Investing in Management Pays Off
It was close to 35 years ago that David Osborne and Ted Gaebler published their bestseller, Reinventing Government. Bill Clinton is quoted on the cover, “This book gives us a blueprint. . .” for better government.
On the first page they argued, “Confidence in government has fallen to record lows.” To use an old phrase, some would contend today is a period of déjà vu. The Pew Public Trust in Government index suggests the public’s view of government has declined since then. In mid-1992 the ‘smoothed’ index showed 29 percent trusted government. That index now shows 17 percent and only 2 percent trust government “to do what is right ‘just about always.’” That was last September. It might be even lower today.
They made another important point in that first chapter. They recognized that there will always be a level of disagreement on “what governments do;” that is what governments should do and for whom. Instead, their book focused on “how they [government] work.” That depends on the quality of management.
They also argued, “The only thing more destructive than a line item budget system is a personnel system built around civil service.” That problem was created a century ago in the laws, to quote from columns related to civil service, that “emphasize rule‑bound structures and procedural control,” “complicated rules and processes that make change slow and difficult” and are “rigidly devoted to the details of administrative procedure.” Those outdated laws are reinforced every time a civil service commission issues a ruling.
The problem was reinforced when George Bush replaced Clinton and the White House reverted to top down control by the Office of Management and Budget. One of the Clinton/Gore ‘pillars,’ “Empower employees to get results” was quickly forgotten. Since then, federal employees have not been seen as a source of expertise for improving operations. To use a phrase from a National Academy of Public Administration report, government has a “compliance culture” that was created by the civil service system. In too many agencies, complying with rules is “more important than delivering value to taxpayers.”
Now a core problem is that culture change takes time. Leaders, managers and employees have to change the way they work. Employees need to understand why, what’s expected, who will benefit, and how it will impact their work experience. Fortunately, government employees are known to share a commitment to public service, but history has convinced them to distrust newly elected and appointed officials. The current reality of Washington highlights that problem. That makes it essential for leaders to win their cooperation.
Improved Performance Starts With Leaders
Leaders are in the best position to assess the need to improve performance and initiate the need for change. However, leaders are not all elected or appointed. They emerge at every level and build support for operational changes expected to raise performance levels. In the absence of change, improved results cannot be realized.
Leaders need to articulate why change is necessary and initiate the planning for the changes that can be expected to improve results. They need to convince or mobilize their co-workers that it will serve their mission and benefit the agency’s stakeholders and “customers.” And of course they need to convince those who control the funding that will be needed. That is generally more difficult than in other sectors where the importance of “the bottom line” is widely understood.
That describes the initiative kicked off in 2011 by newly elected Governor Bill Haslam in Tennessee. He had previously worked as an executive in the business world as well as two terms as the mayor of Knoxville so he understood good management and what was needed to lead improved performance.
Government is different in another key respect – the many agencies have varying missions, management problems, and workforce concerns. That makes them similar to the once popular business ‘conglomerate’ corporate structure. Similar to government, conglomerates operate subsidiary business in multiple business lines. That business model, however, fell out of favor and over two past two decades they were broken up. They proved difficult to manage.
Government at all levels has a far more difficult management problem. The departments are far more varied than any business conglomerate. Each has a different constituency, different ‘customers,’ different metrics, fragmented authority and oversight bodies, regular leadership changes, rigid and outdated personnel systems, underinvestment in managers and supervisors, legacy IT systems – the list is long.
The common element in all successful organizations is the importance of leadership. Research has confirmed, “Effective leadership is considered a key factor contributing to high performance. . . . Leadership is the process of inspiring shared commitment and action towards a common goal.” Employee commitment is essential for meaningful performance gains.
Ideally, that should be the goal of every elected official as well as the appointed leaders. It’s far more likely, however, in business, healthcare or higher education. In those sectors effective leaders and managers are typically promoted from lower career stages and understand what makes their organization a “success;” they share that commitment with employees. It’s also of course true with sports teams.
