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.

The interviews

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

Lynn Scarlett interview

Friday, May 31st, 2002 - 20:00
Lynn Scarlett
Radio show date: 
Sat, 06/01/2002
Intro text: 
Financial Management...

Financial Management

Magazine profile: 
Complete transcript: 

Arlington, Virginia

Thursday, May 2, 2002

Mr. Lawrence: Welcome to The Business of Government Hour. I�m Paul Lawrence, a partner at PricewaterhouseCoopers and the co-chair of The Endowment for The Business of Government. We created The Endowment in 1998 to encourage discussion and research in to new approaches to improving government effectiveness. Find out more about The Endowment by visiting us on the web at

In The Business of Government Hour, we feature a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Lynn Scarlett, Assistant Secretary for Policy, Management and Budget at the U.S. Department of Interior.

Good morning, Lynn.

Ms. Scarlett: Glad to be with you.

Mr. Lawrence: And joining us in our conversation is another PwC-er, Ken Bresnahan.

Good morning, Ken.

Mr. Bresnahan: Good morning, Paul.

Mr. Lawrence: Lynn, let�s start by finding out more about the Department of Interior. Could you describe its various missions and activities for us?

Ms. Scarlett: Yes, the department is actually a wonderful place to be. We have eight bureaus. What people will most recognize of course is the National Park Service, that all of our citizens go to, Fish and Wildlife Service, U.S. Geological Survey, Bureau of Reclamation. We also are responsible for our outer continental shelf, through our Minerals Management Service. Our Office of Surface Mining does regulation of and reclamation of coal and coal mines.

So we really have a breadth of different agencies, but you can boil our mission down to four main areas. We do resource protection. We are probably the nation�s premier federal resource protection agency, conservation, migratory bird protection. We are the guardians, if you will, of the Endangered Species Act. The second area is resource use. Many of our public lands, by their founding were there for access by American citizenry for mining, for energy production. So managing our resources and providing access is a second mission.

Our third mission would be in the realm of -- we kind of lump it under what we call service, but we are guardians, or trustees, for certain native American Indian assets. We actually provide health care funds, some education and related social services to tribes and Indian members. We also have responsibilities for our island affiliates: The Virgin Islands, Guam, et cetera. And then our fourth area, besides the resource protection, the resource use, the services is recreation. People think of our national parks and they think getting on those lands, hiking, biking et cetera. So those are our four main missions. Really pretty vast.

Mr. Lawrence: Now, as the Assistant Secretary for Policy, Management and Budget, what�s your role?

Ms. Scarlett: Well, sometimes I like to think of it as everything. The budget for the entire department goes through me. It is about a 10.6 billion -- or proposed for 2003 is a $10.6 billion budget. We have 70,000 employees; we have 2,500 locations across the nation. You can imagine, with those wildlife refuges, with those national parks. We have about 57,000 facilities, meaning that at our parks, our wildlife refuges, Bureau of Indian Affairs facilities, Bureau of Reclamation. We have many, many, both buildings as well as infrastructure.

When I talked about our mission as having a role in resource use, I should underscore that one of those roles is water. The Bureau of Reclamation is within the Department, so we operate Hoover Dam, Grand Coulee, Shasta, Glen Canyon. Those provide water to 31 million Americans in the West. The dams also -- I love this figure -- the dams also irrigate lands that provide 60 percent of the nation�s vegetables and about 25 percent of the nation�s fruits and nuts. So we are all across the landscape in many different ways.

And my role, I oversee the budget; I also have a lead role in overseeing the President�s management agenda. The President has initiated a 5-pronged agenda that is intended to improve governance and my � well, the bureaus have responsibility for on-the-ground implementation where kind of the big picture of where we�re going to go, how we�re going to stitch all this together. And then there is a policy piece.  The policy piece, again, while our bureaus have a lot of day-to-day policy decisions and issues management, my shop plays a role in figuring out the big picture, where we�re going to go with the Endangered Species Act, what are we going to do with the National Environmental Policy Act, how are we going to work with our bureaus to move forward with a positive policy agenda.

Mr. Bresnahan: We have a lot more to learn about these initiatives, but tell us a little bit about your background and your career prior to the Interior Department.

