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Pearlstein: Improving Productivity

Steven Pearlstein
Washington Post Columnist
Wednesday, June 24, 2009 11:00 AM

Washington Post business columnist Steven Pearlstein was online Wednesday, June 24 at 11 a.m. ET to discuss improving the productivity of government workers.

Read today's column: The Productivity Revolution Trickles Into Government.

Pearlstein won a Pulitzer Prize in 2008 and is co-moderater of the On Leadership discussion site.

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Reality-land: Can you name a company that has 400+ on its board of directors, some of whom have gotten on the board preaching the belief that the company is not necessary, all of whom can pull the various components of the firm in any direction that suits their personal agenda? Oh, and the CEO of this company gets to pick all the upper and most of the middle management based not on ability but on how much money they or their patrons gave to the CEO? Please name one corporation that operates like that in the private sector, otherwise contrasting government to the private sector is an apples and oranges comparison.

Steven Pearlstein: Nobody is suggesting, let alone me, that the two sectors are the same. But there are lessons and techniques that can be brought and adapted from one to the other, including those that I mentioned today. You would be surprised how much leeway cabinet secretaries and top managers in the public sector have. Yes, there are very well-known examples of how the political process and the public exposure screws things up. But for 95 percent of what the government does each day, this rarely happens. It goes on under the radar.

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Arlington, Va.: For years government employees have complained how their wages did not measure up to the private sector, now that the gap between the two has narrowed (if not evened out), I think government employees should be easier to terminate just like employees in the private sector.

I've heard many people say the average time it takes to fire a government employee for performance is 18 months. Not to mention the employee can go on and off probation multiple times before actual termination, thus extending that time even further. Don't you think if dead weight employees were easier to terminate than the other employees would actually become more productive?

Steven Pearlstein: Look, I think every cabinet officer should identify a dozen people in his agency that are notorious underperformers and make a big deal about firing them, if for no other reason that they create a bad environment for the majority of people in the civil service who want to do good work and work hard and accomplish things. They also cast a pall over the civil service that makes it hard to attract good young talent, which is a big lost opportunity at a time like this, when government has less competition for talent from the private sector. And the government should make a big deal about these firings and make sure they stick, so that everyone gets the message and front line managers are reminded that they not only CAN fire people who don't perform, but SHOULD take the risks and time and hassle to do so.

But having said that, people make much too much about the ability to fire under performers. From the people I spoke with for this column, and that I have spoken with over the years who know this subject, it's not the No. 1 problem. It's not the No. 2 problem. It's probably not the No. 3 problem. But it is the fixation of people who want to talk down government or blame labor unions. I hold no brief for the federal employee labor unions -- I think they are particularly selfish and think nothing of putting the selfish interests of their members ahead of the public good. I observe that they have generally fought reform at every turn and are doing so now on the issue of performance evaluations and pay tied to performance. But any fair analysis of what is wrong and what prevents people from fixing it will show that there is an awful lot that can be accomplished in terms of reforming the system and improving productivity without having to change civil service laws or other laws. So why don't we focus on those and see if we can't get some momentum going.

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Baltimore, Md.: For many federal employees, our ability to be productive is hampered by external forces -- Congress, advocacy groups, limited resources and the like.

How can we improve our productivity without being insulated from those factors?

Steven Pearlstein: Federal employees like to blame the "others" just like lots of Republican congressmen and taxpayers blame public employees. We need to stop that. Your collective ability to be productive is much greater than you think, if you just band together and do what you need to do. And if some jerk of a manager is standing in your way, then make an appointment to go see the secretary of your department and lay it out for him or her. As I indicated in today's column, sometimes the problem is that nobody bothers to ask.

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Anonymous: The recent peanut butter scandal and the uncooked cookie dough are typical examples of the FDA not assigning specific tasks to its personnel. In the peanut butter situation, there was a large supplier to a large market, who had a manufacturing plant over-run with roaches and rats. It had never been inspected. The recent illness of people who ate uncooked cookie dough without cooking it and became deathly ill, is another example of no supervision. The only known time that the FDA gets active is when someone becomes terribly ill and the illness can be traced to a specific food. The answer is: assignment or responsibility, and supervision of those responsible. Signed, Cyrano the Organizer.

