Transparency in Performance

Tuesday, May 13th, 2008 - 15:36
Warning:  I just came back from the 9th Annual Mercatus Performance Report Scorecard event so I’m in high wonk mode. . . .  

Post Award Contract Management: Who's Minding the Store?

Tuesday, March 25th, 2008 - 20:00
This insight brief provides the necessary steps agency management must take to recognize the critical role that contract management plays in accomplishing agency missions.Contracting

Clay Johnson, III interview

Friday, August 24th, 2007 - 20:00
"Most people think about government work as focusing on what the policy ought to be, and the key is how a policy is implemented, which gets into how money is spent and how an agency is managed. I think it's really, really important."
Radio show date: 
Sat, 08/25/2007
Intro text: 
Managing for Performance and Results; Financial Management; Leadership; Collaboration: Networks and Partnerships; Strategic Thinking; Organizational Transformation ...
Managing for Performance and Results; Financial Management; Leadership; Collaboration: Networks and Partnerships; Strategic Thinking; Organizational Transformation
Complete transcript: 

Originally Broadcast Saturday, May 19, 2007

Washington, D.C.

Welcome to The Business of Government Hour, a conversation about management with a government executive who is changing the way government does business. The Business of Government Hour is produced by The IBM Center for The Business of Government, which was created in 1998 to encourage discussion and research into new approaches to improving government effectiveness.

You can find out more about the Center by visiting us on the web at

And now, The Business of Government Hour.

Mr. Morales: Good morning. I'm Albert Morales, your host, and managing partner of The IBM Center for The Business of Government.

Good government, a government fiscally responsible to its people, must have as one of its core purposes the achievement of results for its citizens.

Shortly after taking office, President George Bush put forth a bold new management agenda, the President's Management Agenda, or the PMA. The PMA underscores the critical importance of performance, accountability, and results in government management, and it's premised on the belief that citizens have the right to hold the federal government accountable for its performance.

The management reform efforts under the PMA have sought to provide clear, candid and up-front information about federal government programs' successes and failures.

With us this morning to discuss the success of these efforts is our special guest, Clay Johnson, Deputy Director for Management at the Office of Management and Budget.

Good morning, Clay.

Mr. Johnson: Good morning, Al.

Mr. Morales: And joining us in our conversation is John Nyland, managing partner for IBM's Global Business Services in the Public Sector.

Good morning, John.

Mr. Nyland: Good morning, Al.

Mr. Morales: Clay, as the Deputy Director for Management within the Office of Management and Budget, you provide government-wide leadership to the Executive Branch agencies to improve agency and program performance.

Clearly, this is no small feat.

So I'm curious, with such an extensive and critical charge, could you tell us about a typical day or week, to the extent that there is such a thing, in the life of the Deputy Director of Management?

Mr. Johnson: I was asked this question a couple of weeks ago and I really didn't know how to answer it, because I don't think there is a typical day or week. But it caused me to go back and look at my calendar over the last six, eight months, and I was surprised to find out I spend 50, 60 percent of my time in meetings. I knew I spent a lot of time. I didn't realize it was that much.

About a half a day a week is spent getting the word out to either employee groups at specific agencies or general employee groups or to talking with the press.

And the rest of the time is spent at my desk, at my computer. E-mail. I get a lot of questions, a lot of issues come to me. One of my goals is to give people very, very fast, detailed, clear feedback to questions. A nut about it. And so one of my goals is the end of each day, that there are no unanswered e-mails.

So a lot of meetings, a lot of interaction with other people. It's a very busy job.

Mr. Morales: From leading the Bush Administration transition in 2000 to your four-plus years as Deputy Director for Management at the OMB, the President has looked to you for your management prowess to improve the performance of the federal government.

Could you give us your insight into the mission of OMB, but more importantly, could you elaborate on the widely held perception that you have single-handedly elevated the focus on management within OMB, so it really is the Office of Management and Budget.

Mr. Johnson: Well, we joke in the M world at OMB that it's time to put the B back in OMB; that M has gotten to be such a significant part of it. And it really is. It's a much bigger part of the way the entire staff spends their time then it was, say, eight, ten years ago. But I'm not the one that's put the M back in OMB. It's the President that's put the M back in the federal government. It's a priority for him.

Shaun O'Keefe and Mitch Daniels and Mark Everson designed, developed the PMA back in 2001 with the President's endorsement, and it was a campaign promise of the President's to come here and to work with federal employees to cause -- to help the federal government be more effective.

It was a job that I sought out because I like fixing things and seeing things work better. So it all starts with the President.

The people know that when I'm speaking, I'm speaking for him. When I'm talking about the importance of management, I'm talking about a priority for the President. So he's really the one that's caused it to be a priority.

The thing that helps me in this job is I was the head of Presidential personnel before I came into this position, so I knew all the leadership in the different agencies. So I had a lot of credibility with them and they with me, and so when I call, they know who I am, and my relationships with all of the Cabinet leadership helps I think put the PMA into effect.

Mr. Nyland: Clay, speaking of the President, he has called upon you in several instances during his two terms to lead and manage critical initiatives that are very closely tied to his legacy.

Could you elaborate a little bit on your leadership and management approach, and maybe how your breadth of private and public sector experiences has prepared you for your current leadership role?

