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

Lindy Ritz interview

Friday, February 6th, 2004 - 20:00
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Lindy Ritz
Radio show date: 
Sat, 02/07/2004
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Missions and Programs; Leadership...

Missions and Programs; Leadership

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Wednesday, January 21, 2004

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 by visiting us on the web at www.businessofgovernment.org.

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 this morning is Lindy Ritz, director of the Mike Monroney Aeronautical Center, which is part of the FAA and the U.S. Department of Transportation.

Good morning, Lindy.

Ms. Ritz: Good morning.

Mr. Lawrence: And joining us in our conversation, also from IBM, is Dave Able.

Good morning, Dave.

Mr. Able: Good morning, Paul.

Mr. Lawrence: Well, Lindy, let’s start by finding out about the Aeronautical Center in Oklahoma City. Could you give us a brief overview of the Center and what it does?

Ms. Ritz: We started in 1946 as the CAA, or Civil Aeronautics Administration. And what’s interesting is the senator at that time, Mike Monroney, was really the impetus behind it. He ended up writing the first aviation bill, and he was known as Mr. Aviation. We are located on leased land, leased from the city, Oklahoma City, and it was envisioned that we would be the centralized training and logistics facility. So to give you a sense of what we look like, we’re on 1,100 acres. We have plenty of land to expand. We have about 55 major buildings, so it’s like a little city really, and three million square feet of space inside.

Organizationally, I’m kind of a microcosm of FAA and Department of Transportation. I have nine primary organizations reporting to me. But then there’s 24 other straight-line organizations that I support in various different ways.

What was ingenious in my mind from Mike Monroney was that he envisioned way back in the ‘40s that we could have a centralized support function, one-of-a-kind functions, all located centrally in the United States. And that has prevailed. And as we get more and more emphasis on centralization, the bottom line -- how do you do things more effectively and more economically -- the Center is really situated to provide that.

Mr. Lawrence: How does the Center support the FAA mission?

Ms. Ritz: Again, we’re a microcosm of FAA, and in a lot of cases, Department of Transportation. I mentioned one-of-a-kind function. One of our primary areas is training. We have the FAA Academy. It’s the principal source of technical training for the FAA. And, of course, we do have some reimbursable agreements.

We’re accredited by North Central Association for Colleges and Schools. We used to bring most of the students in for certain segments. Now, through different advances in training technology, some come in for residence courses, but we also do web-based training, computer-based training. So we touch every technical employee in the FAA, either by air traffic control training, aviation safety inspector training, airway facilities, with engineers, or electronics technicians. So we touch, as these people go back into the regions across the country, we’re the ones that have impacted their technical skills.

Another major organization for us is the Logistics Center, one of a kind. We support -- we’re located in 28,000 locations. So when you think about all the national air space system that’s made up of navigational aids, radars, IOSs, the Logistics Center is responsible for repair, overhaul, engineering services, storage, distribution. And we also do life-cycle planning related to how long you keep an asset going. Again, the Logistics Center is one of a kind, and sometimes we do direct shipping. But a lot of times, the assets come out of our warehouse in Oklahoma City.

One of the highlights of the Logistics Center, they’ve enjoyed some, I think, incredible success in the last few years. They were awarded the Presidential Quality Award in both 2000, 2001, and they’re ISO-certified.

Another big area at the Aeronautical Center is what we call Business Services. They are the crosscutting support areas, Office of Financial Services. We do enterprise services, IT services. And we’re really coming together as an integrated business solution now, trying to look at the functions that we think we provide the best, and how do you bring it together and provide the best resource for the customer.

One critical asset for us is we operate out of a franchise fund, which allows us to have a revolving fund. It’s perfectly suited to do fee for service and bring in money from a variety of customers and be able to provide services back to them.

Also, our customer base does not just stop with FAA. We provide significant amount of services to the Department of Transportation. Right now, we provide 11 different DOT operating administration with permanent changes station. We do 100 percent of that work. We do TDY travel. We do accounting. So we’re really, again, building a critical mass as being the largest provider of financial services to all Department of Transportation.

