The Business of Government Hour

 

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The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. The executives discuss their careers and the management challenges facing their organizations. Past government executives include Administrators, Chief Financial Officers, Chief Information Officers, Chief Operating Officers, Commissioners, Controllers, Directors, and Undersecretaries.

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Dr. Susan Offutt interview

Friday, February 8th, 2002 - 20:00
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Dr. Susan Offutt
Radio show date: 
Sat, 02/09/2002
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Dr. Susan Offutt
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Arlington, Virginia

December 14, 2001

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 1988 to encourage discussion and research into new approaches to improving government effectiveness. Find out more about the endowment by visiting us on the web at endowment.pwcglobal.com.

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest today is Susan Offutt, Administrator of the Economic Research Service at the U.S. Department of Agriculture. Good morning, Susan.

MS. OFFUTT: Good morning.

MR. LAWRENCE: And joining us in our conversation is Owen Barwell, a PWC consultant. Good morning, Owen.

MR. BARWELL: Good morning, Paul.

MR. LAWRENCE: Well, Susan, perhaps you could begin by telling our listeners about the Economic Research Service and the U.S. Department of Agriculture.

MS. OFFUTT: The Economic Research Service is a part of a very large organization, which is USDA. The big parts of USDA that most people have heard of would be the Forest Service, the Natural Resource Conservation Service that fights against soil erosion and maintains natural resources, the Farm Services Agency that delivers services and subsidies directly to farmers.

And the Economic Research Service is one of a group of agencies that create the scientific underpinning for many of the department's activities. That would include biological research, statistical collection and the like. But the Economic Research Service has existed in some form or another since 1920, so it's relatively old, as part of the bureaucracy goes, although USDA itself, of course, dates to the 1860's. So this is a pretty old organization.

When we began in 1920, our focus was on farm management. That was a time when people were realizing that farming was a business, and that there was an increasingly large urban population to feed, and the question of how markets developed and how the business of farming got done was very important.

So we started out focusing just on the farm, but today, some 80 years later, we have charge that includes all the activities of USDA, that would, for example, lead us to look at issues like food stamps. The largest expenditures from USDA come from the food assistance programs, food stamps, school lunch, women, infants, children feeding programs. So we are concerned about the underpinnings of food stamps, of natural resource management, trade policy, pest and disease management, anything that the Department of Agriculture works on is of concern to us.

We have about 500 employees. About two-thirds of those people are economists, and about two-thirds of those people are PhD economists. So we're a research organization, we're specialized in really one discipline, and we use our skills as economists to look at the range of issues that confront USDA. We have been the economic research since the early 1960's, and we celebrate our 40th anniversary this year.

MR. LAWRENCE: When you say you're concerned about the things that the department is doing, does that mean that's the type of research you are undertaking?

MS. OFFUTT: Yeah. Our mission is to improve the information available to decision makers. An important group of those decision makers are within the Department of Agriculture. The policy officials and the program managers who deal with that whole range, that whole raft of programs.

We're also interested in providing information to other decision makers in the food and agricultural system, people in commodity markets, people who are trading overseas, people who are making decisions about buying inputs, or environmental management questions. So insofar as USDA and public policy has a role to play in the food and ag sector, our job is to try to provide the economic understanding of the consequences, circumstances of decisions and the context in which they occur.

MR. LAWRENCE: You mentioned you have a lot of economists there, but not all the folks are economists; what are the skills of the others?

MS. OFFUTT: Well, we have a hearty band of real sociologists, demographers, anthropologists, a few historians, so they complement our discipline, but there's clearly strength in the numbers of economists at the agency.

MR. BARWELL: Do you see the overall as the administrator of ERS, given the context of the employees, the skills they have, and how you operate in the Department of Agriculture?

MS. OFFUTT: Well, come 2002, I will have been administrator for six years, so in a way, my job has changed over that time. That's a long time to be an administrator, the head of a federal agency. I'm a career employee, and that's true of all the heads of the research agencies, so we tend to just have longer tenure. And in the beginning of my time, my job is really to help organize the incentive structure to the agency to get the work done. It was a lot of investment in human capital management and infrastructure, information technology; it was really setting the stage.

As time has gone on and I've also been involved, of course, in determining what research directions we have taken and where we need to be next. And increasingly, my job is, in a sense, to manage the interface between our little agency and the outside world, whether it's the department or other parts of government.

