Mr. Keegan: Welcome to another edition of the business of government hour.  I'm your host Michael Keegan and managing editor of the business of government magazine.  Combat differs significantly from just a decade ago.  Anticipating the future is key and the US armed forces continue to prepare for future conflicts evolving to meet emerging challenges.  It does this by engaging in rigorous science and technology research.  With us to discuss his efforts in this area is our very special guest Rear Admiral James Shannon, commander of the naval surface warfare center.  Admiral, welcome back to the show.

Adm. Shannon: Michael, it's great to be here.

Mr. Keegan: Also joining us is Kevin Green, IBM's defense industry leader.  Welcome, Kevin.

Mr. Green: Thank you, Michael.  Good to be here.

Mr. Keegan: Admiral, for those unfamiliar with the naval sea system command, would you briefly describe the mission and the evolution of the surface warfare center?

Adm. Shannon: Well, the surface warfare center first is not just one place.  It comprises 10 major commands geographically situated across the United States, and the warfare center does the full spectrum of research, development, test evaluation, engineering, whatever the fleet needs and also supports the Marine Corps.

Mr. Keegan: What can you tell us about your role as the commander?

Adm. Shannon: Well, my job is traditionally, I'm a echelon three commander, report to commander of naval sea systems command, vice admiral Kevin McCoy.  And, my job is to lead people.  I lead 14,000 people.  I'm responsible for the infrastructure for all these warfare centers.  And, I provide a supporting cast role, if you will, to the other admirals in the Navy that are responsible for product.

Mr. Keegan: I was wondering, could you give us a sense of the scale of the operation?  What does the command look like?  Where is it located?  What is the geographical footprint?

Adm. Shannon: Okay.  We are located principally very close here to Washington, DC.  We have five commands within this region.  And, that's right here in Carderock right off the beltway, Dahlgren, Virginia, which many people are familiar with, Indian Head, which was really one of the first proving grounds for the Navy.  There is a explosive warness disposal technology activity in Stump Neck, Maryland, very close Indian Head, and then up the road we go to Philadelphia for ship systems, all mechanical and electrical systems.  We go down the road to Dam Neck, Virginia, for combat direction support activity.  And, then we have a coastal warfare systems site in Panama City.  We do a lot of work in Crane, Indiana.  And, then,  out in California we have Port Hueneme where we do a lot of missile and radar testing.  And, then, also Corona, California, which is in Riverside County, we do a lot of operational analysis on the systems that we have.

Mr. Green: Admiral, that's a wide array of responsibilities.  With that in mind, what have been the top three challenges you face in your position and how have you begun to address those challenges?

Adm. Shannon: Well, I would say the top three really starts first with having a diverse workforce.  That's not just my priority but you hear the CNO talk about that, Admiral McCoy has made that clear that's a top priority in the naval sea systems command.  And, I'll get to back to diversity in a moment.  But, we are also very interested in maximizing total ownership cost.  That, again, is something that's being discussed a lot within the Navy to understand really what our costs are for our ships and to get the most return on investment in whatever we're doing.  And, then, the third thing that I'm certainly a large advocate for is transparency in our product and what we do and open architecture and things like that. 

With diversity really is the priority and  something that were building on right now.  There's a lot of congressional interest in what we're doing to hire our workforce to make sure that our acquisition workforce is robust.  And, that starts with making sure that we have a workforce that represents the people of the United States.  We have a very diverse young workforce, but we don't have a very diverse older workforce.  And, that's because of just the way we hired people over the years.  We really want to bring in more diversity, more cultures, and more innovation.

Mr. Green:.  Well, you have a wide array of responsibilities.  One of your roles is as the surface warfare chief technology officer.  What does that role entail?

Adm. Shannon: That's a great question.  Because, I'll tell you, a year ago, when something called me up and said, surprise, you're now the chief technology officer for the surface warfare enterprise, I had to Google chief technology officer and find out what it is.  Because, it's really nothing that, it's not a term that we typically use within the uniformed force in the military.  And, when I looked up what a CTO was, a chief technology officer, I was happy to learn that there is many different definitions. 

So, that gave me the ability to come up with my own definition of a chief technology officer.  And, what I'm primary responsible is to be the advocate for the surface warfare enterprises, surface warfare community, and work with the chief in naval research who has a large responsibility for science and technology across the entire Navy, not just the surface Navy.  Today, Rear Admiral Nevin Carr is the chief of naval research.  He is a surface warfare officer but he has to look at aviation, he has to look at sub-surface satellite communications - everything. 

So, I'm a fellow flag officer who advocates for the surface Navy, and my role is really to look out way into the future to see that the technologies that are there and try to be a bridge between the operators and the research analysts, the scientists, the technologists, and help a dialog happen about where do we want to take the Navy in the future.

Mr. Green: Sure.  Now, in that role, do you also work closely with folks in industry who might have the same title or have responsibilities in research?

Adm. Shannon: Well, we're not as far along as we should be, is the short answer to that question.  And, one of the things that I found out when I took this job is we did not have that kind of dialogue happening.  A year ago, I spent the first six months probably trying to understand what my role was going to be and making sure the senior leadership in the surface Navy agreed with that.  But, what I've been working on for the past several months is trying to understand where is the Navy putting their money internal to the Navy.  And, then, my plan is in a few months to have an industry day to really be transparent with industry and let industry know, hey, this is where the Navy's putting their money inside the Navy.  It would be a good idea if you were researching things in the same area.  And, then, sharing ideas and sharing technology to really be able to come up with the best solutions.

Mr. Keegan: Could you give us some background about yourself and how your career path led you to become the first chief technology officer for the surface warfare enterprise?

Adm. Shannon: Well, throughout my early career, I was a  below deck engineer who served primarily on destroyers.  Then, as I grew up in the surface warfare community, I got into anti-submarine warfare systems, missile defense systems.  I had the great opportunity to command a couple ships.  Following my command tours, I got into program management where I managed the evolved sea sparrow missile project and took it through its tests and evaluations.  I got involved into the naval integrated FiRe control project and then was lucky enough to be selected to be the program manager for future combat systems open architecture.  And, that all came together to the position I'm in today.

Mr. Keegan: Admiral, you have a robust portfolio, an  import mission.  Could you tell us what makes an effective leader?  And, how has your previous experience formed your leadership style and your management approach?

Adm. Shannon: The biggest thing that you have to do, I think, to lead is to listen.  You have to listen, not just to your people, your subordinates, but you have to listen to your superiors.  And, so, my job is to understand where, what our superiors want.  And, in the position I'm in today that's  primarily listens to the chief of naval operations, and to the secretary of the Navy, and to the Secretary of Defense, and, of course, my own immediate superior, Vice Admiral McCoy.  And, then, I have to go out and listen to the subordinates and understand what their knowledge is and to help focus them and  focus their energy and get them to move in the direction that the superiors told me to move. 

So, as a leader, your job is to lead somebody in a certain direction.  You have to understand the requirement, what is needed, listen to what that need is, and take all those good ideas and point them all in the same direction and get on a path to success.

Mr. Keegan: Is there any particular leaders out there that have informed you?

Adm. Shannon: Well, Vice Admiral McCoy is doing a great job right now of keeping me informed.  But, I would tell you, in this business, probably the person that we often refer back to is Admiral Wayne Meyer, who recently passed away.  He's often referred to as the father of Aegis.  And, it was his idea to build a little, test a little.  And, to really embrace system engineering and to discuss the different trades that you can make to get the best product.  And, to really integrate all your systems so that, that when one system trade is made, that you understood the repercussions to all the following systems.  Admiral Meyer is credited with making the Navy understand that concept, and we still try to build off of that.

Mr. Keegan: Terrific.  What about the Navy's approach to science and technology?  We will ask Rear Admiral James Shannon, commander of the naval surface warfare center, to share with us when our conversation continues on the business of government hour.

Part 2

Mr. Keegan: Welcome back to the business of government hour.  I'm your host Michael Keegan, and our conversation continues with Rear Admiral James Shannon, commander of the naval surface warfare center.  Also joining our conversation from IBM is Kevin Green.  Admiral, could you describe the Navy's approach to science and technology?

Adm. Shannon: Investments in science and technologies are wide ranging, but highly focused on ensuring that the people out there in the fight have the advantage over our enemies in any battle space against all threats.  You'll hear people talking about finding sometimes and saying the term we have to have a fair fight.  When you're really involved with fighting, you don't want a fair fight.  You want that asymmetrical advantage.  And our Navy's comparative advantage to any potential adversary  is our competitive will and our innovative drive.  And, that's where it comes in the science and technology piece.  We continuously operate.  We continuously listen to our operators,  and we try to apply the science and technology that we know well and apply it to whatever systems that we need to improve.

Mr. Keegan: Given the rapidly changing threat our nation faces today in conjunction with the pace of global technological innovation, what are some of the challenges the Navy faces in getting the right technology to our war fighters?