Mr. Johnson: Yeah, John, I've had a really fantastic professional life. I've been challenged in different areas -- the for-profit and not-for-profit world, and the different kinds of industries and companies. And to me, one of the things I've learned is that the key is to go in and find out what it is we're trying to accomplish. What is the definition of success? What are our goals? What is the real output we're trying to create?

If we're spending money, what are we buying? How are we going to buy it? And how are we going to assure that we get what we pay for?

So key is let's be real clear about what our goals are.

A second key I think is in terms of management in general is I think the best definition I've ever heard of a manager -- and this is the way I try to approach it is -- my job is to help the people that work for me be successful, not vice versa.

One of the things I make sure of is the four or five people that work directly for me are the best that I can find. They are particularly well-suited to accomplish what I think needs to be accomplished in the next two, three, four years, the typical length of time that someone has a job in the federal government, and that they have lots of expertise, and then I help them be better than they might be without me there.

So it's a lot of helping and assisting. That's also the approach that I take working with the agencies. The agencies are not there to help me accomplish a Presidential management priority. The President's Management Agenda and I are there to help the agencies be more effective at serving their customers.

So I think those two general principles I find myself applying to everything I've been involved in.

Mr. Nyland: Now, you've acknowledged that those federal programs that have received positive OMB assessments share at least one common characteristic; that is, a clear definition of success.

Could we turn that around a little bit, and would you elaborate on what the clear definition of success was for the President's Management Agenda as it began?

Mr. Johnson: The original language that was associated with the PMA talked about wanting the government to focus on results instead of process and control. If you think about what the word "bureaucrat" means, it means attention to the rules. They are rules, and we're trying to get people to comply with the rules.

That is a traditional way to think about the government. The government really, though, is in the "get it done" business. There are certain things it's trying to accomplish for the benefit of America and taxpayers and citizens. So it ought to be not about controlling what goes on in the federal government. It ought to be about getting things done.

So that was one goal. Another goal was to focus on what does it cost to get things done, and bring a cost consciousness focus on efficiency. And also minimization of duplication. We have a lot of programs, for instance, that work on job training, a lot of different programs that work on community and economic development. Are they working in concert with each other? And sometimes are they working in conflict with each other?

And also to strengthen the ability of the government and employees to perform. We might be highly motivated to do a really good job at managing the federal government, but if we don't have the basic abilities to do so, all that motivation is for naught.

So a lot of the President's Management Agenda is about the ability to cause your agency or your program to be more effective.

Mr. Morales: Clay, along similar lines, going back to the agencies for a moment, you've been on record as identifying four key elements for federal agencies to be successful under the PMA.

Could you tell us about these four characteristics?

Mr. Johnson: Yeah. I started thinking what's the difference between an agency that's doing well and one that's not doing well? Every quarter, we have what we call scorecard meetings, and we talk about the 26 agencies that we focus on in the PMA, and for a couple of these quarterly meetings, I started thinking why are some agencies doing a good job and some not, or some that used to be doing a good job not doing a good job now.

And all of sudden, it dawned on me that there were four key things, as you mentioned. The ones that are doing well have a real clear definition of what they're trying to accomplish, whether it's in financial management or competitive sourcing, or human capital practices. They have a real specific, realistically aggressive action plan, with due dates, key milestones when certain things are supposed to happen.

They have clearly defined accountability. Who is responsible for doing this to whom by when? And it's not what department. It's not what consulting company we're going to hire to come in and do this for us. It's what specific individual, and as long as we're writing down his or her name, let's write down their phone number and e-mail address just in case we want to call to see how they're doing on it.

So that's the third thing.

And the fourth thing is, it has to be real clear to everybody that this is important. It's important to either the President or it's important to the head of the agency or the head of my department.

So all four of those are about clarity, clarity of purpose, clarity of method by which we're going to get there, clarity of accountability, and clarity that it's a priority, and therefore, somebody very important wants it done.

When you have those four elements a hundred percent of the time, in the PMA anyway, people accomplish their goals. You miss one of those or more and a hundred percent of the time it doesn't get done.

It seems overly simplistic, but that's been my experience with it.

Mr. Morales: How does achievement on the PMA translate into better agency performance?

We will ask Clay Johnson, Deputy Director for Management at the Office of Management and Budget, to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour.

I'm your host, Albert Morales, and this morning's conversation is with Clay Johnson, Deputy Director for Management at the Office of Management and Budget.

Also joining us in our conversation is John Nyland, managing partner for IBM's Global Business Services in the Public Sector.

Clay, let's revisit the PMA and the now well-known traffic light scorecard, which represents a method for tracking and guiding the federal performance efforts.

Under this rubric, getting to Green and sustaining the Green status is critical.

But what happens after all have achieved a Green status? How does all this Green, so to speak, translate into agencies and programs working better and continuing to work better? And if I may, what lies beyond the Green?

Mr. Johnson: That's a good question. In fact, it's a question that the President has asked the management people at each agency twice now. The management people at each of the agencies meet with him once a year to brief him on what we're doing, and two years ago, he said, what happened -- the same question -- what happens when the agency gets to Green? What happens then?

And this past year, he challenged us. He said -- because we talked about how we were getting more Green at each agency. He said, that's great. But you make sure all that Green is converting into agencies working better, not only for the remainder of the time that we're here, but beyond.