We’re very proud of the fact that we started the Transportation Security Administration in the start-up, and they went from about nine people in the first pay period to about 63,000. We still do their payroll for them. We do their accounting, and we do their travel, even though they’ve moved on to Homeland Security. And we have started discussions with various other government agencies to be able to provide them that kind of service.

Mr. Able: Lindy, let’s talk a little bit about your role as director of MMAC, the Aeronautical Center. Tell us a little bit about what your responsibilities entail.

Ms. Ritz: Sometimes I think of myself as a conductor, because there’s so many different functions. And I am blessed to have a lot of very talented and creative people. So my job is surely not to get into the day-to-day work of it. It’s how does it come together. If you use the conductor analogy, how do you make sure that each individual musician is playing to the best of their ability, but when it comes together, it’s melodious and it connects as opposed to one outdoes the other or overshadows.

What makes my job fascinating is on a given day, I might be involved in talking about a brand-new accounting system. I may be looking at state of the art training concerns in the technical arena. I may be talking about a logistics issue. Or, frankly, when you have a size of the organization I do, you spend a lot of time on people and budget issues. So it’s trying to get the best, which is not hard because we’ve got very creative people. But trying to maximize their potential, trying to be collaborative and make sure we’re not duplicating initiatives, and really have the Center as a whole come across as a unified entity.

Mr. Able: You mentioned looking at budget issues. It’s a very diverse set of activities in your mission. What type of budget does it take to be able to operate the Center?

Ms. Ritz: If I add up all the different budget areas from F&E and Operations, we come out right at a billion dollars a year. And the impact on the economy, which Oklahoma City is very pleased to have, is about $150 million a year.

Mr. Able: There’s a diverse set of skill sets that are required. And from having visited the Center before, I know that a lot of the things that you do are different than what a lot of other organizations do in government. What type of skill sets are necessary in the people that you have employed at the MMAC?

Ms. Ritz: Well, if I go back to our inception, we started with 350 employees; ironically, primarily women because of the war involvement. And we’ve grown now to about 5,000. And that would include government employees, contractors, and at any given time, we have a certain segment of our students coming in because we train about 20,000 a year.

If you start going around the Center and you look at all the different functions, we have over 200 different job series. So one of the nice things when we’re recruiting people to come to work for us is that if you have the drive, and the initiative, and the wherewithal, you can move all over and physically stay in the same location. But it’s like you can go to a totally different world. You can go from the Academy to logistics. You can go to our Civil Aeromedical Institute, which is a fascinating organization. You could be into a regulatory area, where we have airmen/aircraft registries. So if you start looking at the range of functions and a lot of professional and technical occupations, it’s a very neat coming together and collaboration of skills.

Mr. Able: You’ve had a unique experience in your progression, your career progression, through the government. And it’s been dynamic as well. Can you tell us a little bit about how you have progressed to your current role and where you started in the federal government?

Ms. Ritz: I don’t think I would call my career textbook in the way you read that you go from space to space. I got out of college with a marketing and merchandising major, and never really gave it a thought to go to work for the government. My husband and I moved to New Orleans, and I decided it was time to go to work. I started looking at some jobs related to my field and realized that that really was not going to be a good fit. And quite by accident, I was asked to take a 700-hour job with the Forest Service as a GS-3. Then I was focused on, well, if I like this, how do I get to be permanent? I was able to be a temporary for a year, and finally was able to be a permanent 3. I thought that was the best accomplishment I had. It didn’t matter if I had a degree. You realized you’ve got to get in at the ground floor.

I worked for the Forest Service for a few years and then transferred to the Navy in Corpus Christi. Had to take a downgrade when I transferred. Found out the ropes, how it worked. A big breakthrough for me was to be selected in Navy’s development program in HR. And that allowed me to progress, like, 5, 7, 9, and get trained in every aspect of HR. I just felt liberated as far as I was in an area that I really liked.

I then moved up, and about that time, we decided to transfer to Oklahoma City. The benefit of working for the government, of course, is that you have status and you can then contact other government agencies and say this is what I’d like to do. I was very fortunate because FAA was willing to select me as an 11 and bring me into their HR organization.

From there, FAA was just fabulous as far as providing me opportunities to try my skills and moved throughout the HR organization in various management functions, and ended up then being the human resource management officer.