MR. BARWELL: Right. And you mentioned that you've been in your current position for six years. Let's start taking some time to explore your career prior to joining ERS?

MS. OFFUTT: Well, working backwards, I had immediately come from the National Academy of Sciences National Research Council, where I ran something called the board on agriculture that oversaw the studies the academy does on say pesticide use or resource management, animal feeding practices, you name it.

I was there for about four or five years. And that really gave me a good perspective on a broad swath of agriculture. And as we know, biotechnologies are really changing the landscape in agriculture, and that gave me a good chance to get a handle on how that reality was going to be different in the future. I had come to the academy from the Office of Management and Budget, where I was the chief of the agriculture branch. And that was an interesting time.

We did the 1990 farm bill, which was about the time that we dealt seriously with the budget deficit for the first time. And, as well, we were negotiating what was called the (inaudible) the trade agreement. So I was at OMB for four or five years.

I did a brief stint at ERS before that, and that's because I had come into Washington from the faculty at the University of Illinois, where I was on the agriculture economics faculty, and I had been teaching policy and statistics out there in the great prairie, and that was really where my academic interest in research was developed.

But I always had an angle on policy. My economics training at the doctorate level and the master's level is from Cornell, from the Ag college at Cornell. And they had sent me to Illinois to learn about the real business of farming.

MR. BARWELL: Right.

MS. OFFUTT: No disrespect to dairy farms in New York State, but there's nothing like what goes on in central Illinois in terms of seeing what powers this country's agriculture economy. They felt that was necessary because I grew up here in suburban Maryland, outside Washington, and I had what they call in Ag colleges, no farm background. So I needed something to complement my academic credentials, so it's been an intersection of all those interests.

MR. LAWRENCE: What is it that drew you to public service? One career path would have had you now as, what, head of the department or dean of the business school?

MS. OFFUTT: Well, growing up in Washington, and particularly, I'm old enough that I grew up in Washington before there was really a presence of business and industry. I mean it was a one-horse town, it was government.

And, quite frankly, a lot of the people that you grow up with, my parents were in public service, my mother's in the public heath service at the National Institutes of Health, my father was in government service, and the notion of marrying an expertise in a scientific or an academic discipline with public service comes very naturally in that setting. And when I discovered an interest in feeding the world in the 1970's, like I think a lot of idealistic college students did, in a way, all roads lead to Washington. The question of food sufficiency and food security comes about because markets fail, and government traditionally steps in when markets fail.

So it was probably inevitable, both because of my professional interest, but also my personal orientation to Washington that I would come back, and public service is the logical thing to do here.

MR. LAWRENCE: A number of people we've spoken to have a background in academia and then make their way to government. Is there something about the similarity of the cultures that makes that logical?

MS. OFFUTT: No, it's probably illogical. The university setting, of course, is unique in the sense that everybody has got a job and you can't get rid of them, most of them. I would, you know, most of my career I was in the job insecure category as an assistant professor. But it's not a very hierarchical organization, and there's not a very good, shall we say, labor/management relationship.

Maybe that's logical coming out of that, as you say, this is no way to run a railroad. It's great for producing some kinds of outputs, but it's a lovely life, it's very stimulating in many ways. But if you're a little bit more goal oriented, as the academics would maybe think it's the pedestrian way, you want to see things change.

The university setting is a fairly diffuse form of influence for most people. That doesn't mean that the relationships that you develop with your colleagues and how you learn to work with them doesn't serve you very well. But for me, coming then into a big organization in government, I was surprised by how the hierarchy works, that was new.

MR. LAWRENCE: Which of the jobs you held best prepared you for your present job?

MS. OFFUTT: I think probably it was the time I spent at the Office of Management and Budget, because that's right where the rubber meets the road and where the decisions, the options are winnowed down to the ones that you're actually going to consider.

I mean by the time things get to that level, to the White House, something has to be done. There isn't a lot of time for creative thinking. And you come to understand in that setting how politics and substance really interact, and that's critical to know how your research can be used, because we don't live in a world in which politics doesn't matter, it does. Now, your research doesn't pull any punches because you think maybe a politically unacceptable option has come on the table. But you have to understand what people are confronted with when they make decisions. They don't have much time. They're smart people, they're dedicated, but they're not going to be able to spend an afternoon delving into the details.

So the research has to be crisply formed and accessible to people. So that really, in terms of how I view my job at the Economic Research Service was the most important. How do I help people who have almost no time to make decisions but want to make good.

