The Business of Government Hour

 

About the show

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.

The interviews

Join the IBM Center for a weekly conversation about management with a government executive who is changing the way government does business.

Gwendolyn Sykes interview

Friday, October 28th, 2005 - 20:00
Phrase: 
"We have a renewed spirit amongst the individuals that work here, a renewed interest in the technology and the scientific exploration associated with the President’s new initiative for space exploration going back to the moon, and Mars, and beyond."
Radio show date: 
Sat, 10/29/2005
Guest: 
Intro text: 
Financial Management Managing for Performance and Results...

Financial Management Managing for Performance and Results

Magazine profile: 
Complete transcript: 

Tuesday, March 8, 2005

Arlington, Virginia

Mr. Lawrence: Good morning and welcome to The Business of Government Hour. I'm Paul Lawrence, partner in charge of The IBM Center for The Business of Government. We created The Center in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about the Center and our programs by visiting us on the web at www.businessofgovernment.org.

The Business of Government Radio Hour features a conversation about management with a government executive who's changing the way government does business. Our conversation this morning is with Gwen Sykes, Chief Financial Officer of NASA.

Good morning, Gwen.

Ms. Sykes: Good morning. How are you?

Mr. Lawrence: Good, thank you. And also joining us in our conversation, also from IBM, is Stephen Sieke.

Good morning, Steve.

Mr. Sieke: Good morning, Paul.

Mr. Lawrence: Well Gwen, let's start off by learning more about NASA. Most people are familiar with NASA, and it's widely recognized. For our listeners, could you tell about the mission and the vision of NASA?

Ms. Sykes: Sure, certainly. The vision of NASA is pretty much simple. It's kind of in three key components: it's to improve life here, extend life there, and to find life beyond. That's pretty much the overarching vision. And it's pretty broad, when we're talking about space exploration and talking about exploring the new frontier, which is past our Earth and where we're living. Kind of the mission, what we always focus on at NASA, because of course, everyone would like to focus on what's going on in outer space, but there are some things that are relevant here on the home planet. So our mission is to understand and protect our home planet, to explore the universe and search for life, and to inspire the next generation of explorers.

Because in order to accomplish our mission at NASA, we need to make sure that we have the technical individuals coming in behind the ranks to educate the young explorers coming behind us that are interested in math and science and technology, in order to continue that exploration vision that we have. It's a pretty big mission, and a very big vision, but it's one that's been carried for over sixty years. We started in the Apollo era, and we're now started in a new era, with our new Presidential initiative, as far as space exploration. And that is now looking at going from moon, back to the moon, heading to Mars, and looking at beyond. So we've got quite a lot on our plate at NASA.

Mr. Sieke: That's great, Gwen. Can you tell us a little bit about the specific roles and responsibilities that you have as the Chief Financial Officer of NASA?

Ms. Sykes: Well, they tell me I have quite a few hats. I am the Chief Financial Officer and also the Chief Acquisition Officer, so they affectionately call me Chief Two Hats. As far as the Chief Financial Officer, I maintain the rudimentary budget, accounting, execution, and auditing type of areas. And then in my new role as the Chief Acquisition Officer, I have also incorporated some other financial features, which are procurement and small business.

And what we've done in our new transformed organization since we've gotten the new Presidential vision over a year and two months ago, is streamline a lot of the financial operations within one particular area, so that we have a beginning to end, or soup-to-nuts type of operation, so from the point that we budget to the point that we acquire a acquisition and procurement, and then the finance and the execution, and then as we go forward to being able to do earned value management, or independent cost assessment, we have a common data stream amongst all those.

And being Chief Two Hats, I have the ability to influence the data elements associated with all of those. And it positions us to be in a better opportunity to provide a Space Exploration program that is credible and affordable, and have the data to support it.

Mr. Sieke: Tell us about your team, your immediate team.

Ms. Sykes: My immediate team is made up of about six key SES staffers in various disciplines, from finance, accounting, procurement, policy, and quality assurance, as well as a deputy, of course being Chief Two Hats. The skills that are within my organization are varied, so I have to have -- it's not a one size fits all type of skills development for the actual individuals that work in that area. I have Procurement Specialists, which I have a section in Educational and Skills Training Development for the new and innovative ways that we're looking at procurement. I have to have technological, or engineering and technological-type individuals in my budgeting area, because the types of things we're trying to proffer at NASA and budget for at NASA are very indeed engineering- and technically related. So I have an engineering-type component in my financial shop.

