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.

Kyle McSlarrow interview

Friday, September 19th, 2003 - 20:00
Kyle McSlarrow
Radio show date: 
Sat, 09/20/2003
Intro text: 
Missions and Programs; Collaboration: Networks and Partnerships; Strategic Thinking; Leadership; Innovation ...

Missions and Programs; Collaboration: Networks and Partnerships; Strategic Thinking; Leadership; Innovation

Complete transcript: 

Arlington, Virginia

June 16, 2003

Mr. Lawrence: Good morning, and welcome to The Business of Government Hour. I'm Paul Lawrence, the co-chairman of the IBM Endowment for The Business of Government. We created the Endowment in 1998 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

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. Our conversation this morning is with Kyle McSlarrow. Kyle is the Deputy Secretary of the U.S. Department of Energy.

Good morning, Kyle.

Mr. McSlarrow: Good morning.

Mr. Lawrence: Joining us in our conversation is Kevin Costello.

Good morning, Kevin.

Mr. Costello: Good morning, Paul.

Mr. Lawrence: Kyle, let's begin by finding out about the Department of Energy. Could you tell us about its mission?

Mr. McSlarrow: The mission of the Department of Energy is a fairly diverse one. Because of its history, it has several major focuses. One is the continuation of the nuclear weapons complex. The real beginnings of the Department of Energy can be found at the establishment of the Los Alamos site in the early '40s as part of the Manhattan Project, and really, the business of nuclear energy got its start, obviously, with the weapons program. So that's one track.

Another track is that as the result of that nuclear weapons program over most of the '50s and the '60s, and even into the '70s, at a time when the Cold War began to end and we were winding down, not eliminating, but winding down some of those activities, we discovered something new that was important to the American public, and that was protection of the environment, and that we had made a hash of the environment at some of these sites.

So we have about an $8 billion environmental cleanup program that is very challenging that I've spent a lot of personal time on, and we can talk more about that later.

The science mission is something that's related to both of those, and that is a variety of national labs, actually 17 national labs that we have in the Department of Energy complex that had their origins as part of the nuclear weapons program: big science, big physics, accelerators and things like that, that have really broadened into almost every discipline within science.

They support those other activities in addition to the final branch, which is, as the name suggests, a focus on energy policy. It's an interesting thing that we're really a technology agency, a lot of R&D at the labs. Our name suggests that we actually have something to do with running energy policy in the country, and the truth is we actually have very little to do. We're not a regulatory agency, but we really try to use science, broadly defined, to provide us with solutions to energy policy as well as some of these other kinds of focuses.

Mr. Lawrence: Set the context for us. Could you tell us about the budget of the Department and the number of people? That was interesting what you described so much, the kinds of skills the employees have.

Mr. McSlarrow: Well, the budget is about $23 billion now, and the Department of Energy is an interesting creature, if you will. It's a little different from other Cabinet agencies in that there are only about 15,000 federal employees, and well over 100,000 contract employees. These national labs I was talking about a moment ago are largely run by contractors, and in everyday life, there's often not really a distinction made between people who are contract employees and federal employees. We all sort of seamlessly work back and forth, but, nonetheless, there is a difference.

As I said before, we have about 17 national labs. The makeup of the work force, because it's so heavily focused on science, is that we have very senior, very skilled, highly skilled, employees. I'm not certain what a comparison would be to other Cabinet agencies, but I'll bet as a proportion of management, that we probably have more senior-level management and a lot of people with doctorates and degrees in things that I couldn't even pronounce at this point than a lot of other Cabinet agencies.

Mr. Lawrence: How about a little history lesson here? The labs date back, it sounds like, almost 50 years ago.

Mr. McSlarrow: Right.

Mr. Lawrence: But the Department recently celebrated its 25th anniversary. I wonder if you'd tell us how it came to be a department.