Ms. Scarlett: I have spent 20 years coming out of the policy think-tank world, so this experience in Washington is my first, not only in Washington, but my first in government altogether. I spent 20 years in a public policy think-tank, a couple of years as a visiting lecturer at the University of California, Santa Barbara, actually taught public administration a couple times. But in those 20 years at a think-tank in Los Angeles, I primarily focused my own research on environmental policy but was executive director of the think-tank. So, I oversaw all of our work.

One feature that I have discovered has been particularly relevant to my experience at Interior is that this think-tank actually had a good governance program. We did work on nuts and bolts stuff like activity-based costing, competitive contracting, contract monitoring; we did work on things like best practices in service delivery, so I found when I arrived at the Department of the Interior and was responsible for the President�s management agenda implementation, I was a step ahead, because I knew what the heck activity-based costing was, and I knew what some of the best practices were in implementing it. The same was true of competitive contracting. In fact, the organization that I came from invented the word "privatization," a little-known fact.

Mr. Bresnahan: Now that you�ve been at Interior for about a year, what top management priorities have you set for yourself?

Ms. Scarlett: Well, the Department is vast and so we have many, many different management challenges and issues, but of course, my number one priority is to take the President�s management agenda and make it real. That agenda has a competitive contracting component. I�ll get a little bit more into that later, but let me outline the five areas: Competitive contracting. The second is e-government; how can we utilize information technology and IT technology to really serve the citizens directly. And so we�re looking at e-government not just as a matter of improving efficiency but actually as direct delivery of services.

We have for example a recreation one-stop website that we have underway, which is a

multi-agency website. If you�re a citizen, the idea is that you can go there and say gee, I want to go canoeing. Click, where are my opportunities? Up will come a screen that says gee, you know, you go canoeing, which state do you want to go in? You click on the state and you will then find the state opportunities, the federal land opportunities, maybe even some private. If you need a permit, you can click on and get it. That�s the idea. Kind of a one stop shop for recreation.

The third area is financial management. Of course, no government entity and no management agenda can neglect that incredibly important realm. For us, the single biggest goal on financial management is really to increase transparency. So if you�re a citizen, you can say ah, I see what they�re spending their money on. And accountability; ensuring that our financial management is such that you really link the financial numbers with accountability for the efficient and careful use of those monies.

The fourth area is performance and budget integration. Longstanding effort by the Office of Management Budget to say gee, we really would not just look at your budget in terms of what did you spend last year and how much are you increasing. What we really want you to ask is, are you performing your mission? What are the outcomes? And are you then developing your budget in a way that links those two so that your priorities drive your budget, your performance drives your budget, not last year�s budget driving your budget.

And then the fifth area is human capital, workforce planning and workforce management. So, my number one priority, and I know that sounds like a breathless and breathtaking description, but really, we have responsibilities across all five fronts. Now, I could add to that a laundry list of other endeavors. We have some real challenges with facilities management, making sure we have good inventories of our facilities; condition assessment so we know, is the roof on? What�s missing? Are the toilets functioning well? That�s a big challenge for us. We have maintenance backlogs at the national parks, we have maintenance backlogs at our Fish and Wildlife Service. So the President has made that a premier mission and we in turn have made it our premier mission.

Mr. Lawrence: That�s a good stopping point. It�s time for a break, but stick with us as we continue our conversation with Lynn Scarlett of the Department of Interior.

Do you know what activity-based costing is? You�ll find out in the next segment when we ask Lynn how it�s being used at Interior.

This is The Business of Government Hour. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I�m Paul Lawrence, a partner at PricewaterhouseCoopers. And today�s conversation is with Lynn Scarlett, Assistant Secretary for Policy, Management and Budget at the U.S. Department of Interior.

Joining us in our conversation is another PwC-er, Ken Bresnahan

Mr. Bresnahan: Well, Lynn, you talked a bit about the importance of integration of budget and performance information, why is it so important and what is the current state of affairs at the Interior Department?

Ms. Scarlett: You know, it�s just an incredibly important focus. I would say almost the central focus. Government is about ultimately delivering services, and yet ironically, we haven�t always, when measuring our success, asked, well what was the outcome? Did we, for example create a healthier forest by virtue of our investment in, say, riparian or stream restoration. Have we actually delivered good education outcome in the delivery of our education dollars, say, to the Bureau of Indian Affairs and to their constituents, the Indians.