Adm. Shannon: The absolutely biggest challenge is affordability, and I'm sure that's not going to surprise any of the listeners out there.  We are constantly combating the affordability challenge.  And, affordability, though, gets often misunderstood, because sometimes the affordability is driven because the requirement is too great, and the engineers and scientists out there are always going to default to giving you the absolute best solution they can give.  It's not in their intellectual makeup to give you a system that isn't the absolute best.  So, it's imperative that the people that write the requirements and oversee the requirements manage that, such that we can expect exactly what we want.  And, then, at the same time make sure the affordability or the prices come down.  It's, it's a really tough calculus.

Mr. Keegan: Kevin mentioned, in your role as the CTO, collaborating with maybe somebody from industry.  What about collaborating with the other armed services in this regard?  In your approach to science and technology, could you tell us a little bit about that?

Adm. Shannon: We do collaborate with the other services.  And, I would tell you at the working level, it's done much better than at the more senior levels across the warfare centers.  At the deck plate level, as we say in the Navy, we do a very good job collaborating with other services, with academia, with industry.  The tough part gets when you get up to the more senior ranks when money gets involved and people are trying to determine who pays for what.  And, that's been something that I've often try to work on very closely in terms of architecture, and making sure that you have an open architecture and not to worry so much about the cost of it but just to come to agreement on what that architecture is. 

So, in my own role right now, I do a lot with the Kenner IED systems to build, that's to defend against the improvised explosive device threat that is in the current wars that we face today.  I work very closely with all the services, with the Department of Homeland Services, with the FBI, trying to collaborate on the best ideas to meet that threat.

Mr. Green: It's quite clear that the Navy is engaged and deployed globally in pursuit of missions in support of global  stability and the New World order.  What lessons have we learned from the multitude of missions the Navy is supporting today in Iraq, Afghanistan, and even off the coast of Somalia?

Adm. Shannon: Well, we've learned a lot, especially in this era of what we call irregular warfare with this IED threat, the improvised explosive device threat.  You know, that was a threat that was really based off of commercial technology.  And, it's a threat that, it was always out there.  It was right in front of us.  We recently, I think a year ago, celebrated 25 of the cell phone industry.  And, so, it wasn't anything new.  And, I'm sure many of our great scientists and engineers in our  warfare centers knew how that threat could be used against us.  But there was no forum, there was no way to bring that potential threat to our attention until it happened.  So, we were sort of surprised by that.  And, I think in the future, what we have to really learn from the Afghanistan war and from the Iraq war is that we have to understand the commercial technology is out there and how it can be applied. 

Historically, we've already learned these sorts of lessons many years ago.  I always like to refer back to over a hundred years ago the great white fleet was sailing in 1908.  At the same time, you had a couple brothers out there on this thing called a flying machine.  You know, nobody really thought of how to use that really in warfare.  But, by the end of World War I, ten years later, it was definitely clear that you could use it.  But, we never really even understood the power of airplanes until Pearl Harbor was attacked.  So, today, we have the IED.  Twenty years from now, what's the IED going to look like?  We've got to be ready for that.  And, we have to understand the power of that kind of threat and other technologies that are out there.

Mr. Green: Sure enough.  And, you've described the fact that the Navy operates with other services and other partners.  Are there any issues associated with interoperability that your office is engaged with, or your command is working on?

Adm. Shannon: Interoperability is always a very big challenge and we certainly are working on it.  In my specific role as the single manager, one of my additional duties is I am the single manager for the counter radio electronic warfare systems that we use to defeat radio-controlled improvised explosive devices.  I am responsible, regardless of the service  feeling the system, to look at the interoperability and compatibility of those systems with other systems that put out radio waves such as radios, and to make sure that they're compatible and interoperable.  So, we have a process in place to look at that.  And there's a lot of processes in government to make sure we have that sort of thing. 

Recently, the Navy has also reorganized the organization to bring a lot of our electronic systems all underneath one resource sponsor with the new N2N6 organization, which is going to be responsible largely to make sure that the interoperability challenges will be vetted very early in the process and resourced appropriately.

Mr. Green: That sounds like an awfully large endeavor to undertake.  You're describing very significant change across the Navy and, in fact, across the joint technical community.  Are they any other Navy organizations that will be standing up or taking a larger role going forward?

Adm. Shannon: We're still trying to understand what other organizations' responsibilities are going to be in terms of acquisition and requirements.  But, certainly in the new organizational setup, the CNO created something called the Tenth  Fleet.  And, they're going to play a large role in understanding this interoperability challenge.  The reason the Tenth Fleet was chosen, by the way, was back in World War II, we had the submarine threat out there that we were really not very familiar with in how to defeat that challenge.  So, the leadership in the Navy in those days created the Tenth Fleet just to focus on that one threat, and we obviously did well and were able to mature our anti-submarine capability through the decades.  Admiral Ruffet  is doing the same thing in the cyber world and creating the Tenth Fleet to help shape the discussion, shape the requirements, and make sure we require the right things with the new Tenth Fleet he's standing up.

Mr. Keegan: Admiral, you mentioned earlier one of your challenges is the cost calculus.  You also referenced the fact that, you know, anticipating the future.  I was wondering what changes in the acquisition process may be required to facilitate the deployment of advanced technologies in accelerated manner?

Adm. Shannon: Well, that's a really good question.  And, it's... I think this one is right down my alley to answer.  First, really need to cultivate a culture of innovation that's built on collaboration.  That was what the whole open architecture initiative was about.  It wasn't plug and play or getting the standards right, it's like getting people to talk with each other and collaborate on the best ideas.  And, the way we need to do that is to increase transparency in our science and technology investments.  A large portion of our fielded systems have traditionally come from the same DOD laboratories or the same large Department of Defense companies or universities. 

We need to broaden that to bring in many different industries together to make sure we get the right ideas.  We have to protect our investment in basic research.  The numbers I've been looking at show that in terms of research and development investments, basic research has actually gone down where some of our advanced research has gone well.  But, you need to get the basic research and the understanding of the science down for people to be able to mature it to the next level.  And, finally, we really need to develop a more efficient path for technology transition to the fleet.  Some of this acquisition takes way too long, and we don't have the stomach to be able to do that. 

One of the things that we did well, I would say heroically in this current war, is the way we rebounded from the IED threat.  We were able to recognize the threat and then form up very large, both operational communities as well as technical communities, and to be able to come up with systems and field those systems, put the logistics behind them, and really be able to take on that threat.  And, the results were just magnificent, and lots of lives were saved.  So, we were able to do it but it took a lot of commitment and it took some money and it took resources and talent to make that happen.

Mr. Keegan: Speaking of talent, the federal civilian sector of the government is also looking at this acquisition contracting, getting the right people in there, the actual human resources to do this is an issue.  Do you foresee that as a part of the problem in your area?  Do you have a plan to maybe bolster the acquisition workforce?

Adm. Shannon: I don't have a personal plan.  The Navy has a plan to build up that capability.  There's been a tremendous amount of hiring going on to bring in more people as contract specialists.  But, the one thing in contracting.  It takes time and experience, and you just can't come out of school and expect to be a great expert negotiator in contracts.  So, we have to build that force.  We have to maintain that force and not lose these people.  So, we have to make sure we keep them in the Navy and educate them along the way.

Mr. Keegan: How is the Navy fostering a culture of innovation?  We will ask Rear Admiral James Shannon, commander of the naval surface warfare center, to share with us when our conversation continues on the business of government hour.

Part 3

Mr. Keegan: Welcome back to the business of government hour.  I'm your host Michael Keegan, and our conversation continues with Rear Admiral James Shannon, commander of the naval surface warfare center.  Also joining our conversation from IBM is Kevin Green. 

Admiral, you mentioned one of the changes needed in the Navy's approach to science and technology is to build a culture of innovation based on collaboration.  What does the Navy need to do in order to forge this culture of innovation?

Adm. Shannon: Well, first, you know, I think what we always need to remember and remind ourselves every day that the Navy needs to remain flexible and adaptable to change.  Whenever you look at history and you look at navies that didn't succeed and are no longer maybe with us today, it's because they did not remain flexible and adaptable to change.  That's, the good news is that's part of our Navy.  We tend to always come up with innovative ways that are not written in the book, and I think we need to maintain that sort of thing.  But, yesterday's requirements were fairly stable and understood.  We understood the threat.  We knew how to deal with it.  It was a single threat, in many cases monolithic.  There was clear lines of control and accountability.  But, today, those kind of options are relatively few. 

And, I think what really need to understand is watch what's going on with the rest of society.  Because the Navy is a microcosm of society, and we need to, not be so rigid or shouldn't be rigid with our military view of things and really see how the society is working.  And, you see that with social networking.  You know, things like Facebook and blogs, and that type of communication is starting to creep into our workplace.  And, I think it's a very good thing because it's  sharing ideas.  It's a good opportunity to be innovative and to figure out things before you actually have to bring them up for a decision.