Mr. McSlarrow: Yes. As I said before, the origins were really in the Manhattan Project, and that became institutionalized. Originally of course, the Manhattan Project was secret. Lots of things were happening, but no one talked about it. After World War II, when it became public, and it was institutionalized, it was institutionalized in something called the Atomic Energy Commission, which had really two functions. One was the defense side of nuclear energy, and the other was to kick-start the civilian uses of nuclear energy. You may recall that President Eisenhower actually had a famous speech called the "Atoms for Peace" speech, which I think this year is actually going to be celebration of the 50th anniversary of that in the early '50s, which really started the civilian nuclear program.

The AEC, the Atomic Energy Commission, was responsible for all of the activities that you would think of as the core of the Department of Energy. Over time, what happened is because there were so many scientists, Nobel Prize winners and the like associated with that level of activity, particularly on the physicist side of things, that they started branching out and labs started being added to the mix in biology and materials science, you name it, astronomy, that was being added to the mix.

Over time, there were several different things going on related to nuclear energy in addition, which there was an increasing awareness, particularly with the first 1973 oil shock, and then more particularly the one in 1977 that produced a real desire to do something about energy policy.

So what Congress essentially did was cobble together a variety of different organizations that had a different history and a different legacy but had something in common, and we would argue that the something in common really was national security, but you could look at it through a different prism and package them together, as you said, 25 years ago, into something called the Department of Energy. It's an experience, and maybe you'll want to get into this, with a lot of lessons and a lot of lessons that my counterparts at the new Department of Homeland Security are interested in, because it similarly is taking a lot of organizations with their own histories and their own culture, their own way of doing things, and putting them together and requiring somebody to build out of that a coherent mission-focused organization.

Mr. Costello: Kyle, can you share what your role and responsibilities are on a day-to-day basis as the Deputy Secretary?

Mr. McSlarrow: There are several different ways of looking at it. One is, from the President's point of view, he's designated the Deputy Secretaries of the Departments as the chief operating officers of those departments, and it's often called, although not always within my hearing range, chief bottle washer or utility infielder, and it's a lot like that. The Secretaries of the Cabinet departments tend to be a lot like chairmen of the board or CEO-types of executives, and it's not exactly the same as you would find in the private sector, but it's not dissimilar.

So I define it, and I think each deputy approaches that COO responsibility differently, as focusing a couple of broad things. One is I'm probably the chief policy adviser for the Secretary, so I try to integrate the policies that are coming up through the programs to make sure that they're consistent with one another. As we were just talking about the kinds of issues we're dealing with, the diversity of those issues, is so great that it's not easy for other people really below the Deputy or the Secretary level to make the calls in terms of what really should be the priorities.

At the end of the day, I see my job in terms of policy and of budget as ensuring that President Bush's priorities and Secretary Abraham's visions are carried out, and that as people are doing the work, A, they understand what those priorities are, what the vision is; B, that we implement the programs to get there. That can take a variety of different forms, but it's a lot of trying to ensure that the management of the system produces results. President Bush has been very clear with all of us that at the end of the day, if government doesn't produce results, then we are failing. So we tend to be very focused on performance.

So in my daily interactions, that's what I'm looking for, did something happen -- ideally, did something happen that we wanted to happen, and what haven't we done, how do we get there, what's the plan to get there, where are the problems, where are the challenges, what's the fix? It's just an iterative process that goes on day after day after day, and it's not always something that allows you to say on a certain day of the month, we did it, we can rest on our laurels, because the business of government is ongoing. So every time you solve one problem, there are going to be 10 more behind it. But it's a fascinating and actually exhilarating job to do.

Mr. Lawrence: That's a good point.

What role does the Department of Energy have in homeland security? We'll ask Kyle McSlarrow of the Department of Energy for his thoughts when The Business of Government Hour returns.


Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and today's conversation about management in the federal government is with Kyle McSlarrow. Kyle is the Deputy Secretary of the U.S. Department of Energy.

Joining us in our conversation is Kevin Costello.

Mr. Costello: Kyle, can you tell us a little bit about your career before coming to your present position?

