend the bulk of my time working on the strategic and management initiatives we have going on in the Department. The Department of management, the office of management, has ownership of about 40 percent of all the items in our strategic and management initiatives, and that occupies a lot of my time. So my title is a little bit misleading. I like to see myself probably more aptly described as assistant secretary for performance transformation or performance improvement, and that's the general area that I work in.
Ms. Cammer: Could you tell us about your career before coming to the Department of Education?
Mr. Leidinger: It's varied, and very interesting. About half of my working experience, I've been in the private sector, and the other half I've been in the public sector. style="mso-spacerun: Starting with the private sector, most significantly, I've been in banking, health care, and I have to admit that I was in the government consulting practice at PricewaterhouseCoopers. My public sector experience, most significantly, I've been city manager in Richmond, Virginia, county executive in Fairfax County, and I held elective office for 10 years while I was in the private sector.
Mr. Lawrence: How would you compare the different levels of government you've worked at, state, local, and federal, in terms of their culture, their styles and approaches?
Mr. Leidinger: Local government is where the action is. That's where you fix the potholes and make sure the lights work and the water works, the policemen and the firemen are there, and the classroom teacher is there. It's as they say, where the rubber meets the road. Everything is local, all politics are local, but at the local level, all government is truly local as well. People come to meetings, they come to meetings regularly. They have public hearings on every aspect of government, and it's local. It's a short cab ride, it's a local phone call, it's easy to get ahold of folks at the local level.
As you move away from the local level towards state and federal, it becomes a little more abstract. The direct service delivery is I don't think quite so apparent to most people, and it becomes a little more remote. For the average citizen, it's probably more difficult for them to contact their congressman or their senator, or certainly the President, than it would be to pick up the phone and contact the city manager or member of the city council in their community.
They each do different things, and they're each important in our system. I don't mean to say that they're not. But they're all very distinct, they operate very differently, they all do very different things, yet they all fit.
Mr. Lawrence: Did you find your management styles at these different levels varied?
Mr. Leidinger: No. I'm me. style="mso-spacerun: I can't change.
Mr. Lawrence: Should it have varied?
Mr. Leidinger: Probably not. I think it's important to be involved. I describe myself as an activist. I manage a lot by walking around. I think it's important that I understand what's going on at the level where the people are doing the work. I have been known to walk around and go into an office and sit down and talk to people about reconciling bank accounts, and that's what they're doing, and finding out that we're 2 months behind and the reason for that is we're short of some staff and some other things, and there are just some things you have to fix. So I walk around and I get involved.
I know enough about the details of the business and the details of the processes involved in those lines of business. I think to be able to be effective in exercising both management and leadership roles in doing what's got to be done to improve performance and achieve higher levels of results, and that's been what I've been interested in since I've been in the working world, both in the public and private sector; it's improving performance and results.
Mr. Lawrence: How about just communicating? I'm assuming that by and large, the more local the government is, more often the smaller the organization is, too, even at the federal level, where there are much larger organizations. How do you get the word out in these different size organizations?
Mr. Leidinger: It's difficult, and it requires effort, special effort, no matter what level of government you're at. Admittedly, the more remote you are from direct citizen contact, not only the more difficult it is, but probably the more important it becomes. style="mso-spacerun: At the Department of Education, for example, as we've been going about implementing No Child Left Behind, we've been in touch with governors, state school chiefs, school superintendents across the country. We've sought their advice in formal and informal meetings. We're on the telephone regularly seeking their input.
Even very recently, each of the assistant secretaries in the Department, including me, who doesn't have a direct relationship with educational policy or grants or loans, we have each accepted the responsibility for being in touch with certain governors and certain school chiefs in certain states, not that we may be able to necessarily help them directly. But we want them to know that there's a face and a voice that they can pick up the phone and call if they have an issue, and we'll be their advocate and we'll work on their behalf to resolve their concern as quickly as we can, whether the concern is a simple one like what's the answer to this question, or a more complex one like I really have a problem here and I need some help.
Mr. Lawrence: You've also worked in the different sectors, the public and the private sector. style="mso-spacerun: How would you compare the differences or the similarities of the two sectors?