One of our commands out in Port Hueneme is actually creating their own internal Facebook kind of page just building off of a good idea.  But, I would tell you all of our warfare centers are trying to figure out the best ways to do that.

Mr. Keegan: If you don't mind me asking, we have  interviewed Admiral Allen, Thad Allen, of the Coast Guard, and he is really a champion of social networking and has the iCommandant blog.  Do you have anything similar to that?

Adm. Shannon: I'll tell you, I am sort of concerned about some of the things that I do, just like any parent that I see on Facebook.  And, before I start applying myself to that technology, I want to make sure I understand it fully.  What I do like, though, is the energy that I see on it.  And, I like the fact that it's fairly open and there's a way that you can control the information.  I would say that Admiral Allen is, you know, he is a great leader and he is leading the way, and guys like me need to follow him.  And I need to figure out how to do it better.

Mr. Keegan: Well, you mentioned earlier that sort of visionary role of a chief technology officer.  Would you tell us what role that part of your responsibility plays in building the  culture of innovation?

Adm. Shannon: As far as the chief technology officer, I think what my main role is to get people out of their comfort zone.  That has been one of the ways I've approached it recently.  We have some great scientists, some great engineers in the warfare center family of commands.  But, they've been fairly comfortable in how they've tried to solve problems.  And, they've always talked to the same people. 

What I'm trying to do is to stretch that a little bit, to get beyond their comfort zone, and to challenge them to share their ideas with other people than they may have, because, when they do that, their ideas are going to be challenged.  And, maybe the things that they think are a great idea are maybe not so great.  But, when you bring all the ideas together and you listen to what people have to say, I really think we will get a better product in the end.  So, I'm pushing that.  I'm pushing people beyond their comfort zone.

Mr. Green: Well, you're clearly very close to your customers who encompass the entire Navy and other partners within the Department of Defense as well.  So, how do you get an organization the size of the Navy, I mean, well beyond the technical community, to change the way that it thinks and behaves to forward or to improve innovation and innovative processes and approaches?

Adm. Shannon: One of the best ways we've been doing, and we've been doing this for a while, is education.  Is, get out there and make sure that we get the information out there that we want people to behave the way we want them to behave.  We have to reward people for doing a good job.  We have to reward  people when they are paving new ways of doing business.  And, those are the ways I think we need to get there. 

Mr. Green: It's often been said that innovation and technology need to move away from the silo model and toward a more collaborative and multiplatform model.  What forms of collaboration need to happen to drive this kind of innovation?

Adm. Shannon: Well, the silo model is a traditional top-down approach.  And, if you want innovation to work, I think  the way you need to do it is you need to work from the bottom up.  Diversity in our workforce is the way we need to do it.  Open architectural implementation is a big part of that.  And, all open architecture means is not being a closed architecture.  It means sharing ideas.  It means allowing people to see what's going on. 

One of the things that we have not done well in the Navy or in government is control the data, though.  We have to make sure that the data that we buy, we share throughout industry, throughout academia, with other services.  And, controlling that data is something we haven't done well.  So, we have to understand the data we have and figure out a way to make sure it's available to everybody out there.  We have to improve the government contractor relationship by making people be more accountable to each other.  So, it's not just a one-way street here.  The government has to be accountable to the industry as much as industry has to be accountable to government. 

When I speak to people in industry, they sometimes feel like it's only the government firing the questions at them and blaming them for whatever product is.  The government has to stand up and be accounted for as well.  I think we just need to share ideas and technologies that in the past were held as proprietary, because it was easy to say they were proprietary.  You know, some things we need to challenge as being whether really proprietary or not. 

Mr. Green: Well, as a defense technology leader, I think it's fair to say that you're one of our leading subject matter experts on open architecture.  In your view, how well has industry responded to your call for more of a technical approach that folds more into the open architecture model?

Adm. Shannon: I think that's a really great question.  And, how you answer it depends on where you sit in this play we call open architecture.  Small businesses have aggressively come out and addressed open architecture, because they are looking at this as an opportunity for them to be able to play without having a larger company suck them in and tell them how to do the business.  Small businesses, by their nature, really want to be independent.  Then, there's also companies that have not traditionally played in defense industry are looking at opportunities to compete and they're looking for fair competition.  The only way that can happen is if they can have the same access to that information that, in the past, may have been shut out to them.  And, then, there's the traditional partners that we have within industry.  I think, to a large measure, I give them credit for listening to us and trying to figure out really how to address this openness.  At the same time, they don't want to lose their proprietary goods because they have a lot of investment in those sorts of things. 

So, we're working really closely with them to try to understand, you know, how we can branch out, how  we can be more collaborative.  At the same time, it's very important, in my point of view, that everybody that's a player   has the ability to make a profit, to be able to stay in the game as long as they want to stay in the game. 

So, not everybody is equally addressing the open architecture initiative.  It depends on the business model for each industry that's involved.  The old way of, if you've got a niche product keep everybody out, still applies if that's your business model.  What we're most interested in in the Navy is getting the best ideas, getting the collaborative approach.  And, the other thing you've got to recognize the billions of dollars of taxpayers have invested in in the products that we buy.  We ought to own some of it.  We ought to be able to claim that we own those, that data because we're the ones putting the money behind it. 

So, that's one of the challenges I have in some of my conversations that I have with industry members.  That's one of the things I like to bring up is we ought to get something out of it.  Now, on the other hand, government has not done a good job controlling that data and controlling that information and making sure that we share it with all vendors who are qualified to do that kind of work.  There's a lot of responsibility to be shared but it takes a lot of energy and it takes everybody participating and not trying to go back to the old way of doing business.

Mr. Green: That's a very powerful statement, and you really seem to believe that collaboration is an important element of innovation.  Within the surface Navy, how is that community moving to address collaboration and innovation as a cultural issue?

Adm. Shannon: Well, we regularly meet on the issue and what my role as a chief technology officer in the surface warfare enterprise is, I'm really working with the resource sponsors, in this case Rear Admiral Frank Pandoff, who is responsible for resources in the surface Navy.  And, he leads what's called a future capabilities team.  And, we meet regularly to talk about the different things that we want to invest in and understand how we can link those investments to the strategy that he's trying to follow that the CNO is putting out.  So, facilitating discussion is really the main thing that we're looking at.  We're really trying to understand the total ownership cost; what's difference between readiness and the actual cost of the systems that were buying.  So, it just is a lot of discussion.

Mr. Keegan: Just stepping back a bit, we talked a lot about technology, science and research, and collaboration, but also innovation.  I was wondering, before you assumed command or as you anticipated assuming command, was there anything you did to kind of look at the idea of innovation and how, are there any lessons learned from different industries, the federal civilian space?  Did anything inform you as you took over your current role?

Adm. Shannon: I think we're living in a great age of innovation today just because of what we're all experiencing with the Internet.  You know, just 10 years ago we didn't have the same power of the Internet, and 15 years ago, a lot of people didn't even know what the Internet is.  So, we're still in the discovery phase, I think, in understanding this kind of innovative power that's out there.  And, if our head was in the sand and we didn't take advantage of it, then shame on us. 

So, what I've learned is what we have all learned is to be open-minded to different ideas.  Ideas that are not typical within your own organization.  Listen to what people's ideas are, and see that there's something behind there and see if you can use them.  What has changed from days gone past is we are more open-minded today.  We used to only have one way of doing business.  Tradition was one of our major core values.  I would tell you today tradition is not a core value.  Tradition is very important, but it's not a core value of our organization.  So, because we have to be adaptable and flexible to that kind of change.

Mr. Keegan: Well, most achievements in government, especially in the armed forces is not a solo act.  Would you elaborate on your approach to empowering your staff, the folks under your command?

Adm. Shannon: Yeah, it's again a great question.  My thing is to always delegate down to the lowest level.  And, just a short anecdote on that.  Recently, I had to go away for six weeks of training to what's called capstone training.  It's training required by law for flag officers and general officers to learn more about what's going on in the military organization.  So, for six weeks I was away.  And, when I came back, I realized nobody missed me.  Okay?  So, the fact is we have a very good organization in the warfare center and everybody knows how to do the job for the person one up and one down.  And, we empower people by trusting people.  And, that's the biggest thing you have to do in any organization is build trust.  We build trust internal to the warfare center, we build trust across the whole naval sea systems command.  And, whenever that trust breaks down, that's when you find we have other problems.  So, you have to always build trust.

Mr. Keegan: What does the future hold for the U.S. Navy science and technology research?  We will ask rear admiral James Shannon, commander of the naval surface warfare center, to share with us when our conversation continues on the business of government hour.

Part 4

Mr. Keegan: Welcome back to the business of government hour.  I'm your host Michael Keegan and our conversation continues with Rear Admiral James Shannon, commander of the naval surface warfare center.  Also joining our conversation from IBM is Kevin Green.

