strategy

 

strategy

Jayson P. Ahern interview

Friday, March 16th, 2007 - 20:00
Phrase: 
"We need to make sure that we're flexible to any emerging threats -- to be adaptive to any threat posed from the moving of people or things into this country..."
Radio show date: 
Sat, 03/17/2007
Guest: 
Intro text: 
Missions and Programs; Collaboration: Networks and Partnerships; Organizational Transformation; Strategic Thinking; ...
Missions and Programss; Collaboration: Networks and Partnerships; Organizational Transformation; Strategic Thinking;
Magazine profile: 
Complete transcript: 

Originally Broadcaast Saturday, March 17, 2006

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.

One of today's greatest challenges is protecting the country against terrorists and the instruments of terror, while at the same time fostering the country's economic security through lawful travel and trade. With us this morning to discuss his organization's lead role in facing this challenge is our special guest, Jay Ahern, Assistant Commissioner, Office of Field Operations, at the U.S. Customs and Border Protection.

Good morning, Jay.

Mr. Ahern: Good morning.

Mr. Morales: Also joining our conversation is Dave Abel, director of homeland security services at IBM.

Good morning, Dave.

Mr. Abel: Good morning, Al.

Mr. Morales: Jay, let's give our listeners an overview of the organization. Can you tell us about the mission and the history of Customs and Border Protection?

Mr. Ahern: Absolutely Al, and thanks for the opportunity to talk about the mission of Customs and Border Protection. The way I look at it, and certainly Commissioner Basham as well, we look at it that no agency in government has a greater responsibility for protecting the homeland from the introduction of a terrorist or a weapon of mass destruction or weapon of mass effect coming into this country than the men and women who work the front line for Customs and Border Protection.

And as you know, certainly the President started with the creation of the Homeland Security Department through the Homeland Security Act when he signed that into law in 2002. And on March 1st of 2003, with very little lead time to do adequate planning for doing a merger of this magnitude, we set up the Department of Homeland Security as well as the creation of Customs and Border Protection.

In our mission, not only is it -- certainly the priority mission of protecting the homeland for terrorism concerns, but also at the same time, we have to protect the country for the introduction of agricultural pest and disease that could have devastation on the economy, the country and the agricultural markets. But also as far as traditional trade and revenue issues, $25 billion still go to the general fund of the United States Treasury. But also as far as our drug interdiction role, we seize close to two million pounds of narcotics every year, as well as seize hundreds of millions of dollars for money laundering and drug proceeds going back to drug producing countries. But also as far as the critical function that was formerly within Immigration, relative to admissibility of individuals coming into this country that could again be criminals, adding to the illegal migrant population of this country, or for the introduction of potential terrorist operatives.

Mr. Morales: Now, Jay, this is a very broad mission. Can you give us a sense of the scale of the operations? How many miles of border are covered, how many ports are we talking about? And how many people and items pass through these entrances?

Mr. Ahern: When you take a look at just the expanse of our organization, not only just here domestically, but the foreign offices we have overseas, I mean, certainly when you look at the geography, over 5,000 miles on the northern border, and 2,000 miles plus on the southern border, and the coastal communities of over 12,000 miles. And within those geographic boundaries and kind of the geography that's out there, we have over 300 ports of entry as well. So we have those as kind of our windows of opportunity where we have just considerable amount of individuals coming in to the country, certainly over 400 million people come across our borders each year air, land and sea, and that's a considerable challenge.

And as you mentioned in your opening, it's our twin pillars to make sure that we actually facilitate legitimate travel and trade as we cultivate and deploy our layered strategy for defense of the homeland, and if we don't do that accurately and do it effectively and come out with a well thought-out strategy, stifling legitimate trade or legitimate travel would have such a negative impact on the economy of the country that the terrorist organizations would win in that fashion, so we can't let that happen.

Mr. Morales: And this includes the U.S. territories in both the Atlantic and the Pacific also?

Mr. Ahern: Absolutely correct.

Mr. Abel: So Jay, your organization within CBP is the Office of Field Operations. Can you tell us a little bit about the specific role and mission of that office?

Mr. Ahern: Absolutely. I often look at the Office of Field Operations as one of the most pure examples of a merger. I mean, when we talk about the creation of the Department of Homeland Security, oftentimes, people will talk about it's the largest reorganization and merger in government history, or at least since the creation of the Department of Defense in the World War II era.

But when we actually look at the merger that occurred within CBP, it was really the one that occurred within the Office of Field Operations, where we took three different organizations formerly with Agriculture, Customs and Immigration, and merged them into one organization where we changed lines, chains of command, the front line officers all had the unifying policies and procedures under one organization now, where previously in three different departments of government, they were organized. But to take a look at the scope of the complexity that I talk about with admissibility of individuals, seizure of drugs, preventing terrorists. You know, we do that with an organization of about 25,000 people. And that's made up principally of our front line CBP officers as well as specialists who are doing the agricultural admissibility concerns. We also have import and trade specialists that provide a mission as well as many other support people that keep our organization going. And our part of the organization is basically 25,000 out of over 42,000 in the entire organization.

Mr. Abel: Now, Al mentioned the role that you play in territories as well as mainland United States. What type of role does your office play internationally as well?

Mr. Ahern: Well, internationally, we have a very significant responsibility. Certainly we have many overseas pre-clearance locations throughout Canada as well as the Bahamas, Bermuda, two in Ireland, and also in Aruba, where we have overseas officers stationed -- we have over 500 officers stationed overseas performing that pre-inspection function for people coming back to the United States that have traveled outside the country, but also, we have a very critical mission that we're out there performing. We have over 200 officers stationed in 50 different locations around the world as part of the Container Security Initiative.

So we have individuals there as part of our layered strategy interdicting containers of potential concern before they're being put on a ship laden or destined for the United States. So we have an opportunity to intervene them when there is a score or a target of risk before it gets put on a vessel. And we also have attach� and representatives stationed in many countries around the world, basically working our policies and procedures as part of the embassy corps.

Mr. Morales: So we've talked a little bit about the broad mission of CBP, and about your organization within CBP. I'd like to focus a little bit on your individual responsibilities. Maybe you can tell us a bit about the role that you play as Assistant Commissioner?

Mr. Ahern: It's a very challenging chore, and it's one I enjoy every hour of every day, and it seems like oftentimes, many of those 24 hours are filled. We joke, but it's required. But you know, I do love it and it's something that -- I started 31 years ago and it's something that I've enjoyed and aspired to do all the while. But when I take a look at the responsibility, and I -- I recently did an interview with the Washington Times, and it's something I convey to our field directors and to the front line employees when I have a chance to get out and talk to our field personnel, that if people don't get a sense of urgency and understand how critical the mission is that they perform every day, they're in the wrong profession. And that's how I start every day, realizing that the decisions I make, the policies and the operational determinations we make every hour of every day are critical to the security of the homeland, and that's essential.

Not only as far as, you know, when we execute policy decisions and provide instruction to our field from here, but dealing interdepartmental -- within different departments in government, and certainly within the Department of Homeland Security, I think we've done a tremendous job of moving forward in just basically a little over three and a half, almost four years now, creating the infrastructure, not only for creation of a new department, a new bureau, but also as far as the right policies and procedures, and the right foundation that's going to be there as our legacy years down the road.

We're really at the point in time over the last three or four years since DHS was set up and CBP was created that I believe very strongly some years down the road, it'll be written about in history books, when they take a look what happened post-9/11, what were the actions that were taken by government to go ahead and make sure an act like this never occurred on U.S. soil. I believe a lot of the things that we're doing within DHS and within CBP will be well-chronicled and speak to the security of the country.

Mr. Morales: Jay, you alluded to being in government now for 31 years. Could you describe your career path for our listeners? How did you get your start in public service?

Mr. Ahern: It began a little over 30, almost 31 years ago now. After I graduated from college in Boston, I took the Civil Service examination to go ahead and work for a government agency. I knew I wanted a career in public service. And the first organization that came calling was U.S. Customs, and I actually started on the U.S.-Mexican border in San Ysidro, California in the mid-'70s.

Mr. Morales: Now, you certainly have had a broad set of experiences in those past 30-plus years; how has your previous experience prepared you for your current leadership role and shaped your management approach and leadership style?

Mr. Ahern: Well, I think again, everything you do builds towards what you're going to be as you advance yourself through an organization. And I knew after the first few years in the organization, I wanted to continue to advance, and realizing that you would have to be mobile, have to go ahead and work in a variety of different port and field locations, and to have the different levels of management expertise. I realized that early on. So as I now sit here over 30 years later, I also look back over 10 different moves in a variety of different locations. And I'll take this opportunity to thank my wife and my two children for their support and willingness to move so frequently over those years. Because without that kind of support at home, you can't do it.

But clearly, having different positions in the field, advancing through the ranks at just about every level that's out there -- and this being my third tour back in Headquarters, this is something that I think has prepared me for the challenges today. Because when you take a look at both understanding the field, understanding the headquarters practice and making sure we have a good understanding of what goes within the Washington Beltway dealing with departments, dealing with Capitol Hill, testifying before Congress frequently, those things really -- it just takes a lot of experience and lot of time to get to that point.

Mr. Morales: Great. So it sounds like no regrets then.

Mr. Ahern: Not at all.

Mr. Morales: What is CBP's multilayered security strategy?

We will ask Jay Ahern, Assistant Commissioner, Office of Field Operations at the U.S. Customs and Border Protection, 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 Jay Ahern, Assistant Commissioner, Office of Field Operations at the U.S. Customs and Border Protection.

Also joining us on our conversation is Dave Abel, director of Homeland Securities at IBM.

Jay, can you describe to us what is the advance manifest rule, or sometimes referred to as the 24-hour rule, and the guidelines surrounding the Trade Act? And what is required from the carriers before entrance in to the U.S. ports? And if I may, what happens to them when the fail to meet these requirements?

Mr. Ahern: Okay, I think it's important to kind of begin with talking about the layered strategy we had when we were put in place post-9/11. We realized, given the type of attacks this country was facing at the time -- and continue to face today, I would say -- we needed to make sure that our ports of entry and the borders of the United States were not the first opportunity for us to intercept either something or someone of concern who posed a risk to this country.

So we actually crafted the Trade Act of 2002 that actually got us advance information for not only maritime cargo that we get through the 24-hour rule, but also for air and land shipments as well. And what this does for us is it gives us the information electronically for very specific elements that we can then run through our automated targeting system to score for risk before containers can be put on a vessel destined to the United States. In the last year, we had close to 12 million containers that came into this country. And currently, 82 percent of the containers that come to this country actually come through ports where we have our Container Security Initiative folks staffed overseas.

But the CSI, the Container Security Initiative, would not be functional if we did not have this advance information. So we can run it through our targeting systems, and if anything scores for risk, our officers on the ground, over 200 of them today, work with their host country counterparts to assess the risks, see if they can mitigate it through any additional information that the countries could provide, either through information or intelligence sources. But then if there is a need, we will then X-ray, physically examine or use radiological detection devices to see if there's any radiation or nuclear emanations from that particular container.

And if at the end of the day, we cannot go ahead and mitigate that risk and eliminate it, we will give a carrier a do not lade order, so they will not be allowed to bring that into the United States until we can actually ensure that there's no risk to this country. So that gives us our layered extended border strategy, and that's the example we use for the maritime environment.

Mr. Abel: So you mentioned ATS a couple of times the Automated Targeting System. Can you give us a little bit more detail about ATS, maybe some of the enhancements that you're working on to that system?

Mr. Ahern: Absolutely. ATS for us is an exceptional system. And we use it for the maritime environment where we do ocean rules, where we actually focus specifically for maritime shipments coming into the United States. And we score them for risk. And we think that's smart for us to have the efficient borders I spoke about in the opening, where we didn't want to go ahead and stifle trade as we were trying to provide security. We get 100 percent of all the manifest information, but we then score it for risk.

We also under the Automated Targeting System for passenger, another component within ATS, and there's seven altogether, but the ATSP for passenger is one that's come under some scrutiny lately. And a lot of people think there's commercial sources of information we're using to score, and people have almost like a credit rating attached to them on how we score them. That's just not factually correct. What ATS for passenger targeting does for us, it's a decision support tool for our front line officers that we can have advance information, that we have, by statute, the Aviation Transportation Security Act, signed into law after 9/11, provides advance passenger information and passenger name records, basically the reservation information for travelers coming to the United States. And that's government-provided information that we're required to receive by law.

It's also the same information that we could glean from every single person, those 400 million people coming in to the country, because it's basic biographic information, and we add to that some of the reservation information that's on the record, basically the flight, the information form, the payment, that you could see if you manually looked at somebody's airline ticket. We also then couple that with crossing history. So we would then have the ability to take a look at what that might pose as kind of an assessment of that person's travel.

We also have added into the Automated Targeting System -- and I want to be cautious about giving any kind of operational detail that could compromise the program we have -- but certainly, it's important for us -- and this is something the 9/11 Commission criticized the government for -- as not being nimble and responsive enough to emerging intelligence and informational trends.

And every time when we sit in our classified briefings every day, we will adjust some of our rules based on what we see as the risk. It could for a given hour, a given day, and we use some of that information that we're getting in advance, and as opposed to sending that out through a muster module and having every officer on the front lines brief to that detail, this system, the Automated Targeting System, is flexible enough that we can write targeting rules using that advance passenger information, the passenger name record information, the crossing history, to see if there's any traits or characteristics that the system could identify and flag for the front line officer, again, as a decision support tool. It's not like something that could be used for, you know, determining somebody's ability to board an aircraft overseas.

This again has flags, and sorts 87 million people by air coming into this country, sorts it into a very manageable number of people that may pose a risk. And I say "may." And just flags them for the front line officers to follow up on. And there's no numerical score that's attached to it. It's not like an individual's credit rating that shows that they've been delinquent on bills -- we don't search into that type of information -- but it's something that's critical for us in being able to manage the risk of the universe of 87 million people by air, and we think that's a very good way for us to manage our borders and keep again, legitimate travel moving, but also looking for risk.

Mr. Abel: The volume of information is exceptional. Can you tell us a little bit about the National Targeting Center and how they relate to ATS?

Mr. Ahern: The National Targeting Center I think is one of the greatest innovations that did come up with post-9/11. Right after the events of 9/11, we created a very small office in our headquarters, and it wasn't much larger -- and I know the viewers can't see the size of our studio this morning -- but it wasn't much larger than the studio we're sitting in right now. And we started bringing in some field experts to try to do centralized national targeting, because we had different units around the country targeting for risk, but we realized that the threat of terror was global and it was certainly national for us.

And we didn't want it to just be resident in pockets around the country, so we established a national centralized location to get the automated advance information that we got through the Trade Act a few months later. And also now have the ability to have all the information for people and for cargo coming into the country run through the centralized location at the National Targeting Center. We're very proud of it, it's been something that's been exceptional for us to go ahead and deal with the intelligence community, deal with the other participating agencies -- there's many other agencies that are actually physically co-located with us at the National Targeting Center -- where we can actually manage our very large workload of, again, over 400 million people coming into this country, the huge amounts of trade that we have coming in this country, that again pose windows of opportunity for operatives or weapons of mass effect or destruction coming into this country. So it gives us ability to do centralized national targeting so we can make uniformed decisions throughout the country.

Mr. Morales: So Jay, risk to international maritime cargo demands a robust security strategy that's able to identify, prevent, and deter threats at the earliest point in the international supply chain. The international supply chain is obviously complex and ever-changing. Can you talk a little bit about CSI or the Container Security Initiative, and CTPAT, the Customs Trade Partnership Against Terrorism?

Mr. Ahern: Yeah, absolutely. Those are other components of our layered strategy. As I stated earlier, it begins with information, we got that through the Trade Act; it needs to then be run through a centralized database, that's the Automated Targeting System, managed at a central location, the National Targeting Center. But also, it was for the purpose of getting information to put it out to our assets overseas. Again, we didn't want our borders to be the first time we encountered someone or something. So we do now have over 200 officers placed at over 50 locations around the world. And these are your major shipping ports of the United States.

And at the 50 locations today, that accounts for 82 percent of the container traffic that comes to the United States; it runs through those CSI ports. We'll be opening eight more ports by the end of this fiscal year, and taking it up to a total of 58. And just for those last eight ports, it will only get us to 85 percent of the container universe. And we think that's about where we should stop, but that gives us again the opportunity to go ahead and engage with our host country counterparts. We've entered into declaration of principles with each one of the countries so that we know what each other's responsibilities are -- we're basically out there without authority, but through the declaration of principles, we work collaboratively with the host country counterpart to go ahead and deal overseas with those particular countries on, again, shipments of risk.

CTPAT's another key part, because certainly, we think one of the greatest vulnerabilities in supply chain is point-of-stuffing. And having some of your largest corporations here in the United States and overseas engage with Customs and Border Protection in a partnership agreement -- and this was brought about, again, right after 9/11, with the first group actually signing in November of 2001. We now have over 6000 certified partners, and these are your largest companies worldwide that have agreed in a physical security assessment with us, and we've actually gone out to do validations worldwide on the supply chains to make sure that there are the right controls and procedures and procedural security in place for companies overseas, and throughout the supply chain, so that we can have confidence and a higher degree of integrity at the point-of-stuffing, and all the way through the supply chain as it makes it to our ports, to our CSI teams to make it all the way through the supply chain.

Mr. Morales: Jay, I have to tell you that I'm still grappling with the scale and scope of the operations here. Along with the CSI program that you talked about, can you tell us about collaboration and the criticality of collaboration with other federal agencies? And specifically, can you tell us a little bit about the partnership that you have with the Department of Energy and its Megaports program?

Mr. Ahern: DOE and the Megaports Initiative folks have actually been one of our more critical partners. You know, another part of our layered strategy is the radiation detection capabilities, and we have radiation portal monitors being stationed at our ports of entry here in the United States. And I'll tell you that just within the last year, we had the first installations occurring at our ports of entry, the sea ports, we only had about 37 percent of the containers running through radiation portal monitors, because that's one of the last layers before a maritime container goes into the commerce of the United States, it goes through a radiation port monitor. And we're now at 87 percent, we'll be close to 100 percent by the end of this calendar year, and DOE has been a critical advisor and support for us in that function.

But most importantly, we joined in partnership with them over the last couple of years, that every place we go for CSI, we do joint assessments together. And it is a full collaborative process for us. At that point where we're out there, where DOE is looking to do their radiation detection program overseas as part of a global network, and that certainly fits in with what we're trying to do with CSI, and we think it's better for the U.S. government to put one face out there to these foreign countries, and this is something that we continue to build upon, and perhaps will have a chance to talk later about what we're doing in partnership with them with the Secure Freight Initiative as well.

Mr. Morales: Now, you talked about the ports of entry. Are you able to do this kind of screening at the foreign ports, at the port of departure?

Mr. Ahern: Yeah, we are, and we're going to be doing more of it very soon. What we currently have is a lot of the screening for radiation capabilities. It's only a few of the locations that we now have with DOE that are actually with radiation portal monitors in place where you can actually drive the trucks through. A lot of the other locations, we have handheld devices or some of the host country counterparts have devices of their own, and we complement that with large scale Xray systems as well. But as we move forward towards the next rollout of our overseas strategy with what we're doing with Secure Freight, about what we're doing in partnership with DOE and with our radiation detection capabilities overseas.

Mr. Morales: I'd like to continue for a moment on this theme of collaboration. Could you elaborate on the collaborative efforts your organization has with the other DHS subcomponents, specifically as it relates to the sharing of information used for passenger screening or cargo screening and the border security efforts?

Mr. Ahern: Absolutely. We think certainly the partnerships that we need to have within DHS are critical for us. I mean, probably one of our closest partners is Immigration and Customs Enforcement, ICE. I mean, they are the investigative arm of a lot of the interdiction and the enforcement efforts we do at the ports of entry. And it's important for us to make sure that they have availability to a lot of the same information we do. Now, certainly -- proprietary or privacy-protected information is always maintained and controlled, but being within one department, we think it's a lot easier for sharing that information within the components that are partners. ICE is certainly one. We're doing a lot with TSA as well, not only just the transportation security aspects of it, but also the people part. And we think that's critical for us to continue those partnerships.

And one of our strongest partners we're working with right now is Commissioner Basham and also Commandant Thad Allen of the Coast Guard have charted a senior guidance group to see what other opportunities we have for collaboration with the Coast Guard. We do a lot of things together for training, joint boardings, so there's not redundancy for the trade when we're out, here comes Coast Guard to do a boarding of a vessel and here comes CBP. We're doing that now collaboratively and jointly so that we don't have to have two boardings for industry. And we think that's smart, so we're sharing a lot of information on how we select vessels for, for targeting and for boarding, and for the follow-up enforcement action.

Mr. Morales: Great.

How is CBP managing its border and port security strategy? We will ask Jay Ahern, Assistant Commissioner, Office of Field Operations, at the U.S. Customs and Border Protection 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 Jay Ahern, Assistant Commissioner, Office of Field Operations, at the U.S. Customs and Border Protection.

Also joining us in our conversation is Dave Abel, director of homeland security services at IBM.

Jay, could you tell us, what is the Security and Accountability for Every Port Act, or Safe Port Act of 2006? What are the implications of the Safe Port Act in terms of enabling CBP to better accomplish its mission? And what is the status of the implementation today?

Mr. Ahern: Well, the Safe Port Act actually codified a lot of the programs we've talked about in some of the earlier segments today. It codified our programs for CSI, as well as the CTPAT program. Also, it has more challenges for us as we look at enhancing our Automated Targeting System, and also has a requirement for us to begin doing more overseas work.

There had been a lot of conversation in the Congress over the last several months, probably close to a year now, doing 100 percent screening overseas. I'm not sure that a lot of those that were advocating knew exactly what they were saying or what that meant or what the impact was, but clearly, as a principal in the agency that believes very strongly in extending borders and having a layered strategy, it made sense for us to certainly begin some of the testing of expanding through our CSI program overseas screening. And we think that's going to be one of the key things for the Safe Port Act that we're going to be testing three overseas locations to do 100 percent screening for radiation and X-ray, complementary to our CSI ports.

Mr. Morales: Along the same theme, what is the Secure Freight Initiative, and how does this initiative support the CBP and OFO missions? Specifically, could you elaborate on what is the future direction for scanning cargo, both here in the U.S. and at foreign ports.

Mr. Ahern: Well, the Secure Freight Initiative is something that was announced by the Secretary, Secretary Chertoff, in December of '06. And basically what that calls for is fulfilling the requirements of the Safe Port Act of doing three locations overseas, 100 percent of the container traffic destined for the United States. And we'll fulfill that obligation in the ports of -- Port Qasim in Pakistan, Puerto Cortes, Honduras, and also in Southhampton in the UK.

And those will be locations where we go out with this first implementation in the overseas location, it will give us the opportunity to take the large-scale X-ray systems, high energy systems to be able to have -- to look inside the containers non-intrusively, and also have the radiation portal monitors that DOE -- the Megaports Initiative folks are going to be partnering with us on as well -- to have that radiation capability and then be able to have the capability to remote all this technology file, if you will, back to our National Targeting Center.

And I think the Port Qasim, Pakistan will be one of our best models to talk about, and we should be starting that probably within the next 45 days. So we're very aggressively out there implementing that schedule under the Safe Port Act and under Secure Freight.

But that will give us, in a place like Port Qasim, just because of security concerns outside the embassy; we're not able to put our people in the port of Qasim. So we have the capabilities now for not only just having the radiation portal monitors there, the large-scale X-ray systems, optical character recognition to be able to take a picture of the box, to be able to link that through the electronic file that we have through the Automated Targeting System, and remote all that electronically back to the National Targeting Center for assessment, to see if the score is high for risk, to see if the radiation spectra is high for radiation read, and also if there is an anomaly in the large-scale X-ray.

And that will all be electronically targeted back here in the United States. And then if we need to do a physical inspection -- again, we're not there, but we'll virtually be there, because we actually will have the capability to work virtually through a remote feed, again, video capabilities with the Pakistani customs organization as well as a two-person unit from the embassy to be able to go out there and do a physical inspection, and we'll have the video feeds back real time here to the United States to take a look at those that we need to look at overseas. So that's kind of the perfect model we'll be testing in Pakistan going in the next 45 days or so.

And we're going to really get a good proof of concept here, because certainly technology is great, we love to have technology, help do our job more effectively, but we need to make sure it works. And that's where the Secure Freight Initiative will help us when we go to these first three locations, but we didn't want to just stop where the Congress mandated that we would do three overseas locations. We're also going to begin later this fiscal year four additional modified implementations. We're going to be looking at Bussan, Korea, Singapore and also Port Salalah, Oman, modified implementations in certain terminals in those large ports, and their trans-shipment ports -- certainly a place like Singapore, it's going to pose lot of different operational challenges so we're going to learn a lot in those locations as well. And the Hong Kong location that was much talked about over the last couple of years through the scanning initiative that was going on there, we're going to continue to monitor and assess that pilot as well.

So we'll actually have three that will meet the requirements of the Safe Ports Act, but also four more we'll continue to look at for for further expansion. And that's going to very key for us as we then start to make decisions of, is there the capability to do more scanning overseas. Now, we need to take a look at not only does the technology work, the logistics involved, there's a whole host of issues with host country support, response protocols, if we do have a radiational arm, who's going to do that in certain countries. So this certainly has to be well thought out as we go forward.

We think we have a good plan conceived in the locations we're going to, but it really needs to build upon locations where we have a presence and that's our CSI ports. So we'll continue to thoughtfully roll this out as we go forward, but it's an exciting thing for us to really look at. When I take a look again 30 years ago coming into the organization, would I ever have conceived something like this happening today? No, certainly not, but this is cutting-edge for us, and we think it's exceptional for us to provide additional layers of security for the country.

Mr. Abel: Within Secure Freight, you talked quite a bit about radiological detection, you talked about looking at images, CBP also has a proposal for advanced trade data elements, I guess the shorthand is Ten Plus Two. Can you tell us a little bit about what Ten Plus Two is?

Mr. Ahern: Ten Plus Two -- actually, harking back to our discussion on the Trade Act of 2002 -- had the advance manifest requirement, in the maritime environment, we were getting 24 hours prior to lading, and we actually had a group of our expert targeters from around the country come in and say, what additional elements do you need for targeting for securing this country? And we did go ahead and go through a very rigorous process for many months internally before we then took it out for consultative discussions with the trade.

And we resolved down to the number of 10 additional data elements we feel are critical for targeting for security, as well as two additional elements that we can provide from the carrier relative to container status messaging and also stuffing location on a particular vessel -- the stow plan, if you will. So we think having that additional information is key for us.

And that's a piece of Secure Freight as well, because it's not just the overseas scanning, but it's also the additional data aggregation, and currently taking what we get from the Trade Act, expanding it by Ten Plus Two, it's going to give us greater visibility into the supply chain in seeing who actually is more detail-involved in the transaction. And we think that is the appropriate next step for us, but if I was to push that out months or years from now, I think that having greater visibility into the supply chain through data aggregators, third parties -- and I know there's a lot of issues that we need to work through on that as we go forward -- but that would be part of the longer term vision as we look in the outyears.

Mr. Abel: Is the Ten Plus Two proposal finalized and implemented, or are there steps left to go?

Mr. Ahern: The Ten Plus Two initiative is not finalized and implemented. We are at the point now where we have -- again, one of the things from the Safe Port Act, we've had for many years the Commercial Operations Advisory Group -- Committee, excuse me, it's referred to as the COAC, and we meet with them on a quarterly basis. They basically advise CBP, and previously Customs, on trade practices, and over the last few years, security practices. And certainly this is something we've been very much involved with the COAC on, but also as part of the ACE working group, some of the TSN subgroups that are out there with the Trade Support Network, taking a look at what is out there within industry, because, again, for us to sit down and conceive, say well, we just need these ten additional elements, but if nobody has them, it's going to be kind of an unrealistic theory on our part, so we wanted to make sure we had full consultation with the trade.

Long answer to the very specific question, no, we're not fully implemented, but just in early February, we had our final meeting with the COAC on their proposals back on how we would get the information -- it is the information there. So that will lead us now in to further getting ready for final discussions, and then we'd have to go through the formal rulemaking process. So we'll go through notice of proposed rulemaking, public comment, final rule, and our goal is to have it implemented in a phased process towards the end of the calendar year.

Mr. Abel: You mentioned just a minute ago ACE, which is the Automated Commercial Environment. What's the goal of that program?

Mr. Ahern: Well, the goal of that program certainly is we want to make sure it modernizes what we're dealing with. Not only just our trade process but also our automated tools and targeting platforms as well. And again, we think ACE is the capability that really consolidates a lot of the information that we have, and really, it's going to place a 23-year-old system, the Automated Commercial Environment, we think that's real key for us moving forward.

It's going to enhance the business practices out there, give a single secure web-based portal for the trade community to reach in to us, a lot of the electronic information, not only just for cargo and conveyances, but also crew and certain environments. So this is also going to be a gateway for other government agencies to feed information in, because when you take a look at what CBP does, we're basically the executive agency for many government entities at our U.S. borders. So to have the information come in, this gives us a greater capability for government efficiency and effectiveness so that we can better serve the public.

Mr. Abel: Are there key milestones that ACE has achieved to date?

Mr. Ahern: Yeah, we believe there's been some very good things, and we're certainly very happy with what we've done with the Automatic Truck Manifest, known as the e-Manifest, and the capabilities that we've rolled out there. That's been great. Certainly the number of accounts, we have over 4,500 accounts for importers, brokers and carriers, and the benefit of that is more efficient trade activity. It's good for management, it's also greater visibility in the supply chain, which is good for security, and also increases compliance along the way, and that's real important for us. And the collections, having the ability to do monthly duties, much like you would do in your personal life with your credit card statement, we're still doing a lot of transactional work, and to have a monthly summary for duty taxes and fees has been great, and we've collected, through the end of December of 2006, $753 million through that monthly collection process. So that's extremely efficient for revenue collection and processing, not only for government, but also for businesses we conduct our transactions with.