So most of them are engineers and technicians of that nature, but they have a financial background. And then, of course, you have your typical accountants and auditors, which are doing the execution of auditing. And then I have another contingent of individuals, which are the independent cost analysis-type of individuals. Most of those have Ph.D.-type backgrounds. So I have quite the gamut when it comes to the type of individuals I have to manage, which you can imagine, trying to get each of those elements talking the same language is very intriguing. So hopefully, I've been highly successful in that area, getting most of the barriers broken down, and talking in those different types of disciplines.

Mr. Sieke: Tell us a little about your previous roles before you joined NASA back in November in 2002, and how do you think they've helped prepare you for the role you have now as CFO?

Ms. Sykes: Starting out my career at a good defense contract audit agency gave me the opportunity to look at the detail, and to be able to investigate, to turn over stones, and to be able to look and see how an operation actually works, and how you actually put the financial elements associated with that. Next in my stair-stepper career, I ended up working for Senator Ted Stevens, our representative senator from Alaska. In that capacity, I actually worked in the fisheries development area, and unfortunately during the Exxon Valdez-type of environment. That was quite interesting, because not only do I have the human element, and the element of working in a large senator's office and having to deal with public policy, but also working with the people element, and associating it with a management type of regime in order to accomplish a mission, to get a law enacted, but also ensuring that the financial health of the state was taken care of at that point and time. So that was very intriguing for me in developing my career.

Next on my path, I went to the Department of Defense, and many people ask me, "What's the difference with working with in the Department of Defense and financial management and NASA?" Probably the number. Many billions to a couple of billion. But as you know the CFO Act was enacted in 1990, and that's about the time I went to the Department of Defense. And working in that financial management community, I learned a lot. I actually was on the cutting edge on implementing a lot of new and exciting types of financial management; one of them being working capital funds, which we started there at the Department of Defense, they had had them for quite some time. They were called Navy Industrial Funds, but they have evolved to what they call Working Capital Funds.

So a lot of that basic, financial management, innovative thinking, and of course, the large magnitudes of dollars to be able to explore, and to be able to do that at the Department of Defense, has helped me in my career transition to NASA. The difficulty has been taking all of that knowledge and applying in such a highly technological and engineering-type field.

Mr. Sieke: Gwen, it sounds like in those previous roles, you spent a lot of time collaborating with a lot of people in order to move your agendas forward. How important is that in your role at NASA?

Ms. Sykes: People are key. One of our visions at NASA is knowing that people are first. And we have what we call NASA family is first. And if you do not have the people behind whatever the initiative that you're trying to do, or whatever change you're trying to implement, then it doesn't necessarily happen as quickly as one would think, particularly in a bureaucratic situation. But you find, if you point the folks in the direction, and you challenge them to say is this the right thing to do? Nine times out of ten, 75 percent of them will raise their hand. And if you can get them to believe in that, you can actually impact that change. They will actually start moving towards that change. And that's pretty much what we've done at NASA when it comes to financial management.

Mr. Lawrence: When you described your career, Gwen, you talked about being in the legislative branch and now in the executive branch. Any perspectives of what you thought it would be like when you were in one and looked at the other?

Ms. Sykes: Well, I used to think when I worked for Senator Stevens that there's just one thing you would never want to see being made, or two things in this world you don't want to see made: sausage and laws. Now it's sausage, laws, and becoming a political. I've added that to my agenda. I had no idea what it would be to become a political appointee, and the prestige, the responsibility, and the entrust of the public, to you and the responsibilities of the things that they ask you to carry out as a political appointee, as compared to being a public servant.

I always thought being a public servant was the epitome of service within one's entity and one's career, but once stepping up to the bat to be a political servant, public appointee, it has been truly intriguing, has given me great opportunities, but it is also a significant challenge, because you have such a short time frame to make such a significant impact. And again, back to the bureaucratic or the bureaucracy of government, recognizing that these folks will follow you, but you want to make sure that whatever you do, and whatever you're trying to do, it leaves a legacy for when you leave, or when you move on. Because again, presidential years, you never know. You have to make sure that you have that type of impact, but you want to make sure that what you're doing is something that's going to be right, and it can outlive you.

Mr. Lawrence: I imagine from time to time, you've had other opportunities outside of public service. What's kept you in public service?

