Originally Broadcast December 8, 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 businessofgovernment.org.

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.

In many respects, we are a nation at a crossroads. In the delivery of critical human service programs, policymakers and managers must consider issues such as fundamental reform, funding and financing, and program flexibility to focus on outcome measures and not just the process. In the end, the success of human service programs is measured by the health and well-being of this country's citizens.

As part of a series of discussions on managing human service programs, we have broadened our reach in this space and are honored to welcome our special guest this morning, Jerry Friedman, executive director of the American Public Human Services Association.

Good morning, Jerry.

Mr. Friedman: Good morning, Albert. It's a real pleasure to be here.

Mr. Morales: Also joining us in our conversation is Nicole Gardner, vice president and partner in IBM's public sector social services practice.

Good morning, Nicole.

Ms. Gardner: Good morning, Al. Good morning, Jerry.

Mr. Friedman: Good morning.

Mr. Morales: Jerry, let's start off by learning a bit more about your organization. Perhaps you can give us an overview of the mission, the history, and the activities of the American Public Human Services Association.

Mr. Friedman: Well, thank you for the opportunity to be here this morning. We always look forward to venues in the public arena where we can talk about human services. The American Public Human Services Association is a 77-year-old organization that started around the same time as the Social Security Act. It was really founded by a group of very visionary administrators who were concerned about what back then they called the distribution of relief. They wanted to have a voice in policy in Washington, D.C., and they wanted to look at best practice. And essentially, that is what our organization has stood for for the past 77 years.

We've undergone several changes. We used to be called the American Public Welfare Association, focusing in on those types of programs. But we've actually broadened our horizon, recognizing that there is a realm of human service programs that need the kind of attention that a national association can give it.

Essentially, our mission is strengthening America through excellence in public human services. I think a lot of people don't realize just how large human services is, and the presence that it has in our society. We are generally one-third to one-half of most state and local budgets, and consequently, we have a large business to run and an obligation to run it effectively. But it also is a compassionate business, so we have kind of this desire to make sure that we're maximizing our resources, but doing it in a kind and compassionate way.

Basically, our association does three things. We work for good public policy. Good public policy meaning that there are adequate resources, that there's flexibility to run the programs, that we can actually look at outcomes and invest in clients rather than in the bureaucracy.

We then work with our members to help them implement that policy in the correct way. We do this through training and research and consulting.

And then the final area that we do is we really work on our public image. I think we can be successful mainly to the extent that the public has confidence in our ability to manage our programs efficiently and effectively. And we do that through radio shows, we do that through our website, through our magazines, publications, newsletters, informing the public as well as the profession is a key component of APHSA.

Mr. Morales: Could you give us a sense then of the scale of the operations at your organization and its affiliates? Can you tell us a little bit about who are some of its members and the size perhaps of your budget and the number of employees?

Mr. Friedman: Sure. In many ways, we serve like the National Governors Association does for governors. We perform the same function for the governors' appointed heads of health and human services programs, the state CEOs.

Our core group really are the states. And I've been very pleased that for the past four years, every state and a number of the territories have been full members of APHSA. That's very important to us, because when we go to Congress and we go to testify to say that we represent states, we truly do. Every state is a member.

We then have several hundred local members, counties, areas as large as New York City and Los Angeles to Tioga County, Pennsylvania, that likes to pride itself in being an area that doesn't have any traffic lights or parking meters, so we have that range. And then we have several thousand individual members.

We're a moderate-sized association. We rely a lot on our membership to provide the kind of support to enhance the field of human services. We have approximately 50 employees; sometimes there are more when we get special grants and projects. And we have an operating budget of around $5 million.

Ms. Gardner: So Jerry, now we understand a little bit more about APHSA. You're the executive director. Can you tell us what you do in your job? What does it entail?

Mr. Friedman: I would say that there are probably three major activities that I'm involved in. The first really is association management. We're unique, I think, in that we have to be very sensitive to the fact that our members operate public entities. We treat every dollar that comes into APHSA as if it was a tax dollar, because in many instances, it is. And so we've very sensitive to making sure that we provide the kind of return on the dollar. So just running the association, our own computer systems, our own budgeting processes, our own personnel, occupies a portion of my time.

Probably the largest portion of it is involving member services: meeting with our members, trying to get a sense of areas that they need us to focus in on; sharing best practice.

And then, of course, there's the work that we do on Capitol Hill and with the administration as well as other associations, partnering with them in trying to obtain good policy, good effective resources in the work that we do in Washington, D.C.

Ms. Gardner: In the context of all that, what are maybe the top three challenges that you face? And what kind of things are you doing to address those challenges?

Mr. Friedman: We certainly have the vast array of human services challenges that all of our members face. Internally, you know, we also have challenges in managing during difficult economic times. When states have downturns, when the revenues decline, that also affects our revenues, so that we've had -- from time to time, had to manage during difficult times.

Staff retention is a big issue for us. We're very fortunate in that being in business for so long and having a reputation, which I think is excellent in this city, we're able to attract very, very talented individuals. They gain national exposure. They get to meet with every state CEO. They get to meet with members of Congress. They get to hang out with other associations. And very often, they get recruited because they are talented. So we probably have a higher -- just by circumstances, a higher ratio of turnover than many other organizations.

And, you know, one of the difficult things for me is that most of our core membership is appointed by governors. When their terms expire, they move on to different things. And we develop these relationships, and it's very difficult sometimes to deal with a lot of turnover within the states.

But I think the main challenge in human services, and I think it's also true for our association and all of its components, is truly our public image. The ability to tell our story not only just in Congress, but to the general public I think is critical. We face very unique challenges in human services. We're one of the few industries that is literally working to put itself out of business. We strive for a better society. We strive to alleviate poverty. We strive to eliminate child abuse. And if we're truly successful, there wouldn't be a need for us.

On the other hand, our failures are very visible. We can be successful in dealing with thousands of children. And when we have that unfortunate situation where a child gets lost, of course the public rightfully is outraged as we are, and that draws attention to us. We conduct our business in the open. We're the American Public Human Services Association, and that means if we make a mistake, you're going to read about in the front pages of the newspaper. And often, corporate America and the business community and even the other nonprofit organizations don't have that kind of exposure. So we have unique problems, but we also have unique opportunities, and I think all of this makes us stronger.

Mr. Morales: So Jerry, with that type of a mission, I'm curious, how did you get started in this field? What prompted you to get into this?

Mr. Friedman: Well, I was very fortunate in that I started my career as a probation officer. That may sound like a very strange answer, but when you think about it, what a probation officer does, there's a law enforcement aspect to it, but then on the other hand, there's kind of a case management function. You know, when somebody's coming out of prison, they need a job, they need housing, they need treatment, they may be addicted to drugs and alcohol and you have to work with that. And what I learned from that experience was that very often, the human services system broke down for people, and it was mainly because of the way that we were structured within a categorical system. And that really shaped a lot of my early thinking about how we could provide services in a different way, how we could have a more coordinated strategy for dealing with the multiple problems that people were facing. And so I had this exposure to the broad array of human services through that experience.

I then was fortunate enough to kind of have a career progression that led me to be a county human services administrator in two different counties in Pennsylvania. And then I became a state director of public welfare in Pennsylvania. Later, in Washington state, I was in charge of the Economic Services Administration. And before my job at APHSA, I was the executive deputy commissioner for the Texas Department of Human Services.

What that gave me, I think, was good, practical experience in actually providing the services at the county level, but then having the state experience. And through that, I touched various systems, everything from health care to child welfare to mental health, drug and alcohol programs. And so when the association was recruiting for a new executive director, I think that they wanted somebody with both state and local experience, and having that kind of broader perspective of having administered a wide array of programs.

Mr. Morales: So as you reflect back on your career, is there one aspect of that that you feel has really shaped your current leadership role and perhaps informed your current style?

Mr. Friedman: Albert, the one asset that I think that I bring to APHSA is a 25-year history of being a member. This association was my safety net. When I absolutely needed information and needed it quickly, I had them on my speed dial. When we had public policy that we needed changed -- I can give you a very good example -- and that was with welfare reform when there was a provision that legal immigrants were not entitled to food stamps. Our state legislature and our governor, I was in Washington state at the time, said this is unacceptable, find a way to make a change. It was APHSA, our association, that led the change in Congress that allowed states to purchase food stamp coupons for this population. So I came in with a great deal of passion about the association and the work that the association does as a consumer and as a member.

So what I bring to the association is I have such talented co-workers, oh, they're working on their Ph.D.s and their law degrees and they're just extraordinary, but I can look at something that crossed my desk and say if I was a member, would this make sense to me? And so as long as I think I can keep that member perspective, I'll be able to enrich the association to some degree.

Mr. Morales: That's fantastic.

What are some of the lessons learned from welfare reform efforts? We will ask Jerry Friedman, executive director of the American Public Human Services Association, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Jerry Friedman, executive director of the American Public Human Services Association.

Also joining us in our conversation from IBM is Nicole Gardner.

Jerry, we've used the term "public human services." Can you elaborate exactly what that means?

Mr. Friedman: Well, there's a debate actually on what public human services are. At one point, it was human services that were provided by government employees, but I think that that's changed a great deal with privatization efforts, with partnerships, with contracting. So now we define it more as services provided under the public aegis, where government dollars are used and there's a level of accountability, but it could be provided by a number of different associations, organizations, companies, both private and not-for-profit.

Mr. Morales: Let me go back in time a little bit. In the 1990s, government had made a statement to end welfare as we know it back then, which launched a series of welfare reform initiatives. Could you remind us of some of the key elements of this welfare reform, and from your perspective, how significant a social policy change does this welfare reform effort represent?

Mr. Friedman: If I look back on events that happened in my career, I think welfare reform was probably the most significant change in social policy in my lifetime. And what it did basically was that it ended individual entitlements for people and gave states block grants with considerable flexibility for states and local governments to design programs that made sense to them. Included were some provisions, like time limits, lifetime time limits, work requirements, just a vast array of significant changes to the way that we looked at what had been a dependency program to one that became a program of self-sufficiency.

In many ways, I think some of the lessons that were learned through welfare reform are really beginning to permeate some of the other human services systems as well. But all in all, I think welfare could be considered a successful program in the United States that brought about significant change.

Ms. Gardner: So Jerry, in that context, tell us a little bit about some of the key lessons we learned in welfare reform.

Mr. Friedman: Well, first, if I could just talk a little bit about some of the successes. And you have to realize that the AFDC program had been in existence for many, many years. It was a well-entrenched program basically operated through federal rules. And so when the new law came into effect and states were empowered to develop their own and design their own programs, there was a great deal of both apprehension as well as a great deal of high expectations for welfare administrators who had really wanted to do something different with the program for a considerable period of time.

It's important to note that welfare reform didn't actually start with the new law. There were over 40 states who had gone to the federal government to seek waivers to say we think that we have a better solution to helping people become self-sufficient. And what the federal legislation really was were some of those common threads through all of those various waiver programs.

But when you look at what happened over the course of a decade, there was a 60 percent decline in welfare caseloads in this country. Child support collections for non-custodial parents doubled. Over 1.5 million welfare recipients who had previously never been attached to the workforce had gainful employment and were no longer reliant on the public welfare system to support them. We implemented a national electronic benefits transfer program, a large computerized effort that actually eliminated food stamp coupons in this country. We created hundreds of thousands of child care slots. We invested in prevention programs that resulted in a decline in teen pregnancy among welfare mothers of one-third. And for the first time, reversing a two-decade trend, we actually had a decline in child poverty rates in this country. So by all accounts, you would consider that a success.

Well, there were many lessons to be learned through that. First, there was a really compelling case for change. Welfare dependency was a bad investment strategy, basically supporting somebody. It didn't help grow our society or our economy or the self-image of those who were receiving those benefits. So that we learned that there was kind of both an economic and a moral imperative for change. Yes, indeed, we are a compassionate society. We are our brother's keeper. But on the other hand, we had an obligation to help people maximize their own personal potential and develop their own capacity.

We learned that personal responsibility can be very effective public policy; that in life, there is a quid pro quo; that reciprocity is just the way that we live as Americans, and that its public policy should reflect that. We learned that people can rise to the occasion, that when they were afforded the opportunity, people became job-ready. They invested when there were both incentives positive and negative. People reacted in that they did want better things for their families. We learned, I think, that the best service delivery was designed at the local level. Welfare reform was not a national strategy. It was saying here's the money, here are the resources, develop a local strategy, and that resulted in those successful efforts.

We learned that we had to rely on partnerships, that welfare in this country couldn't be fixed by government. It required corporate America, the business community, the nonprofit world, the faith-based world, education, all coming together in kind of a uniform strategy to help address this. We learned the importance of services coordination and integrating services. What happened with lifetime time limits was that the bar was raised. We had a finite period of time to have people become job-ready or they would lose this safety net. We know that people don't come to welfare offices simply because they have empty wallets and empty pocketbooks, that there's often just a myriad of other problems that exist, and that we needed to address those. And that required the agencies that provided those services to get together in some kind of coordinated strategy. We also learned that there were other multiple strategies that we needed to look at: asset building, predatory lending. You know, there's a whole industry that thrives just because people are living in poverty.

I think the most important lesson, though, was, you know, for years people railed about the public welfare system, and I was one of them, to be honest with you, that it was a failed system. Well, what we learned was it was failed policy. When people are penalized, when their family condition or economic conditions are worse off because they're trying to better themselves and become employed, when they actually lose money, when the most responsible thing that they can do financially for their family is to stay on welfare rather than try to get to work because they'll be worse off, that's failed policy.

When that changed, we demonstrated it was not a failed workforce. The welfare system, this huge entity in this country, literally turned on a dime. Welfare offices almost overnight were transformed from "welfare offices" to "work centers." You know, the message was clear: What can I do to help you get a job today? This magnificent welfare workforce absolutely transformed themselves because they wanted to. They saw firsthand every day how just handing somebody a check and food stamps and hoping that every problem went away was foolish policy. And when that changed and they could make a real difference, they really rose to the occasion.

Ms. Gardner: That's quite a story. So you mentioned a few minutes ago reauthorization. So where are we with the reauthorization of TANF, and kind of what's the status? Where are we going?

Mr. Friedman: TANF was reauthorized after about 12 or 13 continuing resolutions. We just couldn't seem to get congressional attention because of all of the other priorities. And at the very end of the legislative session last year, as part of the Deficit Reduction Act, TANF reauthorization was passed. As an association, we are very concerned about the kind of micromanagement that's been built back into the welfare system. We think that the broad strategy of providing goals for states to reach, and empowering communities to reach those, worked. Clearly demonstrated that. And so we're concerned that we've taken a huge step backwards when it comes to welfare reform. And administrators, rather than talking about how can we get people into gainful employment, how can we help them get better jobs, how can we improve their economic conditions, they're talking about how we can have something count as a work participation credit because of the penalties that they're going to be facing. We're working very hard to minimize any damage as we see it to this program. To continue to empower states, we strive for maximum flexibility, but we're going to have an uphill battle.

Mr. Morales: Now, Jerry, you mentioned earlier that welfare reform really began at the state and local level. And I believe today, we again are seeing state agencies developing innovative public policy agendas to shape the next decade of service to low-income families. Could you elaborate on some of these innovative state programs? What are some of the strengths that you're seeing in some of these programs?

Mr. Friedman: Well, again, I think drawing off some of the success that we had with welfare reform and just looking at public policy that empowers communities, we're seeing this play out in child welfare programs, we're seeing this played out in health care programs. If you went to a Medicaid director 20 years ago and you said what is your job, they would say my job is to pay bills timely, accurately, and efficiently, and basically they did that. If you ask a Medicaid director today what is your job, well, they're part of a governor's health cabinet. They're looking at universal coverage. They're looking at strategies to cover the uninsured. They are looking beyond just paying bills to what are the best treatments and interventions that we can provide? Where do we get a return on the investment? How can we engage consumers? Now can we embrace prevention and wellness programs?

It's an exciting time right now because of a lot of flexibility that's been given to states around health care design. And I would contend that the real leadership for this is not happening within the confines of Washington, D.C., but it's happening in the statehouses throughout the country.

I think the same is true with public child welfare. Welfare administrators are saying, you know, if I could take the resources that it takes to buy foster care and invest in strategies to build stronger families in the beginning, investing in prevention, investing in interventions that help people become better parents up front, then we could save all this money on the back end. But more importantly, children thrive better in families than they do in foster care. It's more than intuitive. It's supported by all the research and by all the evaluations that happen. So what I see happening now are administrators throughout this country, states approaching the federal government just like they did with welfare reform, saying we think we have a better solution based on our local conditions, by the assets and the resources within our community, and our ability to mobilize them.

The other thing that we didn't have 25 years ago, when I was running programs, is we have more supportive technology. It used to be very hard to keep track of all of the records that you needed and the requirements and the rules and regulations when you had six or seven or eight different categorical programs with rules and different requirements. But with computer systems now and the ability to process information, it is much easier, I think, to manage those programs within the compliance rules of the federal government.

Mr. Morales: So Jerry, it sounds like, you know, really workforce strategies are really sort of the key to success here in helping families manage this transition that you describe. But can you give us perhaps some specific examples of programs that are out there that you think are really innovative and are working well?

Mr. Friedman: Well, there are thousands of them. And I think, again, the key was that public administrators were set free to go out and to develop strategies that worked.

You know, one of the things that we used to do, I used to do this when I ran welfare programs, was to go to corporate America and to business and say wouldn't it be nice if you hired somebody off the welfare rolls? You know, it helps the community and it's the right thing to do. Now we can go to corporate America and the business community and say we can help you build your business. We can help your bottom line. We can help your profit. We can do that through tax credits. We can do that through customized job training. We can do that through extended medical assistance coverage and child care subsidies. We can do that through working with new employees to help train them through orientation. So people see this as a better business strategy than they used to as just a social service.

Mr. Morales: So it's about collaboration.

Mr. Friedman: It's about collaboration. It's about partnership. But it's also -- it's about investment. Good public policy, good social policy, good human services policy and making profit don't have to be mutually exclusive principles.

Mr. Morales: That's a very good point.

What emerging technologies hold the most promise for improving human services delivery? We will ask Jerry Friedman, executive director of the American Public Human Services Association, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Jerry Friedman, executive director of the American Public Human Services Association. Also joining us in our conversation is Nicole Gardner, vice president and partner in IBM's public sector social services practice.

Jerry, the goal of working with families in a holistic manner to achieve better outcomes has been around for some time. The change to cross-agency program policy and cross-agency funding streams to support that goal have been somewhat elusive at both the federal and the state levels. Whenever an issue bounces around an industry for so many years and doesn't appear to gain traction, one of two things is usually happening: either, one, the topic is of interest, but there's no real intrinsic value, but the parties sort of enjoy talking about it; or more is happening than we all realize. In your opinion, what's happening here?

Mr. Friedman: Well, I think there's a little bit of both to your question, and we're still kind of defining ourselves in human services in our public policy. Very often we find conflicting things with categorical rules that tend to get in the way of integrated strategies. But again, I tend to be optimistic, partially because of the technology, partially because of welfare reform, and to a great extent through the leadership that's coming through human services that are looking at different and more coordinated strategies. The way that we have partnered with the business community, many states now are actually privatizing casework services, something that just didn't exist before. But they're doing it thoughtfully and rationally and in a way that's devised to get better outcomes. I think that it is still a work in progress, but I think more and more, there is a realization that if we are truly to be investing our human resources wisely, this one-half to one-third of local and state budgets, that we need to have the ability to move beyond all of our individual rules and all of our individual program perspective.

There are huge challenges. First off, if you look at the history of human services, it wasn't like it was formed through some kind of great planning strategy. It seemed like Congress would discover a problem, throw some money at it, and hope that it went away. And the residual effect were all these categorical agencies often competing with each other. They had their own infrastructure. They had their own computer systems. They had their own rules and their own regulations. When you couple that with an advocacy community that's pretty singularly focused, we have advocates around hunger, around developmental disabilities, around mental illness, we don't have advocates for services integration. And yet every one of those programs are adversely affected because there's not a single solution or a single cause of many of these maladies that we have in our society. We've begun to rely a little bit better on technology to get us data and to get us information that tells us where we can invest our resources most effectively.

In the health care arena, there's a lot of work that's going on on electronic medical records. In the course of doing that, I think there's a potential to lay a foundation for further integration of human services in this country. In many areas, there are great demonstrations, but we still as a matter of public policy have not embraced this as the way that we should be doing our thinking and investing.

Ms. Gardner: So in the context, Jerry, of the fact that we're looking at a family as a whole in a holistic way, you mentioned the electronic health record, what are some of the other innovations from a technology perspective that help to break down some of those barriers that exist between the competing organizations and the way that the regulations and the laws have developed?

Mr. Friedman: Well, certainly Internet strategies, looking at ways that people can apply for benefits through the Internet, ways that data can be refreshed, where redundancies can be eliminated, I think have great potential. Many states are developing things like kiosks and automated call centers where they can call in and see whether they're eligible. They can do tests, they can do income tests. All of that is still evolving and still growing, but I think is becoming more and more the industry norm.

There are tools that caseworkers are using that I think are pretty exciting that afford not only greater efficiency, but also greater protections. The state of Alabama has just equipped their child welfare workers with electronic notebooks that do amazing things. Caseworkers can do case notes, they can take photos. They can take photos of children that may have scars and abuses that they can forward to their supervisor to say do we go further with this case? They have GPS so that they know where they're at. They can have a level of safety the caseworkers didn't have before.

Also, you know, for many of the challenges that our clients face, technology is a level playing field. When I was working in Austin, Texas, we had a special project where we refurbished computers. We worked with many of the large computer firms, and we provided these to low-income families that otherwise would not be able to have a computer, and it was just amazing to see what children can do when they're set free in this learning environment through the Internet. Again, it's kind of optimistic. I personally am just still learning how to figure out e-mail, but I've got staff that just do amazing things with computers, and they're always trying to educate me.

There also are ways, I think, that we're being able to process information differently. With the old legacy systems and COBOL language and the way that we had to program, literally taking large business applications and trying to retrofit through different algorithms our human services business, often those things got lost in translation. You know, with decision trees and artificial intelligence and more agile and nimble applications, the potential is there. Looking at outcomes, there are a number of different outcome result systems that are being grown by small companies that are approaching human services, and so I think there's vast potential there.

Ms. Gardner: So any time there's an infusion of technology into an environment that has previously not been able to really do much with it, there are usually barriers and challenges that pop up. So what are some of the big challenges to really taking advantage of emerging technologies in your field?

Mr. Friedman: Well, the biggest one for me, and it's kind of a pet rant, is the process that the federal government has for procuring computer equipment. It's called the APD or the advance planning document process. This is a bureaucratic nightmare that's 40 years old, no longer necessary in my estimation. It was created at a time when I think it was appropriate, when computers and computer applications were relatively exotic, they were relatively new. And the federal government was saying, well, listen, why invest in all of these things? Let's look at have some kind of uniform process and see how we can transfer information back and forth. Also to provide a level of fairness in the competitive bid process.

Well, states now have very robust procurement requirements, every bit as robust as anything that the federal government could do. It stalls the procurement of computer equipment. Because it involves, in many instances, multiple federal agencies, each one can trump the other one in terms of the process. It can take two to three years to get approvals. And in some cases, it's just simply the criteria that they have doesn't make sense. I'll give you one example.

There's a dollar limit that if you exceed -- I think it's $5 million; the dollar amount may have changed because I don't do this every day, but it used to be $5 million -- you had to seek the approval of the federal government. Well, I was in Texas, and I was responsible for a 15,000-person workforce. For me to just routinely replace desktop computers after the depreciation life is gone, I had to go and get approval to do that. Now, ironically, if I wanted to hire 100,000 staff, all I had to do was to put in a state plan amendment. Years ago, the Department of Labor did away with this same process because they realized that it was just antiquated. And I think in many ways, by the time they get the approval, the technology's obsolete.

This is something that we have been striving for for at least the past 15 years, to have this reformed or ended or changed. And I think it's just -- you know, if there's anything that the next administration can do to make life easier for state human services administrators, and especially their chief information officers, it's to absolutely reform this system and to have confidence that states make good, thoughtful business decisions about procuring computer equipment.

Ms. Gardner: So let's talk about something that your organization has been working on specifically, something called the "Organizational Effectiveness Institute, Building the 21st Century Workforce." You started this last May, so can you tell us a little bit about this effort? What was it aimed at and what's happening with it?

Mr. Friedman: We have a training/research/consulting practice at APHSA. In many ways, we needed to be clear about our core competencies and to match that with our members' needs. You know, there are dozens of very, very good consulting firms that do training and consulting in this country. We think that we have a unique niche in that we really understand the business of human services. So we began to do a whole series of evaluation of our own programs, asking our members what their needs were. And essentially they're saying that we need help in looking at organizational effectiveness and then developing good leaders.