From there, probably one of the best things for my career is FAA had the beginnings of a candidate development program. And I was in Class One. They’d had previous classes several years prior to that. But they wanted to resurrect the program. There was about 21 of us that were selected into the program. And this was to be the pool for senior executives for FAA.

One of the strengths of the program is whatever area you grow up in, in this case I’d spent most of my time in human resources, at least temporarily, they want you to get out of that and into another organization, because we all know you manage differently if you’ve never grown up in that arena. And I moved from HR to the logistics side. I went to the Logistics Center as the deputy. Big difference. A lot to learn. A lot of the technical implications, but it was a good move for me. And from there, a totally different direction. And again, it was just a great opportunity that was afforded me. I went to Aviation Systems Standards and became the deputy there. This is an area that takes care of the fleet for FAA. We took care of airmen/aircraft registries, so very aviation-focused.

Good thing for me was I was going to totally different organizations, but I wasn’t physically moving, which is very atypical. I did some detail time in headquarters, as I think everybody should. And from there, I became the deputy of the Aeronautical Center. And then in 1997, became the director of the Aeronautical Center.

Mr. Lawrence: Well, that’s very interesting.

The management agenda of this Administration is focused on the President’s Management Agenda. How is the Mike Monroney Aeronautical Center doing with the issues called out in the PMA. We’ll ask Lindy Ritz, director of the Mike Monroney Aeronautical Center, when The Business of Government Hour continues.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I’m Paul Lawrence, and this morning’s conversation is with Lindy Ritz, the director of the Mike Monroney Aeronautical Center, which is part of the FAA in the U.S. Department of Transportation.

And joining us in our conversation is Dave Able.

Well, Lindy, the President’s Management Agenda provides for areas of specific reform for government agencies. Could you tell us how the Center is doing with the issues called out in the PMA?

Ms. Ritz: First of all, we were very excited to see the President’s Management Agenda articulated and come out in such a way that there was emphasis to do these things, because as you go down in some of the specific areas are things that we thought were important way back. It’s always nice to have this validated in some cases; and a push governmentwide to do that.

We’re one-of-a-kind functions primarily, and it’s always been critical for us to focus on the bottom line and do things in the most cost-effective manner.

So as we started looking at the list of these initiatives, the strategic management of human capital is an area that really focuses on workforce planning. We have a very large workforce. We also know that our average age is 48, much like a lot of the other agencies in government. We’ve not been able to recruit to the extent we’d like, so we’ve been heavily involved in workforce planning. We also know that inevitably, there will be some functions that we end up outsourcing or moving away from. What are we doing to retrain? So again, it just revalidated for us how critical that particular area was and why we needed to spend time on it.

Another area that you hear a lot about is competitive sourcing, or fee for service. The Aeronautical Center, again, provides unique services. We’ve had a varied customer base for over 20 years where it’s not just been focused on FAA, but we’ve had Department of Transportation customers that -- we used to use reimbursable agreements. Now we move money through the franchise fund. But this gets at the heart of full cost recovery, how do you quantify your prices, things that you think more in private industry, but have become more and more important in government.

Another area that we’ve been heavily involved in is the improved financial performance. We have just successfully rolled out our new commercial off-the-shelf accounting system, Delphi. And the procurement piece that goes with Delphi is called Prism. There’s a lot of things that will come out of these two state of the art systems that is needed. And as you know from the PMA, there’s a lot of emphasis on clean audit and the ability to manage your costs.

We’re again involved in expanded electronic government, or e-gov. We have an organization that is made up of three different entities that’s come together, our Enterprise Services Group, that really typifies how you come together and do e-gov. And just recently, the Aeronautical Center was recognized in a very positive way by being selected as the only organization that is testing the three vendors for e-travel. There’s been a decision made that the entire government should move to a paperless travel system; I mean, none too early, I think we would agree. There had been competition, and three vendors were selected then to go through a validation process. And these vendors, assuming they successfully complete this validation process, will be in a position to be selected by various government agencies to use their system to do their e-travel.