Mr. Lawrence: Sure. I have largely been a creature of Washington, D.C., in and around the political process. I've been a private practitioner as a lawyer. I actually ran for Congress a couple of times. I worked for several senators. At one time, I worked for the Secretary of the Army, and indeed, I was a captain in the United States Army.

Then I actually worked at an Internet firm for about 18 months. I like to tell people I've seen the entire business cycle from the beginning to end. But it's always been around my first love, the political process, so one facet or another has touched on that.

Mr. Lawrence: How would you compare the different parts of government? You've been in the legislative sector, and now the executive branch.

Mr. McSlarrow: It's a curious irony, really. In some ways when you're a staffer on the Hill, you feel like you can get things done. You can pass a law, you can do all those things that work toward either the House or the members of the Senate enacting legislation, and you can actually feel some sense of we did something. But you're always missing that piece of actually implementing it. So in some sense, you feel like you haven't actually fulfilled yourself because you haven't actually been out there doing it whatever it was you were working on.

When you're in the executive branch, it's kind of the opposite. You are a doer. I get to make decisions every day big and small. Yet on a broad policy level, it can be very frustrating working in the executive branch. It doesn't matter what level you are, it's just so big and so cumbersome that most decisions are measured in months, and a lot of them take years, and people just don't have an attention span that really lends itself to feeling rewarded in that sense.

So it's one of those things, I think, having worked in both the legislative and the executive branches, I've seen both sides now, and I feel good about the fact that I've done both, and it's sort of two halves to the same thing. But it's really a difference of I think the numbers of people that you actually have to interact with who make decisions. It's very simple when you work for a senator; you got one boss.

Mr. Lawrence: When you described the Department at the opening of the show, you broke it into the four principal lines of business: national security, energy resources, science and technology, and environmental quality. I'd like to take you through those now and ask you some questions about that.

Could you tell us about the activities of the Department regarding national security, especially in the context of homeland security?

Mr. McSlarrow: We actually have a couple different roles. First, and the most obvious, is the fact that we're responsible for maintaining a safe and reliable nuclear deterrent. We are constantly monitoring the weapons stockpile, and then as necessary, refurbishing those weapons, and that's really the absolute zenith of the Secretary of Energy's responsibilities.

Next, we are also responsible for implementing a variety of programs that are focused on ensuring that weapons of mass destruction don't proliferate around the world, and the bulk of those programs are programs that have been supported on a bipartisan basis for about a decade by Congress that are focused on Russia. And in the aftermath of the Cold War, and as they moved toward democratization, there was a real serious question about who was going to control, obviously, the nuclear weapons, but it's broader than that; the entire continuum of activities that supported their strategic programs. Whether it was chemical, biological, or nuclear weapons development, we spend quite a lot of money on that. Our nonproliferation programs are about a billion dollars. That's focused overseas. It's principally focused, but not exclusively, in Russia, and we've started branching out to some other either former Soviet Union states or some other states.

But that starts to get into the question you asked, because that really is the first line of defense when it comes to homeland security. Ideally, you want to be able to control those kinds of materials over there at a source, but what September 11th has done and what the new Department of Homeland Security is doing is we now view this, I think, differently. We now view this as something that is overseas to home, and we need to make sure we have all our bases covered. So as you move closer to America, to the ports in Europe, for example, where materials might be smuggled on board, you would then find the Department of Energy in its technical expertise working hand in glove with the Department of Homeland Security and working with the host countries to make sure we have the ability to detect these kinds of materials, and ideally to stop it. Then as you move close to our shores with Customs and the FBI and the law enforcement actually domestically, now you're really traditionally getting into stuff that's true homeland security types of functions that would either be handled by that department and/or the Department of Justice.

Then on top of all of that, to go back to the national laboratories which we have in the Department of Energy complex, they are our laboratories in the sense that we manage them and we provide obviously the bulk of the funding for our programs, but they are also capable and do quite a lot of work for other entities. Congress made clear last year, and we're working with the Department of Homeland Security on this, that they wanted the new department to be able to tap into this kind of expertise.