So what performance and budget integration is all about is to focus on the outcome. Say, what is our mission, what are the components of that mission, what really constitute success, and are we doing it? Are we achieving it? One of the things that we have done in the past, or many agencies have done in the past is to tend to define their goals as outputs. That is, instead of saying gee, is the air cleaner, or boy, is the water cleaner, or have we developed good education, it�s to say, how many permits did we issue? That�s an output; that�s not an outcome.

How many permits you issue doesn�t tell us at all about whether the world is a better place to live, or we have measured them in terms of inputs. Gee, success in terms of resource management is how many biologists have we hired? Well that�s an input. Likewise, how many dollars -- even the American public is often driven to kind of define success in these terms. What�s your budget for conservation? What�s your budget for some building project? Well, when you think about it, it�s not the dollars that�s the test of success, it�s did you really on the ground achieve conservation results? Have you protected endangered species, have you improved a forest and its sustainability, for example.

So the first part of budget and performance integration is actually to say what the heck is performance, and have we defined it in terms of real outcomes, not inputs or outputs. But that�s just the first step. You then need to say well, what resources do we need and what sets of activities do we need to do to make sure we�re delivering those outcomes. And so we�re undergoing a new strategic planning process. We brought together all of our stakeholders, we had them talk about our mission, we had them discuss, well, what do you think is the real outcome of these programs. We then took that information, we kind of digested it, worked with all of our bureaus then to take the outcomes that the citizenry said that they think Interior is about delivering and then say, well, how do you measure that? And it�s one thing to say, well, our mission is healthy landscapes, but then of course the challenge is, well, how in the world do you measure that?

So we�ve worked really hard over the last three or four months with our bureaus to figure out how do you measure that. We�ve come up with some outcome measures. The next step will be to then say, okay, now we�ve got these outcome measures, what programs and activities are we currently doing, does it look like they are going to really yield those outcomes that we�ve decided we need to measure. If not, how do we change those programs and activities. And then in our budget request, make sure that the request is for those activities and those programs and those priorities that link to or that we think link to achieving those outcomes. So that�s what it�s all about, making sure that you�re driving your resources towards achieving the outcomes that Congress bequeaths to us for our responsibilities.

Mr. Lawrence: Let me ask you about something you mentioned in the last segment. Activity-based costing. I guess in a nutshell, what is it and why is it so important to decisionmakers?

Ms. Scarlett: Activity-based costing is really a pioneering for government way of kind of crunching its numbers, if you will, and managing its activities. Most government budgets historically have been budgets based on simply line item accounts, things like, here is your labor budget, here is your fuel budget, here is your facilities operation account. Things like that. While on the one hand, that enables, say, Congress or a legislator to say, well, you know, how much money are you spending on personnel, it doesn�t in any way allow us to say, gee, how much does it cost us to run a National Park Service visitor center? It doesn�t tell us, uh, how much does it cost to deliver our grazing program out in the West? It doesn�t allow us to answer the question, how affectively are we operating our dams that provide water for irrigation or that provide hydropower? How do we compare with, for example, the private sector that also operates dams, or the local conservation districts that also provide irrigation?

So what activity-based costing does is to begin to collect information where you�re allocating people time by amount of time spent on a particular program or activity. You�re allocating your facilities or equipment to the program that it actually delivers, and that allows you to do all kinds of really good management things.

An example that we have, Bureau of Land Management and Office of Surface Mining. They are two pioneers. I�m pleased to say at Interior, we�re kind of ahead of the 8-ball on this. Bureau of Land Management went to activity-based costing. It took it four years to introduce it. It was not easy, but they are now able to present, how much does it cost their field offices to operate grazing fee permitting programs. What that allows them to do is to say, well, gee, here is the trend line; this looks like the general trend line. How come that field office is way down there in the low cost area and how come this other one is way up here in the high cost area?

Now, it doesn�t mean that the low cost one is really efficient. When you ask that question, you might find out they�re cutting corners, or when you look at the really expensive one, you may find out that their operating conditions, their geographic circumstances, are particularly challenging. But it allows you to ask that question, begin to identify best practices and then roll them out across all the field offices.

Office of Surface Mining. One of the ways that it was able to use this tool was that it operates an abandoned mine reclamation program, but states also do. And one of the claims had always been well, gee, your offices at Interior are more expensive than our state offices providing these same programs. Activity-based costing allowed us to look inside our particular office and say, hmm, how many people they have to run the same program. We found two surprising things. One reason they were more costly was because they were actually not only our offices that were providing mining reclamation, were not only providing that service, but they were providing a lot of research and information to the state offices so they had some personnel dedicated to that; a kind of extra service.