Steven Pearlstein: Often the answer provided by public employees and the union to every problem is to hire more workers and pay them more. No surprise there. But that is often not the best solution. Sometimes it is to work smarter and use technology and smart software and data bases to target attention on the most likely prospects -- like the plants that, based on past experience, have the higher probability of having roaches based on known data. One of the blind spots of the federal bureaucracy is that it doesn't understand the 80-20 rule, and feels that if it inspects or reviews one factory or application or shipment, it has to inspect every one so that it has a zero error rate (which, of course, it never achieves anyway). So it lets the theoretical perfect be the enemy of the good. Big problem in government, don't you think.

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San Francisco, Calif.: You should consider taking a longer look at insurance company reimbursement rates for basic procedures before you get too attached to your overpaid doctor thesis. One of the biggest problems is the government and private insurance companies have cut reimbursement rates for basic and preventative care to the bone. Translate the actual contractual reimbursement rate that doctors receive into an hourly rate and you'll see a big hint as to why defensive medicine and expensive tests and equipment are so popular.

The argument can certainly be made that that sort of care should be left to nurses, and doctors move up the value chain, but that business model hasn't worked out too well. Check out Walgreens and CVS's retail clinic experiments.

Steven Pearlstein: First of all, I'm not sure that business model hasn't worked out well and couldn't work out better with some refinement, if only the law would allow people to experiment with it and make it better.

Second, you don't have to tell me about paying docs more for prevention and consultation. That's what quality medicine and medical home and all the other things I like are all about. Restructuring payment is a key to reform, as I've written many times. And shifting payments so specialists don't get overpaid and primary care docs don't continue to get underpaid is a big part of that, as almost everyone now recognizes.

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Richmond, Va.: Steve, Thank you for addressing the issue of government worker productivity. As government involvement in private business becomes more pervasive, the efficiency and productivity -or not - of government workers will have even more impact on everyone. This isn't a "business" of government question as much as it is a "politics" of government question. But as a long-time government worker, I think it has a critical bearing on any efforts to improve government worker productivity. Do you think that the increased involvement in traditionally non-government activities, or the emphasis that Obama says he is putting on "accountability", will instigate any efforts by politicians to appoint federal agency directors, deputy directors, etc. who actually know something about how to manage the enterprises that they are appointed to run. People outside of government often don't seem to realize how much of the inefficiencies and failures of government agencies are due to the appallingly poor qualifications of the people who are appointed to run them simply because they were political supporters. Unless more can be done to lead government workers by example from the top management, I think all of the business techniques that might be applied to government are diluted. Nothing can replace good, competent leadership. Thank you.

Steven Pearlstein: There is probably not much you can do about that -- agency heads tend to get appointed on the basis of their policy expertise, experience, views rather than management talent. But we really should be more demanding when it comes to the next level down -- the Deputy Secretaries and Directors who actually have the title of Chief Operational Officers, and some of the people below them. We also should have very high professional and management standards when it comes to agencies like the GSA and the Office of Personnel Management, which are, by definition, management focused agencies. A number of Obama appointments in that regard have been very disappointing.

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Washington D.C.: Government agencies normally have two managements -- one political, comprised of campaign workers and party loyalists, and the other of career professionals. Sometimes it's like they're in a parallel universe, related but not fully appreciating the other. The politicals see the bureaucracy as their antagonists or at best, tools to be co-opted to achieve their ends. The bureaucrats think the politicals know nothing about operations, management or performance. Who's right?

Steven Pearlstein: They are both wrong. The political type's antagonism to the civil service is simply counterproductive. If there is a problem and the agency is being unresponsive to legitimate demands, goals, policies, efficiencies, then fix it -- don't grumble about it. But there is a widespread dismissive attitude, as well, on the part of many top civil servants who have very very narrow perspectives and think any change to the way things have always been done are illegal or improper or will result in a reduction in quality. They tend to be very risk averse. And because they are the people through which change has to happen at the front lines of the agency, they are a big part of the problem right now. They don't think so, of course. But they are. They need to be empowered, and given more authority, but they also need to be given responsibility for making things happen and squeezing out more efficiency. And if they fail, they need to understand that they just can't go on blaming the system or political interference or the usual excuses. They have to accept responsibility with authority, which right now is quite uncomfortable for them. Just as Dr. Chu.