Ms. Sykes: Actually, I come from a family of public servants. My dad was in the military, and my mother was actually a public health nurse for the state of Alaska, and she actually would go out to the rural and bush areas and deliver babies out in the rural areas. And of course, my dad having served over thirty years in the military service, our family is pretty much public servants. My sister currently is a public health nurse for the state of Alaska now, also. And I have a younger brother who works in the technology field there in the state of Alaska. It's pretty much a family trait, something that we enjoy doing.

If you don't have a passion for what you're doing, if you don't wake up each day and say I can make a difference, it makes a big difference. Matter of fact, I just had a conversation with a friend yesterday. He thought that as a CFO of major space agency, my salary was truly significant, and he goes, and I just really don't really want to, you know, get into that conversation, I'm like go ahead, check out opm.gov, it's on there. And he's like, I make way more than you. And I was like, yeah. And he goes, why are you staying in there? And I said, I like what I do. The people that work for me, the people that I get to work with, the things that we're doing are great, and it makes a difference to me.

Mr. Lawrence: That's an interesting point.

What's the new age of exploration? We'll ask Gwen Sykes, CFO of NASA, to explain this as our conversation about management continues when The Business of Government Hour returns.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Gwen Sykes, Chief Financial Officer of NASA.

And joining us in our conversation is Steve Sieke.

Mr. Sieke: Thanks, Paul. Gwen, can you give us an overview of NASA's fiscal year 2005 strategic plan, which is called the "New Age of Exploration: NASA's Direction for 2005 and Beyond."

Ms. Sykes: Why, certainly. Just to kind of set the tone or set the pace for what we're doing there, our plan basically reaffirms our commitment to achieve the goal for space exploration, and actually, it's -- we're characterizing, or frameworking around to advance U.S. scientific, security economic interests through a robust space exploration program. And we've actually outlined five key national objectives, of which, the first one is to implement and sustain an affordable human and robotic program to explore the solar system and beyond.

Of course, our second one is to extend our human presence across the solar system, starting with the human exploration returning to the moon by year 2020, in preparation for human exploration on Mars and other destinies. That's pretty much what we talk about at NASA as returning to the moon, Mars, and beyond. And of course, our third objective is to develop innovative technologies, knowledge, and infrastructure, both to explore and support decisions about the destinations for human exploration, which is actually very key, because space travel has impacts on the human body and the human capability. So the technology and the knowledge sharing around that is going to be key as we move to explore further out beyond our universe.

The fourth objective, of course, is to promote international and commercial participation in exploration, to further U.S. scientific, security, and economic interests. We've already built the staging blocks for that with the International Space Station, which we're about to complete, and we hope to have complete by 2010. Then our final objective, of course, is to study the Earth system from space, and to develop new space-based and related capabilities for this purpose; basically looking to be able to, at some point and time in the future, probably past 2020, or not in our lifetime, to actually colonize outside of the Earth's atmosphere, and maybe back at the moon.

Mr. Sieke: I think everyone in the NASA family was really encouraged by President Bush's commitment to NASA last year, when he rolled out his initiative: "A Renewed Spirit of Discovery, the President's Vision for U.S. Space Exploration." Can you talk a little bit about the goals of that initiative?

Ms. Sykes: Well, again, that initiative is basically looking at our moon, Mars, and beyond. But the initiative is something that was quite needed for the Agency. We haven't had the good genesis or the great push that we just got with the President coming back and telling this in January 2004, and I think it's been over thirty years. And now we have a renewed spirit amongst the individuals that work there, a renewed interest in the technology and the science and the scientific exploration associated with this new initiative going back to the moon, and Mars, and beyond. Because, before then, the last couple years, we've been doing what we call the Lower Earth Orbit, or exploration, of just exploring the lower Earth orbit; now we're looking at the great beyond.

The Hubble Space Telescope has basically given us great magnitudes of pictures of things that we have yet to explore and see. So now we're actually going to challenge ourselves to actually have the human presence when we go further. And as a NASA family, we have actually surrounded ourselves with this change. Of course, change is never easy; it's always interesting. But we actually implemented a couple of things called the One NASA: the NASA First Initiative, and that's where we actually went out to the ground level, out to the ten different centers, and we got the unique individuals involved, that says if we are going to meet this exploration challenge, what are the things that we need to do at the grassroots level, to make this happen? And as you can imagine, folks at the NASA level came up with all sorts of ideas and initiatives and things that we needed to change within the organization in order to make this work.

