Our federal government is out of control: too costly, working on the wrong priorities, lacking in management skills, and too arrogant to change. See News Flash: The Federal Government is “Out of Control”. If this were a distressed business, turnaround professionals would use familiar turnaround techniques to get it back in control.
1. Control the checkbook
In a turnaround, the Chief Restructuring Officer (CRO) would set a limit on spending and make sure every expenditure delivered value and fit the strategy before being approved. For the federal government, that limit would be the amount of revenue collected: $2.6 trillion in 2012. This means $1.1 trillion less spending than currently expected.
What’s missing? There is no CRO. Congress is in charge of spending, and sets no limit. What can be done?
2. Create an Inspiring Vision: Describe Success
In a turnaround, the CEO would create a Vision of success consistent with the values of the citizens and the competencies of the organization. For the federal government, the CEO is the President. To gain buy-in, the fundamental values behind the vision must be shared by the vast majority: equal opportunity to succeed without undue interference in their fundamental liberties.
The competencies of the federal government are those functions it does better than any other potential user of citizen funds: defense, foreign relations, currency management, non-local law enforcement, administration of common resources, and establishing the framework for achieving those fundamental values of the citizens, i.e. rule of law for equal opportunity and protection of liberties.
Note: government competencies do NOT include management of operations or sectors of the economy.
What’s missing? The Vision of government should be limited to what it does well: equal opportunity rather than equal outcomes via redistribution and subsidies; a framework allowing individual actions and market forces to operate, rather than regulation of what those actions must be. The current Vision is not inspiring because it takes government too far, beyond the citizens’ values and assessment of government competencies. They know the government is not a competent manager, and they know that equal outcomes means redistribution of income.
The other missing item is a clear statement of goals: “When we achieve the vision, the measurements will be x, y, and z. That’s how we’ll know we succeeded.” For the current Vision, are these measurements inspiring or frightening? If they were inspiring, surely they would be publicized!
3. Set a Strategyto implement that inspiring Vision and reach those goals
In a turnaround, the leadership team together sets a Strategy, allocating resources to the priorities implied by the Vision. The strategy defines boundaries – what will be funded and what will not be funded. These boundaries are enforced in the budget. Certain activities are discontinued. Other projects, those contributing to achieving the Vision, receive funds and personnel. This applies to the federal government as well.
What’s missing? There is no clear federal government strategy, and no budget. There are no limits. Non-strategic activities continue to be funded. Nothing is pruned. Funds are not re-allocated to strategic purposes. The strategy is to continue in office – a clear conflict of interest.
4. Motivate compliance and innovative solutions
In a turnaround, the leadership team communicates the Vision and Strategy, removes managers who oppose the vision, recognizes problem-solvers, devises measurements to identify progress on key elements of the strategy, and restructures incentives to reward strategic success while removing rewards for non-strategic behaviors. This would apply to the federal government as well.
What’s missing? Congress and the President define rewards as be re-elected, regardless of achieving a strategy or keeping expenses within budget, both of which do not exist. Political appointees identify with the President’s goal (re-election), and the Civil Service rules prevent incentive rewards to lower-level employees. Their reward is keeping their jobs by pleasing their politically-motivated supervisors. No federal government employees have any economic incentives for innovative solutions or compliance with strategy or budget. Patriotism and personal values may motivate them to work hard and long, but only on those activities which provide job security by pleasing their bosses.
5. Manage implementation
In a turnaround, once there are clear goals to work for and clear rewards for doing so, the energy of the work force drives success. Management concentrates on removing roadblocks, enabling teamwork, providing resources, and channeling activities into strategically-beneficial projects. Once the organization is aligned in support of a common Vision and Strategy, there is always a basis for assessing the relative of activities and contributions.
What’s missing? The federal government is not aligned, because the Visions too broad and there is no Strategy. Every activity has its own interest group. There is no way to measure the value of an activity, and hence no basis for encouraging or redirecting activities other than whether it supports the goals of the boss. As we have seen, those goals are ultimately about re-election, not achieving Vision through Strategy.
What’s to be done with this out of control government? Can this organization be saved? Uncle Sam needs your ideas for turnaround techniques – send a comment and see it in the next part of this series!
Tom Gray is a management consultant focused on small business and telecom and a Certified Turnaround Professional (CTP). He can be reached at 630-512-0406 or tgray@tom-gray.com. For information on the scope of Tom’s activities, see www.tom-gray.com