However, the Office of Surface Mining was also able to find out, well, even if we account for those resource services, even if we account for those extra people doing that above and beyond, we still are a little people-heavy there, and so maybe over time we need to, through -- as that office evolve and as people retire, we need to think about tightening up the ship a little bit. So that�s what activity-based costing allows us to do, to find that information, identify those management challenges and then manage towards them.

Mr. Lawrence: You said it took BLM four years to implement activity-based costing.  Why did it take so long?

Ms. Scarlett: Well, the Bureau of Land Management is a very large agency with a lot of field offices. It did not have the basic accounting tools or the data. Remember that if you have been doing your accounts by simply what�s our labor costs, what�s all this cost, you need to implement a system whereby your field offices begin to report. Break their day up into parts. Well, I spent two hours on this activity and three hours on that. They needed to develop those tools; they needed to develop the accounting systems and kind of migrate the information over.

However, that shouldn�t scare people, because by contrast, the Office of Surface Mining was able to implement in a very quick and very seamless fashion activity-based costing. It�s expense to do so was minimal, almost an eyelash of its total cost. So sometimes this can be done quickly and sometimes at really relatively little expense. In the case of Bureau of Land Management, a much more complicated agency, it took a little more doing and a little bit more investment.

There is also a learning curve. We are now rolling out activity-based costing across all of our eight bureaus, so there is six others. We do not expect the complicated other bureaus, National Park Service, it�s equally as complex as BLM, in fact probably even more so. But we don�t expect it to take four years. We think that it will be able to learn from BLM. It already has begun to implement business plans in some of its parks. Some of those business plans already include activity-based costing as part of the business planning process. So it need not take years, and I think that with the learning curve, that time frame decreases rapidly as new agencies come on board.

Mr. Lawrence: That�s a good stopping point. Rejoin us in a few minutes as we continue our conversation with Lynn Scarlett of the Department of Interior.

What would your life be like without e-mail? We�ll ask Lynn when The Business of Government Hour continues. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I�m Paul Lawrence, a partner at PricewaterhouseCoopers. And today�s conversation is with Lynn Scarlett, Assistant Secretary for Policy, Management and Budget at the U.S. Department of Interior.  

Joining us in our conversation is another PwC-er, Ken Bresnahan.

Mr. Bresnahan: Well, Lynn, getting back to -- your prior experience in competitive sourcing seems to have prepared you well for the challenges in the President�s Management Agenda in that area. We understand that Interior has some innovative ideas for competitive sourcing, and we�d like to learn a little bit more about that.

Ms. Scarlett: Let me begin by a kind of big picture comment with competitive sourcing. You may recall in the �80s, an earlier competitive sourcing effort in government, and certainly across the country. Oftentimes, the initial focus was on simply cost savings and efficiency. At Interior, we do not view that as the centerpiece of what competitive sourcing is all about. Our entire management focus is on what we call citizen-centered governance. How can we best deliver services to the American people? Not only quality service, but cost-effectively.

So we view competitive sourcing as a way of asking ourselves, gee, if we look at our internal operations, are they best structured to deliver that service? Might we restructure our services in-house in a different way that would allow us to be more effective, or, by golly, through contracting,might we better achieve the good deliver of the service? The contracting gives us opportunity, for example, to access technology that we might not otherwise have. It might give us access to skill sets that would be otherwise difficult for us to get.

In my former life in the think-tank world, one of the things we learned in surveying cities and counties and states that engaged in competitive sourcing is that often, it wasn�t cost-cutting or RIFs, Reductions-In-Force that this was all about. It was, gee, if you�re a small local government, for example, that can�t afford your own engineer. By contracting, you can contract with a company that might have lots of engineers, and you�re just buying a little piece of that engineer�s time, so it gives you access to skill sets. Here we are at Interior, we�re a very large agency, 70,000 people, we�re almost like a small city ourselves, we view competitive sourcing as a way to access those skill sets, to put ourselves to the test of are we delivering in the best way possible.