MR. LAWRENCE: That's a good stopping point. It's time for a break. Rejoin us after the break as we continue our discussion with Susan Offutt of the Department of Agriculture. We'll find out about the challenges of dealing with a knowledge work force when The Business of Government Hour continues.

(Intermission)

MR. LAWRENCE: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers. And today's conversation is with Susan Offutt, Administrator of the Economic Research Service at the U.S. Department of Agriculture. Joining us in our conversation is Owen Barwell, a PWC consultant. Well, Susan, let's probe a little more on the kinds of services and information you provide to USDA; could you describe some of the products?

MS. OFFUTT: Well, we're in the knowledge business, so our product line includes information, descriptive information say about the food and agricultural system, what do people eat, what do they spend their money on, how much money is spent in restaurants, basic facts about commodity markets, what are exports, what are imports, what do we think prices will be. That's part of our output.

Another part, and what I think may be of paramount importance is the research output, really the analytical work that tells people why things happen. I mean the descriptive part is important, what's going on, what do we know about it.

But our research is really intended to get at causality, about why behavior takes place, because that's the key to understanding how to design good policy. If you understand why things happen, then you may be able to affect the outcome.

And then we have certain data services that we provide. It's descriptive, but we're also providing data that other research economists can use, whether they're in universities or private sector. So we have a range of information products. And in the past year, we have become a web-based operation. And we have gone from the traditional paper based research academic orientation to electronic delivery. That's enabled us to serve this diverse group of customers we have much more effectively, because we talk to them in different ways.

The way we talk to people in commodity markets is different from a policy official, and it's different from our colleagues in research, and the web delivery gives us the ability to put all that different kind of material up in one place by topic, so that we can customize delivery.

MR. LAWRENCE: How do you collect all the data, the amounts spent in restaurants, the crops, how is that all collected?

MS. OFFUTT: Well, we rely on primarily other agencies of government to do the data collection for us. One of our sister agencies in the research area is the National Acts Statistic Service, and they do the census of agriculture every five year, a lot of market evaluation. They're the people who go out and estimate corn yield, say, in the middle of the summer. So they're probably our largest single supplier.

But we also turn to the Bureau of Labor Statistics for food prices. The Census Bureau for information on rural areas. I didn't mention that we have a great concern with rural America and rural development. So we are scavengers, and there are very few data collection agencies in the federal government that we have not relied on at some point in time for our raw material.

MR. BARWELL: Now, Susan, in our first segment, you talked about the kinds of people that you employ at ERS, and I've been fortunate enough to meet a few of them, too. They're very highly educated and skilled. But they must be a tough bunch to manage. How have you managed to deal with that?

MS. OFFUTT: Well, of course, it's a pleasure to work with all these people who are listening. But knowing how they're trained in the setting, the institutional setting at the university in which we've all existed for many years, we appreciate that when you come into this hierarchical setting, you can't all of a sudden tell people who have just finished their PhD or been out for five or ten years, do this tomorrow, do that tomorrow.

For us to do the best job, we have to have people who are intellectually engaged in their work, who are driven by curiosity as much as by their skills. So that means that there's the management trick, I think, and I can't pass judgment on whether or not we're completely successful, but I think we've got some way down the road, is to come to a shared understanding of what interesting problems are, so that people are motivated to work on the things that the agency needs to have done.

Now, every once in a while we're going to have to work on some things that don't interest us very much, we understand that. But by and large, you like it to be an interaction between the analysts, the managers; we're accountable for the output, and then our customers. So trying to get people more involved in the problem that we face, whether it's an agency trying to deliver a program, or a commodity group struggling with a big change in their international market, that helps a lot.

But self-determination and problem definition are really key when you're trained at that level, and so we have to be mindful that people need to participate.

MR. LAWRENCE: Is it by definition a flatter organization with less levels of management, is that what that yields?

MR. OFFUTT: We are the flattest organization in USDA, if not the federal government. I think we have one manager for every 13 or 15 people. And, you know, really, once you get a PhD, you ought to be able to work without a lot of close supervision. So I mean it should be that way anyway, but it also turns out that's the way you want it to be, because people are going -- in a creative process or research process isn't predictable. Micro-management doesn't really suit that very well. So we are a flat organization, and it's a hierarchy, but when you're working on any given problem, you want to create a community of colleagues, and we pull them from all divisions and try not to let the organization keep us from putting together the right resources.