What the PMA is about primarily is about agencies developing the ability to be more effective, to develop human capital practices, cost management practices, investment management practices, particularly with IT, financial management practices, and program management practices that, with these abilities and with the motivation to serve the taxpayer and the citizen at a higher level, you can do so.

But just having the ability does not necessarily mean that your programs are going to work better. We've all known of athletes that were very gifted but they never could convert their gifted athletic ability into performance on the field or on the court.

So the President's charge to us we interpreted to mean let's get more Green, let's develop the ability to do well, but then let's make sure the leadership of the agencies are using these new-found abilities to cause their programs to work more effectively, which makes me think that the most important aspect of the President's Management Agenda is what we call the Budget Performance Integration Initiative, which is the effort by which we make sure that we have good definitions of success for each program, both performance objectives and cost efficiency objectives, because when we're trying to get better, the first question is, how do we measure success? And if we don't have good measures, we can never be held accountable or never document or demonstrate that we're getting better.

So one of the things we've developed over the last five, six years is better metrics so that we can more effectively focus on our programs getting better.

The challenge now is being able to convert it to programs working better, and demonstrate it, quantify it.

Mr. Morales: Now, in the last OMB Scorecard, as I look at the breakdown, it appears that of the 15 major Cabinet departments, the Green status tends to be concentrated in many of the smaller departments, such as Labor, State, Education, and Transportation, while the bigger departments -- Defense, Homeland Security, VA, Justice, and Treasury -- seem to have most of the Yellows and Reds.

Why are the biggest departments, with more people and supposedly more resources, apparently lagging behind some of the smaller agencies?

Mr. Johnson: Well, it is true that size and complexity is an issue. The Defense Department is the largest, most complex organization in the world of any sort, so that's a challenge. And the Department of Homeland Security is the combination of 21 or 22 agencies, and so it's still going through some growing pains. The size and the complexity of those organizations has a big impact on their ability to develop the Green level of management capability that they and we aspire them to have.

The biggest issue is not size and complexity. The biggest issue is leadership and attention to detail and attention to these matters. I wish I could say that all of the big agencies' Yellow and Red are the result of size and complexity. A lot of it is that they just haven't paid as much attention to it, or haven't been as good about addressing their management opportunities as some of the other agencies. There are too many examples of big complex organizations doing a great job, and equally sized organizations not doing as good a job and it's -- the size and complexity are the same.

So we don't give the big agencies a pass just because they're big and complex. It's all about those four things I was talking about earlier. It's clear definition of success and action plan and accountability and making sure everybody knows it's important, whether we're are war or not or whether we're under attack or not, how we manage our resources and our people in all of our agencies has got to be a 24/7 priority.

Mr. Morales: Now, along the same lines, in the last OMB Scorecard, about half of the federal agencies -- about half -- received a Red rating in financial performance. Could you tell us from your perspective why this is such a challenging area for federal agencies?

Mr. Johnson: A lot of agencies, like DoD, like HHS, like Homeland Security, can't get to a place where they and we want them to be on financial management until they have a brand-new, many-years-to-develop financial management system. It takes a lot of money and it takes a lot of attention to detail and a lot of commitment.

You've got to know where you're spending the money and be able to account for it and be able to get good, accurate cost information in front of managers, and a lot of those agencies did not have the financial management systems to be able to do that. So they're in the process of developing those.

So that's the substantive reason why. The other sort of scoring reason why is, it used to be a little easier to get to Yellow and then a little harder to get to Green, and we changed what it meant to be Yellow a couple of years ago, which means when you go from Red, you go immediately from Red to Green. There is no Yellow in financial management.

There are a lot of things that are being done in the financial management area that people thought would never happen in the federal government. If you had asked anybody that knows anything about financial management in a large organization -- if asked if the federal government could close its books and issue its audited financial statements in 45 days, if you had asked them that 10 years ago, they would have laughed. We've done it for two years running. The private sector takes 75 days to issue their audited financial statements. We do it in 45. Unbelievable.

Six years ago, the Ag Department had never had an unqualified audit opinion. In its 140-year history, it had never had an unqualified audit opinion. The Chief Financial Officer asked why and nobody knew why. They just knew that it was impossible.

One year later, they had a clean audit opinion, and they've had one ever since. Wonderful things have happened in the financial management area. More things still to happen. We're managing real property in ways that no one thought possible. We're formally reducing improper payments in ways no one thought possible.

But you're right, there's more Red in the financial management area than anywhere else, which kind of disguises some of the big gains that are being made. But that's the way it is and we live with it.

Mr. Nyland: Clay, OMB's website has been primarily a place for OMB to post the results of the quarterly PMA Scorecard.

Could you tell us about the recent re-launch of the site, and how does the new site enable the exchange of ideas between federal employees about good management practices?

Mr. Johnson: We realize that this website was all about the ability to do well; about getting to Green; about improving our ability to become more effective, and there was an opportunity to focus it on taking all these abilities and in fact causing programs to work better.

So we decided to change it. We had matured and we needed to focus on getting beyond Green, as we've talked about.

And we created three sections, which is -- one section which identifies programs that have used various PMA abilities to cause them to be more effective. They used to perform at one level and they saw opportunities to make it better -- when I say "they," I mean federal employees. They took action. They've made changes in the program, and now it's working at some improved level of performance.

