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November 2013:

Three Business Principles for Better Federal Managers

By Tim Quinn

November 4, 2013

Posted in: Fort Meade

Federal managers don’t have it easy.

That’s not hard to understand when one considers that the government shutdown, political polarization, indiscriminate sequester cuts, a pay freeze and general badmouthing of federal employees have made it tough to manage a federal agency.

According to the Office of Personnel Management’s 2012 Federal Employee Viewpoint Survey, only 59% of federal employees are satisfied with their organizations. This number is down from prior years and is likely to dip further in the future.

To succeed in these challenging times, federal managers need new tools, and business may be the best place to find them, as business leaders wrestle with some basic questions everyday.

• Who are our customers?

• How are we different from our competitors?

• What is our strategy?

Today’s federal managers need good answers to these questions, too. There are dramatic differences between government and business, but there are also important similarities. Here is how understanding three business basics can make you a better federal manager.

Know Your Customers

Like business, government agencies have customers. An agency that proudly proclaims, “The American people are our customers,” while basically stating the truth, is missing the point. Specifically identifying whom an agency serves can have a profound effect on how it does business.

For example, the head of one federal agency that makes grants to local law enforcement consistently defined the agency’s customer as, “The small town police chief who sits around his or her kitchen table after a night on patrol and tries to apply for a grant.” That clear image of the customer drove the agency to simplify the grant application, streamline the funding process and strengthen customer support. Agency staff identified with the “cop in the kitchen” and sought to make the chief’s job less burdensome.

One satisfied customer, a local law enforcement executive, told a Senate committee, “They make applying for grants significantly easier and much less intimidating.”

A business that doesn’t know who its customers are or what they need doesn’t stay in business very long. While the consequences for a government agency are not as dire, the public sector should still harness the power that can come from a clear understanding of who their agency is really serving.

Understand the Difference

Government agencies compete. They compete against other government agencies in the budget and appropriations process for the attention of senior policymakers and for the media spotlight. An agency cannot successfully compete if it doesn’t know how it is unique or what it does better than its competition.

Agencies like to say, “Our mission is whatever Congress tells us it is.” That’s true; Congress does decide what an agency is authorized and funded to do. But agencies often have discretion to set priorities and focus their efforts. Thoughtful use of this discretion not only helps the agency meet the needs of its customers, but can also help distinguish it from other agencies with seemingly similar missions.

There is another very practical reason to do this. Any agency recently featured in a General Accountability Office (GAO) report has probably read that it is duplicative of some other agency. In fact, earlier this year, the GAO found 31 areas where agencies may be able to achieve greater efficiency or effectiveness. Within these 31 areas, the government watchdog found “17 areas of fragmentation, overlap or duplication where multiple programs and activities may be creating inefficiencies.”

Applying business basics like market differentiation (standing out amongst your competitors) and competitive advantage (leveraging an attribute you have that others don’t) can help an agency address these sometimes overstated, but always unflattering, charges of overlap.

More importantly, this type of business analysis can help an agency identify actual duplication and put its limited funds to better use — before GAO auditors recommend that it do so.

Know What You’re Doing

Agencies have many stakeholders that pull them in a lot of different directions. Consequently, managers have to balance the needs of Congress, The White House, “the Department” and interest groups, to name just a few. In this environment, it is very easy to run from one “fire drill” or “squeaky wheel” to the next — and accomplish nothing of significance.

In government, the best advice to cope with this reality is: “Focus. Pick a very small number of things you want to achieve, set goals, milestones and metrics, then pursue them with intensity.”

That’s the easy part. The hard part is deciding what not to do.

Business strategy guru Michael Porter has said that, “The essence of strategy is setting limits on what you’re trying to accomplish … it’s choosing what not to do.” Agency planning sessions are fertile ground for growing new “To Do” lists for an already overstretched workforce.

Rarely is a “Do Not Do” list written, however. Simply doing more threatens an agency’s ability to fulfill its core mission.

Using business frameworks like the 7-S Model, SWOT (strengths, weaknesses, opportunities and threats) or business process improvement in planning and execution can help government managers focus their efforts on the essentials. It should also impact how agency principals and staff spend their time, what strategic partnerships are pursued, and how discretionary dollars are spent.

Federal managers don’t have it easy. Expecting them to operate their agencies like a business is unrealistic, but by understanding some business basics, those in the public sector can gain new tools to help them run the organizations that run our country.

Tim Quinn is the associate dean of Loyola’s Sellinger School of Business and Management. He can be reached at tquinn@loyola.edu. For more information, visit loyola.edu/sellinger.

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