MR. BARWELL: And there must be some hiring challenges, too, given that people have to have specialist skills, but also be able to move around the organization and have the breadth of capabilities, too. How do you manage personnel hiring in that context?

MS. OFFUTT: Well, it's not a requirement that you have a PhD to work at ERS. Most people do. If you look at what we actually say is required, it's a certain amount of training in economics. But clearly to function in this environment where you're an independent researcher, you have to have the skills that you learn in graduate school about how to conduct research, how to test hypothesis, how to do statistics, how to run a program. So when we go out and look for people, we've decided that we will look for people who have the best fundamental analytical skills. Now, when you get a PhD dissertation, you become a subject matter specialist, as well. But over the course of your career, you may want to change emphasis. You may be interested in labor markets in one place and maybe environmental economics in another time in your career. So that's a good thing, the flexibility.

But what it means is that we have become increasingly agnostic about where we look for economists. For most of its history, we've relied on the colleges of agriculture and the land grant universities. That's where agricultural economists come from.

But increasingly, and particularly as we move more and more into trying to understand the well being of people in food stamp programs, we have to look outside to the mainstream economic departments. And anymore, it may be 50/50 where we find them.

But the key is to find people who are solid in terms of their research skills, because they can learn the subject matter as they go along, and having that curiosity and that willingness to be flexible is something that we look for.

MR. LAWRENCE: Let me shift gears a little bit and ask about the processes you do. You create reports, you do research, you collect data; what kind of technology do you use?

MS. OFFUTT: Well, information technology, it's electronic now. We have come to a system where all our internal communication is electronic. We have a bulletin board, we have e-mail, everyone has that. But we really no paper flow in our agency anymore except the stuff that comes in from the department, which is not fully electronic, but that's okay, we can scan it.

And so we try to do things by wire, as it were. And every document that we create has an electronic existence, it, you know, doesn't just exist on hard copy, and it's the basis then for dissemination into the web. So we're not always re-entering and reformatting. We're really working with one document and then using our software to relate it to an internal information management system, to relate it to a website. Owen knows we're not quite there yet, but that's our goal, is to not have to duplicate paper and products all the time because that's a big expense.

MR. LAWRENCE: How do you worry about the integrity of the data you use?

MS. OFFUTT: Well, for a long time, we solved that problem by not making the data available to anyone, so the question of maintaining confidentiality or worrying about how clean it was didn't come up. But now that we've made a big investment in the website, of course, we want to make the data transparent to people who want to understand how we used it in analysis, but who also want to use it themselves.

This creates a lot of challenges; for example, when we're working with micro level data, say answers to a farm survey, that's confidential. So we're learning how to build security into our website so that people can have access, but still we won't breach the confidentiality requirements.

The question of the transparency that allows people to say, well, you might have used these data and this analysis, but these data were so, you know, flawed that we can't believe what you said, that's a bigger challenge. We're working now with the other federal statistical agencies to come up with guidelines for information quality, and that goes beyond questions of can you replicate say a regression to documenting where the data came from, are they survey, how good was the survey, is it, you know, statistically representative, and that's a big job because a lot of the data was -- Owen worked with us on a project where we discovered that it's a form of capital. If you're an analyst it's really important to you. That's a lot of your worth to the organization. If you have in your desk drawer information, then you're the only one who has it. So there's a reluctance to share it broadly because that's really important to your value in the organization.

And Owen helped us try to create an environment where people were willing to do that. So it turns out to be the question of access to data and transparency goes right down to the heart of the matter, which is control of information and how that determines your worth as a researcher, your contribution.

MR. LAWRENCE: And how about the quality controls on say the generation of results; research yields a certain finding?

MS. OFFUTT: All our research has to be done to disciplinary standards. So however we talk about it, however we describe it to an audience, the underlying work has to be done with the right methods and reach the right conclusions, and we use, just as you would in the academic setting, peer review. And we also have our reports reviewed by people in the programs. And we don't want to mischaracterize their environment either.

MR. LAWRENCE: This is a good stopping point. It's time for a break. Come back after the break as we continue our conversation with Susan Offutt of the Department of Agriculture. We'll ask her more about how she manages the process of conducting a research and publishing results when The Business of Government Hour continues.