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Washington, D.C.: No, Mr. Pearlstein, the government cut the time it took to complete an investigation that is then adjudicated for a security clearance. The investigations conducted by OPM and their contractors are incredibly poor. They rarely resolve issues developed and because of the way the contract was written the contractor only does the bare minimum required. They don't get the answer, they close the case. They can't check law enforcement records and get copies so we get court records. Not good enough. If the case isn't clean the DOD adjudication facility receiving this awful product must then resolve the issues that OPM and their contractors failed to do. They could go back to OPM and have them conduct additional investigation but that takes way too much time. Instead they resolve the issues using their own resources.

Sorry this is not a good example of government efficiency but it is a great example of a government agency manipulating the numbers to make things look good for Congress.

I have been a DOD adjudicator since the mid 80's and currently OPM turns out the worst investigative product I have ever come across. I don't trust the work has been done and recent court cases verify that contractors lied about completing the work!

Steven Pearlstein: Interesting. But this sounds to me like the traditional civil service attitude, which is that the only way to do things faster or better is to hire more staff and then hire more checkers and checkers to check the checkers. It also sounds like the typical response of the civil service unions to the use of outside contractors, whose work is in every instance that I know of denigrated by the civil servants who would rather protect their own rather than admit that maybe somebody on the outside can do it better. The instinct of the last administration, to outsource everything they could, was wrong. But the instinct of the federal employees unions, that every instance of outsourcing yields inferior work, is equally ridiculous. Frankly, I've had my fill of both sides. Pox on both your houses.

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Define "productivity": I'm sure there actually is some here, but I love your line about "you'll find workers working nights and weekends to meet ambitious deadlines" (add in hoo-hah cheering).

Now last I knew, as an economics graduate student, labor productivity was defined as output divided by hours. If you can get 100 widgets/hr, and then can get 120 widgets/hr, you've increased productivity.

If you get the same widgets/hr, and just browbeat more hours you're just bullying free labor. You haven't increased productivity one jot. Please define your terms, and distinguish the two. Using a tight labor market to bully free work is not productivity, and any increase in output as a result doth not get added to the calculations.

Right now you're blurring the two.

Steven Pearlstein: Again, typical union response when the issue of productivity comes up. How about changing processes and using technology so that the same number of people, working the same hours, can generate significantly more output. Your analysis simply assumes that the current processes are the most efficient use of labor that there can be. Dr. Chu proved that that assumption was very wrong.

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Sorrento, Fla.: Hey Steve:

Thanks for holding a great session. Have there been any audits or studies that have been able to identify departments that are redundant to each other? I would imagine there is a copious amount of work that could be shared between departments instead of many doing the same thing?

Steven Pearlstein: That's really another whole issue, whether the government is doing stuff that isn't really that vital that could simply not be done. I'm sure there is some of that, and it would make for a great series of news articles, but I also suspect that when you add up all the savings, it wouldn't move the needle much in terms of overall federal spending and taxes. Which is not to say it shouldn't be done.

But my focus today was on doing the things that are important and vital in a more efficient way.

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Washington D.C.: Do you think the Federal Service needs employee unions? I do not. The Civil Service offers enough protection. Thanks, from a retired civil servant.

Steven Pearlstein: Frankly, I don't see the need for both. I think there are jobs that should be unionized and not part of the civil service -- security guards, housekeeping functions, that sort of thing. And I think there are civil service jobs that involve core government functions that should never have been unionized. But there is no need for both -- that is just a setup that the public employees have used to weaken public sector management and increase their pay and benefits. Unfortunately, the Democratic Party, including President Obama, is too chicken to confront the Public Employee Unions on that.

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Vienna, Va.: Your article on Productivity Improvement was the best news I've read on how federal agencies are achieving the TRANSFORMATION possible that is promoted by our new president. Many agencies have been improving process and performance through collaboration and the use of Knowledge Management principles to define, measure and achieve goals through team collaboration. All it requires is enlightened management leadership which has empowered employees to implement their best ideas for improvement.

Steven Pearlstein: Yes.

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Boulder,Colo. (Formerly Alex Va. and Takoma Park Md.): Human psychology and/or the human ego will prevent widespread changes in terms of productivity, unless positive reinforcement techniques are employed, much as one would use to train dogs.

I am not a government worker nor have I ever been one, but I hear horror stories on a weekly basis from friends in the DC region who are -- they are earnest, hard working people who are thwarted constantly due to internal office politics (human egos rearing ugly heads).

When they are productive they are punished because they make others -- their mediocre supervisors who long ago gave up caring out of their own frustration -- look bad. It's a real shame. My friends (40-something-year-old mid career females) are completely demoralized by it.

