Valuable lessons to consider before reorganizing the federal government

President Barack Obama stirred up memories when he announced his plan to reorganize the federal government during his State of the Union address earlier this year. For many, the first thought that came to mind was establishing the Homeland Security Department in 2002.

In response to the 2001 terrorist attacks, the merging of 22 federal agencies to create DHS was necessary for political and safety reasons. But experts say the rushed restructuring has resulted in long-term operational consequences for DHS and produced a lingering question about whether the department is governable.

Experts say the government’s experience in setting up DHS provides a cautionary tale for the Obama administration as it decides the details of its broad government reorganization initiative. So far, reaction to Obama's proposal seems guardedly optimistic.

Ronald Sanders, a senior executive adviser at Booz Allen Hamilton, said he was pleased to hear the president cite reorganization as one of his priorities. “Some parts of the federal government haven’t been looked at closely for years — in some cases, decades,” Sanders said. “These kinds of things, in my humble opinion, are always worth doing.”

However, there are important lessons the administration should consider from past government reorganizations, he said.  Sanders noted his personal involvement in several of those efforts, including the restructuring of the Defense Department in the 1990s, the reform of the Internal Revenue Service in the late 1990s and the creation of DHS.

Based on his experience, Sanders identified several lessons the Obama administration would be wise to consider while developing its reorganization plan.

First, and most important, the administration shouldn’t rush, he said. Officials should take the time to draw a blueprint for the reorganization and involve stakeholders in the planning discussions. Second, White House officials should take advantage of the opportunity to re-engineer processes and systems, with an eye toward making the government more efficient. Third, the administration must understand that issues such as culture and tradition matter, which became evident during DHS' creation.

And because the reorganization is already sparking questions from federal employees, administration officials must ensure that they have systems in place to help workers whose jobs might be affected. “There are ways to effect massive organization while minimizing the impact on the workforce,” Sanders said.

DOD’s restructuring back in the 1990s cut more than 300,000 civilian positions, but with the effective use of placement programs and training, the agency had to let only 12,000 employees go, he added.

“There is a temptation to move quickly,” Sanders said. “That has to be balanced against taking the time to engage stakeholders, draw up a detailed transition plan and put the safety net in place so that employees aren’t fearful of this.”

A risky proposition

John Kamensky, a senior fellow at the IBM Center for the Business of Government, said he thinks the reorganization proposal is a good — albeit bold — move.

Kamensky, who served for eight years as deputy director of former Vice President Al Gore’s National Partnership for Reinventing Government, added that technological advances could allow the Obama administration to focus on virtual reorganization rather than the traditional shuffling of government programs.

“The time may now be ripe for attempting to rethink how services are delivered,” Kamensky said.

He mentioned a report the IBM center published in 2008 that examined integrated service delivery at various agencies in Canada and other countries. For instance, one of Canada’s initiatives grouped online services around people’s needs and priorities rather than around government structures.

Using a new approach to restructuring might not be a bad idea because the old notion of shifting the boxes around on the organizational chart is a no-win situation, experts say.

“The typical approach to restructuring has so many risks and dangers built into it,” said Donald Kettl, dean of the University of Maryland’s School of Public Policy. “There are thousands of ways this could go very bad. The odds are stacked against this from the very beginning.”

Kettl said every government structure has a political constituency that backs its existence. Also, it’s difficult to calculate the savings earned from a reorganization.

Nevertheless, the administration could achieve progress on its reorganization initiative by identifying a set of guiding principles and targets early in the process, Kettl said.

“Too often, we think about structure as a first resort when it should be a last resort,” he said. “Without [setting] the stage for this to happen very carefully, [the White House] could miss the historic opportunity to rethink what government does.”