Admiral, let's transition to the future.  What new technologies or trends in information technology do you see the Navy adopting in national security systems to benefit the future?

Adm. Shannon: The trend in technology has a lot to do with computers and the computing base.  And, in terms of national security and defense, the term you're hearing a lot is called cyber war.  We really need to get our hands around that.  And, that was something I alluded to earlier in the radio show when we were talking about Tenth Fleet and what they're trying to do there.  But, we really know, I think, in the future that personal computers are going to become smaller, more people are going to have access to a computer, and then you hear that term cloud computing going on where computers will be less of a tool and that will be more of a portal to the information that's out there.  And, controlling that information and the volume of data and information is something that really nobody fully has their  hands around and being able to control that value will be really important. 

So, what technologies are going to be out there to power those sorts of things and how can we use that technology in warfare systems?  You have to look at power and electricity.  How are you going to make that system work?  Is it going to be used solely with batteries or are we tapped out on batteries and we have to look at other forms of energy, such as the sun, or heat, or just motion?  And, then, when you look at how you can use it to your advantage, how can a potential adversary use that against you?  Such as motion being used to power a system to defeat you.  It's passive all the time and all of a sudden your motion make something happen.  We're going to have to really get our hands around that type of thing. 

And, of course, we have to look at energy in the form of conserving energy.  That's a major initiative in today's Navy.  I referred earlier in the show about great white fleet.  I think we're going to hear something about the great green fleet in the future with Secretary Mabus.  He's really challenged us in our community to come up with ways to conserve fuel and energy, because the cost of fuel and energy is so great that it's hurting our ability to get underway and to train.  As anyone who's gone to sea knows, you have to be at sea to really become experienced at that business.  You can't be good at it if you're always tied up.  So, we have to figure out ways to be efficiently get our fleet underway to do the missions that we want to send them on. 

There's a lot of challenges there.  Autonomous systems.  You see that in today's fight with what's going on with unmanned aerial vehicles.  Other autonomous vehicles, robotic systems.  We're doing a lot in that now but we had to look at nanotechnology.  And those are all the areas that where I'm trying to shape the discussion.

Mr. Keegan: Can I pick up on the green aspect?  Are you folks adding that to your portfolio specifically or is it just something that's understood in the way you operate?  That you're going to go in that direction?

Adm. Shannon: On no, it's definitely in our portfolio.  The big thing going on today up in Philadelphia at our warfare center up there is the electric drive.  We're looking at how to apply electric drive on our ships.  We'll be doing that in the not-too-distant future and it's a way to cut down on fuel.

Mr. Keegan: The evolution of war fighting has undergone historic shifts within the last decade alone.  What other shifts you anticipate in the military in the next decade?  And how do you envision your role in office shifting to adapt?

Adm. Shannon: Well, I think we're in the right place in the warfare centers in adapting to this.  One of the things that we're really looking at is hypersonic technology and directed energy systems such as lasers.  Certainly, there's been a lot in the press over the past 10 years or so with regard to directed  energy and how to use that, but, we need to understand it better.  I think technology has really gone fast and far.  We're seeing where we can actually start applying directed energy in some of our systems.  But, it's all about speed in this business.  One of the acronyms I learned as a young officer was called MATES, and that stood for mission, asset, threat, environment, and speed.  And speed is life in our business.  So, how fast we can come up with this technology, how we can apply to do things faster is really the idea that we need to understand.

Mr. Green: With respect to the people in the Navy who conduct research and development, science and technology, the population has been shrinking since mid-1990s.  Do you see the trend reversing, and, if you do, why?  And, to that end, what steps are being taken to attract and maintain a high-quality technical and professional workforce?

Adm. Shannon: I don't know if the trend has yet reversed.  I think the trend is stabilized, though, in that perhaps we're at that tipping point.  Not quite tipped over yet.  And, I think a lot of it has changed just due to commercial technology and social networks.  More people seem to want to get into the game.  They want to get into the service.  The current young generation sees value in government service, they want to live a life of consequence, they understand that they have a voice in government, they see equal opportunity in our employment and working with us.  So, right now government we have a very aggressive hiring process going on.  Recently, we went up to Detroit to hire some of the engineers out there that were looking at losing work.  We're bringing in a lot of talent from Detroit and at the mid-level because you just can't bring everybody in at the younger level.  You've got to bring some people in at mid level who have experience in other areas that can be applied to our systems. 

We had a major hiring event out in Corona, California, where we brought in lots of people there, over 1000 people attended, and the talent is just simply amazing.  So, I think we're starting to see that tipping point and we're going, the trend's going to reverse itself.

Mr. Keegan: Admiral, for those young system engineers and architects just completing their education who have an interest in the military or in public service in general, what advice would you give them in pursuing a career in public service or the military in science and technology, or, ideally, all three?

Adm. Shannon: Well, first of all, service doesn't apply to the military, and I always like to remind people that you can serve in many different ways.  I've said this before publicly, but I do even tell my own kids this.  It's important to serve because you're giving back.  But, the great thing about government service is when you are in government service, you are living a life of consequence.  The decisions you make will not just only impact the organization that you're in, it will impact everybody in the nation and possibly the world.  And,  even the young people that are making decisions can make decisions that are very consequential and very important to what this nation has to offer. 

So, I always like to tell people that service is not about them.  It's about giving back, and it's being a part of something bigger and feeling or being on a winning team.  And, that's purely an American viewpoint.  But, that's one of the things I feel in the United States of America that we are a winning team and everybody wants to be a part of that.  When you serve in government, you're guaranteed some sense of purpose, some sense of duty, a real sense of honor.  And, you get to follow the path of other great Americans that we've studied in history.  It's a very much exhilarating and it's what Teddy Roosevelt spoke about when he spoke about the man in the arena.  You're in there, you're doing something, you win some battles, you lose some battles, but you're in there  doing the battle, you're not sitting on the sidelines watching what's going on.  So, that's what this kind of service offers you.

Mr. Keegan: That's wonderful advice.  I want to thank you for your time today, but, more importantly,  Kevin and I would like to thank you for your dedicated service to our country.

Adm. Shannon: Thank you very much.  You know, it's really a great opportunity for me to be able to speak to your listening audience and explain what the naval surface warfare center is all about.  We go back a long time.  A lot of people think the warfare center is just one location in Dahlgren, but, as I  mentioned in the earlier part of the broadcast, we're all over the country.  And, we are a legacy of the Navy from back in the 1850s and 1860s when we first created some of our proving grounds in Annapolis and Indian Head and Dahlgren, and then through the two great wars in the last century it kind of got a lot larger and created these laboratories to the early 1990s.  We actually created the warfare centers in 1992. 

And, we've created them to become more efficient and to reduce costs, to get our control around the total ownership cost.  Even back in 1992, that was talked about.  And, when you look at the indicators of what we've accomplished between 1992 and today, our overhead costs in the warfare centers have gone down by 30 percent.  Our productivity has increased by 30 percent.  We have close to 20 percent more scientists and engineers per capita in our work force.  The cost, the hourly cost of labor is less today than it was just a few years ago, because there's so many efficiencies in what we're doing.  We're getting more bang for the buck, or return on investment, less direct labor hours spent on overhead, more spent on actual labor.  And, that's because of the great ideas.

Whoever was leading the Navy in 1982 when they said let's create this warfare center enterprise, it was a good decision.  Because, the total ownership costs have come down as a result of them.  So, I like to be able to tell that story.  We've got a lot more work to do.  We have a lot more efficiencies to find, but we have a very spirited and innovative workforce who are really the intellectual capital of the Navy.  And, they're out there doing their best every day, not just for the Navy today, but building the Navy of tomorrow.

Mr. Keegan: An important mission.  This has been the business of government hour featuring a conversation with Rear Admiral James Shannon, commander of the naval surface warfare center.  My co-host has been Kevin Green, IBM's defense industry leader.  Be sure to join us next week for another informative, insightful, and in-depth conversation on improving government effectiveness.  For the business of government hour, I am Michael Keegan.  Thanks for joining us.

Originally Broadcast October 27, 2007s

Washington, D.C.

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

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

And now, The Business of Government Hour.

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

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

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

Good morning, Curt.

Mr. Coy: Good morning.

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

Good morning, Tom.

Mr. Romeo: Good morning, Al.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

So that's the condensed version.

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

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

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

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

Mr. Morales: Great. Thank you.

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

(Intermission)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Mr. Morales: Great, excellent.

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

(Intermission)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(Intermission)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

This has been The Business of Government Hour.

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

Until next week, it's businessofgovernment.org.

Thursday, January 25, 2007

Washington, D.C.

Welcome to The Business of Government Hour, a conversation about management with a government executive who is changing the way government does business.