Mr. Morales: Jay, I want to take us back to the discussion around technology and screening, and we spent a lot of time talking about radiological screening. Could you elaborate on other types of non-intrusive technology that's being used by CBP in the field today?

Mr. Ahern: Yeah, beyond the radiation portal monitors, something we've used for a number of years, when you take a look back to our history, we were looking heavily into drug interdiction over the years, and we've realized that large-scale x-ray systems were very adaptive to that type of a risk. And so we use a lot of high energy systems. We've got them placed at our land borders, sea ports, other locations as well that are very effective for us; a lot of handheld devices too for density detection, things of that nature.

We're also looking at, is there an appropriate way to have a container security device, to make sure that we can maintain the integrity of what's in the box. Once it's gone through a CTPAT premise, where we know there's control over the security practice at point of stuffing, to be able to secure that box as it moves through the supply chain is important for us. So we're looking at the challenges posed with developing an effective container security device. We have not found one yet. And we're still looking, and we're going to be putting some requirements out and we're going to push that out to the industry as a challenge pretty soon, but -- those are some of the things.

But also beyond just some of the large-scale technology, the evolution of systems. I mean, I talked about our Automated Targeting System and that's a huge technology for us, but I would say that even with all the additional technology we've put out there, there's two things that always keep coming back in my mind as the most critical pieces of technology, and that's our human assets: the men and women that work for us every hour of every day out there on the front lines, they do an exceptional , and technology can't replace what they do. It complements them, it's an additional tool for them, helps them in many ways. And also, I take a look at the several hundred dog teams we still have out there, and they're still pretty good today, and we've not only expanded their use for drug detection, we've now got them trained for human detection, currency detection, and we've done some testing with chemical detection for chem/bio concerns, but also explosive capabilities, so they're a huge piece of technology for us as well.

Mr. Morales: What does the future hold for Customs and Border Protection?

We will ask Jay Ahern, Assistant Commissioner, Office of Field Operations at the U.S. Customs and Border Protection, 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 Jay Ahern, Assistant Commissioner, Office of Field Operations at the U.S. Customs and Border Protection.

Also joining us on our conversation is Dave Abel, director of homeland security at IBM.

Jay, what trends will have the largest impact on CBP field operations, say, over the next 10 years, and how will CBP need to adapt to these changes? And if I may, not to put you on the spot, but what advice would you give to the next administration in facing these challenges head-on?

Mr. Ahern: Well, to take the last point first, hopefully I'm still here when the next administration comes around, being a career person. But I think first up, the challenges they're going to be facing is certainly -- I think the threat of terror and the risk involved with that is not going to go away. It's very clear that there are still individuals out there that want to cause harm in this country. And as the border agency, we need to be prepared for that. So that's going to be the most significant thing we need to continue to focus on. And staying focused on that in the long term is a challenge. Because certainly, when we realize the threat that's out there, that we need to continue to reinforce through our front line people every day and make sure we continue to refresh our strategies to meet the emerging and adaptive trends that are out there.

But the trends that I see out there, you know, we still need to be taking a look at how do we continue to keep our twin pillars alive: facilitation of legitimate travel and trade, and also maintaining the high level of security. That's going to be brought about by the increase of travel and trade. I mean, we're seeing in the maritime environment, container traffic growing by about 12-15 percent every year. We're seeing growth in the air passenger environment. So we need to continue to make sure we're able to stay current with not only the growth in travel, but also the accompanying risk that comes with that, and at the same time making sure that we don't stumble and actually impact legitimate flow by over-securing.

So those are going to be huge things for us, but I think to be adaptive, we need to make sure that we're flexible to any emerging threats, and I think being the border agency that we are and having the layered strategy, it's served us well for drug interdiction over the years, it's served us exceptionally well over the last few years post-9/11 to be adaptive to any threat that's really posed through the moving of people or things into this country, so we need to stay current with those trends. But also just making sure that we're current with the emergence of technology.

I mean, I'll throw a challenge out there to the industry that develops technology for us both of non-intrusive inspection systems, targeting systems, things of that nature -- container security devices. We need to make sure that these things are certainly effective, but not just effective in a laboratory or a sterile environment. Think of our operational environment when companies are looking to develop systems or technology. Dealing with the type of throughput and capacity we deal with every day, that over 400 million equates to over a million people a day coming into this country. So we need to make sure the throughput and capacity is always realized.

Environmental conditions, both sides of our borders, northern and southern, those are very big issues, so it's not a "one size fits all" for how we figure our strategy out, and also for companies that are out there to provide assistance with targeting and also development of technology and systems for us. It's critical that there's a good understanding and marriage between the operators and also the providers of technology.

Mr. Morales: And we all certainly have a vested interest in that.

Mr. Ahern: Absolutely.

Mr. Abel: The War on Terror isn't just impacting the priorities of the organizations within Homeland Security, it's also affecting the budget -- throughout the federal government, the War on Terror continues to impact the budget. What are some of the things that you're able to do in CBP in the coming years to maintain the effectiveness and the efficiency of the organization with the resources needing to be applied towards things like development of new technology?

Mr. Ahern: Well, I think when you take a look at the budget and the priorities of homeland security, one of the things I haven't talked about today is -- one of the things that plagues us today is not having secure documents for everybody coming into this country. Now, the Western Hemisphere Travel Initiative, which was brought about and is a recommendation of the 9/11 Commission, and the Intelligence Reform and Terrorist Prevention Act required it, that people coming into this country must have a bona fide document that's secure, that adjudicates citizenship.

January 23rd of this year, we went in with the full requirement that everybody coming into this country by air from the Western Hemisphere and worldwide must present a passport. And prior to that, and a lot of a people and our listeners may be surprised: "you mean I didn't have to have a passport?" Well, from some parts of the Western Hemisphere, you didn't. But now that is a requirement. Next year in '08, we're going to have the requirement on the landside that will have to be a passport or an equivalent document. And we're working with State Department and other governments on what that equivalent document would be, but it has to be something that is machine-readable, something that has security features in there, but also something that obviously shows identity, with high levels of security and confidence in the identity, but also adjudicates citizenship.

And that's going to be huge for us, making sure that we can provide a higher level of security, because over 8,000 different types of documents are acceptable for entry into this country today. You think of all the different types of birth certificates you get from a hospital or a state or a town or city vital statistics, I mean, those are all the different types of documents that people could present, as well as a driver's license, and those can be easily fraudulently obtained or created. So we need to make sure as we think about that going forward. But that's going to be a huge budget drain for us going forward, and to have the right technology put into our process on the physical land borders is going to be a challenge. And certainly another aspect of our budget is heavily focused on the Secure Border Initiative, on the southwest border initially, but also then moving to the northern border and the coastal communities next to provide security of the borders.

Mr. Morales: We've spent a lot of time talking about technology. I want to focus a little bit inward to the organization. We talk a lot about, with our guests, about the pending retirement wave within government. How are you handling this retirement wave, and what is your organization doing to ensure that it has the right mix of people as you meet these challenges?

Mr. Ahern: You know, there is a point in time when a lot of agencies face it, and we've been facing it for the last couple of years. We've actually had some success with convincing some people not to retire, or actually rehiring some of our annuitants to stay and come back in after short periods of retirement, and that's worked well. But we also need to take a look at how do you develop and plan and mentor people for succession planning. And we've got some programs in place that we're actually carrying out to bring people into our headquarters environments with incentive programs that offer training, leadership training, mentoring as well as some executive education at some of the notable universities around the country, to make sure that they're ready to succeed us when people like me and others depart.

But it's a challenge. I think it's not unique only to the government, I think it certainly happens in the private sector as well, but you do have turnover, and sometimes you get into cycles, and you need to have a very deep bench strength, if you will, for people to succeed -- those that pass and move into retirement after a number of years of government service. But turnover is also a very good thing. I've been now in this job for coming up five years, and I think there will an appropriate time in the future where somebody comes in and takes my job, and then should look at things through a fresh set of eyes and see how they can continue to improve upon what I've been able to accomplish, and others that worked with me. And I think that's a good thing. But we need to continue to bring in people with a broad range of experience.

Law enforcement agencies like ours, we tend to look for people that have kind of grown up in the organization or have worked the front lines, and that's good to a point, but I think we also need to complement that with a lot of people with private sector experience, other government agency experience, so that we have a full view of actually what's going on in our environment, not just through the view of the people that solely work the front line, although that's critical, we need to balance that, so we're looking at alternative ways to bring others in as well.

Mr. Abel: You mentioned the need to be able to bring new folks in, and to continue to backfill the pipeline of qualified folks. In fact, at the end of our last segment, you talked quite a bit about the fact that the success of the organization is predominantly dependent on the quality of the people. I'd like, if you could, for you to expand a little bit. You talked about some of the training things you're doing with new folks. Is CBP recruiting, are you bringing in new folks? And what type of programs do you have to be able to attract the talent that's necessary to keep the high quality of individuals you currently have in the organization?

Mr. Ahern: We are aggressively recruiting, and certainly not only within our front line officer ranks, but also in the Border Patrol. I mean, the President's actually thrown a challenge to the -- or actually, more than a challenge, a requirement to -- with the CBP to actually increase the size of the Border Patrol and double it during the time of his administration, which is going to require about 6,000 more border patrol agents over the next couple of years. So we're in the midst of a hiring initiative there, but also our front line officers. We just had an announcement open and we had 33,000 people that responded to the announcement, which is considerable.

So we're having an adequate pipeline, and then they have to go through the rigor of the testing, the medical, the background, the drug screening, and everything that goes with the pre-employment process, but we're also trying to streamline that, because we know we're competing against other agencies and also private sector companies for talented young individuals coming into the organization, so we need to compress and streamline their process.

We're doing a lot of compressing, hiring at certain locations around the country to bring people on board. There's incentives for high-cost locations We're also trying to be a thoughtful employer in looking for what do we have for advancement opportunities, and I would tell you that -- and certainly any of the listeners -- it's an exciting organization. Being part of DHS today, and specifically within CBP, is an exciting time. You know, the public service that we do is a very notable profession, and it's a critical mission that we do, but not only the opportunity to work in one of our many locations around the country, but the overseas capabilities and the international affairs that we do, I think it just provides limitless opportunities for people in order to come into the organization now or in the future.

Mr. Morales: Jay, 30-plus years, a very, very, successful career, I'm curious. So what advice could you give to somebody who is sort of on that brink, thinking about a career in public service?

Mr. Ahern: I think, certainly begin with taking that jump, go into public service, and as I stated, it's a very notable profession, and particularly today, I've seen so many people over the last few years, particularly after 9/11, that wanted to be part of the solution, and come in to government and try to protect the homeland. So I think that that certainly is to have the will and the desire to come in, and there's often a lot of criticisms or jokes to some degree of the federal civil servant population, I don't see that at all. I think that certainly the people of our organization are dedicated hardworking individuals, and we need more people like that.

But certainly, coming in, one of the things I always look at when I go down to speak to our graduating classes down at the Federal Law Enforcement Training Center, you bring your education, you bring your experience onto the job, you bring whatever was in your upbringing, and then we provide a high level of training, but beyond that, then it becomes the individual's responsibilities, what you want to then make of a career.

You got to be positive, you got to be professional, you've got to have a good work ethic, and you have to take advantage of the opportunities that are out there to you, and not wait for them to come to. And so I encourage anybody that gets into the organization to go ahead and just continue to advance, be mobile, take the opportunities, take some risks, take some jobs that you think you may not be ready for, and it's amazing how quickly you might adapt to some of these challenges. Bt I think it's a great opportunity for people that want to come in and be part of a very significant and meaningful organization.

Mr. Morales: That's fantastic advice. We've unfortunately reached the end of our hour. I want to thank you for fitting us into your busy schedule, but more importantly, Dave and I would like to thank you for your dedicated service to our country over the past 30 years.

Mr. Ahern: Thank you. It's been a pleasure. Thank you both very much.

Mr. Morales: Great.

This has been The Business of Government Hour, featuring a conversation with Jay Ahern, Assistant Commissioner, Office of Field Operations at the U.S. Customs and Border Protection.

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.

Admiral Thad W. Allen interview

Friday, February 23rd, 2007 - 20:00
Phrase: 
"I think the Coast Guard has got it right in our core values of honor, respect, and devotion to duty."
Radio show date: 
Sat, 02/24/2007
Intro text: 
Admiral Allen was selected by U.S. News & World Report as one of the 20 best leaders in 2005 for its America's Best Leaders issue.In this radio show interview, Allen discusses the: History and mission of the U.S. Coast Guard; U.S. Coast Guard's integration...
Admiral Allen was selected by U.S. News & World Report as one of the 20 best leaders in 2005 for its America's Best Leaders issue.
Magazine profile: 
Complete transcript: 

Originally Broadcast Saturday, November 11, 2006

Washington, D.C.

Mr. Morales: Good morning, and welcome to The Business of Government Hour. I'm Albert Morales, your host and managing partner of The IBM Center for The Business of Government. We created the Center in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about the Center by visiting us at the web at businessofgovernment.org.

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Admiral Thad Allen, commandant of the U.S. Coast Guard.

Good morning Admiral.

Mr. Allen: Good morning.

Mr. Morales: And also joining us in our conversation, also from IBM, is Dave Abel, director of homeland security services.

Good morning, Dave.

Mr. Abel: Good morning.

Mr. Morales: Admiral, perhaps you could share with us a bit of the rich and proud history of the United States Coast Guard as it celebrate its 216th anniversary as one of the oldest U.S. government agencies. Can you tell us who founded the Coast Guard, and how has it evolved into the critical component of the U.S. Department of Homeland Security?

Mr. Allen: Well, the Coast Guard was really the brain child of Alexander Hamilton. And you can first find a reference to a Coast-Guard-like entity actually in the Federalist Papers, where he states that a few vessels stationed at the entrance to our rivers and bays would at very small expense be useful sentinels of the laws.

When the first Treasury Department was formed in 1789, and he was the Secretary of the Treasury, he envisioned a fleet of cutters that would enforce the new tariffs that were being applied to help us pay off the war debt. There was a lot of British smuggling going on at the time. So on August 4, 1790, there was legislation approved that would authorize the building of the cutters, and we take that as the starting date of the Coast Guard. We were the first Customs officers, and during the period in the late 1790s when we had disbanded the Continental Navy we were the only maritime force that the country had. And so we when had a quasi-war with France, our cutters were the line ships for the fledgling government. So right at the earliest possible time in our history we really started out as a dual character service. We were a member of the Armed Forces, the Naval Service. And we were also a federal law enforcement agency, and we are unique in the world in that regard.

Mr. Morales: Admiral, you talk about this uniqueness of having both the dual military and law enforcement status. Could you elaborate a little bit on the scope of your multi-mission agency? How is it organized, and tell us how large the Coast Guard is, and give us a sense of the scale.

Mr. Allen: Well, we're not very big. With our military members and our civilians we're anywhere between 45,000 and 50,000. We have 8,000 selected reservists. We have about 36,000 volunteers, the Coast Guard Auxiliary, which are terrific and help us out a lot. But the basic -- I would call it the organizational genius of the Coast Guard is the fact that without having to have a bunch of different agencies do different jobs, we have one agency that can shift its focus and its people and its capability and its platforms to do a specific job one day, and then a different job the next day.

I recently visited Canada, and we had a summit with the Canadian Coast Guard, and they do search and rescue and law enforcement up there. But to meet all the different entities that do the jobs that we do down in United States, we had to meet with Transport Canada, the Department of Public Safety, and their military. So if you can imagine being able to cover all those different types of roles in a single agency, you don't have to build all those different agencies. That's our economic model that we offer to the government. We think we're pretty good value.

Mr. Morales: At first brush folks may think of the Coast Guard as having a domain immediately around the United States, but in fact you have a worldwide purview.

Mr. Allen: Especially as it relates to defense operations and our law enforcement capabilities. For instance, we have authority and jurisdiction over U.S. flag vessels anywhere they might be in the world for the purpose of enforcing U.S. law. And as we speak this morning we have patrol boats deployed in the Persian Gulf that are protecting the oil platforms off of Iraq which are their major source of revenue right now.

Mr. Morales: Admiral, let's talk a little bit about your specific responsibility as the 23rd Commandant of the Coast Guard. Can you tell us a little about your role within the organization?

Mr. Allen: Well, I'm the Chief Executive Officer. This is more like an aquatic holding company in some regards. We do search and rescue law enforcement. We deal with Homeland Security issues. We do polar ice breaking. Managing that portfolio and making sure you have the resources to be ready to do that and also to be mission effective is probably my number one job. And it takes a little bit of understanding, as far as how you run the organization, to know how to balance those various mission requirements that are on you, and make wise decisions on the allocation of resources as our field commanders have to do when they're deciding where they're going to put their cutter patrol hours. But I would say managing that portfolio of all of the tasks we have on the water is probably job one.

Mr. Morales: The Coast Guard is within the Department of Homeland Security. So you also have a relationship with the leadership in the departmental over all. Can you tell us a little bit about the nature of that role as well?

Mr. Allen: Sure. The way the department is organized, they have what they call operating components. And that would be like the Coast Guard, Secret Service, Customs and Border Protection and so forth. And then they have departmental entities like the under secretary for science and technology, the under secretary for management. So there are two lines that report to the deputy secretary and the secretary. The deputy and the assistant secretaries, and then the component commanders, there are seven of us. We call ourselves the gang of seven. And we have a direct reporting relationship with Deputy Secretary Michael Jackson, and Secretary Chertoff.

Mr. Morales: That's great. Admiral, the Coast Guard has a strong reputation for leadership development, a long history of being in to develop strong leaders in government. Can you give the listeners a sense of your career path, and how the Coast Guard helped you to be able to develop your leadership skills?

Mr. Allen: Well, I think every job I've had in the Coast Guard has involved increasing responsibilities and exposure to leadership opportunities. In a way, the best way we can help the Coast Guard is to grow leaders, because we put people in leadership positions much, much earlier than a lot of the other services do. Junior officers coming off their first assignment on a ship can be assigned as commanding officers of patrol boats. We have pilots qualified very, very young; they're out there flying. And we put a lot of responsibility on folks' shoulders early on in their career. That's good, and that's bad. It's good in that we get them seasoned early on, and by the time they mid-grade and senior officers they've had a lot of operational experiences. The bad part is we've got to make sure that the organization is doing its part in preparing those folks to meet those responsibilities, and that's a tremendous challenge for us. The way we do that, we've developed 21 basic leadership competencies, and whether we're talking about enlisted personnel or cadets at the Coast Guard Academy or officers coming in through OCS, we try and train and teach to those 21 leadership competencies.

Mr. Morales: So how critical are the concepts of strategic intent and mission focus in this leadership approach?

Mr. Allen: Well, one of the things I'm trying to do as commandant is trying to get us to focus a little bit more strategically, and kind of look up over the dashboard to the horizon a little bit. One of the things I tell my folks -- and it's very, very easy to fall into this trap in Washington, as we get caught up in what I call the tyranny of the present. Those are the data calls, the questions for the record, the preparations for hearings, all the budget submissions that just pervade our daily life around here. And you get so caught up in the annual budget cycle, the annual hearing cycle, that it's hard to kind of lift your head up, look over the horizon, and see where you're going.

Since I was a one star Admiral back in 1998 and 1999 working for Jim Loy, who ultimately became the commandant, we have been trying to create a way to have officers think more strategic about the context the Coast Guard is in in government, what we are trying to do, and make decisions with strategic intent. If you think about it, when you enlist somebody in the Coast Guard, you're potentially making a 30-year decision. And I don't think we always realize that day with everything else that's going on, that we're laying out, where the organization is likely to be that far down the line. And I think when you take a small step, you ought to know the general direction we're moving towards. So I've stressed to the greatest extent possible to my flag officers and the folks who work for me that we have to develop the competencies in our senior leaders to think more strategically, and then when you're dealing with budget or anything else, you need to source the strategy or act with strategic intent.

Mr. Morales: Admiral, how have your experiences as previous chief of staff of the Coast Guard, and more recently as the principal federal official during Katrina, shaped your outlook and prepared you for your current role as commandant of the Coast Guard?

Mr. Allen: Well, first as chief of staff, I was the chief operating officer of the Coast Guard as opposed to the chief executive officer of the Coast Guard. So I handled most of the business end, and that included budget, the management of headquarters -- I was also the commanding officer of headquarters. And as part of my portfolio of duties there, since when I came into the job we were actually part of the Department of Transportation, I was the departmental executive who was responsible for transferring the Coast Guard from DOT to DHS, all the various line items of support, and services that we shared with DOT, and how that transition took place was my responsibility.

So I gained a great deal of insight into the structural underpinnings of the Coast Guard that had to be transferred from one department to another. I think that helped a lot in understanding our organizational context within the department. My assignment as the principal federal official to Katrina probably gave me the same type of insight, but in the operational dimension of the department, in that how FEMA, Coast Guard, Customs and Border Protection all work against the larger problems that are mission tasking, and how that all comes together, and that informed a lot of my thinking when I was interviewed by Secretary Chertoff to be the commandant on where I thought the Coast Guard needed to go under his leadership.

Mr. Morales: Fantastic. How is the Coast Guard partnering with other Homeland Security agencies? We will ask Coast Guard Commandant Admiral Thad Allen 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 am your host, Albert Morales, and this morning's conversation is with Coast Guard Commandant Admiral Thad Allen. Also joining us in our conversation is Dave Abel, director of IBM's homeland security services.

Admiral, how has the integration into DHS impacted the Coast Guard, and what have been some of the critical macro issues related to this integration, as well as the benefits?

Mr. Allen: Well, I think our integration into the department has been a great thing for the Coast Guard. We've had a hard time over the years finding a home because we're so diverse and multi-mission you don't find a perfect fit in any particular department. In 1967 we were moved from Treasury, our original home, and put in the Department of Transportation when it was formed, and then in 2003 moved from Transportation to Homeland Security. I think the integration is going along very nicely. We feel like we're a contributing member in the department. We think we add stability and maturity, because we were basically transferred over without any impact on our mission set or our resources, and I think we bring a lot of stability to the department.

I think that we're working very, very well with our component partners in the department. We always had relationships with Customs and FEMA, but those are stronger than they ever before. I tell a lot of folks I think that FEMA is better off because they are in a department with the Coast Guard, and I think the Coast Guard's better off because we are in a department with FEMA.

Mr. Morales: Admiral, we talked earlier about the deep culture and the leadership within the Coast Guard. How has this leadership style influenced the broader DHS?

Mr. Allen: Well, I think in a lot of ways. The example we set through our delegation of authority and putting responsibility at the lowest levels in the organization is something that I think everybody would strive to do, and hopefully we are an example in the department to do that. One of the things that allowed us to be successful during the Hurricane Katrina response is that we expect that our operational commanders will exercise what we call on scene initiative, and when we were cut off from higher echelons and communications weren't working down there everybody knew how to do their job, and they did the right thing, and they did what was expected of them. And I think in the long run, I think that's what the American public and the secretary would like to see out of this department.

Mr. Morales: Great. The Coast Guard has developed its maritime security strategy. Can you tell our listeners about this strategy, and how does it directly support the national strategy for maritime security, NSMS, and the Maritime Transportation Security Act of 2002?

Mr. Allen: One of the things that we've been working very, very hard on in the Coast Guard since the attacks on 9/11 is what this means in the maritime environment. And we were very, very pleased last year when the president issued the national strategy for maritime security that lays out an overall umbrella concept on how they intend to look at maritime security issues. We've never had an overarching umbrella document like that before, and we are very pleased with it. There are several supporting plans that are required under the strategy that directly either impact the Coast Guard or we are responsible for executing. The first one is maritime domain awareness. And that's creating a system by which you're able to sense what's going on offshore and create the ability to act so you can defeat a threat as far offshore as you can before it gets close to the coast. But to do that you need to have information about what's operating out there and you have to be able to know which vessels are legitimate and which ones aren't. So maritime domain awareness is a very big part of that national strategy for maritime security. The other one is maritime operational threat response. And that's how you actually put forces together and go out and deal with the threat that's out there.

And then global maritime intelligence integration, which is taking all the different pieces of information and putting them together into what we will call a common intelligence picture so you know why you're acting and you have good intelligence on which to base your operations, and finally there's a requirement for a maritime recovery plan. We hope we never have an incident in our ports, and we're going to try and prevent them, and then we're going to try and respond as best as we can if there is an event. But the reality is, if there's an event in a port, how you restart the waterway, how you deal with the impact on commerce is going to be very, very important. And there's requirement for us to develop a plan for that also.

Mr. Morales: I'd like to go from the very strategic topics that we just talked about in maritime security to one very tactical one, I think is at the forefront of the issues that you face. The Coast Guard must combat the potential threat of watercraft coming close to U.S. ports with IEDs, improvised explosive devices. How is the Coast Guard tackling this issue?

Mr. Allen: What we're tackling is part of a broader strategy on how to deal with maritime security regimes for the country. There's been a lot of focus on container threats, and container threats are important. I believe in the long run there is a technological solution to threats posed by containers either through tracking containers or non-intrusive inspection technologies, and all those are being worked right now. And I think you are going to see within a few years a fairly robust program that will address container security issues.

When you look at port security or maritime security, though, you have to look at the broad spectrum of threats and vulnerabilities that are out there, and you have to kind of allocate resources based on risk, and you have to try and mitigate the threats that are liable to cause the most damage. Based on the research that we've done since 9/11, and this includes extensive surveys of our ports regarding vulnerabilities and threats that exist, we do believe that more attention needs to be paid to improvised explosive devices carried by small boats.

And in general we need to look at the small boat population out there that is not as governed or regulated as well as the larger commercial traffic. This is in regards to how they're registered, how they're operated, what they might be carrying, how we can discern legitimate from illegitimate activities out there. This is anywhere from fishing vessels to small work boats to recreational vessels. And it's something that we're starting to engage in a conversation around the country, because I think we need to build a consensus about what constitutes a maritime security regime for this country that goes beyond containers and looks at a full spectrum of threats that we might encounter in our ports.

Mr. Morales: Let's shift gears from threats against assets to the assets themselves. The Coast Guard has embarked on a comprehensive recapitalization of its critical asset platforms through the integrated Deepwater System program. Can you elaborate a little bit on the Deepwater program?

Mr. Allen: I can. A few years ago, actually when I was a commander I was part of a program that extended the service life of our large cutters. And we engaged in a conversation way back then, that we did not have a good plan for when those ships ended their service life about what was going to replace them. As a result of those conversations we decided that it would good to take a look at our mission requirements in the offshore operating environment, and rather than going for a one-for-one replacement of these ship hulls to take a look at acquiring a system of cutters, aircraft, and sensors that were networked together, and focus on the entire performance of the system as opposed to a single platform. We thought if we did that we'd have more capable platforms, we'd have a more capable system, and we would be a much more intelligent acquisition of our capital plan.

Now, that ultimately evolved into our Deepwater System. We awarded the contract in 2002. We're into our fourth year of that contract. We recently launched our first major cutter, the National Security Cutter. Associated with that acquisition we recently have flown our first aircraft associated with that system. And what we're trying to do is build this architecture of platforms that are all networked together, and at the same time take the legacy platforms that are operating, the old cutters and the old aircraft, and backfit them with command and control systems that will allow them to integrate into the new stuff, and slowly phase the old stuff out as we build the new platform.

Mr. Morales: With the contract having been awarded in 2002, much of the requirements for Deepwater were developed prior to September 11, 2001. Has there been any impact from the post September 11th world to the requirements in Deepwater?

Mr. Allen: There was, and we were in quite a quandary. After the attacks of 9/11 we were faced with two choices, one was to withdraw the requests for proposals and start the acquisition over, or to go ahead and award the contract and then go back and look at our system performance specification, and go back and adjust the requirements for the platforms. A good example would be we had no capability in our cutters to survive a chemical, biological, or nuclear attack. Well, we know now, faced with the current threat environment, if you're going to operate in and around a port we may need a vessel that can go into a noncompliant or non-permissive environment and be able to operate in those environments. So we went back and we changed the requirements for the National Security Cutter, for instance, to include survivability against these threats.

When you do that, that changes the requirements that get rippled through, and there are some cost issues associated with that, and we're working through those now. But we generally have had those post 9/11 requirements validated through the joint requirements process at the department. We briefed up on -- it won't be in on the Hill, and everybody generally understands that; we rebaselined the program, and now our focus needs to be on mission execution.

Mr. Morales: Let's move from assets to talk a bit about people within the Coast Guard. In order to perform multiple missions, Coast Guard has developed specialized units that can be deployed on short notice. Can you elaborate on the plans to reorganize these units under a single command structure called the Deployable Operations Group?

Mr. Allen: I'd like to do that. That's a very important issue to me personally because I am vested in it, if you will. Over the years the Coast Guard has developed what I will call specialized deployable forces. But they've been developed within programs for specific program goals, and employed within a narrow stovepipe as far as operations go. For instance, we have oil and hazmat strike teams, and they're some of the best in the world. They can do level A entry. They participated in the anthrax attacks in the Capitol building. They have been employed traditionally only for oil and hazmat spills.

We also have port security units, which are reserve units that we have deployed to the Persian Gulf and other places that secure the ports of embarkation and debarkation to actually move military equipment in and out. Since 9/11 we've also been authorized to build maritime safety and security teams which are deployable into ports to provide on-water boat teams and then law enforcement tactical teams to lock down ports, and they include dive capability, K9 capability, and remote operated vehicles for searching underwater hulls.