And the other thing that has always troubled me as a consumer of consulting services and training was that very often we go to a training program and something nice happens, we put it on a shelf, and we get back and our desk is piled high and we kind of forget what we learned through that session. So we're very much into looking at actual products, being able to take something away from this experience. And so we created this concept of having an institute where our members, our states, and in some cases local organizations, would participate not for a one-shot training session, but through a process that would lead to a product.

Now, the workforce institute was particularly interesting because when we meet with our CEOs and we ask them what are your greatest needs, the issue of staff recruitment, retention, early retirements, building a bench for new leadership, I mean, many of my colleagues are my age, you know, baby boomers that are of retirement age, and we stand to lose a significant amount of institutional knowledge as well as leadership if we don't find some way to address that. Well, what we learned through our needs assessment was that very often human resources personnel offices weren't necessarily being seen as a solution, that personnel rules weren't seen as an asset that can help enable addressing that issue.

And so what we did was that we created this institute, and it lasted for a year. There were four group meetings of all of the participants, but then there was a lot of individual consulting and peer consulting, which was very important, that happened in between those meetings. And the end result was that the human resources directors walked away with a product which was a workforce plan that they could take to their governor's office. We actually field tested this by bringing in a number of retired commissioners, secretaries, and directors of human services and saying to them basically if your human resources director submitted this plan to you, is this something that you would support?

And so the end result of this one year was an actual working workforce plan that drilled down beyond, you know, I need 20 caseworkers because my caseloads are going to get this high, but looking at skill sets. Where do you find them? How do you work with the universities? How do you work with the training centers? How do you help grow internally your own training capacity to have this happen? What kind of array of benefits and training opportunities do we create for our workforce? How do we embed quality improvement in the way that we do business? And so it was beyond just how you do a workforce plan. It was how you actually make a more effective organization.

Mr. Morales: So Jerry, along these lines, to be a bit more specific, what are some of the workforce capacity building challenges faced by public human service agencies, and how does the institute seek to assist participants in strengthening agencies' workforces and human resource capacities?

Mr. Friedman: Well, what we're trying to do is to embed a strategic process in looking at our workforce needs. And that, I think, has been a missing element. I think we've done traditional recruiting and we've gotten people that have credentials. But when we look at the broader strategy of who's coming into human services today and making it a career, quite frankly, I'm a little troubled.

I'm at the tail-end of my career. I'm in my sixties. I was a product of the 1960s and the 1950s, and I was drawn to public service. It wasn't part of my family tradition. I was drawn to public service by the leadership of this country who talked about human services and public service being an honorable thing that should attract the best and the brightest. You know, we had leaders in this country who were great role models, and it troubles me today that we don't kind of have that sense of government as being such an instrument of good. Not to be critical, but when you turn on the radio programs around the country, all you hear is that government wastes this and government does that. I really take exception to that.

I have worked both in corporate America and I have worked in the public sector, and there are challenges in both and there is competence in both, and unfortunately, there's incompetence sometimes in both. But the public business is a little bit unique because it is in the open. And so I think all of that has created an environment where people just aren't as attracted to public service as they used to be. And so what we're trying to do is to rebuild that through reshaping our public image, getting back to the notion that human services is honorable.

We have always known, those of us who got into this, we didn't get into human services for the money. If we did, we made a very dumb decision. We were driven by a different kind of mission, a desire to make a difference in a different kind of way and contribute in a different way. You know, that spirit I think is something that we want to kind of recapture.

Mr. Morales: What about the future of public human services delivery?

We will ask Jerry Friedman, executive director of the American Public Human Services Association, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Jerry Friedman, executive director of the American Public Human Services Association. Also joining us in our conversation from IBM is Nicole Gardner.

Jerry, perhaps you could elaborate on the types of public-private partnerships that your members and affiliates engage in to improve operations or outcomes. And in what areas do you think you would like to enhance or expand these types of collaborations?

Mr. Friedman: Well, that's a very good question. In reality, there has always been, I think, a level of partnership between at least public human services and the private sector. Many of the actual services are provided under contract. Many of the charitable faith-based organizations have been dealing with people with needs, material needs, basic needs, other human services needs for years. So when you look at the array of vast human services networks that are out there, very often, the majority of the programs are actually provided within the private sector. However, recently, there has been more and more of a movement towards privatizing some of the core functions that had traditionally been part of government.

I think what we try to do best as a national association is to work with our members to make sure that they have weighed all of the factors they could consider into whether this is a good decision or not. I think the issue isn't the whos. It's more the issue of the whats, and being clear about what the core competencies are. If government entities are going to be contracting, then I think they need different skill sets, or need to emphasize skill sets a little differently. And I think we have a good example.

Twenty years ago, states ran huge data centers with state employees. In many areas, these are now run by corporate America under contract. What happened, though, in the state information technology world was that the core competencies changed. They changed to project management, contract management, automation planning, quality control. And I think the same needs to happen as we start to look at actual service delivery. But if we're going to be farming these activities out to for-profit or not-for-profit organizations, we need to be real clear about what the expectations are: managing those contracts and those projects effectively. And so I think that's the critical issue. It's not who's doing it, it's what's being done, and is it done with the eye of actually providing an improved service delivery system rather than because it seems to be the local trend.

Mr. Morales: So Jerry, obviously you just opened the door for a discussion on the future. What do you see as some of the emerging trends in social welfare policy over, say, the next 5, 6, 7, 10 years?

Mr. Friedman: Well, I think we're at a very exciting time. Again, I think the lessons that were learned from welfare reform, the demonstration that state and local governments really can manage programs effectively, is continuing to evolve and continuing to grow.

I see a number of different trends. I think the movement towards services integration clearly is happening in a lot of different areas. I think categorical agencies are beginning to realize that it takes a holistic approach in order to address the needs of families. I think more and more, state and local governments are looking how to return on investment. You know, is this the best result that we can get for the amount of money that we are investing? And I think it kind of goes beyond just looking at a program from a cost perspective. I think we need to look at it from an outcome perspective.

The continued advancement in technology throughout the entire human services system, from consumers to clients to the way that we process mega data in this country, I think is continuing to evolve. And what I see happening is that major corporations are now investing specifically in human services applications rather than retrofitting business applications to human services.

I think that there's going to be a continued movement towards consumerism. You know, there should be nothing about me without me. More and more clients are saying and progressive human services professionals are saying I need to involve a client in this decision in order to have the best outcome. And so there is more of a kind of openness and a willingness to do this.

And I think in many ways it could also be a cost driver, particularly in the health care arena. We need to have the costs of what it takes in medical care to be transparent. We need to know what they are. Consumerism can do a great deal to drive down costs. I heard Speaker Newt Gingrich talk about the airline industry, and he was talking about the combination of deregulation and the Internet and things like Expedia and Priceline and all those different things have driven down the cost of air miles from 29 cents a mile down to 10. It's just a stunning thing what competition can do and we need to start having that application in human services. I think continued partnerships and having strategic approaches and better use of data will continue to be a part of it.

And obviously volunteerism. We need to rely on a community not only for the services that they provide, but for the engagement. My experience is that when people become exposed to what happens in a human services agency or in a human services program or even in an institution, they become advocates for it when they begin to see what it's like. So I think that those are some of the major trends. I think the bottom line, though, to all of these things is what it has always been, and that's we have to keep the clients first. We can't lose sight of our purpose and our reason for being in the human services business in the first place. And that's because people that are at our desks are there with multitude of problems. They're in pain, they're in need. And so we can set up these elaborate systems, but we can't lose our heart. And I think that that's a lesson that's always with us, and to always acknowledge the awesome responsibility that we have in human services.

I used to tell my co-workers you know that a keystroke on a computer can make the critical difference as to whether a child goes to bed hungry or nourished, and that's just an awesome responsibility that plays out a million times a day in this country, and we don't take credit for it. We don't talk about how often the systems work. We focus in on the failures rather than our successes. And if we're going to really change the human services industry and have it grow and thrive as a viable part of our society, we need to change the public image. We need to be able to tell that story better.

Ms. Gardner: So continuing our theme of looking into the future, Jerry, from a policy perspective on some of the specific programs, you know, what's coming up for Medicaid, for TANF, for child welfare? What's going to happen over the next year or two?

Mr. Friedman: Well, I wish I had a crystal ball that I could say that, because we're caught in competing dynamics. You know, I think that there's a growing awareness among people who pay taxes that they want to see a return on their investment. And I think there's also a real acknowledgement that people do have human needs, and I think we're going to continue to strive for that perfect balance. But again, you know, I keep going back to the lessons that we learned through welfare reform about personal responsibility, about work opportunities, about empowering communities to make a difference. I think that those will continue to grow.

The health care area I think is fascinating because we really are, I think, in the early stages of a transformation. I see it happening again with the Medicaid directors in this country and the role that they're playing and looking at prevention and wellness programs, and I think that that'll continue to be a part of it.

I know the direction I would like to see Congress in the next administration go, and that again is always to empower states, to give them flexibility, to have administrative simplicity, to keep client needs at the forefront. And I think if we do that, we can continue to have a stronger society.

Again, the return on investment I think is really important. We as a human services industry need to talk about the return on investment that society does get. You know, when we think about the food stamp program, we don't think about what it infuses into an economy. It's not just that the people who are low wage are able to have better nutrition, but what does it mean for the grocers and the growers and those that transport food and how it contributes to a stronger society?

Think of a society without human services, what kind of world we would have. And so we're getting a little better at telling our story. And I truly appreciate the opportunity to be on a show like this to talk to your listeners and to tell the human services story, to share our challenges as well as some of the opportunities. And I'm just very, very grateful for this experience.

Ms. Gardner: Well, we're honored to have you. In the context of the story you just told about the profound good that can be done, children being nourished, families being helped, if you were to get your aspiration realized that Congress would be proactive and positive in its treatment of human services policy and legislation going forward, how would you challenge your members to then take those things and move forward to really meet the challenge of improving service delivery and living up to the picture that you've painted so articulately?

Mr. Friedman: Well, I think two things: to think holistically, how the various parts fit together to a system of care; and secondly, keep the clients first, keep the needs of the children in this country and the families who are struggling in this country. Unfortunately, I can walk out of this nice building in downtown Washington, D.C., and before I hit the next corner, I will be able to see the failures of our society, where people who have been left out and left behind, the homeless population, who aren't afforded, for whatever reasons, the opportunity to participate in the wealth of this great country. You know, we'll always have our work to do. So those are the things, the messages that I would give.

Mr. Morales: Jerry, it's hard not to be moved by your passion and dedication to public human services, so I'm curious, what advice could you give to someone out there who perhaps is thinking about starting a career in public service and perhaps in particular interested in working in the area of public human services?

Mr. Friedman: Well, I think that the best experience really is hands-on. I always encourage people to volunteer, to spend time in public facilities, nursing homes, to talk to people who have needs to see where their strengths and where they can contribute. I think that that's the greatest thing is through the exposure. You know, we appreciate all of the courses in social work and public policy that happen, but I think it's that hands-on experience, that personal passion that somebody can have, and the exhilaration of actually seeing somebody who has improved the quality of their lives because you've been there, because you've been working with them, because you've tutored somebody who was illiterate and now they're job-ready. I mean, I just can't tell you. It's like maybe the equivalent, the public human services equivalent, of hitting a grand-slam home run in a World Series.

One of the greatest things that I get to do sometimes is to go to graduation classes of public welfare agencies, where they've taken people who had not been job-ready and they're out and they're ready to join the workforce or perhaps they're already working, to see the transformation in their lives. They have a client come back to them and say thank you, you made a difference.

Just one quick story. When I was a probation officer, I had a huge caseload. I didn't always I mean, you had to kind of triage. And years after I had left this job, I received a call one night at my house and it was from a man and I could tell he was obviously very emotional. And he asked if I was the probation officer that had his case, you know, 5, 10 years earlier. And I had to really search my memory banks, and indeed, it was and I did remember that. And what he wanted to tell me was that he was in the hospital, his wife had just given birth to his first child, a son, and that he wanted me to know I was the second call that he made -- the first was to his parents -- that he would not have had that thrilling opportunity to be a parent had I not intervened in his life in an early stage when he was struggling with substance abuse. Now, I barely remembered the case and I didn't do great casework. I gave him a choice: you're going to rehab or you go to jail, you know. But obviously it made an impact on this person. I hadn't thought of that case in years, but to get that phone call is something that just stayed with me for the rest of my life.

We don't always know that we make a difference. And so that's what I would tell people, that if they want a career where they can have those kind of rewards and benefits, then human services is a place that they ought to look.

Mr. Morales: That's absolutely wonderful. Jerry, unfortunately, we have reached the end of our time. I want to thank you for fitting us into your busy schedule. But more importantly, Nicole and I would like to thank you for your dedicated service across the many years and roles that you've had in the area of public human services.

Mr. Friedman: Thank you very much. I appreciate it. If people want to find more about the American Public Human Services Association I urge them to take a look at our website. It has up-to-date information on all of the legislative proposals that are happening in Congress. It's a wealth of information, and it's at www.aphsa.org.

Mr. Morales: Great, thank you. This has been The Business of Government Hour, featuring a conversation with Jerry Friedman, executive director of the American Public Human Services Association.

My co-host has been Nicole Gardner, vice president and partner in IBM's public sector social services practice.

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 how 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.

Announcer: 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 businessofgovernment.org. There, you can learn more about our programs and get a transcript of today's conversation.

Until next week, it's businessofgovernment.org.

Originally Broadcast December 1st, 2007

New York , New York

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 businessofgovernment.org.

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. As we continue our effort to engage government executives who are changing the way government does business, we are here on location this morning in New York City.

All across America, small towns and large cities are facing the social realities of homelessness, and the steady increase in demand for homeless services. While providing shelter and services to those in need is critical, the national conversation is shifting from managing to ending homelessness, especially chronic homelessness. New York City has embraced such a goal, and has begun to reshape and expand its services to prevent homelessness in a more comprehensive and coordinated way than ever before. From a system that did little more than provide cots and meals to single adults and families, it is now recognized nationally and internationally for providing quality shelter and related services in humane settings, with a client-centered philosophy.

With us this morning to discuss his agency's efforts in this area is our special guest, Robert Hess, commissioner of the New York City Department of Homeless Services.

Good morning, Rob.

Mr. Hess: Good morning.

Mr. Morales: Also joining us in our conversation from IBM is Shelley Mills-Brinkley, partner in IBM's public sector social services practice.

Good morning, Shelley.

Ms. Mills-Brinkley: Good morning.

Mr. Morales: Rob, let's start off by learning a bit more about your department. Perhaps you could give us an overview of the mission and history of the New York City Department of Homeless Services.

Mr. Hess: Sure. The Department of Homeless Services in New York was created in the early '90s. Before that, we were part of the Human Resources Administration in the city. And the mission is to support individuals and families that are experiencing homelessness in our city, and to help them move from the experience of homelessness back into the community with whatever supports they may need to support them in the community.

Mr. Morales: Rob, can you give us a sense of the scale of this operation? How is the New York City Department of Homeless Services organized? What's the size of its budget, and how many full-time employees do you have?

Mr. Hess: Sure. The Department of Homeless Services has a budget of just under $1 billion a year. We have over 2,300 employees within the Department, and we contract out for services that include about another 20,000 employees that we pay for through contracts across the city in order to support people experiencing homelessness.

Ms. Mills-Brinkley: With that big operation, can you give us an idea of your role as commissioner? And what are your official responsibilities?

Mr. Hess: We are very, very focused in the Bloomberg administration on the mayor's vision. And with respect to homelessness and the reduction thereof, it's the vision of the mayor that we reduce the number of people sleeping on our streets, and we reduce the number of people living in our shelters by two-thirds or more before midnight on December 31, 2009, so we're very clear in our mission and our vision. And everything we do in the Department is geared toward not managing homelessness, but ending it, and so we're very focused on those objectives.

Ms. Mills-Brinkley: So with such a big vision and mission, what are the top three challenges that you see in your position in getting those goals met?

Mr. Hess: I think the biggest challenge is to figure out the strategies that we need to actually get to the kinds of reductions we're talking about. So with respect to people living on our streets that are experiencing chronic homelessness, we've had to develop a whole new set of strategies on the street, to include much better access to housing directly from the streets, and the supportive services that supports people in that housing. With respect to the shelters, we've had to develop a whole new set of rental subsidy programs to help people move quickly out of the shelter system and back into the community with the support that they need. And so the strategies are a little bit different based upon the population, or where people are starting from, but the biggest challenges are really understanding what it will take to help create the reductions in homelessness that we're trying to achieve.

Mr. Morales: Rob, I understand that you've come to New York City via Baltimore in sort of your most recent role. Could you describe your career path for our listeners? How did you even get started in this field?

Mr. Hess: Sure. I spent five years in the Army, and then after that went to work for the Disabled American Veterans in Baltimore; ran one of the largest thrift stores in Baltimore in one of the toughest neighborhoods in Baltimore and did that for 16 years, and really had a thorough understanding and primer, if you will, on poverty and people who live in poverty, and how they're just so resourceful in so many ways, and we really were one of the largest employers of low-income people in Baltimore City, and we were very, very successful. And so went from that to looking at the issue of homeless veterans in Baltimore. And then created a program in Baltimore called the Maryland Center for Veterans Education and Training that actually became I think the national model for how you could support veterans that were on the streets. And, you know, isn't that tragic that so many of our veterans serve our country and protect us and then end up on our streets? We really have to do better as a nation with respect to that. So we had some success with that.

And then I didn't like what I saw with respect to public policy in this country of managing homelessness, and so ran an organization in Maryland called Action for the Homeless, ultimately led an organization called the Center for Poverty Solutions in Maryland, and then moved to Philadelphia when Mayor John Street asked me to join his administration. And we had a lot of success there in reducing the number of people in the streets over a five-year period of time, at which point Mayor Bloomberg asked me to join his administration here in New York, and I've just been honored to do that.

Mr. Morales: Rob, tell me, how have these previous experiences prepared you for your current role here in New York City, and how did they shape your management approach and your leadership style?

Mr. Hess: Well, I think the number one thing it taught me is you really -- in order to understand a problem, in order to understand what's really going on with somebody living on the streets or living in a shelter, you can do all your research, you can look at all the data, but at the end of the day, you really got to sit down and talk to people that are experiencing that situation and better understand what their wants and needs and desires are, and then shape programs to support them and where they want to go, and there's just a lot of examples of that. So that I think has influenced my management style, my leadership style, my thought process in creating programs and policy.

Beyond that, I think in any organization, no matter how small or large, there are some things that are very clear. You know, the idea of empowering the experts, the professionals, within any organization, to be able to move toward a common vision and help them succeed by giving them a lot of support, a lot of communication, a lot of access. And the freedom to take risks is very, very important. Now, we try to take calculated, well-measured risks, but we're very clear that many, many people worked very hard over a long period of time to end homelessness and they haven't been able to do it. We've got to be able to think very differently, very creatively, take some risks, figure out what's working and keep doing what's working, figure out what's not and stop what's not working.

That stopping what's not working is not always easy, especially when you talk about people that have organizations, very good organizations, that may have contracts to do things that aren't working as well. Very often, we're hesitant to say we ought to stop funding that. Well, here in New York and in Philadelphia, we did that, and focused on strategies that worked, and it made a big difference over time.

And so I think it's a combination of all those things. I think at the end of the day, probably the biggest thing is support our staff, be very clear on our vision, our objectives, our timelines, and do everything we can to communicate that over and over and over again, and stay focused on where we're going.

Mr. Morales: You know, many times in government it's easy to take a safe position, but it sounds like you're really driving towards a culture of innovation and of risk-taking.

Mr. Hess: Absolutely right. The thing that comes with that, of course, is change. And any time you're driving change, you can't do that without creating a certain amount of stress or tension, and so you have to be willing to accept that. And then you have to kind of manage the change and the stress that it's creating in a way that it's productive stress and doesn't become counterproductive. And so that's a little bit of the management balancing act that we try to obtain as we move toward our vision.

Mr. Morales: Great.

What about Mayor Bloomberg's plan to end chronic homelessness in New York City?

We will ask Robert Hess, commissioner of the New York City Department of Homeless Services, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Robert Hess, commissioner of the New York City Department of Homeless Services.

Also joining us in our conversation from IBM is Shelley Mills-Brinkley.

Rob, a typical perception about homelessness is that a homeless person is predominantly male, perhaps mentally ill, and living on the street. Perhaps you could shed some light and clarify some of these misperceptions by telling us what population represents the majority that your agency serves. Who's most at risk, and what events precipitate or cause individuals or families to become homeless?

Mr. Hess: There's no question that the largest majority of people experiencing homelessness we see are women and children, families with children. The second fastest-growing group are adult families, or what we call "couples." Actually, the smallest group, and the group that we're having the most success in eliminating homelessness, is single adults that you described.

Since we announced -- the mayor announced the five-year plan, we've seen a 19 percent decrease in single adults. And we're actually at the lowest level with single adults in our system that we've been since 2002, and we're continuing to go down. And so we feel very, very good about that. We've seen a 15 percent decrease in the number of individuals, primarily single males, living on our streets. But at the same time, we've seen a little bit of growth in families with children and adult couples, and so they are by far the fastest-growing and the majority of people that we see.

Mr. Morales: That's interesting. It must take much different strategies to address those three groups that you described.

Mr. Hess: It really does. And the other thing that you see is more and more young moms with a couple of children entering the shelter system. Part of that you can attribute to a tougher rental market, and part of that you can attribute to the really low-wage jobs that are available at an entry level. But the gap between what people need to earn in order to pay the rent has really gotten very, very large.

Mr. Morales: Could you give us a brief overview of Mayor Bloomberg's five-year plan to end chronic homelessness? Specifically, give us some background on its development, and a high-level outline of the nine-point action plan that seeks to reshape the city's approach to assisting homeless and those at risk.

Mr. Hess: Yeah, the mayor and Commissioner Linda Gibbs, who's now deputy mayor, really spent a lot of time engaging leaders across New York in order to bring them together on a very high level and think through the kinds of strategies we need to move from managing homelessness to ending it, and set some very aggressive targets. And in fact, the group came back and developed a plan that would get the 2/3 reductions, both the number of people in the streets and in our shelter system, within 10 years. And the mayor reviewed that plan and said the plan is great, it's exactly what we should be doing, but I don't have 10 years. We have term limits here in New York. I've got five years left.

So in the space of just a few very quick minutes, the plan went from a 10-year plan to a 5-year plan because the mayor said we need to make ourselves accountable for this and not leave this important work to any future administrations. And so all the points that were raised kind of accelerated in importance, and the timelines accelerated very quickly.

And so what we have learned with the support of all those high-level folks is that this plan needs to be dynamic. The strategies are changing by the month. I don't think that there's many of the initial strategies that we have not replaced with new-and-improved versions of those strategies or just very new and creative ideas that weren't even thought of by the initial group.

Let me give you an example. I was surprised to learn very early on in my tenure here that we had 800 individuals in the shelter system that had been in the shelter system in New York City for between 8 and 20 years. Can you imagine living in a shelter system in any city in this country for the better part of a generation? And yet many people were. And so once we recognized that, we then went to work in an aggressive way -- a 100-day initiative to place all of those individuals into permanent or permanent-supportive housing. And we did it. We then found that we had 46 families that had been in our shelter system for more than five years. In that same 100 days, we moved those 46 families into permanent housing.

And so we made a lot of progress, but that particular strategy could not have been foreseen by those developing the plan. It was only digging deep and drilling deep into the data to understand who was in our system that allowed us to identify those populations, develop strategies very quickly, enact those strategies, and then get that job done. The beauty of this kind of technique, however, is that we then learned a lot of things that we can apply to other families that are in our system.

Mr. Morales: That's just fantastic, and you've alluded to some of the great successes that your agency has had. So what are some of the big-ticket items that still remain to be done to meet the 2009 goal?

Mr. Hess: Well, I think most of them are in place. We recently created four new housing subsidies. We don't have a one-size-fits-all population, and so we've got four new strategies. We call them the "Advantage New York" suite of housing subsidies. We'll spend $129 million this year on those housing subsidies alone. But they will allow people to move out of shelters more quickly, move back into the community, get the support that they need to become self-sufficient or move towards self-sufficiency, and we think that's very important.

We have added a lot of money to community-based prevention sites. And so we'll soon be spending about $20 million a year to develop these community-based sites. And we'll be attaching Section 8 subsidies and other subsidies to those sites, that we'll be spending well in excess of another $100 million a year on community-based prevention. And so those are some of the kinds of big-ticket items that we've put into place to help move us toward our objective.