That's one new section on the website.

Another new section is keys to success, management keys, teamwork keys. And a third section is obstacles that exist out there that people should be mindful of and should work with us and Congress to remove. So there are things that help us be more effective; things that get in the way of us being more effective, and then examples of us overcoming all these challenges and causing our programs to be more effective.

So we're very excited about it. It's, and we think it's the way the site ought to be focused now given where we are after six years of PMA.

Mr. Nyland: That's great. Could you tell us a little bit about the President's Management Council, or the PMC? It's our understanding that President Bush has attended several PMC meetings, being briefed on real, meaningful results. Perhaps highlight some of those real examples of meaningful program performance -- and I understand that there's an interesting story from the Interior Department about feeder mice.

Mr. Johnson: Feeder mice, my favorite story.

Three years ago, I guess -- we've done it three years in a row now -- we had the President meet with what's called the President's Management Council. This is a group that was formed I think formalized by Executive Order in the -- maybe in the Clinton Administration, and then we carried on the tradition, where you take all the Chief Operating Officers and all the senior management officers in the agencies and they meet every other month to talk about issues and opportunities of common interest.

It's typically the Deputy Secretaries in the large agencies or the Under Secretaries for Management and in the smaller, independent agencies, like GSA and OPM, it's the heads of those agencies.

And so this last time we were, apropos of getting beyond Green, we were not talking about improving competitive sourcing and human capital. We were talking about programs working better. And we talked about big, big changes like FAA, a very large organization where there had been a lot of wasteful spending, a lot of cost overruns. Management came in -- and I don't mean just political management, I'm talking about political career -- looking at this and deciding that there were opportunities to run FAA better.

They saw the opportunity to consolidate offices. They installed a new financial management and cost accounting system. They improved individual managers' accountability for service levels. They developed better service metrics. They competitively sourced their flight services operation. There was a lot of dissatisfaction with the service level and the cost being provided to private aircraft operators. They renegotiated a labor contract, and they looked at their staffing levels, and the results were that they improved customer service from 54 percent approval rating to 77 percent approval rating in a couple of years. They improved their savings of their operation $200 million for the year, and they improved agency performance significantly. Just really sort of an agency-wide effort.

At the other extreme, you had the feeder mice story, a great story. I've told the people at the Interior Department when I visit with them -- I said if this story is not true, don't tell me. It's too good a story. I want to believe that this story is true. No one has denied it, and Lynne Scarlett, who's the Deputy Secretary over there, swears that it's true.

But there's a Chickasaw National Park or Chickasaw Recreational Area in Oklahoma. And the Interior Department had given their managers better cost information about where they were spending their money, and then challenged all their managers to think about their mission, really think much more single mindedly about what business they were in and look at how they were spending their money and think about spending more money or as much money as possible directly against their mission versus indirect monies against their mission. And the more money you can spend directly against your mission, the more focused on your mission you'll be.

So they're in the business of providing recreational opportunities for citizens, and they also have two endangered species there. They have an endangered snake and an endangered owl there that they keep fed.

So they looked in great detail with new information about where they're spending money, and they realized they were spending a lot of money raising mice to feed these endangered animals. And it struck them that this is really -- these mice were really expensive to raise. And someone asked the question what could we buy mice for? And they determined they could buy mice cheaper from the pet store than they could raise them. They realized well, we're not in the feeder mice raising business. We're in the endangered animal preserving business and in the recreational opportunity business. So they stopped raising mice. They bought the mice from the pet store. They reduced their costs $15,000 a year and took those savings and spent it to improve the quality and quantity of the trails through the wilderness area.

So just a great story. Fifteen thousand dollars a year, not $15 billion, $15 million, but it's the same. It's the principle. And it was all done by the management given the charge to think about how you can spend even more of your money directly against your mission versus on indirect costs, and they came up with just a classic way to do it.

So one of our big challenges in the federal government is look for the feeder mice example in every agency, large and small.

Mr. Morales: Clay, let me switch gears a little bit here. In 2003, OMB initiated its program assessment rating tool, which is commonly referred to as the PART.

Could you tell us briefly about the PART, what is its purpose and scope, and how has it introduced a new level of transparency and led to a more citizen-centric approach to government?

Mr. Johnson: The PART was developed in 2001 under the leadership of Mitch Daniels and Shaun O'Keefe and Mark Everson. And when they wanted to focus more and more on the effectiveness of programs, they realized there was no consistent way of evaluating programs, and there was a lot of programs couldn't tell you whether they worked or not.

And so that -- it was just develop a number of questions that we should ask ourselves about every program that every small businessman, every large businessman, every non-profit organization either does or should be asking themselves -- what's our purpose? How are we set up to achieve that purpose? What sort of plans do we have for the future? What's the quality of our management? How do we define success? What are our performance measures? How accountable do we hold ourselves, or are we held accountable for those results?

These are commonsense 25, 27 questions that are not esoteric. They just -- any organization ought to be asking themselves about it, and you can ask of them Defense programs, Interior programs, Social Security programs.

So it's a consistent set of questions, a way to get a feeling for whether programs work or not. If they don't work to our satisfaction, if we don't have satisfactory answers to all those questions, where are there shortcomings? What do we need to work on to cause a good program, a medium program or a bad program to work better?