All of those operated independently within different chains of command for different mission requirements. My intent is to bring them all together under a single command, not to move them, but to create a command structure by which we can optimize their employment and be able to what I will call adapt a force package. So if we have a particular event like a Katrina, taking down New Orleans, or a massive oil spell locking up a port, or an earthquake, let's say in San Francisco, you can take the elements you need for each one of those deployable teams, put them together, and deploy them through Coast Guard aircraft, and get the right force package on the ground, and be able to do that within four to eight hours, the flyaway package.

Mr. Morales: Admiral, earlier you used the term "aquatic holding company." And we understand that many of the Coast Guard's shore facilities date back to the 1915s. What are your plans to evolve and transform the shore-based forces in order to meet the new demands facing your agency in this post 9/11 threat environment?

Mr. Allen: Well, there are two issues. They are one of the shore-based forces themselves, and the second one are the facilities they occupy. We organized the shore-based forces into sector commands, and that was the right thing to do. And now we have shore-based commands that are capable of all-hazard response with a single commanding officer. Before, we used to have multiple commanding officers in and around our ports based on their mission assignment. We have done away with that and we have consolidated the command structure.

The challenge we have before us is we have very, very old shore facilities, we have search and rescue stations that date back to the -- some of them go clear back to the 19th century. And we have not done a good job keeping up with the recapitalization of what we will call our shore plan, or the actual physical facilities that our shore operators operate in.

There are three significant challenges that I don't think we have spent enough time assessing, estimating the impact of and then moving forward in the budget process, that I have to deal with as commandant. One of them is the condition of our shore facilities. The second one is the condition of our polar ice breakers. And the third one is, where are we going to go with our AIS navigation mission. And especially in a post 9/11 environment where we can be expected to try and reestablish AIS navigation in a port as we had to do following Katrina.

Mr. Morales: Great. What are some of the United States Coast Guard's key organizational priorities? We will ask Coast Guard Commandant Admiral Thad Allen 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 Coast Guard Commandant Admiral Thad Allen. Also joining us in our conversation is Dave Abel, the director of IBM's homeland security services.

Admiral, can you describe to us some of your key organizational priorities for fiscal year '07?

Mr. Allen: I can. One of them is maintaining our legacy fleet while we build out the new deepwater fleet and making sure that it's supported. We have used our assets up faster since 9/11 than we'd anticipated. And the gap between our old equipment and the arrival of new equipment has created some problems, especially in air patrol hours and patrol boat hours for us down south. So I guess the number one priority would be to make sure we maintain our current fleet so we can execute our mission.

A second priority is to establish our new mission of air intercept for the national capital region which we started last week. Fiscal year '07 carries the resources for us to do that. And we'll be operating out of Reagan Airport, and we'll be intercepting general aviation aircraft that happen to stray into the national capital area. Continuing the deepwater project is important for us too to make sure we keep our capitalization on track. And we've had great support from the administration and Congress in that regard.

And finally, to make sure that we are sustaining our homeland security missions, there are also extra resources in the budget for us to increase our inspection of waterfront facilities and overseas ports.

Mr. Morales: Could you describe the Coast Guard's principles of operation as outlined in the publication America's Maritime Guardian? How do these principles empower and enable the execution of your critical missions?

Mr. Allen: Well, a few years ago we decided to boil down the essence of the Coast Guard, or quite frankly sketch out our organizational DNA, the doctrinal publication we call Pub 1, and it's very similar to what they do in the DoD side of the House. There is a joint staff Pub 1 that lays out this is what we expect, these are the principles by which we operate under. In the Coast Guard Pub 1 we have laid out principles of operation, and they include things like the principle of restraint. Since we are a law enforcement organization, when we're not operating with DoD we need to understand that the constitution applies when we're dealing with our fellow citizens, and so we need to treat them with respect. In fact, Alexander Hamilton wrote a great treatise admonishing his revenue cutter captains to make sure that they understood that they were dealing with fellow citizens in doing boardings.

Another one would be the principle of on-scene initiative that I mentioned earlier. That's the notion that if you're on scene, you have the resources, and you have the capability, and you're empowered to do that, we expect you to act, and do what you are supposed to do out there. And that was shown no better than in the skies over New Orleans.

Mr. Morales: Speaking of the skies over New Orleans, the Coast Guard received much praise in most post-Katrina assessments, rescuing over 33,000 lives. Is there something unique about the organization of the Coast Guard that allowed such an exceptional response to a complicated circumstance like Katrina?

Mr. Allen: Well, I think most folks in the Coast Guard would tell you that we were just carrying out our normal mission under our normal doctrine, but we just encountered an anomalous asymmetrical event that completely was off the scope in terms of scale. But we were able to get enough aircraft into the area to have a meaningful impact. We didn't rescue everybody down there. There were some wonderful people from Fish and Wildlife from the State of Louisiana and other folks that really contributed. But as a result of our air forces, our small boat forces in the evacuations of the nursing homes by our people there, we were able to save between 33,000 and 34,000 people.

The reason that was possible is that we have multi-missioned aircraft and we have multi-missioned people. We basically took every existing aircraft that wasn't being flown for search and rescue in the Coast Guard and brought it down to the New Orleans area, in excess of 40 aircraft. And in fact to the point where we asked the Canadians to come down and assume the Search and Rescue Guard in New England so we could take the helicopters and move them down there. Once we did that, because we train our people as multi-mission, we were able to intermix pilots, crews, and maintenance crews from all over the Coast Guards. One day I was flying on an 860 helicopter from Cape Cod with a pilot from San Diego, a co-pilot from Michigan, and a rescue swimmer from Mobile, Alabama, all in the same airframe working seamlessly because they operate under the same doctrine, and there's repeatable training and tactics that they use, and you can go to any aircraft, put the crew together, and they can fly.

Mr. Abel: One of the things that was very complicated in the overall response to Katrina was the necessity for communication and interoperability between federal, state, and local organizations. How has the Coast Guard's relationship with different levels of organizations changed or strengthened since the response to Katrina?

Mr. Allen: Well, I think it has changed and I think it has strengthened. This is not a Coast Guard issue, this is an overall federal issue, and there are two components to this. I testified recently on the Hill and I try to break this down into an organizational component and a technology component. The organizational component is interoperability at all levels of government, and then horizontally, and that's the ability to get into the same command center, share the same spaces, understand the doctrine, understand what you're trying to accomplish, and be able to work seamlessly across all the federal agencies and then down through the state and local governments. That's the organizational component of command in control.

There's a technical component to that, and that's interoperability of communications. And that's who's got what radios, what frequency they operate on, and who can talk to whom. That was probably the bigger problem in New Orleans than anything else. Number one, they lost the communications infrastructure in and around the city, and when they were trying to bring that back up, to have all the different first responders down there, sometimes operating on different radio spectrum was a problem, and it was identified as a problem. It's being worked right now as a result of the lessons learned, reports that came out of Katrina.

In relation to the Coast Guard, we operate under maritime mobile radio frequencies, and we have a coastal radio system that's set up to get the mayday calls when they come in. We were able to reestablish our system, but our system ultimately needs to be able to talk with the land first responders, which are in a different frequency spectrum. We're in the process right now of changing that, our Coast Guard radio system, under a project called Rescue 21, that will allow us to be more interoperable with state and local responders. And I would say that is an enduring challenge for the entire United States. And when the state and localities are buying radio systems they need to really think about the interoperability with the federal first responders.

Mr. Abel: You referred to the flooding of New Orleans as a weapon of mass effect unleashed on a city without criminality. It's an interesting view. Can you elaborate a little bit on that assessment?

Mr. Allen: I can. The reason I used that term is it invokes a different paradigm than normal hurricane response. And I think one of the failures in the Katrina response was the failure to understand that we weren't operating in a traditional mode against a traditional hurricane, as far as mounting a response, that something else had happened that made it more complex, that made it asymmetrical, that made it anomalous. And that was the breaching of the levees. If the levees had not breached in New Orleans, you would have found what I would call ground zero of the event to be Waveland and Bay St. Louis, Mississippi, which were almost wiped off the face of the earth by a 25- to 30-foot tidal surge. But with the flooding of New Orleans, you had a different degree of a problem set, and what you're really dealing with was the equivalent of a weapon of mass effect being used on the city without criminality.

And the reason that I say that's significant is if there had been criminality involved, we would have known what to do. There would have been a senior law enforcement officer in charge. We would have been trying to fight the thing as a crime scene. We'd have been trying to deal with the implications associated with criminality involved in that. But since there was none, there wasn't a cue for anybody to understand that it was something different. And in the absence of understanding that there was something different and anomalous about it, we treated it as a regular run-of-the-mill hurricane, which was not the right response.

Mr. Abel: You mentioned some of the things that we can do going forward technically, to be able to prepare ourselves for similar responses. Are there things that we need to do organizationally or operationally to be able to do that as well?

Mr. Allen: There are and we're already working on those. For instance, FEMA is the federal coordinator for what we call mission assignments. If there's something that needs to be done, FEMA is not expected to provide that particular service. They're expected to go find it and provide it to the state and local governments. They do that through what's called a mission assignment. And they can issue a mission assignment to the Coast Guard, to the Corps of Engineers, and that's how they handle things like debris removal with the Corps of Engineers.

Between FEMA and the Coast Guard over the last year since Katrina, we have come up with pre-scripted mission assignments. So we come up with a scenario on which you need let's say Coast Guard airlift or Coast Guard surveillance of a coastline, we write it out. With the exception of filling in the date and the time, we both hold the piece of paper. When the event occurs and they need to move us, it's a matter of filling in the blanks on the paper, and we're gone. And we can actually launch on verbal notification, which is what we would.

It's this pre-negotiation of mission assignments plus we have trained Coast Guard admirals to be principal federal officials similar to the duties I perform, and have jointly trained them with FEMA's federal coordinating officers. And we have deployed as teams, we have evaluated evacuation plans, and we have tested the deployability of this folks. And that's way far ahead of where we've ever been before.

Mr. Abel: Admiral, with the very broad mission that the U.S. Coast Guard has, collaboration must be critical to your operations. How is the Coast Guard enhancing coordination and collaboration amongst all the other components of the Department of Homeland Security?

Mr. Allen: Well, I think the first big example is something I've been involved in for the first three years at the department, until I went down to Katrina last year, and that's the Joint Requirements Council. That's an entity that takes a look at all the requirements of the department. And as major acquisitions are being looked at at the department, they review them, see whether or not there are commonality requirements so you're not buying two platforms when you can buy one. And this relates to everything from aircraft clear down to -- one of the most successful projects that they ran was a consolidated handgun buy for the entire department, where whether you were Secret Service, Coast Guard, or Customs and Border Protection, we were buying off the same handgun contract with a tremendous cost savings.

They've done also the same thing for IT licenses, software licenses and things like that. And I don't think there's probably any end to the particular partnerships that we can form that will achieve better efficiency and effectiveness inside the department. But the Joint Requirements Council would be one example of that.

Mr. Abel: Along the same lines of collaboration, how does the Coast Guard plan to better integrate operations and assets with the Department of Defense, specifically the U.S. Navy? And how does the national fleet policy assist in facilitating this integration?

Mr. Allen: Well, you know, we have great relationship with the Navy, it's never been better. And we have an enduring requirement to be interoperable with them in time of war, and when we're needed for a combatant commander. Admiral Mike Mullen and I have a great relationship. And we believe if you take the Navy's fleet and the Coast Guard's fleet and you put them together you have a national fleet. We have the world's best Navy, and we have the world's best Coast Guard; together they make the world's best maritime force. So he and I are working very, very hard to operationalize this concept. And a good example of that would be Littoral Combat Ship, which was just launched a couple weeks ago. It has a deck gun, a 57-millimeter deck gun. It is the same deck gun that we will use on our large cutters. And wherever we can, we're looking that where we have commonality of requirements, to have commonality of systems or platforms, and that would be a good example of that.

And that's needed because -- you talked about interoperability with DoD, we have negotiated as part of the national strategy for maritime security, protocols under which the Navy and the Coast Guard and other forces will work together, and whether or not it's a Homeland Security or a law enforcement issue, if you will, or whether it's a Department of Defense homeland defense type of a mission. And under the agreements and the protocols that we have negotiated, you could have Coast Guard forces working for a naval component or you could have Navy assets working for a Coast Guard entity in trying to intercept a boat offshore, let's say, and do a boarding.

Mr. Morales: What does the future hold for the U.S. Coast Guard? We will ask Coast Guard Commandant Admiral Thad Allen 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 Coast Guard Commandant Admiral Thad Allen. Also joining us on our conversation is Dave Abel, director of IBM's homeland security services.

Admiral, the role of the Coast Guard has evolved over the last five years. How would you characterize this evolution, and how do you envision the Coast Guard over the next five to ten years?

Mr. Allen: Well, I wouldn't say it's evolved so much as we've gone back and resurrected a mission that was given to us years ago that's become prominent again. A lot of people ask us about the maritime security mission we've got right now and how it impacts us, but frankly, we've had this mission since 1917.

There was a piece of legislation passed after a sabotage event by German saboteurs in New York harbor in 1915 resulting in something called the Espionage Act, which is some of the organic legislation that FBI holds right now. That is the original authority for our captain of the ports to be able to direct to close ports, protect facilities, and so forth. So, the port security mission is not new, it just emerges from time to time.

During World War II, the Coast Guard was over 200,000, and a good deal of our authorities then were to direct and control the ports. So it just happens to be a reemergence of a longstanding mission that we've had, that is what the American public needs from us now. And we're capable of diverting our resources, realigning them, putting them where they need to be, and be responsive to the American public.

Mr. Morales: What about the next 10 years, any major changes that you see in the next 10 years?

Mr. Allen: Well, I think the challenge before us is to come up with what the end state is for a maritime security regime in this country. We made a lot of changes since 9/11. We significantly improved port safety and maritime safety, but the question is what is the end state that we are driving to?

We have a very good example in aviation security where there's a 200-mile air defense information zone. If you penetrate that zone and you haven't called in or you're not using a transponder, you get met. We have never thought about the oceans in those kind of terms. And the water is very, very different. We have 95,000 miles of coastline with rivers, lakes, and everything else that are potentially -- have to be covered in this country. 95 percent of all the cargo moving from outside the hemisphere comes by vessel.

But we're not dealing with bright borders like we see in the land areas. What you see are layers of legal structures that overlap on the water because they developed quite differently. They have a 12-mile territorial sea. You have a 12-mile contiguous zone that allows you to enforce customs, immigration, and sanitation laws. Then you have an exclusive economic zone out to 200 miles.

We have never tried to manage the water like we do the air. But the question is how should the water be managed, and I don't think there's been a discussion in this country or an agreement on where we need to go. One of the things I'm going to try and do during my tenure as commandant is lay out what I propose would be a security regime for a costal nation state in the current transnational threat environment. And we're also going to have to make sure that we understand how to do this globally, because if we do it unilaterally and our other partners around the world don't, we're going to create an unlevel playing field, not only in terms of commerce, but in terms of reciprocity on how we're treated everywhere.

So the challenge I've laid down for my people in Coast Guard Headquarters is to start working on this, so when we deal with legislation, rulemaking, our agenda to the International Maritime Organization, which is where we handle international issues, our budget, outreach to stakeholders around the country, we can say here's what we're building to. Here's how we think we ought to regulate the waters, here's where we think people ought to carry transponders, and it's a discussion we need to have with the country. That's what we need to be doing in the next five to ten years.

Mr. Morales: You've been quoted as saying that your enduring goal is to lead a Coast Guard that is steadfast in character but adaptive in its methods. Can you elaborate on this, please?

Mr. Allen: I sure can. We don't want to lose that organizational DNA that goes back to 1790, that started with independent cruising cutters that has evolved into the principles of operation that we use right now, including on-scene initiative. We want to keep that always. But how those resources, how those capabilities are being applied in a different threat environment, what you have to understand, there's an entirely threat and political context that we're operating in right now, so we need to be adaptable.

For instance a few years ago, when Admiral Loy was the commandant of the Coast Guard, he made a very brave decision that was not always well received throughout the organization. He was bound and determined that we should arm our helicopters. That was something that was almost unheard of in some areas of the Coast Guard. But we did it. And it's been the single most effective drug interdiction capability we put out on the waters in the history of the organization. And last year we seized 150 tons of cocaine. Most of that was as a result of warning shots and disabling fire from our helicopters. So what you need is an organization that has the ability to keep those core values and that organizational history of being able to act and do the right thing but be adaptive enough to coming threats where you're able to bring in technology and manage change so the organization gets better every year, as far as dealing with the current threats.

Mr. Morales: Admiral, how does the Coast Guard grow and improve the competency of its workforce going forward?

Mr. Allen: Well, that's probably our biggest challenge, because the requirements are changing radically and we're inserting new technology all the time. And every time you hire somebody in the Coast Guard, you're potentially making a 30-year decision. Being flexible and agile in how you train people and how you develop competencies is extremely important.

I've got a team taking a look at our human resource strategy right now as it relates to the new mission set and where I'm trying to drive the Coast Guard. And within a couple months I've asked them to come back and tell me what the major changes we need to make as far as how we're managing accessions, how we're training them, how we track competencies.

A key thing for us right now is to get much better at training our junior people in law enforcement; we do a lot of that on the job, on cutters. We think a lot of that needs to be in the classroom. We need to have more of a professional certification for some of our folks that operate out on the water. We're closely aligned with what you would see with the CBP or other law enforcement organizations.

Mr. Morales: Picking up the discussion of the classroom, how valuable are service academies such as the United Sates Coast Guard Academy to your long term strategy?

Mr. Allen: Well, they're extraordinary valuable because you need a mix of officers, you need a diversity of background, and you need a diversity of education. One thing the academy does for us is it allows us to produce engineers. Engineers are in short supply; everybody's fighting for them, trying to recruit them and everything else. So there's a certain amount of capability and competency that you need to indemnify the organization against by home growing it, if you will. And the academy is one place where we can do that. It is also a place where we can take young people coming out of high school, give them a college education, but in the four years also imbue them with the history and traditions of the Coast Guard and create a nucleus by which we can build an officer corp. And then we can surge officer candidate school, which is much shorter, and we can vary the sizes of those classes to complement, to fill out the entire officer corp.

Mr. Morales: Admiral, earlier you described a relatively young workforce within the U.S. Coast Guard. But we do talk to many of our guests about some of the pending retirement waves and challenges within government. What are you seeing within the Coast Guard and how are you planning for the future?

Mr. Allen: In relation to our military personnel, we don't have the pending problem that a lot of people are going to see, and that is the retirement of the baby-boomer population and the loss of intellectual capacity and intellectual capital in organizations. I think we've done a good job on the military side. It's more of a manner of how do you manage competencies and reshape that workforce as you need to once you have them for a 30-year career. We need to do a better job in recruiting and retaining our civilian workforce. If you were to take a look at where our shortages are now in the Coast Guard, our major shortages are in our civilian workforce, and our ability to recruit, retain, and then provide promotional ladders for these folks is extremely important.

We're challenged in our civilian workforce in that we don't have as many as other agencies. And they are commingled with the military workforce, so making sure that they have career progressions is very, very important. Our challenge is we may not have a critical mass of those positions that will allow us to be able to promote them up and allow them the virtual certainty they can stay in the organization and still work in their specialty and be promoted. And that's one of our big challenges right now.

Mr. Morales: Admiral, you've had a very successful and distinguished career. What advice can you give to a person who is interested in a career in public service? And in particular for that young person who may be out there who is interested in a career in the Coast Guard?

Mr. Allen: Well, whether it's a career in public service or the Coast Guard, you need to understand that when you're involved in public service, in addition to the compensation that you get that may not be as great as you would be able to enjoy in the private sector, you're being compensated psychologically for doing something for your country. And there's a notion of a service in serving something that's bigger than yourself when you do that. And I think that's embodied in public service. It's particularly embodied in service in the Coast Guard.

And the advice I usually give folks is that, number one, you need to understand that you're serving the country. Number two, you need to get up every day and go to work and enjoy it, and if you're not, then you should do something else. And number three, if you're coming home from work and you're not enjoying it, then you need to look at yourself and what's going on in your personal life.

I think the Coast Guard has got it right in our core values of honor, respect, and devotion to duty. And when people are looking to come in the Coast Guard, I would just say they need to think about those three core values. And I think of them as concentric circles when I'm talking to young folks in the Coast Guard. The first one is honor. And that's a compact you make with yourself on how you're going to conduct your life and the principles you're going to live by. Respect, which is the next one, is how you're going to conduct your life in relation to those around you, the compact you make with your teammates, your officemates, the people in your own organization. A devotion to duty is a compact you make with your country.

So honor, respect, and devotion to duty I see as concentric circles that build the individual from their self out to that larger sense of duty that's related to the blue uniform we all wear.

Mr. Morales: Admiral, that's a great model and great advice I think for all of us. Unfortunately, we have reached the end of our time. I do want to thank you for fitting us into your busy schedule today. But more importantly Dave and I would like to thank you for your dedicated service to our country.

Mr. Allen: Well, thank you very much. I would just advice your listeners if they want to find out more about the Coast Guard, we do have a website, it's www.uscg.mil. You can also go to gocoastguard.com and you can find more information about our service.

Mr. Morales: Great, Admiral, thank you.

This has been The Business of Government Hour featuring a conversation with Commandant of the Coast Guard Admiral Thad Allen.

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

As you enjoy the rest of the 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 the government, but who deserve our unconditional respect and support.

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

Integrating Performance and Budgets: The Budget Office of Tomorrow

Wednesday, January 31st, 2007 - 20:00
Governments are under increasing pressure to produce--and to demonstrate--results in terms of their mission. Over the last decade, countries around the world have undertaken reforms with the aim of improving the relevance and effectiveness of public services and the quality of public sector management. Integrating Performance and Budgets showcases attempts by federal and state governments, as well as a mix of developed and developing countries, to introduce performance or results-oriented budgeting and management as a means to support better decision making and accountability.

Driving Operational Innovation Using Lean Six Sigma

Tuesday, January 30th, 2007 - 20:00
Author(s): 
Government leaders today face mounting pressures to innovate; yet finding ways to actually enable innovation remains a challenge for many. Top organizations with successful track records of innovation, however, have discovered one possible solution. Lean Six Sigma, a relatively well-known approach for achieving operational excellence, can, as it turns out, do more than simply improve processes. It can help leaders discover innovation opportunities far beyond operations, enhance financial performance and create organizations that have an inherent inclination toward innovation.

R. Allen Pittman interview

Friday, January 26th, 2007 - 20:00
Phrase: 
"Where we need to move from where we are today, how do we transform ourselves -- it is moving from a personnel transaction-based organization into a human resources consulting behavioral-based organization."
Radio show date: 
Sat, 01/27/2007
Guest: 
Intro text: 
R. Allen Pittman
Complete transcript: 

Originally Broadcast Saturday, January 27, 2007

Washington, D.C.

Mr. Morales: Good morning, and welcome to The Business of Government Hour. I'm Albert Morales, your host, and managing partner of The IBM Center for The Business of Government. We created the Center in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about the Center by visiting us on the web at www.businessofgovernment.org.

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Mr. Allen Pittman, Assistant Secretary for Human Resources and Administration, and Chief Human Capital Officer at the U.S. Department of Veterans Affairs.

Good morning, Allen.

Mr. Pittman: Good morning, Albert.

Mr. Morales: And joining us in our conversation is Solly Thomas, associate partner in IBM's Human Capital Practice, and former Acting Associate Director for Human Capital at the Office of Personnel Management.

Good morning, Solly.

Mr. Thomas: Good morning, Al.

Mr. Morales: Allen, perhaps you could start by giving our listeners an overview of the history and the mission of the U.S. Department of Veterans Affairs.

Mr. Pittman: Be more than my pleasure to do so. Veterans Affairs actually was established through an Executive Order creating an agency by President Hoover in 1930. In 1989, we became a Cabinet-level department under President Reagan.

Mr. Morales: Could you give us a sense of the scale of the VA? Also, how is it organized, the size of its budget, the number of full-time employees, and its overall geographic footprint?

Mr. Pittman: Absolutely. VA has 235,000 employees, and that fluctuates every month, typically goes up to about 238,000, drops down to about 234,000, but we're currently about 235,000 employees. Of the 235,000 employees, just to give you additional information, we have approximately 190,000 employees that are members of the union. So that's taken into consideration. The VA itself is broken into three major operating groups.

We are kind of different than the rest of the government in that we're actually an operating company if you look at us as a business entity. We have Veterans Health Administration. That has the largest component of employees -- approximately 190,000 employees. Then we have Veterans Benefits Administration, and then we also have the National Cemetery Administration. The remainder would be the staff offices supporting those three operational groups.

We have 1598 locations made up of 156 hospitals, 877 outpatient clinics, 136 nursing homes, 43 residential rehabilitation treatment programs, 207 readjustment counseling centers, 57 veterans benefits regional offices, and 122 national cemeteries.

Mr. Thomas: Allen, perhaps you could tell us a little bit more about your specific role as the Assistant Secretary for Human Resources and Administration, and also as the Chief Human Capital Officer. Could you tell us a little bit about the areas under your purview, the organizations, the size, the budget, the resources available to you?

Mr. Pittman: I have five program areas. There's human resources. There's labor relations management; there's administration; there's diversity management, and then the Office of Resolution Management. I have -- reporting into those five program areas, I have approximately 550 employees, and I have a budget responsibility for around $101million.

Mr. Thomas: Allen, I want to shift the focus now and ask you to describe your career path for our listeners. How did you begin your career? Could you talk about your experiences, and also what drew you to this critical position at the VA?

Mr. Pittman: Well, let me go back a little further than what you anticipate by that question, but I think I have to set the stage. I actually was a money and banking major in college, with the University of Arkansas. I had returned from Vietnam -- I'm a Vietnam veteran -- and I was on the G.I. Bill. And majoring through money and banking, I had reached the last semester of my eligibility out of the G.I. Bill and was running out of money. And I had to take one class which remained in my core criteria in reference to my major. Unfortunately, there wasn't anyone available to teach that class. So I switched to personnel management. That's how I got into personnel management.

Upon graduation, I started interviewing within the area that the University of Arkansas was located in, which is Northwest Arkansas. Unfortunately, the only jobs I was receiving came from Tyson Foods. And at that time, the offer that I was given was actually $2,000 less than the poverty level. And my dad, who was a family physician -- here comes a tie as far as health care -- suggested that possibly I get into pharmaceutical sales. So I ventured into that arena as far as that industry sector, and I went to work for American Cyanamid Lederle Laboratories, and eventually for Pfizer Labs.

So I became a pharmaceutical detail man. In my background in the military, I was a hospital corpsman. Again, you'll see there's a thread of health care. So I was able -- I was a caregiver in the Service, obviously, even though it was in a combat-oriented environment. But with pharmaceutical sales, I started understanding pharmacology. After I left Pfizer and went to work in the private sector, I went to work at a hospital, where I was a personnel manager.

I eventually went to work with Fluor Corporation, which was an engineering construction organization, and that was one of the best moves I made, principally because it was so fundamentally sound in reference to its training and development organizations. And from the human resources component, they soon put me into a fast track program where they wanted to make a general manager out of me. But in order to do that, I had to complete all the various disciplines within human resources.

And at Fluor Corporation, they had everything but labor relations. So therefore, I became a fundamental human resources technician, in that I've been in every discipline that there is within human resources, either as a technician or a supervisor or a manager. With that then I soon went on down the road in human resources, but I was soon contacted in the early '80s by a gentleman that I worked with for about 22 years. And we started two companies, both in health care -- both were ambulatory care, but one was home infusion, and the other one, the last one, was U.S. Oncology, which was a cancer-based community-based organization for the treatment of cancer. That's really helped me out. The background that I had created a situation for me in these operational companies that we started up not only in maintaining the direct responsibility for human resources, but also being the operating executive within those two organizations.

So I bring a different fit into the government in that I'm a true operational executive, and have been for over 20 years. However, I'm also a human resources professional. And I think that's always important. When you look at a career in human resources, it's unusual to have someone that understands health care to the degree that I do, and can apply it through a human resources aspect.

Mr. Thomas: Allen, with such a fascinating background and wealth of experiences, I'm curious: how have these experiences prepared you for your current leadership role, and how has this informed your current management approach and leadership style?

Mr. Pittman: Well, it's been beneficial from this respect. I think that you know I'm a political appointee. And with that, a political appointee comes into an environment that the majority of -- at least 98 percent or 99 percent of the employee base are career employees. At the VA, we only have 15 political appointees. We're treating veterans. This is not political, this is an apolitical environment.

So with that, the fact that I have this experience, that brings credibility. So when I talk, I bring credibility from the standpoint of -- again understanding the business, and being able to relate the business to a human resources decision or strategy. And that's been most important.

The other aspect, too -- in those two organizations in particular that I referenced about starting up, we had approximately 40, 45 acquisitions in those two organizations. So needless to say when you acquire an organization and try to transform and transition those two organizations together, it is very, very difficult. So it requires a lot of selling experience and being to sell the program, but importantly, you have to work collaboratively and participatively. I am a collaborator in reference to my management ability. In addition to that, I believe in participation.

That's where ownership comes in as far as whatever strategy or initiative you may have, and ownership by those that are participating in that initiative. I think that's been crucial, because there's such a short time to be able to come into the VA to hopefully impact and move that organization from a collaborative standpoint to where it should be.

Mr. Morales: Fantastic.

What is the VA's human resource strategy? We will ask Allen Pittman, Assistant Secretary for Human Resources and Administration, and Chief Human Capital Officer of the VA, 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 Allen Pittman, Assistant Secretary for Human Resources and Administration, and Chief Human Capital Officer at the VA.

Also joining us in our conversation is Solly Thomas, associate partner in IBM's Human Capital Practice.