Ms. Mills-Brinkley: Can you tell us a little bit more about your new homeless outreach strategy? How does it represent a redesign of the street outreach services? And I understand that you've implemented a new point -- a single point of contact, if you will, in all five boroughs.

Mr. Hess: Yes. I mean, this is very exciting. I mean, one of the first things I did upon arriving in New York some year and a half ago was to spend a night a week for the first couple of months on the streets across the five boroughs of the city with various outreach teams, see what's going on, talk to people living on our streets, watch our outreach teams in action. And what I concluded is that we had a lot of well-meaning outreach teams doing the best they could with limited resources, without any ability to collect or share data in a meaningful way, without access to the kind of housing resources that they needed to help people move off the streets. And so it was clear to me that we weren't going to get from where we were to our target of reducing the people in the streets by two-thirds or more using the strategies that were in place. And I'll spend a minute just telling you what we did about that, because I think it's instructive of how we do business.

So I couldn't even figure out, because these contracts were across various city departments, how many outreach teams we had. So I decided to hold a meeting one morning and invite every outreach team to the meeting. The only ticket to admittance to the meeting was you were a line outreach worker, you worked on the streets. No supervisors, no managers, no executive directors. And I just went to see who was going to show up. It turns out 160 outreach workers showed up.

And so I said to them, look, our vision's very straightforward. There's 4,200 people living on the streets today. Before midnight on December 31, 2009, we need to get down below 1,429 people living on the streets. Tell me how to do it. Tell me what works, what doesn't work. What would you need to accomplish that lofty objective?

And we spent the next couple of hours listening to outreach workers tell us what worked, what didn't work, and what they would need; captured it all on flipcharts; sent all the outreach teams to lunch; reorganized all of those charts in priority order. And then when they came back from lunch, we did what everybody's had done to them: We gave them each three or four sticky-colored circles and said go vote for the things you think we should -- or the highest priority. They did that.

And then in the afternoon, we invited the outreach workers back in with all their bosses: the supervisors, the directors, the executive directors. And I said to the group this is what I heard this morning. In order to get from 4,200 to 1,400, we'll never get there doing what we're doing for these reasons that we heard, and so here's what we're going to do. I'm going to terminate all your contracts and we're going to put out a new concept paper and then a new RFP and have organizations apply. And we're going to have one single point of accountability in each borough with a plan. It can be a multidisciplinary plan. You can have as many subcontractors as you want. But we're going to fund a plan that will get us to the target by the specified time in each borough in this city.

And as you can imagine, there was a little bit of grumbling to start with. And once we got beyond that, a remarkable thing happened. Providers started talking together and working together to develop these plans to respond to the RFP, and many of these providers had not worked together before. And what came out of it was an amazing competition. And it took the better part of a year, but currently today in place in this city on the streets are very innovative, very cooperative, resource-rich efforts with absolute plans, with absolute targets in every borough, one single point of accountability. And so now we're organized in a way to get the job done.

While we went through that process, though, we couldn't lose any time, and so we did two additional things. The first thing we did is we began work on a handheld wireless device that every outreach worker can now have that collects and shares data in real time, so that nobody had to worry about when the last time somebody was contacted or tried to ask questions, you know, of somebody on the street for the thirtieth time. Can do it once, get that data in, and share it.

The other thing we did during that year was we looked around the city and we said we've got encampments in this city that are just a disgrace. We went around and took pictures of all 72 encampments. We found 72 across the 5 boroughs, went to the mayor and said, Mayor, this is the city today. And he said that's not good. What are we going to do about these encampments?

We said, well, we want to get all city departments working together that are necessary, and outreach teams, and go out and end the need for anybody to sleep in these unhealthy encampments. The mayor said do it; gave us a year to do it. We did it in six months. So there's no encampments left in the city of New York at the moment. Every now and then, one will spring up and we'll go address it very quickly. But we used that learning in how to kind of end these horrible encampments and house people in those encampments as lessons learned that now inform the new strategies that are occurring on our streets. And so that whole process really informs how we are creating the strategies to move toward our target.

Ms. Mills-Brinkley: And of course, preventive care is part of the whole strategy as well, because you have to prevent the whole incident of homelessness from continuing. The old adage, "An ounce of prevention may be worth a pound of cure." What are you doing in the prevention area, if you will?

Mr. Hess: You know, that's just really very exciting. What we did in prevention is we looked across the city and we said we've got six community districts where a very high percentage of people in our shelter system come from. And so we put what we call "home-based" or "community-based" prevention centers in each of those six community districts, and that was about two years ago. And we gave those providers wide range in how they would use the money we gave them to prevent people from having to enter the shelter system and help people stay in their home stably. And here's what happened: in those six community districts, the percentage of people entering the shelter system went down, while at the same time, the community districts that did not have prevention services available to them, sadly, went up.

And so what did we learn from that? We ought to have prevention all over the city. And so now, as we speak, we're ready to award contracts all across the city of New York to put home-based, community-based prevention in all of those locations across the city, so we can support anybody that needs it, and try to bring down the number of people entering a shelter from across the city. Much better outcome to intervene on the front end and help people stay in their housing.

Now, the other thing we decided to do with our prevention sites is attach our Section 8 priority certificates, our federal housing subsidies, to those sites. So historically, people, sadly, have entered the shelter system, in some cases, in New York City in order to try to get a housing subsidy, because they need it. We don't want them to have to go through that. So we've attached about 3,000 Section 8 certificates for access only by our home-based providers. And so I think that's making a big difference as well.

Mr. Morales: That's fantastic, Rob, and I love the enthusiasm here. Now, you mentioned earlier a little bit about Advantage New York. So what are the benefits of this program, and how does it differ from the city's previously rental subsidy program called "Housing Stability Plus?"

Mr. Hess: Well, I don't talk about Housing Stability Plus anymore. But if I did, I would tell you that that was a program that was well-intentioned, served our needs for a period of time, but had some unintended consequences associated with it. So if I was to talk about it, which of course I don't anymore, I would probably tell you that you had to be on public assistance in order to receive the rental subsidy. And so if you were out and in an apartment and you had any disruption to your public assistance, the rent didn't get paid that month. And that, of course, made landlords crabby when they don't get paid. And so that was one disincentive.

A second disincentive was, in order to stay on public assistance, you couldn't earn over $8.50 an hour. Well, that's a problem. We need people out working and earning, and we don't want to disrupt their rent because they're earning too much. And so there were some things in there that just didn't work as well as we'd like, and so we moved from that to our suite of Advantage New York housing subsidies, which we think are much stronger.

Now, the first premise we used -- and people told me this as I visited shelters all over the city and said what's working with HSP and what do you need that you're not getting and what would be the perfect housing subsidy and all the rest, what people told me overwhelmingly was they wanted to work. People want to work. They want to be able to pay their own bills. But they need jobs that pay enough for them to be able to pay their own bills, or they need a combination of being at work and a little bit of a housing subsidy to get that done.

And so the first Advantage New York program we created is called "Work Advantage." And here's how it works: you're in the shelter system for 90 days, you're working for 30 days, at least 30 days, at at least 20 hours a week at a minimum wage or higher job. Once you've accomplished just those basic criteria, we give you a letter that says you're eligible for Work Advantage. At that point, that family goes out and finds an apartment, tells us where that apartment is. We go out and inspect that apartment to Section 8 standards, the HUD standards, because we want to be sure people are moving into a quality apartment.

Once that happens, the family moves out into the apartment. We're going to pay the rent for at least a year and maybe two, but we're going to ask that family to do three things. Keep working, try to expand their hours and expand their earnings the best they can.

Second, open a checking account. We're paying the rent, so we want them to put some money in a checking account and write a check to the landlord every month for $50. Not much, but the experts tell us we're much better off if that family gets in the habit of making a rent payment every month. So even though it's 50 bucks, it's important to get into that habit.

The third thing we ask them to do is open a savings account. And into that savings account, again, because we're paying the rent, we ask folks to put the value of between 10 and 20 percent of that rent into a savings account every month. So if the rent's $1,000, put between $100 and $200 a month into a savings account. Why? Because there's going to be rainy day, and when that rainy day happens, we don't want people to have to run back to the shelter system. We want people to be able to weather that storm and stay in stable housing. And so those three things are very important.

Now, if toward the end of the year that family says to us thank you very much, this was great, we're fine on our own from here on, we don't leave it at that. We do two more things, and this has never been done in this country before, I don't believe.

The first thing we do is say to that family, okay, you paid $50 a month to the landlord. That's $600. We're going to write you a check for $600 so you can add to your savings account. We're going to reimburse you that money you paid your landlord.

The second thing, if you put $200 a month into your savings account, 20 percent of the value of your rent, and you've got $2,400 in savings, we're going to write you a check and match that. So at the end of that year, when you're ready to make it on your own, you're going to have you could have as much as $5,000 in the bank. We think that's very exciting. We think that will help many families. It gives them the hand-up that they need and supports the work that they've put into that first year, even at low-pay wage paying jobs in order to be moved towards self-sufficiency in a real way. Real hope.

Now, not every family's going to make it over a year. And so for families that are playing by the rules but still can't make ends meet, maybe there's been some fits and starts in the job market, maybe hours go up and down, who knows? We'll extend them for a second year, same deal. So at the end of two years, they could have up to $10,000 in the bank. And we think most families will be fine after that.

But there'll still be a small segment of families that'll need some additional help. And for them, we tie them into what? Home-based, community-based prevention sites to work with them, to move them to another program if, despite their best efforts and ours, they couldn't get to self-sufficiency after two years. We think this is very exciting. We don't want to see those families come back to the shelter system, because that's not a highest and best outcome for anybody. That's Work Advantage.

And you say, okay, so that's good, but what if you can't work? If you can't work, we have what we call "Fixed Income Advantage." If you're on SSI, SSDI, fixed income, can't work, never be able to pay the rent in New York City on that little bit of income, we're going to give you a letter and move you out. You go find an apartment; we're going to inspect it. You move out, we'll pay your rent for up to a year. But the day you move out of shelter, we give you a home-based after-care worker to work with you to get a Section 8 certificate with our priority, the top priority. The idea being you move out immediately, don't have to stay in shelter, we get a Section 8 for you. We flip the funding in place over the course of the year, even language in the lease so it can flip from our funding, local funding through Advantage, to Section 8 funding, so the family doesn't have to move. And they ultimately end up with a long-term subsidy because they need that. That's Fixed Income Advantage.

Two more. This is very exciting. One is Children's Advantage. We take the list of our families and give all that information to the child welfare system. In some families, the child welfare system comes back and says to us you know what? You know, some of these have got kids in foster care, there's other issues going on here. This family really doesn't need to be focused on work just yet. We need to focus on giving them the support they need to bring their family back together. So for that family, we give them a Children's Advantage letter. They move out, like Fixed Advantage; find an apartment; we inspect it; they move out. Child welfare system works with them to reunite their family, and we get them a Section 8 in place because they're going to need some long-term support.

Fourth group, Short-Term Advantage. Now, this is interesting and it's very sad in many ways. We have a significant number of families in our shelter system that have -- their income level's fine, but they ran into a little bit of a pothole in the road, maybe got evicted, have short-term problems, but they're still working, they still have good income. To those families we say go out and find an apartment. An apartment can be in New York City or it can be outside of New York City, but find an apartment with a rent level that you can afford to pay given your income, and bring us back a copy of the lease. And there, we recognize they need a little bit of a hand-up to make it. And so when they bring us back a copy of that lease, we'll pay the landlord the first four months' rent, we'll pay the security deposit, we'll pay the broker's fees, and we'll give that family a furniture allowance.

Now, we've moved over 300 families out of the shelter system in New York City using Short-Term Advantage when we started the pilot last summer, and not one of those families has returned to the shelter system. Not one. It's very exciting.

And, you know, you talk about the numbers and you say that's great, but when it's Mrs. Jones, who was living in a shelter system with two kids and now has her own keys and is out there doing so well in the community because of this, and was working all along, she just ran into a little pothole, we gave her a little bit of a hand-up. And she's just so appreciative, and that family is so much better off, it really makes a big difference.

Mr. Morales: That's fantastic. I mean clearly, this is a model of teaching and providing people the tools to help themselves, and you've tailored this to the individual needs as opposed to a cookie-cutter approach to your programs. That's fantastic.

What about delivering homeless and social services in the wake of a natural or manmade disaster?

We will ask Rob Hess, commissioner of the New York City Department of Homeless Services, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Robert Hess, commissioner of the New York City Department of Homeless Services.

Also joining us in our conversation from IBM is Shelley Mills-Brinkley.

Rob, New York City has become synonymous with emergency response and the lessons learned from the 9/11 disaster. Could you elaborate on your efforts to plan and prepare for future emergency situations? Specifically, how is New York City preparing to deliver homeless and social services in the event of a natural or a manmade disaster? And what are some of the key lessons learned from previous experiences that are being brought to bear in your planning?

Mr. Hess: You know, that's really a loaded question in so many ways. I think in the post-Katrina era -- especially in the post-9/11 era, but more so the post-Katrina era, local jurisdictions have realized that we may not always be able to rely for initial response as quickly as we might like from, say, the federal government. And I don't mean that as a criticism of any federal agency.

Having said that, the mayor here, Mayor Bloomberg, has tasked us to be able to provide initial support to New Yorkers in the event of any natural or other disaster that might occur. And so our department has worked very closely with the Office of Emergency Management and other city departments, especially social service departments, to craft a plan whereby we could house in the worst-case emergency -- which frankly, I hope we never have to unveil -- but we could house up to 600,000 New Yorkers after an event. And we would do that by opening up to 65 evacuation centers, up to 511 shelters, and providing meals and support safely to over 600,000 New Yorkers. And I think if we did that, our shelter system would be the sixteenth or seventeenth largest city in America. And so again, we certainly hope that we never have to do that, but we are training city employees to be able to meet that mission should it ever become necessary.

And so what does that mean? That means we have to train about 70,000 New York employees. We would need 17,000 employees on every shift, and we would have 12-hour shifts for as long as an event were to last. We've had to begin stockpiling supplies, work very closely with the Department of Education to figure out what schools we could use, and with the police for security and all the rest. And so it is a huge, huge planning and logistical undertaking that the mayor has tasked us to do. And again, working with OEM and other city agencies, we're well on the way to getting there. We've trained thousands of city staff just in the last three or four months. And so we view it as a coastal storm planned response, but it could be rolled out for any emergency.

One of the interesting things that I learned in this process is that New York City is one of the three most likely targets to a major Category 3 or 4 storm. Who knew? I certainly didn't. After I guess Florida and New Orleans, New York City is the most likely place that such a storm could hit. And so we're preparing for that, but we also understand that we have responsibility in any other event, and so we're training now all the time. In fact, we'll be sending a contingent from DHS along with other New York City contingents to California to work on the sheltering system there around the -- on the wildfire that occurred there. And so we will continue to look for other training opportunities around the country, and benefit from that knowledge as well to inform how we will meet the mayor's goal of being able to house New Yorkers here in the event of a catastrophe.

Mr. Morales: Let's hope that we never need to activate that plan.

An independent research organization called Public Agenda recently released a report entitled, "Compassion, Concern, and Conflicted Feelings: New Yorkers on Homelessness and Housing." First, what are some of the key findings in this report? And second, to what extent does this independent research firm confirm that you're on the right track or need to go in a different direction?

Mr. Hess: Well, this is a very interesting report. I mean, largely what they found was that New Yorkers are with us. New Yorkers support the resources, the work that we're doing to help end homelessness. They think ending homelessness is the right approach. And they also think that people that are experiencing homelessness have to take some personal responsibility as well. And so if we create guidelines for coming in to apply for shelter and other things, the public supports that. But at the end of the day, the public, based upon this report sort of confirms, they're willing to put extra resources, extra time, extra energy into their neighbors that are less fortunate and provide great services that end homelessness, but there also has to be a balance, and the balance is on the side of some personal responsibility being accepted by those that are receiving those benefits.

Ms. Mills-Brinkley: Speaking about compassion and concern, I'd like to turn our attention here for a minute to the veterans, and I know you spoke earlier about what you did previously in working with the veterans population in Maryland. According to the National Coalition of Homeless Veterans, NCHV, veterans returning from active duty often face an array of problems during the transition from military to civilian life, which places them at risk for homelessness. Would you elaborate on the programs you have in place here in the city to address the homeless veterans?

Mr. Hess: Look, I am just so proud of our mayor and then-VA Sec. Nicholson, who came together last December and said we're going to end the need for any veteran in New York City to need to sleep on our streets or to enter our shelter system. The mayor asked me to co-chair a task force on this issue with Jim Farsetta, who is our VA regional director. And I have to say that Jim and his staff are just great partners; worked together with us very closely. We'll before long begin rolling out the strategies that we believe before the end of this mayor's administration will eliminate the need for any veteran to sleep on our streets, or any veteran to sleep in our shelter system. We can do better than that and we should. We owe it to those veterans. And I know the Veterans Administration is committed to that. I know the mayor is committed to that. And so this administration will work with the VA to get that done, and we're just very proud of those efforts.

What a tragedy that any veteran who serves this nation would now walk our streets. We just have to do better than that. We will in this city.

Ms. Mills-Brinkley: Thank you. When you're talking about any of these populations, a lot of times they need multiple types of services in order to end their homeless situation. Would you elaborate on your working relationship with other city social services agencies, such as the city's Human Resource Administration and Department of Social Services? You talked earlier about working with Child Welfare. That would be under the Administration of Children's Services. Can you talk about the collaboration and coordination of services?

Mr. Hess: Yeah, let me do that in kind of two ways. First, let me take you back to the encampment discussion we had earlier. What I didn't spend much time on was talking about I talked about the six months it took us to eliminate the encampments. What I didn't talk about is the three months prior to that, it took us to get 12 city and state departments working together to figure out how we were going to go deal with these encampments in a humane, social service-oriented way. But we did that: brought city and state departments as diverse as the Department of Transportation, Department of Sanitation, police, fire, parks, and others together in a coordinated way, and that effort continues to this day. And so we can be very proud of that in this city, and it's an example of how these really are intergovernmental efforts.

With respect to social services, we're very fortunate in this city to have a deputy mayor for social services, Linda Gibbs, who, under her leadership, all the social service commissioners report to. And we work very closely with each other as a result. And so there's really no issue that can't be talked about or dealt with or strategies created across departments.

For example, when we created our new Advantage subsidy programs, not only do our clients benefit from that, but the Human Resources Administration clients that are in domestic violence facilities can benefit from that. There are some families that are identified by ACS that benefit from that. And so we try to do things collaboratively across agencies in a way that you don't always see. And I really would say that the mayor creating a deputy mayor position for that purpose has really made a big difference in the city.

Ms. Mills-Brinkley: Wonderful. So talk to me a little bit about the McKinney-Vento Homeless Assistance Act. Is that a tool that you use as well in ending homelessness?

Mr. Hess: It's a very important tool. Now, as you know, that's one of the primary funding sources for homelessness services across this nation, and so we use it well. I mean here, we use it to renew programs that are working in our community, but we also use any additional dollars we're able to scrape together out of that competition to fund supportive services for all of our supportive housing programs.

You know, the mayor here committed to adding 12,000 units of supportive housing across the city over a 10-year period. Well, the bricks and mortar is one piece to that, but then you need the service side. You need to be able to provide the service dollars to support all the families and individuals that'll be in that supportive housing. And we use the Shelter Plus Care portions of the McKinney funding in order to do that. And so it's a very important funding source for us.

Mr. Morales: Now, Rob, you're obviously engaged in solving a very complex and multidimensional issue, and you spoke earlier about coordinating multiple city agencies and organizations, but perhaps you could elaborate on the kinds of public-private partnerships that you engage to improve outcomes. And in what areas would you like to perhaps either enhance or expand these types of public-private collaborations?

Mr. Hess: That's such a broad question. There are so many areas we could take that down, but let me to say to begin with that much of what we do, we do through contracts with nonprofit providers. And in New York City, we have some of the best nonprofit providers in the country, I think. That makes our job much easier, when you can reach out and contract with a provider you know is going to get the job done.

Those providers also have boards of directors that have high-level leaders from across our city, and so they're being informed through their membership on boards of directors of nonprofits. And that education is very important to us, because then as we reach out to the business community and others, they have a much keener understanding of what we're trying to accomplish and how they might be able to help us in a variety of ways. And so I think that's very important.

You know, in this city, the mayor has created a Commission on Poverty to be able to reduce the level of poverty across the city, and do some very creative things with respect to cash incentives. And so the foundation and the private sector has stepped up in a very big way to support this particular initiative of the mayor so that we can try some new and innovative things that have worked in Mexico and other places in order to reduce the poverty rate in our city. And so all of that helps us. And so there's just so many of these relationships.

I mean, government, the best of governments, can't do very much by itself. We really need the public support. We really need the nonprofit community working closely with us in support of our goals. We really need the business community, the foundation community, the academic community, all working toward common visions when you have visions that are as bold and aggressive as we have in this city.

Mr. Morales: That's fantastic.

What does the future hold for the New York City Department of Homeless Services?

We will ask Robert Hess, commissioner of the New York City Department of Homeless Services, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Rob Hess, commissioner of the New York City Department of Homeless Services.

Also joining us in our conversation from IBM is Shelley Mills-Brinkley.

Rob, maintaining a highly skilled results-oriented workforce has got to be key to the success of any organization, especially yours. Can you give us an overview of your agency's human capital strategy? What are some of the steps being taken to attract and maintain a high-quality technical and professional workforce?

Mr. Hess: Well, we do a number of things. First, we are so fortunate to be in New York City, that when we have senior-level positions, we typically attract applications from around the country, and in some cases, around the world. And so the level of talent we're able to attract is just remarkable. And part of that is I think we're probably the largest department of our kind, certainly in our country and perhaps in the world, and so that helps us.

But we do do some other things as well. I mean, we have a summer intern program where we'll have we'll invite around 50 or 60 grad students and undergrad students from around the country to join us for the summer. And so we look for obviously the best and the brightest. I think this past summer, we had folks from 15 or 20 different states that came in and spent the summer with us in everything from my office through our law department, through policy and planning, to the operational divisions. And so we really have just a remarkable group of young people that are extraordinarily talented with us every summer. And not surprisingly, some of those folks actually come back as our staff. We recruit folks out of that pool on occasion.

We also have a variety of other programs that come to us from a variety of ways. So we'll have interns throughout the regular school year as well. And so we really have been able to attract a very high level of talent.

Mr. Morales: That's fantastic. It must be a wonderful experience for those students that come over for three months of their break.

Mr. Hess: You know, not just for them. It's a wonderful experience for us to have fresh eyes come in and kind of look at things and question what we're doing, and we give them every opportunity to do that. The only rule at DHS is don't come in there to punch a timecard and do your eight hours. We want your mind. You know, if you're not contributing by providing some intellectual capital, you're in the wrong place.

Mr. Morales: That's great.

I'd like to sort of transition now and look towards the future. What are some of the major opportunities and challenges that your organization will encounter in the future? And how do you envision your agency will evolve over, say, the next three to five years?

Mr. Hess: Well, I think the challenges are not unique to New York City. I think the challenges are the kind of challenges that we need to grapple with as a nation. You know, there is a growing divide between kind of the haves and the have-nots, and I think we just need to be honest about that. I think we have seen a shrinking pool of affordable housing across this country, and I think we need to be honest about that. I think we've seen a much greater gap between entry-level wages and housing costs in almost every city, if not every city, in this country, and we need to be honest about that. And I would hope that we will begin to see some real discussion on the federal level, a real national dialogue on some of these issues that will help us figure this out, because we can.

I mean, if we look back just over the last 40 years, we've seen things like the G.I. Bill. Well, when I left the Army, I didn't have much money, right, didn't get a high-paying job, did not have a college education. But because of my military service and the G.I. Bill, I could go to school at night while I worked during the day and get my degree. When I got married, I think using the VA benefits through the G.I. Bill, I actually put $500 down to buy our first house. Those opportunities aren't there in quite the same way they were for me a few years ago, and so I think we need to think about that as a country.

Things like the CETA program and other kinds of big-work programs that allowed employers to take a chance and bring employees in to see how good they could be just aren't as readily available. And so I think there's things that we could do with respect to federal and national policy that would make it much less likely that people would experience homelessness, and I think we ought to have that dialogue. And I'm not sure that we had enough of that dialogue over the last 10 or 15 or 20 years.

Ms. Mills-Brinkley: So earlier, you were talking about giving staff handheld devices to use in the field in order to bridge the conversation gap that may have happened if you don't have those. To what extent has technology advances enabled your agency to be more effective and efficient in meeting your noble goal? And what technology do you see as the most promising going forward?