The reward for being productive and/or managing a productive staff/department must be great enough to subvert the power of individual egos and their insecurities, from which they operate.

Steven Pearlstein: I think this is an accurate description of many offices in the federal bureaucracy. The bad pushing out the good. This is why tough and frequent and candid evaluations are key and why it is crucial to tie pay and promotions to those evaluations. And it has to start from the top down, so mid level managers know that they themselves will suffer if they don't get better performance out of their people. The people I blame most for the current situation are the GS-13's and above who really have the power to change things but don't because they believe its above their pay grade. It's not. They are, frankly, very well compensated, which is fine with me, but they need to deliver.

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Southwest Nebraska: Mr. Pearlstein, thanks for the excellent, sharp discussion. I really appreciate your candor and your willingness to talk with questioners.

Steven Pearlstein: You are welcome.

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Washington, D.C.: I'm a federal government worker in my 20's and your column today rings so very true. What can those of us in non-managerial positions do to help? Where I work, empowerment is a dirty word and despite paying us six-figure salaries, we have zero autonomy and ownership in our work and are prohibited from making even the simplest decisions.

Steven Pearlstein: I say just take ownership, start acting like you think you should, get your good colleagues to join you, and if somebody gets in your way, explain that you look forward to having a full and frank discussion with the secretary or somebody in his/her office. Also, take good notes and find a back channel to Jeff Zeintz.

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Princeton, N.J.: I have never been a member of a government workers union, but I have seen the results of the private security investigations and sorry, but DC is correct. They stink.

Steven Pearlstein: Fine. Then fix it. But what's not accepetable is that a security investigation takes 440 days.

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Washington, D.C.: I think the current system encourages government workers to talk about how busy they are without actually doing anything. I'd like to see "billable hour" concept used in private law firms where you're actually reporting what you do. I know many people work for government so they don't have to do that, but really, it's sad how little gets done. It's blamed on the system but mostly, it's the people. Right, Steve?

Steven Pearlstein: Any re-engineering that really improves productivity has the equivalent effect of "billable hours." I'd be afraid to actually adopt such a concept in the federal government because all you'd get is another layer of paperwork and bureaucracy and inflexible rules, with an entire handbook on what is a billable hour.

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Beautiful Downtown Lake Ridge, Va.: The issue with government (I have worked in state/local for 17 years) is risk tolerance. Government tends to abhor failures - even normal, expected ones. A single occurrence tends to set in motion meetings, new procedures, etc. These slow the process (what ever that may be) and reduce individual morale and motivation. (Group punishment model.) Private business tends to be more tolerant of risk and associated failures. Government needs to foster a culture where it's good to try, and failure isn't the end of the world.

Steven Pearlstein: You have hit the nail on the head -- and we've just got to change that. People have to grow up and understand that just because one government employee, as an example, commits fraud with a government credit card, it doesn't mean that the government should take credit cards away from all its employees. Leaders have to be big enough to stand up and explain that the money saved by giving employees credit cards far exceeds the money lost to fraud. That doesn't mean you don't adopt effective systems for rooting out and punishing fraud. You do. But you don't throw out the baby with the bathwater.

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Washington, D.C.: DOD adjudicator again wrong. I want to do my job the most efficient way possible and give the taxpayers the biggest bang for the buck.

Your OPM example is not a good one. Don't talk to OPM but the users of their product. OPM back in 90's turned out a quality product i.e. investigation. However, now they have outsourced the investigation to contractors. The contract administrators never talked to folks using the product and they, i.e. OPM was more concerned about closing investigations quickly rather than turning out a quality product.

Problem started under Clinton when he laid off 5000+ DSS folks and wanted to turn investigations into a business.

So, before you run your Pulitzer Prize winning mouth know the facts. And never assume!

Steven Pearlstein: I didn't run my mouth. I quoted something from the mouth of a McKinsey consultant who had looked at the process and thought it had improved productivity and wrote it up in a published article. If you have a beef, take it up with McKinsey, which knows a thing or two about management.

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But what's not acceptable is that a security investigation takes 440 days. : How do you know? For very high levels such as communications security if a person has lived out of the country or traveled a lot, it is immensely difficult to track down all his contacts.

Steven Pearlstein: That was an average number, not an outlier.

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Anonymous: Improve productivity of Federal government workers?------how about providing less boring jobs, supervisors less narrow-minded and bureaucratic and more open to using the different talents of their employees, and public leaders who don't dump on the government to win votes.