Just to give you an example, a lot of people don't realize this, but quite a lot of the technology solutions to homeland security had been something we had just focused in our national labs really before homeland security became an issue, just because it seemed like useful kinds of activities to engage in. So the foam that a lot of people I think will remember that was used to actually clean the Hart Senate Office Building and some other areas that were potentially infected by anthrax spores was actually something created at the Sandia National Lab, and it was created well before 9/11 and that anthrax attack ever took place, just because some scientists decided that this was something that somebody needed to study and come up with a solution to.

So a lot of times, you have scientists out there who are just thinking way ahead of where everybody else is, and part of what we like to do is to give these laboratories the flexibility not only to do the work we're asking them to do and that maybe the new Department of Homeland Security is asking them to do, but also to think about what kinds of things need to be done, and that was an instance where they hit it dead-on.

Mr. Costello: Kyle, from the perspective of the energy consumer, can you share with us what the Department's activities are in terms of deployment and focus of resources, especially in light of the recent spike in gas prices and rolling blackouts and the like?

Mr. McSlarrow: Yes, I said at the outset it's an interesting thing that despite our department's name, we actually don't have a responsibility for energy, and actually, that's not just completely tongue-in-cheek. We're not a regulatory agency. We're basically an R&D agency, so we tend to view energy policy as something that's related to technology and technology solutions. So a lot of our focus tends to be on how we can ensure that whatever the energy source, whether it's renewable energy, wind and solar and geothermal and things like that, or nuclear energy, or coal, or what have you, can be delivered safely, abundantly, cheaply, and most importantly in recent days, cleanly. So a lot of our work goes to that.

But the Secretary of Energy is the chief energy adviser to the President, and so sometimes it's just the bully pulpit, but the bully pulpit is not unimportant. Natural gas is an issue where we've actually raised the alarm in recent months that we have tremendous strains on the system right now with natural gas. We produce less than we used to here at home, and natural gas is used not just for home heating, but increasingly over the last decade or so has been used to actually produce electricity. So everybody loves natural gas, there just isn't enough of it, and so it's really put a strain, it's injected some volatility into the market. And so one of the things that we're doing on June 26th is hosting a national summit on natural gas to make sure that we're focused on what it is we can do to find additional supplies of natural gas, and also what steps we can take as a nation to focus on conserving natural gas when we don't need to use it and really trying to find a balanced approach.

That's not something that's regulatory; it's not going to be a government mandate, but it's something that our department has the responsibility, if you will, to try to pull together not just producers and consumers, but environmentalists, other stakeholders, to try to arrive at something that goes to the national well-being.

Mr. Lawrence: You're responsible for the strategic petroleum reserve; did I get that correct?

Mr. McSlarrow: Correct.

Mr. Lawrence: From time to time, people say gas prices go up, let's open that up. Could you maybe give us another history lesson on why do we have that, and what's the purpose of it?

Mr. McSlarrow: The strategic petroleum reserve is the result of the oil embargoes in the '70s, and at the time, when we were without a petroleum reserve, we really were at the mercy of oil cartels. Congress made a decision, it was an expensive one, we're talking a couple of billion dollars, to buy oil and store it in salt caverns, two in Louisiana, two in Texas. They have a capacity to store about 700 million barrels, and we've actually filled them to 600 million barrels. To put that in perspective, if you had a complete wipeout of all of our oil imports, we could survive just off of that for over 50 days, and nothing on the horizon suggests we're ever going to have that kind of problem.