The Business of Government Hour is produced by The IBM Center for The Business of Government, which was created in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about the Center by visiting us on the web at www.businessofgovernment.org.

And now, The Business of Government Hour.

Mr. Morales: Good morning. This is Albert Morales, managing partner of The IBM Center for The Business of Government, and your host for The Business of Government Radio Hour.

Never before have the issues surrounding the management of human capital been more important than they are today. Globalization, the maturing of a Baby Boomer workforce, the high costs of health care and changing demographics are all forcing the government, and the private sector, for that matter, to take on the challenges of managing a diverse workforce.

With us this morning to discuss their organization's role on this topic is our special guest John Salamone, Executive Director of the Chief Human Capital Officers Council at the U.S. Office of Personnel Management.

Good morning, John.

Mr. Salamone: Good morning, Al; good morning, John. It's a pleasure to be here.

Mr. Morales: Also joining us in our conversation is John Kamensky, associate partner and senior fellow at The IBM Center for The Business of Government.

Good morning, John.

Mr. Kamensky: Good morning.

Mr. Morales: John, perhaps you could start by giving us a brief overview of the mission of the U.S. Office of Personnel Management, otherwise known as OPM.

Mr. Salamone: Thank you, Al, I would be happy to. For your listeners who may not be familiar with the agency, they can go to our website, which is opm.gov, and there, they would be able to find our 2006 to 2010 strategic and operational plan. In that plan, they will find OPM's mission, which is to ensure that the federal government has an effective civilian workforce, and they will also find our roles and responsibilities, which are multifaceted. For example, we accomplish our mission by providing federal agencies with personnel services ranging from recruitment tools to background investigations, as well as the administration of the federal retirement benefits and health insurance plans.

OPM also provides leadership for federal agencies on human resources policies. We provide guidance on labor management relations and programs to improve workforce performance. We do this in a way that's really designed to ensure compliance with the Merit Systems principles, and also protection from prohibited personnel practices. So basically, OPM's job is to hold agencies accountable for their human capital practices.

Mr. Morales: The Chief Human Capital Officers Act of 2002 established the Chief Human Capital Officer position as well as the Chief Human Capital Officers Council. At the time, I believe you were working for Senator Voinovich of Ohio, who championed this Act. Can you give us some background on the Act and why the Chief Human Capital Officer's position and the Council were established?

Mr. Salamone: Sure, I would be happy to. And I have the unique role, I think, of working for Senator Voinovich when he was working on the Chief Human Capital Officers Act, and now in my role in overseeing the Council. So I've had an interesting dynamic, and it's a unique perspective, I think. I will say that when I took the job, when I told Senator Voinovich that I was going to take the job, he sat me down and said, well here's what we would like you to accomplish, or here's what I would like you to accomplish. So I have my marching orders from the Director of OPM, but also from Senator Voinovich.

But to get at your question, both the position of the Chief Human Capital Officer and the Chief Human Capital Officers Council were created through Title 13 of the Homeland Security Act of 2002. The legislation created both the positions of the Chief Human Capital Officer and the Council really to elevate the importance of strategic human capital management in the federal government. Prior to the creation of the Council, there was some talk within the federal government that we really needed to elevate HR so human resources could be on a level playing field with some of the other chiefs; the chief information officer, the chief financial officer, really to get human resource professionals to have a seat at the table with the top level management in federal agencies.

Mr. Kamensky: John, before we discuss the Council and its role, let's talk a little bit about the Chief Human Capital Officer's position itself. Can you explain sort of what that role is and what the scope of responsibilities are of that officer within an agency?

Mr. Salamone: I would be happy to, John, that's a very good question. And actually, the Act specifically notes the responsibilities of the Chief Human Capital Officers, and those roles and responsibilities include such things as setting the workforce development strategy of the agencies, assessing workforce characteristics and future needs based on the agency's mission and strategic plan, allowing the agency's human resources policies and programs with the organization's mission, strategic goals and performance outcomes, developing and advocating a culture of continuous learning to attract and retain employees with superior abilities, and also identifying best practices and benchmarking studies.

And I would be happy actually on that last point to talk a little bit about what we've got going on in the Council with identifying best practices.

Mr. Kamensky: The Council that you just mentioned, could you tell us a little bit about the mission and the charter of the Chief Human Capital Officers Council and -- like how many people are on it, and their responsibilities, and how does that operate?

Mr. Salamone: Sure. I would be happy to. And in the Act actually, they specifically mentioned three areas for the Council and what the Council should be focusing on: first of all, working toward modernizing human resources systems; improving the quality of human resources information; and influencing legislation affecting human resources operations in organizations.

Now, the Director of OPM, Linda Springer, serves as the Chair of the Council, and the OMP Deputy Director for Management, Clay Johnson, serves as the Vice Chair.

We also have Chief Human Capital Officers from the 15 departments and other agencies, including the Environmental Protection Agency, NASA, the Nuclear Regulatory Commission, the Social Security Administration, the Director of National Intelligence, and we also have a small agency representative in the National Science Foundation.

The Council has -- in addition to just the Council structure, we have six subcommittees: Emergency Preparedness; Hiring and Succession Planning; the Human Capital Workforce; the Human Resource Line of Business; Learning and Development and Performance Management.

Mr. Morales: John, can you tell us specifically about your role and responsibilities at OPM as the Executive Director of this Council?

Mr. Salamone: Sure. As the Executive Director, I think my primary responsibility really is to advise and coordinate the Council business and the activities for the Chair and for the members on the Council. I also coordinate OPM's staff participation with all the Council activities. I really viewed my role coming in to this job that I am not the subject matter expert on any of these issue areas. I am learning quite a bit, and it's a tremendous opportunity. But I want to make sure that I bring the right people from OPM, the right staff from OPM to meetings with me so we can lend support to the Council activities.

I've also helped facilitate the development of the Chief Human Capital Officers 2007 strategic plan with our six subcommittee chairs. And the listeners can actually go to our website, which is www.chcoc.gov, and there, they will be able to find our strategic plan for the subcommittees. But my role also includes providing briefings to various human capital stakeholders, including the media. So I am happy to participate in today's event, and I'm hoping that your listeners will learn quite a bit about the Council and will help us raise awareness for the activities that we have going on.

Mr. Morales: Great. We'll certainly have some more questions for you coming up in a little bit.

But first, we obviously talked a little bit about your tenure with Senator Voinovich, but could you describe for our listeners your career path? We're always interested in how people got started in their current roles, especially within the public sector. And more specifically, how has your previous experience, including the work on the Hill, influenced your current leadership style?

Mr. Salamone: That's great. I am really happy to, and actually, I'm very excited because in March I will have reached the 15-year mark with federal service. So I will be accruing leave at the 8-hour milestone, I guess. But my career began in the office of Senator D'Amato in my hometown of Rochester, New York. I worked for Senator D'Amato on a part-time basis as a district representative in his Rochester, New York office, handling issues like case work and constituent relations. I mean, it was really an excellent experience for me personally to get started with federal service. It was very exciting, very energizing. And after about a year and a half, I moved to Washington to serve as Senator D'Amato's assistant personnel director, a position that I was actually promoted to in November 1994.

So I've always had an interest in government service and in personnel, and I think I had a very good solid foundation in Senator D'Amato's office. While I was working in his office, I started my master's degree in public administration at George Mason University, and I was happy to have Mark Abramson as one of my professors there.

Senator D'Amato actually lost in 1998, but that was the year I finished my graduate program, so I was very fortunate enough to apply into and be accepted into the Presidential Management intern program. So I left Senator D'Amato's office in November -- December of 1998 and went right to the Office of Personnel Management , where I served as a Presidential Management intern, finished my two-year tenure there, stayed on for an additional year, and went back to the Senate in January of 2002, where I began working for Senator Voinovich on his Oversight of Government Management subcommittee.

When I went to work for Senator Voinovich, my roles and responsibilities included human capital, but they weren't limited to human capital. I had a much broader portfolio, actually, and the way that the subcommittee was broken down was the Oversight of Government Management, the Federal Workforce and the District of Columbia. And I handled the Oversight of Government Management portfolio for the Senator, which included such things as the Social Security disability process, DOD supply chain management issues, the GAO high risk areas, federal law enforcement reform, which was a personnel issue. I also handled trade-related issues, the human capital issues related to the trade agencies.

But I really think that my previous experiences have prepared me well for the position that I am in right now. I believe that I have an open and collaborative approach to accomplishing the tasks at hand. Director Springer has given me a great deal of autonomy for managing the Council, and I think that's really been extremely helpful for me both personally and professionally to grow, to develop and cultivate relationships with the Council members, with OPM staff, and really piggybacking on the skills and competencies and the things that I learned while I was at George Mason, and kind of the things that I have been working on professionally as well.

Mr. Morales: Great.