Government again is different. As the Trump administration made clear with the creation of the Department of Government Efficiency, newly elected leaders sometimes initiate politically-dictated changes that are contrary to the career plans and expectations of employees. Similar actions in the past triggered support for unions and the threats of strikes. Union problems now far more prevalent in government. DOGE was intended to cut costs, but performance is now reported to be worse in several agencies.
Governor Haslam took a very different approach. In contrast to Trump/DOGE, one of his announced goals was building a “winning” workforce. As he commented in a speech, “Whether it’s in business, government or sports, the team with the best players wins. Unfortunately, in Tennessee state government . . . the rules don’t allow us to go out and recruit great players.” Today, years later, the state’s agencies are recognized as among the better employers in the state.
Haslan recognized the need for executive level experience in management. Several of the department commissioners he appointed were previously executives in larger companies. That is atypical but it benefited the state. (More typical is the Trump cabinet. There was only one corporate executive among the original appointments, and he was the entrepreneur who started the company.)
Now a core problem is that culture change takes time. Leaders, managers and employees have to change the way they work.
Gallup Argues Effective Managers Are Essential
Government has historically not recognized the importance of “management.” Where it is the focus of a website, the emphasis is typically on “. . . efficiency, and accountability of programs and services… aligning strategic planning with measurable outcomes.” The OMB website, as an example, is silent on workforce management, employee engagement, and performance management..
In direct contrast, Gallup’s research has highlighted the linkage of how employees are managed and their performance. The research shows that “70% of the variance in team engagement is determined solely by the manager.” They argue,
“. . . poor management produces poor outcomes, and excellent management produces excellent outcomes.”
That is why McKinsey contends, “Investing in middle managers pays off – literally.” The research behind their Organizational Health Index shows 11 manager behaviors (e.g., open and trusting, consultative, supportive, inspirational) that contribute to ‘healthy’ manager/employee relationships and higher employee performance. (That is closely related to the research on high performance organizations.)
Their research highlights the importance of the selection of new supervisors, their training, and the assessment of their performance. It’s been documented that many organizations, private and public, make the mistake of promoting workers who enjoy the technical aspects of their jobs. Too often, when problems surface, they opt to use their technical skills rather than mentoring their people.
The focus on technical skills got started years ago when workers were expected to meet production quotas. It was common for decades. But that began to change when using job knowledge took center stage. Government agencies still need employees with production skills (e.g., mechanics, welders, and technicians). Then manager training was typically limited to understanding employment laws and the steps for handling problem employees.
However, there are now hundreds of occupations where performance depends on professional knowledge, the quality of judgment, interpersonal communication, decision making – the capabilities needed by knowledge workers. That requires a different approach to supervision. Perhaps most important is mutual trust so employees feel comfortable trying new approaches to solve problems and improve results. For managers, coaching and advising is key.
Governor Haslam committed to understanding the barriers to improving performance. As an early step, his cabinet members undertook a review of operations, asking if there were services that could be provided more effectively and efficiently and second, if government should be providing the service, is it being provided effectively and efficiently? That created a shared concern with improving performance. It found ineffective employment practices were common barriers to improved performance.
Working with his HR commissioner, they made a core decision – to transition to pay for performance based on the use of S.M.A.R.T. performance goals. Employees always have a good understanding of what for them is satisfactory, what would be exceptional performance and what is unacceptable. At each level, everyone can understand how their efforts contribute to agency results.
Goal based management is widely used in the private sector. The state invested three years in training managers along with informal feedback from employees to support what was successful culture change. It changed the way managers manage. The state’s strategy remains a model for transitioning to better results.
It is more complicated now with the rollout of AI but the investment in better management is supported by recognized experts. It’s consistent with the results of the World Management Survey that highlights a key point – “best practice management changes do not require a high level of capital investment” – the cost is nominal. Additionally, Tom Peters, co-author of the widely read 1982 book on management, In Search of Excellence, argued in the last of his 20+ books, Excellence Now: Extreme Humanism and the last sentence in an early paragraph, “That is, I repeat, people people people – yup, what the hell else is there.”
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