(Intermission)

MR. LAWRENCE: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers. And today's conversation is with Susan Offutt, Administrator of the Economic Research Service at the U.S. Department of Agriculture. Joining us in our conversation is Owen Barwell, a PWC consultant.

Well, Susan, at the end of the last segment, you were describing how research gets done, and I'm wondering at the end of that when you have conclusions, what happens next?

MS. OFFUTT: Well, a lot of what happens after you reach conclusions depends on when you reach them. If you present conclusions on an issue that's, say, already being debated on the Senate floor, people have already made up their minds. There's not really any value to new information. And, in fact, you can create more trouble than you'd care to by all of a sudden introducing some new consideration at the last minute. The political process is not always nimble enough to accommodate it, and politics being what it is, we can't expect it.

So we find that our conclusions are most useful to people when they come in the beginning to think about a problem, when they're thinking about the options, or how to characterize it, or what really causes this, or what creates an opportunity. So timing is everything in our business and anticipating what decisions have to be made is the most important.

And then our conclusions are non-threatening, because we aren't contradicting an established position someone has taken, and that's when I think we're most useful.

MR. LAWRENCE: How do you do that anticipation? One can't help but think that research takes a long time and issues flare up very quickly and that must be an incredible management problem?

MS. OFFUTT: Well, it's not all a guessing game. I mean there is your guessing in the sense as informed by what you know about the sector and how it's evolving, and so we, for example, saw that the question of labeling food was going to become more important, and that was because people had questions about how food was produced, does it use biotechnology, is animal welfare protected. So the economics of information in the market were clearly becoming important.

We didn't know exactly what the policy setting would be. We didn't know; although we might have guessed that the U.S. and the European community would be loggerheads over the issue, so we can, in a general way, anticipate. That's not to say that we're not surprised sometimes. But over the five or ten years, we're probably right more than we're wrong.

MR. LAWRENCE: Well, you describe a process whereby the researchers conducted in advance and it informs. What happens when that doesn't work out that way?

MS. OFFUTT: Well, sometimes we miss the boat, there's no doubt about it, and then I suppose like everyone else, you try and bury your mistakes. It goes on the website, but we don't make a big deal about it. But sometimes we find that research we did say two years ago all of a sudden becomes important, and that's the beauty of the website, because it preserves that body of knowledge in a way that sequentially issuing reports doesn't, because then you train people to say, oh, what's new, and if it's not new, it's not valuable. But now, because we can create this big treasure trove of stuff, it's a resource, and so they don't say, oh, it's stale. It may very well be relevant.

So sometimes we can improve the timing by managing how we push information to people, which is you think there's nothing new, you think there's nothing out there, but we did this two years ago, here it is, and that's why we invest in the web, and a lot of our management time in thinking about, well, here's an opportunity, here's a problem someone is dealing with, a challenge they've got, have we ever done anything that could be useful, could we repackage that, does it need some new information. So it's an ongoing management process, it's not just research products fall out at one end and you never see them again.

MR. BARWELL: Now, Susan, we talked a lot about the research process and finally getting to some results and some conclusions, and we've talked about how you put that out through paper documents such as magazines and other guides, and also out on the web, too, but who's really interested, who are your real customers and stakeholders in your organization?

MS. OFFUTT: Well, in a lot of ways, we're just learning. Until we had the web, we didn't really have a good way of keeping track of who was using our information. We had mailing lists. I mean we certainly knew who we were sending our information, no question. But who was actually using it? We didn't have that kind of relationship.

Now, we have done, as I think many places, organizations in government have, customer sessions and you ask people, focus groups and the like. But the web is going to allow us, and we're just now investing in the technology to connect directly with users and have them tell us what they want and what they find useful.

In a policy setting, we're now creating extra nets, which are secure, sort of like our own private secure website where we can say carry on a discussion that needs to take place before the U.S. stakes out a position in international in a forum we can manage information in the dialogue there. That's much more advanced than simply sending briefing papers out and hoping someone reads them, because now we know whether we provided the right information.

MR. BARWELL: That sounds like an example of how you incorporate these groups into the research agenda setting process. Are there any more examples that you do?

MS. OFFUTT: Well, for example, one of our most important set of stakeholders, and historically the oldest, are people who grow commodities, which is the business of agriculture in this country. And we, for many years, had a way of communicating with them which was really the analyst with the expertise and say sugar, talk to the sugar people, and the analyst with expertise -- we talk to lead people.