The kind of problem you tend to have is the one you identified, which is there is a supply shortage someone in the world, whether it's Iraq and the oil supply is stopping there, or the strike that took place last winter in Venezuela, some proportion of the oil is off the market and the price rises as a result. Our view as a policy matter is that the oil reserve is there for national security purposes. It is there when you truly have a severe oil supply shortage. It's not there to manipulate prices in the markets. Sometimes people have a hard time accepting that, but I think ultimately it's the right thing to do to know that we're not wasting that asset, because we have yet to confront the truly horrible situation of oil supply shortage, and hopefully we won't. But if we do, we'll be ready.

Mr. Lawrence: That makes sense.

How is the Department of Energy addressing the items called out in the President's management agenda? We'll ask Kyle McSlarrow to bring us up to date when The Business of Government Hour returns.


Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and today's conversation about management in the federal government is with Kyle McSlarrow. Kyle is the Deputy Secretary of the U.S. Department of Energy.

Joining us in our conversation is Kevin Costello.

Kyle, let's spend some time on the Department's response to the President's management agenda. Could you tell us generally how it's going?

Mr. McSlarrow: The President's management agenda is a central part of what I do in terms of managing the Department. I said earlier in the show that the President has made it very clear to us that he expects us to show results for what it is we do in government. The President's management agenda is an attempt to really flesh out what that means in practice in several key areas, which I assume we'll go through.

The Department of Energy piece of this has been to take the lead on a couple of items, particularly on e-government, and then to really try to implement each of these pieces of the management agenda in a way that -- as we call it when you go through this process, getting the green -- which just by way of explanation means that all of the agencies are rated in two ways, and they're rated with a red light, green light, yellow light approach, and obviously red would be bad, green is good, and yellow means you're making progress but you're not quite there. We're managed on an absolute scale, where are you in terms of achieving the objective, and we're managed in terms of progress.

The good news from our point of view is the Department of Energy is one of I think only four or five agencies that's actually all green across the board in terms of progress. The bad news is like most other agencies, we're still well short of where we need to be in terms of actually achieving the objectives. The management agenda really got off and running probably a year and a half ago, so early 2002. It was talked about really during 2001, and they built the program, but that's really when it was kicked off.

So I'm pleased that we have improved, that we've made progress, and as I said, in some ways relative to other Cabinet agencies, we're actually doing pretty well. But at the end of the day, the real measurement is whether or not you're achieved these objectives, and so we still have our work cut out for us. It's part of everything I say to our managers, and I'm sure they're tired of hearing it, but they'll stop hearing it when we actually accomplish our goal.

Mr. Costello: Could you tell us about what you've done so far regarding your IT, what the Department is planning to do, and how that might fit into your overall e-government, e-business modernization at the Department of Energy?

Mr. McSlarrow: I'm glad to have an opportunity to walk through this. One of the things the management agenda is designed to do is to bring greater government efficiencies to bear, both within each Department and among the Departments. So, for example, with IT, what we discovered, we actually have what is called an e-government working group, which is a subcommittee of the President's Management Council on which I sit. One of the things we did was explore how government agencies spend their monies when it comes to IT, and we discovered a lot of duplication. So on one level, what we're trying to do is to bring some kind of sensible order to what budget requests each agency makes, to identify the kinds of IT projects where one, say, the Department of Defense, can put in a request for some kind of enterprise architecture, but it could be something that other government agencies can be users of and pay for the benefits that they're getting so that you don't have the Department of Energy, the Department of Defense, the Department of Agriculture all buying the same thing, when in fact one can buy it and the others can use it. So on that level we're trying to bring efficiencies to bear.

Then within each department in our case, we're instituting something called I-MANAGE, which is designed to -- we're trying to make a little more systematic and bring some common order to the enterprise architecture of the Department. Because we have so many scientists and so many labs and so many people who know things about computers, the result was that every single department or program or official it seemed thought they knew best about what IT needs they had, and probably all of them were right, but they produced the wrong answer. The right answer is for most functions to have one system so people can talk to each other, and then identify those areas where there should be some additional flexibility.

