5 top management priorities for 2011

Steve Kelman is professor of public management at Harvard University’s Kennedy School of Government and former administrator of the Office of Federal Procurement Policy.

Here’s a list of the Obama administration’s best options for improving the management of government programs and operations. With one exception (see item no. 1), they aren’t new. But the 2010 elections highlighted the role and performance of government, and perhaps will provide an opportunity to move some oldies-but-goodies along.

1. Adopt the recommendations of the Bowles-Simpson deficit commission. I disagree with some aspects of the plan, as others probably do, too. But everyone knows the deficit is unsustainable in the long term, and if everybody supports only the particular mix of program cuts, entitlement changes and tax increases most compatible with their ideology, we will remain deadlocked. Although some would say the recommendations are a matter of policy and not management, I would suggest there is nothing better we could do to improve the standing of government in the minds of Americans than to make a serious effort to reduce the deficit.

2. Focus on high-priority goals. Using metrics is the government’s version of using profit to improve business performance. The Obama administration has taken a decisive step by changing the focus of measurement from a compliance exercise driven by the Office of Management and Budget to a tool for agency managers to use to improve — and not just report on — performance. In addition, each Cabinet agency has adopted five or so high-priority goals, with targets for improvement in the next two years. Information about the goals, including who has ownership of them, and quarterly progress reports will start appearing on the Web soon. Full disclosure: My wife, Shelley Metzenbaum, is in charge of this effort at OMB.

3. Get serious about incremental development on IT projects. The old way of developing major applications in one fell swoop has produced many disasters. Introducing new systems in quick increments gives users a chance to react to them and suggest changes, thereby reducing rework down the road. That approach also provides momentum for projects that have good chances of success while allowing exits from bad projects before too much money is spent. Finally, project increments align better with the short time horizons of political executives, increasing the chances that those leaders will take an interest in moving the systems forward.

4. Move contracting resources to the front end and back end. The acquisition workforce needs to be beefed up, but in a time of resource scarcity, we must also find ways to redirect existing capacity. Source selection is the most bureaucratic and lawyer-intensive stage of the process and generally adds the least value. I recommend relentlessly pursuing the changes of the 1990s that streamlined source selection and redirecting resources to higher-value areas: working on requirements, contract type and incentives upfront before the solicitation comes out and managing the contract for results after it has been signed.

5. Give agencies incentives to cut costs and be more efficient. Agencies typically find that savings are subject, in effect, to a 100 percent tax rate, with all the money being taken away by OMB and Congress. Not surprisingly, that discourages agencies from seeking savings, especially because it is often painful to do so. We need to experiment with alternatives for allowing agencies or contractors to keep a portion of the savings they generate. For example, we could pay a portion of demonstrated savings to employees or establish a fund for future program use. On the contracting side, I recommend reviving share-in-savings contracting, the best management improvement idea that has been abandoned in the past decade.