February 9, 2009 – Harvard professor Linda Bilmes served as an assistant secretary in President Clinton’s Commerce Department and is co-author of an upcoming book, The People Factor: Strengthening America By Investing In Public Service, which she wrote along with W. Scott Gould, who has been nominated as deputy secretary for Veterans Affairs. Bilmes spoke with NationalJournal.com’s Lucas Grindley about her research and how investing $10 billion in federal employees could yield a $300 billion return. In the first part of the interview last week, Bilmes discussed how to avoid waste and mismanagement in the stimulus package. Edited excerpts follow. Visit the Insider Interviews section for previous discussions in the series.
AUDIO Audio file playback requires Flash player. Download here. Audio Snapshot: Linda Bilmes (Feb. 9) – Music by Kevin MacLeod (incompetech.com). Licensed under Creative Commons “Attribution 3.0”
NJ: I know research for the book has been in the works for several years. What have you learned?
Bilmes: This is really a book about the need to invest in the 1.9 million federal workers who are all over the country and who run the government. We have reached the conclusion that when you look at many, many problems confronting the country — whether it is the flawed intelligence that led us into Iraq, the amount of waste and fraud in the reconstruction effort, the failure of the regulatory oversight of Wall Street, the salmonella in the peanut butter, the lead-tainted toys from China, the post-Katrina debacle, the list goes on and on and on — what these things have in common is that there has been a breakdown in the federal work force because of the fact that we have systematically underinvested in the federal work force for decades. This really dates back to the Reagan era. It’s a long period of time in which the federal work force has not been seen as the key lever to making the government work well…. We are calling for a complete reinvigoration and overhaul of the federal work force.
NJ: Is this something that can be measured, that you can say at the end “we did this and we got better performance”? Or is it one those times when you are measuring against something that didn’t happen, which is bad performance?
Bilmes: That is a very good question. We believe that with an investment of about $10 billion over the next five years, we can reap about $300 billion to $600 billion — in that range — of increased services and productivity and direct savings. That’s our estimate, which is outlined in the book in excruciating detail.
NJ: How much is savings and how much is increased productivity?
Bilmes: It is a combination of productivity, reduced duplication, reduced fraud — and a lot of it is getting better bang for the buck out of the service contractors, the contracts which are for services as opposed to buying a thing….
Anyone who has even renovated a home knows that depending on how much you control the cost, you control what’s happening. You really think through ahead of time what you’re going to need to do, what you can afford, what you can’t afford. You think through what happens if the schedule slips, and so forth. That contract can vary from sort of 100 to 200 — there is a wide scope. And right now, you have a very eviscerated federal contracting work force — they have been cut and slashed — as well as a very, very wide slate of other managers who are supervising contractors who have basically been given no training in how to manage these things and very little authority. So it’s not surprising that the amount of contracting and the sort of dollar amount that we’re spending are absolutely going through the roof, and with many very widely publicized meltdowns, particularly in the IT area, where the failures ranging from VA to IRS to the Pentagon are legion. And basically, the bulk of our savings and productivity improvements comes from much, much better managing of the multisector work force.
NJ: President Obama is going to appoint a chief performance officer. Would that person have something to do with making contracts more efficient?
Bilmes: Well, I sincerely hope so.
NJ: Do you think that duty is something that should be centralized under one person?
Bilmes: The leadership for changing the culture of how we really view the federal work force — a work force which has largely been dumped on for decades — that cultural shift has to come from the very top. It has to come from the president, it has to come from the Cabinet secretaries, and then below that level, the political appointees…. But the political appointees and the senior executives and the senior managers and supervisors need to receive extensive training in the same way, pretty much, that we think about training in the military. Training is a way of life in the military. You’re not hired and expected to know how to be a colonel; you go through extensive training to get there. We see a total philosophical shift in the way we think about the federal work force, which is our bulwark against our enemies both military and economic. That really does have to come from the top.
NJ: Even training costs money, and you note in your book that salaries don’t compete with the private sector. Won’t it be hard to sell the idea of getting more money for these sorts of things now, in this kind of economic climate?
Bilmes: It may. It may. I think that people don’t necessarily recognize how pivotal the federal government is in everything they do. From the minute you wake up in the morning and your alarm clock rings to the time that is established by the atomic clock in Boulder, Colo., and NIST [the National Institute of Standards and Technology]; to eating your breakfast cereal, where all the ingredients are regulated by the Food and Drug Administration; to getting in your car, where all highway emissions and all car safety and so forth is regulated by the federal government; your life is very, very much affected by the federal government. But people don’t necessarily see that connection.
And what has tended to happen, we believe, over the past decade is that the media, the Congress, the presidents — the general public culture has been a sort of “gotcha” culture toward the federal government. A mistake is vastly amplified. You have the successes of government minimized. So there has become this extremely kind of tiny-footed, risk-averse culture in the government that has emerged as a result of decades of criticism and blame in which bold initiatives are discouraged, innovation is discouraged, and trying new things is almost not allowed. I have legion of example in the book. It is partly about money, but I want to emphasize that a lot of it has to do with flexibility and with restructuring of processes like hiring processes and promotion processes and mentoring processes and training processes.
NJ: And you really think that could be resolved, that they could actually be more flexible? The government is not known for that.
Bilmes: I think that this is a fixable problem. I really do. I think when you look around the world, there are some problems that seem somewhat intractable, but this problem of getting a first-class functioning public service and a first-class federal government and investing in a federal work force, I think, is long overdue to be addressed. And I think it is truly fixable.
The problem of how to recruit top students quickly should not be as difficult a problem to resolve as Gaza. We are treating these problems as if this is some kind of impossible, intractable problem because the government has in the past not been able to fix it. But I truly believe that with a different attitude to the government, a different appreciation, and these days a different economic environment, I believe that the time is ripe to fix some of these problems. And this is essential to maintain the quality of life in America.
NJ: In your book, you point out that the government isn’t competitive with the private sector in hiring young talent. Why is that?
Bilmes: We surveyed about 2,000 students for writing the book, and generally what you found — there was between 30 and 40 percent of students who said they would consider working for the government, so you had plenty of students who were willing to consider working for the government. You don’t need everyone to work for the government…. We asked a series of attributes, and then we asked, “Are you more likely to get this in the public sector or the private sector? In the public sector or the nonprofit sector?” And basically what we found is that all of the attributes that people most wanted in a job were ones that the government, they felt, didn’t offer. For example, they wanted to work in an environment where you could rise as high as your talents will take you, which they perceived did not exist in government. They wanted to work in a caring environment, which they perceived did not work in the government. They perceived that the government was less family-friendly than either the private or the nonprofit sector.
NJ: Are these perception problems or are they actually right?
Bilmes: That’s a very interesting question. And when I presented some of this material to groups of senior executives who come here for executive education at Harvard, that’s a question which always comes up. Are these perceptions or is this reality? To what extent is it that the government is not getting its message out? To what extent is it that the government needs to be restructured? And I think there’s some of both.
NJ: So what about you? Would you consider going back into government?
Bilmes: Oh, well. That’s another subject, that’s another subject.
NJ: There are quite a few openings, I hear.
Bilmes: [laughs] No comment on that one.