So the purpose is give us some consistency, give us a way to compare program effectiveness across the board, and then to do so in such a way that it allows us to focus on the things that need to be fixed to make the program work better.

Mr. Morales: How has OMB's Program Assessment Rating Tool changed the way government does business?

We will ask Clay Johnson, Deputy Director for Management at the Office of Management and Budget, to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Clay Johnson, Deputy Director for Management at the Office of Management and Budget.

Also joining us in our conversation is John Nyland, managing partner for IBM's Global Business Services in the Public Sector.

Clay, continuing with our discussion on the PART, how have federal agencies dealt with the requirements of the PART, and what strategies have they employed to be successful, and what are some of the challenges that they continue to face today?

Mr. Johnson: I'm going to give you a little bit more of a historical answer than maybe you asked for, but initially, there was a lot of skepticism about the PART, because they thought that -- and analyzing programs was code for let's get rid of programs that the Administration is not interested in and blame it on performance.

So there was not enthusiastic acceptance of the PART for, say, the first 12 months of the President's Management Agenda being in effect. But then agencies and federal employees began to realize that this was about programs working better, programs that were priorities, and programs that were not priorities, working better. There's another process for deciding whether we get rid of programs or not.

But in the management world, we want all programs to work. We want great programs to work even better, and we want bad programs to work at an acceptable level.

So their initial response was reluctant participation, and then it became enthusiastic. And one of their big challenges initially was to develop measures of success.

In the first year, when we evaluated 20 percent of all the programs in the federal government, half the programs evaluated in that first year could not demonstrate a result, either positive or negative or neutral. The reason for this was nobody was asking. Nobody was asking what have you done for me lately. How are you performing as an organization?

So what agencies have probably spent the most time on in the last five, six years as a result of the PART is get clearer definitions of success. You can't hold employees at the lowest level, the medium level, or the senior manager of a program responsible unless you can define clearly what success is.

I think that's what the most of the energy has been focused on is let's clearly define success and then develop action plans for developing an approach of accomplishing success.

Let's develop relevant measures of performance, and what this allows us to do is it makes the PART relevant to great programs, medium programs, and bad programs. It's not just a tool for programs that are performing at an inadequate level. It's a tool for every program, because we want every program to work better than it did the year before.

Mr. Morales: So let me explore this a little bit more. How does a program's PART score influence, say, its budget, either in the President's budget recommendation or the Congressional considerations? And what effort is the Administration making to generate interest in program performance on the Hill?

Mr. Johnson: I think there's a tendency to believe that its primary purpose, the primary purpose of the PART, is to help set the program's budget.

It should be a major piece of information that appropriators and OMB staff look at when they recommend and agree on a budget, or disagree on a budget.

But performance should be an issue. Nothing should happen automatically because a program performs or doesn't perform. Sometimes a program doesn't perform because it's brand new and it's hard, and we don't know how to slay the monster and so we're working on it. And sometimes we're not spending enough money on key aspects of the program's operation for that to be successful, and so in some cases, we have recommended that spending be increased to cause it to be more effective.

So nothing should happen automatically because a program works or it doesn't. Some people would like to have programs automatically go away or be expanded based on whether they work or not. That should not be the case.

The primary purpose of the PART is to help management and people who oversee the program's performance in Congress work together to cause it to be more effective. And a secondary, but very important use of it, is to inform the budget process.

Now, you asked about what are we doing to work with members of Congress. Some members of Congress understand program performance. They get it. They're behind it. They like it. And their constituents expect them to pay attention to how the taxpayers' money is being spent.

Other members of Congress fear it. They would prefer not to have to factor in whether a program works or not. It's more difficult. It's easier to pay attention to how much money you're spending on a program than it is to pay attention to what we're getting for the money. And maybe their constituents are less interested in whether programs work or not. They're more interested in how much money we're spending on a given program.

So when we talk about the Hill, the Hill is a combination of 535 different viewpoints about program performance. Every committee, every authorizing committee, every appropriating committee, is different. And so what we are doing to work with members of Congress is to work with every committee in the ways that make sense for them.

Some of them are very receptive. Some of them have been very reluctant to talk to us about program performance. Some used to be reluctant. Now, they're receptive. Some are still reluctant. Some have been receptive and now they're enthusiastic. So they all have different needs. They need better -- different levels of communication, education. We need to show them how it can help them be better Congressmen or Senators. How it can help them better serve and represent their constituents. And so it's a big educational challenge and opportunity to do it right for the agencies and for OMB, but every member of Congress and every committee is different.

Mr. Morales: Now, along these lines, I've heard that some agencies have expressed concern over the fairness or the consistency of the process, and in particular their PART scores.

Is this due to the inherent nature of the programs these departments operate? Is it related to something else, and is there a specific PART appeals process, so to speak? And if there is, how does this work?

Mr. Johnson: Well, the validity and the objectivity of these PART scores is a big priority. If they are known to be biased or developed haphazardly, then there's no reason to pay attention to it. And so we made this a priority from day one. Every year when PART scores are developed, there are consistency checks. We also then compare these similar programs across agencies to see that they're being evaluated consistently.

So we do a lot of checking on the validity and objectivity of these, and we've gotten better at it. I think the scores we have now in years four and years five are probably more objective than they were in years one and two. But there's a lot of attention being paid to that.