That brings me to the mechanisms. The more traditional mechanism to do competitive sourcing, and the emphasis, by the way, is on competition. Putting ourselves to that test of, you know, how do we measure up against everybody else providing similar services. A-76 was the

old-fashioned way of doing that. It�s a fairly cumbersome process, where you look at your particular business unit, you do cost comparisons hypothetically against external units. We

think that while A-76 has some utility, in some ways, the tool itself is more cumbersome than the outcome that you�re trying to achieve. So, we have developed an expedited review process.

A lot of our field units -- I mentioned that we have 2,500 or so -- are really small units with just a few people. We can�t recombine those people. And by the way, they�re often in the West, miles apart from each other, so we can�t recombine those into bigger business units that would be suitable for, say, an A-76, or competition comparison. Many of our units are 10 people or less. Well, a 10-people or less kind of entity doesn�t render itself well to this fairly lengthy and complex review process. So we have an expedited review process that�s geared towards being able to compete some of those commercializable services that are 10 units or less.

We have developed guidelines. It�s a 60-day review process. For those folks who have ever gone through an A-76, they know 60 days is really short and probably not doable under the more traditional A-76. So, it�s a mechanism to kind of, in a general way, doing a competition and a cost comparison without worrying about whether every last dollar was identified and every T crossed and every I dotted. It�s kind of a generic way of doing a competition.

Mr. Lawrence: What have been the results of those small competitions?

Ms. Scarlett: Well, we�re actually just beginning, so there is no "there" yet. We just completed in the middle of April identifying all of the different activities within the bureaus that would be subject to competitions under competitive sourcing, and we�re now beginning the process of doing those reviews. So it�s too early to tell, but we should know pretty soon what the results are. I should say, by the way, that we expect, if we look at the experience of the Department of Defense in the past, or even, for that matter, cities or counties, we expect that we�ll compete pretty well on some of the services and we�ll likely retain some of them in-house. Others, we�ll expect to find that, gee, the private sector really is going to be able to do this better or higher quality or better access to technology. So we are agnostic on the outcome; we want the results to determine where we go.

Mr. Lawrence: Even though the Department of Defense has that experience, I think when people think about competitive sourcing or A-76, they think about job loss, and I note that by the end of 2003, the Department is supposed to compete 15 percent of its commercial activities workforce. How is that working its way through the Department?

Ms. Scarlett: The President�s Management Agenda tried to set some goals, and they set that 15 percent goal. Interestingly enough, we right from the beginning cautioned that it would be probably better to focus on outcome -- that is, you know, are you achieving higher quality

low-cost service and where is it that you can do it -- than on some kind of arbitrary number. But they set that benchmark. So we went out and we used the Fair Act. Many people are familiar with that Act, which asks us to identify commercializable services within the Bureau, and of that universe, we then identified 15 percent to go through this review process.

But what we tell folks is, remember, there is a big difference between 15 percent going through a review process and any outcome as it relates to employees and employee cuts in jobs. We do not know what the impact will be overall from that competition on our employees and on our workforce. But here again, I should underscore that what we have emphasized is trying to work with our employees.

One of the first things I did when I got on board, when I learned of the President�s Management Agenda, learned that competitive sourcing was one of those five prongs, was to call a meeting with our union. We sat down with the unions, we actually have a resolution with the unions to work with us. So if a competitive outsourcing effort results in the decision to outsource, we will then work with our unions on transition strategies, giving those employees alternatives somewhere else in the department, retraining them, finding some kind of workforce transition so that those folks about whom we care and care deeply will, to the best extent possible, be able to have a job.

Mr. Lawrence: One of the things I noticed is right now, the Department is experiencing some restrictions on electronic communications, websites and e-mails and the like. What kind of management challenges is that presenting?

Ms. Scarlett: This challenge has been unbelievable. We could spend 10 or 11 of your programs on this challenge. As a result of a court decision, we were disconnected from the Internet across all of our 8 bureaus. That occurred in December, December 5th or 6th. We are now about 80 percent back up. My office and the Office of the Secretary continues not to be connected to the Internet. Most of the bureaus did not get back online until sometime in March or April.

Think about it for a minute. All of our payroll systems are computerized, and a lot of electronic payments of reimbursements, of payroll systems. We were going through our annual accountability report, our 2001 financial accounting. All of that information had typically been transferred electronically between our bureaus in the field and between us and the Treasury, to do, for example, reconciliations. The areas of impact were so vast that we began to do a daily impact report, which was just a table, and it was about a half-inch thick of lists and lists and lists of impacts.