Mr. Hess: Well, you mentioned the handheld, so let me stick with that for a minute, because this is very exciting. You know, it's an absolute tragedy to me when someone living on the streets dies in view, in public view, because of very cold weather, for example. I've always felt that we could do better than that, and we have to do better than that as a city. And so the handheld devices, in addition to doing the great data collection that we talked about, also now take advantage of GPS. So if you're an outreach worker and you see me sleeping on the streets and it's very cold weather and you check me to make sure I'm okay, I'm not a threat to myself in terms of the weather and what could happen to me, you automatically are pinpointing my location and date and time stamping your contact with me. And that then, by technology, can be transmitted to a command dispatch map and date and time stamped.

And so maybe it's green right after you contact me. Maybe our medical professional will say given the weather outside, we'd have to check on me again within two hours to make sure I'm still okay. Right? Maybe in an hour and a half that green dot turns yellow and a dispatcher knows he needs to get somebody back to me. And maybe if it's two hours, it turns red, and we know we got to get somebody back there quickly to make sure that I'm okay.

So my point is that utilizing the technology that we're developing, we will save lives on the streets of this city during bad weather conditions, and other times as well.

Mr. Morales: That's very exciting.

So given all the efforts that are underway, I have to ask, what can ordinary citizens of New York do to help contribute to your efforts within the agency? And perhaps you could tell us just very simply, what are three ways in which the average citizen could help overcome this issue of homelessness?

Mr. Hess: Well, I think there's a couple things that folks can do. I mean, first and foremost, if you see somebody on the street that looks like they need help and you're in New York City, dial 311. You know, take the time to let us know and we will dispatch an outreach team or other appropriate professionals and make sure that individual is okay and give him -- offer him support, offer him the ability to move indoors. That's number one.

I think number two, acknowledge people experiencing homelessness as human beings. Too often, you sit and watch and people just walk by and never even make eye contact with somebody that may be living on the streets, so make eye contact. If you're in the habit of saying good morning or good evening to folks, do that. That's a big step.

If you want to help with the issue generally, you can visit a shelter nearby, take a tour. If you feel comfortable, talk to people. Figure out what your own comfort level is and then push that a little bit. Maybe you go in once a week and sit down and read a book to a child that's experiencing homelessness living in a shelter. But somehow get engaged and better understand the issue and figure out what you can do and what you want to do to help become part of the solution. And if people would do that, I think it would make a huge, huge difference.

Mr. Morales: That's great advice.

Now, Rob, your career in public service has been marked by passion, which is clearly coming through in this interview, and your dedication to a very, very critical national issue. What advice would you give perhaps a person who was thinking about a career in public service, and in particular, someone who may be interested in ending chronic homelessness and working with those who are most at risk?

Mr. Hess: I guess the advice I would give is, first of all, find a career path that you can be passionate about. If you're not passionate about it and it's just a job to collect a paycheck, it seems to me that would be a terrible way to spend a career, so find something you can be passionate about. And then try to leave your preconceived notions to the side and learn as much as you can. And you're always better off listening than talking. If you can start there, even things that you hear that you may absolutely disagree with at first blush, give them a chance. Let it sink in and try to understand why that individual is saying whatever they're saying to you. Why are they saying that? Why do they believe that? What's going on with them that makes that real to them? And if you can do that, you can really then understand issues in a very different way, and figure out how to move towards solutions over time to complicated problems.

Mr. Morales: That certainly goes back to the story you told us when you allowed the 160 outreach workers to sit and just talk to you as opposed to having all their supervisors there and getting a different perspective.

Mr. Hess: Look, they're the experts. We just want to take the best experts we can get, bring them together, figure out the right strategies, and then we want to support them in those strategies.

Mr. Morales: That's great.

Robert, that's obviously great advice. Unfortunately, we have reached the end of our time. I want to thank you for fitting us into your busy schedule, but more importantly, Shelley and I would like to thank you for your dedicated service to the great city of New York in helping to alleviate the plight of homelessness.

Mr. Hess: Thank you so much. And I just want to assure your listening public that we're going to do everything we can in the city of New York, under the leadership of Mayor Michael Bloomberg, to move towards eliminating the need for people to sleep on our streets and our shelters. And we're going to drive toward that two-thirds reduction that we talked about, and we're going to work every day and every hour between now and midnight on December 31, 2009 to get this job done. We owe it to the citizens of New York, we owe it to those experiencing homelessness, and we're not going to waste a minute along the way.

Mr. Morales: Fantastic.

This has been The Business of Government Hour, featuring a conversation with Robert Hess, commissioner of the New York City Department of Homeless Services.

My co-host has been Shelley Mills-Brinkley, partner in IBM's public sector social services practice.

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 how 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.

Voice-Over: 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 businessofgovernment.org. There, you can learn more about our programs and get a transcript of today's conversation.

Until next week, it's businessofgovernment.org.

Originally Broadcast December 8, 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 businessofgovernment.org.

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.

In many respects, we are a nation at a crossroads. In the delivery of critical human service programs, policymakers and managers must consider issues such as fundamental reform, funding and financing, and program flexibility to focus on outcome measures and not just the process. In the end, the success of human service programs is measured by the health and well-being of this country's citizens.

As part of a series of discussions on managing human service programs, we have broadened our reach in this space and are honored to welcome our special guest this morning, Jerry Friedman, executive director of the American Public Human Services Association.

Good morning, Jerry.

Mr. Friedman: Good morning, Albert. It's a real pleasure to be here.

Mr. Morales: Also joining us in our conversation is Nicole Gardner, vice president and partner in IBM's public sector social services practice.

Good morning, Nicole.

Ms. Gardner: Good morning, Al. Good morning, Jerry.

Mr. Friedman: Good morning.

Mr. Morales: Jerry, let's start off by learning a bit more about your organization. Perhaps you can give us an overview of the mission, the history, and the activities of the American Public Human Services Association.

Mr. Friedman: Well, thank you for the opportunity to be here this morning. We always look forward to venues in the public arena where we can talk about human services. The American Public Human Services Association is a 77-year-old organization that started around the same time as the Social Security Act. It was really founded by a group of very visionary administrators who were concerned about what back then they called the distribution of relief. They wanted to have a voice in policy in Washington, D.C., and they wanted to look at best practice. And essentially, that is what our organization has stood for for the past 77 years.

We've undergone several changes. We used to be called the American Public Welfare Association, focusing in on those types of programs. But we've actually broadened our horizon, recognizing that there is a realm of human service programs that need the kind of attention that a national association can give it.

Essentially, our mission is strengthening America through excellence in public human services. I think a lot of people don't realize just how large human services is, and the presence that it has in our society. We are generally one-third to one-half of most state and local budgets, and consequently, we have a large business to run and an obligation to run it effectively. But it also is a compassionate business, so we have kind of this desire to make sure that we're maximizing our resources, but doing it in a kind and compassionate way.

Basically, our association does three things. We work for good public policy. Good public policy meaning that there are adequate resources, that there's flexibility to run the programs, that we can actually look at outcomes and invest in clients rather than in the bureaucracy.

We then work with our members to help them implement that policy in the correct way. We do this through training and research and consulting.

And then the final area that we do is we really work on our public image. I think we can be successful mainly to the extent that the public has confidence in our ability to manage our programs efficiently and effectively. And we do that through radio shows, we do that through our website, through our magazines, publications, newsletters, informing the public as well as the profession is a key component of APHSA.

Mr. Morales: Could you give us a sense then of the scale of the operations at your organization and its affiliates? Can you tell us a little bit about who are some of its members and the size perhaps of your budget and the number of employees?

Mr. Friedman: Sure. In many ways, we serve like the National Governors Association does for governors. We perform the same function for the governors' appointed heads of health and human services programs, the state CEOs.

Our core group really are the states. And I've been very pleased that for the past four years, every state and a number of the territories have been full members of APHSA. That's very important to us, because when we go to Congress and we go to testify to say that we represent states, we truly do. Every state is a member.

We then have several hundred local members, counties, areas as large as New York City and Los Angeles to Tioga County, Pennsylvania, that likes to pride itself in being an area that doesn't have any traffic lights or parking meters, so we have that range. And then we have several thousand individual members.

We're a moderate-sized association. We rely a lot on our membership to provide the kind of support to enhance the field of human services. We have approximately 50 employees; sometimes there are more when we get special grants and projects. And we have an operating budget of around $5 million.

Ms. Gardner: So Jerry, now we understand a little bit more about APHSA. You're the executive director. Can you tell us what you do in your job? What does it entail?

Mr. Friedman: I would say that there are probably three major activities that I'm involved in. The first really is association management. We're unique, I think, in that we have to be very sensitive to the fact that our members operate public entities. We treat every dollar that comes into APHSA as if it was a tax dollar, because in many instances, it is. And so we've very sensitive to making sure that we provide the kind of return on the dollar. So just running the association, our own computer systems, our own budgeting processes, our own personnel, occupies a portion of my time.

Probably the largest portion of it is involving member services: meeting with our members, trying to get a sense of areas that they need us to focus in on; sharing best practice.

And then, of course, there's the work that we do on Capitol Hill and with the administration as well as other associations, partnering with them in trying to obtain good policy, good effective resources in the work that we do in Washington, D.C.

Ms. Gardner: In the context of all that, what are maybe the top three challenges that you face? And what kind of things are you doing to address those challenges?

Mr. Friedman: We certainly have the vast array of human services challenges that all of our members face. Internally, you know, we also have challenges in managing during difficult economic times. When states have downturns, when the revenues decline, that also affects our revenues, so that we've had -- from time to time, had to manage during difficult times.

Staff retention is a big issue for us. We're very fortunate in that being in business for so long and having a reputation, which I think is excellent in this city, we're able to attract very, very talented individuals. They gain national exposure. They get to meet with every state CEO. They get to meet with members of Congress. They get to hang out with other associations. And very often, they get recruited because they are talented. So we probably have a higher -- just by circumstances, a higher ratio of turnover than many other organizations.

And, you know, one of the difficult things for me is that most of our core membership is appointed by governors. When their terms expire, they move on to different things. And we develop these relationships, and it's very difficult sometimes to deal with a lot of turnover within the states.

But I think the main challenge in human services, and I think it's also true for our association and all of its components, is truly our public image. The ability to tell our story not only just in Congress, but to the general public I think is critical. We face very unique challenges in human services. We're one of the few industries that is literally working to put itself out of business. We strive for a better society. We strive to alleviate poverty. We strive to eliminate child abuse. And if we're truly successful, there wouldn't be a need for us.

On the other hand, our failures are very visible. We can be successful in dealing with thousands of children. And when we have that unfortunate situation where a child gets lost, of course the public rightfully is outraged as we are, and that draws attention to us. We conduct our business in the open. We're the American Public Human Services Association, and that means if we make a mistake, you're going to read about in the front pages of the newspaper. And often, corporate America and the business community and even the other nonprofit organizations don't have that kind of exposure. So we have unique problems, but we also have unique opportunities, and I think all of this makes us stronger.

Mr. Morales: So Jerry, with that type of a mission, I'm curious, how did you get started in this field? What prompted you to get into this?

Mr. Friedman: Well, I was very fortunate in that I started my career as a probation officer. That may sound like a very strange answer, but when you think about it, what a probation officer does, there's a law enforcement aspect to it, but then on the other hand, there's kind of a case management function. You know, when somebody's coming out of prison, they need a job, they need housing, they need treatment, they may be addicted to drugs and alcohol and you have to work with that. And what I learned from that experience was that very often, the human services system broke down for people, and it was mainly because of the way that we were structured within a categorical system. And that really shaped a lot of my early thinking about how we could provide services in a different way, how we could have a more coordinated strategy for dealing with the multiple problems that people were facing. And so I had this exposure to the broad array of human services through that experience.

I then was fortunate enough to kind of have a career progression that led me to be a county human services administrator in two different counties in Pennsylvania. And then I became a state director of public welfare in Pennsylvania. Later, in Washington state, I was in charge of the Economic Services Administration. And before my job at APHSA, I was the executive deputy commissioner for the Texas Department of Human Services.

What that gave me, I think, was good, practical experience in actually providing the services at the county level, but then having the state experience. And through that, I touched various systems, everything from health care to child welfare to mental health, drug and alcohol programs. And so when the association was recruiting for a new executive director, I think that they wanted somebody with both state and local experience, and having that kind of broader perspective of having administered a wide array of programs.

Mr. Morales: So as you reflect back on your career, is there one aspect of that that you feel has really shaped your current leadership role and perhaps informed your current style?

Mr. Friedman: Albert, the one asset that I think that I bring to APHSA is a 25-year history of being a member. This association was my safety net. When I absolutely needed information and needed it quickly, I had them on my speed dial. When we had public policy that we needed changed -- I can give you a very good example -- and that was with welfare reform when there was a provision that legal immigrants were not entitled to food stamps. Our state legislature and our governor, I was in Washington state at the time, said this is unacceptable, find a way to make a change. It was APHSA, our association, that led the change in Congress that allowed states to purchase food stamp coupons for this population. So I came in with a great deal of passion about the association and the work that the association does as a consumer and as a member.

So what I bring to the association is I have such talented co-workers, oh, they're working on their Ph.D.s and their law degrees and they're just extraordinary, but I can look at something that crossed my desk and say if I was a member, would this make sense to me? And so as long as I think I can keep that member perspective, I'll be able to enrich the association to some degree.

Mr. Morales: That's fantastic.

What are some of the lessons learned from welfare reform efforts? We will ask Jerry Friedman, executive director of the American Public Human Services Association, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Jerry Friedman, executive director of the American Public Human Services Association.

Also joining us in our conversation from IBM is Nicole Gardner.

Jerry, we've used the term "public human services." Can you elaborate exactly what that means?

Mr. Friedman: Well, there's a debate actually on what public human services are. At one point, it was human services that were provided by government employees, but I think that that's changed a great deal with privatization efforts, with partnerships, with contracting. So now we define it more as services provided under the public aegis, where government dollars are used and there's a level of accountability, but it could be provided by a number of different associations, organizations, companies, both private and not-for-profit.

Mr. Morales: Let me go back in time a little bit. In the 1990s, government had made a statement to end welfare as we know it back then, which launched a series of welfare reform initiatives. Could you remind us of some of the key elements of this welfare reform, and from your perspective, how significant a social policy change does this welfare reform effort represent?

Mr. Friedman: If I look back on events that happened in my career, I think welfare reform was probably the most significant change in social policy in my lifetime. And what it did basically was that it ended individual entitlements for people and gave states block grants with considerable flexibility for states and local governments to design programs that made sense to them. Included were some provisions, like time limits, lifetime time limits, work requirements, just a vast array of significant changes to the way that we looked at what had been a dependency program to one that became a program of self-sufficiency.

In many ways, I think some of the lessons that were learned through welfare reform are really beginning to permeate some of the other human services systems as well. But all in all, I think welfare could be considered a successful program in the United States that brought about significant change.

Ms. Gardner: So Jerry, in that context, tell us a little bit about some of the key lessons we learned in welfare reform.

Mr. Friedman: Well, first, if I could just talk a little bit about some of the successes. And you have to realize that the AFDC program had been in existence for many, many years. It was a well-entrenched program basically operated through federal rules. And so when the new law came into effect and states were empowered to develop their own and design their own programs, there was a great deal of both apprehension as well as a great deal of high expectations for welfare administrators who had really wanted to do something different with the program for a considerable period of time.

It's important to note that welfare reform didn't actually start with the new law. There were over 40 states who had gone to the federal government to seek waivers to say we think that we have a better solution to helping people become self-sufficient. And what the federal legislation really was were some of those common threads through all of those various waiver programs.

But when you look at what happened over the course of a decade, there was a 60 percent decline in welfare caseloads in this country. Child support collections for non-custodial parents doubled. Over 1.5 million welfare recipients who had previously never been attached to the workforce had gainful employment and were no longer reliant on the public welfare system to support them. We implemented a national electronic benefits transfer program, a large computerized effort that actually eliminated food stamp coupons in this country. We created hundreds of thousands of child care slots. We invested in prevention programs that resulted in a decline in teen pregnancy among welfare mothers of one-third. And for the first time, reversing a two-decade trend, we actually had a decline in child poverty rates in this country. So by all accounts, you would consider that a success.

Well, there were many lessons to be learned through that. First, there was a really compelling case for change. Welfare dependency was a bad investment strategy, basically supporting somebody. It didn't help grow our society or our economy or the self-image of those who were receiving those benefits. So that we learned that there was kind of both an economic and a moral imperative for change. Yes, indeed, we are a compassionate society. We are our brother's keeper. But on the other hand, we had an obligation to help people maximize their own personal potential and develop their own capacity.

We learned that personal responsibility can be very effective public policy; that in life, there is a quid pro quo; that reciprocity is just the way that we live as Americans, and that its public policy should reflect that. We learned that people can rise to the occasion, that when they were afforded the opportunity, people became job-ready. They invested when there were both incentives positive and negative. People reacted in that they did want better things for their families. We learned, I think, that the best service delivery was designed at the local level. Welfare reform was not a national strategy. It was saying here's the money, here are the resources, develop a local strategy, and that resulted in those successful efforts.

We learned that we had to rely on partnerships, that welfare in this country couldn't be fixed by government. It required corporate America, the business community, the nonprofit world, the faith-based world, education, all coming together in kind of a uniform strategy to help address this. We learned the importance of services coordination and integrating services. What happened with lifetime time limits was that the bar was raised. We had a finite period of time to have people become job-ready or they would lose this safety net. We know that people don't come to welfare offices simply because they have empty wallets and empty pocketbooks, that there's often just a myriad of other problems that exist, and that we needed to address those. And that required the agencies that provided those services to get together in some kind of coordinated strategy. We also learned that there were other multiple strategies that we needed to look at: asset building, predatory lending. You know, there's a whole industry that thrives just because people are living in poverty.

I think the most important lesson, though, was, you know, for years people railed about the public welfare system, and I was one of them, to be honest with you, that it was a failed system. Well, what we learned was it was failed policy. When people are penalized, when their family condition or economic conditions are worse off because they're trying to better themselves and become employed, when they actually lose money, when the most responsible thing that they can do financially for their family is to stay on welfare rather than try to get to work because they'll be worse off, that's failed policy.

When that changed, we demonstrated it was not a failed workforce. The welfare system, this huge entity in this country, literally turned on a dime. Welfare offices almost overnight were transformed from "welfare offices" to "work centers." You know, the message was clear: What can I do to help you get a job today? This magnificent welfare workforce absolutely transformed themselves because they wanted to. They saw firsthand every day how just handing somebody a check and food stamps and hoping that every problem went away was foolish policy. And when that changed and they could make a real difference, they really rose to the occasion.

Ms. Gardner: That's quite a story. So you mentioned a few minutes ago reauthorization. So where are we with the reauthorization of TANF, and kind of what's the status? Where are we going?

Mr. Friedman: TANF was reauthorized after about 12 or 13 continuing resolutions. We just couldn't seem to get congressional attention because of all of the other priorities. And at the very end of the legislative session last year, as part of the Deficit Reduction Act, TANF reauthorization was passed. As an association, we are very concerned about the kind of micromanagement that's been built back into the welfare system. We think that the broad strategy of providing goals for states to reach, and empowering communities to reach those, worked. Clearly demonstrated that. And so we're concerned that we've taken a huge step backwards when it comes to welfare reform. And administrators, rather than talking about how can we get people into gainful employment, how can we help them get better jobs, how can we improve their economic conditions, they're talking about how we can have something count as a work participation credit because of the penalties that they're going to be facing. We're working very hard to minimize any damage as we see it to this program. To continue to empower states, we strive for maximum flexibility, but we're going to have an uphill battle.

Mr. Morales: Now, Jerry, you mentioned earlier that welfare reform really began at the state and local level. And I believe today, we again are seeing state agencies developing innovative public policy agendas to shape the next decade of service to low-income families. Could you elaborate on some of these innovative state programs? What are some of the strengths that you're seeing in some of these programs?

Mr. Friedman: Well, again, I think drawing off some of the success that we had with welfare reform and just looking at public policy that empowers communities, we're seeing this play out in child welfare programs, we're seeing this played out in health care programs. If you went to a Medicaid director 20 years ago and you said what is your job, they would say my job is to pay bills timely, accurately, and efficiently, and basically they did that. If you ask a Medicaid director today what is your job, well, they're part of a governor's health cabinet. They're looking at universal coverage. They're looking at strategies to cover the uninsured. They are looking beyond just paying bills to what are the best treatments and interventions that we can provide? Where do we get a return on the investment? How can we engage consumers? Now can we embrace prevention and wellness programs?

It's an exciting time right now because of a lot of flexibility that's been given to states around health care design. And I would contend that the real leadership for this is not happening within the confines of Washington, D.C., but it's happening in the statehouses throughout the country.

I think the same is true with public child welfare. Welfare administrators are saying, you know, if I could take the resources that it takes to buy foster care and invest in strategies to build stronger families in the beginning, investing in prevention, investing in interventions that help people become better parents up front, then we could save all this money on the back end. But more importantly, children thrive better in families than they do in foster care. It's more than intuitive. It's supported by all the research and by all the evaluations that happen. So what I see happening now are administrators throughout this country, states approaching the federal government just like they did with welfare reform, saying we think we have a better solution based on our local conditions, by the assets and the resources within our community, and our ability to mobilize them.

The other thing that we didn't have 25 years ago, when I was running programs, is we have more supportive technology. It used to be very hard to keep track of all of the records that you needed and the requirements and the rules and regulations when you had six or seven or eight different categorical programs with rules and different requirements. But with computer systems now and the ability to process information, it is much easier, I think, to manage those programs within the compliance rules of the federal government.

Mr. Morales: So Jerry, it sounds like, you know, really workforce strategies are really sort of the key to success here in helping families manage this transition that you describe. But can you give us perhaps some specific examples of programs that are out there that you think are really innovative and are working well?

Mr. Friedman: Well, there are thousands of them. And I think, again, the key was that public administrators were set free to go out and to develop strategies that worked.

You know, one of the things that we used to do, I used to do this when I ran welfare programs, was to go to corporate America and to business and say wouldn't it be nice if you hired somebody off the welfare rolls? You know, it helps the community and it's the right thing to do. Now we can go to corporate America and the business community and say we can help you build your business. We can help your bottom line. We can help your profit. We can do that through tax credits. We can do that through customized job training. We can do that through extended medical assistance coverage and child care subsidies. We can do that through working with new employees to help train them through orientation. So people see this as a better business strategy than they used to as just a social service.

Mr. Morales: So it's about collaboration.

Mr. Friedman: It's about collaboration. It's about partnership. But it's also -- it's about investment. Good public policy, good social policy, good human services policy and making profit don't have to be mutually exclusive principles.

Mr. Morales: That's a very good point.

What emerging technologies hold the most promise for improving human services delivery? We will ask Jerry Friedman, executive director of the American Public Human Services Association, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Jerry Friedman, executive director of the American Public Human Services Association. Also joining us in our conversation is Nicole Gardner, vice president and partner in IBM's public sector social services practice.

Jerry, the goal of working with families in a holistic manner to achieve better outcomes has been around for some time. The change to cross-agency program policy and cross-agency funding streams to support that goal have been somewhat elusive at both the federal and the state levels. Whenever an issue bounces around an industry for so many years and doesn't appear to gain traction, one of two things is usually happening: either, one, the topic is of interest, but there's no real intrinsic value, but the parties sort of enjoy talking about it; or more is happening than we all realize. In your opinion, what's happening here?

Mr. Friedman: Well, I think there's a little bit of both to your question, and we're still kind of defining ourselves in human services in our public policy. Very often we find conflicting things with categorical rules that tend to get in the way of integrated strategies. But again, I tend to be optimistic, partially because of the technology, partially because of welfare reform, and to a great extent through the leadership that's coming through human services that are looking at different and more coordinated strategies. The way that we have partnered with the business community, many states now are actually privatizing casework services, something that just didn't exist before. But they're doing it thoughtfully and rationally and in a way that's devised to get better outcomes. I think that it is still a work in progress, but I think more and more, there is a realization that if we are truly to be investing our human resources wisely, this one-half to one-third of local and state budgets, that we need to have the ability to move beyond all of our individual rules and all of our individual program perspective.

There are huge challenges. First off, if you look at the history of human services, it wasn't like it was formed through some kind of great planning strategy. It seemed like Congress would discover a problem, throw some money at it, and hope that it went away. And the residual effect were all these categorical agencies often competing with each other. They had their own infrastructure. They had their own computer systems. They had their own rules and their own regulations. When you couple that with an advocacy community that's pretty singularly focused, we have advocates around hunger, around developmental disabilities, around mental illness, we don't have advocates for services integration. And yet every one of those programs are adversely affected because there's not a single solution or a single cause of many of these maladies that we have in our society. We've begun to rely a little bit better on technology to get us data and to get us information that tells us where we can invest our resources most effectively.