You don't want to straightjacket people, but we were at a point where systems weren't actually effectively communicating with other systems, so our I-MANAGE initiative is designed to have in one database the kinds of information that all managers, it doesn't matter what specific programs they're in, can go to so you can see real-time data on projects and timelines and initiatives and what the status of them is, where they are in terms of the spending, where they are in terms of performance integration with the budget, and allow us to pool this kind of information so managers can have access to it.

That's just one initiative among many when it comes to IT or e-government. But it's not something that's ever been attempted before, and there's a good bit of cultural education that's going on, because a lot of people just sort of scratch their heads and say I haven't needed to do this before. So a lot of this is about explaining to people not that you're doing things wrong, but that there are huge opportunities out there, and opportunities that in many cases the private sector has already figured out that we can take advantage of, too.

Every time I go through an exercise like this, I find that after it's done, it's implemented, about two months later, somebody will stop me in the hall and say, I get it, now I understand why. But you just have to sort of get people to take the plunge first.

Mr. Lawrence: Another one of the items in the President's management agenda is competitive sourcing, and you described that the Department has many more non-employees assisting in its mission than employees. What does competitive sourcing mean to the Department of Energy?

Mr. McSlarrow: Yes, it is a strange thing when it comes to the Department of Energy. Just by way of explanation, competitive sourcing is often misunderstood. It's often thought of as just simply privatizing government jobs and throwing it to the private sector. The truth is, it's an exercise in trying to force people to analyze and answer a simple question, which is what is an inherently governmental activity? When you identify that kind of function as inherently governmental, there's something about it that only a government official should be doing, that allows you to be a lot more disciplined about looking at other jobs. So those jobs can be done by government employees, or perhaps it might be better if they're done in the private sector.

That reaches the second stage of the analysis, which is a comparison of the costs and efficiencies associated with a government employee doing a particular kind of function or a private-sector employee doing it. I don't go into competitive sourcing assuming that one group or another is better. I think that's what the analysis is designed to tell you. You need to let it do its job. I do think it's important that we at least ask the question, and this is obviously something that could be controversial from time to time.

But as you point out, it's a little different with the Department of Energy, because so much of our ongoing work right now is done by private corporations, by contractors, and so there's a little bit of we already contract out so much work, what could there possibly be left to contract out? I think probably in a very large sense that's right, but I also think there are discrete areas; in our case, financial services was one area we decided to look at, and there are probably others that as we move through the A-76 competitive sourcing process we'll look at, we at least need to ask the question and see what the answers are.

Mr. Costello: Can you share with us the Department's budget and performance management initiatives and how those might play both internally and externally with your M&O contractors also?

Mr. McSlarrow: Yes, the budget and performance integration is a perfectly sensible and logical goal. You want to be able to match your dollars to real results, to real performance, but it's very hard to implement it in practice. It's probably hard for any government agency to do. I think it's especially hard for a research and development and technology agency to do. It's easy for a scientist to come in and say I've got a great idea. I want to spend a billion dollars and build an accelerator and study all kinds of subatomic particles that you've never heard of. And it's quite another to say, okay, besides that, it's a great thing just for science's sake, what is it that we actually get out of it, because the whole point of doing the research is you often find answers to questions you never thought of asking. So you have to really balance the kinds of programs that you're funding and force people to ask those kinds of questions and understand, at least with R&D, particularly basic science, that you're not always going to get a perfect match between "dollars and performance."

For our other programs outside of the science arena, I think we've had a much easier time. I think it was just that people historically had not been forced to think through how to justify their programs, and now that they're doing it, we're actually in our second year of this cycle now, it was probably fairly rough the first year. I think my expectation, just based on what I've seen so far, is that it will be much better this year. I think people now have the rhythm of the kinds of questions that you ask before you ask for money from the American taxpayer.

The flip side of it is you have to make sure, having supported and justified a need for a certain expenditure of money, that if you get it from Congress, you now have to prove that you implemented what you said you were going to do. So part of the process is a painful one, which is that we actually rate performance in these programs. We started this last year, and this year, as those ratings come out, if people aren't performing according to the performance that they themselves participated in identifying, it's going to affect their budgets because we're not going to keep throwing good money after bad.