Some of the impacts were surprising. All of us can imagine, uh, oh, you got no

e-mail. That�s kind of been good; it takes an hour off the front of my day. I don�t have to go through my e-mail. I sort of like that. But it really has been in all of these kind of hidden and unexpected places, such as how do you do reconciliations? We actually had people from our Denver business center have to get on an airplane with a floppy disk and fly it to Washington during our 2001 accountability process. That�s the kind of thing that we had to experience.


Mr. Lawrence: That�s a good stopping point. Rejoin us in a few minutes as we continue our conversation with about management with Lynn Scarlett of the Department of Interior.


What does the future hold for Interior? We�ll ask Lynn for her thoughts when The Business of Government Hour continues. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour.  I�m Paul Lawrence, a partner at PricewaterhouseCoopers. And today�s conversation is with Lynn Scarlett, Assistant Secretary for Policy, Management and Budget at the U.S. Department of Interior.

And joining me is another PwC-er, Ken Bresnahan.

Mr. Lawrence: Well, Lynn, in our conversations about the mission and activities of the Department, you described a lot of things, and I noticed that there were several landmarks near Manhattan. So I�m wondering how the events of 9/11 disrupted things, or what management challenges they brought.

Ms. Scarlett: Obviously, 9/11 throughout the entire government, the federal government, and frankly, state and local, has been an enormous challenge for us. For the Department of the Interior, we really do have a lot of critical infrastructure. We have, as I mentioned earlier, a number of the dams, Hoover, Glen Canyon, Shasta, et cetera. And we have a lot of national icons. People think America, they think, guess what, Statute of Liberty, they think the Washington Monument; those truly are emblematic of who America is.

So we did have to face immediate challenges of ensuring the protection of those facilities. And right in the New York area, of course, we have, and I did not know this until 9/11, we�re one of the largest landowners or landholders in the Manhattan area. There are the Statute of Liberty and Ellis Island and a lot of other lands that are Department of the Interior-managed lands. We also have Federal Hall, which was where George Washington was sworn in. It�s about two blocks, three blocks from the World Trade Center.

So when the World Trade Center collapsed, it was the equivalent of about a 6.5 earthquake in terms of the impact on the ground. That caused some cracking damage to Federal Hall, and we did have to go in and figure out how to ensure the structural integrity of that building. We played a big role right on that day because of our National Park Police presence in New York of providing some additional help in that terrible, terrible disaster that drained all of the manpower of every police force and emergency force in the area. A lot of people fleeing the site ran to Federal Hall for protection. It was an area of refuge. People came in to get away from the dust, to get away from the calamity. So we set up kind of a mini health care center there. So we were right on the ground working right there.

The 9/11 affected us in other ways. We have 4,300 law enforcement, federal law enforcement agents. National Park Police, Park Rangers, Fish and Wildlife Rangers, Bureau of Indian Affairs, Bureau of Land Management. Their resources all were tapped to help out. Whether it was in the Air Marshal program or protecting all of these infrastructures. So we played a very direct role, and of course, the challenges are ongoing. We have a special challenge, because our mission is access to lands, recreation. We can�t simply become a fortress. We have to keep our Washington Monument open to people. That�s what it�s there for. So how do you balance that access with protection?

Mr. Bresnahan: Well, Lynn, that certainly highlights the importance of having well-trained federal employees available to help in a crisis and emergency. We hear almost constantly about the wave of retirements that are about to begin, or perhaps have already begun. What steps has Interior taken to prepare for this wave of retirements?

Ms. Scarlett: Interior is, like many other agencies, facing some looming retirements, and one of the things that we�ve done as part of our ongoing effort to address that is to try and develop an overall workforce planning strategy; identify first of all who are those people that are about to retire, what kinds of jobs are they in. We�ve learned, for example, that about 20 percent of our workforce that�s trained in property management and acquisition and procurement is going to retire in the relatively near future. So that means, by golly, we�ve got to get folks like that trained. Likewise, in certain other key areas, we�re facing a big, big percentage of people that are about to retire.