Mr. Leidinger: To manage effectively and successfully, and I qualify it that way, in both the public and the private sector requires a great deal of work. You have to pay attention, you have to understand the business, you have to be committed, you have to be engaged, you have to be a little passionate, certainly, and you just have to press on every day in as many areas as you can. Managing in the private sector I think is very difficult, but it has the advantage of having a more limited focus, a more limited span of attention, and generally as a CEO, you have fewer lines of business than you do in government.
The government, on the other hand, is broad; it's diverse. There are a lot of players involved. Much of it is conducted on a public stage in a public arena. You're on the stage very often with elected officials. The air is charged with a variety of political electricities that are not found in the private sector. As I mentioned, all of this is done under the scrutiny of the public eye.
So when all is said and done, while managing in the private sector is very, very difficult, I think it's more difficult to manage effectively in the public sector. Perhaps more simply stated, in the public sector, the span of control in terms of lines of business or business activities is much more broad than it is in the private sector.
I can understand why things happen in government that don't happen in the private sector. The responsibilities of government are so broad, there is so much going on in so many places, they're so different, that it's really difficult for whoever is in charge to know what's going on everywhere at all times.
Mr. Lawrence: That's a good stopping point. We'll be back in a few minutes with more of our conversation with Bill Leidinger of the Department of Education.
How is the President's management agenda affecting the Department? We'll ask Bill when The Business of Government Hour returns.
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and today's conversation is with Bill Leidinger. Bill is the assistant secretary for management at the U.S. Department of Education.
Joining us in our conversation is another PwC partner, Debra Cammer.
Bill, let's talk about the status of the President's management agenda items at the Department. What can you tell us?
Mr. Leidinger: In terms of status, the Department was scored when all other Cabinet and
sub-Cabinet agencies were scored. We discovered much to our delight that we had enormous opportunities for improvement. We received a red in all five categories. We felt bad about that until we looked at everybody else's score and saw that there were a lot of reds out there.
Eighty-four or eight-five percent of the scoring in terms of the original status was red, and we knew not only did we have really an enormous opportunity for improvement, but we were in good company; there were lots of folks the same way.
We took that very seriously, and we've been working very hard at it, and we are now at the point in the most recent scoring, I think July 1st, we have four green and one yellow, with our yellow being in financial management. But even there, that's not planning, that's implementation. We're installing Oracle financials across the entire Department, both in the massive student-lending program, as well as throughout the rest of the Department activities, and that may very well be the first Cabinet agency that has a departmental-wide enterprise financial system. So even with that, we're feeling very good about it.
Ms. Cammer: Education has a new plan in place called One-ED to address its human capital and competitive sourcing needs. Can you talk to us a little bit more about this initiative?
Mr. Leidinger: When we started out, we knew that we had to focus in the human capital area, in competitive sourcing, and restructuring. We started out by deciding that whatever we ended up with had to be ours, had to have department ownership, and that meant that the employees had to be a big part of developing what we ended up with.
So we got together a large number of employees who spent 90 days putting together our plan. We thought when we started we were going to have three separate plans: a competitive sourcing plan, a human capital plan, and a restructuring plan. We knew as we started doing this that we certainly didn't have all knowledge in the world, and we wanted to be also certain that we had people at the table with us who could challenge us and be very critical thinkers as we went about doing what we were doing and sort of keep us on track and challenge our thought processes. style="mso-spacerun: So we asked the National Academy for Public Administration to come on board and do that critical thinking from the public sector point of view as well as help us with best-in-class issues from the public sector side.
We also asked the Private Sector Council to help us in the same way, bringing private sector experience to us, and we got some great help from both. We were assisted by some folks from NAPA, the National Academy for Public Administration, who had great experience in the federal service in a variety of agencies, and from the Private Sector Council, we had some very senior people, like senior vice presidents from HR from institutions like Chase Bank, Lockheed Martin, and what have you. So we had the best of both worlds. But still, it was not their role to tell us what to do; they were there to help us do what we had to do for ourselves.
As we got into the plan, as we got into our activities, we realized that looking at human capital and competitive sourcing and restructuring and trying to address some of the questions that OMB was asking about how are you going to be shaped, what are some of your metrics with respect to your organization five years from now, we began to conclude that you couldn't answer those questions until something else happened, and that something else was that you are satisfied with the work that you are doing, what is your mission, what is your purpose, it's two given tasks: execute your lines of business. If that's your principal responsibility, you have an obligation to make certain your delivery knows with maximum performance, if you will, and achieving maximum results.