There is an appeals process. If you are in disagreement in an agency with your OMB counterparts over the score, we create an appeals board every year that I chair, and we get Deputy Secretaries from two or three agencies or the head of some of these smaller independent agencies and very detailed briefing books are prepared and they go over the material. They review it, and we make decisions, and sometimes we change the PART scores, and often we accept it. But a lot of effort goes into this appeals process, and it's a really commendable process.

So I think there might be some general grousing about objectivity and so forth, but I bet by and large, the acceptance of the PART scores is very, very high.

Mr. Nyland: Clay, in February of last year, OMB unveiled a new website, Can you elaborate a little on, and what's the purpose of this site? What does it contain, and are there any plans to expand its application and use in the future?

Mr. Johnson: We are very excited about Expect More. We think it's a really neat concept. One of the things we try to do is to get Congress to pay more attention to whether programs work or not and interest groups to more pay attention to whether programs work or not, and agency personnel to pay more attention to whether programs work or not.

And we realize well, one way to make this happen is to make all this performance information really, really public, really unavoidable. You can't pretend that the information about a program not working isn't out there. You can't pretend that a program doesn't work because it's known to one and all that it does if this information is really public.

So this information had all been in the public domain. You had to really know where to go it. You had to be able to read OMB's version of English. So we decided we would make it much more public and much more readable by a lay audience, and so a lot of effort went into doing this. And we decided we would call it, thinking you should expect more from your federal government. You have a right to know how your money is being spent and where it's being spent well and where it's not being spent well, and in every case where it's being spent well or not, in every case, what we're doing to make it work better.

We did focus groups with people, asking them to review some of our write-ups, and got great feedback about what they understood and didn't understand and the kind of information they would pay the most attention to.

One of the things that we found out from these focus groups was we asked them if they would expect to get information from the federal government about how programs worked. And we did four focus groups, and about half the people we talked to said, yeah, they would expect that from the federal government.

And then we asked them if you got information like this from the federal government, would you expect it to be objective. Nobody, not one person, thought it would be objective. The thing that that told us these better be really clear, clearly written, very substantiatable, all kinds of checks and balances, all sorts of quality control, because the readers are going to be Doubting Thomases. They're not going be inclined to believe this. They're going to be inclined to view it as one Administration trying to sell its particular agenda to the American people.

So it has created lots of attention in Congress. We've had authorizing committees call us and ask about the programs that don't work, and we've asked them why are you asking us this, because they said we want to spend all of our oversight hearings focusing on these programs that don't work. Bingo. That's it. That's the thing. That's the answer.

Gallaudet University, which had some difficult leadership difficulties and challenges installing a new president and a lot of unrest amongst the students, was evaluated to be a program that was ineffective. It receives a lot of money from the federal government. It graduates 42 percent of its students. That's unacceptable by anybody's standards.

So it was made very public that Gallaudet was rated ineffective via the PART. It confirmed what a lot of students were saying, which was our school needs to be better than this.

So it became one of the things they referred to in their laundry list of things they thought needed to be fixed at Gallaudet. And I guarantee you as a result of the PART score and a lot of other gripes that the students had, there's been more conversations about how to make Gallaudet the wonderful university it used to be and can be in the last couple of months than maybe had taken place in the past many years.

So the idea is to prompt behavior and prompt discourse about whether things work or not, and if they don't, what are we going do about them. And if they do, what are we going to do about them to make them work better?

Mr. Nyland: You know, some at OMB have said that is the widest and deepest resource on the effectiveness of the federal government on the web.

I understand the publishing of successes, but what really is the benefit of disclosing failures or highlighting those programs that are in Red or Yellow status?

Mr. Johnson: I love that question, because I've had very senior members of this Administration ask me directly and ask other people why on earth are we making it public what doesn't work? And my response to them is, well, first of all, let me ask you: do you think the American public really believes that all this stuff works? I think the American people are shocked to find out that as many of these programs work as we say they do. They know a lot of this stuff doesn't work. So they're not surprised by some things work better than others.

When by saying that this works and this doesn't work, we're saying we are committed to fix everything. When we talk about a program that doesn't work and here's why it doesn't work, what we're saying is we know why it doesn't work and this is what we're going to focus on.

If we have a program that works great, we say here are the things that could work even better, so here's what we're going to do to make it go from great to fantastic.

People give us so much credit for the candor and the commitment to doing well by talking about our successes and our failures that the benefit of that far exceeds some unrest that might be stirred up by talking about some parts of the federal government that don't work.

So it's critical. You have to be honest about where you are. You have to be honest, whether you're talking with an individual employee about what they're doing well and not, and you have to be honest with a leader of a program or a leader of an agency about what's doing well and not.

Everything at HUD and at Interior and at Ag and the Defense Department don't work the way they should. Some things do. Some don't. Let's call them for what they are and focus on everything working better, but be targeted about what it is we're trying to fix.

Mr. Morales: That's fantastic.

What does the future hold for the PMA, the PART, and other government management reforms?

We will ask Clay Johnson, Deputy Director for Management at the Office of Management and Budget, to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Clay Johnson, Deputy Director for Management at the Office of Management and Budget.

Also joining us in our conversation is John Nyland, managing partner for IBM's Global Business Services in the Public Sector.

Clay, if you were contacted by the OMB Transition Team in 2008, what might you recommend they do in the areas of performance management or the PART, and how might they try to institutionalize the management reform efforts that you've started?