In the health care arena, there's a lot of work that's going on on electronic medical records. In the course of doing that, I think there's a potential to lay a foundation for further integration of human services in this country. In many areas, there are great demonstrations, but we still as a matter of public policy have not embraced this as the way that we should be doing our thinking and investing.

Ms. Gardner: So in the context, Jerry, of the fact that we're looking at a family as a whole in a holistic way, you mentioned the electronic health record, what are some of the other innovations from a technology perspective that help to break down some of those barriers that exist between the competing organizations and the way that the regulations and the laws have developed?

Mr. Friedman: Well, certainly Internet strategies, looking at ways that people can apply for benefits through the Internet, ways that data can be refreshed, where redundancies can be eliminated, I think have great potential. Many states are developing things like kiosks and automated call centers where they can call in and see whether they're eligible. They can do tests, they can do income tests. All of that is still evolving and still growing, but I think is becoming more and more the industry norm.

There are tools that caseworkers are using that I think are pretty exciting that afford not only greater efficiency, but also greater protections. The state of Alabama has just equipped their child welfare workers with electronic notebooks that do amazing things. Caseworkers can do case notes, they can take photos. They can take photos of children that may have scars and abuses that they can forward to their supervisor to say do we go further with this case? They have GPS so that they know where they're at. They can have a level of safety the caseworkers didn't have before.

Also, you know, for many of the challenges that our clients face, technology is a level playing field. When I was working in Austin, Texas, we had a special project where we refurbished computers. We worked with many of the large computer firms, and we provided these to low-income families that otherwise would not be able to have a computer, and it was just amazing to see what children can do when they're set free in this learning environment through the Internet. Again, it's kind of optimistic. I personally am just still learning how to figure out e-mail, but I've got staff that just do amazing things with computers, and they're always trying to educate me.

There also are ways, I think, that we're being able to process information differently. With the old legacy systems and COBOL language and the way that we had to program, literally taking large business applications and trying to retrofit through different algorithms our human services business, often those things got lost in translation. You know, with decision trees and artificial intelligence and more agile and nimble applications, the potential is there. Looking at outcomes, there are a number of different outcome result systems that are being grown by small companies that are approaching human services, and so I think there's vast potential there.

Ms. Gardner: So any time there's an infusion of technology into an environment that has previously not been able to really do much with it, there are usually barriers and challenges that pop up. So what are some of the big challenges to really taking advantage of emerging technologies in your field?

Mr. Friedman: Well, the biggest one for me, and it's kind of a pet rant, is the process that the federal government has for procuring computer equipment. It's called the APD or the advance planning document process. This is a bureaucratic nightmare that's 40 years old, no longer necessary in my estimation. It was created at a time when I think it was appropriate, when computers and computer applications were relatively exotic, they were relatively new. And the federal government was saying, well, listen, why invest in all of these things? Let's look at have some kind of uniform process and see how we can transfer information back and forth. Also to provide a level of fairness in the competitive bid process.

Well, states now have very robust procurement requirements, every bit as robust as anything that the federal government could do. It stalls the procurement of computer equipment. Because it involves, in many instances, multiple federal agencies, each one can trump the other one in terms of the process. It can take two to three years to get approvals. And in some cases, it's just simply the criteria that they have doesn't make sense. I'll give you one example.

There's a dollar limit that if you exceed -- I think it's $5 million; the dollar amount may have changed because I don't do this every day, but it used to be $5 million -- you had to seek the approval of the federal government. Well, I was in Texas, and I was responsible for a 15,000-person workforce. For me to just routinely replace desktop computers after the depreciation life is gone, I had to go and get approval to do that. Now, ironically, if I wanted to hire 100,000 staff, all I had to do was to put in a state plan amendment. Years ago, the Department of Labor did away with this same process because they realized that it was just antiquated. And I think in many ways, by the time they get the approval, the technology's obsolete.

This is something that we have been striving for for at least the past 15 years, to have this reformed or ended or changed. And I think it's just -- you know, if there's anything that the next administration can do to make life easier for state human services administrators, and especially their chief information officers, it's to absolutely reform this system and to have confidence that states make good, thoughtful business decisions about procuring computer equipment.

Ms. Gardner: So let's talk about something that your organization has been working on specifically, something called the "Organizational Effectiveness Institute, Building the 21st Century Workforce." You started this last May, so can you tell us a little bit about this effort? What was it aimed at and what's happening with it?

Mr. Friedman: We have a training/research/consulting practice at APHSA. In many ways, we needed to be clear about our core competencies and to match that with our members' needs. You know, there are dozens of very, very good consulting firms that do training and consulting in this country. We think that we have a unique niche in that we really understand the business of human services. So we began to do a whole series of evaluation of our own programs, asking our members what their needs were. And essentially they're saying that we need help in looking at organizational effectiveness and then developing good leaders.

And the other thing that has always troubled me as a consumer of consulting services and training was that very often we go to a training program and something nice happens, we put it on a shelf, and we get back and our desk is piled high and we kind of forget what we learned through that session. So we're very much into looking at actual products, being able to take something away from this experience. And so we created this concept of having an institute where our members, our states, and in some cases local organizations, would participate not for a one-shot training session, but through a process that would lead to a product.

Now, the workforce institute was particularly interesting because when we meet with our CEOs and we ask them what are your greatest needs, the issue of staff recruitment, retention, early retirements, building a bench for new leadership, I mean, many of my colleagues are my age, you know, baby boomers that are of retirement age, and we stand to lose a significant amount of institutional knowledge as well as leadership if we don't find some way to address that. Well, what we learned through our needs assessment was that very often human resources personnel offices weren't necessarily being seen as a solution, that personnel rules weren't seen as an asset that can help enable addressing that issue.

And so what we did was that we created this institute, and it lasted for a year. There were four group meetings of all of the participants, but then there was a lot of individual consulting and peer consulting, which was very important, that happened in between those meetings. And the end result was that the human resources directors walked away with a product which was a workforce plan that they could take to their governor's office. We actually field tested this by bringing in a number of retired commissioners, secretaries, and directors of human services and saying to them basically if your human resources director submitted this plan to you, is this something that you would support?

And so the end result of this one year was an actual working workforce plan that drilled down beyond, you know, I need 20 caseworkers because my caseloads are going to get this high, but looking at skill sets. Where do you find them? How do you work with the universities? How do you work with the training centers? How do you help grow internally your own training capacity to have this happen? What kind of array of benefits and training opportunities do we create for our workforce? How do we embed quality improvement in the way that we do business? And so it was beyond just how you do a workforce plan. It was how you actually make a more effective organization.

Mr. Morales: So Jerry, along these lines, to be a bit more specific, what are some of the workforce capacity building challenges faced by public human service agencies, and how does the institute seek to assist participants in strengthening agencies' workforces and human resource capacities?

Mr. Friedman: Well, what we're trying to do is to embed a strategic process in looking at our workforce needs. And that, I think, has been a missing element. I think we've done traditional recruiting and we've gotten people that have credentials. But when we look at the broader strategy of who's coming into human services today and making it a career, quite frankly, I'm a little troubled.

I'm at the tail-end of my career. I'm in my sixties. I was a product of the 1960s and the 1950s, and I was drawn to public service. It wasn't part of my family tradition. I was drawn to public service by the leadership of this country who talked about human services and public service being an honorable thing that should attract the best and the brightest. You know, we had leaders in this country who were great role models, and it troubles me today that we don't kind of have that sense of government as being such an instrument of good. Not to be critical, but when you turn on the radio programs around the country, all you hear is that government wastes this and government does that. I really take exception to that.

I have worked both in corporate America and I have worked in the public sector, and there are challenges in both and there is competence in both, and unfortunately, there's incompetence sometimes in both. But the public business is a little bit unique because it is in the open. And so I think all of that has created an environment where people just aren't as attracted to public service as they used to be. And so what we're trying to do is to rebuild that through reshaping our public image, getting back to the notion that human services is honorable.

We have always known, those of us who got into this, we didn't get into human services for the money. If we did, we made a very dumb decision. We were driven by a different kind of mission, a desire to make a difference in a different kind of way and contribute in a different way. You know, that spirit I think is something that we want to kind of recapture.

Mr. Morales: What about the future of public human services delivery?

We will ask Jerry Friedman, executive director of the American Public Human Services Association, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Jerry Friedman, executive director of the American Public Human Services Association. Also joining us in our conversation from IBM is Nicole Gardner.

Jerry, perhaps you could elaborate on the types of public-private partnerships that your members and affiliates engage in to improve operations or outcomes. And in what areas do you think you would like to enhance or expand these types of collaborations?

Mr. Friedman: Well, that's a very good question. In reality, there has always been, I think, a level of partnership between at least public human services and the private sector. Many of the actual services are provided under contract. Many of the charitable faith-based organizations have been dealing with people with needs, material needs, basic needs, other human services needs for years. So when you look at the array of vast human services networks that are out there, very often, the majority of the programs are actually provided within the private sector. However, recently, there has been more and more of a movement towards privatizing some of the core functions that had traditionally been part of government.

I think what we try to do best as a national association is to work with our members to make sure that they have weighed all of the factors they could consider into whether this is a good decision or not. I think the issue isn't the whos. It's more the issue of the whats, and being clear about what the core competencies are. If government entities are going to be contracting, then I think they need different skill sets, or need to emphasize skill sets a little differently. And I think we have a good example.

Twenty years ago, states ran huge data centers with state employees. In many areas, these are now run by corporate America under contract. What happened, though, in the state information technology world was that the core competencies changed. They changed to project management, contract management, automation planning, quality control. And I think the same needs to happen as we start to look at actual service delivery. But if we're going to be farming these activities out to for-profit or not-for-profit organizations, we need to be real clear about what the expectations are: managing those contracts and those projects effectively. And so I think that's the critical issue. It's not who's doing it, it's what's being done, and is it done with the eye of actually providing an improved service delivery system rather than because it seems to be the local trend.

Mr. Morales: So Jerry, obviously you just opened the door for a discussion on the future. What do you see as some of the emerging trends in social welfare policy over, say, the next 5, 6, 7, 10 years?

Mr. Friedman: Well, I think we're at a very exciting time. Again, I think the lessons that were learned from welfare reform, the demonstration that state and local governments really can manage programs effectively, is continuing to evolve and continuing to grow.

I see a number of different trends. I think the movement towards services integration clearly is happening in a lot of different areas. I think categorical agencies are beginning to realize that it takes a holistic approach in order to address the needs of families. I think more and more, state and local governments are looking how to return on investment. You know, is this the best result that we can get for the amount of money that we are investing? And I think it kind of goes beyond just looking at a program from a cost perspective. I think we need to look at it from an outcome perspective.

The continued advancement in technology throughout the entire human services system, from consumers to clients to the way that we process mega data in this country, I think is continuing to evolve. And what I see happening is that major corporations are now investing specifically in human services applications rather than retrofitting business applications to human services.

I think that there's going to be a continued movement towards consumerism. You know, there should be nothing about me without me. More and more clients are saying and progressive human services professionals are saying I need to involve a client in this decision in order to have the best outcome. And so there is more of a kind of openness and a willingness to do this.

And I think in many ways it could also be a cost driver, particularly in the health care arena. We need to have the costs of what it takes in medical care to be transparent. We need to know what they are. Consumerism can do a great deal to drive down costs. I heard Speaker Newt Gingrich talk about the airline industry, and he was talking about the combination of deregulation and the Internet and things like Expedia and Priceline and all those different things have driven down the cost of air miles from 29 cents a mile down to 10. It's just a stunning thing what competition can do and we need to start having that application in human services. I think continued partnerships and having strategic approaches and better use of data will continue to be a part of it.

And obviously volunteerism. We need to rely on a community not only for the services that they provide, but for the engagement. My experience is that when people become exposed to what happens in a human services agency or in a human services program or even in an institution, they become advocates for it when they begin to see what it's like. So I think that those are some of the major trends. I think the bottom line, though, to all of these things is what it has always been, and that's we have to keep the clients first. We can't lose sight of our purpose and our reason for being in the human services business in the first place. And that's because people that are at our desks are there with multitude of problems. They're in pain, they're in need. And so we can set up these elaborate systems, but we can't lose our heart. And I think that that's a lesson that's always with us, and to always acknowledge the awesome responsibility that we have in human services.

I used to tell my co-workers you know that a keystroke on a computer can make the critical difference as to whether a child goes to bed hungry or nourished, and that's just an awesome responsibility that plays out a million times a day in this country, and we don't take credit for it. We don't talk about how often the systems work. We focus in on the failures rather than our successes. And if we're going to really change the human services industry and have it grow and thrive as a viable part of our society, we need to change the public image. We need to be able to tell that story better.

Ms. Gardner: So continuing our theme of looking into the future, Jerry, from a policy perspective on some of the specific programs, you know, what's coming up for Medicaid, for TANF, for child welfare? What's going to happen over the next year or two?

Mr. Friedman: Well, I wish I had a crystal ball that I could say that, because we're caught in competing dynamics. You know, I think that there's a growing awareness among people who pay taxes that they want to see a return on their investment. And I think there's also a real acknowledgement that people do have human needs, and I think we're going to continue to strive for that perfect balance. But again, you know, I keep going back to the lessons that we learned through welfare reform about personal responsibility, about work opportunities, about empowering communities to make a difference. I think that those will continue to grow.

The health care area I think is fascinating because we really are, I think, in the early stages of a transformation. I see it happening again with the Medicaid directors in this country and the role that they're playing and looking at prevention and wellness programs, and I think that that'll continue to be a part of it.

I know the direction I would like to see Congress in the next administration go, and that again is always to empower states, to give them flexibility, to have administrative simplicity, to keep client needs at the forefront. And I think if we do that, we can continue to have a stronger society.

Again, the return on investment I think is really important. We as a human services industry need to talk about the return on investment that society does get. You know, when we think about the food stamp program, we don't think about what it infuses into an economy. It's not just that the people who are low wage are able to have better nutrition, but what does it mean for the grocers and the growers and those that transport food and how it contributes to a stronger society?

Think of a society without human services, what kind of world we would have. And so we're getting a little better at telling our story. And I truly appreciate the opportunity to be on a show like this to talk to your listeners and to tell the human services story, to share our challenges as well as some of the opportunities. And I'm just very, very grateful for this experience.

Ms. Gardner: Well, we're honored to have you. In the context of the story you just told about the profound good that can be done, children being nourished, families being helped, if you were to get your aspiration realized that Congress would be proactive and positive in its treatment of human services policy and legislation going forward, how would you challenge your members to then take those things and move forward to really meet the challenge of improving service delivery and living up to the picture that you've painted so articulately?

Mr. Friedman: Well, I think two things: to think holistically, how the various parts fit together to a system of care; and secondly, keep the clients first, keep the needs of the children in this country and the families who are struggling in this country. Unfortunately, I can walk out of this nice building in downtown Washington, D.C., and before I hit the next corner, I will be able to see the failures of our society, where people who have been left out and left behind, the homeless population, who aren't afforded, for whatever reasons, the opportunity to participate in the wealth of this great country. You know, we'll always have our work to do. So those are the things, the messages that I would give.

Mr. Morales: Jerry, it's hard not to be moved by your passion and dedication to public human services, so I'm curious, what advice could you give to someone out there who perhaps is thinking about starting a career in public service and perhaps in particular interested in working in the area of public human services?

Mr. Friedman: Well, I think that the best experience really is hands-on. I always encourage people to volunteer, to spend time in public facilities, nursing homes, to talk to people who have needs to see where their strengths and where they can contribute. I think that that's the greatest thing is through the exposure. You know, we appreciate all of the courses in social work and public policy that happen, but I think it's that hands-on experience, that personal passion that somebody can have, and the exhilaration of actually seeing somebody who has improved the quality of their lives because you've been there, because you've been working with them, because you've tutored somebody who was illiterate and now they're job-ready. I mean, I just can't tell you. It's like maybe the equivalent, the public human services equivalent, of hitting a grand-slam home run in a World Series.

One of the greatest things that I get to do sometimes is to go to graduation classes of public welfare agencies, where they've taken people who had not been job-ready and they're out and they're ready to join the workforce or perhaps they're already working, to see the transformation in their lives. They have a client come back to them and say thank you, you made a difference.

Just one quick story. When I was a probation officer, I had a huge caseload. I didn't always I mean, you had to kind of triage. And years after I had left this job, I received a call one night at my house and it was from a man and I could tell he was obviously very emotional. And he asked if I was the probation officer that had his case, you know, 5, 10 years earlier. And I had to really search my memory banks, and indeed, it was and I did remember that. And what he wanted to tell me was that he was in the hospital, his wife had just given birth to his first child, a son, and that he wanted me to know I was the second call that he made -- the first was to his parents -- that he would not have had that thrilling opportunity to be a parent had I not intervened in his life in an early stage when he was struggling with substance abuse. Now, I barely remembered the case and I didn't do great casework. I gave him a choice: you're going to rehab or you go to jail, you know. But obviously it made an impact on this person. I hadn't thought of that case in years, but to get that phone call is something that just stayed with me for the rest of my life.

We don't always know that we make a difference. And so that's what I would tell people, that if they want a career where they can have those kind of rewards and benefits, then human services is a place that they ought to look.

Mr. Morales: That's absolutely wonderful. Jerry, unfortunately, we have reached the end of our time. I want to thank you for fitting us into your busy schedule. But more importantly, Nicole and I would like to thank you for your dedicated service across the many years and roles that you've had in the area of public human services.

Mr. Friedman: Thank you very much. I appreciate it. If people want to find more about the American Public Human Services Association I urge them to take a look at our website. It has up-to-date information on all of the legislative proposals that are happening in Congress. It's a wealth of information, and it's at www.aphsa.org.

Mr. Morales: Great, thank you. This has been The Business of Government Hour, featuring a conversation with Jerry Friedman, executive director of the American Public Human Services Association.

My co-host has been Nicole Gardner, vice president and partner in IBM's public sector social services practice.

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 how 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.

Announcer: 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 businessofgovernment.org. There, you can learn more about our programs and get a transcript of today's conversation.

Until next week, it's businessofgovernment.org.

Originally Broadcast October 27, 2007s

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 businessofgovernment.org.

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.

Healthy and productive individuals, families and communities are the very foundation of the nation's present and future security and prosperity. The Administration for Children and Families within the U.S. Health and Human Services Department partners with state and local governments, for-profits and nonprofit organizations, faith- and community-based organizations and Native American tribes to design, administer and promote programs that strengthen children, families and communities.

With us this morning to discuss ACF's efforts is our special guest, Curt Coy, Deputy Assistant Secretary for Administration at the Administration for Children and Families within the U.S. Department of Health and Human Services.

Good morning, Curt.

Mr. Coy: Good morning.

Mr. Morales: Also joining us in our conversation is Tom Romeo, IBM's general government industry leader.

Good morning, Tom.

Mr. Romeo: Good morning, Al.

Mr. Morales: Curt, let's start by talking about the Administration for Children and Families, otherwise known as ACF. Could you share with us a sense of the history, mission and activities of your organization, and how it supports the overall mission at HHS?

Mr. Coy: I most certainly will, Al. We like to think of ourselves at ACF as the social services of HHS, the Department of Health and Human Services. We're the human services piece of the HHS. Back in 1991, ACF was two different agencies, and they merged into one organization. And since then, as your introduction alluded to, we're principally responsible for those federal programs that promote the economic and social well-being of families and children and individuals.

We have a number of relatively well-known programs, one of which is the Temporary Assistance for Needy Families, commonly known as welfare, and other things like child care, child support, child support enforcement, community services. And we also have subagencies like the Administration for Native Americans and the Administration for Developmentally Disabled folks.

Mr. Morales: Now, this is certainly a very broad mission. So can you give us a sense of scale of the organization, how is ACF organized, the size of its budget, number of full-time employees and its geographic footprint?

Mr. Coy: In round numbers, ACF has about 1,250 federal employees, and a probably close to equal number of contractors, maybe a few less. And we are split essentially equally between Washington, D.C., or the central office, and 10 regional offices throughout the country. Depending on how you count them, about 120 different programs, social programs that we administer. And they're made up of all kind of programs; discretionary, mandatory, entitlement programs, research and development. Every kind of grant-type program there is, we manage at ACF.

Our current budget is somewhere around $47 billion, which makes ACF the second largest agency within the Department of Health and Human Services after Medicare and Medicaid folks within HHS. Our budget, just to put in some degree of context, is bigger than the National Institutes for Health, the Centers for Disease Control and Prevention and the Health Resources Services Administration combined.

Mr. Morales: That's a lot of money and programs to manage with a seemingly modest number of resources.

Mr. Coy: We like to pride ourselves on being able to manage these programs. In reality, ACF is about 2.1 percent of the entire HHS population, but we're managing probably more programs and more dollars than any agency within HHS.

Mr. Romeo: Curt, thanks for providing us with that sense of the organization. Perhaps now you could tell us a little bit more about your area and specific role within ACF. What are your specific responsibilities and duties as the Deputy Assistant Secretary for Administration? And maybe you could tell us a little bit about the areas under your purview.

Mr. Coy: I sure will, Tom. The Deputy Assistant Secretary for Administration, for all intents and purposes, is the chief operating officer of the agency. And you can well imagine all of those sorts of things that come underneath that: resource management, human resources, acquisition, contracts. I also wear the hat of CIO for the Administration for Children and Families. I also wear the hat of CFO, chief financial officer, and the chief grants officer. It's one of the largest grant-making agencies within the federal government. Within my specific office, we have about 220 folks. That's about 100 people here in Washington, D.C. and about 120 in the 10 regional offices that we have throughout the country.

Mr. Romeo: Regarding your responsibilities and duties, what are the top three challenges that you face in your position, and how do you address those challenges?

Mr. Coy: I don't know if these will be in order, but they're the ones that come to mind: first and foremost is the human resource or human capital, and the resource management of how we do our work in ACF. And that's a combination of factors of federal employees, contractor employees, support employees and so on and so forth. ACF's workforce, the demographics of that workforce, is clearly a challenge. It is a maturing workforce. And so getting in good folks and doing good succession planning is a real big challenge.

Most certainly is grants. But we do a lot of grants in ACF, and being able to mange that function effectively, to be good stewards of the taxpayer money, is critically important. On the other side of that fence is the chief financial officer or financial role that I play in ACF. And, again, that's ensuring that we are good stewards of the taxpayer money. But on a practical level, that's the CFO audit, that's all of those things that go with being the CFO.

That's three. And I would add probably two others: the technology challenge. That clearly is critically important as we go down the road and start looking at how we best utilize both our people and our contractors in our systems work.

And then finally, probably one that's more near-term in the next 18 months to two years is sort of stability. And what I mean by that is clearly, the election cycle is upon us, and looking at those challenges as we go down the road and ensuring that we have a stable senior leadership within ACF, and that stable leadership is comprised of both political appointees and career senior managers.

Mr. Morales: Curt, you and I have had the pleasure about 10 years ago of crossing paths, and I know you have a very interesting background. So I'm curious, can you describe for our listeners your career path and how you got started in your career?

Mr. Coy: It's probably one of the stranger career paths. I started out as an enlisted person in the Air Force. For some strange reason, I was accepted into the Naval Academy, graduated from there. Spent the next 20-some years in the Navy as a naval officer; first as a, if you will, a ship driver, and then the last 10 or 15 years as a supply corps officer. Supply corps officers in the Navy are generally considered the business and financial managers of the Navy.

After that, I went to work for Coopers & Lybrand, which then morphed into PricewaterhouseCoopers. I was there for about seven years. I was hired in 2000, in the fall of 2000 to be the director of the HHS Program Support Center, which is about a $400 million fee-for-service organization.

Two years later, I was asked by the new Secretary, then-Secretary Thompson, to become the Deputy Assistant Secretary over at ACF.

So that's the condensed version.

Mr. Morales: That's the Reader's Digest version.

So with all these broad ranges of experience, how has your career, both in the Navy and later on in the private sector, prepared you for your current leadership role and shaped your management style and approach?

Mr. Coy: I don't think any one thing shapes or makes a person what they are now. But there's a lot of background that goes with that. Folks have asked me similar-type questions. My background of being a naval officer is accountability. And that accountability leads to lots of other things.

Probably one of the characteristics that makes a good leader is curiosity. Why do these things work this way? Why do people do things the way they do it? And then probably, I've given a number of lectures at HHS about leadership, and one of the things I tell people is leadership is about taking care of folks. And there is a difference between management and leadership. And I often tell people that management is managing things and leadership is leading people.

Mr. Morales: Great. Thank you.

How is ACF integrating budget and performance information? We will ask Curt Coy, Deputy Assistant Secretary for Administration at the Administration for Children and Families, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Curt Coy, Deputy Assistant Secretary for Administration at the Administration for Children and Families. Also joining us in our conversation is Tom Romeo, general government industry leader for IBM.