How is the Chief Human Capital Officers Council structured? We will ask John Salamone, Executive Director of the Chief Human Capital Officers Council at the Office of Personnel Management, 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 John Salamone, Executive Director of the Chief Human Capital Officers Council at the Office of Personnel Management.

Also joining us in our conversation is John Kamensky, senior fellow at The IBM Center for The Business of Government.

John, we want to talk about some of the changes you and Director Springer have put in place to enhance the effectiveness of the CHCO Council. I believe this past year, OPM established the Deputy CHCO position. Why were these positions established, and what are you looking to accomplish through these new roles?

Mr. Salamone: Sure. Actually, the Deputy Chief Human Capital Officers I think are extremely important. And prior to my coming on board, the Director talked about adding the Deputy Chief Human Capital Officers at the Council meeting last March. And we really see the Deputies playing three very important roles for the Council. First and foremost, they will help us serve as the links to the federal human resources directors. We've heard through GAO reports, through interviews that I actually conducted with the Chief Human Capital Officers and Deputy Chief Human Capital Officers when I first came on board -- I went around and met with all of the Chief Human Capital Officers and the Deputies. It took me about two months. And we heard that, you know, what was happening at the Council level wasn't necessarily filtering down to the federal human resource directors.

So, most if not all of the Deputy Chief Human Capital Officers are either HR directors themselves or they have HR directors that report to them. So we're hoping that the Deputies will serve as another set of eyes and ears to come to the Council meetings and filter information to the HR community.

Second, I think the Deputies will also help us identify and share best practices. We have a lot of goals in our strategic plan dealing with finding and sharing best practices. And really with their subject matter expertise, we're hoping that the Deputies will identify and help us share those best practices and find the right forums to share those best practices.

And finally, really the Deputies will help us ensure continuity when there are changes in leadership at the Council level. Most if not all of the Deputies are career civil servants, so when there are changes in administration or changes at the individual Chief Human Capital Officer level in an agency, the Deputy Chief Human Capital Officer will be able to step in and say here are the things that the Council's been working on, here's the direction that the Council is going, here's what's working, here's what's not working, and really just helping us ensure that there is continuity when we have that leadership change.

Mr. Morales: Certainly helps broaden the reach of the Council across the agencies.

Mr. Salamone: Most definitely. Most definitely.

Mr. Morales: Also recently, OPM made some additional changes to the subcommittee structure of the Council. Can you describe these changes as well as the rationale behind the new structure?

Mr. Salamone: Sure, I'd be happy to. And again, this was something that the Director was working on right around the same time, about the March Council meeting, right before I came on board. We have six new subcommittees. The structure includes Emergency Preparedness, Hiring and Succession Planning, the Human Capital Workforce, the HR Line of Business, Learning and Development, and Performance Management.

The six subcommittees -- really the Director looked at the structure that we had previously, and some of the subcommittees are the same, some of them are split up and combined in different ways. But really, the current structure is intended to ensure that we focus on the most pressing human capital issues facing the government.

And we've been very, very active with all of the subcommittees. Each of the subcommittees meets on a monthly basis, and we've been working very diligently toward meeting the goals and objectives that we've outlined in the FY 2007 strategic plan for the subcommittees.

Mr. Morales: Now, on the same topic, the subcommittees released their new mission statements and operational goals, which are obviously sponsored by the CHCO Council. Can you talk about how and why this document was developed, and more specifically, how the subcommittees plan to accomplish their goals?

Mr. Salamone: Sure, absolutely. The subcommittee's strategic plans were really born out of a conversation that Director Springer had, and she thought that the best way to get the Chief Human Capital Officers engaged and have the subcommittees work on things that are meaningful is to give the subcommittees and the subcommittee chairs the autonomy to develop their own strategic plans and things that they want to work on to accomplish the goals for the Council.

We've really taken a bottom-up approach. The Council members and the subcommittees had a great deal of autonomy to draft their own mission statements and their own goals. I will say that I played a role in that to the extent that I provided each of the subcommittees with a draft mission statement, because I felt that it was better to give them something to react to rather than starting from scratch. But when it comes down to the goals and objectives that they've put together, really, those were conversations that happened at the subcommittee meetings to really drive the agenda for each of the subcommittees.

Let me add to this and talk a little bit about how the subcommittees plan to accomplish their goals, to get back to your original question, Al. Each of the subcommittees, as I'd indicated, meets on a monthly basis. And I bring the OPM staff with me to the relevant subcommittee meetings. The listeners can go on the website -- as I indicated, it's www.chcoc.gov -- to pull up our strategic plan. And you will see that, you know, the goals -- for example, the Emergency Preparedness subcommittee, one of their goals was to assist OPM in the development of a communication plan for pandemic influenza. This subcommittee was extremely active with OPM when we were developing our guidance last summer from May to August. They helped us develop our guidance, and they helped us pre-clear our guidance before we went through the OMB clearance process.

So we're working very collaboratively between OPM and their subcommittees to accomplish the goals and objectives that they've put forward.

Mr. Kamensky: John, in 2006, the Office of Personnel Management issued its strategic and operational plan, so that's separate from what the Council's plan is. But it includes outcome and goals that are focused on human capital results that agencies have to implement. What role does the Council play in helping OPM achieve those kinds of goals?

Mr. Salamone: That's a great question, John. Actually, if the listeners look in the back of our strategic plan, the Council strategic plan, they will see that we have linked OPM's operational goals and objectives, the relevant operational goals and objectives, to the subcommittees as well.

So not only do we have OPM staff that go to the Council meetings or subcommittee meetings to talk about the goals and objectives that the subcommittees have put together, but we have staff that goes to the subcommittee meetings to talk about OPM's goals and objectives so we can partner and collaborate with the Council to accomplish the goals and objectives that OPM has set forward.

We've had some very good successes. As I mentioned, the Emergency Preparedness subcommittee, working with OPM on the pandemic influenza guidance. But we've also had the Hiring and Succession Planning subcommittee work very closely with OPM to develop more targeted job fairs for college students for our job fairs.

Mr. Kamensky: The Council and its members seem to operate maybe a bit as a federation of independent agencies. They obviously have diverse views and stuff because they come in from different programmatic areas. But what's the biggest challenge for OPM and the Council to work together on achieving common goals?

Mr. Salamone: That's a really good question. And yes, I think operating as a federation of independent agencies is probably a good descriptor. But I think we really do, fortunately, have a very open and collaborative working relationship with the Council and the Council members. And I think we're very pleased with the progress that we've been making so far.

But to really answer your question, John, I think we'll continue to find ways to strengthen and enhance those relationships so that we can work together to secure a positive legacy for the Council so that the next set of leaders coming into their CHCO roles will have a solid foundation for working with OPM, and building on what we've been able to put in place for the Council.

Mr. Morales: John, one of the other elements of the CHCO Act was the establishment of the CHCO Academy. Can you talk a little bit about this academy, as well as why it was established, and what role does it play in relation to the Council and the agencies?

Mr. Salamone: I'd be happy to. And actually, the academy was originally intended to serve as a way for the Chief Human Capital Officers to learn about and share best practices. With Director Springer opening up the Council meetings to Deputies as well, we now have Deputies come to the meetings. But I've worked on several training academy sessions. I serve, I guess, as the dean of the training academy. But when I came on board, the training academy sessions were relatively low turnouts. Six -- maybe five, six, seven Chief Human Capital Officers would show up.

My first meeting, we had Deputies on board, so I think we had close to 17, 18 members. But I took a look at the training academy sessions and felt that we may actually be missing an opportunity. In getting back to the link to the federal human resources community and the practitioners, I thought it was a good idea really to open up the academy sessions to allow each Chief Human Capital Officer to bring three staff members with them to the training academy sessions.

And in the last couple of sessions that we've had, we've had between 60 and 70 attendees. And that is 10 times what we were originally having when the Council first set up the training academy sessions. And in this year alone, we had in January a training academy session on the SES Pay-for-Performance System, where we had 70 agency representatives attend and hear best practices. OPM kicked off the meeting, talked about the system, talked about the requirements, talked about the certification process. And then we had the Department of Labor, the USDA, Department of Agriculture, and the Department of Treasury share best practices with those 70 attendees on things that they've done to help improve their SES Pay-for-Performance System.

And in February, we had a training academy session on Telework. And we talked to some agency -- some agencies brought some agencies in to talk about things that they are doing in their agency to enhance and promote Telework, which is obviously extremely important to the federal workforce, and quite frankly, an area where I think we need to focus a little bit more attention on. But really the training academy sessions I think is one of our biggest successes.

I am going to look to possibly webcasting the training academy sessions as a way to reach an even wider audience, something that I'm talking to the OPM staff about and will be talking to the Council members about as well. It may not make sense to webcast every single training academy session. But certainly there are some that we could webcast, and if the issue was hot enough, we really could reach a very, very wide audience.