Well, increasingly, we're trying to draw them to all these groups together in one time so we can have a discussion where they listen to each other, but we also listen to what they're saying about the opportunities they face.

On the web, we'll be able to create these communities of dialogue, where we'll know how people customize a web page to suit them, and that should give us clues about what they're using and what they think is valuable.

MR. LAWRENCE: The federal government does what seems to be a lot of economic research. Could you take us through that community and describe how you interact with them?

MS. OFFUTT: Yes. We're one of, gee, I should know the exact number, 10 or so, federal statistical agencies which are coordinated by the chief statistician at the Office of Management and Budget, and some of these agencies are very well known, the Census Bureau, the Bureau of Labor Statistics certainly are well known to probably most Americans. Others like the Economic Research Service are not so well known. The Energy Information Agency, a critical part of DOE is one of them. And we have common concerns, either in data collection, most of those are primary data collection organizations, or in the generation of economic statistics.

The Bureau of Economic Analysis does the national income accounting. We provide them with estimates of farm income that they use in rolling it all up into gross domestic product and the like.

So we have common concerns about data quality you asked about earlier, and integrity, and how do you give maximum access to data for people without breaching confidentiality. So we have a lot of operational concerns that we share, and we have a forum, a monthly meeting chaired by OMB where we do that.

MR. LAWRENCE: I was going to ask is there a formal way that everyone gets together and �-

MS. OFFUTT: Yes, there is. Kathy Walman (phonetic) who is a chief statistician convenes us as a group once a month and we talk about issues, whether it's training or a survey issue that is of mutual concern, or an update on the census, so it's an important communications link.

MR. BARWELL: How do you know you've done a good job? I mean what sort of measures do you put in place to measure success?

MS. OFFUTT: For us, measuring success is very difficult. The way we think about success, it's changing the way people view the world, whether it's giving them another option for an action to attain a goal, or whether it's increasing their understanding of why markets are the way they are, and that's a lot of intangibles, because we can provide the best information in the world and people can still make bad decisions.

MR. BARWELL: Sure.

MS. OFFUTT: So we don't want to be blamed if they make a bad decision, we just want the credit when they make a good one. So the metrics of this are still a little fuzzy in our minds, but there are instances where we can document that the debate, the discussion was going this way, we issued a report, it said here's another way to look at the problem, go on.

A good example of that would be the work we've done with our farm survey data, to understand how diverse American agriculture is. The policy discussion is about this stereotypical American farmer. And you might think we had two million of the same kind of people out there, right, they all had -- there's ma, pa, and they raise goats, chickens, wheat and the like. But, in fact, in these two million farmers, there's incredible diversity, so not surprisingly, they experience government policies in different ways, whether it's the way they manage their land or the way they market their commodities.

We use the farm survey data to characterize this diversity in important ways, and that turned out to be useful to this Secretary of Agriculture, Ann Venamon (phonetic) when she issued a policy and principals book in September that leaned heavily on that work and talking about her vision of agriculture and appreciating the importance of consumers driving the markets and how that created opportunities for different producers.

So we think that that's a piece of work, where without that empirical underpinning, it wouldn't have been possible for people to convincingly portray the richness in the sector.

MR. LAWRENCE: A lot of information that's generated by the government is tremendously valuable that people use and later go on and do financial things with; is that true about some of the information you generate, and if so, do you worry about the dissemination of it and the control so that it is transparent?

MS. OFFUTT: Yes, we do worry about that, and we are just one part of a group within USDA that does the market analysis. Owen and his colleagues at PWC helped us in an important study to manage that process better. The quality of the output there depends on the quality of the input. How well do we share information across analysts? How available, how accessible is that? How timely is the delivery?

So that's real important because USDA information moves the market, no doubt about it, and there's a real important function there. Some of our sister agencies are the ones that put out the crop forecast, national statistic service, or price reporting, and that's extremely valuable.

MR. LAWRENCE: It's time for a break. Come back with us after the break as we continue our discussion with Susan Offutt of the Department of Agriculture. In the last segment, we'll ask her about some of the changes she might expect the future will bring. This is The Business of Government Hour.

(Intermission)

MR. LAWRENCE: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers. And today's conversation with Susan Offutt, Administrator, Economic Research Service at the U.S. Department of Agriculture. Joining us in our discussion is Owen Barwell, a PWC consultant.