Allen, could you elaborate on the four-part HR consulting model that you and your team had recently rolled out? And how does it frame your human capital strategy?

Mr. Pittman: Well, to give you just a little bit of background, first of all, VA, unfortunately over the years, has not kept up as far as leading edge technology or actually systems from a people perspective within the VA. And you might understand why. VA is mostly known for health care and also veterans benefits. So therefore, when the budget comes through, from an appropriation standpoint, it's typically for health care and benefits administration, plus for national cemeteries, of course.

So when you talk about overhead, which we are, it's very difficult to get those dollars that are necessary to move forward. What we've done since I've been there is to identify what we need to be within the future. So we're going through an HR transformation process. And I will tell you something that I think is somewhat funny. When I first came here and did an assessment of VA from the human resource perspective, I mapped out what I thought needed to be done before we sat down and did a collaborative strategic plan as far as human capital plan is concerned. Turns out that it matches the President's Management Agenda, and I would prefer to say that the President is following my lead, but unfortunately, that is -- that is not -- as it turns out, it's a pretty good fit.

And this is not rocket science when you look at human resources. If you look at the fact that fundamentally you're a personnel organization, a personnel department, even though we are 235,000 strong, then you'll soon see what we must do. And automation is almost non-existent to VA. We have a payroll system that has a component for human resources in it.

So taking a look at where we need to move from where we are today to where we're going to in the future, and the people involved, and how do we get there, how do we transform ourselves, a lot of it is moving from a personnel transaction-based organization into a human resources consulting behavioral-based organization. But you also need to have the tools that allow you to do that.

We went through that process and soon realized that if we're going to become a consulting organization, then what do we need to subscribe to? And you mentioned the four-step consulting model. Well, it includes the focus on customer needs, exploring solutions, developing and executing action plans, and closing the loop with our HR practitioners, but also the line managers that they work with.

So what we're trying to do is take those four components and develop core competency training programs so we can create an organization that is a consulting organization. We have a three-year plan in reference to that training and development piece as far as human resources and the human resource professionals are concerned. A lot of it's contingent also upon automation.

Mr. Morales: You talk about the scale of transition. Could you elaborate a little bit more on the VA's plan to transition to an HR line of business? And how does this move factor into your strategy, which you talked about, of moving your HR function to a more consultative and less transactional focus?

Mr. Pittman: Well, if one understands -- if you're a personnel transaction-based organization -- I'll give you an example of that: within the federal government, there is a Form 52, which is actually a change of status for an employee that's filled out typically by either the supervisor or human resources. And it's a paper form, and that's the way we do it at VA.

Understanding that that's a transaction itself, and then also understanding that our survey has shown us that approximately 36 to 42 percent of our HR professionals are transaction-based tasks, then you can see just how much labor it's taking in order to move an individual from one slot to another to perform any function within human resources. So just imagine if we automated those functions, then wouldn't that give us more capacity without even adding staff? And that is our strategy right there.

We want to automate, thus increasing capacity of our human resources professionals to allow them to do consulting without adding FTE. In order to do that -- that's where our HR line of business comes into play -- pretty much tells us where we need to go, and that's even better. Why? Because we don't have to build it. The HR line of business goes through a process through OPM. And OPM goes through the due diligence process of not only creating the project teams that represent all the departments and agencies within the federal government, to be able to select going through a due diligence process of who can perform these functions from a transaction-based piece.

Most people call these organizations "service centers." So a service center can offer, for example, classification. What we're doing is buying that service from either another agency and the agencies that have been identified within the federal government have been identified, and there's four that meet the criteria we need from the human resource information standpoint.

However, at the same time, OMB is going through a process of due diligence as far as the private sector is concerned, allowing them the opportunity also to become service center operators. So we're waiting for that one aspect to be complete. But by utilizing a human resource information system, this allows us to go into the database. And the database, in this respect, comes from a personnel file.

Once we automate that personnel file, the official personnel file, then this human resource information system -- an automated system can reach down into that database and pull out all these various aspects of an employee. And that will help us in managing our workforce.

Mr. Thomas: Allen, I want to talk a little bit about performance management. I want to know if you could elaborate on the VA's five-tier performance management system, and your experience implementing the performance appraisal plans. In particular, I'm interested in hearing what kind of findings, what your experience was under your performance management data site.

Mr. Pittman: Well, most people are unaware of this, that there is an awful lot of publicity in reference to the Department of Defense and Homeland Security and the issues they're having to train and to implement a five-tier performance appraisal system, which is absolutely crucial to performance planning. VA is the second largest agency and department within the federal government -- 235,000 strong.

All 235,000 employees are on the five-tier system. We had that ratified by the union six months ago. And we've worked with our union partners to get that. That was an essential piece. If we didn't do that, other than our Senior Executive Service who is on a five-tier system already, and that's approximately 300 of our executives -- if we didn't have a five-tier system, we'd still be on a pass/fail system. Now, the pass/fail system doesn't bode well for lots of different reasons. If you and I -- Solly, for example, are in the same classification and the same job title and we perform the same work, and you receive a pass and I receive a pass, but you work extremely hard and I work just enough to get a pass, then who can the supervisor and who should the supervisor invest in from a training and development standpoint for the future of this succession plan and also strategies of VA?

If the investment goes into you, I have every right to raise my hand and say, "How come you're not investing in me, I also have a pass?" We need to be able to distinguish between the levels of performance to give us a determination of who from a career path and career progression standpoint is going to move forward; also, who needs development, how can we invest those very valuable and scarce resources, dollars, that we get from the Congress, to invest in you?

So from a five-tier system, we started this process just this last six months, with the exception of the Senior Executive Service. So we have gone out and we've tested it, we've implemented it in all parts of the country. We are writing up the objectives as we just speak now that align with incentives, the incentives being defined as the strategies of the VA, strategies of the organization and also the objectives of the individual. So we can have measurable metrics that will afford us the opportunity to move people through the system based upon performance.

Now, the experience we have has been short-lived other than the Senior Executive Service. We've piloted this program and it's working extremely well. We had approximately three VISNs. VISNs are integrated systems within VHA. So it's Veterans Information and Integrated Service Network -- that's what a VISN is. So we've done that, it's working extremely well, and now we are doing a wholesale rollout in reference to the five-tier performance appraisal system. Unfortunately, we don't have that much experience to speak of.

Mr. Thomas: And you mentioned that you worked with the unions. I'm sure they raised some concerns at the outset. How did you address those concerns?

Mr. Pittman: Well, I speak very openly and short and to the point. And if I'm asked a question, I'll answer the question, obviously, but if there is a confidential situation, I'll explain it's confidential, I can't explain it. But in talking with the unions, I've been very, very clear about their relationship. When I first came into the VA, I read the master agreement with reference to the American Federation of Government Employees master agreement and saw that it was a pro-union master contract. In talking with the unions, I expressed that, and I said, well, what we need to do is not to create a pro-management agreement, but to create one that is equitable for not only the unions, but also for management, which would impact, obviously positively, the employees.

It's very, very difficult to manage an employee, the human capital asset, if in fact you can't do it directly. And if you have to give 30 days' notice every time you do something, whether it's a salary increase or whether it's a performance appraisal or et cetera. And that's what we talked about. We talked about how we could collaboratively develop a master agreement that would allow us the opportunity to manage the employees for the benefit of the veterans that we serve. Otherwise, we are too restrictive right now. In addition to that, I did talk about the fact that, you know, there's a trend within the private sector in particular that unions are becoming more and more minimized. And there is an opportunity to work with us in a partnership to develop an equitable plan, an equitable agreement to allow them to participate properly in the future.

You know, I talked about performance planning. Their concern was performance planning. And when there is an issue, whether it's positive or negative, but typically negative, then there is not a performance plan in place that allows the employee a good-faith effort to turn around and to continue employment. We have a philosophy at VA, I have a philosophy at VA -- it's our job to retain an employee. It's not our job to separate an employee. It's difficult enough bringing someone on board, so why not keep them. So through a performance plan request that they had as far as negotiations are concerned, I said absolutely, that's what supervisors are supposed to do.

Again, some of the very basic elements of labor management relations that should have been there were not there. We are creating that.

Mr. Morales: How is VA transforming how it manages its workforce?

We will ask Allen Pittman, Assistant Secretary for Human Resources and Administration, and Chief Human Capital Officer at the VA, 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 Allen Pittman, Assistant Secretary for Human Resources and Administration, and Chief Human Capital Officer at the VA.

Also joining us in our conversation is Solly Thomas, associate partner in IBM's Human Capital Practice.

Allen, we often talk with our guests about the pending retirement wave in government and the type of impact that this will have on their operations. What are you seeing within the VA, and what plans are in place to mitigate its possible effects?

Mr. Pittman: This is one of the most important areas that not only VA, but also the government, needs to respond to and respond to very quickly. Director Springer of the Office of Personnel Management uses the phrase "retirement tsunami." And I think that's a pretty good graphic, as a matter of fact, when you start talking about retirement. At the VA, which is in parallel to the rest of the agencies, but speaking about VA, we actually have 60 percent of our employee workforce that is eligible to retire within the next five years, not 10 years.

And doing an analysis in reference to where they're at as far as their retirements are concerned -- they being the employees, we've done two things. One is we have started a program of actually asking the employees -- which is part of succession planning -- it really surprises me when I first came on this, has anybody ever asked the employee when they have an expectation of retirement? And it's not illegal to do so. And the reason behind that is anyone can apply for retirement. They have to fill out an application actually to retire. They can actually pull that application anytime they want to, even though they've said they're going to retire. But from a planning perspective, you need to understand that.

What's even more important, not only from a planning perspective, is also understanding the intellectual, institutional knowledge that they have. They maintain a lot of information that's not written down anywhere. And it's absolutely necessary that we try and transition that knowledge base to someone else.

And the way that we are trying to approach it is actually multifaceted. What we're looking at and doing an analysis, which was the first part of what I was starting to answer a moment ago, is we were looking at those eligible to retire from an age perspective. When is it that they will retire based upon tendencies? If you look back over the years and look at the individuals that hold certain positions, you'll see that the higher the level, the shorter the time they will have as far as an age perspective. They may retire at 55, they may retire at 58, depending upon the number of years and combination. But you'll find, for example, senior executives, they normally do not go to age 65. Our senior executives typically go right at 59-1/2. And the rationale behind that is they have their high threes.

But if you look at that, that's when an individual -- an executive -- I happen to be 59, just for your information -- I know that I have a lot of years left. You may not think so, but I do. And you're at your peak. So why in fact should we work hard on trying to retain those individuals, how can we retain those individuals, not just plan for future replacement of the individuals through succession planning, but why can't we -- from a legislation standpoint, why can we retain without impacting their high threes as an individual, moving them into another slot parallel for a year or two-year period, to be able to transfer that institutional knowledge they have, and also to mentor their replacements, et cetera. That's an example of what we're trying to do.

The other aspect as far as succession planning is concerned also: the federal government has a tendency of really spending a lot of time on workforce planning. It has been an exceptional tool for the last two to three years. But it is now time to move to succession planning. Director Springer actually has taken this under her objectives and strategies. I believe VA started that process.

Part of what we need is automation -- if you recall, we need to have a learning management system that catches the skills inventory of each individual, not only their skills, but also their educational licensures, to be able to create a database so we can at that point develop a gap analysis in reference to where their skills and where their experiences and professional knowledge are in reference to where we're going from the VA perspective.

The federal government typically does strategic planning on a five-year basis. We are moving to a 10-year plan. There is nothing that you can accomplish in the five-year period. So why don't you look further out, look out further and see what your lines of business are going to be, what your technologies are going to be, what skill sets are necessary to support those lines of business, and start looking not only internally through a gap analysis, developing those competencies through leadership development programs and/or skill development programs to be able to support the lines of business into the future. And also to sit down and review the strategic plan on an annual basis. Right now, there's legislation out there that you have to review your plan every two years.

Well, typically an agency or department will take that plan off the shelf every two years, dust it off, enhance it, put it back on the shelf. It needs to be a living document, where you are looking at it every year and determining that if your lines of business that have been identified in the future have changed, you need to revise your strategies, which means you revise your skill sets necessary to support them.

So one of the things we need to do is to develop career pathing programs. VA does an exceptional job, and I'm serious, an exceptional job, for the highest levels of leadership. That includes the Senior Executive Service. And we have a program that's called the Senior Executive Career Development Program, which actually is a feeder program into the Senior Executive Service. We also have another program called the Leadership VA. The Leadership VA is actually the first executive-level, usually GS-13, 14 and 15 level development program, that is a feeder into the SESCDP, which feeds into the SES program.

However, the void is this: we don't have anything universally across the VA for the GS-3s through 12s. How do you create the pools of talent, how do you create the developed pools of talent in order to succeed? And this succession plan itself identifies positions based upon not only skill sets, but also careers. We have a tendency of recruiting. When we recruit for future purposes, we don't really recruit for the future. What we are recruiting is for now, for the vacancy. We are changing our recruitment strategies, our recruitment strategies for the future development based upon the skill sets necessary to support the strategies of the future and also technologies in the lines of business. So when we go out and recruit, we actually are offering a career based upon a need for the VA, not the vacancy.

Mr. Morales: I want to go back to some of the earlier comments you made about the -- certainly the size of the VA and its geographic dispersion. I'm curious. How does the VA evaluate HR field performance as well as impart some of these best practices to the HR community? And what steps are you taking to ensure that the policies and procedures are documented and communicated in a timely and comprehensible manner?

Mr. Pittman: Well, this is twofold. Again, when I came onboard and did an assessment, I asked first of all, do we have the human resource information system? That system is absolutely crucial to anyone that is in the profession of human resources. Why? For example, when you are talking about field audits, you can do system audits if you have a human resource information system, it will save you a ton of time to ensure that you have compliance to various policies, to include, for example, veterans preference on the hiring process. So a system that we will have on board over the course of the next two to three years maximum will be on board to allow us to do that.

In the meantime, I looked at also again what OPM was requiring us to do to go green. And by the way, we have gone green. We went green approximately six months ago. So we are the largest federal agency that has a green status at the current time. And part of that process, and what we needed to do, is to create an accountability organization. The accountability organization functions like an audit organization that comes out of human resources.

So it's a manual process, and what we do is we started out with just one individual. And we now have 11 staff that's in the accountability office. That's how important it is to our organization, and also one of the most important strategies we've done to ensure compliance. I think that you know that first of all, we are Veterans Affairs. So therefore, one of our most and greatest priorities that we ought to have is the hiring of veterans. And as you well know, there is veterans preference from a legal perspective that needs to be complied with.

We are the second-largest department behind the Department of Defense, with 30 percent of employment being veterans. And we absolutely believe in the merit system to begin with. I'm a strong supporter of the merit system, which surprised me when I came on board, coming from the private sector. However, I'm a firm believer that that needs to be there and to be maintained. And the other aspect of it, too, is that any preferences that we have as far as legislation is concerned needs to be followed to disability, age, whatever it might be -- needs to be followed.

So this accountability organization has been absolutely crucial. What it does, it checks every aspect, every function of human resources, not only from a recruiting standpoint, but from a classification standpoint, compensation, disciplinary action, it ensures compliance. Unfortunately, being the size that we are, 235,000 employees, and the dispersion that we have geographically as far as our locations are concerned, needless to say, this is a little bit difficult when you have a staff of 11. What we are doing though is, we're now training up the field staff, field human resource organizations, coming out of each one of our administrations -- that's Veterans Health Administration, Veterans Benefits Administration and National Cemetery Administration -- their human resources staff, to function as a team with us.

We've taken an integrated team approach. Those individuals that come from field operations will now be auditing their own facilities or even in their own administration. Therefore, we will have more capability to be able to do that. That's how we do it currently. We are anticipating automation. It will help us as far as system audits.

Mr. Thomas: Allen, you had mentioned some changes you had put into place to focus on the recruitment process. Maybe you could elaborate in a little bit more detail. And on a related matter, does the VA use flexible compensation strategies to attract and retain quality talent?

Mr. Pittman: To answer your question in reference to flexibility, the answer is yes. We extensively use such things as recruitment relocation and retention incentives. We use special rate ranges to attract and retain quality employees that possess mission-critical competencies. So we use all the flexibilities that OPM allows, and we use them very aggressively. The other aspect, too, in mentioning the recruitment strategies, when I first came onboard -- again, and it seems like everything that I have done is being matched by someone else from an initiative standpoint -- either the President or the OPM, so they are following me extremely well, by the way. But I will tell you, we needed help as far as our recruiting strategies, in reference to bringing people onboard.

Our analysis of the general schedule, the GS classifications, in the hiring of the general schedule employees was that we were exceeding in the neighborhood of 95 days to bring on a general schedule. From a Senior Executive Service onboard process, we were in the neighborhood of 220 days. So can you imagine? We're sitting here trying to compete with the private sector, and a private sector employee has been offered a job from us for the Senior Executive Service probably has gone to work for three or four companies during that 220-day period.

So you can just imagine the talent that we were losing. So what we ended up doing is we sought help from the Office of Personnel Management actually. And they have a process; it's called a hiring makeover. We asked them to come in and help us. We are an operational organization, so we don't have that much staff to sit back and assess, analyze. We have to operate an organization, and at the same time try to do these assessments. So OPM offered their services; we took advantage. They came in, and it was most beneficial. From a general schedule standpoint, taking a look at what we were doing and how we were bringing people onboard, we have now gone down to 38 days in reference to the onboard process for the general schedule, which also helps us as far as going green and maintaining our green status.

Also from the Senior Executive Service standpoint, we've reduced the 220 down to 98 days, and we're on our way to an objective of 45 days. Now, one aspect that we've done just recently is the utilization of USA Staffing. USA Staffing is an application of recruitment that also enhances and expedites the process of delegated examining units. So the delegating examining function, which actually rates and ranks applicants and their applications, takes into consideration the preferences and creates a certificate. It's done automatically through the automated USA Staffing approach.

So that's been most beneficial in impacting what we are doing. Now we are in the process of rolling that out. We have 800 licenses that we are going to be going after pretty soon through the Office of Personnel Management, which will help us again trying to bring that onboard process down to something manageable, and therefore not losing the talent as much as we have in the past, because competition with the private sector is just huge.

Mr. Morales: How is VA planning for its future staffing needs?

We will ask Allen Pittman, Assistant Secretary for Human Resource and Administration, and Chief Human Capital Officer at the VA, 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 Allen Pittman, Assistant Secretary for Human Resources and Administration, and Chief Human Capital Officer at the VA.

Also joining us in our conversation is Solly Thomas, associate partner in IBM's Human Capital Practice.

Allen, you talked about your movement to a 10-year plan. So as you look at this horizon, what types of personnel challenges do you think the VA will face?

Mr. Pittman: From a personnel challenge standpoint, if you're talking about human capital into the future, we have a huge challenge ahead of us. I'd just very briefly talk about succession planning. Obviously, you have to ensure that you have a flow of candidates for employment. That's absolutely crucial that we not only focus there but also understand what we are about in the lines of business that we're going to support in the future.

Again, mentioning our three administrations, if you know that VHA, Veterans Health Administration, is the largest component of our operating units and it is patient care-oriented, then that tells you pretty much the focus that we would have in reference to that administration. Doctors, nurses, health care professionals and health care technicians.

And we need to ensure that there is a constant flow, and we're taking steps to do that. We've developed, for example -- we're trying to brand ourselves within the minority community. It's an unusual approach; again, this is thinking outside the box. The private sector and the federal government typically go after anyone that they can recruit, but the most overlooked segment of our society happens to be the minorities. And that speaks very, very clearly. I mean, if you look at under-representation within the government, that speaks to where we are not getting candidates for employment from.

So why not become the brand within that minority community? I'll give you an example. We developed just recently and implemented in Puerto Rico a community prosperity partnership with one of the nation's largest Hispanic organizations, LULAC, and also the American GI Forum, which is a Hispanic veteran organization that's chartered by the federal government. And what the intent is is to look 10 years in the future and see what our job requirements are based upon the lines of business, the skills necessary to support those, and turn it right around and go into the Hispanic community through the storefronts that belong to American GI Forum and also LULAC; they're inviting us into their community.

The problem with our recruiting strategies typically is we don't understand the culture. So by working with them to develop those strategies, what we're doing is taking those job requirements into their youth development programs and developing that individual to where they are qualified for the job openings. The biggest barrier that we have is finding a qualified candidate for the job posting. So if we have a qualified candidate, that minimizes that barrier approach. Well, there's other approaches, too. Nursing; nursing shortages continue to happen. And it's not that there are not individuals that want to become nurses, the numbers are there. It's just that the nursing schools don't have the number of openings because they don't have enough instructors.

So therefore VA, has taken another unique approach. The Deputy suggested -- again thinking outside the box -- why doesn't VA have a nursing school, a national nursing school? Well, we're looking into that, so we can have people come to us. I also have been talking with the surgeon generals of the British Military Services. And they are very, very supportive of this. The allied health care professionals, for example, the non-nurses, non-physicians, those that have made the actual decision to separate from Service, why can't we bring them into our organization? Remember, we hire veterans. But also, we are bringing in qualified individuals.

If we had someone, for example, that was a hospital corpsman in the navy that wants to come to VA and become a nurse, we have a program where they can actually come in and we'll send them to a nursing school. We'll pay them 100 percent of their salary while they are going to school, and then whenever they get out of school, then they'll sign a contract with us for a number of years of service in order to pay us back for taking them through that process. But in talking with the military branches, they are wholeheartedly supportive of that. The one concern they have is that our program becomes so good that those individuals that were in the military or on the border, I mean on the edge of making decision whether staying in the military or leaving, that they may make the decision to leave or separate. So that's a concern we have is making sure we have a human capital for the future.

Mr. Morales: Along sort of the same lines, what challenges and adjustments do you foresee as a result of the ongoing operations in Iraq and Afghanistan?

Mr. Pittman: There is a program that we have that's actually called Coming Home to Work Initiative. And for those young men and women, the veterans returning from Iraq and Afghanistan, the theaters, that have been severely wounded or disabled, they typically would go through a process of rehabilitation assessment, for example, at Walter Reed -- or it could be Bethesda Naval or it could be in San Diego, it could be at Madigan in Seattle. There is a process they're going through where there's determination being made as to whether they can stay in the service, or unfortunately, from their perspective, being discharged.

And I would tell you, if you ask them, they want to stay in the service, they want to stay, and they actually want to go back to Afghanistan and Iraq. And it makes you so proud when you talk to them. But what we have is in the Coming Home to Work Initiative is actually a compensated work initiative. What that means is while they are going through rehabilitation and being paid by their military branch, by the Department of Defense, we have them come to work for us for 17 hours a week, and our one commitment is and the top priority is getting back for rehabilitation therapy. Any employment they had, we'll get them back. But what we're trying to do is during the 17-hour-a-week process, is to help them develop a new profession, a new occupation.

And we started that program about 2-1/2 years ago, and since that period of time, we have hired onboard with us -- mostly in information technology actually. It's about approximately 45 individuals, but we have more that's coming through the process itself. So we're trying to anticipate, from an employment perspective, those individuals coming back. From a network perspective, from a Veterans Health Administration standpoint, obviously we have health care needs also. And we're trying to adapt to that. And we're doing an extremely good job there. And particularly when it comes to brain injury and spinal code injuries, we actually have Centers of Excellence across the country, eight in number. And we're known now as a Center of Excellence for those severe injuries.

Mr. Thomas: Allen, I want to talk a little bit about technologies that are used in the Human Resources area. There's a lot of talk about commercial best practices, and certainly you have an interesting perspective coming in from the private sector. What emerging technologies do you think hold the most promise for improving federal human resource management?

Mr. Pittman: Well, I really think that what we need into the future is really what we are trying to do now through the HR lines of business. However, to take a step further, we need to have an opportunity to where we created a desktop management, human resources management approach for each manager and supervisor. If you look at the flexibility that we have by automating personnel files through the electronic official personnel file process under e-gov and also the human resource information system under the HR lines of business, the intent is to create an icon sitting on that desktop, that computer desktop, that not only sits there with the other icons you may have, like Word and et cetera, but to be able to tap into this icon that says H-R-I-S.

Now, through access rights to whatever applications may be within the human resources information system and also field rights, that supervisor -- as I had mentioned to you earlier, we have a Form 52 which is a manual process on an employee change of status of some sort -- if that supervisor wants to initiate an action, then they can just tap that icon, go into that -- the certain field of an application, fill out electronically that form and also transmit it -- if it requires upline management approval -- to transmit it.

It also has the learning management system that sits within it. For example, the individual development profiles of those employees that they supervise; what kind of training is necessary; what's necessary into the future? So it's to create a desktop approach that's absolutely essential for every manager in order to manage the workforce of tomorrow.

Mr. Morales: Allen, you have a tremendous passion for the business, and you started your career in the private sector and sort of had a variety of experiences. I'm curious and I'd love to learn, for those folks that are out there possibly thinking about a career in public service, what advice could you give them to get started?

Mr. Pittman: I think it's an honor to serve for the public, with the public, in any kind of opportunity that one may have, whether it's the federal government, state, local, could be the Peace Corps, could be the military. If one were to ask me 35 years ago what I would do for anyone coming out of high school, I would highly recommend having a two-year tour duty in public service. And I'll say the Peace Corps again, or it could be the military. I happen to be one of those individuals coming out of a process to where I was a little bit on the wild side, and I needed to have an understanding of a little bit more discipline in my life.

And what I understood in the military, as an example -- and this happens in public service, it's not about I, it's about we. It's a team. You cannot move anything to an outcome unless you have others to help you and to be part of that team approach. And just by the mere fact that you know that you're giving back to your community in one form or another, truly, truly excites me day-in and day-out.

Some say this is a sacrifice. This is not a sacrifice; it's an honor.

Mr. Morales: Great, that is fantastic. Unfortunately, we have reached the end of our time. I do want to thank you for fitting us into your busy schedule, but more importantly, Solly and I would like to thank you for your dedicated service to our country and our veterans.

Mr. Pittman: Thank you very much. Again, I would just like to emphasize, if one has the opportunity for public service, please serve. I can't miss this opportunity to say something about Veterans Affairs; the Veterans Health Administration itself. If you have been reading anything about the VA over the course of the last two years, you now know that the Veterans Health Administration has the highest quality outcomes of any health care distributing system in the world. It's known for its quality care. What a change.

And our Secretary has a tendency -- Secretary Nicholson has a tendency of saying this is the best story never told. And that's true. We're taking an approach now that every opportunity we have, like I do now, to talk about Veterans Affairs, talk about not only medical care, but the Veterans Benefits Administration, and also the shrines that we have for those veterans that are going be laid to rest.

And again, thank you very much. Again, it's an honor to be here and it's an honor to talk about the Veterans Affairs Department.

Mr. Morales: And it is a wonderful story.

This has been The Business of Government Hour, featuring a conversation with Allen Pittman, Assistant Secretary for Human Resource and Administration, and Chief Human Capital Officer at the U.S. Department of Veterans Affairs.

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

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 are improving their government, but who deserve our unconditional respect and support.

For The Business of Government Hour, I am Albert Morales.

Thank you for listening.

Michael Ryan interview

Friday, January 5th, 2007 - 20:00
Phrase: 
"MCC provides assistance in a manner that promotes economic growth and the alleviation of extreme poverty and strengthens good governance, economic freedom, and of course, investments in people."
Radio show date: 
Sat, 01/06/2007
Guest: 
Intro text: 
Financial Management; Managing for Performance and Results; Missions and Program ...
Financial Management; Managing for Performance and Results; Missions and Program
Complete transcript: 

Originally Broadcast Saturday, January 6, 2007

Arlington, Virginia

Mr. Morales: Good morning and welcome to The Business of Government Hour. I'm Albert Morales, your host, and managing partner of The IBM Center for The Business of Government. We created this center 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 www.businessofgovernment.org.

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Michael Ryan, vice president of the Administration and Finance with the Millennium Challenge Corporation.

Good morning, Michael.

Mr. Ryan: Good morning.

Mr. Morales: And joining us in our conversation is Pete Boyer, Director in IBM's federal consulting practice. Good morning, Pete.

Mr. Boyer: Good morning, Al.

Mr. Morales: Mike, perhaps you could start by giving us an overview of the Millennium Challenge Corporation. Tell us a little bit about the mission and give us an overview of the Millennium Challenge Act of 2003, and some of its key requirements.

Mr. Ryan: That would be my great pleasure.

The MCC mission is simply to reduce poverty by supporting sustainable economic growth in developing countries -- in those countries which create and maintain sound policy environments.

The Millennium Challenge Act established MCC to administer the Millennium Challenge account. This was established in January of 2004 as a result of President Bush's commitment at the Monterey summit. And that summit focused on financing for development, and the purpose, as stated, was to provide greater resources for developing countries, taking greater responsibility for their own development. It sometimes been referred to as assistance with accountability.

The act itself mandates that MCC provide assistance in a manner that promotes economic growth and the alleviation of extreme poverty and strengthens good governance, economic freedom, and of course, investments in people.

The MCC program, of course, is only one component of our overall foreign assistance strategy, but it is an important and an innovative one. It's something new, and our work draws on lessons learned from international development organizations over the past 50 years, and it focuses on the long-term mission of reducing poverty, as I mentioned, through economic growth.

In short, we work in partnership with some of the poorest countries to create country ownership instead of long-term dependence on assistance. We want to give assistance in order for countries to take over the job of their economic growth and alleviate poverty within their borders.

Mr. Morales: Mike, this is certainly a non-trivial challenge in mission. Could you tell us a little bit about how your organization is organized, the size of your budget, and how many people are employed in your organization?

Mr. Ryan: MCC was designed as a small and a federal corporation and is meant to ensure accountability for the aid we administer. As a federal corporation, it's managed by a chief executive officer, who's currently Ambassador John Danilovich, and he's appointed by the president and confirmed by the U.S. Senate.