We knew competitive sourcing was on the horizon, and we also knew that we didn't want our process to become an outsourcing process; we wanted it to be a competitive sourcing process. So then we linked the notion of, if we have to do the best job we can do at doing what we're supposed to do and at the same time have competitive processes, we're going to have to
re-engineer our major business processes to make certain that the Departmental employees have available to them the best redesigned business processes to enhance the opportunity in the hope for improved performance and results. If the decision was made then to, if you would, compete those redesigned business processes with the private sector processes, we could be comfortable that our employees would be in a good competitive posture. Without re-engineering business processes, we were concerned that employees would be going out in old creaky galleons against some nuclear fleet, and we didn't want that to happen. We wanted our employees to be in the best possible competitive position.
So that began to lead us into the notion that hey, the competitive sourcing is really tied up in human capital, because that's a big part of the skills you need for these redesigned processes, and we began to link that with our skills work we did last fall, our skills survey, and we began to see that while we're working real hard to align the Department with the President's management agenda and the Secretary's strategic plan and all that stuff, our human capital plan and our competitive sourcing was really going to be the engine we were going to use to drive the organization to achieve our strategic and management objectives.
So we came up with the One-ED notion, and the One-ED notion says that we're all going to be in alignment, we're all going to be going in the same direction, we're all going to get, if you would, the noses pointing in the same direction, because that will help establish the focus, and what we're going to do in our One-ED notion is make certain that we've got the best work processes that we can, we'll go through the competitive sourcing as all federal agencies are required, and we're confident then that we're going to be in a position to deliver best value results, whether it's done in-house or by the private sector, also knowing that we wanted to avoid an outsourcing process but, rather, we wanted to have a competitive sourcing process.
We felt comfortable that redesigned business processes with the objective help that employees could get within those redesigned business processes putting together a competitive package that our employees probably more often than not will win these opportunities, best value will be delivered, and we'll end up with a win-win situation as far as the taxpayers are concerned, the employees are concerned, but, more importantly, the work we're doing on behalf of the public.
Then that led us into some discussions about what does that say about restructuring or what our organization ought to look like, and our answer was, why are we trying to define the answer, let's let the answer be the result of the product. Let's go through the process focusing on our work, on our business needs, delivering what we have to do, do it in a way that represents best value, and when that's done, then the organizational structure that's there to support the end product will be what it's going to be. The architecture will speak for itself. The results will be the results. I liken it to there's two ways you can get a golf score, if you would. You can walk out on the eighteenth green, write a number on a scorecard and hand it to somebody and say that's what I think the score is going to be. Or you can go to the first tee, you can play through, you can write down your real score at the end of 18, and that's something that's valid and you can have confidence in. That's the direction we're going.
We feel good about what we're doing. We've had it validated, certainly not only by NAPA and the Private Sector Council, but OMB has recognized it as being one of I think the two most creative strategies for linking and relating all of these tasks that we have under the President's management agenda. So once we put that in place in terms of spending time thinking how are we going to do this, then the time came to put our foot in the path. We have blanket purchase agreements out and the first task order to begin to implement this, and I felt that if I was going to go around the Department sharing with other assistant secretaries that this is the right way to go, I'd better be willing to demonstrate that I walked the walk.
So the first major business processes we're taking on are HR, human resources. Those are processes I'm responsible for, and I want to be able to demonstrate that, as I said, I'm willing to walk the walk. But on the other hand, the HR function is one that cuts across the organization, and it's absolutely fundamental to help us carry out our human capital strategy in the best way we can. So, again, it's kind of a win-win to approach that one first. We feel very comfortable and confident about our approach, but I'll also be candid and tell you it's going to be very aggressive and is going to require a great deal of work.
Ms. Cammer: You're right, it sounds very aggressive. It also sounds very innovative. Can you give us a sense of the timeline and where things stand?
Mr. Leidinger: We hope by January 2003 to have done all our process mapping and redesigned business processes in eight functional areas. I know I'm going to miss one or two, but human resources, legal services, audit review, payment processing, the IT processes in both the student lending and the rest of the Department, the financial services in both the SFA, the student financing and the rest of the Department, some policy issues involving, again, student financial aid, and the Office of Post-Secondary Education. We're going to have those business processes redesigned by January 2003, ready to make the decisions about which of those processes we want to subject to the competitive sourcing process.