The Aeronautical Center, because of our background in performing travel for a wide variety and doing it for Department of Transportation, was selected to do all the validation of those three vendors. We’re very excited to be involved in this. I think it’s a learning process, and there will be significant benefits to the agencies that use this as far as being able to go paperless; the savings will go from reduced numbers of employees and just quicker turnaround.

And finally, the whole aspect of budget performance integration: one of the nice things about our new accounting system is it does integrate performance and costs. For the last two and a half, three years, the Aeronautical Center has piloted our cost and performance process that’s being used now in headquarters. And this gets at in a very structured way how we’re balancing our initiatives and our costs, and how we budget toward that, and how we hold ourselves accountable for accomplishing those things that we’ve set out that we want to do.

Mr. Lawrence: It sounds like there’s been a lot of activity around the PMA, and I’m curious. As the leader of a large organization, how do you motivate your team to want to go work on the PMA? I mean, you know, a lot of managers are blocking and tackling down in the weeds, and it’s not perhaps as interesting as new policy and things like that. How do you get everyone focused on those things?

Ms. Ritz: First of all, I’m lucky to start out with a very talented and creative workforce. We probably had a head start on looking at some of the PMA initiatives, because as I mentioned, a lot of our functions could be outsourced. There’s a lot of competition, and we’ve known that. Early on, we dealt with A-76 studies, and we’re very focused on what does it cost us to do our business, customer focus, and be able to benchmark and baseline our costs.

So what I found is that intuitively, people understand that. It makes good sense. But if you give them the ability to be a part of that success and they realize they’re working to ensure that we have these jobs available several years down the road, or we continue to have flourishing functions that we offer, people buy into that.

Also, I think what’s made a big difference is they feel accountable, but they also are given, because that’s the smart way to do it, is to give them the creativity to come up with new ways of doing business. If we’re going to change the way we do business, what makes the most sense? So it’s getting them aligned with -- when we talk about a shared vision. We know what we want to be, and the premier provider of business services, and aviation support services.

With that in mind, then how do we want to do this? How do we want to collaborate with each other? And some of the successes and the return on their investment has been very significant. And I think then they feel like they’re the ones that really earned it. They made it happen.

Mr. Able: You mentioned in the first segment that your organization operates as part of a franchise fund. That may be unfamiliar to some folks who are listening. Can you explain to us first what a franchise fund is?

Ms. Ritz: There’s a lot of people that don’t know what that is. But I take you back to 1994. The Government Management Reform Act authorized six franchise pilots. And interestingly enough, FAA was not among them. We heard about it almost after the fact. We liked what we heard. And so we went back through our appropriations committee, and in fact, we were authorized by public law and through our 1997 appropriation act.

The whole idea of a franchise fund was to act more like a business, to start making it easier to consolidate administrative services, and to be able to be in a position where you could start shrinking that area in government. So they provided such things as revolving fund, and our authorities mirrored what the pilot organizations were: the ability to carry over four percent of your revenue at your end. There’s also a provision for an operating reserve. You can invest back into your company, if you will, on capital investments. But on the other hand, you have to earn your revenue. You’re not guaranteed the things like cost of living increases. You’ve got to earn enough money to be able to take care of those expenditures. And they talk about entering into a franchise fund, but in some cases, just like businesses, if they’re not going to make it, what you have to do to move out of it.

It’s been a very successful function for us. I think some of the original pilots have gone out of the franchise, but we’ve been very pleased that we’ve been able to hold on to our authority.

Mr. Able: Since you’ve had some experience operating as a franchise fund for a while, what would you draw out as being the most significant benefits of the operation? What’s been most beneficial to your operation as a franchise fund?

Ms. Ritz: Those specific organizations, as well as those organizations that support them, have been able to focus like it’s a real business. You inject competition and market forces into the whole way of doing business. It really gets them to look at, if I decide to partner, I can lower my costs if I do this. They can see the bottom line. It does lower overhead and spread costs, even some of the ways we have done our hiring and selections. We don’t necessarily always hire a full-time permanent employee. We may hire a temporary. We may make more use of contractors.

Again, you don’t want to have so much overhead to where if your business ebbs and flows, you’re buried by your overhead. So all this to say that the whole focus then is the running of the business and how you can be the most cost-effective, how you can market, how you can stay in touch with what the customer really wants, that probably had not been there before. And what was exciting to me is this carried over not to just those in the franchise, but those organizations supporting the franchise organizations.