I'm going to have to give credit to a DHS staffer, Department of Homeland Security staff member. I was talking about the training academy sessions at a recent presentation I gave at the National Academy of Public Administration. And they actually suggested that we webcast the training academy sessions. So it was an excellent suggestion. And one of the benefits I think about getting out there and talking about the mission and the successes of the Council is to hear from the community on what we're working on and how we can make improvements.

So certainly that was a worthwhile suggestion. And I'm hoping that we're going to be able to pull that off.

Mr. Morales: That's a fantastic forum for sharing best practices across a wide variety of agencies. That's great. Are they typically run by Council members?

Mr. Salamone: Actually, I work with the Council members to pull together the training academy sessions, the topics -- sometimes the Director, Linda Springer, will suggest topics. And she actually suggested the SES topic, and I thought that Telework was the next logical thing for us to be working on, or the next logical issue area for us to highlight. But we're open. And I talk to the Deputy Chief Human Capital Officers, I talk to the subcommittee members, and I talk to the members of the Council, about what future topics would be relevant and timely for the Council to showcase as an academy session.

Mr. Morales: That's fantastic.

What are the some of the key human capital challenges facing the federal government? We will ask John Salamone, Executive Director of the Chief Human Capital Officers Council at the Office of Personnel Management, 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 John Salamone, Executive Director of the Chief Human Capital Officers Council at the Office of Personnel Management.

Also joining us in our conversation is John Kamensky, senior fellow at The IBM Center for The Business of Government.

John, what are some of the biggest human capital challenges facing the federal government? And mind you, we only have an hour to discuss this. And what are OPM and the Council doing to address these challenges?

Mr. Salamone: I think, Al, you know, one of the biggest challenges that we have facing the federal agencies today is hiring. The federal government must continually look for ways to recruit, hire, and retain top talent. You know, as I indicated, we do have a Hiring and Succession Planning subcommittee. The subcommittee has several goals. But really where we need to start is federal agencies have to take a look at the processes that they have in place for hiring their employees, and make sure that they are utilizing to the fullest extent possible all of the flexibilities available to them.

The Chief Human Capital Officers Act included several flexibilities such as category rating instead of having agencies use the Rule of Three. And OPM actually is working and positioning themselves to help the federal community to streamline the hiring process as well. For our listeners that are interested in the federal hiring process, they can go on the OPM website, www.opm.gov, and there, they'll find OPM's Hiring Toolkit.

The Hiring Toolkit is an excellent, excellent resource for federal human resource professionals, and it's really intended to help the federal human resource community and the managers navigate the hiring process and identify any bottlenecks that they have within their agency. Human resource professionals go on the Hiring Toolkit, they'll see that we've mapped out the 45-day hiring process, and we identify how long it should take in each step of the process. And then agencies can map that against how long it takes them to identify or hire an employee.

And what the Toolkit will do is identify where there may be very large gaps, and it will give the agencies helpful hints on how they can close those gaps to streamline the hiring process. In addition to hiring, I think the federal government must also focus on succession planning initiatives to ensure that we have the right talent to fill in for the loss of institutional knowledge when our federal employees retire. OPM has a plan to help agencies fill mission-critical occupations through our Federal Career Day job fairs.

And as I indicated, our Hiring and Succession Planning subcommittee on the Council has been working very, very closely with OPM on targeting those job fairs for mission-critical occupations. So that's another I think very big challenge that we have for the federal government. And as long as I am serving as the Executive Director of the Council, I'll really do my best to ensure that we have OPM and the Council working together to solve the biggest and most pressing challenges that we have in the human capital world and facing our federal government.

Mr. Morales: John, I'm sure that these challenges of hiring and succession planning are further exacerbated by projections on the retirement wave and the loss of talented and skilled individuals. What's the Council doing to recruit and retain the next generation of federal workers? And specifically, I'm interested in what is the Council doing to attract the younger generation, those that are perhaps still in college today, and may have some interest in working for the federal government?

Mr. Salamone: I think the first thing obviously is the Federal Career Day job fairs, but that's certainly something that the Council is looking at. And actually in our January meeting, full Council meeting, we had a briefing from the Gallup Organization and the Council for Excellence in Government, talking about their study that they had released earlier in the year: Understanding the Workforce of the Future. And they surveyed the general public and got some feedback from the general public on what were the perceptions of working for the federal government.

And I think that there is some really good news in that report, that they identified that we have an opportunity to go after and recruit Generation Y, the 18-to 29-year olds. There are specific findings. They said 34 percent of the Generation Y cohort are interested in working for the federal government. I think that is extremely promising. So the federal government has not done in the past 10 years or so a lot of recruiting. Recruitment has been ramped up in the past couple of years.

But we really need to see how we can target the Generation Y through colleges and university visits, through certain intern programs, to recruit and get some talent in the door, get some excitement about federal work and having the younger generation answer the call to serve. So I think there are some good new stories out there, and there are some opportunities for us to go after and recruit that Generation Y.

Mr. Morales: That's a surprising statistic. 34 percent is a very large number.

Mr. Salamone: Yeah, it is extremely large and something we're very very excited about.

Mr. Kamensky: Last year, OPM and the Council actually conducted a couple of hiring satisfaction surveys to try to improve the federal hiring process. Can you tell us a little bit about what these surveys were and the kind of results you saw, and what agencies plan to do to address the issues that surfaced?

Mr. Salamone: Very good question, John. And actually, the surveys were implemented prior to my coming onboard. But I will say that OPM staff did brief the Council on these issues during our November 2006 Chief Human Capital Officers Council meeting. The goal of the survey really is to improve the hiring process and assess management applicant satisfaction with the agency's hiring process in key areas. On the management side, the surveys look at things like job announcements, r�sum� contents, applicant quality and quantity, and hiring flexibilities.

For the applicant survey, we look at things like job announcements, r�sum� building, applicant storage and retrieval, job search, and just overall satisfaction. The findings that we discussed at the November meeting included on the management side, we're finding very high percentages of managers -- 90 percent to be exact -- believe that the vacancy announcements that they write for their agencies and for positions in their agencies accurately reflect the jobs at hand. So I think that was a very good statistic.

However, only 34 percent feel that they have the flexibility to use pay-setting flexibilities. And that's something that we want to take a look at and work with the agencies on to try and get that number up a little bit. But agencies are setting targets to date, and they've chosen to focus on improvements in several areas. And I'll just name some of those areas.

Things like hiring satisfaction; the appropriate number of applicants on the certificate; job announcements; the quality of the applicants; receiving certificates in a timely manner, again streamlining that hiring process to make sure that we are getting the certificates in the hands of the hiring manager fast enough so we don't lose that talent when we're competing against someone that may be interested in the government but we lose them to the private sector.

Again, just working on the job announcements and the application process, really making the job announcements more appealing to the applicants, putting catchy language in there, getting away from things that say "the incumbent will serve in this capacity," and just kind of improving the way that we write vacancy announcements.

Mr. Kamensky: In addition to hiring, another challenge that seems to be facing a lot of agencies is performance management; in particular, pay-for-performance. That's been a hot topic in the public sector, as agencies are looking to link individual and organizational performance. What's the Council doing to make sure agencies have the systems in place to support strong performance management programs, and that the agencies and the managers have the skills to manage them?

Mr. Salamone: That's an excellent question, John. And if you look at the recent survey results from the Federal Human Capital Survey, this was one of the -- and I think the lowest scoring result that we had for the federal government -- that employees felt that their pay raises were based on performance. And it's something that our subcommittee on Performance Management is looking at. I mentioned the academy session on the SES pay-for-performance system. That's one component.

But what we really need to do a better job of in the federal government is linking the agency's mission and driving that down to the goals and objectives that we set forward for the employees, that line of sight -- creating a line of sight that employees know what they're working on contributes to the mission of their agency or the mission of their organization, and that they are paid based on that performance, and based on how well they contribute to the mission of the agency.

If you look at the goals and objectives of the subcommittee, they're looking at identifying best practices for performance management. And I'm going to be working with the subcommittee to identify those agencies that have done a good job, those departments and agencies that are doing a good job, finding those best practices and showcasing those best practices in a document that we'll be putting together at the end of the year. So there's a lot going on. It certainly is a hot topic for the federal government. GAO recently issued their 2007 High-Risk Report, and it did include human capital as a high-risk area.

There's been a lot of work that's been done on human capital. But they mentioned as a first step toward human capital improvement that Congress must pass a pay-for-performance system for the federal government. So it's not only incumbent upon the agencies, but we can't do it alone. We need some help from Congress, and I don't know how likely it's going to be that that's going to happen. But it's certainly something that we will be looking at and hoping will happen to give us the flexibility to create a system that levels the playing field for the agencies.

Mr. Kamensky: That's interesting, as performance management has obviously been an enduring topic for a lot of things. There's a initiative this administration has taken up in the past couple of years called the HR Line of Business, the Human Resources Line of Business. And you have one of your subcommittees devoted to that. Could you explain a little bit about what is a Line of Business, and sort of what is the subcommittee doing, and how are they going to help move this initiative along?