Then we go into the detailed process we've laid out, we call it the strategic investment process, leading up to the competitive sourcing. style="mso-spacerun: We're also going to incorporate activity-based costing so that we have real metrics on costs as well as on the other metrics we'll be gathering as we go about the business process for engineering, the other metrics relating to performance and cycle time and things like that.
Mr. Lawrence: That's a good stopping point. We'll continue our conversation with Bill Leidinger of the Department of Education in just a few minutes.
This is The Business of Government Hour.
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and today's conversation is with Bill Leidinger, assistant secretary for management at the U.S. Department of Education.
Joining us in our conversation is another PwC partner, Debra Cammer.
Ms. Cammer: Bill, when we left, you had touched on the subject of alignment of goals and values, and that really piqued my interest. Could you go back and talk some more about that?
Mr. Leidinger: As we began to look at the President's management agenda and the Secretary's strategic plan, the Secretary himself spent a lot of time on that strategic plan, he's really invested heavily in it, and I know he talked to a number of people about it, I suspect even the President. He wanted to make certain it was in alignment with the President's management agenda, which makes sense.
We also had a number of things we had to do in the Department, such as our blueprint for management excellence. That included addressing the 600-and-some management deficiencies that were sort of brought to our attention by the Government Accounting Office, the Comptroller, our independent auditors, the Inspector General, Congress and others. We talked about developing a culture of accountability, make employees aware of their jobs, what's expected of them, give them tools and training in all the help we need, hold them responsible for results, and hold them accountable for attaining that. So we began to think about aligning all of these things, again, from a strategic and management perspective, get our organization in alignment, and we're satisfied that we did that.
For example, we have a management tracking system. All of these things I've mentioned, these items I've mentioned, they're all broken down into tasks, and the tasks all have an owner, a beginning date, an end date, a status. We have an executive management team that meets weekly, we have a separate management group that reviews the status of all activities, and we manage on exception by exception, focusing only on the reds and the greens. style="mso-spacerun: We've aligned our own program internally. We've aligned that with the President's management agenda. We know what we're doing relates to the President's management agenda. style="mso-spacerun: We're tracking all of these things. style="mso-spacerun: OMB likes what we're doing, by the way, and they're so satisfied with our tracking and our focus on this that they're using our tracking system, how we score ourselves, to evaluate us in large measure on the President's management agenda, so we feel good about that.
Anyway, it's one thing to get sort of the things in alignment, it's another thing to get the people in alignment. I like to tell the story that I've never had these variable lenses before, and when I got them, I'd look out the corner of my eye one way or the other and things were not in focus and in different shapes. I thought something was wrong with the glasses. The people who made the glasses finally explained to me one day very directly, Bill, if you want to see things clearly, point your nose at what you want to see. I did that, and all of a sudden everything was clear to me.
That's kind of like what we're trying to do in the organization. style="mso-spacerun: We're trying to get all the arrows to point in the same direction and to have a clear focus. So we said to ourselves, well, if we get our organizational goals, objectives, and tasks, if you would, all in alignment with the President's management agenda and the Secretary's strategic plan, it only follows that people ought to be in alignment. So to do that, we started with the senior officers. The senior officers have performance contracts with the Secretary that include targets with respect to the President's management agenda, the Secretary's strategic plan and all those other items; I'll just call them that other stuff.
The SES performance agreements have been amended to include performance standards related to the same management and strategic focus. style="mso-spacerun: Likewise, we've conducted performance standards training for every evaluator and rater in the Department, so that means every employee now has those performance standards being included in their performance agreements. We've gone back and we looked at our training offerings. We're going to make certain our training offerings are in alignment to support our people as well as to meet our human capital requirements, again, to make certain that we can deliver in our strategic and management directives.
We looked at our awards programs to make certain that they're in alignment. We've looked at all of our leadership development programs we have in the Department, again, to make certain we're focusing on where we're trying to go. We've even gone and looked at our new employee orientation program to see what we were doing with new employees, probably several hundred a month that come in, and what are we doing with new employees. We found we had to do a lot of work, which kind of surprised us. So we changed that program really from an employee-processing program to an employee orientation with some processing at the end. We begin by telling them what the Department of Education is and what our work is, where they fit, and then we begin to talk about our management and strategic direction and tell them quite frankly how they fit with that and how their performance will be evaluated with respect to that.