Mr. Able: It’s interesting. You actually have -- as a franchise fund, you have customers.

Ms. Ritz: Yes.

Mr. Able: And the way you relate with those customers on their budget allocations and their allowances is different than you would if you were not under a franchise fund. What type of reaction or difficulty have you had in negotiations with your customers on budget allocations and allowances?

Ms. Ritz: There’s a tendency to think there’s this magical thing called a franchise fund that arrives with money already in it. And somehow it means that we have no limits and we can take care of anything they want.

On the other hand, there’s a tendency for those organizations that we already support to somehow think when we bring on new customers, rather than viewing this as reducing overhead and potentially reducing unit cost for them, they view it, or used to, more or less with skepticism that we’re going to be paying more attention to other customers than we did with them. So some of that just needs to be proven out.

There’s a lot of misconceptions. There’s an assumption that you don’t have to adhere to statutory authorities, which, of course, you do. Appropriation law doesn’t change. There’s a tendency to think because we have a revolving fund, you can park money. You’re not quite sure what you want to use it for, but if we give it to you, we’ll get back with you. Well, obviously, that’s not acceptable. And we have to adhere to that very strictly.

There’s a perception, as I mentioned, that we might reduce our support to current customers, which it’s very important to convey to them why a broader customer base can help them. And there’s an assumption, too, that you’ll have more flexibility to bring on additional employees. And when you think about it, you only have as much money as what you’re charging your customer and what you’re bringing in. And you have to build up your reserves. You don’t start out with a huge nest egg of money to operate with.

Mr. Lawrence: That’s a very, very good point.

Why is it important to have CFO-compliant financial systems? We’ll ask Lindy Ritz, director of the Mike Monroney Aeronautical Center, when The Business of Government Hour continues.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I’m Paul Lawrence, and this morning’s guest is Lindy Ritz, director of the Mike Monroney Aeronautical Center, which is part of the FAA and the United States Department of Transportation.

And joining us in our conversation is Dave Able.

Mr. Able: Lindy, we left off talking about the franchise fund. And one question I still have is, what services do you currently provide as part of the franchise fund?

Ms. Ritz: When we first started the franchise fund, we looked at those functions that we currently had a diverse customer base through memorandums of agreement. So we started out with payroll, travel, accounting. Interestingly enough, we did international training through the Academy, printing, and multimedia.

After that, then we added IT and our Center for Management Development, which is in Palm Coast, Florida. That’s our management training school. And the last two, and the largest two organizations that we brought on in the last few years, are the Logistics Center and then our Aircraft Maintenance Base. We’ve talked about the Logistics Center.

The Aircraft Maintenance Base performs all in-house maintenance on our fleet, as well as contracting out to other government agencies who have like aircraft. So you can see that it’s very diverse, but again, they have to operate by the same premise. And then as the fund director, I’m responsible for ensuring the integrity of their individual accounts, but then I manage the overall franchise to make sure that we’re balanced and within policy.

Mr. Able: Let’s talk a little bit about the Enterprise Services Center. What exactly is the ESC, and how does it operate?

Ms. Ritz: The idea about ESC was really born out of a couple of management retreats, where we focused on some of our emerging business. And that was our financial area, our IT area, and our enterprise area, where we were developing automated systems. And we talked about how they really were a very logical partnership, and their customers were very similar. But they were operated as separate organizations, and we realized and had feedback from some of our customers to say, I don’t want to have to worry about deciding which organization to go to. I just want you to develop a product and make it happen. And it should transparent to me. So the idea of the ESC was born where although they still are independent organizations, we’ve realigned some of the functions for more clarity, some between development and operations.

