We’re reminded of the lilting yet ominous line from the song Somewhere Over the Rainbow: “And the dreams that you dare to dream, really do come true.”

Leaders in the states and the federal government seem to be frequently using their own magic word these days: Reorganization. There are a number of reasons why shifting agencies and their tasks around can seem appealing. At the state level, we’re told, some governors simply want to return to simpler days when they could fit the full cabinet around one big table. Of more importance, as Bob O’Neill, executive director at the ICMA told us a couple of years ago, "If consolidation creates the opportunity to work across traditional boundaries, it can improve effectiveness, speed and flexibility."

In late January, according to the Washington Post, President Obama called for “the most aggressive reorganization of the federal government in at least half a century, asking Congress for the authority to merge agencies and departments if necessary.’ The President made his point with abundant clarity when he cited the fact that “The Interior Department is in charge of salmon while they’re in fresh water, but the Commerce Department handles them when they’re in saltwater. I hear it gets even more complicated once they’re smoked.”

At the state level, more than half the governors talked about redesigning or reorganizing state government as a priority in their 2011 State of the State addresses, according to the National Governors Association. “For better or for worse,” Oregon Governor John Kizhaber noted, “the Great Recession has leveled the House of Oregon to its foundations and given us the opportunity to build it for the 21st century.”

A History of Mixed Results. Historically, the results of governmental use of the magic “R” word have been mixed. For example, at the federal level, the reorganization of the Department of Transportation was considered very successful according to Thomas H. Stanton, a fellow of the Center for the Study of American Government at Johns Hopkins University. He attributes the success to the careful thought that went into that reorganization as well as the fact that there was an overarching mission for the new agency.

Somewhat different was the Immigration and Customs Enforcement Agency, which has had to deal with two very distinct missions, since customs enforcement and immigration are dissimilar tasks, with unmatched goals. Then, of course, there’s the Department of Homeland Security. Says Jitinder Kohli, Senior Fellow at the Center for American Progress, “The Department of Homeland Security’s problem was that it was done very quickly and without a sense of what its purpose would be. It was driven by politics rather than practicalities"

Nebraska provides an elegant example of a state that has reorganized twice in recent years. First it consolidated. Then it deconsolidated.

In the mid-1990s, the Department of Social Services and the Department of Public Institutions blended into one big department. It sounded like a great idea at the time - a way to erase fragmented and sometimes competing practices. But, as state budget administrator Gerry Oligmueller told us a while back, the merger created a Leviathan that was incomprehensible to the people it served. So, in 2007, the big agency was divvied up again. “Now, the public is able to see much more clearly the individual entities that focus on specific needs,” said Oligmueller.

One of the problems with the 1990s organization was that it relied on the idea of a governance committee for its leadership structure (The committee had one person focused on service, one on finance and support and one on regulation.) “When you were looking for someone in a leadership position who was responsible it was hard to figure out who that was exactly,” said Oligmueller who has been budget administrator since 1995. “I think that when people are studying and laying a plan out for organization of health and human services, they need to be extremely conscious of the public’s need to continue to understand what services are and who’s responsible.”

Wonder Drug vs. Poison Pills.  Whether or not reorganizations improve the effectiveness and efficiency of governments, one thing is clear. They’re not an antibiotic-like wonder drug which can alleviate symptoms in a day or two. They’re more like the kind of physical therapy that can relieve pain – but sometimes only after months or years of treatment.  “Ramming a reorganization through doesn't work,” says Stanton. “If you have trouble getting it passed you'll have trouble getting it implemented"

Paul Posner, director of the Public Administration Program at George Mason University, and president of the American Society of Public Administration recently listed this kind of “glacial change,” as one of the “poison pills” of reorganization efforts in an article in The Public Manager.

He writes that reorganization efforts “take many years to mature and fulfill their original promise. The U.S. Department of Defense, created in the late 1940s, finally became a more integrated department with the passage of the Goldwater-Nichols Act in 1986 which strengthened the department’s authority to establish commands and to provide incentives for personnel to move across the services.”

Among the other poison pills Posner refers to are:

• No magic bullet: “Reorganization guarantees no managerial or programmatic benefits.
• No single right way: “Agencies can be organized by purpose, client and geography among many other dimensions.”
• The law of conservation of problems: “For every problem that reorganizations solve, they create new ones. Each program and bureau that is folded into a new agency, in fact, has multiple objectives and faces. So, when they are reorganized one face is highlighted to the neglect or even exclusion of other competing goals and values.
• The mirage of cost savings: “It is equally, if not more likely, that the reorganization will cost more [than the previous incarnation], certainly in the near term.
• The inevitability of complexity: “Reorganizations simplify in one sense, but add complexity in another.”

Reorganization of Administrative Services Holds Promise.  It’s possible that reorganizations can be somewhat more straightforward when they focus fundamentally on consolidating administrative functions to set up centralized expertise in common administrative services, like procurement. That allows agencies to focus on their core business, and can increase the chances that reorganization may actually save money. “Unless they can reduce staff or combine back office organizations, it doesn’t save a lot,” says John Thomasian, director of the Center for Best Practices at the NGA

Washington has embarked on just such an effort, with legislative approval to merge five administrative departments into three. The new arrangement took the state’s department of general administration, office of financial management, department of personnel, department of information services and state printer and sliced and diced them into the following:  1) A Department of Enterprise Services – all the internal services for agencies except the backbone IT functions, (including procurement which had been spread around in various places 2) Office of Financial Management (this is the government’s prime policy shop and includes a new CIO position) and 3) Consolidated Technology Services (which will also have a new emphasis on contracting out some of what it does)

Kathleen Drew, executive policy advisor to Governor Christine Gregoire in Washington and a state senator from 1992 to 1996 says, “The Governor’s view is to look at the 21st century and what government is going to be responsible for and how we can deliver services effectively and efficiently in a declining revenue environment.”

No One-Size-Fits-All Approach, But There Are General Principles.  Ultimately there is no one-size-fits-all approach to a successful reorganization at any level of government. But, in addition to the points we’ve outlined above, here are five other general principles that can contribute to the success or failure of any such effort.

• Merging organizations creates cultural conflicts. It’s a real challenge to merge “people who have different working styles and maybe even disrespect the other side’s working style,” says Johns Hopkins’ Stanton. “It is very hard to put organizations together and get the same kinds of efficiencies you’d get compared to conducting downsizing or restructuring internally."

• Merging organizations may lead to less power and authority for part of the organization. Combining different agencies can mean that the mission and resources of one might get subsumed. For example, putting FEMA within DHS seems to have weakened FEMA.

• Reorganizations are sometimes undertaken for the wrong reasons. Not only is saving money an elusive goal, it’s also inadvisable for reorganizations to be driven by internal policy conflict or organizational struggles which turn on personalities.

• In government, reorganization requires a lot of buy-in from many different groups. Alabama’s recent studies on consolidating schools haven’t actually resulted in significant change. Initially, it appeared that there might be savings, but when it emerged that the savings were primarily at the local level, it was hard to get traction in the state. What’s more, according to Johnny Franklin, an education policy advisor in the governor’s office, “Too many folks are satisfied with the status quo. The school folks don’t want to change.”

• In the federal government and many states, a reorganization can’t be driven by the executive branch alone. “Anything in this area is very sensitive on the Hill,” says Kohli. “The administration will have to do a lot of work to make sure their proposals will win significant buy-in, otherwise they won't get anywhere in Congress."

Magic image courtesy of digitalart / FreeDigitalPhotos.net

Bottle image courtesy of aopsan / FreeDigitalPhotos.net

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