All of these things probably are meritorious, but there is not an unlimited budget, there's not an unlimited budget even in the entire federal government, let alone within the Department of Energy, and so we're going to move resources to programs that are performing the best.

Mr. Lawrence: Interesting.

What's the President's Management Council, and what do they do? We'll ask Kyle McSlarrow, a member of the Council, to tell us about it when The Business of Government Hour returns.


Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation s with Kyle McSlarrow. Kyle is the Deputy Secretary of the U.S. Department of Energy.

Joining us in our conversation is Kevin Costello.

Kyle, as the Deputy Secretary, you're a member of the President's Management Council. Could you tell us about the PMC, including its roles, and what you do on it?

Mr. McSlarrow: The President's Management Council is made up of the government agencies' COOs, in this case the Deputy Secretaries. So that's the makeup of the Council. The principal focus is on ensuring the implementation of the President's management agenda. We've been talking about different components of that, but it was thought at the beginning of the Bush administration, every administration comes in and talks about management reforms and to varying degrees they succeed or fail. One of the decisions that was made early on was that if we were going to make a difference in terms of management reforms, this had to be done at a very high level.

So we meet every month, and let me just tell you, for Deputy Secretaries to meet that often on this subject, that's an extraordinary expenditure of time, because not only do we have several-hour meetings once a month, but we have subcommittees that are devoted to each of the components of the President's management agenda.

I sit, as I mentioned before, on the e-government management agenda subcommittee, and we also meet once a month. Then of course, there's a lot of work that's going on between those meetings. But we've figured out pretty early on that these are initiatives that while they have to be implemented agency by agency to a very large degree, their success really required us to band together. Sometimes they require us to spend more money on certain things like IT investment in certain arenas, so it helps to be able to have OMB, which is really a big part of this process, sitting there and understanding that it's not just the Department of Energy coming hat in hand saying we need more money, there's an entire President's Management Council that's thought through the business case for why we want to do something, and it just brings a lot more heft to the process. And I think, frankly, it's really allowed us to share experiences and ideas across departments, whenever we have a particular challenge or an issue that we're dealing with, in a way that probably a less-formalized process might not have allowed us to do. So it's really the engine that's driving the management reforms.

Mr. Lawrence: What's the spirit of the group? It doesn't have authority, so it's collaborative?

Mr. McSlarrow: It's very collaborative, very collegial. The person who's really responsible for pulling it together and is also a member of the Council is the Deputy Director of OMB for management. Everybody knows about the Deputy Director for the budget side, but OMB actually has another initial, and that's the M in OMB, and it's management. It's something that President Bush views as just as important as the budget side.

It used to be Mark Iverson, who's the newly confirmed and sworn-in commissioner of the Internal Revenue Service, and is now Clay Johnson, who was just confirmed by the Senate as the Deputy Director. So he helps shepherd the process along. In a sense, this is a council that has no direct authority, and yet it's made up of everybody who actually does have the authority in their respective agencies. So we can actually accomplish a lot.

Mr. Costello: Kyle, over the last several months, we've seen the formation of the Department of Homeland Security. I was wondering, in terms of your observations or feelings, do you believe that there are any lessons learned from the way Homeland Security has come together that might change the way the Department of Energy is doing its business or something from which you could benefit?

Mr. McSlarrow: I mentioned earlier we just celebrated 25 years of the creation of the Department of Energy, and while I haven't been around those 25 years, having come in at the tail end of that 25-year period, there were still issues that needed to be resolved. It seems like a very simple thing, but one of the things that Secretary Abraham latched onto very early on in the Bush administration was still this sense of not everybody understanding what our mission was, and his view was, it was very simple, our mission is a national security mission. It takes many forms, but at its core it's a national security mission.