Mr. Johnson: That's a very good question, and we talk about it now because we want to have all this work carry over to the next administration, because it's really not about Republican goals or Democratic goals. It's about goals, and having clearly defined outcome goals and having a way to focus people's energies and attention on getting them accomplished in a reasonable period of time.

What I would advise any new administration to do, and what we're going to do with them, is to say when they come in is to say here are the goals that each agency and each program management team are being held accountable for accomplishing now.

And their performance evaluations are tied and their bonuses and their salary increases are tied to whether or not they accomplish these goals. So one of your big responsibilities coming in new is to decide whether these are the goals that you want them to focus their energies on accomplishing, and if not, what are the goals?

But without regard to what they are, there need to be very clearly defined outcomes that management can be held accountable for accomplishing, not because they'll be wayward if they're not held accountable, but because they want to be focused. They want to do a good job of serving the American people -- they, the career employees. They're not afraid to be held accountable, but they want there to be a good clear agreement on what the definition of success is, and then they want to be given the resources necessary to accomplish those goals and have some input on what those goals are.

I would encourage him to think about management as being about effective government, not about large or small government. But whether you're Republican or Democrat, everybody should be interested in how effective the programs work; how effective our government is.

The other piece of encouragement I'd give to them is when you are talking about management to federal employees, talk about work with them. Do this with them, not to them. The key to the success of any management agenda is that it be viewed as being good for the employees. If employees don't want something to happen in an agency, they win. There's a million nine of them and there's a couple thousand political appointees, and it won't last.

But if employees -- federal employees, career employees, understand that a particular management agenda is good for their agency, it will help their agency be more effective, as I believe they feel the PMA is, they will endorse it, they will support it, because they want their agency -- HUD or Defense or Homeland Security or VA -- they want their agency to be effective. They want, by and large, to be an effective public servant, and they want to have improved ability to do so, and that's what the PMA is about, and that's what the next administration's management agenda should be about as well.

Mr. Morales: So more specifically, how does the current status of the PART, say, compare to where you might have envisioned it going five years ago, and are there areas that you think need more attention going forward?

Mr. Johnson: My understanding is that the group that developed the part in 2001 thought that there would be more purposefulness as a result of the PART, there would be measures that could be used to drive more specific behaviors in a program as opposed to broader general behavior.

My understanding is that the developers of the PART in 2001 did not foresee our being as public with it as we have made it. But they've applauded it.

The birth mothers and fathers of the PART give us big kudos for taking it to the public and making it unavoidable by the interest groups and by members of Congress. The one thing that they have envisioned that we haven't done as much of, which is a priority for the next two years, is to use this information to look at cross-cut areas. And the PART allows us to look at all the programs dealing with a similar subject, and bringing some better sense to how they work in concert with one another; maybe combine some programs and so forth.

That's something we want to do more of, particularly in the next two years. But the PART allows us to do that, and we need to take advantage of that opportunity.

Mr. Morales: Clay, I'd like to ask you about bloggers for a few minutes. The world of bloggers and the passage of the Transparency Act really represents a small but significant change in the culture here in Washington, D.C., and may suggest there may be new ways to focus attention on management issues that would have escaped attention in the past.

What plans does the Administration have to take advantage of these new developments?

Mr. Johnson: What we are doing is making everything a lot more transparent. We are making our PMA status and progress -- have for the last six years -- very public with the Scorecard. We are making program information, program performance information, very public, with

There is tremendous transparency that didn't exist before. One of the things we have to be able to do is to make it transparent, but also make it transparent in such a way that if someone wants to go and really analyze this and try to make sense of it, the data is analyzable; that they can download large sums of data and run it through different analytical programs to suggest that we ought to do more of this and less of that or whatever.

Bloggers talk about wanting to do that. A lot of think tanks talk about wanting to do that. There are good bloggers and bad bloggers, just like they're good reporters and bad reporters. But there are a lot of ways, a lot of commentary that can move mountains, and some of it's been coming from the blogging community.

The blogging community was instrumental, critical to the passage by Congress of the Coburn-Obama bill that calls for all this procurement and grant information to be made public. The bloggers said we deserve to know this, and they let their Congressmen and Senators know it, and they responded by approving the bill.

So they're an important public information source, and what they want is information that they can look at and analyze.

Mr. Nyland: Right. You've been quoted as saying that the average agency is better managed today than the best managed agency was back in 2001.

That's a very powerful and bold statement. Could you elaborate on this insight and what challenges lie ahead for the next administration and the agencies?

Mr. Johnson: The reason I say that is I look at that Scorecard where we look at how agencies are performing, and there are 26 agencies, and there are five key management areas that we look at. So there's a 130 scores, five times 26.

In 2001, there were 110 Red scores and two or three Green and the rest Yellow. A Red score means our financial management or human capital or whatever their area's ability is totally unacceptable. 110 out of 130 were totally unacceptable.

Today, out of the 130 scores, approximately half are Green and 30 percent are Yellow; 20 percent are Red. So the average agency today is sort of a Greenish-Yellow agency, to use the PMA parlance, and six years ago, it was a bright, bright Red.