The notion was that gee, if we adopt a new strategic plan in its simplest terms and announce it to everybody and do nothing, probably nothing would happen, or maybe 2 percent of the people in the organization would be doing work related to achieving the objectives of the strategic plan. style="mso-spacerun: So we said okay, we like the President's management agenda, the strategic plan and the other strategic and management initiatives we had in alignment, now let's go to the other part of the organization, which is the people, and begin to align the people right along in accord, again, all the arrows going in the same direction, so that everybody knows where we're going and is personally linked in a very responsible way to where we're going.
Mr. Lawrence: You've just described a very intricate process of aligning things. How long did it take, and what were the challenges to get there?
Mr. Leidinger: I forgot to say part of our alignment was the development of a new employee performance and evaluation system. We're in the final stages of negotiation on that with the union, and that too will be in place. We radically changed the way we evaluate employees' performance, and it's constructive. I would say we really began in earnest in February of this year. We've been working hard at it. There have been a large number of people working at it. It hasn't all been done by two or three people. There have been a large number of people. It's been part of our management process. Remember I mentioned the executive management team reviewing these things?
When the One-ED project was developed, all the tasks needed to execute that One-Ed project were rolled into our management tracking and reporting system, and that's followed weekly. Every task has an owner, a start date, an end date, a status, and everybody is held accountable. So I had the responsibility for helping develop the Ed PASS system. I had the responsibility for reviewing the training, and other people had responsibility for other things along the way. So everybody just goes off and begins to get it done; big effort.
The employees are right when they say holy smoke, how can we get this done when we've got all this other work we've got to do, our daily work. style="mso-spacerun: The answer is simple, but it's difficult. The simple answer is, you can't quit what you're doing to do what you've got to do. You've got to keep what you're doing and begin to do what you've got to do. So while the train you're on now is going 90 miles an hour, you got to start to build and operate another train that goes faster and works better at the same time. style="mso-spacerun: At some point, you'll be able to make the transition, but you will be on a faster and better train.
Ms. Cammer: What was the response like from the employees when you rolled this out?
Mr. Leidinger: I can also tell you that these employees who said it was impossible have become very strong advocates of what we've been doing. style="mso-spacerun: Sure there's organizational resistance, there's cultural resistance, but I think there has been a great deal of understanding that's been reached and an understanding that says there are no tricks in this stuff and, quite frankly, as I tell the folks, there are no Ds or no Rs involved in what we're doing. I say if you don't believe me, go to your neighborhood library, pull out the last three or four issues of "Harvard Business Review" and read the abstracts on every article, and you'll see that what we're talking about is what's going on in high performance organizations around the world. I think people understand that.
Does everybody agree? No. style="mso-spacerun: Does everybody want to be a player? style="mso-spacerun: No. Are people capable of playing in the new environment? Probably not. But on the other hand, I think there are a large number of people who are excited about this, more and more people are beginning to understand what it's all about and that it makes sense, and that the end result when all is said and done is to deliver better products to the people that we serve.
Mr. Lawrence: Earlier, you talked about competitive sourcing, and you just mentioned the reaction of the employees. Sometimes competitive sourcing is heard as out-sourcing. What are you doing to make sure people hear this correctly?
Mr. Leidinger: Spending time doing it, because there has been concern in our organization, and I'm certain that concern persists. I've just flat-out told them it's not out-sourcing. It may end up that some things that done by the private sector, but it's going to be done on a basis of a competitive process that's based on fair value, and in order for employees to compete, should that work process be one subjected to competitive sourcing, we want to assure those employees that they're going to have the best business process they can, that they're going to be working as well as they can, and we're going to have people available to not only work independently to create and take us through this strategic investment process, but also to help employees to put their proposal together in the best possible way that they can.
Again, the whole purpose of this is to equip our employees to be truly competitive. I think if you're competitive in your process, in your costs, in your cycle time, our employees I think have an inherent advantage, they know the work better than anybody, they know the work. If you can compete, marry good processes with good costs, good cycle times, good performance with people that already know the work, that's why I say it's almost an unbeatable combination, and I think you can say in all candor that you'd be surprised if the overwhelming majority of those things weren't retained.