They now are operating as the ESC. They’ve come up with a logo, and they sell themselves as ESC. Immediately, that made sense from a marketing standpoint, reduction of costs. I’ve seen some very creative ideas coming from them on how not to duplicate some of their support services. The idea with ESC, and primarily our customers are FAA and Department of Transportation, is provide business solutions, and through shared services, which is exactly what we’re doing. We have a variety of IT people, accountants, contracting people. The base that we operated from was our new commercial off-the-shelf accounting system, Delphi. And it’s an Oracle, federal financials, 11-I. We felt like that was the way the operate in that that was something that not only we needed, but would be very attractive to other federal agencies who now are trying to be compliant with some of the new federal regulations, financial statements, timeliness. So our thrust is, how do you maximize what we have with this new system and reach out and provide these kinds of services to other government agencies?

Mr. Able: Who are some of the people, who are some of the organizations that can use the services provided by the ESC?

Ms. Ritz: Within the franchise fund, we can do business with any government agency. We’ve primarily focused on Department of Transportation, as I mentioned, because of our longstanding relationship with them. We now have a relationship with Department of Education, as I mentioned, Coast Guard, who’s now gone to Homeland Security, as well as TSA, our large customers. We have been in conversations with some of the small agencies, because they look at a significant amount of investment if they were to replace their current accounting system. They’re looking at how would they be compliant; is their accounting system in the position to do financial statements, and have integrated financial data. So it’s becoming more and more attractive to some of these agencies to come to an organization like us and say, I would like to have you support us through your system. Some may want us to do the operating side of it. Some may want to just use our system and have their own people operate through our system. And I think that’s going to continue.

And there’s also a strong force within the government to consolidate and not have every agency develop their own automated system or duplicate. And we were excited because we felt like --and we are the only department-level organization that has a commercial off-the-shelf solution on a single instance. We’re driving the Cadillac right now, and it’s exciting because it’s always better to have a product that serves the customer’s needs and is new and shiny.

Mr. Lawrence: So if any of our listeners manage a small organization that would look to be able to be to use this type of service, what type of benefits would they expect? What’s the benefit to any of your customers’ organizations?

Ms. Ritz: The financial impact, I think, is significant, in that if you are trying to transition and develop your own system or working with commercial off-the-shelf system, you need to have a lot of upfront dollars; it’s time-consuming. You need to bring in the right people. We’ve gone through the growing pains, and we’ve stood up various -- well, all modes now within Department of Transportation are on Delphi. So our folks have gone through all those different transitions and implementation. What we’d like to save some of these other agencies is, do you have to go through that? We have been able to fine-tune some of the kinks in the system. And we would like to be able to provide them a system that can support their financial needs and not have them have to get tied up in that that may or may or not be what they think their core mission is.

Mr. Lawrence: When other organizations are working through that kind of analysis, how do they get over sort of the following point of view: the financial part of my organization is really key, and having these people here doing my own thing strikes me as very important. So while there may be learning, I’m building the skills of this organization while they go through that. And it is, in fact, something I’m probably called to task on many times by my stakeholders. So how do they work their way through that?

Ms. Ritz: I think it’s always disconcerting when you have a certain number of people dedicated to a function and you think you might outsource it. Nobody wants to deal with reductions in force or reassignments. But as you see reduction in budgets, difficulty in backfilling, we’ve been successful in discussing with agencies the need to maybe refocus what their financial areas are involved in, had they really spent the time on financial analysis as opposed to just the operating accounting part.

We do not do their policy, obviously. We have been able to work directly with each entity and carry out what their overall financial or governing policies dictate. So it’s a transition. I think some people are not willing to just jump 100 percent. Sometimes they may start with just wanting to use our system. They start seeing how we operate, and as they transition or attrit, and have more and more vacancies, we may start taking one function over for them, like an accounts payable function, and you gain confidence. But we would like to see, and most agencies are going to need to spend more time on the whole financial analysis part, which has tended in times past not to get the attention it deserves. So I think it’s a balance and a trust that has to exist.

Mr. Lawrence: I’m curious what your experiences have for people thinking about consolidation and making the choices you say about moving some things around so they can focus on other things.

Ms. Ritz: It’s got to fit. They’ve got to feel comfortable, because when you think about it, if the agency is called to task with an accounting problem, we’re very much a part of them. It’s just like right now when you have someone do your taxes, you want to know they’re right there. A lot of it has to focus on what is the best capital investment. Is the system that we’re offering, does that fill their needs? And you see more and more less customization and more commercial off the shelf, where then you’re able to do releases in a timely way.