So that leads me to conclude that our ability to manage our resources and to accomplish desired outcomes is better today on average than the very best agency was six years ago. And it's not easy being Yellow. And it's really not easy being Green. Anybody that knows anything about managing an agency looks at what the criteria are for being Green and they don't ever challenge it. And the process by which we give out the Yellows and Greens is very stern and very stiff, and it doesn't require a lot of subjective interpretation. You either have achieved the desired performance on activities or they exist or they don't exist.

But all of these have been hard-earned Yellows and Greens, and so agencies have really done a good job.

You asked about the best way to institutionalize this going forward. I think the one simple thing, if you're only going to focus on one thing, is make your reforms good for the employees. If it helps the employees do better work, it'll stick and it'll cause the work to improve. You say, well, performance goals, you know, holding agencies more accountable, clearer performance metrics or clearer efficiency metrics, doesn't that put federal employees under the gun? Doesn't that make them more apt to fail?

That's not how employees think of it. Employees describe that as they want to be held accountable. They want clearer definitions of success, because one of the things they want is they want the opportunity to brag when a program performs well, or some of their attempts to improve performance pay off and they've raised the level of performance.

Every incoming administration talks about how dysfunctional the federal government is: elect me; I'll come in and make it work. So they tend to run against the federal government. The federal employees are much maligned by all incoming administrations. If you have clear definitions of success, incoming administrations can't get away with that. There's more specific information you can point to about this works, but this doesn't work, and here's what we're doing to make it work better.

So there's more purposefulness. There's a more adult debate about if something doesn't work, how much doesn't it work and why doesn't it work, and there can be more intelligent, corrective action plans put in place to make everything work.

Mr. Morales: Clay, I want to flip the lens a little bit here, and you just gave me the perfect segue. OMB has a reputation of being a very demanding and stressful place to work. And yet it's also achieved the number one ranking in the Partnership for Public Service's "Best Places to Work" in the federal government survey.

So what are some of the benefits of working in such an environment, and what advice could you give to a person who might be considering a career in, say, the public sector or even possibly interested in joining OMB?

Mr. Johnson: I think the reason why the 500-or-so employees at OMB are so pleased to be there is that it is the center of the government universe. Everything that moves in the federal government involves OMB. It involves money or it involves how money is spent.

And so if you want to be where the action is, OMB is it.

The standards of the employees we hire across the government are high, so I don't know that we hire dramatically more talented employees or our standards are higher. Our standards are high, but so are the Labor Department's and so are the Interior Department's. But we throw our employees into the middle of things very quickly. They understand that their work is very, very important, and they are part of getting things done. Sometimes their recommendations are accepted. Sometimes they're not.

But when an item comes into OMB, it's a proposal. It's a new program that someone wants to put in place yesterday. It's not something that they're thinking about doing in 2012. There's a lot of urgency to address the requests for money, or there's a lot of urgency to develop a budget or there's a lot of urgency to figure out the best way to structure a program to cause the money to be spent most responsibly. There's a very short time frame for everything that goes on in OMB, and then a decision gets made or it's not. And the Congress approves it or it's not in a matter of months.

So you can see the benefit of the results of your actions very, very quickly, and you know that you've participated in causing a new program to get launched or an old one to get reconstituted, or some things to be combined or monies to be spent more in this area and less in that area.

There's a great esprit de corps there. Some people stay a long time. Some people go from there to other parts of the federal government with great training, and we welcome people who want to stay there for their whole career, and we welcome people that want to spend a few years there and then go on.

It's just a great, great place. There's great pride of accomplishment and effort. That's also one of the benefits from being small in size -- 500 people. Everybody can be very plugged into what's going there and kept very knowledgeable, and they can hear from their senior management how much they're respected and loved by the management and regarded by all the federal government.

Mr. Morales: Well, that's just fantastic. Unfortunately, Clay, that will have to be our last question.

I do want to thank you for fitting us into your busy schedule. But more importantly, John and I would like to thank you for your dedicated service to our country in leading the President's Management Agenda.

Mr. Johnson: Thanks. Honored to be here. These are great questions. I like talking about what we're doing, because most people think about government work as focusing on what the policy ought to be, and the key is how a policy is implemented, which gets into how money is spent and how an agency is managed. I think it's really, really important.

I encourage your listeners to take advantage of our two websites, Pay attention to how your programs, if you're a federal employee, are considered to work, how comparable programs are working or not, learn from it. There's a lot of information there that can drive behaviors within the federal government and drive what kind of sentiments are expressed to your elected members of Congress, for instance, about desires to cause -- help get involved in making programs work better.

And, I encourage federal employees to send in examples of things that they think are keys to success, obstacles that they wish to be removed, obstacles to success, and also send us examples, large and small -- feeder mice or FAA -- examples of programs that they're proud of that have been cause to be more effective.

Mr. Morales: This has been The Business of Government Hour, featuring a conversation with Clay Johnson, Deputy Director for Management at the Office of Management and Budget.

My co-host for this morning's program has been John Nyland, managing partner for IBM's Global Business Services in the Public Sector.

As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who can't hear this morning's show on we're improving their government, but who deserve our unconditional respect and support.

For The Business of Government Hour, I'm Albert Morales. Thank you for listening.

This has been The Business of Government Hour.

Be sure to join us every Saturday at 9:00 a.m., and visit us on the web at There, you can learn more about our programs and get a transcript of today's conversation.

Until next week, it's

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