Curt, let's talk for a moment about the President's Management Agenda, or the PMA. In the last OMB scorecard, about half of the federal agencies, including your department within HHS, received a red rating in financial performance. Could you tell us from your perspective why this is such a challenging area for federal agencies? And second, what has your agency done to contribute to your department's progress and improvement over the last year, so much so that OMB has provided a green rating in progress?

Mr. Coy: Well, that's a long question and an interesting one. In ACF, we've been very successful in the PMA overall. Each quarterly progress rating since 2003, ACF has gotten about 105 out of 109 green progress rating.

With respect to the financial management challenges, just set the stage very, very quickly. The Department of Health and Human Resources is 65,000 employees. In round numbers, their net cost of operations is about $623 billion. HHS also has about 12 operating divisions, of which ACF is one of them, National Institutes for Health is another, and so on and so forth, and about five major accounting centers.

HHS has been working very, very hard to implement a systems-oriented approach to financial management. We have a system called the Unified Financial Management System, but having said what I said about HHS and their budget and the number of divisions, you could say the same thing about the Department of Defense and Homeland Security. The complexity of these organizations is clearly a challenge.

What PMA does is they assign scorecard ratings of red, yellow, and green. And then they divide that further every quarter into progress ratings and status ratings. Right now, HHS is green in progress and red in status. The red in status is in large part due that we're not finished with our UFMS implementation.

The challenge of implementing the state-of-the-art sort of systems environment is exasperated by the size and complexity of what HHS does, or the other federal agencies that are red. But the good news is, as you look at HHS, the progress ratings -- and what progress does is says you're moving toward and doing the right things. And what's exciting about that is HHS has been receiving these green progress ratings. In other words, we're hitting the milestones.

So financial management is not just the CFO audit. It's also looking at how do we develop and adapt a world class financial management system and practices, and use that information on a daily, weekly, and monthly basis.

Mr. Morales: Now, could you talk a little bit about budget and good practices? Budget and performance integration lies at the heart of ensuring both strategic allocation and the efficient use of funds. Many organizations are working to implement the budget and performance integration aspects of the PMA.

But can you tell us about your agency's efforts to get to green and sustain for the budgeting and performance integration? And how has your organization expanded the use of financial data to inform the management decision-making process?

Mr. Coy: Our President's Management Agenda scorecard with respect to budget and performance integration is we have a green in status and we have a green in progress.

First and foremost is probably our PART success. And the PART is the Program Assessment Rating Tool. We are also using financial data to inform management on a number of things, such that we turn things around and use financial data to make decisions.

And I'll give you two or three examples. We use financial data to look at or improve program oversight, debt collection, implement actions resulting in cost savings to the agency. And some of these things are as mundane as prioritizing site visits to grantees, decreasing the number of open or active grants.

I will tell you, in ACF, we have a real success story with respect to grant audits. We've closed over 7,000 grant audits in the last three or four years. We've made a concerted effort to use that financial data to close out a number of our grant audits. We also improved our single audit compliance supplements and a number of our internal controls. Our Child Support Enforcement folks use the information out of UFMS almost on a daily and weekly basis to do forecasting, to take a look at actual expenditures, to take a look at how we prioritize conference spending and travel, and the list goes on and on and on.

The good news is, in all honesty, the use of financial information in today's government is critical. And I don't know that we're proud that we're using it. It's a practical application of what we have to do. And we have to do that because we don't have the kind of people -- numbers -- that we used to.

In the good old days, if you will, it was kind of fun and interesting and easy to have people with spreadsheets and keeping track of all of these things. And we don't have that luxury anymore. But again, it goes back to technology making things happen a little bit better and faster.

Mr. Morales: Now, Curt, earlier in describing your career, you used the word "accountability." So I find it interesting that your organization has received an unqualified opinion on its principal financial statements for the eighth consecutive year, I believe, which clearly demonstrates a pattern of financial accountability. What is the significance of having this clean opinion? And what are the keys to successfully achieving a timely and clean opinion?

Mr. Coy: Well, first, the significance to me is it clearly shows that we're working hard to be good stewards of the taxpayer money. It's not just simply making sure all the numbers are in the right columns or in the right categories. The CFO audit has become so much more than that. It shows that we're a professional organization, that we take pride in what we do, and we stay on these things.

And that's probably the next thing you have to remember: you got to keep up with this year-round. This is not a two-week drill at the end of the fiscal year. This is something that you do over and over and over again throughout the entire year. And probably most importantly is we've been -- knock on wood -- pretty fortunate to have some very, very sharp folks working on this. I think the success of any program in any organization, whether it's in the private sector or public sector, is dependent upon having good folks. And we have some incredibly sharp people that are doing these things, and they're incredibly dedicated.

Mr. Romeo: Curt, part of that accountability is around improper payments. And agencies are required to annually review programs to identify those susceptible to significant improper payments. Improper payments can include payments made in the wrong amount, to an ineligible recipient, or improperly used by the recipient.

Can you elaborate a little bit on the initiatives and strategies that the department has employed to manage and reduce improper payments? Tell us a little bit about the progress you've made. I think the progress you've made in the other areas is very impressive. And then talk a little bit about how much of a challenge that effort still presents to your agency.

Mr. Coy: In HHS, we have about seven programs that are tracked by the Department or OMB, the Office of Management and Budget. Of those seven programs, Medicare and SCHIP, and so on are some of the others -- but ACF owns four of them; the TANF program, which is welfare, Temporary Assistance for Needy Families, our child care program, our foster care program, and our Head Start program. And we also have an improper payments initiative called PARIS. I'm going to talk about that in a few minutes as well.

But the fact of the matter is these four programs are integral to the Department of Health and Human Services' improper payments initiative. And each one presents a different challenge. For example, for the Temporary Assistance to Needy Families, or welfare, that's principally a block grant program that goes out to states. The federal government, for all intents and purposes, does some oversight of that program. But it's left principally up to the states to develop their own welfare programs. That was part of welfare reform back in 1996, and was reinforced again by the reauthorization just last year.

When you say improper payments, we shouldn't be giving money out to the wrong people in the wrong amounts of money. For example, TANF, each state has different eligibility requirements. And so do you measure those that are ineligible, do you measure how many improper payments go to people that aren't supposed to be getting it? Just coming up with those kind of small nuances is critically challenging, if you will.

On the flip side of that is the Head Start program, which is a lot more discretionary program. And what we've done is we've developed an error rate, and we're reporting these things in our budget on a yearly basis. And so -- in each one of these things, they're each done separately.

Now, we've also done about 7 to 15, depending on how you count it, risk assessments of programs that we also have. And we are very serious about it. ACF deserves a lot of credit, those program folks deserve a lot of credit for coming up with strategies to implement the 2002 law.

Mr. Romeo: I can see where, with as many programs as the ACF oversees, it could be a real challenge to track payments across all of those and ensure the correct payments, especially with the number of people that you have as employees.

Mr. Coy: Well, it really is a challenge, because each of these four programs are entirely different, so you can't measure improper payments in Head Start the same way you might measure improper payments in the welfare program. And then there is the child care program and the foster care program. And they're all different size budgets, but they all go out and they're managed by states. The Head Start program is managed by Head Start grantees. And so you can imagine the rolling effect of this.

But what's also interesting is watching the end users of this improper payments initiative and that cultural change, because their first instinct was, "We don't want to have anything to do with this. It's not my problem. That's a federal government problem." Then it went to, "Well, I really don't want anybody to know my error rate." "Who wants to be told what your error rate is? I don't care if it's 1 percent or 50 percent. Nobody wants to be told that you have an error rate."

And that cultural shift is changing now, such that you see things, the nuances of seeing state and local websites that say, "And we're doing these things to support the President's Management Agenda." Or "We're doing these things," maybe not necessarily to support it, but in response to the President's Management Agenda, or in response to the Improper Payments Act.

And we've taken it from, if you will, an environment, I think anyway, that is negative in nature, such that it's now looked at in terms of, "This is critically important." It doesn't mean that you're going to get back all of this money. It doesn't mean that there is going to be billions of dollars that gets poured back into the federal treasury. But what it means is that we, as good stewards of the taxpayer, both at the federal level and at the state and the grantee level, are paying attention to this. And I think that's really the cultural change that one's looking for.

Mr. Romeo: I think the effective application of those dollars to the people they're intended for is a very positive outcome of the programs that you're running.

Mr. Coy: Well, if you look at any one of these significant Improper Payments initiatives, for every dollar that is not spent in the wrong areas is another dollar that can be spent on a Head Start grantee or can be spent on the state's welfare system, can be spent in child care and foster care.

Mr. Romeo: One other area of assessment is the PART tool. So in 2003, the Office of Management and Budget initiated its Program Assessment Rating Tool, commonly referred to as PART. It places greater emphasis on results and outcomes rather than processes and outputs. Can you tell us a little bit about how your agency has performed under the PART? And how has PART enhanced your agency's performance management efforts?

Mr. Coy: PART is rather interesting, and it started out rather slow. And the concept is, "We're not going to just give you money. And to fix your program, we're going to have to give you more money."

What the Program Assessment Rating Tool tries to do is take a look at the intent of the program, and is the program successful with respect to the intent of that program. And so they break PART down into about 25 questions and its four different areas, with the first and fourth section the most important. And then they rate each program as effective, moderately effective, adequate, ineffective, or results not demonstrated.

In ACF, we have had the absolute pleasure of being, if you will, "PARTed" 27 times in the last several years. And we've gotten the following ratings: three were effective, that's the highest score you can get. Eight were moderately effective; that's, if you will, a, b, c, that's the b of things. Seven were adequate. Nine were results not demonstrated. And none of them were ineffective.

We have a great deal of pride that our Child Support Enforcement program scored about 90 percent, which is the highest score for any social services program within the federal government, period, bar none. About 98 percent of ACS performance measures track outcomes rather than outputs. While it may sound like a nuanced response, measuring outcomes instead of how many widgets are you producing with this money and so on, but what is it that you're actually getting for this program, is critically important. And we've seen this success translate into green PMA scores in status and progress.

Our PART team within ACF recently got a Secretary's Distinguished Honor Award. And the other good news is our PART scores are improving. Over the course of 2002 through 2005, we had about 57 percent of our programs that were evaluated rated as results not demonstrated. For the period of 2006 and 2007, only about 12 percent of those scores were results not demonstrated.

So what it shows is two things: first is, there is a little bit of science that goes into the rating tool. But it also points out that you may need to make changes into your program to get the results that you're looking for. And we've used this tool, and now we've inculcated it into our budget and into all of our budget documentations.

Mr. Morales: Curt, we only have about another minute left in this segment. But I do want to ask you about grants management. The grants management line of business seeks to establish a government-wide solution to support the end-to-end grants management activities.

Now, earlier, you mentioned that ACF is perhaps the second largest of the grant-making agencies within the federal government, just behind CMS. Could you tell us about your agency's efforts to become a grants line of management shared services provider within the federal government?

Mr. Coy: We are one of three agencies selected by the Office of Management and Budget to be a Center of Excellence for grant systems processing.

A couple of years ago, in the essence of time here, OMB asked agencies and the private sector to submit proposals to be a Center of Excellence. We did. We were successful. And so now we have about eight different partner agencies. We process about $59 billion in grants through our system alone.

The net operating costs remain at $5 to $6 million a year, which is, if you go look at some of the other grant systems in the federal government, about 10 times less than them. And we got into it for in large part selfish reasons. As you indicated, we're one of the largest grant-making organizations in the federal government. And one could even argue that the Medicaid, Medicare services-type things aren't pure grants as we know them as grants.

We were the big dog, if you will, with respect to the number of grants that were put out -- both in dollars principally. And we thought we had a pretty good system. We wanted to become a Center of Excellence so we wouldn't have to go to anybody else. But the key concepts of the whole Center of Excellence that we've inculcated into ACF is, we look at it as a partnership with our folks that are part of us. It's a shared cost. The overall operating costs are about $5 or $6 million. If you do half of the grant transactions through there, then you pay half the cost.

ACF used to pay the full freight of that $5 or $6 million. Now we pay about 60 percent of it. That money that is physically saved goes back into any number of things, whether it be more grants, whether it be more training opportunities, whether it be more travel opportunities. And so being one of the Centers of Excellence has been really successful for us.

And we've been recognized with a number of awards. We got just this past fall a President's Quality Award, which was HHS' very first President's Quality Award. We've also gotten just recently the Civilian Leadership in Enterprise Architecture Award, presented by the E-Gov Institute.

We were also given the National Grants Contract Management Association Award for Electronic Solutions just this year in April. So we're pretty excited about that.

Mr. Morales: Great, excellent.

What about the Faith-based and Community Initiative? We will ask Curt Coy, Deputy Assistant Secretary for Administration at the Administration for Children and Families, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Curt Coy, Deputy Assistant Secretary for Administration at the Administration for Children and Families.

Also joining us in our conversation from IBM is Tom Romeo.

Curt, discretionary grants permit the federal government to exercise judgment or discretion in selecting the applicant or recipient organization through a competitive grant process. In the last fiscal year, the agency provided substantial discretionary grants awards. Could you tell us about the agency's effort to ensure efficiency and manage or reduce risk in this area?

Mr. Coy: I sure can. Let me give you the broad picture. In round numbers, ACF awards about 7,700 grants a year. That's about 20,000 transactions when you add in all of the MODs and this and thats to them, for a total cost of about $47 billion of grants. Of those, about 3,000 of those are discretionary grants, and about 8,800 transactions, worth about $7.5 billion.

And we have a very structured and rigid process with respect to providing discretionary grants. And it all starts with the program announcement. In the contracts world, that's called the Request for Proposal. By the time we get it on the street, it has been vetted by a number of folks. And the program announcement clearly indicates what you're looking for, so that it's critically important that this program announcement be very clear and hopefully very crisp.

In almost every case, we have panels of outside civilians, non-feds, that sit on the panels and evaluate these proposals. And we come up with a rating and ranking list based upon those evaluations. And so they're independent panels overseen by the feds. And so the panel is done. We normalize those scores across panels. And you sort of draw the line on how much money do you have for that particular program. And you draw the line and everybody below the line is not funded, and everybody above the line is funded.

Those grants that we think we're going to fund, we make sure that perhaps there is a geographic distribution that's there. You don't want to have two highly rated grant proposals but they're right next door to each other in the same city, state. You want to try and spread opportunities out across geographic areas.

You also take a look at those grants or proposed grantees and see how they're performing. There are some grantees that are on watch lists because of audits and so on and so forth. So we take a look at it from that aspect.

Once we get done with all of that, that list is then vetted through the grants officers. So the program staff puts it together. Once those two pieces come together, the program staff and the grants staff, and that list is finally established, it comes to me. As the chief grants officer, I take a look at it. Then it goes to the Assistant Secretary. The Assistant Secretary looks at it. And then once the Assistant Secretary says, "Yes, check," then those grants are sent over to the department for sort of one last vetting before we actually make the grants.

Mr. Romeo: Curt, President Bush's Faith-based and Community Initiative represents a new approach to government's role in helping those in need, through its oversight and implementation of key elements of the initiatives agenda. Would you elaborate on how ACF has significantly expanded the number of faith-based communities partnering with HHS?

Mr. Coy: Well, you're hitting on all of the ACF milestones here. ACF is one of the leaders with respect to the President's Faith-Based and Community Initiative programs. And we have a whole wide variety of them, ranging from the Mentoring Children of Prisoners, which the President spoke about in his State of the Union address a couple of years ago, the Healthy Marriage Initiative, the Fatherhood Initiative, the Compassion Capital Fund.

And all of these programs are meant to further the President's Faith-Based and Community Initiative program. And they do it by a number of different areas. Our Compassion Capital Fund initiative, if you will, is sort of a two-part initiative. One is to set up intermediary organizations to help these grassroots, faith-based and community associations apply for federal grants. And so we've been very successful in awarding grants to these intermediary organizations whose sole function is to help those organizations do just that.

We also have another component of the Compassion Capital Fund. We call them mini-grants. And they are $50,000 one-time grants to help a faith-based or community organization in any number of things. And we evaluate those. We started out with, in round numbers, about 52 of them. And in this last year, we gave out about 310. And they range from things -- simple examples of, "Gee whiz, I really could use a new van to get folks from here to there. And that would help my faith-based and community organization do this and that. So I need $47,000 or whatever the number is to do that." "I need a new computer system and printer to be able to print up flyers and so on, so I can do outreach to these folks."

Whatever you might imagine $50,000 might account for, people apply -- and we've given out close to 1,000 of these $50,000 grants, which -- when you think of the federal government, they're worth billions and millions of dollars and hundreds of thousands of dollars. But $50,000 will go a long ways to help one of these organizations. And that might be just the thing that kind of kicks them over the top when it comes to that. So we're very proud of that type of situation.

Our Mentoring Children of Prisoners, as I alluded to, what that does is it gives grants to community organizations that provide children and youth of incarcerated parents with mentors. And we're looking at these kinds of things and seeing very, very positive results when it comes to having good mentors to folks who have kids but are incarcerated.

As well, the Deficit Reduction Act, or TANF, which was reauthorized last year, included about $150 million to support programs that were designed to help couples form and sustain healthy marriages. And so many of these kinds of grants with respect to that are faith-based and community-type grants.

But one of the things that we try not to do is we don't discriminate one from another. What we are trying to do is make sure that faith-based organizations can apply for federal funds just like anybody else. And that's the thrust of what the President's initiative of faith-based is.

So our coalition partners include local governments. They include civic groups; they include churches. They include ethnic and immigrant groups, women's organizations, labor organizations, immigration organizations, community health providers, faith-based organizations, nonprofit social services. And so it's a large encompassing program that we've taken a great deal of pride on its success in the last several years.

Mr. Romeo: Curt, another area that your department has made progress in is improving its real property asset management and rightsizing your asset inventory. Would you talk about how your agency has contributed to the Department's efforts in this area?

Mr. Coy: Well, the Department has a large real property inventory. Under the leadership of the Assistant Secretary Joe Ellis, we have really come a long ways in managing this property. If you sort of think about it, we have the Indian Health Service and the Department of Health and Human Services. They have anything from hospitals to warehouses to all kinds of things.

We're developing a computer-based organization that tracks leased property and owned property by the government, and starting to look at how we manage this property in a much better fashion. Within ACF, we're relatively easy. So I would like to say that we contributed significantly to HHS. But we don't own any buildings. We lease our space. And so our input to real property is principally ensuring that our leases are input into the database, that our leases conform to the kinds of things that the Assistant Secretary has said we need to conform to, as well as OMB.

Mr. Romeo: One of your many hats in the agency is also as the information technology portfolio lead. What are some of the key IT management challenges that ACF faces? And what has your agency done to enhance its IT capabilities to meet such challenges?

Mr. Coy: Well, probably, as I alluded to earlier, the thing that consumes most of our time in the IT world is our grant system Center of Excellence. And we have a number of partners, as you might imagine, and managing that system has become increasingly important.

As CIO, we also are looking at our IT infrastructure. And the IT infrastructure is servers and e-mail and just the business of doing things on a daily basis. ACF has joined a number of other HHS agencies in a shared service platform, it's called the Information Technology Service Center, ITSC, in the hopes of putting together those scale of services, such that we're not managing all of these servers and the nuances of those kinds of things.

Probably the next challenge is the Unified Financial Management System. We implemented that just this past year. There are still things that we need to get the bugs worked out of. And so that consumes time and energy and resources.

And quite frankly, as you look at ACF's budget with respect to discretionary funding, we have been, for all intents and purposes, flatlined for the last several years. What does that mean? We're absorbing pay raises, we're absorbing the cost of increased server costs, we're absorbing the costs of increased IT. And so you get to a point where you have to make some decisions on -- while you would like to do this, what's the business case to be able to go out and get that multimillion-dollar server, for example.

Mr. Morales: Curt, just to change tracks here a little bit. With such a critical and broad mission, collaboration must be critical to your success. What kinds of partnerships are you developing now to improve operations or outcomes at ACF? And how many of these partnerships change over time?

Mr. Coy: Well, to answer your last question first, they change all the time. But one of the things -- and it's most interesting having the CIO role, the CFO role, and the chief grants officer role, and Deputy Assistant Secretary role, because what you're looking at is technology is allowing and the drive to improve business services and government efficiency. It has to. So it's forcing a change in the way organizational boundaries are looked at.

Technology is clearly -- simple things like e-mail. It used to be that you'd take a memo from here to there, and you'd have a runner that would take it to the next building to the -- and now you can communicate almost instantaneously. The grant Center of Excellence that we have is probably an excellent example on how multiple agencies have decided that they have a common interest that's best served by going outside their agency. But they still need to ensure that their mission-critical services are done, and they're done preferably and hopefully at a lower cost.

And so the key to working on this, and a reason this line of business is succeeding for us anyway, is that the vision has to be structured not just on ACF, but the vision has to be structured on what's the bigger picture. And the vision of, in reality, our grant system Center of Excellence is to get grants out the door in a timely and cost-effective manner. It's not to get grants out the door. The way ACF does it, in a timely and in an effective manner. And so these kinds of things become the catalyst as you're working across different agencies.

But the fact of the matter is, you can say technology and you can say financing, you can say all of those things. But you're never going to avoid that interpersonal relationship, the working with other senior staff across agencies. And once you create that bond of that senior staff in fact developing common goals and visions, they quickly become the primary agents of any transformation that you're talking about. And they redefine where those organizational boundaries really are.

I would suggest that across the board, the example that we've seen with our Center of Excellence for the grant system has been a very successful tool. It's been a very collaborative effort, and it's actually been sort of fun.

Mr. Morales: What does the future hold for the Administration for Children and Families?

We will ask Curt Coy, Deputy Assistant Secretary for Administration at the Administration for Children and Families, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Curt Coy, Deputy Assistant Secretary for Administration at the Administration for Children and Families.

Also joining us in our conversation is Tom Romeo, IBM's general government industry leader.

Curt, I'd like to transition now and look towards the future. What are some of the major opportunities and challenges your agency will encounter in the future, and how do you envision your office will evolve over the next, say, three to five years to meet these challenges?

Mr. Coy: Well, I think our office is evolving a lot. And that's principally as a result of a maturing workforce. You can call it what you like, but the fact is, retirees are on the rise within the federal government. And so how do we handle that kind of succession planning as you lay out training and lay out hiring schemes and so on and so forth. So that's probably the biggest challenge is we're looking at how do we in fact ensure that our programs are done and done properly.

Technology has to be one of those challenges. It also has to be the opportunity that technology is going to allow us to do things better, faster, hopefully more inexpensively, and to be able to leverage our assets across the board.

And then finally, strategic hiring. How do we bring in the right people? So we have a whole strategic hiring process that we have. As we transition to next year and the year after and the year after, I would suggest that in the near term, those are the kinds of things that keep me awake at night.

Mr. Romeo: Two of those points were about your human resources. How do you ensure that your employees have the appropriate training and skills? And what is the organization doing to ensure that it has the right staff mix to meet the upcoming challenges?

Mr. Coy: Well, we're doing two or three things. We have a very robust training plan. In the past several years, we've seen well over 90 percent of ACF staff participating in some degree of training. And that can be extensive training. It can be sort of online training for computer usages, but we've been very aggressive in trying to ensure that all staff have training opportunities.

We also have taken a look at our training funds. We've fenced training funds. And we've made training part of all of our SES performance contracts. Training's important, and we're going to measure it. Senior staff are being held accountable for those kinds of training things. And so we're making that accountability in training on ensuring that we have the skill set.

We're trying to stand back and look at our hiring from a more strategic sense. And what I mean by that is in the days of past, if you will, if a Head Start program person left, then you would go look for another Head Start program person. But in reality what you want is somebody who could read and write well, somebody who can do analysis and strategic planning and so on and so forth. And what are those kinds of characteristics that we're looking for in our entry level workforce as we move up the whole career path that we have.

And so when you look at the human capital aspect of ACF, we've been very successful in retaining good folks. We've been very successful, and recognized for it. So we're looking at the kinds of skill sets that we're looking at when we hire people; once we have them, to ensure that we have training opportunities; and in some cases, training opportunities at the expense of other things, at the expense of perhaps travel, and perhaps even at the expense of hiring another person. Because for every $100,000 that you put into the travel kitty, in round numbers, that's a person that you're not hiring.

Mr. Romeo: Are there special steps taken to attract and maintain high quality technical and professional resources?

Mr. Coy: Well, one of the things that we're trying to do is a strategic hiring process. And we've done is we've tried to lay out and look at our workforce somewhat more strategically.

If you look at the number of occupational codes or series that the Administration for Children and Families have, in round numbers, there are four occupational codes or series that account for over 82 percent of the staff at ACF. So if you manage those four occupational series and you do it well, the other 18 percent you can do on a onesie-twosie basis, on an as-needed basis as you go down the path.