Mr. Lawrence: That's a good stopping point. Rejoin us in a few minutes as we continue our conversation about management with Bill Leidinger of the Department of Education.
What does the future hold for government and for the Department? We'll ask Bill for his thoughts when The Business of Government Hour continues.
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers. Today's conversation is with Bill Leidinger, assistant secretary for management at the U.S. Department of Education. style="mso-spacerun:
Joining us in our conversation is Debra Cammer, another PwC partner.
Ms. Cammer: Bill, education has the lead on one of OMB's e-government initiatives to provide online access to loans. Can you tell us more about the innovative approach the Department is taking to this initiative?
Mr. Leidinger: Innovative is your word.
Ms. Cammer: Yes.
Mr. Leidinger: Different might be my word. We hope it's successful, we think we're on the right track. style="mso-spacerun: The Department very much supports the e-gov initiatives and the President's interest in better linking citizens with government and the transaction of business between the two.
We were asked to head the e-loans project. We're doing that, and our partner agencies in that project, and I'm going to forget somebody, but certainly the VA, SBA, HUD, and maybe one or two others, and I'm sure there are others, are involved with us. We didn't originally have the lead on that project, someone else did, and it was going in a direction that I think OMB felt a little uncomfortable with, and we shared that view since we were a partner at that time. They asked us to take the lead, and we felt that, as in the direction begin taken by most other initiatives, that it ought to be portal-based, if you would, as opposed to sort of an organizational base or direction that it had been taking.
As we thought about this project from our perspective at Education, we realized that we've got thousands of lending partners for student loans, banks all over the country, educational institutions that are involved in that. On the other hand, we've got just thousands and thousands and hundreds of thousands of people, people seeking loans, people in school with loans, people out of school repaying loans; we have a large number of customers out there. As we thought about how were we going to develop an e-loan program, we began to think about what's in it for our customers, what do our customers want, what is the value that we can deliver to our customers that will make this good for our customers.
On the other hand, we began to think that gee, we just don't want to do something because we think it right, and should it be wrong, we'll alienate our lending partners on one hand or our consumer partners on the other, and that's not good for what we're trying to do. So we developed this notion that what we ought to do is, believe it or not, talk to our partners and tell them what we're up to and find out from them what would be of value from them. Sort of ask the question, how may we help you; we have this idea leading an effort on e-loans with some partner agencies, and how may we help you? style="mso-spacerun: They in turn would be doing the same thing with their customers and their partners, the notion then being in the case of Education, if we find certain sets of values or certain value adds that we can deliver to our lending partners, then that's what we ought to do. On the same token, if we can find certain pieces or types of value adds that our customers, the people who have to pay the loans, who have the loans, if there is something we can do for them, then we ought to do it, that makes sense; we ought not try and impose on them what we think is right.
So we approached our lending partners via surveys to ask them what they were interested in, what their needs were, and how might we best be able to meet them, and we're approaching our customers using principally focus groups around the country or however we're going to do it, the idea then being that we would know at Education what value add our respective customer groups were looking for.
We shared this notion with our partner agencies, and they liked it. style="mso-spacerun: They saw that an approach like that could have real value to them. We then went to the people at OMB who are involved in loans and loan policy and oversight and what have you, and they liked the approach, too. So the approach we're taking then is simply to ask our customers and our partners what may we do to help you, to identify those areas, and then to deliver.
We don't know yet what our business model is going to be because we're still in the process of identifying value adds. If it turns out in the case for Education that all of our lending partners say there is nothing you can do for us other than don't try and complicate things for us, our reaction might very well be then we're not going to do anything for you. Our customers, on the other hand, may have something very much that we could do for them, or vice versa. The bottom line is we're being driven by what our customers and partners want, and we're focusing on value adds, as expressed by them. As we work with our partner agencies, we have identified there may be some value adds that we can deliver to each other, so that's sort of the low-hanging fruit, the quick-delivery things.
Mr. Lawrence: Earlier, you've talked about the human capital initiatives and the potential competitive sourcing initiatives. How will you measure the success of these?