And we have a forum by which we go and we have the dialogues; we call them transformational dialogues, with the individuals, and we challenge the center directors at each of those centers to actually take those things and incorporate those things and make sure that we're actually moving forward, so it's a grassroots level. So not only are we engaged actively within the NASA community, but because we are so energetic about it, it shares, and it actually shows, and what we talk about outside of the NASA community, so our external stakeholders are hearing and seeing the transformation, and they're buying into where we're heading, and we're getting great national support, internal and external.

Mr. Lawrence: Could you give us a sense of some of the ideas that were being described in these forums, in terms of magnitude of change?

Ms. Sykes: Some of them are relatively simple, like information technology sharing, and partnering with colleges, academics, and commercial entities in order to develop new and emerging out of the box type thinking, science and technology. Some things stretching the beyond, and recognizing maybe the individuals at that actual NASA center didn't have the technology or the skills, or the engineers to do that. But they look to the academies, the schools, or other areas that are on the verge of some new technology, and partnering with them in order to move forward.

That was very new, and that was very grassroots, and then there's some things that are as simple as even in my financial management area, of being able to have travel funds that they can expend in one pot versus another, which gives the managers the flexibilities, because we're operating at full cost, to say, "do I really need the travel dollars, or do I really need to procurement dollars?" It's also about being able to get that flexibility. So that was something that was brought up from the grassroots, and operating in a full cost environment and we went to Congress and said, "Can we get the leverage and the ability to do that." So, it's soup to nuts; no ideas not entertained or thought of or worked through.

Mr. Lawrence: Let me bring you back down to Earth. Could you describe to us the four mission directorates of NASA, and their themes as described in the budget?

Ms. Sykes: I'm not sure you're bringing me back down to Earth, considering pretty much everything we do has a relatively -- either in space, or in the air. What I will start with is aeronautics, which is probably relative to here on Earth. Research and development in the aeronautics is one of our first missions, and they're basically focusing on the technologies for safe, reliable and efficient aviation services, which work with, and partner with a lot of our airlines here in the U.S. and international area. And some of the things that they've actually been working on, like noise reduction, and high altitude unmanned vehicles. I think you probably saw some of our X34 and X33 projects, and we've had significant success with those actual projects out there.

The other one, which starts heading into outer space -- sorry, we're moving from Earth -- is our science area; they carry out scientific exploration of the Earth, Moon, Mars, and beyond. They chart the best route for discovery, and reap the benefits of Earth and space exploration for our society. Some of those examples that are taking place in that directorate are Mars and lunar robotic explorations; being able to use robotics on Earth, or in the moon, or as we move out to Mars, as you know, we've had two successful orbiters that have landed: Spirit and Opportunity. And, believe it or not, there are still producing. They're kind of like the Eveready battery. They were supposed to die like three months ago, so I'm still paying for them.

Mr. Lawrence: So that was your CFO prospective just there?

Ms. Sykes: Yes. So we have the Eveready battery in Spirit and Opportunity on Mars, and they're still transmitting. And then of course, we have the newest one, given our new vision, is the exploration systems. This is developing capabilities and supporting the research and technology that enable a sustainable and affordable human and robotic exploration. How does this differ from science? It's the fact that this is the area that we're using to develop the new crew exploration vehicle.

By 2010, we will have to retire our current fleet of orbiters, and we will have to have some new orbiter by which to travel into space, to go to the International Space Station, to return to the moon, and then to move on to Mars. So that's what that area will be focused on. So we're using what we call spiral development. It's an acquisition term that actually originated, I believe, over in the Department of Defense. They've actually done quite a few successful spiral developments, and we're using the same type of development process to develop the new Crew Exploration Crew Vehicle for NASA. And then the final one is currently supporting our current fleet of orbiters, which is our space operation, which is fully engaged at this moment in returning to flight, which is our first priority in the President's vision.

Mr. Sieke: Thanks, Gwen. How does NASA's budget enable the new age of exploration, and reaffirm the President's vision for space exploration?

Ms. Sykes: Well, as a CFO of the Agency, I really like that question. When the President unveiled his vision for space exploration, he gave us two key tenets: it needed to be credible and affordable. And those are the two things that my office in particular works with, but we also work very close, hand in hand, with the Mission Directorates and the Center Directors out at the NASA centers to ensure that we are doing that. And we've been rallying the troops at all levels, and like I said, some of the innovative things that have come up from the One NASA leadership workshops, the new innovations are actually cost-cutting and cost-sharing. And so therefore, we're able to something that is affordable and credible.