The whole look of owning your own system and having it designed to meet your specific needs, I think is changing. And what we would help them with, too, is how do you reengineer their processes to where you’re reengineering them to fit the system, not the other way around.

Mr. Lawrence: What changes lie ahead for the Mike Monroney Aeronautical Center? We’ll ask Lindy Ritz, the Center’s director, for her perspective when The Business of Government Hour continues.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I’m Paul Lawrence, and this morning’s conversation is with Lindy Ritz, director of the Mike Monroney Aeronautical Center, which is part of the FAA and the U.S. Department of Transportation.

And joining us in our conversation is Dave Able.

Mr. Able: Linda, you’ve described activities in MMAC that are quite a bit different than some of the other traditional organizations in government. And this is a future direction, a new direction, that many organizations are taking. Can you describe some of the challenges you face today that may be different than what the more traditional organizations or those that have been doing business in a similar manner over the last 10 years are facing? What’s different about the challenges you face today?

Ms. Ritz: One of the things I focus on, and I mentioned it earlier, is our workforce is close to retirement age. We’ve not been able to backfill to the extent we would like, so I’m constantly focusing on how do I have state of the art skills, how do you continue to have an infusion of new ideas, but a balance of those folks that have been seasoned and been with us for a long time.

The other challenge with some of our newer employees is that with defers retirement system, it’s really more portable than CSRS. A lot of us that came into the government felt like we would be with the government for our entire careers. These days, and you would see that in most industry, a lot of employees, pretty much after a few years, decide they’re ready to move on. How do you continue to attract and sustain those individuals that we need in highly-technical positions? How do you create an environment that stimulates them, where they see that they have opportunities for growth, which is very important.

The other aspect that’s terribly important and somewhat different from the old-style government is that there is a significant emphasis on metrics, being able to prove you’re cost-effective, and knowing that the customer has the ability to pick up and go someplace else, take the money that they’ve normally been giving to you and go pay someone else to do the work. For us, that’s terribly important, because most of our functions I’ve mentioned you could outsource or you could go to another provider.

Mr. Able: How does that impact the management skills that are required of you and how you may have to operate differently or manage differently than you would have, say, five or 10 years ago?

Ms. Ritz: I talk a lot about what our vision is, but the need to be flexible, the need to not assume that there are guarantees or entitlements. When I talk to people coming into the FAA for the first time and they talk about their future, and I can talk a lot about what’s in front of them, I’m very careful not to say, and if you move into a job you like, I think you can have it for as long as you want, because I don’t know if I can say that. What I want to provide is an environment that will continue to grow, take on new and possibly different work. And what I challenge them with is is they bring the right set of skills, and they have the right initiative, and energy, and creativity, there will be jobs for them. Will it be the same? Probably not. So their challenge is to be more flexible, a little bit more aggressive, and to continue to give back, because they’re part owners in what we’re doing.

Mr. Able: A couple of questions about change in the organization. And over the last year to year and a half, the Department of Transportation has gone through significant changes, with TSA and the Coast Guard both going to the Department of Homeland Security. If we look backward, what has been the impact of those changes on your organization?

Ms. Ritz: Right now, they are major customers. We’re still providing those services. We do know that potentially that will change, because there could be an emphasis on the part of Department of Homeland Security for TSA and Coast Guard, that they would like to have one central provider, where we’re only doing two of their functions.

We’re already looking ahead if that would happen. That’s a significant reduction in business. You’ve got people needs. How do you direct those skills to a new customer? It’s an opportunity, but you’ve got to balance that. The timing is never known for sure, so how do you ensure that you don’t have significant void, which then potentially could raise costs because your customer base has diminished.

Mr. Able: Well, if we look at FAA, FAA is in a period of significant change as it moves forward -- establishment of the ATO and a performance-based organization, hiring Russ Chew as the Chief Operating Officer. There are exciting changes going on in the FAA right now. How do those impact your organization as you move forward?

Ms. Ritz: We like the changes. We feel like an organization like ATO is perfect for what we’re trying to provide, and that is that we’re a service provider. And we feel like we should be able to provide those services, bottom-line focus, to any customer.