What makes us a little bit different is we're overseen by a board of directors, who make the major decisions, what countries to give assistance to and the like. And that board of directors is chaired by the secretary of state. The vice chair is a secretary of the treasury. Other members include the -- the United States trade representative. The U.S. aid administrator. And it is has interestingly two public members currently, although, there may be more in the future.

Kenneth Hackett, who's the president of Catholic Relief Services, and Governor Christine Todd Whitman, who in addition to being the governor of New Jersey, was also a former EPA administrator and now is a president of the Whitman Strategy Group.

We have a number of departments. We have operations, we have a department of accountability, a department of policy and international relations. Of course, we have congressional public affairs and an office of the general counsel. And then we have the department that -- that I head up, administration and finance.

As far as our budget goes, the commitment had been to rise to $5 billion a year. The current request is for $3 billion. The House passed a bill, and now is at $2 billion. I don't know where that's going to end up. And clearly, one thing that gives us a good deal of flexibility is that all of our MCC funds are no-year funds, which means that we can obligate funds for a five-year compact at the beginning of the five years, and it's available until it's expended on that -- that compact. It saves us from year-to-year ups and downs and countries can rely on this -- this assistance.

As far as the -- the level of staff, as I said, we're small and we're -- we aim to be small. We want to arise to a staff of -- of 300 in Washington, D.C. Currently, we have 20 people stationed overseas that are above that 300 number, and that number overseas should rise as we established additional contacts in other countries. At the present time, we have approximately 280 people in Washington.

Mr. Morales: So, almost 300 people managing $3 billion in assets?

Mr. Ryan: That's right.

Mr. Boyer: Now, Mike, what are your specific responsibilities and duties as a vice president of administration and finance, and could you tell us about the areas under your purview?

Mr. Ryan: Sure, Pete. I -- I'm essentially a chief financial officer in the federal mold. I'm responsible for the same areas that many CFOs are responsible for, financial management and reporting, financial services, budget formulation execution, development of annual performance plans, oversight of financial systems, and producing the annual performance and accountability report and procurement.

I also have oversight of HR, Human Resources, recruiting in development. Facilities management, both in Washington and overseas. IT and personnel security. So, it's just a full range of administrative and financial duties that you'd expect to see in an organization with my title.

Mr. Boyer: Now, Mike, you clearly had a very interesting career. Could you describe your career path for our listeners? Specifically, how did you begin your career?

Mr. Ryan: Well, I should start off by saying that I -- I had been a civil servant until my current appointment with MCC for many, many years, but my first position actually was a mathematics teacher in Baltimore City schools. After I earned an undergraduate degree at St. John's College in Annapolis. But I left teaching math and went to -- to Harvard where I got a -- a PhD in near eastern languages and civilizations. I got that degree in 1981, after having joined the federal government in 1979.

During my studies on -- on that degree, I spent three years researching Egypt and traveling around the Middle East under a Fulbright at Smithsonian and the Center for Arabic Study Abroad fellowships.

I've had several positions in the Department of Defense and Department of State. And when I first joined in 1979, as I mentioned previously, I was a Middle East analyst for the Department of Defense. I've also had senior-level positions, including deputy director of a plans directorate under the Defense Security Assistance Agency. I've been the acting deputy assistant secretary for International Narcotics in Law Enforcement Affairs in the Department of State. I was also the executive director and comptroller of that same bureau in the Department of State.

I also worked at EPA, where I first met Governor Whitman, and I mentioned before, when she was the administrator. And I first started as a comptroller there in 1997, with responsibility for budget formulation and execution. As all -- as well as all aspects of financial management in operations.

I became the deputy CFO of EPA then in 2000, and I had that job until 2006. May, actually, when in joined MCC. At EPA, I also managed their strategic planning, budgeting, financial management, performance measurement analysis, and their accountability functions.

Mr. Boyer: Mike, that's a very broad set of experiences. I'm curious, how have these experiences prepared you for your current leadership role at MCC, and have formed your management approach and leadership style?

Mr. Ryan: I guess being deputy CFO at EPA and acting CFO during periods when EPA did not have a Senate-confirmed CFO in place was the best preparation for my technical duties at MCC. Having a practical experience in managing a CFO shop, including problem-solving in all areas normally reporting to a CFO, and also extremely useful contacts within the CFO counsel, helpful opportunities to share experiences across the federal CFO community.

Previously, I think overseas experiences in the Department of -- of State and Defense, where I was based in Washington, but did extensive travel, in addition to my -- my work, as I -- I -- on my degree that I -- I referred to previously, helped me understand other country's governments and -- and cultures, and how you deal with countries in their own terms and -- and not necessarily bring your own cultural assumptions to play.

So, it was a useful body of knowledge overseas and -- and in the CFO environment because I had to deal with a wide variety of people and -- and people who approached tasks from different angles, and it's tremendously useful in the federal workplace, which is, as you know, wonderfully diverse.

Another useful leadership lesson from defense was that you really have to build a team from the people that you inherit, and then you get to the task of recruiting others. And everybody brings skills to the task. It's a leader's responsibility really to find the best way to use each team member's skills to support the mission and target your recruiting to fill any areas where skills need reinforcement.

I think it's another example of why it's important to appreciate the diversity of abilities and backgrounds represented in the federal workforce based on all the talents that federal employees bring to work everyday, I think we're well equipped for problem-solving from a variety of perspectives, and we're especially well set up to deal with foreign governments, many of whose children, if you will, came to the United States either recently or in the distant past as immigrants and deal very well with those cultures.

Another lesson learned from my experience in defense, state, and EPA, and especially now at MCC, is the importance of public/private partnerships. The private sector has a depth of talent and knowledge that's always refreshed, and government can make good use of private sector expertise to augment its workforce to accomplish the civic tasks without institutionalizing that expertise when it might not be appropriate. To the next set of tasks that lie ahead. It helps to keep public sector organizations more nimble by allowing us to take on specialized talent as needed, while maintaining a basic core of skills in the career ranks.

For example, when EPA was assigned to a government center of excellence to host financial systems, my staff and I argued successfully for a public-private partnership along private sector centers of excellence to compete for technical services in the IT area and in accounting.

This competition, I understand, here at the beginning of December is still going on at EPA. OPM is -- is now, I understand, going to do something similar, and I think that's a good model for a small lien organization like MCC. That is reaching out to the private sector for help in those areas that the private sector does especially well, and can tailor its support for the needs of the day without institutionalizing that support and fixing it in place.

Mr. Morales: That's fantastic. I can -- I can see now why you are focusing on solving some of the world's greatest challenges. Thank you.

What kinds of innovations are being pursued by the Millennium Challenge Corporation? We will ask Michael Ryan, vice president of Administration and Finance with the Millennium Challenge Corporation 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 Mike Ryan, vice president of Administration and Finance with the Millennium Challenge Corporation. Also joining us in our conversation is Pete Boyer, director in IBM's federal consulting practice.

Mike, in pursuit of its mission to reduce poverty by supporting economic growth as you described in the first segment, the MCC has identified and defined three key principles to guide the efforts.

Can you elaborate on those guiding principles and what is new about the MCC approach to international development?

Mr. Ryan: Well, thank you. The three principles are first of all, to reward good policy. Countries are selected based on their performance, as shown on objective indicators. Not indicators that -- that MCC develops, but that NGOs of the private sector, someone outside, an objective measurement is done on governing justly, which means investing in their citizens and encouraging economic freedom.

The second thing, in addition to rewarding good policy, is that we operate as partners. Countries are responsible for identify the greatest barriers to their own development, ensuring civil society participation in planning and developing a Millennium Challenge account, or MCA program.

Then, to participate in -- in a MCA program requires a high level commitment from the host government. Now, when I say "MCA," of course, I mean the Millennium Challenge account, which is the appropriate that MCC uses.

Each country enters into a public compact with MCC. That includes a multi-year plan for achieving development objectives and identifies the responsibilities of each partner in achieving those objectives.

The third principle, the first being rewarding good policy, and the second, to operate as partners, is to focus on results. MCA assistance goes to countries that have well-designed programs with clear objectives, benchmarks to measure progress, procedures to ensure a fiscal accountability per the use of the Millennium Challenge account assistance, and a plan for effective monitoring and objective evaluation of results.

Because we focus on rewarding good policy, we are seeing something new, and this is where the innovation comes in. Something new in international development, which our CEO calls the MCC effect.

We are seeing examples of countries making important policy changes on their own in order to qualify for funding for the Millennium Challenge account. This is extremely encouraging because we are seeing positive change even before MCC investment begins. I could give one example of this that happened fairly recently in the last couple of months.

We had one country that had a policy. Actually, it was written into their constitution, that married women couldn't inherit property in their own name. And we determined early on that this would mean that only 50 percent of the population would get any benefit out of the --economic benefit out of -- out of our policies, and we told the government, no, this is just not acceptable. You know, we can't continue our conversations if this stays in place. Although it was a longstanding policy and it was rooted in -- in culture and -- and in -- in prior law, they went ahead and changed that law, and they did that without receiving a nickel from us. And one got the feeling at the end of the day that there was something in just getting the stamp of approval that they had passed the test.

That's one anecdotal account, but a very real one. Two Harvard economists studied the MCC effect in a report released earlier this year, and they concluded that countries are responding to MCC's clear and actionable incentives. This is -- was -- was done in the Kennedy School of Government; it was called "Can Foreign Aid create an Incentive for Good Governance: Evidence of the Millennium Challenge Corporation."

Then there was another one from the manager of the World's Bank's "Doing Business Project," And the quote there I think is a good one, in which they stated that we have seen a number of reforms around the world in both rich and poor countries, but in many of the developing countries, the reform has actually been primarily as a result of the inclusion in the Millennium Challenge account.

Now, I would note that we often see reforms, as I -- as I mentioned before, in anticipation of the funding of the Millennium Challenge account, and not just as a result of projects in those countries.

Mr. Morales: That's a powerful story. Now, you used the word "compact." Can you describe the MCC compact development and implementation process, and what are the criteria methodology for determining eligible countries and establishing these compacts? And can you tell us a little bit about the composition of the projects that make up the portfolio?

Mr. Ryan: Surely. I think around the compact development, you get a lot of the innovation that -- that you asked me about before. I mean, what is different? Well, for example, for the fiscal year 2007, the candidative countries, you know, were identified on the basis of a per-capita income, and they must be in the low-income, preferably, for a lower/middle-income categories established by the World Bank. By law, only 25 percent of our funding may be used for lower/middle-income countries, assuring that most of our support goes to the poorest nations in the world. And I might add that we make every effort that if a lower/middle-income country makes a -- a proposal for a compact, and it is for some of the poorest people in their country, we find that to be a very compelling argument for going to that lower/middle-income country.

We report to Congress on our selection methodology, and our board of directors that I mentioned before, base a selection on specific performance indicators developed by independent, third-party institutions. We also seek public comment on selection methodology.

Right now, we're using 16 indicators in three broad categories, and countries must score above the median to be eligible. These indicators come from organizations including the World Bank, the World Health Organization, Freedom House, and UNESCO. And again, the indicators are -- are in the three areas that I mentioned before, ruling justly, investing in people, and -- and I think I mentioned economic freedom.

And by "economic freedom," we -- we mean things like the costs of starting a business or the days to start a business, trade policy, those things that might be either barriers or spurs to economic development we want to see.

Investing in people, you could have public expenditure on immunization, public expenditure on primary education, and -- and interestingly, girls education completion rate, which we see -- think to be extremely important.

Ruling justly, I think we're more familiar with. I mean, civil liberties, political rites, voice and accountability, rule of law, and significantly control of corruption.

The MCC board selects eligible countries using the above methodology and submits a report to Congress, and the selective countries are then eligible to begin developing a compact proposal for MCC consideration. At this time, we have 11 signed compacts in place, representing a total of nearly $3 billion, supporting programs in agriculture, infrastructure, land tenure, healthcare, and other sectors. Most compacts extend over a five-year period.

Mr. Boyer: Mike, does the MCC dedicate any funds for those countries that do not specifically meet the compact criteria, but are moving in the right direction? And if so, how?

Mr. Ryan: We do, Pete. We offer a threshold program that provides financial assistance to help improve a score on one of our -- of the 16 indicators that I mentioned.

The board of directors selects the countries for the threshold program based on their overall performance on all 16 indicators and their demonstrated commitment to improving the scores and their ability to undertake reform. Countries selected for threshold consideration must create a plan that identifies miserable ways to improve a specific indicator score and they must submit that plan for MCC review and approval. We make threshold program agreements with countries whose plans demonstrate meaningful commitment to reform and a high likelihood of successful implementation. And, of course, the measurement of that success is, again, done outside of MCC. I'll just give you two examples.

In the first case is the government of the Philippines, which actually passed the corruption indicator, but both the government of the Philippines and MCC felt that we would like to work more on this. And so, we made $21 million in threshold funds available to the Philippines in 2006 for anticorruption efforts. And what was really exciting about this was that the government made a decision to match those funds fairly closely so that it doubled the amount that was available, and we view this as a real commitment to reform on behalf of the people of the Philippines.

Another example that's not corruption was in 2005, Burkina Faso in Africa became the first threshold country to be approved for a compact funding. Burkina Faso was awarded $12.9 million for its threshold country plan, which was designed specifically to improve girl's primary education completion rates.

Mr. Boyer: Those are powerful examples. What does it mean for compacts to enter into force, and how does it relate to the actual disbursement of committed MCC funds to recipient countries?

Mr. Ryan: Well, this is another term of art. A compact is a contract is between MCC and a foreign government. It sets out the terms of the programs to be funded along with the funding to be dedicate in each year -- in each compact year for specific project components.

For example, a compact might set out dollar amounts anticipated to be spanned in each five years on a component such as improvement of a particular set of rural roads to get products to market, for example. The compact also outlines the general terms of the road improvement work to be undertaken. The signing of the compact commits the full funding for the specified project in a given country. After the signing, we continue to work with the country, we do due diligence, and we make sure that all conditions are in place to support a proper disbursement of funds.

When those conditions are met, then we declare the compact ready to enter into force, we obligate the funding and technical terms and the disbursements begin thereafter.

Mr. Boyer: Mike, to supplement its organizational structure in assisting caring out its mission, MCC has several formalized interagency agreements, or IAAs, with other federal government agencies. Could you elaborate on these collaborative relationships?

Mr. Ryan: Well, I think that -- that with a small organization, it must be clear to everyone that we can't do everything that is necessary for us to succeed. So, we have a number of these kinds of agreements.

For example, the National Business Center of the Department of Interior pays the MCC employees and provides financial systems and some accounting support. We also work closely with USAID, and to some extent, with the Department of Justice for the threshold programs that we discussed earlier. Treasury also provides technical assistance, especially in the banking sector, and from time to time, no doubt will sign other IAAs with other federal entities as the need arises.

Mr. Morales: Excellent. How is the MCC managing its program development efforts? We will ask Michael Ryan, Vice President, Administration and Finance for the Millennium Challenge Corporation 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 Michael Ryan, Vice President, Administration and Finance with the Millennium Challenge Corporation. Also joining us in our conversation is Pete Boyer, director in IBM's federal consulting practice.

Mike, how does the MCC make sure that compacts with partnered countries are going to produce the results that will satisfy the U.S. taxpayers and meet the goals of the MCC?

Mr. Ryan: Well, I think that the U.S. taxpayer has shown the willingness to fund humanitarian assistance and assistance to poor people, as long as the overhead is not too high, and as long as the goals are worthy, and the people that really need the assistance receive it.

To ensure that we meet some of these expectations, MCC forms a transaction team whose members work closely with representatives from the country developing a compact proposal. Our teams include people with a range of a pertinent expertise in economics, law, and the appropriate technical areas, such as engineering or agriculture. We may also have someone who's an expert on gender issues, for example, or other social issues, or even the environment.

Partner country representatives are expected to engage in wide consultation with members of the public in a civil society in their own countries to ensure their compact proposals reflect needs identified by their own people and the poorest among them, and that the solutions are likely to work best for them.

MCC transaction team members evaluate all parts of a proposal and work with partner country representatives to develop practical, well-designed programs that incorporate steps to measure and evaluate results. MCC's investment committee, on which I have a vote, also plays an important role. It's chaired by the deputy CEO and is composed of MCC's senior officials.

The MCC committee considers all aspects of compact development and votes up or down any aspect along the way. MCC's board of directors, of course, has the final vote on a compact. The best designed compact programs are in the support of the investment committee first, and then the board of directors by incorporating meaningful evaluation of results and showing the promise of reducing measurably the number of people living in poverty. And, I might add, all of our discussions of the size of our staff and the amount of money that we put into overhead I think is an important one because we try to keep the overhead fairly low.

Mr. Morales: Now, Mike, as the -- as the CFO, many of our listeners may find it interesting that the MCC has identified that Chief Financial Officers Act of 1990 and the Federal Financial Management Improvement Act of 1996, and various other financial laws and regulations did not cover your operations.

What is MCC's basis for this position and does the MCC plan to follow at least the spirit, if not the letter, of those laws because they make good business sense?

Mr. Ryan: Actually, Al, we do manage our business according to the mandates of these laws and regulations. As we've said several times, we're small and organized as a federal corporation, rather than as a typical independent agency. And we were established after many of these laws were enacted. But we comply with them, however, and because we're part of the executive branch, and because they make good business sense.

For example, we issued our financial statements on November 15th with the rest of the federal government, and I might add, we got a clean opinion on that, and we intend to do similar things in the future.

There have been a number of government management reforms enacted in legislation in recent years. Most of them aimed at focusing agencies on managing for results and enhancing accountability for program outcomes. I'd like to think that MCC was designed to accomplish both of these ends, so it is not a stretch for us to follow the course outlined in legislation.

Mr. Boyer: Mike, on a similar topic, a key element of all compact development and execution is fiscal accountability. You know, the mechanisms and processes that assure that funds are managed properly and procurements are undertaken in a fair, open, and transparent manner. However, some of the compact countries do not perform accounting on a accrual basis by recording commitments and obligations.

Would you elaborate on the guidance provided to compact countries and requirements placed on those countries, and how has MCC handled this situation?

Mr. Ryan: Well, Pete, that's a question that's going to warm accountants' hearts all over the city this morning. MCC has a department of accountability which is responsible for these matters, and my department, of course, supports their work. Consistent with our model of country ownership of MCC-funded projects, compact countries must have internationally recognized system of accounting in place. It does not have to be identical to the U.S. model, but has to be recognized. We're constantly refining our approaches to this and expect to see continued improvements in the future.

For example, we require compact countries to have a fiscal agent and a procurement agent that we consider to be technically qualified. But while some countries might not use accrual accounting, the accountable entity, which is the organization set up in the country to carry out the compact by the government of that country, the accountable entity, often referred to as an MCA, set up by the government of a compact country must provide us with regular estimates of their cash needs. And these actually can serve as a surrogate for accruals, and indeed, we did an accrual in our financial statements just like every other federal entity on November 15th, as I mentioned before.

Mr. Boyer: Well, Mike we're -- we're glad we can get the -- the hearts of the accountants warmed up this morning.

Mr. Ryan: Let's not warm them too much.

Mr. Boyer: The USAID Office of Inspector General identified vulnerabilities affecting the MCC program in several criteria areas, including procurement, cash management, and disbursement that may adversely impact its financial operations. For example, the IG identified that the MCC Cape Verde compact had problems in the areas of cash management and procurement.

Could you elaborate on the MCC strategy for mitigating such risks and vulnerabilities? Specifically, has the MCC established policies and procedures for evaluating disbursement requests submitted by recipient countries to ensure that the amounts disbursed are only for immediate cash needs?

Mr. Ryan: Sure. First of all, I -- I have to point out that we have a very collaborative relationship with our IG. And I personally engage in conversation with IG staff on many issues, including the one you're -- you're asking me about. And while we do not always agree, we receive many useful recommendations that have caused us to improve our procedures. And we've been working on some exciting -- at least exciting to me, possibilities to enhance mechanism for getting funding out to compact countries.

Our current approach requires quarterly disbursement requests from a country. It comes into MCC, we consider it, and we say yes to the -- to the funding, its justified under the compact or -- or we ask questions. But we disburse on a monthly basis, asking the country to project their cash needs for the coming month, as I mentioned before.

However, we are in consultation with the Department of Treasury right now to see if we might use their Web-based online system for making payments worldwide. They call this system ITS. This would enable us to require that fiscal agents I mentioned previously overseas to request payments based on specific invoices and to justify disbursements in a systematic way in -- in real time. In addition, we're investigating to see if there might not be a private sector that would provide a -- a global payment solution, as well.

Treasury is interested in working with us on a solution in either case, and if we can't do this, I believe it would address the IG's concerns that you've -- that you've mentioned before. I'd also like to be able to try a pilot as early as January of 2007, so quite soon with -- with one or two countries to see how this actually might work in -- in reality.

Mr. Morales: Michael, we talked earlier about some of the interagency collaboration, and we know that the MCC has outsourced much of its administrative functions, including human resource and payroll management.

But does the MCC recognize the value of implementing an integrated human resource and payroll system, and can you elaborate on the status of this effort and the overall strategy to forge an integrated system that reduces the reliance on manual processes and enhances your interface with the NBC systems?

Mr. Ryan: Well, that's a great question. I mentioned before our -- our interest in keeping overhead down and of course manual processes are done by people, and people are overhead. So, we want to cut down on these things. They also introduce errors, as everyone knows, and -- and we'd like to do as much as possible automatically and with an -- with an integrated system.

We get great service from Interior's National Business Center, but it does not have an integrated system at this time. I understand they have long-term plans to make it integrate in the future, but at the current time, it's simply not.

The benefits of integration are especially important for a small organization like MCC. We do not have the personnel to make the multiple entries required by a non-integrated system, especially as we take on more compacts and more countries. We will be engaging consults soon to perform an analysis of how MCC might best achieve full integration of its financial management. And also, I hope a reasonable timeframe for achieving it.

You know, I am intrigued by efforts to engage private sector organization as -- as a center of excellence to supplement governmental centers of excellence. I am very familiar with the competition that's been going on at EPA, and I'm -- I'm looking forward to see the results of that competition for running their financial system. It's something that I saw at the beginning of when I was -- when I was at EPA. And now, I read recently that OPM is -- is also looking for a private public competition in this, and I think that's really healthy and something that might work very well for MCC.

Mr. Morales: What does the future hold for the Millennium Challenge Corporation? We will ask Michael Ryan, vice president, Administration and Finance with the Millennium Challenge Corporation 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 Michael Ryan, vice president, Administration and Finance with the Millennium Challenge Corporation. Also joining us in our conversation is Pete Boyer, Director in IBM's federal consulting practice

Mike, in its rather brief existence, the MCC has had some significant achievements, and we've certainly talked about many of those today.

What do you envision for the MCC over the next 5 to 10 years, and what are some of the key challenges and major opportunities facing the organization?

Mr. Ryan: Well, our overwhelming challenge is going to be compact implementation. We've been talking about performing the compacts, and that's what the corporation (off mike) spending its first two and a half, three years of existence doing. But making sure that results that we envision are achieved is our next challenge. Most of the work will be undertaken by partner countries, as they own the projects. So, it's really more of a challenge to them. And the real beneficiaries -- if -- if both us, that is to say MCC and the host governments are successful, the real beneficiaries are the poor people of our partner countries.

Mr. Morales: Mike, with such a small organization, I can only imagine that every single individual has a critical role and -- and is critical to the organization.

To that end, what steps are being taken to attract and maintain a high -- high-quality technical force, and can you elaborate on initiatives to ensure that you have the right skill and the right staff mix?

Mr. Ryan: First of all, let me say that I don't think any organization in my federal career can claim a higher quality workforce than MCC. And we owe that in part to the attractiveness, I think, of our mission, but also we've talked a lot today about public/private partnerships.

We have a partnership with Korn/Ferry International, in particular their Futurestep Division, which ahs been supporting our recruiting and hiring efforts. We've also been energizing our recruiting efforts through partnerships with targeted non-profit organizations who subscribe to our belief that, and this is a term we think has some power, that a diverse workforce can make a world of difference. And as far as training goes, I've been tasked by our CEO to create an overarching training plan for MCC. Everything from language skills to management skills. And we're beginning with training for all our transaction teams in partnership with the Federal Executive Institute.

Mr. Boyer: Mike, you mentioned MCC's focus on low overhead, and we've talked about it on a number of questions today, but how do you respond to people in a developing community that have expressed that MCC's proposed staffing level of 300 is very lean for an organization planning to disburse $2 billion or more per year?

Mr. Ryan: Well, you know, when the road is -- is twisting and turning and you're in a race, you'd rather have a sports car. So, we're -- we're -- MCC is based on a new organizational model. And we think our -- our leanness is an asset rather than a liability.

The key to our ultimate success has got to be related to our ability to identify the right countries with the right governance and respect their responsibility for their own development. We believe this approach is more likely to give arise to sustainable efforts and lasting reduction in poverty.

If we were to increase our own numbers, we might be -- just might be more tempted to give ourselves a larger role in other countries' efforts, and we really don't want to do this. Having said that, we are concerned with the growing workload, and we're constantly looking for ways to streamline our work and procedures.

In fact, it's interesting as far as this question goes that as I left MCC to come to this program this morning, we'd had a little meeting in which we talked about our model and whether we should change it, what aspects we should change to meet the challenge of the growing workload that's -- that's certainly coming. But I'm confident that this is a problem that we can meet square on, and we aren't going to go above 300 people in Washington.

Mr. Boyer: I like the race car analogy, Mike. MCC's compact pipeline seems to be robust and growing. Could you give us a sense of the current and future pipeline, and is there a point at which expansion becomes too much for a fairly new organization like the MCC?

Mr. Ryan: Well, obviously, I can't predict how much the pipeline will develop, and because so much of our future activities will depend on congressional funding, and that again will depend on what we do in our measurements of success. But we've been signing. This past year, we've signed six compacts, and I would think that this year, I would hope we'd sign three or four. But beyond that, it would be difficult to speculate.

We've learned a great deal about what works and doesn't work based on our experience with the 11 compact countries so far and recognizing that individual circumstances make each nation unique in its capabilities and the development issues that it seeks to address, we know that we found some approaches that are replicable, and we may identify some efficiencies as a result.

Finally, I really think being a new organization is a benefit because we can implement new ideas without being burdened by our past. Perhaps a real challenge is to remain, as the song goes, "every young," and avoid the bureaucratic impulse.

Mr. Morales: Michael, you've had a highly distinguished career in public service spanning some 25 years, as you indicate.

Is there any advice that you would give to an individual who is perhaps considering a career in public sector, or who may have a specific interest in the efforts at the MCC?

Mr. Ryan: I think the most important question might be why should someone want to work for the United States government? Because, after all, MCC, even though we're different and new, is part of the -- is a part of the federal community. The answer, I think, has to be, because it's the largest, most ambitious, and most diverse enterprise in history. Working for the federal government means upholding the principles on which the country was founded in the form of the Constitution, which is still the model for many countries, and many of the countries we deal with. The federal mission is also large enough to accommodate just about any interest or skill.

What's the best preparation for a federal job? I think everybody has their own concept, but I always recommend that people get the best general education available to them, especially in the liberal arts. But, to me, that means science, math, history, and language, before they specialize.

USA Jobs is a central Web site for all federal jobs openings, and it really does contain something for everything. Our MCC.gov Web site also provides the ability for individuals to go on and do online applications for our jobs, and actually anybody who comes to talk to us, no matter who they are or where they come from or what their background, ultimately, we ask them go back to our Web site, MCC.gov, and fill out an online application.

With respect to jobs at MCC, we find a variety of technical skills useful, much like the other federal agencies in the development community. But I would encourage people to focus on foreign language skills, with French, Spanish, and Portuguese, the most useful to MCC at this time.

To work with representative other countries, there is an obvious benefit to being able to speak and understand their languages. Of course, it's not just language; we can never have too many employees with skills that include communicating across cultural lines, regardless of what their technical expertise may be.

Mr. Morales: That's fantastic. Mike, we have reached the end of our time, and that'll have to be our last question.

I do want to thank you for fitting us into your busy schedule this morning, but more importantly, Pete and I would like to thank you for your dedicated service to our country.

Mr. Ryan: Well, thank you. It's a great honor for me to be here. It's a great pleasure.

I'd like to invite everybody who would like to learn more about MCC, certainly more than -- than I was able to give this morning, to go to our Web site, MCC.gov, and there you can see information about countries, about our programs, and also apply for a job if you want, as I mentioned before.

Thanks a lot; I appreciate being here this morning.

Mr. Morales: Fantastic. Thank you.

This has been the Business of Government Hour featuring a conversation with Michael Ryan, vice president, Administration and Finance with the Millennium Challenge Corporation.

Be sure to visit us on the Web at businessofgovt.org. There you can learn more about our programs and you get a transcript of today's conversation. Once again, that's businessofgovt.org.

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 Radio Hour, I'm Albert Morales. Thank you for listening.

Lt. Gen. Roger A. Brady interview

Friday, October 20th, 2006 - 20:00
Phrase: 
"Our job is to make sure that we have the right airmen with the right skills in the right place at the right time."
Radio show date: 
Sat, 10/21/2006
Intro text: 
In this interview, Brady discusses: the Air Force's transformation strategy; Force development initiative; Personnel Services Delivery (PSD) initiative; National Security Personnel System (NSPS); Supporting Air Force families; and the Air Force's organizational...
In this interview, Brady discusses: the Air Force's transformation strategy; Force development initiative; Personnel Services Delivery (PSD) initiative; National Security Personnel System (NSPS); Supporting Air Force families; and the Air Force's organizational culture.
Complete transcript: 

Originally Broadcast Saturday, October 21, 2006

Washington, D.C.