So we've created hiring schemes for those four occupational series, and gone out nationwide and advertised for those jobs. And folks come in and they apply for these jobs. And we have panels from all of the programs that come in and interview them. And so then we end up ranking and rating these folks. And we may hire 20 of them at a pop, or 30 of them, depending on what our budget looks like and so on and so forth. And there is a hope and the intent that we can almost take any one of these 20 or 15 or 30 folks and plug them into almost any program office within the Administration for Children and Families and they'll be successful, because they have the requisite skills to be able to do that.

How do we keep and attract these folks? What we've had from entrance interviews as well as feedback from our process is -- we have things like a student loan program. We're one of the few operating divisions within the Department that has a student loan reimbursement program. We have a tuition assistance program. We have a leadership development program that is designed to develop high-performing GS-12s, and 13s, and 14s, and 15s.

And then finally, we have developed a culture, if you will, that we only hire -- for the most part, there are exceptions like anything, but for the most part, we only hire at the 9, 11, 12 level. When we need to advertise for a GS-13, 14, or 15, we do that internally. And it forces two or three things. It forces that manager out there to say, "Wait a minute. You're not going to get your next GS-14 replacement off the street. It's going to be from that pool of folks that you see right now. So you better make sure that those folks are getting the training and the opportunities that they need." So we have a very robust program when it comes to those kinds of things.

Mr. Morales: Now, Curt, earlier you mentioned the pending retirement wave. So specifically how are you handling this situation, and what are you doing to ensure that the organization has the right mix as you move into these years?

Mr. Coy: Our workforce has shrunk about 10 percent over the past five years. We've often reported -- as you look at the demographics and the statistics -- and I do -- but ACF remains -- as you look at the Department of Health and Human Services as a whole, we're more diverse, we're more educated, and we're more experienced than HHS. And those are all good news things.

The bad news is that in the next five years, about 50 percent of our non-supervisors will be eligible for retirement. That's almost double what the population of HHS is. Within the next five years, 75 percent of ACF supervisors will be retirement-eligible. That's again way above any of the norms that you even read about in HHS or in the federal government as a whole.

And so we need to take a look at those key issues, and we have been, when we do succession planning. Because what we've seen is, number one, we try and manage ACF as a whole. It's not managing as entities. And we haven't said, "Okay, you get five people. You get 10 people. You get 20 people, 30 people, 200 people."

We take a look at ACF across the board and we make serious management decisions on where we need to do that backfill, because what happens is, over the past five years, in round numbers, we've been able to replace about three people for every five that leave.

And so if you take the leadership aspect of being able to manage the workforce and then bringing in the right folks at the entry level in those four occupational codes and series and you focus on those, hopefully we'll be in a good place. Sometimes change is difficult. But we also look at this opportunity -- when it comes to the percentage of supervisors and non-supervisors who are retirement-eligible, and then you stand back and look at the demographics of that. And in any given year, about 20 percent of those who are eligible actually do retire. But you don't know who that's going to be.

That's the very frustrating part is, you can't do succession planning based upon Bob, and Mary, and Joe, and Susie and so on and so forth, because you're not even allowed to ask somebody when they're thinking about retiring. And so you have to do it on a more global sense, not on a more finite sense. That provides a little bit more of a challenge.

Mr. Morales: Curt, you've had a very extensive and very successful career both in public service as well as in the private sector. So I'm curious, what advice might you give a person who is considering a career in public service?

Mr. Coy: Public service is an honor. As corny as it sounds, people ask me, "What made you get back into the government?" The fact of the matter is, public service really is an honor, and that public service is critically important to the way that you view your job.

I would also suggest when it comes to young folks in government service, my advice would be "be curious." That's probably the one attribute that I value the most. Leverage those who go before you. Make sure that you get everything you can from them before they leave. Don't accept the status quo. It's one of the things that probably, stereotypically, government employees have their worst reputation. And that's the status quo. Don't look at things from a status quo perspective.

And then finally, I would suggest that you celebrate what you do and how you do it and why you do it. Because if you're not in that shower in the morning thinking of all those things that you got to get done today, and if you're not driving home at night or going home at night going, "I didn't get these things done today," I would suggest that you're not having fun. And maybe you need to look for something else to do, because at ACF, there's no way that you can't possibly not be challenged by the kind of work that we do.

Mr. Morales: That's fantastic advice. Curt, unfortunately we have reached the end of our time. I want to thank you for fitting us into your busy schedule. But more importantly, Tom and I would like to thank you for your dedicated service to our country both as a naval officer and now at the Administration for Children and Families.

Mr. Coy: Thank you, Al. I appreciate it.

Mr. Morales: This has been The Business of Government Hour, featuring a conversation with Curt Coy, Deputy Assistant Secretary for Administration at the Administration for Children and Families.

My co-host has been Tom Romeo, IBM's general government industry leader.

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 how 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 businessofgovernment.org. There, you can learn more about our programs and get a transcript of today's conversation.

Until next week, it's businessofgovernment.org.

Originally Broadcast July 21, 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 businessofgovernment.org.

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.

The Department of Defense is transforming to become a netcentric force. This transformation hinges on the recognition that information is one of its greatest sources of power. Information is a strategic component of situational awareness which enables decisionmakers at all levels to make better decisions faster and act sooner.

Transforming to a networkcentric force requires fundamental change in processes, policy, and culture. Changing these areas will provide the necessary speed, accuracy, and quality of decisionmaking critical to future success.

With us this morning to discuss this critical transformation and the role of IT is our special guest, David Wennergren, Deputy Assistant Secretary of Defense for Information, Management, Technology, and Deputy CIO.

Good morning, Dave.

Mr. Wennergren: Good morning, Al. It's great to be here with you.

Mr. Morales: Also joining us in our conversation is Linda Marshall, partner in IBM's defense industry practice.

Good morning, Linda.

Ms. Marshall: Good morning, Al.

Mr. Morales: Dave, perhaps you could begin by describing the mission of your office and how it supports the overall mission of the Department of Defense.

Mr. Wennergren: Absolutely. So the Department of Defense Chief Information Officer is responsible for all of the information management and information technology initiatives across the entire Department of Defense -- Army, Navy, Air Force, Marine Corps, defense agencies, a rather broad set of responsibilities. Three and a half million people deployed in rather austere conditions around the world, millions of computers, thousands and thousands of systems, hundreds of networks, about $30 billion a year IT budget. Probably about 170,000 of those 3-1/2 million people as IT professionals working in the organization.

And it's kind of fascinating to watch what's been going on, because for decades the Department of Defense, like all large organizations, has functioned very effectively as a very decentralized organization: lots of chains of commands with the thought about local organizations develop local solutions to meet local needs. But the Internet Age happened, and so now we're in a world where it makes much more sense to band together to develop enterprisewide solutions. So as the CIO team, you're in a sense responsible for charting the course, to do what we call our transformation to networkcentric operations. It's the idea about together, we could share knowledge instantaneously around the world to be more effective in our role as the national defense for our nation.

Ms. Marshall: Dave, could you please describe your specific responsibilities and duties as the Deputy Assistant Secretary of Defense for Information, Management, and Technology, and as the Deputy CIO?

Mr. Wennergren: Yeah, it's rather a long job title, isn't it? So I work for John Grimes, who is the Assistant Secretary of Defense and the Department of Defense CIO, and I'm his deputy. So my team is responsible for the CIO portfolio. John is responsible for all of the command and control and communication systems for the Department of Defense, in addition to having the responsibilities of the Chief Information Officer. So my team, and my job as the Deputy CIO, is to take care of the CIO portfolio for DOD.

Ms. Marshall: So regarding those duties and responsibilities that you have, what are the top three challenges that you face in your position, and how have you addressed these challenges?

Mr. Wennergren: Well, front and center I think on everybody's plate is this idea about information sharing; that is, the world moved away from a world of decentralized organizations, local people making local solutions for local needs. There wasn't a lot of knowledge sharing going on. But the power of netcentricity is that the right person can get the right information wherever they are. So if you're a Naval Reservist stationed with Marines in Fallujah and you need to reach back to get to an Army system to get the knowledge that you need, you'll be able to do it in a networkcentric world.

Second, and probably front and center on everybody's plate, too, no matter whether you work in government or in industry, is the information security portfolio. The threats and attacks on our networks grow by the day, and people's privacies are in jeopardy, and information that the nation needs to defend itself is at risk. And so all of us are spending a lot of time focusing on security of our network and information assurance. And what it means to take care about information security changes as again you move away from a world of local networks where security tended to focus on defending the perimeter of your local network, to a world where everything's available on the web. And so now it's about sustainability and survivability of the internet, and the global networks, and being about to find the knowledge you need, when you need it to get your job done.

And third, and a little bit more challenging because it's a little bit more esoteric, is this idea about enterprise alignment. The very big organizations in this Information Age have to learn to work together. And so there's a lot of success stories, but there still are a lot of changes that have to be worked through as we learn to work together as a single DOD team across all of the services, and with our allies and coalition partners, with the rest of the federal government, with industry and with academia. So as you adopt to enterprisewide solutions that will service everyone, you have to behave like an enterprise, you have to be willing to use somebody else' solution, to take the test results of another organization, to use a system developed by another organization, and that gets into a lot of cultural chain stuff.

Mr. Morales: Absolutely. Now Dave, you've been in the information technology business within government for some time now. Could you describe for our listeners your career path, and how did you get started?

Mr. Wennergren: I probably have a non-traditional path for a CIO kind of guy, because I didn't grow up as an IT professional. I came to work for the Department of the Navy as a civilian employee directly out of college, and had a number of different jobs. At one point in my career, I did the public-private competitions of the OMB A-76 program. I did the base closure rounds of the '90s for the Navy. I was involved after the base closure rounds with installation, management, and logistics work, where one of my jobs was to go and reorganize the bases that didn't close.

Some people say that's like running from one program of hate and discontent to another, but I am a hopeless optimist, so I like to think that they're all programs that help people deal with change. And so I think I ended up then as the Deputy CIO because I had had a career of dealing with large-scale change management issues. And I became the Deputy CIO in 1998, so it was at the time when everybody was getting pumped up about Y2K. And I was the Deputy CIO for the Navy for about four years, and then became the CIO for the Department of the Navy for four years. And then six months ago, after 26 years, I left the Department of the Navy and came to work in the Office of the Secretary of Defense as the Deputy CIO for DOD.

Mr. Morales: So you've obviously had a broad set of experiences, both on the technology side and on the business side. So I'm curious, how have these experiences prepared you for your current leadership role, and how have they informed your management approach and your current leadership style?

Mr. Wennergren: Well, the good news, I guess, is that in assessing the world from my Department of Defense perch, we're working on the right side of stuff in the Department of the Navy. Our priorities then are still my priorities now, and I think I learned a lot. In the Department of the Navy, there are two services: the United States Navy and the United States Marine Corps, so there were a number of cultural change management issues in getting those organizations to work together, of which I was a big proponent, and so now I'm getting to put my money where my mouth was, because now I'm going to help the Navy and the Marine Corps and the Army and the Air Force all work together.

In a large organization that's very decentralized, as ours is, there becomes great power in the idea of team, and so a lot of the work that I've done over the course of my career is to help organizations function as effective teams. And I think that the IT workers, probably before anybody else recognized that every problem that they faced crossed traditional organizational boundaries, and so the only way to be successful is to get the right sets of people from the right sets of disciplines to work together, and even if they had disparate views to begin with, could become engaged in a common solution to get to the future.

And so oftentimes, you have to use a lot of tools -- you beg, plead, borrow, cajole -- whatever it takes to get people to begin to function outside of the comfort zone that they had to become part of a new team. The other thing I guess I would notice that having worked in the Navy for a long time for some really great leaders, is that it's really apparent to me that there is a covenant relationship, that leadership really is a covenant responsibility between you and the organization. You're here to serve the organization and the people of the organization.

When you realize that, then you understand the obligation that a manager has to create the environment where people are supported, encouraged, and challenged. And so if you get the right people in the right jobs, then great things can happen.

And that's really what being a CIO team is all about, I think.

Mr. Morales: Excellent.

What is the DOD's netcentric vision? We will ask David Wennergren, Deputy Assistant Secretary of Defense for Information, Management, and Technology, and Deputy CIO, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with David Wennergren, Deputy Assistant Secretary of Defense for Information, Management, and Technology, and Deputy CIO.

Also joining us in our conversation is Linda Marshall, partner in IBM's defense industry practice.

David, DoD is transforming from platformcentric to networkcentric operations. And the CIO is providing key leadership to meet this netcentric vision. Could you elaborate on DoD's netcentric vision? What are the goals of netcentric operations that are driving this transformation, and how does the recent acquisition of netcentric enterprise services fit into this overall construct?

Mr. Wennergren: Sure, absolutely. Netcentric operations, or netcentricity, is the buzzword de jure for the Department of Defense, and sometimes I think for people, it can sound a little bit jargony. I'm a relatively simple-minded guy. I like to tell the story about tinkertoys and plasma balls, because I think it gets to the heart of the matter.

In the old days, people developed point-to-point solutions, communications systems and networks, and it was much like building with tinkertoys. And I'd build one and then I'd have to connect to you, and Linda would have one and I'd connect to her, and you can begin to see that as you grow and grow in terms of nodes on the network, that interconnections become unwieldy. And so much like a tinkertoy tower that's been built too tall, it begins to crumble.

The idea of netcentricity is much more like the plasma balls that we've all seen, where energy -- or in this case, knowledge -- is in the center of the plasma ball, and wherever I touch the outside of the globe, the energy gets to me. So no matter where I am in the organization, I can plug into the global information grid, which is basically our network and data structure, and get the knowledge that I need. It's really all about the flow of knowledge and enhancing the flow of knowledge across the organization.

There was a Gartner statistic from a few years ago about how, in any large organization, public or private, about 70 percent of the knowledge of that organization lived on people's hard drives, which of course mean it wasn't really actually knowledge that you could share.

So this netcentric idea is really all about the flow of data, sharing of knowledge, and once again, knowledge management being a relatively new discipline, it begins to take on this academic aura of tacit knowledge capture and a lot of other jargons, and so we can actually simply that too, if you want. Because I'm a firm believer in the John Wayne School of Knowledge management theorem. There's a great movie clip where John Wayne's a Marine sergeant, he's talking to the young Marine and he says, "Son, life is tough. It's tougher if you're stupid."

And if you think about it, that's what knowledge management's all about. It's about the power that happens when people that work together learn together, it's what happens in the ward room or in the chief's mess on a ship when people who deploy together train together, that together we can be much smarter, much more agile, much more creative than we might be individually.

So netcentricity is really about making that happen. So it's not the sexiest thing around, but it really is all about the data. Making data visible, because the three problems I often face is I can't find it. And if I can find it, I can't access it. And if I can access it, I can't understand it. So working on those three sets of things are sort of crucial.

And you mentioned netcentric enterprise services, which is a series of core enterprise services. If you move to a netcentric world, there are some things that need to be provided by the corporation or the enterprise for the benefit of everybody, and that's what the NCES program is all about. There's no need for people to buy separate collaboration tools, federated search and discovery. We could have global directory services, we could have an enterprise portal. And so all these things that will be provided by the enterprise for the rest of the organization are what comprise the NCES program.

Mr. Morales: Now, this is likely related, but you've been quoted as saying that the world is not about separate networks. Could you elaborate a little more on what you meant by this statement?

Mr. Wennergren: That was probably a little bit more philosophical than practical, because it clearly does involve different networks now, but I think it is that idea about what does the word "enterprise" mean to you? Because different components of the Department of Defense are very big. In my Navy life, the Naval Sea Systems Command is a $30 billion a year organization. If I yank them out of the Navy and put them in the Fortune 100, they'd be way up the list. But if they're only building things that work for the Naval Sea Systems Command and the people that buy and maintain ships, they're missing the point, because the Naval Air Systems Command buys and maintains airplanes, and they're part of a broader Navy-Marine Corps team, they're part of a broader DoD team. They're part of a team with our allies and coalition partners, and on and on the list goes.

And so you have to have your mind firmly focused on -- you may be part of an individual organization, but you better be buying and building for the broader team. As a classic example, when a aircraft carrier leaves San Diego on its way to the Persian Gulf, it's got equipment and training to go do the job of being part of a carrier strike group. But halfway through the journey, they're diverted to do humanitarian relief because of a tsunami. Completely different partners, non-governmental organizations, different types of collaboration tools -- what we would call the unanticipated users. If you're not thinking about how to be connected to the rest of the world, you won't be able to be part of the network solution.

Ms. Marshall: What is the Department of Defense's data and information strategy for delivering timely, relevant, critical information to the warfighter in this new digital era, and how does this strategy seek to make data identifiable, accessible, and understandable throughout the entire enterprise?

Mr. Wennergren: It's a really exciting thing that's going on. We have a lot of folks that are working on this. Mike Krieger is one of my directors, and he's just been a true champion for change in this space. We have a netcentric data strategy, and then the corresponding directors and guides that tell you how to do it, and it focuses on what we were just talking about, about if you could make data visible, accessible and understandable, then you could share knowledge quickly.

And the way that it gets manifested is in what we call Communities of Interest, COIs. Communities of Interest are formed when people from different organizations that have a common problem or common issue get together to create a solution. There are lots of great examples of COIs. The one I thought I'd talk with you about for a moment is maritime domain awareness. So what kind of commercial vessels are out at sea? What are their crews, what are their cargos?

Interestingly, that kind of knowledge exists in databases that of course in the old days were stovepiped and owned by different organizations. So Community of Interest forums involves the Navy, the intelligence community, the Coast Guard, Department of Homeland Security, Department of Transportation. And in a matter of months and a few hundred thousand dollars, instead of what we would have done in the past, when we had a penchant for saying, I've got existing legacy systems, they're not quite fitting the bill, so let's go buy the multi-gazillion dollar new system that takes year to deploy. So instead of doing that, they got together, they found the data, they used the commercial state of the art technologies like XML to make the data available to be served up, and in a few short months, everybody is able to see this information.

So whether you are the captain of the Coast Guard cutter or the Navy vessel, you're able to see the information that you need on the commercial vessels. It's fabulous and it happens really fast, and there's lots of these COIs going on. There are COIs about blue force tracking, keeping track in the battlefield of all the people that are on your team, strike missions, which are all about planning targeting but use the basic issues of what, when, and where that are equally applicable whether or not you're planning a Tomahawk missile strike or you're trying to do disaster relief at FEMA, and the list goes on and on and on.

And it's a wonderful thing because it brings together people quickly to find the solution and deliver results in a few short months. I'm just so excited about it, because it's changing the way we do business. It's much like the model of weather. Everybody contributes local weather data because they'd like to know what weather is like in the rest of the world. So everybody's publisher serves up the stuff that they have for the benefit of being able to use the information that the others have too.

Mr. Morales: So it's really about a collaboration. That's sort of the key component to all this.

Mr. Wennergren: Yeah, absolutely. You know, we focus on the technical side of it at this point, but there are other aspects there, too. And so the technology exists to make data strategies happen, but there are other parts of it, too, because of course, there are process changes and policy changes and educational opportunities. So hand in hand with our netcentric data strategy, we have an information sharing strategy, and now we're working on the corresponding implementation plan that actually lays out the other kinds of changes that need to take place in order to break down the impediments to sharing of the paths.

Ms. Marshall: So Dave, what role does service-oriented architecture play in making your data strategy, as well as your overall netcentric vision, a reality?

Mr. Wennergren: Yeah, SOA is at the heart of the matter. There's a fascinating philosophical change that's going on right now. For years, we've had this systems view of the world. It's the way programs are designed, it's the way architectures are built, but the world really is now all about services, and this idea that you could develop a service and serve it up, I could do it as a self-service transaction. I could be standing, waiting for the bus, go to the enterprise portal from my little wireless device, and do a transaction because it's service-oriented, rather than standalone monolithic systems of the past. And so the document that we'll be publishing is called our netcentric services strategy, and it's the companion document to the data strategy that tells how SOA will be used to make this vision a reality.

Mr. Morales: David, how do you balance the need to procure best-of-breed technology with the security of DoD's information technology infrastructure? So for example, how do you deal with the reality that almost all commercial off the shelf software has at least some components of it that were developed in other countries?

Mr. Wennergren: Yes. I would say that the top two issues for me are information sharing on the one hand and information security on the other. And the challenge that we have is people often refer to them as a balancing act. How do you balance information sharing and information security, which is not the analogy that I like, because I think it pits one against the other. And it implies that advances in information security come at the expense of the ability to share, which are of course the simplest kinds of information security solutions.

And so one thing that's happening is the information security professional is viewed as the knucklehead that just wants to shut down access. The information sharing zealot is viewed as the crazy person that doesn't understand that it's a dangerous world out there and they shouldn't just be opening the door. And so it really has to be something that we focus on together, and so using a nautical analogy about the high tide rises all boats, we need to be extremely successful at both information sharing and information security.

And if you think about it that way, then you will choose for a different set of information security solutions, because the easy information security solutions are always about isolation, right? The more I wall myself away, the less bad things can get in, but of course, the less collaboration can go out. And so this idea about we must be extremely successful about sharing and security, that's what's driving the set of security solutions and secure collaboration solutions that we're looking at now.

It is a challenging time. Globalization happened, and things are built around the world, and so it is really important that people understand what they're buying and what they're using it for, and the pedigrees and the security of the different solutions, and one size never fits all. What's important for speed in an unclassified environment might be different than what's needed in a highly classified environment. So software assurance, what's made where, and the pedigree of it and the security of it are all things that people need to take into consideration, but there is a continuum about using this kind of technology for this sort of answer, different kind of technology for a more secure solution.

Mr. Morales: So let me expand on this theme, if you will. You've called for innovative partnerships with industry. Could you elaborate on what kinds of partnerships you are currently developing to improve operations or outcomes, and in what areas would you like to enhance or expand this public-private collaboration?

Mr. Wennergren: Absolutely. Gone are the days where people can go their own way. The government shouldn't be in the business of building their own stuff. There are wonderful commercial solutions that are out there, and government needs to leverage those. Gone also have to be the days where the government person built this really detailed spec and threw over the transom and expected a vendor to just deliver on it. It would seem to me in this information world that it's the height of arrogance to imagine that you as the government person trying to get a solution know all the answers.

And so what I'm a big fan of is performance-based contracting and managed service, and this idea that my relationship with industry ought to be one about a strategic partnership, where I talk about the results that I need to obtain and I talk about the service levels that I expect, and perhaps I have some kind of fixed price contract vehicle with incentive payments so that if you can exceed my expectations, you'll be rewarded for your innovation and performance, and then all of the great minds at your company are able to be brought to bear.

In my Navy life, when we did the Navy/Marine Corps Intranet, which was a large seed management contract, it was done as a performance based contract, we didn't tell the winning contractor that he had to buy Dell computers and use Windows 2000. We told him about latency and refresh rates and security and customer satisfaction, and then gave the company the freedom to pick the right products to deliver it for our behalf, and that's the future. You can't do this alone, and you need to leverage the fact that industry has this huge set of great brains that can help you find the path to the future together.

Mr. Morales: Great.

What about the DoD's IT innovation? We'll ask David Wennergren, Deputy Assistant Secretary of Defense for Information, Management and Technology, and Deputy CIO, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with David Wennergren, Deputy Assistant Secretary of Defense for Information, Management, and Technology, and Deputy CIO.

Also joining is in our conversation is Linda Marshall, partner in IBM's defense industry practice.

David, in your previous role as the Department of the Navy's Chief Information Officer, you led the Identity Protection and Management Senior Coordinating Group. Could you tell us about your efforts to oversee and coordinate DoD's biometrics, Smart Card and PKI initiatives? And what is the Department doing to better its performance on the Security Scorecard in accordance with the Federal Information Security Management Act, otherwise known as FISMA?

Mr. Wennergren: Yeah, I'm really fortunate that as I change jobs, I continue to get to chair of the Identity Protection and Management Senior Coordinating Group. That's a long acronym, IPM-SCG. It's been a wonderful adventure. I think we often underestimate the success of the Department of Defense's Smart Card and PKI, Public Key Infrastructure initiatives. Over the course of the years, we've issued 12 million Smart Cards with PKI credentials on it.

We have a workforce of 3-1/2 million people walking around with the Common Access Card with their PKI credentials on it. It's one of the largest smart card PKI implementations in the world, and certainly one of the most successful. And you know, 10 years ago, we would have been on a path for 50 or 60 different PKI solutions, where everybody that wanted to do something via the web and needed to do SSL or something like that would have gone out and bought its PKI solution and none of them would have worked together. And to have one card that's your military ID card, that's your physical access badge -- well, let me tell you a little bit about how it works.