I think the good news for the Department of Homeland Security is they don't have that problem. Everybody there from Secretary Ridge on down understands the mission is homeland security, so I think that will be enormously helpful to them, and so to some extent, I think they start with a better-focused mission than perhaps the Department of Energy did back in 1977.

The other thing that I've learned from DOE's experience is that cultural change, even in the workplace, is something that you have to recognize and work through. You just don't take people who've worked in a particular agency with a certain way of doing things, a certain history and a sense of belonging to a group and throw them together with a bunch of other people and expect everything to work out fine. You're going to have tension, you're going to have misunderstandings. I believe that they're doing this. I think Secretary Ridge and my counterpart, Gordon England, the Deputy Secretary and the other officials that I've talked to, understand that. They understand large organizations and how important it is to instill that sense of mission, because that's the most important thing to actually I think build a cohesive workplace.

There are a lot of issues that they shouldn't expect everything to be resolved in the first year. They're just going to have to prioritize. As I said, 25 years later, there are still issues we're resolving, and hopefully it won't be that long for the new department, but probably some things are going to probably take years. But most importantly, the important things, I think they will do quickly, and we have enormous confidence in their ability to do so.

Mr. Lawrence: Let me ask you to put on your visioning hat. Where do you see the Department in 10 years? Will it be made up of the same components?

Mr. McSlarrow: I think it will be. The last major structural change for the Department of Energy was the creation was something called the National Nuclear Security Administration several years ago, and it was really designed to bring all of the nuclear weapons complexes and the national security missions under one roof. The idea I think was to give a little more purpose and direction at the managerial level to those programs.

I think on the energy side of the house, that is, the things that focus on fossil energy or nuclear energy, renewable energy, energy efficiency and those kinds of things, we have tried to move toward something that's a more coherent organization that really focuses on energy.

I don't know that Congress will ever formalize that, but I think we're doing that administratively. I think when Congress tends to act, they tend to act because they've reacted to some perceived problem, and I think that right now, we're tackling the kinds of challenges that all departments have, but obviously some are unique to our agency, and I think Congress is disposed to let us do that job.

The one interesting thing is that the budgets that have been enacted I think reflect a growing confidence in the kinds of work that the employees of the Department of Energy do and their ability to do those programs well. So I don't just measure success by budget dollars. On the other hand, if you're not doing a good job, you know it when it happens. So I think there's a good relationship with Capitol Hill on that right now.

Mr. Lawrence: You've had an interesting career of different kinds of public service. I'm curious, what advice would you give to a person interested in a career in public service?

Mr. McSlarrow: My rule of thumb in life when it comes to employment has always been to work for interesting people. I have done that more often than I have saying to myself I want to be a lawyer or I want to be a politician or I want to be an Energy Department official.

I have found invariably that if someone I really liked and respected who's smart and a good teacher and a good role model, somebody who is willing to have me on their staff or allow me to work for them, that it always worked out. Life in employment is just one set of experiences after another, and I think if you're disposed to think about public policy, you can start anyplace, whether it's to go be an intern on Capitol Hill or go start in a government agency, but be prepared to a do a bunch of different things. I think that's the only true way you're really ever going to ever figure out what exactly you want to do with your life. I'm actually still trying to figure that out, but eventually I will figure it out sometime. I guess that would be my once piece of advice, a little bit counterintuitive.

Mr. Lawrence: Thank you, Kyle. I'm afraid we're out of time. Kevin and I want to thank you for being with us this morning.

Mr. McSlarrow: Thanks for having me. I appreciate it. And if folks are interested in more information about the Department of Energy, I would invite them to go to our website, which is

Mr. Lawrence: Thank you, Kyle.

This has been The Business of Government Hour, featuring a conversation with Kyle McSlarrow. Kyle is the Deputy Secretary of the U.S. Department of Energy.

Be sure and visit us on the Web at There, you can learn more about our programs. You can also get a transcript of today's very interesting conversation. Again, that's

Kyle McSlarrow interview
Kyle McSlarrow

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