And Sean O'Keefe, our former administrator, actually said that we needed to make sure that we promote a synergy across the Agency that supports long-term exploration vision in a way that is sustainable and affordable. And many people within the organization internally and externally believe that it is true. And we are actually moving out towards that, but the great thing about having our new budget and our new vision is that it's incremental; we actually pay as we go. We don't look for a big payload to start it out and then we may not be able to finish it. It's an incremental budget, we pay as we go. As this technology emerges, as we grow in the technology, we seek to get the additional funding and move forward in the process.

Mr. Lawrence: How is NASA doing with the President's Management Agenda? We'll ask Gwen Sykes, CFO of NASA, to take us through this when our conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence., and this morning's conversation is with Gwen Sykes, Chief Financial Officer of NASA.

And joining us in our conversation is Steve Sieke.

Mr. Sieke: Gwen, can you discuss for us NASA's plan for implementing the President's Management Agenda, particularly with respect to your role as the CFO of NASA?

Ms. Sykes: Why certainly. At NASA, we have a very high respect and high regard for the President's Management Agenda, because it sets the stage for things we can do as a agency to ensure that we're doing the right things in specific areas. So at NASA, our formal administrator, Sean O'Keefe, and of course, our Acting Administrator, Fred Gregory, we have set the stage that every week at our Senior Leadership meetings, we actually get together and we have a weekly update from each of what we call the Senior PMA Champions. Now, we just don't pick individuals out of those different areas, we pick the key leading leader within each of those functions and we identify their name and their picture each week on a report, on a bulletin, that shows what are the things that you've done this week in order to advance your goal in moving towards the President's Management Agenda; what are some of the challenges you are encountering as you move forward; and where do other parts of the Agency need to play in, to focus and to provide attention to; and then what are some of the accomplishments that you have each week in some of those particular areas.

So it's actually a rallying tool that we use, and a management tool that we use at the Senior Executive leadership area on a weekly basis. So there's a lot of senior attention focused on the President's Management Agenda. But in particular, and for the Office of the CFO, there's actually about three of the President's Management Agenda items that I'm actually responsible for, of course one being financial management; the other being budget; and then of course the competitive sourcing with procurement. And so those three areas, I actually monitor in the same fashion and in the same form as we do in the Senior Leadership role. As you can imagine, my face is on three of them currently, and I get three or four reports weekly, but I actually go back to my key leadership and I have a weekly forum in which I conduct the reports, find out what's going on, what are things that we need to do, and what are the impediments for making sure that we're doing the good, sound things that we need to do in order to advance the President's Management Agenda.

But underneath all that, you know, each of those leaders have also defined what we call the Functional Leadership Plan within my organization, and that functional leadership plan is a five-year plan. It's a "get well" in financial management; where do we want to be to be the best in procurement, in competitive sourcing, as well as in budgeting. So we developed a five-year plan that says, in order to be the best, moving from where we are today and where we want to be in five years, they've actually developed a five-year strategy in changing policy, process, and procedures, as well as developing the individuals with the skills, knowledge, and tools and succession planning within the organization to make sure that we keep viable and keep rich as we move forward.

So we've haven't adopted this more as the President's Management Agenda, but more as a NASA Management Agenda, in order to make sure that we're focused and we're guided towards our new vision, our exploration vision. But within that, on a year-to-year or day-to-day basis, we have what we call the Financial Leadership Plan, which is the one-year increment. What are some of the some of things that we're going to accomplish to ensure that we meet the five-year strategic goals that we've outlined for ourselves?

And we do monitor that, and it's actually been automated this year, because of course, at NASA, if you're technical and engineering, you don't use Excel spreadsheets; they love to automate things and they love to put it with colors. So we have the red, yellow and green metrics, and that kind of gives me an idea on a weekly basis where is budget on certain key issues that they're supposed to be accomplishing for this year? Are they red, are they yellow, or are they green? And these folks actually rate their own selves to find out how they're doing. And if there's something that's an impediment, that's when I raise it at the Senior Leadership Forum, by which to get Mission Director Support, or actually get the Administrator or the Deputy Administrator support to break through that barrier and to advance the agenda.

