Highlights of a GAO Roundtable: The Chief Operating Officer
Concept: A Potential Strategy To Address Federal Governance
Challenges (04-OCT-02, GAO-03-192SP).
The federal government is in period of profound transition
requires a comprehensive review, reassessment, reprioritization,
and reengineering of what the government does, how it does
business, and, in some cases, who does the government's business.
Agencies will need to transform their cultures so that they are
more results oriented, customer focused, and collaborative in
nature. At the same time, GAO's work over years has amply
documented that agencies are suffering from a range of
long-standing management problems that are undermining their
abilities to efficiently, economically, and effectively
accomplish their missions and achieve results. On September 9,
2002, GAO convened a roundtable to discuss the application and
the related advantages and disadvantages of the Chief Operating
Officer (COO) concept and how it might apply within selected
federal departments and agencies as one strategy to address
certain systemic federal governance and management challenges.
The invited participants have current or recent executive branch
leadership responsibilities, significant executive management
experience, or both.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-03-192SP
ACCNO: A05231
TITLE: Highlights of a GAO Roundtable: The Chief Operating
Officer Concept: A Potential Strategy To Address Federal
Governance Challenges
DATE: 10/04/2002
SUBJECT: Accountability
Federal agencies
General management reviews
Internal controls
Productivity in government
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GAO-03-192SP
United States General Accounting Office October 2002
GAO By the Comptroller General of the United States
GAO- 03- 192SP
HIGHLIGHTS OF A GAO ROUNDTABLE
The Chief Operating Officer Concept: A Potential Strategy
to Address Federal Governance Challenges
Why GAO Convened This Roundtable
The federal government is in a period of profound transition that requires
a comprehensive review, reassessment, reprioritization, and reengineering
of what the government does, how it does business, and, in some cases, who
does the government*s business. Agencies will need to transform their
cultures so that they are more results oriented, customer focused, and
collaborative in nature. At the same time, GAO*s work over the years has
amply documented that agencies are suffering from a range of long-
standing management problems that are undermining their abilities to
efficiently, economically, and effectively accomplish their missions and
achieve results.
On September 9, 2002, GAO convened a roundtable to discuss the application
and the related advantages and disadvantages of the Chief Operating
Officer (COO) concept and how it might apply within selected federal
departments and agencies as one strategy to address certain systemic
federal governance and management challenges. The invited participants
have current or recent executive branch leadership responsibilities,
significant executive management experience, or both.
October 2002 HIGHLIGHTS OF A GAO ROUNDTABLE The Chief Operating Officer
Concept: A Potential Strategy to Address Federal Governance Challenges
The full special publication is available at www. gao. gov/ cgi- bin/
getrpt? GAO- 03- 192SP. For additional information about the special
publication, contact J. Christopher Mihm, Director, Strategic Issues on
(202) 512- 6806 or mihmj@ gao. gov.
Highlights of GAO- 03- 192SP
Elevate attention on management issues and transformational change. The
nature and scope of the changes needed in many agencies require the
sustained and inspired commitment of the top political and career
leadership.
Integrate various key management and transformation efforts.
While officials with management responsibilities often have successfully
worked together, there needs to be a single point within agencies with the
perspective and responsibility* as well as authority* to ensure the
successful implementation of functional management and, if appropriate,
transformational change efforts.
Institutionalize accountability for addressing management issues and
leading transformational change. The management weaknesses in some
agencies are deeply entrenched and long standing and will take years of
sustained attention and continuity to resolve. In addition, making
fundamental changes in agencies* cultures will require a long- term
effort. In the federal government, the frequent turnover of the political
leadership has often made it difficult to obtain the sustained and
inspired attention required to make needed changes.
Within the context of these generally agreed- upon themes, the
participants offered a number of ideas to help address management
weaknesses and drive transformational change. United States General
Accounting Office
What Participants Said
At the roundtable, participants generated ideas and engaged in an open
dialogue on the possible application of the COO concept. There was general
agreement that the following three themes provide a course for action. G A
O Accountability Integrity Reliability
Highlights
G A O Accountability Integrity Reliability
Highlights
Page 1 GAO- 03- 192SP The Chief Operating Officer Concept
United States General Accounting Office Washington, DC 20548
Comptroller General of the United States
October 4, 2002 Subject: Highlights of a GAO Roundtable on The Chief
Operating Officer Concept:
A Potential Strategy to Address Federal Governance Challenges The federal
government is in a period of profound transition that requires a
comprehensive review, reassessment, reprioritization, and reengineering of
what the government does, how it does business, and, in some cases, who
does the government*s business. Agencies will need to transform their
cultures so that they are more results oriented, customer focused, and
collaborative in nature. At the same time, GAO*s work over the years, most
prominently in the High Risk and Performance and Accountability Series,
has amply documented that agencies are suffering from a range of long-
standing management problems that are undermining their abilities to
efficiently, economically, and effectively accomplish their missions and
achieve results.