MR. BARWELL: Susan, we've talked a lot about what you do, but what about the future, what sort of issues do you think will drive the focus of ERS research in the future?

MS. OFFUTT: I think a lot of our work will be driven by the interaction between consumers and the food and ag system. For most of this nation's history, it was a supply side kind of enterprise. We were just concerned about getting people enough to eat. Well, we've moved way past that. In fact, just recently we had the surgeon general tell us that obesity is the number one health problem in the U.S. But affluence, in addition to obesity has brought the people the ability to choose. And the food market is much more sophisticated than it was 20 years ago, lots of different kinds of products, we care about how they're made, we care about where they come from.

So consumers are sending signals back down that supply chain like they never have before. And a lot of the adjustment that the sector makes is to these signals. It's no longer a commodity business, that is, where the goal is to produce as much as you can as at low cost as you can. It's like the car industry now, what kind of car do you want, and that's where a lot of public health issues, a lot of public preference issues will drive our work.

MR. BARWELL: And these issues sound very much different from today's issues.

MS. OFFUTT: They are. Right now I think we're in a transition period and it's certainly not the case that we would ever say we don't worry about the cost competitiveness of the fundamental bedrock of agriculture, which does start with commodity production.

But increasingly, as international trade becomes important, and it is important to U.S. farmers, we have to deal with how other economies are evolving. There's a huge middle class coming up through developing countries, they're the customers of the future. We don't know very much about them, about their cultural preferences, how they view food safety. There's a lot of work to be done there.

MR. LAWRENCE: You hear a lot these days about the coming retirement wave of government employees; that they'll all leave and knowledge will be gone and that will just be an issue. Is this something that you worry about?

MS. OFFUTT: We do worry about it because we're, as an agency, not as young as we used to be, and we're trying to deal with it in two ways, one, quite frankly is, we hire fewer people than we used to.

As we've invested in information technology, we have reduced our hiring. We hire at about half the rate of attrition. Part of why we're able to do that, of course, is that information technology makes each one of us more productive so we don't need as many people. And part of it is, by hiring people and creating expectation that they may work on a lot of different issues during their professional lifetime, we're really moving away from the one specialist or two specialists, one job slot. We really need people who can cover a lot of territory, maybe not this year, but in five or ten years.

So the recruiting strategy is to look for the basic skills that give us the subject matter flexibility we'll need, and I think that will largely help us cope.

MR. LAWRENCE: Is retainage a problem? One can't help but think that you take these highly educated people and you train them about markets and commodities, that they will be incredibly valuable to some private sector organization; is that an issue?

MS. OFFUTT: Yeah, well, not just their value in a private sector organization, but in other parts of the government. ERS had traditionally been sort of a training ground for people who went on to the big program agencies and managed commodity programs and the like. And that pool is pretty sparse these days, and it is a concern, not so much for us, because we know where to get more, but, you know, if we're processing people to learn institutional in's and out's, that supply has contracted, and I think it is a bigger issue for those other agencies.

And people go on to the private sector, and you know, our view is, that's great, you know, every good person who finds a job and has been with us is good advertising for us, and we want people to come and go from the agency, we think that strengthens us.

MR. LAWRENCE: What kind of skills would a young person have to have to be of interest to ERS; is it just economics and the and the highly quantitative skills?

MS. OFFUTT: Well, certainly good economics matters, that's our discipline, and we have to have that to ensure the credibility of our analysis. But we look for people for, as I said, are flexibility, in the sense that they're not going to mine one vein really deeply for a long time, which can be a little bit hard to find in PhD's because that's not what they train you to do at the university, they don't say go for it to be flexible, they say go for it and do this for 30 years.

But the people who also, and it sounds corny to say, but I think it's true, they care about the kinds of problems that come to government. There aren't too many places where you can go to do research on those in a very secure setting like we have at ERS, and we find, for example, people who are worried about food insecurity in this country find a good home with us because we're concerned not just about the immediate problems, was there too much fraud in the food stamp program, but how many poor people are out there, how do they make decisions about food, what do we know about their behavior that would be useful in designing more effective programs. So a lot of people really are motivated because the public policy questions are meaningful to them.

MR. BARWELL: And that's something that I have to deal with in recruitment, too, is, the younger people come to me and they are wrestling with the choices of public or private sector careers. What sort of advice would you give to a young person that wanted to take up a career in the public sector?