Mr. Sieke: Gwen, it sounds like there's an awful lot of monitoring done to make sure that people are kind of moving the ball forward, and that to the extent that there are impediments, you're doing what you can to break those down. Can you give us an example of one that was kind of thrust before you as, you know, Gwen, I need your help. How do we fix this and get to the next level?

Ms. Sykes: Actually, that was one that I thought had been resolved in my own area, in finance and accounting. We had the opportunity of migrating to a new financial management system, and I believe Patrick Ciganer was one of your guests here, and --

Mr. Lawrence: He was. Yes, he was.

Ms. Sykes: And one of those challenges, of course, in migrating to a new financial system is that some of the data is not always repository or gets into the new system, so you're actually trying to catch up as you move forward in your migration. And one of those areas was funds distribution, and what we realized is, even though the finance and accounting area had funds distribution information within the system that they inputted into the new core finance SAP system, there were additional data items, or detail data, that was in the hands of the Mission Directorates. And they were not incentivized at that point and time to put that data in.

So as we kept going through to try to do the reconciliation and the new and the legacy system to the new SAP core finance system that we implemented, we found that there was only so much that my staff could do, but they needed the support of the Mission Directorates. But, of course, the Mission Directorates were busy trying to get about the business of their new exploration vision. So I was able to raise, at the Senior leadership, that says, if you want the fund balance with Treasury to be resolved, I need key people within each of the Mission Directorates to focus on this effort, and they need to do this, that, and the other in order to resolve this issue.

At that point and time, the Administrator and the Deputy Administrator signed out a letter to the Mission Directorates, and I also signed the letter, that says we will get this done, and we will get it done by this time frame. And that's one of those opportunities where something that the staff brought to me that says, we can't do any more unless we have someone else's support, and then, that's what rallied to team to make it happen.

Mr. Sieke: Can you also talk about some of the ways you're improving financial management and reporting to NASA, and how you're making those reports available to people outside of NASA?

Ms. Sykes: This is actually very critical to our affordable and credible financial management. Not only does my group in the Office of the CFO have to be able to be in the position to deliver the analytical capability for financial management in NASA, but we see ourselves as customer-focused now. I think in the olden days, you'd see the comptroller coming, and, oh no, they're going to cut my budget. But really what we're trying to do in the Office of the CFO here at NASA is change it to the point that we partner with them. We find new and creative ways in order to finance, budget for, and move forward in the programs, because we are a dynamic agency, and we are doing cutting-edge technology.

We are also trying to take our Project and Program Managers who were normally engineers and scientists, and I'm trying to make them into Financial Managers. So they have all been indoctrinated, and we actually have developed a course called Financial Management for Non-Financial Managers, because at NASA, we're operating at what we call full cost. We have full cost budgets that we put together and we execute at full cost. So this has been quite a challenge, for not only myself, but for the folks here at the Agency. So we have a huge learning curve.

So my group, all the CFOs at the ten different centers, as well as at headquarters, are in the position of providing a customer service or tool to teach our engineers and scientists how to be good financial managers in order to be able to fully justify the costs and the resources associated with the programs and projects. One of the best news articles -- of course, the press folks probably wouldn't think so -- but it was in the Florida Daily, and it said, "Byzantine cost accounting practice at NASA has caused the Hubble Space telescope to be too costly." I thought, yes, they finally got it. And the Byzantine cost accounting method they were talking about was full cost. We now can identify how much it really is going to cost NASA to do something, if Congress asks us. And the Program and the Project Managers were key in developing those estimates. So now, we have a fully burdened, fully knowledgeable, what is it going to cost us do something? And that puts us in a better position to be credible and affordable with the American taxpayer because we're not playing a shell game, we're actually showing them how much it costs to really do our business.

Mr. Lawrence: Gwen, in the last couple of segments, you referred to One NASA, and you've talked about the different tools and techniques. My question is about why this came about. Could you give us a little history about what the problem was, and how this addressed it?

Ms. Sykes: Well, initially, before Sean O'Keefe actually came on board, and after I came on board, probably in 2002, in between that time, we had the Columbia accident, and one of the items, or something that came out of the Columbia Accident Investigation Board, was there didn't seem to be within the culture of NASA the ability to share, or to promulgate ideas, or to actually inform other people of different things within the Agency. And so we wanted to create a forum by which people felt comfortable to engage in dialogue, and felt comfortable in sharing your ideas, or sharing your objections about current business practices, or current practices in general within NASA.