So we�ve done a couple things. We have a really innovative internship program on the procurement and acquisition side. We launched it a few years ago, we�ve revved it up. This year, we had 700, I think, applicants to come in and go through special training. They do an internship with procurement and acquisitions people. They go through special training. And we�re hopeful, and in fact it�s already borne fruit to some extent, that some of these people will say well, this is a really cool place to work; we�re going to have our careers here.

We�ve done the same on financial management. We have a real need for financial managers, and we�ve created an internship program there with a similar result. Lots of people saying, hmm, I�d like to go try that. The National Parks Service, quite creative, has recognized that it has a dearth of MBAs, just folks who really are trained in business management. So they have a special business plan program, they bring interns in from MBA schools and they actually work with the park superintendents developing business plans. And as part of that internship program, what we�re finding is people say, gee, I thought I was going to work in some corporation. This is kind of cool to be working at some wonderful national park and applying my business skill. So some of them are staying on, and that�s the kind of thing we�re doing.

Mr. Bresnahan: How about technology workers?

Ms. Scarlett: Well, we need technology workers as well. Really across all these fronts. Where we have identified key needs, those are the areas where we�re developing. Now, I don�t believe we have quite as large an internship program like we have for financial management or acquisition and procurement in the realm of technology per se, but there is a tremendous need there. And I�ll tell you what, what there really is a need for is not so much just people with technical expertise, but people who combine technical expertise with management experience and can do that crosswalk between the techie world and the business world and the management world.

Mr. Lawrence: Let me ask you about your thoughts for the future of the Department of the Interior for the next five years, ten years.

Ms. Scarlett: The Department of the Interior, it is a wonderful place, let me say first of all. I am so privileged to be able to be working here, because it does manage all of America�s treasures. I think as we look to the future at Interior, there will increasingly be a greater business management focus brought to bear as we manage those facilities. I think, as I look on the horizon, we�re going to see more cross-department integration. The bureaus will retain their independence and their personalities and their particular missions, but we�re finding a need to work together more, have common business practices.

In some instances, we�re doing what�s called co-location. Instead of Bureau and Land Management having one office and, let�s say, our neighbors at the Department of Agriculture and the Forest Service who are on lands right adjacent having another office, we�re saying, maybe we can work in the same facility together and jointly provide the services across a landscape, which by the way, doesn�t respect jurisdictional boundaries. Invasive species run right across those boundaries. How do we work together?

So, integration, better integration, a business orientation I think is part of our vision for the future. And then, just this performance focus, really steering towards asking that question of have we got the job done? That�s what I would see for the future of Interior.

Mr. Lawrence: What are the challenges of performing integration like the examples you described?

Ms. Scarlett: Each bureau has its own corporate culture. It�s a little bit like doing mergers between companies. There are different corporate cultures, and transcending those corporate cultures and getting people to work together is a challenge. Sometimes it gets down to very simple technological things. One agency will have a phone system that is different from another agency�s and they can�t call each other in the same office. So how do we figure out how to make that work. So there are technical barriers, there are cultural barriers, if you will, but we are finding really a lot of desire to have this more citizen-centered service as opposed to a

bureau-centered focus. And people stepping up to the table saying, well, we can keep our unique characteristics, but where we have shared responsibilities, let�s integrate our efforts to address them.

Mr. Lawrence: What advice would you give to a young person considering a career in public service, let�s say, at the Department of Interior, for example?

Ms. Scarlett: The advice I would give to someone wanting a career in public service is that it�s very important to have some sort of skill set that would be or you think would be applicable.  You could be just passionate about environmental protection, for example, and that�s a good thing, that�s a good motivator. But ultimately, when push comes to shove, if you�re going to serve in government, you�re going to need to have those skills as a biologist, for example, or as an IT specialist, or as a, I would say, boy, there is a lot of room for folks with their business skills.

So get yourself a skill set and then that will allow you to find a good and useful place in the government. And by the way, there is almost no skill set that isn�t relevant. We do so much at Interior or just across the other agencies. So there is almost no skill set that�s irrelevant.

Mr. Lawrence: Well, Lynn, I�m afraid we�re out of time.

Ken and I want to thank you for being with us this morning.

Ms. Scarlett: Thank you.

Mr. Lawrence: This has been The Business of Government Hour, featuring a conversation about management with Lynn Scarlett, Assistant Secretary for Policy, Management and Budget at the U.S. Department of Interior.

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

This is Paul Lawrence. See you next week.

Lynn Scarlett interview
Lynn Scarlett

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