Mr. Morales: Good morning, and welcome to The Business of Government Hour. I'm Albert Morales, your host, and managing partner of The IBM Center for The Business of Government. We created the Center in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about the Center by visiting us on the web at businessofgovernment.org.

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Lt. General Roger Brady, Deputy Chief of Staff, Manpower and Personnel, United States Air Force.

Good morning, General.

LTG Brady: Good morning.

Mr. Morales: And joining us in our conversation is Bob Bleimeister, partner in IBM's Human Capital Practice.

Good morning, Bob.

Mr. Bleimeister: Good morning.

Mr. Morales: General, can you tell us about the mission of your office and how it supports the mission of the Department and the Air Force specifically?

LTG Brady: Well, as much as it might seem like a clich�, we like to say that our job is to make sure that we have the right airmen with the right skills in the right place at the right time. That's important for the Air Force; obviously for the individual as well. But we support Air Force commanders, and by extension also combatant commanders around the world, in the variety of missions that airpower is assigned.

Mr. Morales: General, can you give our listeners a sense of scope and scale, how big is the Air Force in terms of military personnel, Reserve civilians; how big is the manpower budget and how big is the overall personnel community?

LTG Brady: Well, it's rather large. When you add civilians and all the components that you talked about, active Guard and Reserve, about 700,000 people. About 350,000 of that is active, about 75,000 Reserves, 105,000 Guard and about 160,000 civilians. So it's a large enterprise of very talented people.

Mr. Bleimeister: General, could you focus a little on your role as Deputy Chief of Staff for Manpower and Personnel, and tell us more about your specific responsibilities?

LTG Brady: Yes, I'm responsible at the headquarters Air Force level. I guess you'd think of it as corporate headquarters in the civilian context for the Air Force's policy on education, training, development, benefits, compensation, also services; the services that we provide our people on bases for family support and recreation as well as manpower. We kind of handle a lot of the cultural issues of the Air Force, like we do uniforms and things of that nature, and currently, we're -- as you may have heard, we're working on a rather significant personnel reduction within the Air Force, which occupies a lot of our effort at the moment.

Mr. Bleimeister: You've had a pretty lengthy career. Could you give us some highlights of that, and perhaps what some of the most important things you did that may have prepared you for this role?

LTG Brady: Well, I think -- I'm not sure that anything prepares you for this role, actually, but I started out during the Vietnam era. I in fact went toVietnam as an intelligence officer, as a lieutenant, then later went to pilot training and flew in the mobility world for a number of years. Also, I was a training command instructor -- pilot training instructor for a long time. I've served in plans jobs, in acquisition and maintenance, personnel operations for many years. So I've seen a wide spectrum of the Air Force.

Mr. Morales: General, I'm curious, you mentioned earlier you have about 700,000 personnel in total in the Air Force community. About how many individuals are in your organization that service those 700,000 people?

LTG Brady: I have a little over 200 people here at Air Force headquarters, but then I have -- we also execute the assignment system for the Air Force, which is -- unlike most industries you would see, we move -- transfer about 160,000 of our people every year, and that execution process is accomplished by an organization in San Antonio that's another 2,500 people. That's our personnel center, and they're kind of the execution arm of Air Force personnel policy.

Mr. Morales: That's a large number. You surely don't see numbers like that in the private sector.

LTG Brady: That's rather large.

Mr. Morales: Great. You talked about some of your earlier experiences going back to the Vietnam War. How have these experiences, such as being a command pilot involved in a variety of major deployments, prepared you for your current role, responsible for Air Force manpower and personnel issues?

LTG Brady: Well, I think the most -- as I look back on my career, I don't think anybody planned back in the late '60s for me to be the Air Force Deputy Chief of Staff for Personnel. But as it happens, I have a great background for doing this because I've seen so many parts of the Air Force. Obviously, being an aviator I think teaches you lots of intangibles about situational awareness and knowing what's critical and what's not and what decisions have to be made now and what decisions could be made later. But I think specifically for this job, I have pretty good familiarity with a lot of the different -- as we like to call them -- a lot of the different tribes in the Air Force, the different functional communities, and so they have a different kind of -- sometimes a thought process, cultures within the Air Force culture, and an awareness of those is very helpful in dealing with them in what can be very personal and sometimes emotional issues.

Mr. Morales: Well, I've got to expect with 700,000 people, it's probably several cultures within an organization of that size.

LTG Brady: Yes, there are -- there are.

Mr. Morales: Excellent.

How is the Air Force transforming, maintaining and shaping its force structure? We will ask Lt. General Roger Brady, Air Force Deputy Chief of Staff, Manpower and Personnel, 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 Lt. General Roger Brady, Air Force Deputy Chief of Staff, Manpower and Personnel.

Also joining us on our conversation is Bob Bleimeister, partner in IBM's Human Capital Practice.

General, many pressing issues have required the United States Armed Forces to reassess and transform the way they operate to properly meet future challenges. Could you give us an overview of the Air Force's transformation strategy?

LTG Brady: Sure, I'd love to, but let me first spend just a moment telling you the environment that we are in that makes this transformation critical. We find ourselves in a situation, as you can well appreciate, fighting the Global War on Terrorism, which we refer to as The Long War. It's going to go on certainly for the rest of our careers, if not the rest of our lives, we anticipate.

So we have to win that war. We also have to be prepared for the next war, whatever that is. And so we find ourselves with a very high tempo operations tempo. We find ourselves with operating costs that are very high, and there is not much flex there because the tempo is so high, and we find ourselves flying very old equipment; the oldest equipment we have ever flown -- the most effective equipment in the world but old -- 23 years old on average -- we'll be over 30 years old, even if we get everything we are trying to buy in the next few years.

So we are way behind in our investment strategy, and people -- as any business will tell you, the cost is going out of sight, particularly health care. So where is our flex? We need to look at our portfolio of human capital and see what we can do there to be more effective, because we can't affect our operating tempo; we have to win. And if we don't want to fly 75-year-old airplanes, we've got to find a capability to recapitalize ourselves.

And so our flex is in people, and we also have to get -- people are our most important asset, and when I say that, you would ask, well, then why are you getting rid of them? I say because they are very valuable, but at the same time, they are very expensive. And the people we have have to be the most flexible, the most educated, the most appropriately trained, and we have to maintain the capability to sustain the benefit -- the benefits that our people have had over the years and have come to expect and deserve, including health care, et cetera.

So we cannot afford to have too many people. We got to have the right number. And so that brings us to the transformation that led to a reduction of some 40,000 full-time equivalents in our people over the next few years, which gets me to your question of strategy. What's the strategy for doing that? Well, again, warfighting is job one. If you do nothing else, you got to win the war. You can't get to be second place in our business. So we're focused on warfighting skills and those capabilities that deploy forward.

We then worked ourselves back from the deployed locations and said, okay, what does it take to sustain the institution, and as you go further back, what does it take to sustain garrison locations, and look at how efficient we are there. We do not want to take risk forward. We will manage risk in the rear, in CONUS, which drives us to seeing how efficient we can be in our organization and our processes, and the use of our very precious human capital resource to affect the future and to be as good and better than we have been in the past.

Mr. Morales: General, you alluded to these reductions in manpower, and I believe you alluded to the program name AFSO21, which stands for the Air Force Smart Operations 21. With all of these reductions and this change, what do you expect the impact to be on the corps airmen and women, especially those that remain?

LTG Brady: Well, I think that we're going to have -- as I said, we're going to have to use our people more efficiently, more effectively. Now, if we don't change the way we do things -- I mean, we can't just expect people to run faster. So we have to help our people learn to work smarter, and that's what AFSO21 is about. Air Force Smart Operations 21 is a combination of all those great management process improvement efforts that have been successful in industry and within the Air Force, such as lean initiatives and things of that nature, so that we can use the people that we have more effectively, help them work smarter and not harder to get the job done. And in many ways, we will broaden the capabilities of our people. We want to enhance their educations in every way that's appropriate, and I think we will make many of the jobs that our people have much more fulfilling. We will expect more of them, but we will prepare them to meet the challenge, and they will.

Mr. Bleimeister: General, given the reductions you've talked about, what actions are being taken to make sure that's the right number, and the shape of the force, once that reduction is taken, meets what you need to do for your strategy?

LTG Brady: Well, we have a -- as you know, we have a volunteer force, which is a huge challenge over time. It's the force we want. 100 percent of our people want to be with us, but they can also leave when their tour of duty is up, if they want to. So we have to be on top of taking care of our people, and we have to have some good analytics that tells us historically what our people are going to do -- you know, we always say it's easy to make personnel policy, but you don't always know how your people are going to respond to it in a voluntary environment.

So we have a very rich history, career field by career field, specialty by specialty of how a career field tends to behave over time, how it relates to market forces, et cetera, and obviously, this is -- I have to tell you, there is a lot of science involved, but it's frankly more art than science in my view. But we have a lot of people who have a lot of talent in this regard to determine, you know, what the force will look like, what it takes to maintain a certain force.

Some of our highly skilled technical people, for example, are the same people that are greatly valued in the outside world. So you find yourself having to perhaps recruit more of those kinds of people, because they tend to not retain as long because there are other attractive opportunities for them. So throughout your force, you have to look at all of those things to make sure that you have the right number of folks, and that you retain the right number of folks for the future to have your force structure look right.

Mr. Bleimeister: A lot of alternatives to work with, but you still have to meet mandated end strength targets each year. For our listeners, end strength refers to the limit set by Congress on the number of people the military can have on active duty.

General, how did you do on end strength in FY '06 as far as those targets went?

LTG Brady: Yes, at the end of fiscal year '06, which ends, of course, at the end of September, and we will -- we came in about 6,000 under, and that's good because we are going down. We're coming down at about 20,000 people in fiscal year '07, so being 6,000 ahead at this point is a good thing. So we would like to stay within one to two percent of our authorized end strength. Given that we are in a reduction mode, we are pretty happy with where we are at the moment.

Mr. Bleimeister: And will normal conditions get you to the '07 number, or are you going to have to implement other force-shaping actions? In the past, things like reduction boards have been held.

LTG Brady: Right. We will do some of that. We have greatly relaxed the requirements for people to get out in terms of -- we've expanded their opportunity to leave if they want to. We've relaxed some of the requirements to serve out commitments that they've made in the past. Career field by career field, as I implied earlier, you know how many people you need in each year group, because at the Air Force, unlike a civilian business, we can't go to another company and hire somebody of a certain grade, certain skill level and certain rank.

So all of our people are all homegrown, so we have to pay attention year group by year group to how big that force is. And so you know how many people you want to leave in each year group. We will provide some monetary incentives and some voluntary separation pay for some year groups, and for people who are already retirement-eligible; in other words, those people at 20 years and out, there will be a selective early retirement board. And again, we will allow some of those people to, who might not be eligible to retirement by virtue of a recent promotion, we've relaxed those rules as well. So we've tried to put together a portfolio, and with the help of the Congress, we are getting the authorities we need to shape our force by a combination of methods.

Mr. Morales: It sounds like there's many levers that you can actuate to meet those goals. I'm not going to ask you which is more complicated, doing that or flying an airplane, although I think many of our listeners may be interested in that answer.

In addition to maintaining and shaping the active duty force, we understand that you also spend a fair amount of time focusing on some of the specialties between the regular, the Air National Guard, the Reserve components as well the civilian components and the contractors, and this is usually described as the total force. Could you describe some of the total force initiatives being pursued to ensure that this balance such as Blue to Green and Palace Chase, among others?

LTG Brady: Right, yes. And I'm glad you mentioned the total force. We are extremely proud of all the components of our force. Our civilians are just absolutely top notch, and our Guard and Reserve are absolutely second to none. They are maintained -- we maintain them at exactly the same level of proficiency as the active force, and when we go forward there -- it's absolutely transparent as to who they are. You wouldn't be able to tell a Guardsman from an active duty from a Reservist.

So they are very critical to that. So we look at -- as you imply, we look at what size we needed those components to be. A lot of our young people that leave us from active duty will look for opportunities in the Guard and Reserve, and there are some opportunities for them to do that, because we need to keep them robust. We are also looking at opportunities for people who are perhaps in skill sets that are overmanned to stay with us as civilians, and there is some opportunity for people to do that and to stay in government service. So you're exactly right, we do pay attention to the size of each component and where those reductions are taken.

Mr. Morales: So it's really a very large portfolio management process in terms of managing the blends of all these characters of people?

LTG Brady: Yes, it is.

Mr. Morales: Excellent.

How is the Air Force personnel function specifically being transformed? We will ask Lt. General Roger Brady, Air Force Deputy Chief of Staff for Manpower and Personnel, to explain this to 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 Lt. General Roger Brady, Air Force Deputy Chief of Staff, Manpower and Personnel.

Also joining us on our conversation is Bob Bleimeister, partner in IBM's Human Capital Practice.

General, force shaping and reductions are only part of the equation. The Air Force is involved in numerous force development programs as well. What is its fundamental purpose of the force development initiative, and can you provide an overview of some of the initiative programs in place to enhance force development, such as the International Affairs Specialist Program.

LTG Brady: The fundamental purpose of force development is to deliberately connect education, training and experience with the goal to be, as I said from the very outset, producing the right number of airmen and with the right competencies at the right time. And recall what I said earlier about we can't hire somebody off the street, you know, mid-level in their career. So we grow our own. So the development part of the personnel business, the human resources business in the Air Force, is absolutely critical to us. And so through the force development initiatives, we want to deliberately develop a cadre' of airmen equipped to tackle our toughest challenges.

Now, before we instituted force development, frankly, it was more ad hoc. Members accrued the right sets of skills eventually, but most of the time the skills were required outside of a formal system, and perhaps sometimes even in spite of the formal system. So force development in its latest iteration, which began about 10 years ago actually, started with a realization that at some times at our most senior levels, our people were too stovepiped.

In other words, their background was too narrow, and so we had very senior people who were very deep in a particular part of the Air Force -- operations or maintenance or whatever -- and yet we needed them and their expertise in a broader set of skills. So the initial effort began with this realization, and the desire perhaps to develop along the way some second competencies for people. A primary competency perhaps and a secondary competency.

And that has become even more important as we find space operations becoming even more important, and now, of course, cyberspace operations. So we need a set of leaders and certainly mid-level people who understand the operational and the strategic level of war and can operate in the different media, the domains that we operate in airspace and cyberspace. So our efforts are along that, with that side picture.

Now, in terms of specific efforts, what we look at is, young airmen and young officers come into the force, and initially their focus is on technical competency and what you might call an occupational skill. But as they get further into the career, we need to broaden them so that they see more of the operation, so they understand how their particular specialty contributes to the overall joint effort within Air Force and with other services.

So when we do that then, we focus on education, we focus on training in schools in which you put all of these people together and they gain a renewed respect for the different talents that are in the Air Force, and they learn how to bring all the different talents of the Air Force to bring to bear combat capabilities that are required. And we have -- we send people to school. We spend a lot of money educating our people.

We send them to a school called Squadron Officer School, for example, at about the four-year point. Now, these are captains, essentially. We then have an intermediate school, when people have made major, and that's at about the 10-, 11-, 12-year point. We bring them -- and that's where they learn more about command and staff. In fact, we have a school called the Air Command and Staff College. Then they go usually and have their first command, squadron command, or go to a staff position. And they will come later to a senior development opportunity at our Air War College, et cetera, where they learn more about the operational art of war, and how you bring all the forces together.

These people are lieutenant colonels and colonels, and they've been in the Air Force around 20 years by this point. So we then continue even after people -- those people who go on and perhaps become general officers and senior leaders in our Air Force, we provide them educational opportunities within the Air Force and also in the civilian world so that we can be as broad as we need to be, at the same time be technically proficient.

Mr. Bleimeister: And how are you aligning these programs to support joint officer requirements as well?

LTG Brady: That's a very good question. As you may know, there was an act passed, I believe in 1986, the Goldwater-Nichols Act, which required -- which dictated joint service -- service in joint assignments with other services at certain times in your career, particularly for those individuals who were going to rise to general officer rank, to flag rank. And so there are times in your career -- that usually comes about the time, for most people, at the major, lieutenant colonel realm -- between, you know, 10 and 15 years, that's about the time that you would get into joint assignments.

And that's where you learn a great deal about not only your own mission, you bring to that effort the expertise of an airman, and so the services provide interdependent competencies that are unique to that service. And we feed the joint fight that way to be what we are, which is the best military in the world. So joint experience gives -- exposes our people to that environment where we see all the competencies of the services and the unique capabilities that they have to come together to perform a mission.

Mr. Morales: General, obviously you are making large investments in people, and whether you are in the public service or even in the private sector, you lose very talented people with critical skills at any given point in time. How do you go about correcting these potential skill imbalances, especially as a result of trying to drive towards a particular end strength requirement?

LTG Brady: Well, as I said earlier, first of all, we have some experience with what the retention rates you might say are -- how good we are at retaining different kinds of skill sets. Now occasionally, the economy will throw us a curve on that, but we have pretty good indications year-in, year-out on what people are going to do in the different skill sets. And quite frankly, we have some skill sets that are very difficult to retain because they have -- people have, with the skill sets, have lots of options. But we are able to deal with that now. As you get more senior, we are able to use people more broadly, so specific technical expertise becomes less -- relatively less important than managerial skills and leadership skills.

So as we get more senior, we can use people a lot more broadly, and we typically, just like industry would do -- you know, you might move a CEO from one company to another, where he really knows nothing about the business, but he understands business. It's the same in the Air Force; you can move many times a colonel or a general officer from one portion of the business to another, where he may not have a specific technical tactical expertise, but he or she understands the Air Force and how things fit together in the fight, and the leadership skills and certainly the talent of the people below you make you successful.

Mr. Bleimeister: General, I'd like to shift our discussion to the personnel function and the personnel organization. We understand there is a lot of transformation being worked with the organization itself called an initiative, Personnel Services Delivery. Could you tell us about PSD and what some of the goals are?

LTG Brady: Certainly. And this is perhaps one of the most challenging things that we've done, certainly in the personnel community, in a long time. To be quite candid, personnel services, or HR, as your audience might be more familiar with, in the Air Force has been and still is to a large degree very much a hands-on operation. If you want something done with your payroll, if you want something -- if you need to talk about benefits, if you want to talk about your next assignment, if you want to talk about another training opportunity, in the Air Force, you can go talk to a human being.

You can go talk to someone. And that's both good and bad, because in many cases, it means you leave your job, you get in your car, you drive across base, you find a person who knows something about what you want to talk about. It's very much hands-on. About 90 percent of our operations are hands-on. In the civilian world -- industry have kind of moved away from that model long ago.

So our challenge that we find ourselves in is how do we do that more efficiently without losing the personal touch and taking care of people? So we have really gone to school with looking at a lot of the civilian world and how HR has done, and so we are looking at how we use call centers, how we transform our processes so that we can reach back from overseas to get thing done. How people could go online and take care of a lot of the purely transactional things that have to do with personnel. If they need to change allotments in their pay, if they want to volunteer for an assignment, if they want to retire for that matter, they can now do that online.

They don't have to get in their car, drive across base, find a parking spot, et cetera, et cetera. So what this means is our personnelists, HR in civilian terms, our specialists in the human capital, are now going to be focusing less on transactional activities and more on being advisors to commanders as to how to train, develop, and take care of their people. So this means, quite frankly, that you are going to need fewer personnelists then we've had in the past, but I think it also means that it's going to be a richer job.

Something that is different in the Air Force that will not change, different from much of the civilian community, is again that cradle-to-grave business we have with our people. And so a large part of human resources in the Air Force is cradle-to-grave development of our people, and so a large part will be advising and being strategic advisors to commanders about how we take care of and mentor, evaluate, motivate, et cetera, our people. So I think it's an exciting possibility.

But it's changed, which means it's challenging, people view it with some suspicion sometimes, some fear, perhaps, a little uneasiness about something that is that significant -- because it's a very significant change in what personnelists have traditionally done in the Air Force. But our folks are starting to embrace it, and I think it's going to do great things for our people and for our Air Force.

Something that's very interesting about this is that the change is also generational. Those of us who are a little older in the force and were around before computers came -- as I like to say -- were used to having our hands held by personnelists. So it's a more difficult change for us to take care of ourselves online or in a call center. But the younger generation has never known anything but that, and so they are eager for it. So it's an interesting challenge, as you relate to the different generations in the Air Force, as to how we take on this issue.

Mr. Bleimeister: So it sounds like the personnel field isn't exempt from the reductions and force shaping initiatives that are going on?

LTG Brady: No. Absolutely not.

Mr. Bleimeister: And what about -- are there initiatives to better integrate from a total force perspective how you manage civilians, Reservists, even the contractor work force --

LTG Brady: Absolutely. In fact, we use our civilians and we use our Air National Guard and our Reserves interchangeably with active duty. And that means that you've go to be as consistent as you can in how you manage those people. So what we are looking at is, as part of our transformation, is when we transform a process, an end-to-end global process -- and because, as I said -- because we move about a third of our people every year, we have to have global processes, because if you move from here to Germany to Japan in your functional community, you need -- we don't want to have to retrain you every time you go there. So it's very important that we have global end-to-end processes.

And when we change a process, unless there is a legal or statutory or Secretary of Defense directive that requires that we treat a component differently, those processes need to be the same. So that's a change for us, but we will work through that. So unless there is a bona fide reason to do something differently in one component from another, we won't.

Mr. Morales: General, we've talked a lot about the focus on the core of the Air Force, and you talked about the 106,000 deployments that occur every year. With these ongoing deployment demands, I'm curious, how are you helping the airmen and their families maintain a total life balance? Are there any key initiatives focused on supporting the Air Force family?

LTG Brady: Now, that's great, that's a great question. It's long been understood in the U.S. military that you recruit the member but you retain the family. And regardless of how happy the military member may be, if the family is not, you're eventually going to lose that person. So families are absolutely critical to us, and unlike a military of generations before us, we are largely a married force. So we are principally a family organization.

So yes, we are. We have great programs in our airmen and family support centers that provide support to people when -- to their families, when they are gone. We have great programs where the individual is left behind, the spouse and family that's left behind, we stay in contact with them. They can always rely upon the service for support. We have sponsored programs that do that. We have capabilities to provide child care for people, to give spouses a break.

We have a very robust program when we reintegrate people back into a family after a deployment. Sometimes separations do interesting things to family relationships, and so if there are challenges or frictions, when that happens, we follow up with people and we do -- we stay in contact with people so that we can provide families whatever support they need, and so there just lots of effort that goes in to make sure that we take care of the entire family unit.

Mr. Morales: That's fantastic.

How will innovative change shape the Air Force of the future? We will ask Lt. General Roger Brady, Air Force Deputy Chief of Staff, Manpower and Personnel, to discuss this 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 Lt. General Roger Brady, Air Force Deputy Chief of Staff, Manpower and Personnel.

Also joining us on our conversation is Bob Bleimeister, partner in IBM's Human Capital Practice.

General, as you look over the next 10 years, what type of personnel concerns do you think the Air Force will face?

LTG Brady: Well, I think there are a couple of challenges as we go forward. We are becoming more and more a technical force. We always have been on the leading edge of technology. But as we go into space and cyberspace, and as we operate in those domains, as equipment becomes more technically oriented, we -- that requires a skill set of people, that requires us to have really good people and to continue to develop, educate, and train them and provide them with a wide variety of experiences. We also find ourselves operating around the world in coalition environments. We need to understand whoever the hostile force is, in a cultural sense.

We also need to understand our partners; our coalition partners, and we will inevitably go to war in the future with coalition partners, as we have -- as we are now and as we have in the recent past. So continuing to develop our people to operate effectively, both in terms of the interface with the technology that we have and the equipment that we have, and also with our coalition partners will be increasingly important to us. And we're placing great focus on that.

Mr. Morales: General, in our time, we haven't had a chance to discuss in too much detail the BRAC and QDR, but I am curious -- how is Personnel and Manpower involved in helping ensure seamless transition to some of the new structures and missions while preserving its unique vital capabilities?

LTG Brady: Well, that's a great question. And obviously, when you move people around and you have units move as we have had associated with the Base Realignment and Closure activity, you have missions that change, you have particularly -- Guard and Reserve, you'll have units change missions. So you've got a lot of people that you've got to train for the -- retrain for the new mission. So there are challenges there.

And as we -- as we draw down also, as I said earlier, we have a reduced manpower pool, but at the same time, we have a mission that's demanding as ever. So that means that we have to pay even more attention than we have in the past -- what we call our tooth-to-tail ratio. So you've got to look at your management structures, because management structure's our tail. And so we have to look and see to make sure that within our processes at every level of the organization, we don't have redundancy in the things that we do.

And as we like to say, we can't have checkers checking checkers. And so a lot of work that we're doing is to make sure that our process is aligned and then we cut out as much redundancy as we can, and we make our organizations as flat as we can.

Mr. Bleimeister: General, I would like to shift to another force of change; the National Security Personnel System, NSPS. Can you give us your -- that will impact the civilian workforce. Can you give us your understanding of NSPS and how you think it will impact the Air Force civilian workforce and your own organization?

LTG Brady: Yes, NSPS is critically important to us. Our civilians are absolutely vital to everything that we do, and we're using them more and more, in fact, right up to a general officer level, and in many cases we're using them interchangeably with general officers, which gives us great flexibility in our general officer corps.

But what NSPS does -- unlike the system that we now live under, NSPS will give us the flexibility to reassign people more easily. It will give us the capability to reward our best people. It greatly cuts down on the bureaucracy associated with skill levels and reclassification of jobs and things like that that make reassignment of people painful for everyone; for the individual, for the organization, et cetera.

I think it will be a great boon to our people. It allows us to move our people around more easily and identify our best people with greater precision, and give people the development that they need so that those civilians who want to serve at higher levels have the capability to get development to do that. So I think it's a wonderful initiative and we're trying very hard to implement it now, and it will pay us great dividends, both to the institution and the people.

Mr. Bleimeister: Organizations going through large scale change like you're going through often conflict with the current culture of the organization. How do you think the Air Force will adapt culturally over the next coming years as this change is implemented?

LTG Brady: Well, we like to believe that we're the most adaptive of all military folks, but you raise an important question. We are a large organization, and some would say a large bureaucracy, and that's true. However, we're an organization that is used to change. We have been, for example, operating in the deserts of Southwest Asia since August of 1990, constantly. So a lot of our people have seen the sandbox.

And when you do that, from the people who have come from the various parts of the Air Force and perhaps grow up in a particular functional area, all of that -- to even a greater degree than at home base, gets melded together, because you are focused on a absolutely critical mission, you live together, you eat together, you work together, and there is a great bonding of airmen in that experience. You gain an incredible appreciation for what the services people do, for what the personnelists do, for what the fighter pilots do, for what the aircraft maintainers do. And if you didn't have that appreciation before, you come away from that experience understanding that it takes all of us to make this work.

So I think we're looking forward to this challenge. And it is change, and because we're humans, we tend to resist change, and change is difficult, but at the same time, I think we've proven over many years that change is something that we can accomplish and we'll thrive in this environment.

Mr. Morales: General, your passion has given us a window into the exciting personnel transformation going on in the Air Force. What advice can you give to a person who is interested in a career in public service, especially in the military? And finally General, what do you say to a young enlisted Lieutenant Airman about the career opportunities and climate of the Air Force in the future?

LTG Brady: I think we would like to say that we have a rich heritage and we have an endless horizon. We're a force that operates in air and space and cyberspace. It is the ultimate high ground. There are incredible challenges. We ask our young people how can we do things better, and they tell us. There is great opportunity for people who want to serve a cause that's greater than themselves. And it is an exciting place to be.

And when you go forward and particularly -- you go to the most difficult, what might be the seemingly most difficult place to serve in our Air Force, you will find the highest morale among our people, because they know they're serving a cause that's greater than themselves. They have come to trust, rely on, and respect each other. It's a wonderful thing to see. It's a very rich life, it's a very demanding life.

I think that many Americans -- young Americans are going to continue to want to do this. We need very talented people who are willing to serve this country and be a part of something very important. And so I think there is great opportunity across a whole array of educational backgrounds and skill sets, men and women -- women have done an incredible job in our force. They represent about 20 percent of our force now, almost, and they're involved in virtually everything that we do and are succeeding marvelously. It's an absolutely -- a great team to be a part of and I'm excited every time my -- every day I come to work to be with great young people -- and they're looking younger and younger to me -- but to be with young people who want to succeed, who want the Air Force to succeed, and want to serve this nation, it's very gratifying.

Mr. Morales: General, that's fantastic. Unfortunately, we have reached the end of our time. I want to thank you for fitting us into your busy schedule today, but more importantly, Bob and I would like to thank you for your dedicated service to our country in the various roles you've held in the United States Air Force.

LTG Brady: Thank you very much. And again, thank you for having me here. I always relish the opportunity to talk about our Air Force and the great young men and women who make it such a great institution.

Mr. Morales: Thank you. This has been The Business of Government Hour, featuring a conversation with Lt. General Roger Brady of the United States Air Force.

Be sure to visit us on the web at businessofgovernment.org. There, you can learn more about our programs, and get a transcript of today's fascinating conversation.

Once again, that's businessofgovernment.org. 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.

David A. Bowen interview

Friday, October 6th, 2006 - 20:00
Phrase: 
"[My IT] strategy basically consists of five components, and they all start with 'C' -- the five C's are 'Confirm, Comply, Consolidate, Construct and Communicate'."
Radio show date: 
Sat, 10/07/2006
Guest: 
Intro text: 
In this interview, Bowen discusses: the Mission and scope of FAA's chief information office; the FAA's key information technology priorities and initiatives; FAA's Strategic Sourcing for the Acquisition of Various Equipment and Supplies (SAVES) program;...
In this interview, Bowen discusses: the Mission and scope of FAA's chief information office; the FAA's key information technology priorities and initiatives; FAA's Strategic Sourcing for the Acquisition of Various Equipment and Supplies (SAVES) program; Collaboration and partnership among agencies; New technologies that enable FAA to manage more effectively; and Information technology security.
Complete transcript: 

Originally Broadcast Saturday, October 7, 2006

Washington, D.C.