So I have my Department of Defense Common Access Card, I can use it to do physical access to get on to the base. I can use it when I get into my office to do cryptographic log on onto my computer network, which is much more secure than doing user IDs and passwords. I can use the PKI credentials on the card to launch myself to secure websites. So once again, rather than having to remember 40 or 50 different passwords for different secure websites, I can use my PKI credentials to get to secure websites.

Passwords really need to go away. Passwords are not a secure way of doing business, user IDs and passwords. It's easy to crack passwords, and so that's why people keep wanting to make them more complex. They tell you they have to be longer, special characters, capital letters, and they're still easy to break, so they want you to change them. And so how many passwords do each of you need to remember? You probably write them on a yellow sticky, put them on your computer -- security professionals go crazy when I say that because of course I don't do that, but people do, right? And so this idea about being able to use the Smart Card with its PKI credentials has been a huge improvement to our security.

The number one attack vector against our networks a year or so ago was people cracking passwords, which we have dramatically reduced by having everybody in the Department of Defense use their card for cryptographic log on, but it doesn't just stop there because it's not just about physical security, physical access, and it's not just about cyber-security. So it actually is a key, forgive the pun, to doing e-business. So now I have a Defense Travel System, I put my card in, the hardware token, the card itself with the PKI credentials allows me to do a digital signature. So rather than having to do paper processes with wet ink signatures, I can do digital processes and speed up transactions, improve customer service, get paid in a couple of days now on my travel claim rather than the weeks it took to process the paperwork. So it's been a real accelerator for the transformation to e-government for us, too.

Homeland Security Presidential Directive 12, HSPD 12 has sort of said, well, this idea about a common card that you would use for physical access like we're doing with the Common Access Card, the DoD needs to be standard across all of government, and so we're a real leg up on implementing HSPD 12 because of what we've done with the card.

Biometrics are another fascinating area, because biometrics have the added advantage of telling you about somebody's history. The power of the PKI and the Smart Card is about I am who I say I am, and I'm still a valid member of the community. So this is Wennergren, and he's putting his card in the slot, and we have not revoked his certificate, so he's still a valid member of the community. The power about biometrics, like fingerprints, is that they connect you to your history. So a biometric of somebody trying to enter a base can be compared to the biometric that's in a database about a criminal activity, and allows us to connect people to problems. So biometrics work is a real growth industry for us, too.

And at the moment, fingerprints and iris scans and voice recognition and facial recognition are some of the big ones, but the number of biometric technologies that are being looked at grow by the day. It's really exciting to see. The interesting thing that's happened is that, as I mentioned earlier in the interview, what security means to us changes as you move to a web-based world. And so it's kind of fascinating now, a lot of the effort is being spent on what we call continuity of operation planning, because in this new world, it's all about being able to get to the knowledge that you need.

So a continuity of operation plan that you had a few years ago about how to protect the boundary of your network and what you would do if the server was down locally may not be the same kind of continuity of operation plan you need in a world where you're relying upon this single authoritative data source.

So there's a lot of work that's going on in addition to the things we've already done like the identity management work to improve our FISMA scores. There's a lot of work being done to make sure that we really understand the survivability and the sustainability of the network and the internet. How would you function if part of it's not available to you, and the fact that we're all in this together. I can do the best job in the world of securing my DoD computer, but I don't do this alone. I do this with partners in industry, I do this with partners in academia, and we're all sharing data together. So the security level of each of my industry partners, and the academic institutions that I do business with, has to rise with my security levels, too, or else they now become the weak links in the network.

Mr. Morales: David, I want to take us back to something that you said in our first segment. As the Deputy CIO, a big portion of your job is to put in place the policies, cultural change, strategies, and educational outreach to help staff recognize that they are part of this broader enterprise that you described. To this end, what are some of the common push-backs that you encounter in this role?

Mr. Wennergren: Push-back? People don't like what the CIO does? There is an interesting dynamic tension that happens. Because -- not to be clich�d, but I think the C in CIO actually should stand for "Change," because a majority of my time -- as a CIO, you have to understand technology because you have to be able to describe it to others, but I do spend the majority of my time focusing on cultural change issues. Not surprisingly. So we survey our workforce and our leaders and we understand who they are and -- so we're a bunch of type A personalities, and not surprisingly, we're a bunch of control freaks, right?

People want to have the -- give me the money, tell me what you want done, and I'll go get the job done, leave me alone. And we become very expert. And so now I'm an expert that wants to own it myself, because that's when I feel most comfortable. And yet in this Information Age, it's often about me relying upon somebody else to do something for me. So this shift that says it's time to step out of your comfort zone and begin to rely upon somebody else to do something for you or you're going to lose some personal control, it's a huge part of my job.

And so whether it's about the duplicative legacy system -- you build a time and attendance system, Linda -- Albert, you build a time and attendance system, how many time and attendance systems do I really need? So as the CIO, it's my job to tell you, Albert, that --

Ms. Marshall: That Linda's is better.

Mr. Wennergren: Exactly. Right. That maybe your baby's ugly, right, and doesn't need to be around for us anymore -- those are hard conversations, right, and so they often smack on the -- but I understand my business better than you because you're the IT guy, and I'm the -- fill in the blank, the doctor, the lawyer, the financial management specialist.

And so part of the job of the CIO is to help point out that there's a business case, right, and there's actually ways to measure. And so you can let these things be your guide to help you understand that there is a future path that might be more effective if you could come with us from where you are today in your comfort zone and be willing to step out of it.

Ms. Marshall: Dave, I think it's fair to say that information technology is an area sometimes noted for its turf battles and proprietary views.

Mr. Wennergren: Everybody has an opinion, don't they?

Ms. Marshall: Would you elaborate on your efforts to foster an enterprise view and to break down silos, and how does the Department's Enterprise Software Initiative support that effort, and how does it enable your organization to operate more like one enterprise as opposed to in those silos?

Mr. Wennergren: The DoD Enterprise Software Initiative is a wonderful example. There are lot of things that are going on, because you're absolutely right. The beauty of moving to the web, the beauty of having enterprise portals, the beauty of web services is that all those things help -- allow us to move from the world of local solutions to the world of functioning as an enterprise. So there are these great technologies that are forcing functions.

The DoD ESI initiative is focused on this idea about leveraging your buying power and being aligned in what you do. And so it's a great example about moving to an enterprise. And it's been so successful for us that it spawned the idea of the federal governmentwide smartBUY initiative. So they're sort of co-branded now, the DoD-ESI effort and the federal government led smartBUY.

It began as this idea about if you buy in bulk, you get a better deal. So if I need 10,000 copies of a software license and you do it, rather than each of us buying separately, we could band together. But it really grew into so much more, and we have Enterprise Software Initiative agreements with dozens and dozens of companies. And I think if you had them in here, Oracle would be a great example.

In my Navy life, we created a single enterprise licensing agreement for Oracle database products. It was great for me, because I knew I had an ever-increasing base of people that were using Oracle database products, and so how is it going to stay ahead of the licensing costs? I got one fixed price for the entire Department of the Navy to use the Oracle database parts, but it was a win for them, too, because it reduced them from having hundreds of separate contract vehicles and administrative overhead to one vehicle, one bill, one payment, and it allowed them to say, you already have my database product, may be you'd be interested in other products that I sell, too.

And so they really can be win-wins. And the efforts just continue to grow. We estimate that over the last seven, eight or nine years, we've probably helped the Department of Defense avoid spending about $2 billion in licensing costs by having done these agreements. The one that we're about to unveil is for data at rest, encryption technologies, which of course is a pressing concern of everybody now -- what happens if a laptop is stolen or lost. Was the data encrypted to protect any sensitive information on it? And this one's going to be incredibly groundbreaking for us. Again, it's a co-branded SmartBUY federal government DOD-ESI initiative to buy encryption technologies.

And so we will pick the two or three products that are the ones we want to buy and will not only be available to all of DoD, it will be available to every federal agency, and for the first time for one of these agreements, it will be available for every state and local government agency. So we'll be able to help make more efficient use of our resources and raise the bar of security not only across the federal government, but across federal, state, and local governments. That's what the power of working as an enterprise together does for you.

Ms. Marshall: Related to this discussion and regarding IT portfolio management, DoD-IT investment decisions need to be aligned to your strategic goals to improve combat capability, warfighting readiness, and mission performance. To this end, would you elaborate on DoD's capital planning process? What sorts of budget constraints are you dealing with now that you didn't have to face several years ago?

Mr. Wennergren: You know, people often don't fully appreciate the power of portfolio management. It often begins as an exercise that sounds like, well, it's about being good stewards of the taxpayer dollars, which is really important -- it's about what are you spending money on and how can you change the way you spend money. But it really is so much more.

So for us, it began as this idea about what you have, what have you got, tens of thousands of legacy systems and applications and hundreds of legacy networks, and do you really need those? And so which are the ones that are really part of your future? But what it really became was the forcing function to move us to netcentric operations, because you're able to have a preference. I choose four solutions that will be, and then fill in blank about what your future needs to be.

So for us, at the risk of far too much IT jargon, it's going to ride on an enterprise portal, it's going to be a web service, it's going to use the DoD Common Access Card to gain access. Those sets of things that help allow us to be netcentric. And so now you can choose in preference of those solutions. You can help move the organization from what they had before to what they need to have for the future, but it doesn't stop there. Because as we move away from the legacy networks, we move away from the networks that are less secure. And so the new solutions are improving security. So this portfolio management process, which helped me understand what I owned and what I was spending money on, and reprioritize and being more effective at how I spend money, has also helped me to achieve my vision of netcentricity and helped me to raise the bar in security.

Ms. Marshall: Would you tell us about your efforts to establish a standard IT product configuration to be used across the federal government and not just in DoD? What are the benefits and critical challenges to this effort, and what's the status?

Mr. Wennergren: If you want to be netcentric, you have to be aligned, and you have to be interoperable. And so the more that you can be aligned to commercial off the shelf solutions -- the more you can be aligned to standards, the better off you'll be able to be. If you have to build a solution for 28 different versions of an operating system, there's a lot of nuances there that go into what happens. And so the DoD team, the Air Force, the National Security Agency, a lot of folks have worked really hard -- the Army -- putting together a partnership with Microsoft to develop what the secure configuration of Vista looks like that every DoD computer will have, and it will be available through all the hardware sellers. And the secure configuration of Vista has been adopted by OMB and will be used by all of the federal agencies now, too.

So again, this idea about if you get together and talk with your industry partners, you can understand what you need and where they're headed, and you can create a partnership that will raise the bar on security and product conformance for everybody, and so it's a wonderful example.

Mr. Morales: David, I want to come back to this theme of partnerships and collaborations and focus now inwards again to the organization. As you've described, government work is accomplished by teams of employees. Could you elaborate on your approach to empowering your employees, and how do you lead change and enable your staff and those within the organization to accept the inevitability of change and make the most of it?

Mr. Wennergren: Change happens, get used to it. It's one of my favorite subjects. It smacks on human nature and psychology and all sorts of interesting disciplines. It really is at the heart of everything that we do. Organizations are often the last thing to change. It takes a long time to shut down an organization -- as they say, tear down the flag pole, move buildings and those sorts of things, but the challenges have spanned organizational boundaries. So getting people to function as a team is hugely important.

When I was the Deputy CIO for the Navy, we cared enough about this, we actually wrote a book called The Power of Team, and it was geared to help organizations create effective CIO organizations, and the only way to have an effective CIO organization is to have an effective team. And so this idea about being a positive force for change and being able to work with rather than work against others is hugely important. It doesn't have to be a case of my victories at the expense of your defeat, right? We really can find ways if we work together that it will be better than if we went our own individual ways.

There's lots of great leadership books about this. One of my favorites is Max DePree's book, Leadership Is an Art, and it's just fascinating to read. It's one of those great books with big print, lots of white space, a few number of pages, a great easy book to read.

Mr. Morales: Pictures, too?

Mr. Wennergren: No pictures, but every time you read, you will get something more out of it. And he has this great quote about, "Great leaders see opportunities where others see challenges or problems." And that really is the key, are you going to be a cynical voice for change or a positive voice for change? I think people fail to recognize that if you're an IT professional, whether you're in government or industry, you are viewed by all of your peers as knowing more about the subject.

And so your level of cynicism, your level of reticence, your level of reluctance or fear becomes like a magnifier for them -- it's a resonator, it's like the ripples in the pond, a little bit of perturbation on your part creates great angst in the rest of the workforce. It's not to say that you want to endorse things that are bad ideas, but to the extent that things are a good idea, you have to be an avid vocal storyteller about why they're a good idea.

It's no surprise that if you drew a bell curve of an organization, the majority of people are not like early adopters of change; they're change-neutral or change-averse. And so if you want to get an organization to move from where it is to where it will be, you have to help the organization have courage and be willing to understand the new idea. We often underestimate the power and importance of storytelling. You can't do it alone, right? Everybody has to be a good storyteller and everybody has to work together as a team.

There's another great book that I love -- forgive me, I have lots of books that I love. Another great one is the book Execution by Larry Bossidy and Ram Charan. And in it, they have a fabulous quote that says, "Leaders get the behaviors that they exhibit and tolerate." And it is so true. If you're going to be a positive force for change, if you're going to be a leader of teams that are empowered to do great things, wonderful things will happen. If you're not, then you'll fret and fear and things won't get done.

Leaders help others find their gifts and find their talents and help create a better future. If you empower smart people to get the job done, amazing things will happen. If you feed their creativity and don't be an impediment in their way but support them as they go, fabulous results will happen.

Mr. Morales: So David, not to add more challenge or complications to this equation, could you tell us then how federal managers can effectively manage an ever-increasing blended workforce, which is composed of both contractors and federal employees? And can you tell us a little bit about the intrinsic differences to these two groups?

Mr. Wennergren: Yes. It's a fact of life. Workforces are blended workforces. In the Department of Defense, we use a term called "total force." It is a recognition that an effective warfighting team is composed of active duty military personnel, selected Reservists, government civilian employees, contractors, we're all in this together. So clearly there begins with this conversation about what are governmental functions that have to be performed by government decisionmakers, what are functions that don't have to be performed by government people. Get yourself past that and get yourself to this idea about we're all in this together. Because I find organizations of the past often have like a class system, where contractors are like vendors or they're somebody that I'd just like feed things to, and they're not equal participants.

The successful organizations that I see recognize who needs to do what jobs and then function as a fully integrated team to get the job done. Once you understand who has what set of responsibilities, you need to be able to use the great ideas of everybody on the team. Offices that have large numbers of contractors in them are very effective, because companies are able to bring the right talent to bear quickly. And so there's this partnership of government decisionmakers with understanding of the organization and continuity, contractor teams that are agile and flexible and can help augment the knowledge of the organization quickly.

And that's the key recipe for success in my mind.

Mr. Morales: Great.

What does the future hold for DoD's IT efforts?

We will ask David Wennergren, Deputy Assistant Secretary of Defense for Information, Management, and Technology, and Deputy CIO, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with David Wennergren, Deputy Assistant Secretary of Defense for Information, Management, and Technology, and Deputy CIO.

Also joining us in our conversation is Linda Marshall, partner in IBM's defense industry practice.

Dave, you are the vice chair of the CIO Council. Can you tell us about the Council's role and responsibilities and its initiatives to address federal IT challenges?

Mr. Wennergren: Sure. In our last segment, we were talking about a couple of books, and the role of the federal CIO Council reminds me of another one, The Power of Alignment by George Labovitz and Victor Rosansky, and it's a powerful book about the key issue that faces us all today, and that is, how are you aligned as an organization?

And in the book they talk about what's the main thing that you do. And understand your main thing, then you can work on issues of alignment, both horizontally and vertically.

And in a sense, that's what the federal CIO Council is all about. It is the forum where CIOs from every federal agency can get together to achieve alignment and sustain alignment, to share ideas, to share best practices, to not go it alone. There's a healthy amount of stealing of each other's ideas, and that's what it's all about. So I've been really fortunate to be involved in the federal CIO Council. It's the way that we implement the President's Management Agenda. It's the way we collaborate and share ideas. I have this great opportunity working with Karen Evans, who's the OMB information technology leader and the chair of the Council with me.

It's all about strategic use of information. We have three committees. We have a committee that focuses on architecture and infrastructure issues. We have a workforce committee which has done an outstanding job, and then we have a best practices committee. It's wonderful, because the group meets regularly, and so as issues emerge, like pressing issues that we have today about privacy and security, CIOs are able to volunteer time and resources to help resolve those kinds of issues.

Mr. Morales: With the evolution of the global threat environment, and the many challenges associated with it, how do you envision DoD and its information technology efforts evolving in, say, the next five years to meet these challenges?

Mr. Wennergren: You know, I do a strategic plan. I try to get the team to focus on the next two years, because the farther out you go in the IT world, the world becomes fuzzier and fuzzier. Five years doesn't seem like much when it comes time for doing Department of Defense budgets, but it's a great length of time in terms of all the wonderful innovations that take place. But as I look in my crystal ball, the importance of the web is huge, and we will continue a rapid migration -- rapid migration to portals and web services. And again, that speaks to the security issues then that we've already touched on about the sustainability and survivability of a global enterprise network that relies upon the commercial sector, and it speaks to the issues of can I trust the data; is there integrity of the knowledge that I'm using, because not being able to trust the data is as bad as not having the connection.

The other idea is of course we're all in this together. And so we've got to keep looking for ways to raise the bar in collaboration, to raise the bar on security, across government -- with industry, with other governments, with academia. And I guess the last part is that people need to keep their eyes on the innovations of the future. What often begins as something that seems recreational only actually fosters collaboration. I'm intrigued by YouTube, I'm intrigued by Second Life.

Second Life, which seems like a game to most people my age, is really like this virtual reality that companies like IBM have been huge users of. I understand they have like 2000 accounts to do virtual online collaboration. I think that's a fascinating example of the kind of thought leadership that IBM has had in this business. There is a hotel chain that uses Second Life to do virtual floor plans and see how the six million inhabitants of Second Life traverse. Two countries have embassies on Second Life now; Maldives and Sweden, and Reuters has a news desk now. If you're an old fashioned guy, you might look at that and say well, Second Life is this video game. But Second Life is actually this innovative new way to collaborate, and so we have to keep our eyes focused on the non-traditional ways of helping to get to the future quicker.

Ms. Marshall: So Dave, with innovation and transformation, these things create new competitive areas, new competencies, new ways of having to do business. What qualities will be needed in the warfighter of the future and those IT staff who provide support? And to that end, what steps are being taken to attract and maintain a high quality technical and professional workforce that are willing to take on that change?

Mr. Wennergren: It really is all about the people. Deputy Secretary of Defense Gordon England, who was my boss before when he was the Secretary of the Navy as well, he used to point to an aircraft carrier and say, "You see that aircraft carrier, big, giant, massive thing, it's not worth anything until it's manned by a crew of 5,000 men and women who are trained and equipped and ready to go." If you don't have the right workforce, you'll never be able to be an effective warfighting force of the future.

The interesting thing is that we survey the workforce extensively, and the common wisdom was that -- the number one issue facing us was the graying of the workforce, the workforce is about to retire. But we find that not to be true for the Department of Defense workforce. The much more pressing issue for us is the need for retraining, that people came into a job and they want to stay. But the skills that they developed initially are not maybe the skill sets they need for the future. COBOL programming, not such a big thing anymore. Being a knowledge manager, being an information security professional, being a website developer, so it's this retraining of the workforce that's really front and center for us. It's all about being a learning organization.

Peter Drucker was one of the great leadership minds of 20th century and he said a lot about the importance of continued learning, and I'm taking that to heart. He said that good management is all about making people's strengths effective and their weaknesses irrelevant. And that's what a continually learning kind of organization does. And so we are expending a lot of energy helping people to get professional certifications, which doesn't sound like a big deal, but it's something that the government wasn't so good at doing a few years ago.

Helping people understand that if you want to attain these competencies, this is the career path that you ought to go on and these are the kinds of training that you need to do and those sorts of things. Second and related to that is it's not just about the IT workforce, it's about the entire workforce and their expectations. You know, the average age on an aircraft carrier is 21 or 22 years old. People that are coming into our organization at that age, what are their expectations? What do they have as the technologies and advantages that they have in their life at home or at school, and are we going to provide them that kind of technology.

In my Navy life, our commercial of the day is about accelerating your life, which is a fascinating message, because accelerating your life implies that come and join us and you can be part of something better faster. And so we better make sure that we're staying abreast of the kinds of technologies that they're used to be using and using very effectively, and having them available for when they work here.

Ms. Marshall: Dave, you are the recent recipient of a Federal 100 Award, which goes to individuals who have made a difference in government technology, and as well, you have been a previous John J. Frank Award recipient. Given that peer recognition, first, would you tell us a little something about these awards? But more importantly, what emerging technologies hold the promise for improving federal IT?

Mr. Wennergren: You know, both being an Eagle Award Winner, the Fed 100 this year, and the John. J. Frank Award last year were really great honors for me. It's kind of humbling to be recognized by your peers for making a difference in the IT space, and especially humbling when these people who have been mentors and friends of yours have received these awards in the past, and to be able to join their ranks has really been a wonderful experience for me, and it's a nice feeling to be recognized for whatever work you do.

And you know, the fascinating thing is of course that the hard work that I do pales in comparison with the people that I do the work for. And so what motivates me everyday is the fact that there are tens of thousands of young men and women who are deployed far from home in harm's way defending the nation, and they chose careers of service and sacrifice. And so if I as the IT guy can help make that life more effective and better for them, then that's great motivation to come to work.

And so what are we going to give them to have them have a productive future? And I think that's the heart of your question, and I think we've sort of touched on it. You know, this idea about it's a web-based world is really at the heart of it, that if I'm a Naval CC officer and I'm stationed in Fallujah with the Marines, and when they reach back to get knowledge from an Army organization, can I do that? And we're saying yes, you can. And it requires all of us to be really vigilant about adopting these enterprisewide solutions, buying the right stuff, being interoperable, making the right choices about when's the right time to buy the one big system versus when's the right time to just ensure interoperability, to allow people to go do things with speed and agility, but have them do it in a way that's interoperable.

So portals, service-oriented architecture, web services, the security portfolio will continue to be a growth industry for us. We've made a big difference with Common Access Card and PKI, but there is much more to be done, much more to be done about attribute management, that is this combination of my identity and attributes about me that ought to give me access to data and the world of biometrics.

So there's lots of opportunities for growth.

Mr. Morales: Dave, you've had a very interesting and highly successful career within public service. What advice would you give to someone who is out there perhaps considering a career in public service?

Mr. Wennergren: Well, it's been a fabulous opportunity for me. And I think people choose one of two career paths. Some people have very organized career paths, where they plan they're going to do this for two years and do that for three years and plan out their whole lives, I kind of have managed my career by chaos. You know, one adventure has led to another, and I've been very fortunate in where those adventures have led.

I think working for the federal government has been great. It's a wonderful opportunity. You know, you get a chance to get leadership experience very early. In the military and in the civil service, you're a leader of large groups of people at a very young age, and so you learn leadership skills quickly and you get to work on some things that are very big stages. The scope and size of the military departments in the Department of Defense is unrivalled pretty much anywhere.

And so you get to be part of something really big. It does take the right blend of patience and impatience. Large organizations are like large ships, they sometimes turn slowly. You need to be impatient because you need to keep pushing for the next thing to happen. You need to have a certain amount of patience though so you don't become too frustrating where sometimes you have butt heads or don't make progress as fast as you like. But I think it's been a really rewarding experience for me, and I think it's an opportunity for somebody to be a positive force for change and make a difference quickly.

Mr. Morales: That's fantastic. We've unfortunately reached the end of our time here together this morning. So I do want to thank you for fitting us into your busy schedule, but more importantly, Linda and I would like to thank you for your dedicated service to our country across your federal career.

Mr. Wennergren: Thank you. Thank you, Albert. Thank you, Linda. It's been great being here with you. I guess I would offer to the audience that I'm easy to find. If you have questions, david.wennergren@osd.mil, and if you're interested in any of the things we talked about today, we do have a website; it's www.dod.mil/cio-nii. And all of the documents that we talked about today, you can find there.

Mr. Morales: That's fantastic.

Mr. Wennergren: Happy hunting.

Mr. Morales: Thank you.

This has been The Business of Government Hour, featuring a conversation with David Wennergren, Deputy Assistant Secretary of Defense for Information, Management, and Technology, and Deputy CIO.

My co-host has been Linda Marshall, partner in IBM's defense industry practice.

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 how 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 you every Saturday at 9:00 a.m., and visit us on the web at businessofgovernment.org. There, you can learn more about our programs and get a transcript of the day's conversation.

Until next week, it's businessofgovernment.org.