On September 9, 2002, GAO convened a roundtable to discuss the Chief
Operating Officer (COO) concept and how it might apply within selected
federal departments and agencies as one strategy to address certain
systemic federal governance and management challenges. The invited
participants were generally individuals with current or recent executive
branch leadership responsibilities, significant executive management
experience, or both. The intent of the roundtable was not to reach
consensus, but rather to generate ideas and to engage in an open dialogue
and nonattribution- based discussion on the possible application and the
related advantages and disadvantages of the COO concept. As expected, the
participants expressed a range of differing views on the COO concept, its
application to the federal government, and other related strategies to
address federal management challenges.
Nonetheless, as detailed in appendix I, it appears that there was general
agreement that the following three themes provide a course for action.
Elevate attention on management issues and transformational change.
Integrate various key management and transformation efforts.
Institutionalize accountability for addressing management issues and
leading
transformational change. In addition, within the context of these
generally agreed- upon themes, the participants offered a number of ideas
to help address agencies* management weaknesses and drive transformational
change.
GAO- 03- 192SP The Chief Operating Officer Concept Page 2 The Congress has
had and will need to continue to have a central role in improving
federal management. For example, over the last 2 decades, the Congress has
put in place a statutory framework intended to improve federal management,
decision making, performance, and accountability. Congressional oversight
and legislative action have also been instrumental in helping a number of
agencies address their individual management weaknesses. Given the
Congress* important role in federal management through legislation and
oversight, it will need to be fully engaged in any ongoing discussions on
how best to elevate, integrate, and institutionalize key management and
transformational change responsibilities.
From an implementation perspective, if the Congress and the administration
decide to pursue the ideas generated at the roundtable, it may make sense
to pilot alternative approaches in a select number of agencies using a
value- and risk- based approach. For example, an agency that is
experiencing particularly significant challenges in integrating disparate
organizational cultures or that is engaged in major transformation efforts
may be an especially appropriate candidate. Similarly, an agency with
long- standing management weaknesses and high- risk operations or
functions may also be a good firstphase candidate. Piloting alternative
approaches would allow the Congress, executive branch leadership in the
Office of Management and Budget and Office of Personnel Management,
agencies, and others to gain experience with various approaches before
deciding when and where any given approach should be more widely applied.
Appendix I provides highlights of the matters discussed by the roundtable
participants as well as subsequent comments we received from the
participants on a draft summary of the roundtable discussion. Appendix II
provides a list of the participants. This document will be posted to our
Web site at www. gao. gov. For additional information on our work on
strategic human capital management and federal agency transformation
efforts, please contact J. Christopher Mihm, Director, Strategic Issues on
(202) 512- 6806 or at mihmj@ gao. gov.
I wish to thank each of the participants in the roundtable for taking the
time to share their knowledge and to provide their insights and
perspectives on the important matters this document discusses. I look
forward to working with them on other important issues of mutual interest
and concern in the future.
David M. Walker Comptroller General of the United States
Appendix I GAO- 03- 192SP The Chief Operating Officer Concept Page 3
The Chief Operating Officer Concept: A Potential Strategy to Address
Federal Governance Challenges
Highlights of Roundtable Discussion
The roundtable*s overall purpose was to discuss the Chief Operating
Officer (COO) concept and how it might apply within selected federal
departments and agencies as one element of an overall strategy to address
certain systemic federal governance and management challenges. The
roundtable discussion neither sought nor achieved a consensus on the COO
concept. However, it does appear that there was general agreement on a
number of important overall themes that can serve as a basis for
subsequent analysis, discussion, and consideration. These generally
agreed- upon themes provide a course for action.
Elevate attention on management issues and transformational change. The
nature and scope of the changes needed in many agencies require the
sustained and inspired commitment of the top political and career
leadership. There is no substitute for top leadership involvement,
including the President through, for example, the establishment of a
governmentwide management agenda. Top leadership attention is essential to
overcome organizations* natural resistance to change, marshal the
resources needed to implement change, and build and maintain the
organizationwide commitment to new ways of doing business.
Integrate various key management and transformation efforts. By their
very nature, the problems and challenges facing agencies are crosscutting
and thus require coordinated and integrated solutions. However, the
federal government too often places management responsibilities (for
example, information technology, human capital, or financial management)
into various *stovepipes* and fails to implement transformational change
management initiatives in a comprehensive, ongoing, and integrated manner.
While officials with management responsibilities often have successfully
worked together, there needs to be a single point within agencies with the
perspective and responsibility* as well as authority* to ensure the
successful implementation of functional management and, if appropriate,
transformational change efforts. At the same time, it is not practical to
expect that the deputy secretaries, given the competing demands on their
time in helping the secretaries execute the President*s policy and program
agendas, will be able to consistently undertake this vital integrating
responsibility. Moreover, while many deputy secretaries may be nominated
based in part on their managerial experience, it has not always been the
case and, not surprisingly, the management skills, expertise, and
interests of the deputy secretaries have always varied and will continue
to vary.