Mr. Morales: Good morning, and welcome to The Business of Government Hour. I'm Al Morales, your host, and managing partner of The IBM Center for The Business of Government. We created The Center in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about the Center by visiting us on the web at businessofgovernment.org.

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is David Bowen, Assistant Administrator for Information Services and Chief Information Officer for the U.S. Federal Aviation Administration.

Good morning, Dave.

Mr. Bowen: Al, good morning to you.

Mr. Morales: And joining us in our conversation is Pete Boyer, Director in IBM's Federal Consulting Practice.

Good morning, Pete.

Mr. Boyer: Good morning, Al.

Mr. Morales: Dave, can you tell us a little bit about the history and the mission of the Federal Aviation Administration?

Mr. Bowen: Sure, I'd be happy to. Very succinctly, it's basically to provide the safest aerospace system in the world. And let me give you a little bit of context around that. The FAA manages over 24 million square miles of airspace. Actually, we manage the airspace over about 15 percent of the world's surface area. Airspace we manage covers the continental United States as well as Alaska, goes halfway out over the Atlantic Ocean, and almost entirely out over the northern Pacific Ocean.

That chunk of airspace alone is 15 million square miles of airspace. We handle between 56,000 and 57,000 flights in that airspace everyday -- so it's a big chunk of airspace. There is a lot of air travel, a lot of activity in there, and nothing moves in that airspace without us giving approval. We monitor military operations, we give the space shuttle permission to launch; we know what's going on in almost all parts of that airspace all the time.

Mr. Morales: That's an incredible scope and scale. Can you tell us a little bit about specifically the mission and scope of the FAA CIO office, and can you also give us a sense of scale in terms of budget and number of employees?

Mr. Bowen: Sure. Our scope really has two pieces. It involves the strategic IT planning across the FAA's lines of business, and from an operational perspective, we have the responsibility of making sure that our IT infrastructure and systems are secure from cyber attacks, if you will. The FAA has a federated model where the lines of business have the operational responsibility for managing your own systems, and our role is to coordinate their activities across the agency.

So my office isn't all that big. We have about 94 FTEs, and our annual budget is about $37 million. However, we do get involved in IT spending across the agency, and the FAA has a very large IT budget, exceeding $1.5 billion annually. So it's a pretty big chunk of budget that goes into IT-related activities.

Mr. Boyer: Dave, on a related topic, please describe your role as Assistant Administrator and CIO. Specifically, what are your official responsibilities, and how do you support the mission of the organization?

Mr. Bowen: Well, Pete, to respond to this question, I'll paraphrase from my own job description. Basically, to be the advisor to the Administrator on the agency's information technology, and help direct strategic planning for IT across the agency. We just alluded to that. We're also responsible for ensuring that our technology assets are effectively and efficiently aligned with the FAA's strategic mission needs. And as I said, we oversee the implementation and operation of our IT security programs.

As you can probably imagine, the FAA is very IT-intensive. If you think about what it is we do, my office plays either directly or indirectly into almost all of the agency activities. Our management of the FAA is based around what we call a "flight plan" that has four operating components. One is to make sure that we safely manage the airspace; one is to make sure that we provide adequate capacity for aircraft in the airspace system; the third one is to provide international leadership to the aviation communities around the world; and then the fourth one focuses on the FAA itself, and that is to make sure that we're running the agency efficiently and effectively and basically providing organizational excellence. Our administrator likes to talk about running the FAA like a business, and when I interviewed for the position, her charge to me was run IT at the FAA like you'd be running IT in a large business.

Mr. Boyer: And clearly, you've had a very interesting career. Can you tell us about your previous experiences before becoming the CIO?

Mr. Bowen: Sure. I'm not a federal employee by career, obviously, and I'm not in the aviation industry by way of my career. My career basically has consisted of increasing responsibilities in the IT area at progressively larger health care institutions. I've been a CIO at a 7-hospital system, a 14-hospital system, a system with 50 hospitals, and then lastly with a very large health plan in California: Blue Shield of California, based in San Francisco.

An interesting note here, I did take a diversion for a little while in my career and ran a technical manpower company in Saudi Arabia for a couple of years. So I have some overseas experience, international experience. By way of education, I've got a bachelor's degree, I've got an MBA, and in a little bit of a twist, I'm also a certified public accountant.

Mr. Morales: Dave, from your background, we do see that your connection to FAA could be the fact that you're a certified commercial pilot. People always have interesting stories of how they got started in that field, so I'd be interested to hear your story of how you got interested in flying.

Mr. Bowen: How I got started flying? Well, it's something I've always wanted to do. My dad was a pilot during World War II, although he stopped flying after the war and hasn't flown since. So it's something that I've always wanted to do. I got started back in 1980. I was doing some consulting, had a little bit of a bonus in that enabled me to begin taking flying lessons. So I've been flying ever since, and worked my way up through the progression of ratings and licenses, through an instrument rating, commercial rating -- I've never flown professionally, but I've also owned a number of aircraft and have worked up through the ranks in terms of aircraft as well.

So basically I'm with the FAA because I have a passion for flying. I'm very passionate. I love this stuff. I love going around and talking to the people in the agency about what they do. As I told the Administrator when I interviewed with her, I've been her customer for the last 25 years. I want to bring some business expertise to the government, and I just love working with the people in the FAA.

Mr. Morales: That's fantastic.

What are some of the key priorities and initiatives for the FAA? We will ask David Bowen, Assistant Administrator for Information Services and Chief Information Officer within the FAA, 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, Al Morales, and this morning's conversation is with FAA CIO David Bowen.

Also joining us in our conversation is Pete Boyer, Director in IBM's Federal Consulting Practice.

Dave, what are some of the organizational priorities for 2007 at the FAA?

Mr. Bowen: Well, it kind of takes us back to the topic that we talked about about the scope of the office, basically coordinating activities across the agency. We have a number of things on the docket, if you will, for 2007, a lot of things around cost efficiencies, cost effectiveness, establishing standards, taking dollars out of our infrastructure operations so that we can put them to better use in doing more customer-focused things.

We're looking at consolidating some of our data centers. We have a number of those, and think that we can get that number down. We've got a number of points where we touch the web, and that's just a concern for us not only from a cost standpoint but also from a security standpoint, and we want to reduce those. We've got an objective around reducing servers.

And then the other thing I feel very strongly about, and that is we need to work on where our next generation of IT professionals is going to come from. To that end, I've had some input from my staff that they would like some assistance with career planning, career development. We have some programs to bring new blood in to the agency; we want to beef those up. And then obviously, to continue to protect our systems from cyber incidents.

When I got to the agency, I embarked on a program that I called meet, listen and learn for the first 100 days, that they talk about the first 100 days in government, and that was really to go around the agency and talk to people, find out what they were thinking about IT, what their issues were, how IT supported their business needs or didn't, if you will.

It gave me the opportunity to get out and really see at ground level what was going on, what people were doing. I got to a number of regions. I was at our Aeronautical Center in Oklahoma City, was at our Technical Center at Atlantic City. I went to Alaska, I flew airplanes up onto glaciers and helicopters and did all kinds of neat stuff. And then came back and was charged by the Administrator to develop a strategy for moving IT forward, and so I presented her this strategy around the Memorial Day time frame. She approved it, asked me to make sure that I ran it by all the other line of business executives, and so finally in July, she came out with an endorsement of our strategy.

The strategy basically consists of five components, and they all start with "C." This kind of comes from my pilot training. When you're learning to fly, at least general aviation, they tell you if you get into trouble, there are four Cs that you need to remember: that's "Climb, Communicate, Confess, and Comply." So this strategy is built around five Cs, and the five C's are "Confirm, Comply, Consolidate, Construct and Communicate." So --

Mr. Boyer: I noticed you left "Confess" out.

Mr. Bowen: Yeah. I'm afraid that's for later.

Mr. Boyer: That's for later?

Mr. Bowen: So what we're trying to do is, first thing we're trying to do is to confirm our standards, our infrastructural standards. And then secondly, develop processes to enable us to make sure that going forward, this new stuff at least that we built begins to comply with those standards. So that's point number two.

Third point is consolidation, and we talked about that: infrastructure, data centers, servers et cetera. The fourth thing refers to the construction of a career development plan for the staff, and start focusing on some of the staff issues. And then finally the fifth point -- as always, you need to communicate, you need to communicate what you're doing, your successes, et cetera. So that's the going-forward strategy for the time being. We may change it over the next year or so, but for now, that's kind of what we're working off.

Mr. Morales: I'm excited to see that you've identified the human capital challenges as a priority of yours. I know that many of the organizations and agencies are struggling with that piece, but I'd like to get to that a little bit later. How has the FAA assisted the Department of Transportation in becoming the first Cabinet -level agency to achieve green in the PMA's e-govern area?

Mr. Bowen: Well, I'd like to take credit for that, but unfortunately, it was all done by my predecessor, Dan Mann. Dan, back in 2004-2005, when this initiative first came out, was very aggressive in getting together with our IT security manager, Mike Brown, and the two of them put a huge push on throughout the agency to get our system certified and authorized in 2004, primarily, and then moving into 2005.

Under the e-Gov. initiative, we had to have 90 percent of our systems reviewed in 2004 and certified, and working with our line of business staffs, we were actually able to beat this percentage -- whereas we had -- I think it was 95 percent was the eventual percentage that we were able to get done in 2004, and then took that to 100 percent in 2005. And so at that time, we had over 275 systems, and it's certainly a credit to Dan and his efforts as well as to the folks across the agency to be able to get that done, and that was a big factor in the DoT being able to achieve that green rating in the PMA initiative.

Mr. Boyer: On a similar topic, Dave, to help the effort to control cost, the FAA has embarked on an important agency-wide strategic sourcing initiative. This initiative is called Strategic Sourcing for the Acquisition of Various Equipment and Supplies, or the SAVES program. Could you describe the SAVES initiative and how it relates to your office?

Mr. Bowen: Sure, Pete. I'm glad you defined what SAVES actually stood for. It's a pretty long title. I had to go back and research it myself. The SAVES program, I would describe it as a managed and highly structured reverse option of standardized packages of goods and services.

Currently, we're packaging goods and services into a couple of different buckets; one is around office supplies, one is around office equipment, one is around career services, one is around printing services, and one is around IT network equipment. And so we are gathering specifications for these goods and services together, we are putting out proposals on the street for vendors to bid on those services; we have a sort of a web-based reverse option, which a lot of people are doing these days. And then we're awarding qualified vendors who are aggressive in their pricing and bidding the ability to have contracts with us for these standard sets of services.

We are right now partway through this program. A couple of contracts have been let, a number of RFPs are still out there on the street, but we do expect to save about 14 percent across the board, or $5 million on these services annually. At least we expected to do that when we put the program together. Our first two contracts I will tell you are doing much better than that. So we're very excited about this initiative, and look forward to the savings that we think it will generate.

Mr. Boyer: Now, we've talked with many of our guests about the use of collaboration and partnership among agencies and with the private sector to achieve mission results. What kind of partnerships are you developing now to improve IT operations or outcomes at FAA, and how do you see these partnerships changing over time?

Mr. Bowen: Well, in my commercial experience, I did a lot of this collaboration. I actually chaired an organization that was comprised of all the Blue Cross/Blue Shield CIOs from around the country. So this is very consistent with the style in which I like to operate and find out what other people are doing, and not reinventing the wheel. So we concurrently collaborate with a lot of different organizations both inside and outside the government. We share data with them, we share methodologies, and then in return get a lot of benefit from that.

Let me talk about two areas specifically. One is the IT security area. Here, we can cooperate with the various intelligence and security agencies of the federal government. We collaborate also with air traffic control organizations outside of the government, outside the United States, those being Canada, Mexico, also with what we call Eurocontrol, and we're in the final throes of signing an agreement with NATO for the sharing of data relative to IT security practices and procedures and alerts.

We also collaborate in the same area with various companies in the private sector who supply us technology, and also as well with large universities who are assisting us in developing state-of-the-art technologies around IT security.

Outside of the IT security area, the air traffic control area is an area where we obviously cooperate with NASA, the Defense Department and others, and we also co-operate with the private sector companies as well, particularly in the development of what we call the next generation Air Traffic Control System. We're sharing data with the National Geospatial Agency and others, and I think going forward, we're going to see much more data sharing, much more collaboration with agencies like the Department of Homeland Security, Defense Department, increasing cooperation with our customers in the commercial airlines, and certainly private sector companies in making use of their resources and sharing information with them.

Mr. Morales: Dave, earlier, you mentioned that one of the priorities was around cost efficiency, and we talked a little bit about some technologies. What are some examples of potential new technologies that may help the FAA manage itself more effectively?

Mr. Bowen: Well, Al, this is really a terrific question, because there is so much new technology coming into aviation, it's unbelievable. A lot of things we're seeing actually are being deployed in the general aviation community before it gets into the commercial aviation community. So there's so much stuff happening, it makes it a very interesting time to be a part of the FAA.

Let me talk about some of these technologies. Probably first and foremost is what we call ADSB, which is Automated Dependent Surveillance Broadcasting. Basically what this is it's based on GPS technology like you're seeing in your cars, where the car knows where it is. But ADSB goes a step further and basically says I'm a GPS receiver, I'm operating in an airplane and I'm going to be broadcasting my position, not only to ground base stations, but to other aircraft who may be operating in the area. And because of this, we can then reduce the separation between aircraft because we now have a much better idea of exactly where in space that aircraft is operating. Before, we had to make allowances for the variability around radar, and so now that can be reduced.

What that means is that we can pack more airplanes into a given airspace, and that is consistent with our capacity, our goal from our flight plan. But not only that, it means that we can actually do that more safely, because the aircraft now know where each other -- where they all are, and where all the other aircraft are, and then the aircraft can actually assist the ground-based controller in seeing and avoiding other aircraft operating in its airspace.

I've flown some aircraft with this technology up in Alaska, and it's really interesting to see what you can do with that. That's one technology that's going to be a real cornerstone for some of the new air traffic control capabilities that we're working to develop.

Some other technologies include what we call ASDE-X. It's basically a surface radar just like operates on the airport, looks across the airport surface to see where aircraft are operating.

There is a new technology coming out called Synthetic Vision. We're actually seeing this being deployed in some general aviation aircraft. And if you really stop and think about it it's really neat, because the GPS receiver knows where it is and it knows where, let's say, the airport is, or the runway that you're trying to land on as a pilot. Unfortunately, you can't see the runway because there's clouds in the way or it's night or raining, or whatever. But because the GPS knows where the runway is relative to your position, the GPS can construct a visual image of what that runway would look like if in fact you could see it.

So you can basically shift your attention to flying -- a CRT display screen that will bring this runway into your field of vision digitally, even though you can't see it outside and enable you to land on it, basically sort of like Microsoft Flight Simulator. So that's pretty neat, and you're starting to see that.

We also flew in Alaska some new equipment that looks at not only where the airplane is currently, but again through GPS where the airplane is projected to be. It's called Trajectory Projection. And there is an indicator that goes ahead of the airplane and says in a minute or a minute-and-a-half or two minutes from now, if you currently are on your course and speed and altitude, this is where you're going to be in space. And that's very helpful in Alaska for terrain avoidance and things like that, so that if somebody makes a turn, again, the GPS knows how high it is and it knows how high the terrain is, and it can alert the pilot if you're turning into terrain that's actually higher than you are.

This kind of technology has been in use in the military for a while now, but it's just now coming into use in the general aviation area. So those are some new technologies that we're really excited about.

Mr. Morales: It is fascinating, exciting.

What is the FAA's IT investment in capital planning process? We will ask David Bowen, Assistant Administrator for Information Services and FAA's Chief Information Officer, to explain this to 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, Al Morales, and this morning's conversation is with FAA Chief Information Officer David Bowen.

Also joining us in our conversation is Pete Boyer, Director in IBM's Federal Consulting Practice.

Dave, given both your private and public sector experiences, we'd like to get a sense of your management strategy. Could you provide us an overview of your management strategy?

Mr. Bowen: I'd be happy to, Al. When I joined the agency, I brought with me a set of principles which I call our operating principles. These came from my experience at Blue Shield, and really helped us institute a very disciplined culture there. So we're starting to roll those out, certainly in my group in the FAA and the groups that I am interacting with. It really talks about principles and behaviors -- and I won't go into all of the details, but some of the principles that we are trying to enforce here include enforcing a culture of data-driven decisionmaking, not making decisions based on, you know, hearsay or whatever. Be prepared to know the details of your line of business. Leadership should be in the trenches. That's a leadership principle.

And then one that I think is important talks about alignment. You know, you give everybody the opportunity to participate in a decision, but once the decision is made, we expect people to get in line behind the decision and act accordingly. Don't go out of the meeting room and basically try to undermine the decision that you just made. So that principle says once we get to alignment, act aligned.

Well, there are a couple of behaviors, too, that I want to highlight. There were about six or seven of them that I brought to the agency, but a couple that I'll highlight include one is to be clear and explicit. What are we asking to be done, who are we asking to do it? How are we asking for it to be done, and when are we expecting it to be completed? Oftentimes in a discussion, these parameters aren't agreed to mutually by the parties, and result in confusion.

A big one for the FAA involves taking an enterprise-wide view. This is where we are challenging people to start thinking about doing what's in the best interest of the agency, not necessarily what's in the best interest of either of them personally or their line of business. And that's a very difficult thing to do given the line of business focus that we have in our culture.

Two other ones: one involves responding with appropriate urgency, and then the final one is to take personal responsibility for execution. And that is to hold people accountable and make sure that people understand that they have a responsibility to make things happen. And, you know, if it doesn't happen, then they need to be accountable. They should not be making excuses, "I couldn't do x, y, or z." They need to stand up and be accountable and take on this responsibility.

So those are some of the things that I brought to the FAA from the commercial world. And so far, they are working out well.

Mr. Morales: Earlier this year, the IBM Center for the Business of Government published a report comparing the U.S. air traffic system to the systems in the U.K. and Canada, which have adopted market-based principles and rigorous capital investment processes. Unlike the U.K. and the Canada systems, the U.S. ATC capital investment planning process has been marked by a history of relatively poor performance and high costs. Could you tell us about this planning process at FAA, and highlight some of the more recent improvements?

Mr. Bowen: Sure, I'd be happy to. I think part of this gets back to the context that I tried to set in the beginning of this discussion around the size and scope of the services that we provide. A comparison with the air traffic control system in Canada and in the U.K. is probably appropriate from a structural standpoint, but maybe not from a volume standpoint. Our aerospace is far larger; we handle far, far more aircraft. And so we think that our business is a lot more complex.

Nonetheless, we have had to improve our acquisition and management review processes over the last couple of years. We have been called to task by the IG, and as well the OMB, and have had our projects on the various watch lists of those sort of oversight kinds of agencies. We've taken a number of steps to improve our processes. Obviously we, like most of the -- or all of the agencies in the federal government -- are now doing business cases around our expenditures. We are doing projections of where our projects are.

I happen to sit on the FAA investment review committee that reviews all investments across the agency, so I bring not only an IT background, but also a financial management background to this process. And I am starting to ask a lot of tough questions, as are some of my counterparts on those investment review committees.

So we are actively improving our project management processes. We just had our final project taken off the OMB management watch list, so we are right now not in anybody's sights as far as the oversight boards. Everybody seems to be relatively happy with the way things are going. We discuss these projects periodically, review them, and overall, I think our processes have improved significantly.

Mr. Morales: That's fantastic. I know being under that kind of scrutiny puts a fair amount of undue pressure on your organization.

Mr. Boyer: Dave, there are many exciting approaches to technologies that are vogue in the marketplace today promising significant advantage and cost savings and improved systems integration. For example, there is the rise of Service Oriented Architecture, or SOA, which is the architectural style whose goal is to achieve loose coupling among interacting software agents. What is FAA's investment strategy to enhance its future technology portfolio?

Mr. Bowen: Well, Pete, I'd like to say we are further along in that area than we are. You know, it's funny, you get these sort of waves of timely topics or whatever, and some of it seems to be the most recent sort of wave du jour, if you will, in the IT community. But nonetheless, there are a lot of advantages to moving to a service-oriented architecture.

What I have got to say though is that because we are still operating in a federal model and we haven't established hard standards around software development and the software development life cycle, we have a lot of people doing a lot of different things. So we are not there yet. We certainly want to move to a position where we do have standards in this area, but we are just not there.

Mr. Morales: Well, we've talked a little bit about security earlier, but as you know, information technology security has been in the news a lot lately, with stolen laptops causing major problems in various government agencies, and also causing concern among our citizens over issues like identification theft. FAA has made significant progress in addressing computer security weakness. Could you elaborate on the progress made by FAA remedying such weaknesses?

Mr. Bowen: Al, I'd really be happy to, because we are very proud of the progress that we've have made in this area. It kind of takes us back to the discussion around -- the getting to green in the PMA agenda. And we made huge progress in the area of IT security. We have a state-of-the-art Cyber Security Incident Response Center which monitors the FAA computer networks 24 hours a day, seven days a week.

I talked about the various agencies that we are collaborating with in doing this and sharing data with. We think our center is one of the best in the civilian government, was just certified at a new higher level of CMM, which is a Capability Maturity Model standard that is in use for operations of this type. We have a performance objective in the flight plan of not having any cyber events disrupt our systems.

And despite the fact that we deny over one million access requests to our network each and every day, we have yet to have a significant cyber event. We are looking to set up this Cyber Security Center as a federal government center of excellence for computer system security. We are working with the Department of Transportation in helping them out and moving this forward. So a lot of progress there, things going well, and we are real happy about that.

Regarding the identity issue, this is an area of particular sensitivity to me, and may get back to the conversation we had around the health care experience, because in the health care space, this personal identity issue and identity theft issue has been on the forefront of our activities for the last five or six years going back to the HIPAA legislation that mandated some protections for particularly health-related information. So in the health care sector, we are very sensitive to that.

I talked to our Deputy Administrator probably a couple of months ago about the possibility of encrypting data on all the laptops, and got his endorsement to do that, and so we've embarked on a policy whereby we are not going to fool around with this stuff. We are going to basically make it a policy that every laptop in the Federal Aviation Administration is going to be encrypted, so that in the event it gets lost, stolen or whatever, we know that we are protected from that theft and the resultant loss of data, and any kind of implications that it may have, and not have to worry about it.

This goes beyond recently published OMB guidelines for the protection of what they call Personally Identifiable Information, or PII. But again, I feel strongly about this -- probably my health care background -- this is the right thing to do. We need to do it, and we are doing it.

Mr. Morales: On a similar theme with personal identification, we understand that the FAA is currently planning for the implementation of smartcard technology, programming personal access to facilities and information systems to meet the requirements of HSPD-12. What's FAA's strategy around this initiative?

Mr. Bowen: Well, we do have an HSPD-12 program in place. HSPD-12 has two phases: a physical access phase which allows an individual access to physical facilities, as well as a logical access, which allows an individual access into their computer systems applications and things that they are allowed to use. We are pretty far along in the physical access piece; we have systems in place that have some degree of that kind of capability. We need to put them together, and we need to bring them up to standards that are mandated by HSPD-12 in terms of the information contained on the card and things like that.

We have a little bit more time to work through the logical access implications of HSPD-12. We do have a team working on that. It is being driven largely out of our area, my office, and we are developing plans, we are developing an architecture and infrastructure. I think this is an area where we really want to spend time looking at what industry has done and also what other agencies are done, because unlike most of the initiatives, it seems to me in the federal government this is an initiative that is relatively consistent across all of the agencies.

You know, the Agriculture people need the same kind of physical access and logical access that we do. And so I'd certainly like to see more inter-departmental cooperation in this area so that we can move forward collectively and not all have to reinvent the wheel. Right now, we are taking a build approach to HSPD-12, particularly in the logical access piece. But we continue to look at what industry solutions are out there being offered by various vendors. And some of the agencies I think are taking a leadership position and offering services to other agencies, and we certainly want to explore those. Bottom line here is to make the best business decision that's in the best interest of the FAA.

Mr. Morales: Excellent.

What does the future hold for the FAA's IT office? We will ask CIO David Bowen 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, Al Morales, and this morning's conversation is with FAA's Chief Information Officer, David Bowen.

Also joining us in our conversation is Pete Boyer, Director in IBM's Federal Consulting Practice.

Dave, what trends, whether demographic, technical, economic, and/or industry, will have the largest impact on the FAA over the next 10 years, and how will your office adapt to these changes?

Mr. Bowen: Well, this is a really exciting topic, and I think we touched on it when we talked a little bit about new technologies. But there are a number of industry events that are moving to sort of show us the wave of the future, a couple of trends that we are watching very carefully and actually participating in. Obviously, we see an increase in air travel over the next several years.

The air travel business fell off after 9/11, but we are to the point where it is now higher than it was at 9/11, and certainly as high as it was shortly before 9/11, so we see air travel continuing to increase. And that's a factor that we are going to have to deal with. We are actually projecting an increase in air travel overall by a factor of three by the year 2025. So that there is some sort of long-term study numbers that we've had done, and those are the kind of numbers we are seeing there.

There are a number of other things happening in the aerospace industry. You may have read about the coming wave of what we call VLJs, very light jets. These are small, nimble, four- or five-six-passenger jets that we are actively involved in certifying. They are using new technology and new types of manufacturing methods to bring these aircraft to market at much lower prices than we've seen private jets in the past, and so we think we are going to see an increase in that kind of traffic.

We also see commercial space travel developing. I just saw a note the other day, I think it was -- I forget, Paris Hilton or one of the Hiltons -- booked a flight on some space travel junket at some point in the future. We can kind of chuckle about that, but we have a branch in the agency that's dedicated to space travel, and they are actually very, very busy.

We certify space ports and oversee space launches and things like that, and we see this is an area of enormous growth for us. We also see the growth of what we call UASs, which are Unmanned Aerial Systems. We made some press, I think, recently where the sheriff of Los Angeles County wanted to fly some unmanned surveillance aircraft. And certainly we are working with people like the Naturalization Service, who are flying unmanned aerial platforms, if you will, to look at borders and everything else.

The military obviously has been using some of these systems for some time, but we are seeing increasing civilian uses for these types of platforms. So all this has to be dealt with through increased automation as a way of dealing with this, as our current system which is run by humans, largely human-dependent, is becoming more and more -- I shouldn't say incapable -- but it's certainly becoming more and more difficult for us to manage all these different types of air traffic, all operating in the same airspace.

So the solution is really going to be more automation. I mean, we don't see any way around it. We are in the process of developing what we call the next generation air traffic control system, which is going to enable us to deal with these projected volumes of traffic as well as these new types of aerial platforms.

Mr. Boyer: Now, Dave, according to a June 2005 Federal Computer Week survey, the FAA was voted one of the best places to work in the Federal IT. How do you intend to retain this impressive accomplishment?

Mr. Bowen: Well, I wish I had seen that before I joined the agency. And I talked about why I joined, but I think one of the reasons I joined the agency is one of the reasons why we got that high rating. I think we attract people who are passionate about aviation. That's why I joined the agency. My goal is to be sure that our folks in IT understand the mission of the agency and how they clearly contribute to it.

So from a standpoint of somebody coming into the agency, I think our mission around air traffic control and around aviation safety is very, very visible and very real to people. I mean, you walk through an airport and see little kids coming out of the jetway meeting mom or meeting grandma, where they travel to -- you know, travel to go and be with the family -- I mean that's really what we are all about. And I -- you know, I take that very seriously, and I know that a lot of my colleagues in the agency do, too.

We are trying to do some management things I think that will attract IT people to the agency. I think I talked about my management style. Basically, I see my role as sort of a coordination/collaboration sort of facilitator. I like to set goals, get people the resources that they need and get out of their way. I am a very hands-off manager, and my people seem to like that.

We talked about communication. One of the things that we've done and was done based on a suggestion I got out of one of my all hands' meetings is to develop a website, or a capability on our website, where people can anonymously ask the CIO a question. And we've had a lot of response to that, and a lot of questions about all different kinds of things. Not just IT topics, but all kinds of things all across the agency.

So I think that is one thing -- one of many things that we can do to be sensitive to the needs of our people, help communicate the mission of the agency, and clearly show them where their activities tie directly to our mission and to our flight plan. We reward our employees for superior performance, and we also try to have fun in the process.

Mr. Boyer: That's excellent. Given your private and public sector experience, what have you learned about the ideal skills and traits that a CIO must have to be successful across these industries?

Mr. Bowen: Ideal skills and traits? I think the most accurate description that I've heard of the CIO job is to build relationships and execute with excellence. And that came out of a quote by one of the CIOs in CIO Magazine, and I think that's very true, certainly at high levels in the government agencies where I operate. My technical skills have long since departed me, but it's my business skills and my relationship skills that I think are what the FAA is depending upon me to use to move IT at the agency forward.

I think you have to know and understand the business you are in. And I am going to talk probably in another month or so, maybe two months, I think, to a group of health care people about how health care skills may transition to other industries. And we kind of touched upon that in this discussion, but I think the fact that I was a pilot and have operated in the airspace system and owned aircraft and gone through all the pilot-type stuff really helped me to understand the business, plus the fact that I bring a passion to the business as well. So I think in terms of private versus public sectors, those are some universal, I think, similarities.

Mr. Morales: Dave, you've obviously had a very successful private sector career, and now you've made the transition over to government. What advice could you give to a person who is interested in making a similar transition over to public service?