Mr. Leidinger: I think the success in my mind is not going to be measured by how much is retained in-house, how much goes to the private sector, if you would. The success in my mind is going to be, number one, are business processes improved, have we shortened cycle time, have we increased productivity, is our performance better, are our customers better served, have we gone through the competitive process, has it been fair, has the end result been right, do I feel satisfied with the outcome of this effort. To me, that's a judgment. That may be quite subjective, if you would, but that's okay. Someone else may want to attach some other metrics to it, but I think the results are going to speak for themselves. We have to be very satisfied that we're not so much focusing on keeping score as we are in delivering the best service and best products to our customers, and along the way, we've explored the competitive sourcing, and whatever the outcome is, we know it's been fair and right.
Ms. Cammer: How are you going to train the managers throughout the Department to become aware of the human capital issues?
Mr. Leidinger: We have been spending time in all the offices, not only talking about our strategic plan and the President's management agenda and our other strategic and management objectives including One-ED, but we also have these things included on our website, we have specific training sessions for our managers, linking the performance standards into the managers' performance agreements and requiring them and the employees to link them into the employees' performance agreements, requiring them to read all of these things before they start the process, having people available to answer questions and help them develop performance standards related to these strategic and management objectives. These are all the things that we're doing.
It's not all going to happen overnight. A lot of this is new, and even if it's not new, there's an enormous amount of material to absorb, and much of it is in a new direction and a new focus, so it's going to take some time. So on one hand, while we're being very aggressive in doing everything that we can do and ought to be doing, on the other hand, we're understanding that it's not going to happen overnight, but we've got to keep pressing forward.
Mr. Lawrence: Let me ask you a question. At the federal government level, is management cool? By that I mean, a lot of political appointees say you get into the federal government and you want to do policy, that's how you leave your mark, and yet we spend an awful lot of time talking about the importance of management. What's the role of management?
Mr. Leidinger: Policy is very important. Policy, again, you might say it's the strategic direction; it's setting the expectations, sort of like planning, if you would. style="mso-spacerun: Management is the next dimension. style="mso-spacerun: When the policy has been set, the target has been set, the boundaries have been created, the rules have been established, then you look around for somebody to say now make it happen, and I'm one of those people. Management includes many things, but certainly to make things happen and to breathe life into that policy, and achieve the ends sought and desired in that policy requires elements of management, leadership, determination, single-mindedness, strong exercise of will, experience, luck, and lots of good employees who are there to help and make it all happen.
I have interviewed a number of people for spots in the group that I'm involved in, and I describe the work that we do, this implementation, as tough, dirty work. It's two and three yards at a time, and it's lots of disappointments, it's lots of resistance, and every day is not always a great day, but you've got to keep plugging away at it. The rewards, while they may be small, and progress on a given day could be enormous in significance, but when all is said and done and all the policies in the world are established, if nothing happens, there might just as well be no policy. So to me, it's breathing life into policy, it's making it happen and getting us all to the desired end.
Mr. Lawrence: You've had a long and distinguished career, and there's still more of it, I know.
Mr. Leidinger: Let's hope it's a lot longer.
Mr. Lawrence: I'm just curious, what advice would you give to a person interested in a career in public service?
Mr. Leidinger: Do it. Just absolutely do it. I've been lucky in my life, I guess. I've had a chance to do a lot of things, good things, fun things, significant things in both the public and the private sector, and from each one of those, I have learned enormously, and I've taken things away with me that have been absolutely applicable in whatever I do next. From some perspectives, what I'm doing now, I am only able to do because I can take all these experiences that I've had, good ones and bad ones. You learn from losing just like you learn from winning, but maybe it's because in all these opportunities and all these different settings and environments that I'm able to take everything I have kind of done and roll it up into one big thing and use it again.
Mr. Lawrence: Bill, we're out of time. Debra and I want to thank you for being with us this morning.
Mr. Leidinger: Great being here. Thank you.
Mr. Lawrence: This has been The Business of Government Hour, featuring a conversation with Bill Leidinger, assistant secretary for management at the U.S. Department of Education.
Be sure and visit us on the web at endowment.pwcglobal.com. There, you can learn more about our programs. You can also get a transcript of today's very interesting conversation. Again, that's endowment.pwcglobal.com.
This is Paul Lawrence. See you next week.