Thanks.

Steven Pearlstein: That would be good. And how about public employees who don't blame everyone else for their problems but roll up their sleeves, take responsibility and get it done, even if it does involve a bit of personal risk.

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Reston, Va.: I agree with the report in that gains in efficiencies should be realized in the government. The government has been trying to do this along the lines of identifying and implementing "best business practices".

There may be a few examples of success; but agency level accounting - across the board - is still unable to adequately track the flow of funds.

The best way to gain efficiencies is for Congress to mandate that every agency publish their detailed budgets, their contract cost data (applied at a low WBS level), and spend rates cross-walking the budgets with the contracts and in-house costs.

If this info was public, then watchdogs could compare year to year and apply some pressure to the system.

Steven Pearlstein: Sounds like some good ideas.

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New York, N.Y.: Steve:

Your points are well taken, but you should make an important distinction between the federal government and the state and local governments.

One important reason why the federal government has the ability to innovate is because the officials who make management decisions are not beholden to Public Employees Union. At the state and local levels our officials are significantly beholden to all of the assorted unions for votes and contributions. Go try making a management decision at the state level that will adversely affect the unions. Good luck. I think this is one of the main reasons why so many of the states are in total disarray.

On a related point, I think it's a total moral outrage that in these trying fiscal times the states are cutting social programs of every stripe (Medicaid, food stamps, elder programs). The only thing that is off the table from cuts is union salaries, benefits and pensions. So while poor folks can't get healthcare and Granny can't get her Meals on Wheels, the municipal workers are retiring early and living large. All because the elected officials are scared out of their wits from the union bosses. What an outrage!

Steven Pearlstein: Thanks.

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Freising, Germany: That's quite an interesting article today on bureaucracy and productivity. Here in the European Union, with less political unity than in the U.S., bureaucracy appears to be at times overwhelming, and the trend has been to privatize departments and encourage competition to drive down costs. But forcing lower salaries on civil servants certainly doesn't increase job motivation, and hence, by extrapolation, productivity.

Did the U.S. go through this phase of privatization? What was the prevailing opinion regarding its success?

Steven Pearlstein: Yes, we did, and I don't think privatization is the right answer in most instances. It is a workaround to the problem that government isn't working well. That suggests fixing the problem rather than letting it fester.

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Anonymous: The article hit the nail on the head. The problem with government programs is government regulations that have to be met--the proverbial red tape. I made a suggestion in my department to include several (currently separate) approval documents into the strategy document that must be prepared for actions over $100K. It didn't go anywhere. Why? Because it was felt I didn't go through channels. Not that it wasn't a good idea, mind you, but I didn't go through channels. My explanation wasn't accepted. Do I now respect that my management has the best interests of our customers at heart? No.

Steven Pearlstein: Good example. Wonder what the Secretary or Deputy Secretary of your department would think of that if he/she knew?

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Herndon, Va.: Mr. P: As a now-retired USG employee (most of the time with the Dept of State), I believe there needs to be a change in the most common system of pay (GS-1 through GS-15), with the so-called "automatic" pay increases, but what will replace it? Pay banding doesn't seem to work much better. The major problem - until supervisors are well-trained and prepare evaluations of employees that clearly delineate their strengths and weaknesses, with pay tied to the evaluations - no cure is in sight.

Steven Pearlstein: That's probably right.

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New Carrollton, Md.: I'm curious, who told you it takes the IRS 15 days to hire someone? I asked 10 senior managers what the fastest they ever brought someone on board was. They said two months. The 500 Revenue Officers who started last week took over 90 days to bring on board from the date the application period closed. While I don't doubt that somewhere around here someone was hired in two weeks, that is much different than what you wrote. I wish it was true and we could bring people on that fast, but currently that has no basis in reality.

Steven Pearlstein: As before, that was from McKinsey.

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Bethesda, Md.: Steven:

Your column implies that the private sector is efficient and that's just not true. It's not about government vs. the private sector, it's about good managers vs. bad managers. Both the public and private sectors have an ample supply of both. The quality and productivity of any organization is in large part a function of management.

Steven Pearlstein: I never said that private was good and public was bad. Most of the problems you find in government bureaucracies can be found in large private sector bureaucracies as well. It is just that the private sector is father along in the productivity revolution.

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Steven Pearlstein: That all the time we have today. Thanks for a lively discussion. "See" you next week.

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