Mr. Bowen: Well, what advice could I give? Kind of a tough question. I would say that you need to find something that you need to be -- that you can be passionate about and go for it. In my limited experience, and I have been in the federal government now six months, the one thing that really surprises me is that there is an enormous range of opportunities to do things in the federal government. Enormous possibilities for interesting assignments, for details, for moving around in the federal, sort of, you know agency world and moving up.

I think we probably have more flexibility to do some of these things than I would say we have in the private sector. And the government certainly encourages that as a way for federal employees to develop their career. So certainly that potential is out there for people to do things, and if you have a positive attitude and you've got initiative and you are passionate about the agency mission and what you want to do, I think the potential is unlimited, so I tell people to go for it.

Mr. Morales: Excellent, excellent. That's great advice.

We've unfortunately reached the end of our time, and that'll have to be my last question. I do want to thank you for fitting us into your busy schedule. But more importantly, Pete and I would like to thank you for your dedicated service to the public and our country as CIO of the FAA.

Mr. Boyer: Thanks Al, I am delighted to be here. If people want to learn more about the FAA, they can go to our website, faa.gov, lot of stuff there. And I hope to maybe come back and talk to you again soon.

Mr. Morales: Excellent, we'd enjoy that.

This has been The Business of Government Hour, featuring conversation with the Assistant Administrator for Information Services, and Chief Information Officer for the U.S. Federal Aviation Administration, David Bowen.

Be sure to visit us on the web at businessofgovernment.org. There, you can learn more about our programs, and get a transcript of today's conversation.

Once again, that's businessofgovernment.org.

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.

 

Josefina Carbonell interview

Friday, September 22nd, 2006 - 20:00
Phrase: 
"Our mission is to provide services and support, and empower people to live independently with dignity in their older age. We're the largest provider of home and community based care in this country."
Radio show date: 
Sat, 09/23/2006
Intro text: 
In this interview, Carbonell discusses: the Mission and history of the Administration on Aging (AoA); Reauthorization and modernization of the Older Americans Act; Medicare prescription benefits program; Aging and Disability Resource Centers; Measuring...
In this interview, Carbonell discusses: the Mission and history of the Administration on Aging (AoA); Reauthorization and modernization of the Older Americans Act; Medicare prescription benefits program; Aging and Disability Resource Centers; Measuring AoA program results; and the Importance of collaboration and partnerships. Missions and Programs
Magazine profile: 
Complete transcript: 

Originally Broadcast Saturday, September 23, 2006

Arlington, Virginia

Mr. Morales: Good morning, and welcome to The Business of Government Hour. I'm Albert Morales, your host and managing partner of The IBM Center for The Business of Government. We created the Center in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about the center by visiting us on the web at businessofgovernment.org.

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Josefina Carbonell, Assistant Secretary for Aging at the Department of Health and Human Services. Good morning Josefina.

Ms. Carbonell: Thank you. Good morning to you all.

Mr. Morales: Also joining us in our conversation is Brenda Kunkel, managing consultant at IBM. Good morning Brenda.

Ms. Kunkel: Good morning.

Mr. Morales: Josefina, you have so much experience and passion for older adults. How did you get interested in this field of aging, and can you tell us how you got started on your career path?

Ms. Carbonell: Well, first of all, I started as a volunteer. Part of my family efforts have always been to volunteer and contribute to the community. And I started as a United Way volunteer many years ago, and with the Red Cross, in filling some of the needs, basically in emergency response, in '72, to an earthquake in South America.

Then they were developing all the Hispanic capacity building for community support and volunteering efforts, and I was asked to join the United Way in their efforts for recruitment of new volunteers. And of course then that transferred into really looking at community resources and public service mostly. And they developed a capacity to build new programs around the same time that the Older Americans Act was being created nationally as a pilot program. One of the first pilot programs for senior centers and Older Americans Act occurred in Miami, Florida. And I was asked to join that planning effort through United Way of Dade County at that time. That led, eventually, to my engagement in the first Hispanic aging organization in the country to be launched, at the end of '72, and then developed into a larger, mostly based in grass roots, and that led to a whole array of areas, both in health care and long-term care in the community.

Mr. Morales: Outstanding. Before serving at the Administration of Aging, you led an aging community services organization in Florida. How has your leadership style changed as you've taken the various positions you have in your career?

Ms. Carbonell: You know, like Secretary Leavitt likes to say, it depends on what seat you're sitting in, your role transcends that specific seat that you occupy. My perspective, the role that I come from is the community role. I am historically the first community provider, or business provider in the aging seat, ever. Mostly policy people have occupied university research -- persons. So I was the unlikely, but the right fit in that role as a leader. It was very clear to me as I came onboard that -- and having worked in the specific programs that the Administration on Aging administers throughout the states and local communities across this country, and I had done that work for over 30 years in the community.

It clearly gave me a very solid base on what our consumers were, what the role of the leadership role, and the functions of the U.S. administration was in a different level and a different perspective on how policy would drive, would impact the ability of providers in the community level, to be able to serve the ever-growing aging populations. So, you know, when I got into the role we realized that the role of the Administration on Aging needed really a quantum leap in the kind of modernization and getting up to speed to the rest of the health care transformation that was happening just around us, just in the immediacy of HHS.

I think the leadership of Secretary Tommy Thompson, which brought in incredible leadership, not only in welfare reform, but in aging services. He was the first one to develop the whole welfare reform change agent in the state models. He was also the first to develop the transformation of long-term care from institutional base to common community based in his own state.

So I was very attracted and very pleased and honored to serve under his tenure, and now under tenure of another very exciting governor, former governor, Mike Leavitt, both governors that had been chief operating officers for their own states. And as a chief operating officer from the community level in these programs, they gave me a distinct role and opportunity to shift, use my best talents, and modernize my talents to implement national programs and national policies, and transform really long-term care.

Mr. Morales: Excellent.

Ms. Kunkel: To clearly have an understanding of the impact of the policies that your administration is implementing on the community services, can you tell us a little bit about the mission and history of the Administration on Aging?

Ms. Carbonell: Well the Administration on Aging was created in 1965 by the Congress. The original mission -- you know, it's one of the unique pieces of legislation that I've seen. Our unique mission is, number one, to really develop the capacity to make sure that we provide services and supports and empower people to live independently and with dignity in their older age. But the second most important part of our mission is, we have a distinct charge to keep people out of nursing homes by allowing people to live independently.

So it has been a very -- in the kind of transformational change that I think that we're going through in health care reform in this country, and entitlement reform, and other kinds of challenges that we have for our older population, has given us a very important role and a very unique role for us to play within the changes. It developed a whole network, as the years progressed. It was born at the same time that Medicaid was born and Medicare, so it's 40 years old, 41 this year. It is a whole network that was developed locally based up, the other way around. So the capacity was built, unlike other agencies, in the department where you have -- you go all the way down to maybe just the regional level in the structure of the administration.

The greatest asset within our organization is that the bulk of all of our dollars are contracted out to the private sector and the local communities, the state units on aging and then the area agencies on aging, which sort of serve as our local planning and service areas, most of them privatized, run either by non-profits or also by public entities, counties, et cetera. And then you have over 29,000 providers, most of them in the private sector providers, either for profit or not-for-profit faith-based communities. And then you also have over 230 tribes that form part of the overall network that we contract with tribes across the country, so it has a tribal program alongside the states' programs.

So it really gave us the opportunity to have a system in place to be consumer centered. Most importantly it was locally designed. It means the planning efforts come from the local level up to the state plans, and then to the local, to the federal government, we set standards and basically monitor and improve the efficiency. But as the years progressed, we went from an agency that basically does grants, to positioning our agency and the services that we provide in a better role -- to take a central role in the transformation of health, and most importantly long-term care services in this country.

Ms. Kunkel: So for listeners who may not be familiar with the Administration on Aging, can you talk more about the current role of the organization?

Ms. Carbonell: The role of the organization -- we're the largest provider of home- and community-based care in this country. You have not only the meals-on-wheels programs, that -- one of the greatest achievements in volunteerism in this country has been led under the meals-on-wheels program and the nutrition services. But we are also -- home care, we run the adult daycare centers. We contract for services that support family caregivers, which was one of my responsibilities coming in, implementing the new family caregivers support program, knowing that family caregivers in this country are providing the bulk of the care for older people and disabled people in this country.

So our mainstay of long-term care and -- as our family caregivers. Also the role of prevention and health care promotion, and disease prevention in simple ways that we can implement it with simple tools so people can remain independent in their own communities. But most importantly also, being able to focus more on consumers versus services or service silos.

Ms. Kunkel: And what are your current priorities?

Ms. Carbonell: The current priorities are threefold: Ensure that we provide accurate and good access and information for people to access an integrated health and long-term care system. Less confusing, easily accessible, reduce duplication. We want to maintain -- give people the ability to maintain themselves healthier in their communities. And then we want to support family caregivers, to help their elderly remain at home, independent and living in their communities.

We also are focusing our efforts on promoting and preventing elder abuse, financial exploitation in areas of fraud and abuse that are perpetrating many of our vulnerable populations. We want to make sure that we do it in the best effective fashion that we maximize our taxpayer dollars. But most importantly that we assist people in using their own resources, empowering people using their own resources better, so they may age in place, and plan ahead much better for their long-term care needs.

Mr. Morales: How is the Administration on Aging supporting new Medicare and Medicaid programs for seniors? We will ask Assistant Secretary for Aging at HHS, Josefina Carbonell 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 Assistant Secretary for Aging at HHS, Josefina Carbonell. Also joining us in our conversation is Brenda Kunkel.

Josefina, we understand that the Older Americans Act is currently being reauthorized and modernized. How will this change aging services?

Ms. Carbonell: Well, I think that first before talking about reauthorization I want to put this in some kind of context as it relates to our current long-term care system. Currently, long-term care system is really institutionally biased. It really focuses on institutional care and chronic diseases, although, you know, the incidence of chronic disease is really on the way to decreasing for boomers. People are living longer than before. The reality is that the inevitable condition of aging would bring chronic condition is one of the biggest challenges in chronic care, one of the biggest challenges that we have for the demographics of aging in this country.

I think that the goal to keep people, and to assist people to live longer, is to assist them to take care of their chronic conditions or to manage their chronic conditions better. So our goal to modernize long-term care, which is basically the centerpiece of the reauthorization of the Older Americans Act, goes along with the reform and the transformation and the modernization that has occurred with Medicare, and it is simultaneous to the changes that we are trying to implement in Medicaid reform.

So again it will be a parallel movement to ensure that we transform the long-term care system from an institutional medical model only system to a more integrated model where we will have not only the supports but focusing instead of just on services or caretaking role to more of empowering people and assisting the people to plan ahead, and a more consumer-directed option of putting the consumer front and center.

So again, number one, the role of the reauthorization and our reform and transformation is really targeted at the capacity of our nation to respond to the aging of the baby boom generations, and then of course future generations as we look at that. And then of course to be able to reflect those changes, we need to really transform the act from an institutional based program, which obviously, unfortunately, it's financially unsustainable. Mostly due to the unintended consequence that Medicaid has become the primary payer for long-term services in this country. Yet it only covers 12 percent of the population. But the reality, it's unsustainable. And, it's really based on an old demographic model. We're living longer, so therefore that paradigm has changed and the goals should change alongside with it. Currently it's very complex, very fragmented, and difficult for people to understand, and most importantly, again it's heavily based on institutional care when we know that people want to remain in their communities, and in their homes independently as more if possible.

So there's three key approaches to that we're using, or three key principles that will drive the reauthorization proposal, which is called Choices for Independence. Again, we're shifting from institutional care to consumer-based and community-based care. Number one, most importantly is that we will empower individuals to make informed decisions about their care options, and to help them access the care that they need. And that includes not only dealing with the older people right now, because the act allows us to reach a younger population than retirement age. It gives us the opportunity to reach people at younger age or at middle age, there's still time to make some planning, changes in your -- both your financial security, but also in your long-term care planning goals to be able to meet the needs in the future.

We're also making sure that to enable to turn the tide around, both on spend-down of people to Medicaid or on a direct link between hospitalizations and nursing home. It's really provide and target services to those at highest risk of nursing home placement before they become eligible for Medicaid, but most importantly before they become disabled and on a down track to more dependence and spend-down.

And then thirdly we're trying to enable people to make behavioral changes that really reduce the risk of disease and disability as they age. We know that our older population and our seniors are much healthier than their former cohorts were. We want to keep that.

We want to be able to also deploy the best science and the best evidence-based prevention science that we have, that we invest through our institutes of health at the department, and our research and science institutions across this country, and the medical technology and health technology to be able to keep people at home and empower them with the right tools that they can simply be able to assist themselves. And then really target public dollars at those at a highest risk, and again at those that most need it.

Mr. Morales: Yeah, the theme of empowerment certainly comes through very clearly. How does the Administration on Aging support seniors on Medicare policies and programs?

Ms. Carbonell: One of the things that I found out early on is obviously their partnerships are so crucial to an agency such as Administration on Aging, because obviously aging crosses all the sectors that we work with; we can't do this alone. So one of the agencies that we have been closest to in partnering since the early times have been the Centers for Medicare and Medicaid Services, particularly on the Medicare portion.

Number one, most importantly, our network or the network of our providers provide the majority of the insurance counseling for both Medicare and Medicaid products throughout the country. And, most importantly, the network has worked very closely with the Centers for Medicare and Medicaid Services, most recently to help inform, educate, and assist in the enrollment for the new Medicare drug benefit that came online January this year.

And then the second portion of our work and our partnership with Medicare is and has been and will continue to take a more important role in the future with the new Medicare benefits in assisting people on how to make best use of the prevention, and the chronic disease prevention benefits that have been put online and have been brought into the new Medicare law in assisting people to make sure that they get their vaccines, that they have access to the kinds of new benefits that have come online, and that we assist them in how to navigate and access those new preventive benefits that keep people healthy in their communities.

Ms. Kunkel: Great. One of the areas of collaboration between AoA and the Centers for Medicare and Medicaid Services that you mentioned is the new federal benefits, prescription benefits program. How would you characterize the implementation of that new program?

Ms. Carbonell: We're very pleased with the outcome. We've worked very hard, the Administration on Aging and our partners in the community. It has been a tremendous effort where not only have the communications, the ads, and the efforts done under Medicare was important. I think the partnership that we developed with the Centers for Medicare and Medicaid Services gave us the grass roots local community support that was so needed for particularly our seniors, our older seniors, our seniors -- our low-income seniors, which are a very difficult population to reach and to assist in educating about this new benefit.

So the partnership that we developed early on, working together, adding value, and adding, most importantly, a very critical part of the work that we do, it was a natural for us at the Administration on Aging to partner. As part, not only of our statutory role as the lead aging advocate throughout the government, but most importantly as a very effective bringing down that personalized assistance to the individual Medicare beneficiaries played a very key role in achieving 90 percent enrollment of 38 million people by May 15th, and the work continues, it hasn't stopped. We're working through, particularly with our low-income communities, where we know that the majority -- about half of the people that still had not enrolled are eligible for the additional benefits.

So we continue to work with those communities and rural communities, in limited-English-speaking communities where we know that more people need to be assisted through this effort. And again, at the end of the year we will continue to work in the second phase of the enrollment period. So we're very pleased that even in those most vulnerable populations, we have achieved three-quarter percent enrollment in the Hispanic community, in the African American community, in the Asian American community where you have so many languages. It was very rewarding to see that the work had paid off, and most importantly that paid off because of that personalized assistance was there at the community level.

And also in the private sector, it created opportunities, greater opportunities for enriching the partnerships at the community level. Private and public partnerships where you saw municipalities coming together with banks and other business sector community in assisting people to enroll, either because they were lending them the computers at the community level to access or they were lending staff resources or volunteers, or they were partnering with community colleges and universities to bring their service down to the community.

So it was very exciting, and has been very exciting and has opened up other avenues of further collaboration that are going to very much serve us as we move forward with obviously creating better access, better information, and better consumer empowerment.

Mr. Morales: Josefina, we only have about a minute, but I want to touch upon something that you mentioned earlier, which I think is very important for seniors, and that's this whole issue around financial protection and financial security, and fraud. Can you tell us a little bit more about what you are doing in this area?

Ms. Carbonell: We've run the Medicare patrol programs, which are really another fantastic volunteer, and certified volunteers, which assist us in educating and preventing health care fraud and assisting people in understanding their Medicare bills and making sure that they get the kind of services what they purchase.

We also -- we know that the vulnerability of many of our seniors are tied directly to their functional status. So we know as people age and become frail and dependent and homebound and isolated, they're at highest risk of being abused financially, you know, whether it's a caretaker, whether it's a family member, or just -- the opportunities are abound, to be taking care of -- to be really taken advantage of.

We also run eldercare programs in the legal services to assist people, you know, about their rights, but most importantly to protect them. We have developed a whole -- we run the Nursing Home Ombudsman Program, which is another huge program that serves as the -- we serve as ombudsman for nursing home and long-term care independent living facility members, and we are the conduits, an independent body to assist the elders and their caregivers in problems that they're having in facilities, and we work very effectively to educate, but also to assist.

We worked again with Centers for Medicare and Medicaid Services in their implementation of their quality improvement initiatives, both in nursing home and in home healthcare. To use the ombudsman program as another avenue, another support, adding value at the community level, adding local resources that people could turn to, to be able to support them in questions or problems in challenges that they were encountering.

Mr. Morales: Great. How is the Administration on Aging tracking results? We will ask Assistant Secretary Josefina Carbonell to share the details 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 Assistant Secretary for Aging, Josefina Carbonell. Also joining us in our conversation is Brenda Kunkel.

Ms. Kunkel: Josefina, there is some points that we would like to follow up from our last segment. Starting with, how is the Administration on Aging supporting a more effective long-term care approach?

Ms. Carbonell: What we're doing is really we're looking at key models as strategies that we've been investing in as a segue to the implementation of the new reauthorization when it comes through, is really focusing on strategies that will improve our efficiency, but will allow us to transform from the current old system of care to a more integrated model.

And particularly we're focused on those areas, where we know that states have been successful in transforming their own long-term care system and home and community-based care, Wisconsin being one of the first ones, Utah, Washington, et cetera, et cetera. So we've invested in four program areas under the discretionary area that have led us to the point that we are right now.

One has been the investments in developing of the Aging and Disability Resource Centers, what we call the ADRCs or -- or for short, one-stop centers in which we are creating a single coordinated system of access and information to long-term care supports, for people -- for general people in this country.

Second is, using again our -- the best science that we have developed and best technology and making sure that that we implement the programs under an evidence-based science model, particularly in the area of prevention. So we're using our best science, which has already been proven, taking it off the shelves and putting it to test at the local level with people, and making sure simple tools for people can remain healthy and independent in their communities.

The third area is of course the most important, it's transforming from a siloed approach, service-oriented infrastructure, to a more consumer-driven and consumer-directed care approach model. And then of course our own -- your own future campaign, which is the whole -- insuring that we provide the right tools for people to plan ahead for their future and their future long-term care needs.

Ms. Kunkel: Great, and let's return to that first element, which is the Aging and Disability Resource Centers. Can you tell our listeners more about them?

Ms. Carbonell: Well, the Aging and Disability Resource Center initiative really represents a historic partnership, again between the Administration on Aging and the Centers for Medicare and Medicaid services where it had never been done before, that funding was put together jointly under the Systems Change Grants initiatives that occurred in the investments, since '01, to the current period, to really build the capacity to initiate system's change in access to long-term care. So what we're trying to is again, looking at the fragmented system, the duplication and the real difficult system of access to long-term care of different agencies, and develop a one-stop shop kind of programs, where they are virtual one stop, "no wrong door" kind of concept at the community level to assist people with disabilities of all ages to make informed decisions about the care supports that they might need.

Again, also provide the information assistance to all individuals regardless of income and serve as a single point of entry to all publicly administered supports including Medicaid, the Older Americans Act and state revenue programs. Since 2003, we've funded 43 ADRCs -- Aging and Disability Resource Centers or one-stops, and we have received grants. Currently it's being expanded and extended and it's exciting to see that many of the states are already taking these programs nationally.

States have also implemented their own state statutes to integrate the long-term care systems to again, reduce fragmentation, improve access, but most importantly, improve the efficiency of the programs and give people better choices to remain at home, including using their own resources. And we've really focused on performance and outcomes, and we define outcomes not only on financial side, but really define outcomes on a consumer perspective. So we want to make sure that we developed a whole array of tracking outcome information and sharing lessons learned across the centers.

Again, as we see the fragmentation between the different models in each states, we want to make sure that we give grantees the ability to not only set the guidelines at the federal level, but most importantly, to assist them in tracking those outcome data in areas such as program visibility, trust, effectiveness, and efficiency. And again, they must develop efficient ways of getting information to consumers again, as well as for sharing information across state agencies.

We know that in many states -- we know that the programs, the different long-term care services or supports are funded through different agencies and through different regulations and guidelines, and it just makes it a maze for people and their caregivers to access those kinds of care. One-stop centers have really brought that together with CMS -- brought one single point access into all publicly funded support systems. But it has allowed us to begin to develop the capacity and the infrastructure for taking on people in all income levels and assisting people to also plan ahead about their long-term care needs.

Mr. Morales: Josefina, on this topic of outcomes we understand that you focused efforts on measuring program results, especially focusing on outcomes in your management of the Administration on Aging including the development of new GPRA plan. Can you tell our listeners about this plan?

Ms. Carbonell: Well, the most important thing is that, of course, the key element of the President's management agenda, is the integration of performance measurements with the program budgeting. And at AoA, we know that our budget success really relies on the quality of our performance measures. And that was quite a surprise for folks looking at me -- coming from the private sector saying, "Why would you be passionate?" And one of the first things that I did when I got into office was to bring on someone with extensive experience in performance outcomes from the general department, the management and budget area, to come into the immediate office of the Assistant Secretary, not only because I was passionate about performance, but most importantly because we knew that how important performance was going to be to the success of our budget and our operation and our programs.

We've streamlined our performance measures to focus really on three broad areas that are critical and resonate not only with the OMB and Congress, but most importantly with us, and that's improving our program efficiency. To us it means increasing our return on investment, making sure that we have turned the agency around, increasing the number of people served for a million dollars. So not necessarily getting more money to do more work, it's really getting better efficient programs, better outcomes out of the existing dollar amounts that we have, so again, increasing our efficiency.

Efficiency to me also is defined in the way that we provide client outcomes. Not only are we serving a meal, are we keeping people healthier by serving that meal, are we assisting people to remain at home independent, versus institutionalization by providing home care supports that range not only from costlier home health care kinds of service, but then we have transportation and we have other modes of non-intensive or non-medical supports that are very practicable and very much needed by people to remain at home.

And again, increasing our targets to again, to vulnerable populations. If we are to prevent, you know, institutionalization, we really need to serve those at highest risk. So we want to make sure that we are serving the right people.

So those are the three areas where we really focused our investments, really improving our efficiency factor by 15 percent from 2002 to 2004. You know, we are paying attention to increasing our return on investment and that it's really not only doing better with the dollars that we have, but providing quality services. So we're tracking outcome by measuring results by consumer satisfaction, and also, most importantly, by assessing how effective are our services in keeping people in their homes and communities and assisting caregivers to care for their loved ones longer.

So those are the results that are very promising that are coming in. We are very encouraged. We'll continue to build upon them to improve. Of course, the targeting measures are really targeting in the sense of making sure that we are serving the right people and that we target those that are more vulnerable to nursing home placement, and being able to assist them immediately by the personalized service, and again by the partnerships that we develop in the community.

Mr. Morales: So in this arena it really is as much a question of effectiveness as it is about -- with efficiency?

Ms. Carbonell: Absolutely, and we're particularly proud of our outreach to consumers. Again, one of the most important things we did as a management tool and as an administration tool for the Administration on Aging was really focusing on who are our clients and who are we really trying to serve. Are we trying to just continue to build upon services infrastructures with actually no context of who our real customers are, then that's why consumers and providers that are really the ones that serve, you know, our customers to making sure that the senior remains at home independent, we wanted to make sure that we were doing the right things, and in the kinds of standards and policies that will facilitate that transformation from a service siloed approach to a more consumer-based approach. So again, giving them the right tools, investing in areas where it would improve the efficiency of the programs, but it would also improve the quality of the care and the transformational care that needs to happen in a long-term care.

Mr. Morales: We only have a minute, but this is such a critical topic -- along this theme of program success, we talk a great deal and you have mentioned this around collaboration. And this is a collaboration and partnerships between the agency, other governmental agencies, NGOs or even the private sector. How do you see this partnership evolving over the coming years?

Ms. Carbonell: Well, I think that almost virtually every significant initiative that the Administration on Aging has taken on has been based on partnerships. That tone was set early on in this administration. How -- we needed to look at how, you know, interdependent we were, but most importantly how important it was for us. I mean, for me coming from the community, it was clear that part of the fragmentation that we experienced at the community level, whether be it on an individual basis when an elderly or a family caregiver was trying to access those kinds of support or information and the fragmentation or a provider, like I was, to be able to serve that whole individual and all their needs was trying to see how we could collaborate better in not only the systems but in the implementation and the direction that we gave at the federal policy level and guidelines.

So again, collaboration is critical to our work, it's certainly collaboration with CMS on the implementation of the prescription drug benefit like we talked before, you know, has been able to be of critical importance to millions of people and that were educated and enrolled in the benefits as a result of the partnership. The partnership with CMS on the Aging and Disability Resource Center, the one-stop, has opened the door that will lead to the modernization, both the Older Americans Act and the Medicaid program and how important -- and we've begun to eliminate that fragmentation of access to long-term care at the national level because of our joint commitment. And that's translating down, channeling down to the local provider and most importantly to the consumers, which is where we're trying to impact the change.

Mr. Morales: Great. What does the future hold for the Administration on Aging? We will ask Assistant Secretary Josefina Carbonell to discuss this 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 Assistant Secretary for Aging Josefina Carbonell. Also joining us in our conversation is Brenda Kunkel.

Josefina, it seems as though the very definition of retirement is changing. What do you predict for the future of the concept of retirement?

Ms. Carbonell: I think we have the first wave of baby boomers turning 60 this year. And we know we have two boomers that turned 60, President Bush and Sylvester Stallone. It really is defining the way that we look at age and retirement in this country. I think many people are choosing to continue to work past their age, and not so necessarily within their same job or same field. So we're looking at people taking pauses in their lives and doing career changes, or actually looking for non-traditional job structures where people will be working in different lifestyle changes along their lifespan.

I think we've talked about boomers and one of the thoughts for the future generations, and I think that as we learn from the past, we need to look towards the future. And I think the best advice is keep healthy. I think your best investment in your later life is to invest early in healthy -- adopting healthy lifestyle choices, and continuing to live them throughout your lives.

And second, most importantly, start saving early and planning early for when you're older, and also get back to your community. I think there is a great opportunity for people to give back and we know the great value that many of our older people are contributing to communities across this country.

Mr. Morales: Many of our guests share challenges in making sure that their staff have the best training and skill set for the future -- and I think this also ties to retirement and the amount of knowledge that is typically lost in organizations that have high rates of retirement. What is the administration doing to attract and retain highly qualified employees and to stem the tide of this brain drain?

Ms. Carbonell: I think the most important thing is that -- we looked at the appropriate mix of staff. I think the strategic human capital investments have been very important for us and they have really driven our reauthorization proposals and the principles of reauthorization. And that is to really retool our organization and agency from an agency that just had grants to an agency that's really leading change in long-term care reform, but most importantly in giving people and consumers the right information so they can have better choices to remain independent.

So the capacity of the shift in the strategic investments in our staffing, not only at the federal level, but also at the state and local level has been critical. I'd like to say that employers, I think in general, in both the private and public sectors really will be facing a great brain drain as a large segment of our workforce begins to retire. So this will create a powerful incentive really for employers to identify new ways of retaining, of retraining, and retooling, older workers and recruiting older workers. I think that certainly that's an opportunity for looking at some of the recent surveys that have come out from MetLife that found that half of adults aged 50 and 70 want to do jobs that help improve the quality of life in their communities. And I think that that's another wonderful opportunity to be able to actually attract a whole core of people to come in to the federal workforce as an opportunity.

Mr. Morales: That's fantastic. Josefina, you just have a wonderful personal career and I have to ask you this. Probably many people out there are interested in contributing in this field and so my question to you is what advice could you give to a person who is really interested in a career in public service or in community service?

Ms. Carbonell: Well, I think we need to continue to look at America as in transition. I think that the 21st century offers us some great opportunities and great challenges. I think that that's a wonderful time, a unique time to be in public service. I think more and more the business of government, there seems to be a thin transformation of that dividing line between private sector doing the government's business and government doing the government's business. And I think that it's coming closer together and it doesn't necessarily need to be in conflict with each other.

I see the opportunities for great public services, whether you're serving in that capacity in a government role or in inherent government capacity or you're serving in that role in the public sector as a private sector contractor to a government agency.

Mr. Morales: That's wonderful. Unfortunately we've reached the end of our time and so that will have to be my last question. I want to thank you for fitting us into your busy schedule. But more importantly Brenda and I would like to thank you for your dedicated service to the public and to our country in the roles that you've held at the Department of Health and Human Services.

Ms. Carbonell: Thank you. Thank you very much, and thank you for this wonderful opportunity to be with you. I think if I may, I'd like to -- obviously it's my role as the chief aging advocate in this country -- is to make sure that, you know, all of us have caregiving responsibilities. We either have our own families that we are trying to struggle, our jobs and struggle to deal with our loved ones as they age -- relatives or relatives-in-law, and I would like to put in a plug for our elder care locator number, which is what we're trying to do is improve the access of information to resources and supports of people -- can get the right choices to remain at home. And that number is 1 (800) 677-1116.

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