So we created the One NASA Forum. And the One NASA Forum takes on many myriads of transformation and communication-type opportunities, but it focuses on the individuals within the Agency, putting them in a position to articulate whatever their concern is, or whatever their idea is. One of the forums is that we have a website that we call the One NASA website, where from different centers, internal or external to NASA, people actually submit questions, submit comments, submit concerns, and they get compiled.

And as a key leader in the Office of CFO, I have to respond to those questions, and there is a immediate turnaround time frame by which we try to reply to them within a 48-hour time frame. And we do reply. And then the other forum is what we call Transformational Dialogues, or Informational Dialogues, where we take key leaders, executive leaders, depending on the center, depending on the issues, and depending on some of the stuff that has been put into the website for that particular center, we send the key leaders in those areas that have been identified as a great significance, or importance, or relevance to the area; we send the key leaders out there, put them in a chair, hand them a mic, and let them have a conversation with the people that are at the center.

But, also, as you recognize, some people will not raise their hands in a crowded forum in an auditorium when they have those opportunities, so at the same time, we do have folks in the auditorium, but we also have set up, while we're doing those dialogues, the opportunity for people around the center and around the area who may not feel comfortable standing up in the auditorium, to send in questions, to get their items and issues addressed at that point and time. So we have a lot of forums, but the whole concept is to keep the communication flow going, to make sure that folks within the Agency know that the executive leadership is here to listen, and we do.

Mr. Lawrence: It's fascinating, and involves an awful lot of outreach.

What does the future hold for financial management at NASA? We'll ask Gwen Sykes, CFO of NASA, for her perspective, when The Business of Government Hour returns.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Gwen Sykes, Chief Financial Officer at NASA.

And joining us in our conversation is Steve Sieke.

Mr. Sieke: Gwen, how do you envision NASA in the next five to ten years?

Ms. Sykes: As a agency, I've probably told you that we're definitely engaged enthusiastically in our new exploration vision, and we're well equipped in terms of pretty much the skills and the knowledge, because we're actually going through a transformation and doing the hard changes now in order to make sure that we're retooled and we're re-skilled in order to meet the agenda that we've set out, and laid out for the next twenty years. So as I kind of look down the road, I see an organization that has made some excellent progress currently to date in achieving the vision. And I see a public that is fully engaged and supportive, and connected with our ability to more forward in exploration, and look at our world and planet in new ways, in moving out.

Mr. Sieke: Is there any advice you would give to other CFOs in government on ways of achieving efficiency in their financial systems, or performance budgeting, based on your experience?

Ms. Sykes: First, you have to engage the hearts and the minds of the people. You can't do anything without the individuals at the organization, to make that change. And in order to operate efficiently and productively, you will need the people pulling together and kind of moving in the same way to get things done. But one of the things I have found tantamount in my new role as a CFO at NASA has been ensuring that we have the system in place, and that it is actually one single system for financial management. And when I speak of financial management, I talk of a whole range of financial management: the budgeting, the execution, and the performance, and the costing associated with it, as all one continuous circle, and data has to be able to be shared amongst all. Once you have a system in place that supports that capability, and you have the people well-trained and well-skilled in that area, then you need to properly align the policies, processes, and procedures to fit all of those areas and make sure that they move forward. And that's what we've done at NASA, and that's where we're heading.

Mr. Sieke: And there's an awful lot that's bundled into that, because what you've done, Gwen, is move from all those things happening at ten centers to having one system that captures all of it. What are some of the major challenges that you faced in that transformation, moving from the ten centers to the single system? I know there's more than just a few.

Ms. Sykes. Let's see. The first challenge was our Legacy Systems. As you mentioned, I had ten centers, and just to give you the magnitude of the system's migration, I had ten centers with ten legacy accounting systems, with over 120 possible subsystems that we could identify. And in the one year of execution when we did our migration, when we only did it in one fiscal year, we migrated over twelve years' worth of data, which amounted to almost fifty billion transactions, into a single instance, in one fiscal year. Also, while at the same time we're doing the migration, we were of course having to continue the operations of our business from day to day.