Mr. Salamone: Sure. Actually, the mission of the Human Resources Line of Business is to support the governmentwide effort to ensure that the line of business meets the needs of the agency in their strategic management of human capital. The Human Resources Line of Business was established to really take a more central approach for some of the backroom day-to-day paperwork processes of the agencies, and consolidate those and centralize those into certain lines of business.

And really what we're trying to get to for the federal government is moving away in human resources -- moving away from just the day-to-day paperwork processing of the Standard Form 52s, the paperwork that you need to process, federal applicants, and the paperwork that you need to process for individual personnel files, and really move human capital or human resources in the direction of being more strategic partners, more strategic consultants in the agencies, so that an HR professional in the government can go and work with the manager and say here's how we can help you streamline the hiring process, here's how we think you would benefit from a different vacancy announcement, or using different language in your vacancy announcement.

So the Lines of Business will actually free up our HR professionals and help us develop the skills and competencies we need to make the human capital professionals in the government be more strategic. Now, we did not have a Human Resources Line of Business subcommittee in the Council. This was something that was new that the Director added. And really their first goal and most important goal is to provide more visibility of the Human Resource Line of Business to the Chief Human Capital Officers Council.

Gail Lovelace, from the General Services Administration, serves as our subcommittee chair. And the subcommittee is working extremely close with Norm Enger, who is the program manager at OPM for the Human Resources Line of Business. So we have a very good working relationship between the subcommittee and Norm Enger's office.

Mr. Morales: John, we only have about 60 seconds left. But over 90 percent of the federal employees are actually located outside of the Washington, D.C. area. What role does the Council play in reaching out to these employees that are beyond the immediate reach?

Mr. Salamone: That's a great question. And, you know, I think one way that we are looking to improve that coordination out to the field is to work through the federal executive boards and push information out through that infrastructure. But we're also hoping that the Chief Human Capital Officers and Deputy Chief Human Capital Officers will take what they learn and take what we discuss at the Council meetings and push that information out to their human resources professionals in the field.

I've made a pledge and offer to the Chief Human Capital Officers that I'd be happy to come and speak to their human resources team, whether they have an all-hands meeting here in D.C. that's broadcast out to the field -- to just introduce the Council to them, talk about what we have going on, talk about the things that we're working on in the Council. So I think I can play a role in that. But really, we're looking at working with the FEBs, working with the Chief Human Capital Officers and then seeing what role I can play in filtering information out to the field as well.

Mr. Morales: Great. What does the future hold for the Council?

We will ask John Salamone, Executive Director of the Chief Human Capital Officers Council at the Office of Personnel Management, 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 John Salamone, Executive Director of the Chief Human Capital Officers Council at the Office of Personnel Management.

Also joining us in our conversation is John Kamensky, senior fellow at The IBM Center for The Business of Government.

John, can you talk a little bit about the role the Council plays in the area of emergency planning? You alluded to this a bit earlier. Specifically in the areas of preparing for the pandemic threats, or responding to natural disasters such as Hurricane Katrina.

Mr. Salamone: I'd be happy to. And actually as I'd indicated, the subcommittee was extremely instrumental to OPM when we were working on our human capital guidance for pandemic influenza. And listeners can go to www.opm.gov/pandemic to pull up our human capital guidance. And they'll see what OPM has been working on and the guidance that we've delivered to the community.

But I'll say that not only with the human capital guidance for pandemic influenza, the Council was extremely helpful during Hurricane Katrina. Now, that was prior to my tenure on the staff of the Council, but OPM Director Springer held several conference calls immediately following Hurricane Katrina to discuss with the Council members existing personnel flexibilities to help the employees out in the Gulf region. And actually, there's a summary of those conference calls and what was discussed on the Council's website on our documents page; it will detail what the Council members talked about and things that we were working on to really help the employees in that region.

Mr. Kamensky: John, the Council's been in existence for, what, four years now. What challenges did OPM and the agencies face to get it off the ground? And how has the Council evolved to respond to those challenges?

Mr. Salamone: I think, John, that's a great question. And with your background in government, you know that whenever you start anything new in government, it's always difficult to start from the ground up. My predecessor, Mike Dovilla, who was the Executive Director prior to my tenure, really did an outstanding job setting up the Council, starting from scratch, and getting a very solid foundation in place.

My goal really when I came on board looked at my roles and responsibilities as the Executive Director, set some short-term and long-term goals for myself. And really my long-term goal is to make sure that I'm doing everything that I can to build on that foundation, work with the Director of OPM, work with the Council members, work with our stakeholders, to raise awareness and secure that positive legacy for the Council so that the next generation of Chief Human Capital Officers that come in have a good solid foundation and know that they're coming into a Council that serves a wonderful purpose for the human resources community, and has done some very good and innovative things for the community, and they can take it and build upon our successes.

Mr. Kamensky: In doing that and looking out to the future, how does the Council stay current on human capital issues? And what role do you guys play in anticipating or planning for future trends?

Mr. Salamone: That's a very good question. And actually, to Director Springer's credit, she's changed the structure of the Council meetings to make sure that we have more engagement and more involvement from the Chief Human Capital Officers. And beginning with the January meeting this year, we are breaking the meetings -- they're two-hour meetings, and they happen -- we have six meetings a year; they occur every other month. The first hour of the meetings really is to focus on the business of the Council. OPM will give briefings on cutting-edge issues that are coming up or things that we're working on at OPM. The subcommittees will conduct briefings. But that last hour is really for the Chief Human Capital Officers to volunteer and discuss cutting-edge topics that they have going on in their agency.

For example, our March meeting, which is coming up in a couple of weeks, Dr. Reginald Wells from the Social Security Administration is going to talk about Social Security's distance learning process, and how they've implemented strong distance learning procedures for the Social Security Administration, something that we can share as a best practice at the Council, something that fits in very well with the mission of our Learning and Development subcommittee, something that we hopefully will be able to showcase at the end of the year in a best practices document.

Mr. Morales: John, along the same lines, one of the trends that we're seeing is this transformation of the human resource workforce from what was traditionally a transactionally based organization to a more strategic business partner. Can you talk a little bit about what the Council is doing to address this transformation? But more importantly, to ensure that the HR workforce has the necessary competencies.

Mr. Salamone: Al, that's a great question, and I alluded to it a little bit before with the Human Resources Line of Business dialogue that we were having. And actually this particular issue dovetails very well with the HR Line of Business. Our human capital subcommittee is working on this very problem. And, you know, their mission is to make sure that we have the skills and competencies in the human resources community to serve as a strategic consultant for federal agencies, and making sure that we're hiring a new generation of human resources professionals that have those competencies to service as a consultant.

Mr. Morales: John, we started this show talking a little bit about your background and your experience on the Hill and at OPM, which shows a real commitment to public service. What advice would you give to a person perhaps still in college who is interested in a career in public service?

Mr. Salamone: Al, I'm happy you asked that. And I will have to say that I have been extremely fortunate, very lucky, and I am extremely honored to have served in all of the positions that I have had. You know, starting in Senator D'Amato's office part-time three days a week making $9,000 a year, I know I was not going to get rich, but I knew that it was a wonderful experience. I would not trade one day of my 15 years of federal service for anything.

I'm sitting here with you today; I never in my wildest dreams would have imagined that I would be on the radio talking about very important human capital issues that are facing the federal government. I would say to college students out there, give the federal government a chance. You could rise up very quickly, make an impact, and really do a great service to your nation by serving as a federal employee.

I'm going to work as hard as I can to continue my federal service, and we'll see where this job takes me. But I'm very excited about the future. And I think all the college students that are out there -- really think about it, because federal service is a noble profession, and you'll have an opportunity to do great things for the United States.

Mr. Morales: That's fantastic. And with that, we hope that the next Gallup poll shows a couple of more points increase in that 34 percent population.

Mr. Salamone: Hope so.

Mr. Morales: John, we have unfortunately reached the end of our time. I do want to thank you for fitting us into your busy schedule. But more importantly, John Kamensky and I would like to thank you for your 15 years of dedicated service to our country.

Mr. Salamone: I appreciate that Al, John. Thank you very much for the opportunity to come here today. If any of your listeners are looking for information on the Chief Human Capital Officers Council, they can visit our website at www.chcoc.gov. And in addition, too, they can go to the OPM website if they're interested in the Office of Personnel Management, at www.opm.gov. And finally, for those college students or those of you in the audience that are interested in federal employment, please visit our website, www.usajobs.gov. And there, you will find vacancy announcements and job opportunities that are available to you in the federal government.

Mr. Morales: Fantastic. Thank you.

This has been The Business Of Government Hour, featuring a conversation with John Salamone, Executive Director of the Chief Human Capital Officers Council at the U.S. Office of Personnel Management.

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 am 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.