Traditionally, most organizations feel like they have to have those organizations within, or managed, or owned. There’s a lot of differences of opinion on how that can work. We have quite a bit of history in providing services to organizations that we don’t report to or are not controlled by. But through servicing agreements and different metrics, we’ve been able to provide them the service they need. But let’s face it, that’s a different mindset than has been around. We all tend to think I need to own it; otherwise, I’m not sure I’m going to get the service I need.

There’s a balance. As Russ comes in, he’s trying to get the best service. It’s important for us to be able to provide to him what we can do and do it in the most cost-effective way. The decisions are not totally decided exactly reporting relationships, but you also want to make sure that to be cost-effective, you keep your customer base diverse. So the more autonomous or the more decentralized -- that you’re operating in a very free manner to deal individually with your customers -- is best.

Mr. Lawrence: I think it’s interesting you describe yourself as a service provider. How do you think about new services in the future? Same ones? Different ones? And how will you know where you’ll end up?

Ms. Ritz: I go back and look at what has happened in the last several years. It’s been exciting, and some of the things we talked about in a strategic plan in ‘96 are now all starting to happen. And that’s kind of scary because we think your strategic plan goes on the shelf; you never pay any attention. So it’s heartening. On the other hand, some things happen by chance, and you maximize that. But a concern I’ve had is that you need to stick primarily with what your core skills and your core mission is. We work for the FAA, so as we’ve launched into some of these other services, it’s important that we’re not doing something that is contrary or outside the mission of what we originally set out to do. We’ve been successful in expanding our customer base, reducing our costs.

As I look ahead, I think there’ll be changes. I think there’ll be modifications of some of the things we do. The travel arena has grown more than I think we ever thought it would. I don’t think we ever anticipated the opportunities for automated travel. That may spin off.

The ESC was an idea how you could bring functions together, and then some of the products that our customers may want are different than what we’re providing today, but I don’t think will be significantly different from the core skills. Where you get into trouble, in my estimation, is if you really launch out and go into something that has no relationship to your skills or what your strengths are. I think then you start tending to erode what you really need to be in business for.

The other challenge we’ll have is when do we get to a point that some of our functions are really not what we need to be spending most of our time on, and do we have the wherewithal to say we’ll outsource those so we can grow larger in our key arenas.

Mr. Lawrence: Well, as we learned in the first segment, Lindy, you’ve had a very interesting career. So I’m just curious about what advice you’d give to somebody interested in being in public service.

Ms. Ritz: I look back on my career and feel extremely fortunate of the opportunities I had, the training, the exposure. And when I talk to college graduates or kids wanting to get into business, I worry sometimes that there’s not enough emphasis on the benefits of government service. I would start out by saying to be in public service is a very noble and exciting cause. When I think about the work that I’m involved in and the impact that we can make on the American public, pretty heavy stuff.

Saying that, there are great opportunities in so many different government agencies. We tend to compete with industry, and a lot of times, the perception is that either the salaries or the opportunities are not as great. I would urge young kids coming out of school, but even individuals who are thinking about a change in career, not to assume they know everything that a government job would hold, but ask questions, look at different advertisements, and start looking at, is this an area where they think they can really make a difference.

I think that people getting out of school today are missing a wonderful opportunity if they don’t consider to at least look closely at what government service can provide.

Mr. Lawrence: That’ll have to be our last question, Lindy. We’re out of time.

Dave and I want to thank you for joining us this morning.

Ms. Ritz: Thank you. If there are any questions or any additional information that I can provide, or you would like to know more about the Aeronautical Center, our FAA website is faa.gov. We have a link to the Aeronautical Center, and then at the Aeronautical Center, there are links to the various organizations, such as ESC, that I talked about.

Mr. Lawrence: This has been The Business of Government Hour, featuring a conversation with Lindy Ritz, director of the Mike Monroney Aeronautical Center, part of the FAA and the U.S. Department of Transportation.

Be sure and visit us on the web at businessofgovernment.org. There, you can learn more about our programs and get a transcript of today’s very interesting conversation. Once again, that’s businessofgovernment.org.

This is Paul Lawrence. Thank you for listening.

Lindy Ritz interview
02/07/2004
Lindy Ritz

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