That was a heroic trial for the folks in the Financial Management area, but they did it, and it's done, and it's behind us. Now the hard work comes in being able to what we call standardize the data, particularly, the historical data. One of the challenges that we found in some of our Legacy Systems was how old they were. One of my systems, we actually had to go out and hire unique programmers. When I speak of unique, they had to be well-versed in COBOL in order to do the migration. I was actually hoping I could get that contract because I knew COBOL, but it was an interesting migration. Recognizing that the historical data is now populated in a new relational database, and being able to bring that data up to a certain level of standard -- and you have to recognize, because of the historical nature of it, you're only going to get it a certain point -- but once you've made that migration and you start operating forward, you'll see that the improvement of the data is there, and your ability to do the analysis and to provide information to our customers, which are the Mission Supports and the Project and Program Managers, becomes better year by year. So we've moved out of the valley of despair, and many people, if you've been through migration systems, and we're moving up into the other realm, of being able to accept it, and producing great financial information.

Mr. Lawrence: When you think about government financial management, is there an issue, or issues, perhaps, that you think will most change the field over the next ten years, or have the most effect that people will be talking about?

Ms. Sykes: One of the things that have been well talked about within the private sector, which is now making its move into the public sector, is the Sarbanes-Oxley. The American people want to hold the private companies and entities responsible and accountable for their actions with regards to the stock market; they are going to hold the public sector CFOs just as accountable and just as responsible for the operations of their American tax dollars.

And we are seeing that a lot of the new directives coming out of the Office of Management and Budget are focusing on internal controls. What is your level of internal controls, at the Agency level, that can provide attestation and assurance that you are operating in a credible financial management way within your organization. And we have actually, at NASA, taken the lead on that, given our current position. And I've instituted an office of quality assurance which reports directly to me and only to me. And they have gotten the ability from the administrator of the Agency to tap into, review, and assess and make attestations to the internal controls of any operation that has a financial management impact, or financial impact. So that gives us the wide breadth to be able to go in, assess, review, and strengthen our own internal controls, rather than waiting for our Inspector General to go and point that out, or the GAO. We are taking it upon ourselves to do our own housecleaning.

Mr. Lawrence: Gwen, you described in the previous segment your family's commitment to public service, and of course your distinguished career as well. So I'm curious, as you think about public service, what advice would you give to someone, perhaps a young person, interested in public service, and maybe even in financial management?

Ms. Sykes: Advice that I would give to someone going into public service? You've got to like what you're doing. Do it for the right reasons. If you're doing it for the monetary gain, then I would probably advise you to do something different. But when I say do it for the right reasons, as a CFO of this agency, the best part of my job is to be able to go back to my home state of Alaska, go into the rural elementary schools in Bethel, Alaska, and talk about the neat things that NASA does, space exploration. And to see the light in the kid's face when they light up and say, not only are you from home, you have a 16.2 billion budget that you manage, but you work with astronauts. You're absolutely cool. You can't buy that. So I've become really cool.

But also, as a individual that's looking to go into public service, it's a great opportunity. You have the opportunity to see many great things. Like I said, at NASA, I get to see orbiters fly, I get to see where the astronauts do their training; working for the Department of Defense, I got to have the experience of being on the Kitty Hawk, overnighting on the Kitty Hawk. I had the ability and experience to see the B-22 fly. You know, you get to see the military doing paramilitary type maneuvers at night, and during the day. These are great things that you are able to get to see, and it's kind of like that MasterCard commercial, being able to be on the Kitty Hawk: priceless. So those are some of the great things you can do. But a career in public service, definitely need an education, education is key. Always challenge yourself throughout your career to continue to get education. And remember you're doing it for yourself, because you're interested in it.

Mr. Lawrence: Gwen, that was a very interesting answer. That'll have to be our last question. Steve and I want to thank you for being with us this morning, and for squeezing us into your very busy schedule.

Ms. Sykes: Well, thank you. But also, I'd to like encourage all of those who would like to find out a little more about NASA and its interests and the things we're doing and exploring, to hit www.nasa.gov. Thank you.

Mr. Lawrence: This has been The Business of Government Hour, featuring a conversation with Gwen Sykes, Chief Financial Officer of NASA. Be sure and visit us on the web at www.businessofgovernment.org. There, you can learn more about our programs and research and get a transcript of today's fascinating conversation. Once again, that's businessofgovernment.org.

Mr. Lawrence: For The Business of Government Hour, I'm Paul Lawrence. Thank you for listening.

Gwendolyn Sykes interview
10/29/2005
"We have a renewed spirit amongst the individuals that work here, a renewed interest in the technology and the scientific exploration associated with the President’s new initiative for space exploration going back to the moon, and Mars, and beyond."

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