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FY-Eye: The Flow-Chart Fallacy

By Ed O'Keefe

Partnership for Public Service CEO Max Stier writes on the op-ed pages of The Post today in response to the news that the Obama administration is considering a reorganization of the government's financial regulatory and food safety agencies.

Mighty Max writes:

To be clear, government reorganizations themselves are not necessarily a bad thing. And perhaps we should restructure our financial regulatory agencies and consolidate oversight of food safety. But there are two major problems with such reorganizations.
First, they are really, really hard. According to a survey of Fortune 500 executives, more than 70 percent of corporate mergers are doomed to "outright failure." Reorganizations require sustained commitment. In a town with collective attention-deficit disorder, carrying momentum for any reform effort beyond the next election cycle can be a pipe dream. With 535 potential authors of any overhaul, it is hard to achieve consensus and clarity on a plan. And reorganizing agencies should be accompanied by a restructuring of congressional oversight responsibilities so department officials don't have to answer to a dysfunctionally high number of bosses. The fact that DHS falls under the jurisdiction of 86 committees and subcommittees illustrates how agencies are set up for failure if a reasonable oversight structure is not built in.
The bigger problem with reorganizations is that they distract from the real problems.
When government fails, it typically has little to do with the way an agency is organized and almost everything to do with the performance of senior leadership at federal agencies, their ability to effectively manage the people working under them and the culture of the agencies.

Stier writes later that:

Before investing tremendous amounts of energy in major reorganization plans, the Obama administration would be better served by focusing on preparing its political appointees to effectively lead federal agencies. Energized, well-trained leaders have much more potential to turn around a failing agency than a major reshuffling does.
The administration should also invest in developing useful measurement tools to gauge agency performance. The president's budget calls for improved performance measurement in government. His administration should make it a priority to keep this promise.

Max's group is of course responsible for the Best Places to Work survey, one measurement of agency success that OMB Director Peter R. Orszag recently warned he will take into account when preparing future budget requests.

Thoughts? Discuss below.

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By Ed O'Keefe  | June 8, 2009; 11:00 AM ET
Categories:  FY-Eye, Public Service  
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