MS. OFFUTT: Well, I think your first job experience really makes or breaks your emotional feeling about public versus private sector. Now, I'm a public sector person myself. But my advice to someone who is contemplating public service and working the federal government specifically is, pick a small agency and get a good boss.

Very large organizations, and I don't mean this as a criticism, but as an observation, are not very kind to young, new people. They can often telegraph the notion that you're going to wait 15 years before you do something really fun.

MR. BARWELL: Right.

MS. OFFUTT: A small organization, for example, like OMB was, hey, you're there, you're on the ground, you're an integral part of the team right away. ERS is a small organization by those standards, too. So smallness matters. But even more important is, get a good boss. You want somebody you can learn from.

MR. BARWELL: And so what does it take to be a good boss?

MS. OFFUTT: Well, I can tell you what I think about a good boss, that is, the people I've enjoyed working for.

MR. BARWELL: Okay.

MS. OFFUTT: Number one, you want somebody who can make a decision and explain it to you, all right. You don't have to agree, you may disagree, but at least, number one, someone made a decision, and number two, you knew why, you know, particularly when you go to school for as long as we have when we get PhD's, that's how you are, why. So somebody has got to be able to answer the why question, that's all you need to know, you don't have to agree.

Second, go to work for someone who's got a lot of energy and vitality, you know, where a sense of things can be done. It's just not very inspiring to work for people who are too calm, I guess would be the way to put it. So you want a sense of energy, I think.

MR. LAWRENCE: What's your vision for ERS over the next 10 years?

MS. OFFUTT: I hope that we can make the most of this new information technology. We believe knowledge is power, and we've just been handed this incredibly versatile way to communicate information which our knowledge. And I think if we can exploit that, understanding how our clients differ, one from the other, and what matters to them, and how they absorb information, this influence that we have on how people see the world will only be enhanced. And I think we have the opportunity to do it. It's really a wonderful thing.

MR. LAWRENCE: One of the things I found interesting is the status of the people who lead the research organizations. You're a career employee, some are political appointees; do you have any thoughts on how that's come to be and what the mix is and why?

MS. OFFUTT: Well, we know from reports from the we know from reports Brookings Institution and your outfit, as well as others, that there's been this gradual push down where the political layering comes at lower and lower levels, and I think that's just partly what you see reflected in the change in the leadership of the federal statistic and research agencies.

You know, I guess my feeling is, it's as much a function of the person as it is whether they're career or political, whether they do a good job. But it is the case, I think, when you have a big rebuilding task to do, as I think we did when I came to ERS. Continuity of one kind or the other is important, and you need to be able to give people in your organization consistent signals. If you constantly have changes in leadership, they don't get that. I mean everybody knows this is the garden-variety problem, but certainly the continuity you've had, not just with me as administrator, but all my senior managers having been with us for four or five years really gets you results.

MR. LAWRENCE: Continuity is important, but also, I would assume, especially in research, refreshing is important, and I can't help think that the way you've described the relationship between your staff, they all have PhD's, and academia might be kind of an interesting model to have people move back and forth frequently to get refreshed and learn; is that something that could actually happen?

MS. OFFUTT: Well, there was a time when my agency did a lot of this sort of coming, but you know, with two career families, the old model where you just uprooted everyone and went out to, you know, the University of Nebraska for the year, that doesn't work anymore.

So what you have to do is create sort of virtual relocation. It's important people to go to professional meetings, to make sure that interaction, however important electronics are, human interactions still matter, so you just have to make sure people do that once in a while.

MR. LAWRENCE: Well, Susan, I'm afraid we're out of time. I want to thank you very much for joining us this morning.

MS. OFFUTT: Thank you.

MR. BARWELL: Thank you.

MR. LAWRENCE: And do you have a website if people are interested in all the interesting things you've said, where they can go and learn more?

MS. OFFUTT: Why yes, we do, www.ers.usda.gov.

MR. LAWRENCE: Thank you very much. This has been The Business of Government Hour featuring a conversation with Susan Offutt, Administrator of the Economic Research Service at the U.S. Department of Agriculture. Be sure and visit us on the web at endowment.pwcglobal.com. There you can learn more about our programs and research, and you can also get a transcript of today's fascinating conversation. Once again, that's endowment.pwcglobal.com. This is Paul Lawrence. See you next week.

Dr. Susan Offutt interview
02/09/2002
Dr. Susan Offutt

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