Institutionalize accountability for addressing management issues and
leading transformational change. The management weaknesses in some
agencies are deeply entrenched and long standing and will take years of
sustained attention and continuity to resolve. In addition, making
fundamental changes in agencies* cultures will require a long- term
effort. (Former GAO work has noted that the experiences of successful
major change management initiatives in large private and public sector
Appendix I GAO- 03- 192SP The Chief Operating Officer Concept Page 4
organizations suggest that it can often take at least 5 to 7 years until
such initiatives
are fully implemented and the related cultures are transformed in a
sustainable manner.) In the federal government, the frequent turnover of
the political leadership has often made it difficult to obtain the
sustained and inspired attention required to make needed changes.
Within the context of these generally agreed- upon themes, the
participants offered a number of ideas to help address management
weaknesses and drive transformational change, as highlighted in the
sections that follow.
Adopt an Approach to Management Reforms and Transformational Change that
Is Sensitive to Individual Agencies* Needs and Circumstances
There was strong agreement that the nature and scope of the management
problems confronting an agency, the degree to which it needs to undergo a
fundamental transformation, and its current organizational structure are
among the factors that need to be carefully considered in determining the
best way to elevate, integrate, and institutionalize management reforms
and transformational change. As a result, there is no *one size fits all*
solution to address the challenges agencies face.
For example, one approach that was discussed is to create an under
secretary for management, along the lines proposed by the President for
the Department of Homeland Security (DHS). Under the President*s proposal,
the under secretary for management at DHS would be the lead official
responsible for key general management functions such as budget,
accounting, and finance; procurement; human resources and personnel;
information technology and communication systems; facilities and property
management; security; and performance management. Also under the
President*s proposal, the Chief Financial Officer (CFO) and Chief
Information Officer would report to the secretary, or to another official
of DHS, as the secretary may direct. The under secretary would be
appointed by the President, subject to Senate confirmation, to a position
organizationally equivalent to the four program under secretaries.
On the other hand, to lead efforts to fundamentally transform an agency,
it may be appropriate to create a position at the highest level in the
agency, such as a second deputy secretary or a principal under secretary.
Such a position could have responsibilities for general management
functions as well as issues that are more strategic and require a wider
range perspective and higher level of authority. Such issues include:
organizational alignment; matrix, risk, and change management; strategic
planning; the stewardship of the agency*s core values; and internal
communications and knowledge management.
The roundtable discussion did not focus on what approach may work best for
any given agency. Rather, as previously suggested, the participants
stressed that whatever approach is used, it must be sensitive to the
specific needs and circumstances an agency faces. The critical point is to
craft an approach in each case that (1) sets responsibility and
accountability for functional management issues and transformational
change at an organizational level appropriate for the types of reforms
that are needed and (2) creates
Appendix I GAO- 03- 192SP The Chief Operating Officer Concept Page 5
integrated leadership responsibility in a single organizational position
for key
management functions such as human capital, financial management,
information technology, acquisition sourcing strategies, and performance
management, as well as for transformational change initiatives, if
appropriate.
Articulate Responsibilities in Statute
The participants suggested that in crafting an approach for any specific
agency, the Congress should make clear in statute the broad
responsibilities for at least the senior official responsible for
management and transformation. The Congress has taken this general
approach with other important management legislation that can serve as
illustrative models. For example, the Chief Financial Officers Act
requires 24 federal agencies to have CFOs. The CFOs are to *possess
demonstrated ability in general management of, and knowledge of and
extensive practical experience in financial management practices in large
governmental or business entities.* The act also clearly lays out the
CFOs* responsibilities, including developing and maintaining integrated
accounting and financial management systems; directing, managing, and
providing policy guidance and oversight of all financial management
personnel, activities, and operations; and approving and managing
financial management systems design and enhancements projects.
The CFO Act also created the position of the Deputy Director for
Management (DDM) in the Office of Management and Budget (OMB) to focus
greater attention on management reform in the executive branch. Under the
CFO Act, the DDM is responsible for establishing governmentwide financial
management policies and general management policies for executive
agencies. Among the DDM*s wide- ranging financial management
responsibilities are to: provide overall direction and leadership to the
executive branch on financial management matters; review agency budget
requests for financial management systems and operations, advise the
Director of OMB on the resources required to develop and effectively
operate and maintain the systems, and correct major deficiencies in the
systems; and chair the CFO Council. The DDM also has significant general
management responsibilities including establishing general management
policies for executive agencies; performing functions relating to areas
such as the systematic measurement of performance, procurement policy,
information and statistical policy, and property management; and fostering
managerial innovation as well as undertaking other specified functions
that may be prescribed by the Director.
Several of the participants noted that, by establishing the broad CFO and
DDM responsibilities in statute, the Congress created a number of
important advantages. First, of course, the Congress created unambiguous
expectations for the positions and underscored its desire for employing a
professional and nonpartisan approach in connection with these positions.
Second, establishing responsibilities in statute creates, in effect, an
implicit set of qualification standards and expectations that the
incumbents will have leadership experience in the areas that will be
within their portfolios. Third and more directly, several of the
participants felt that by articulating qualification requirements directly
in the CFO Act, the Congress took an important step toward further
ensuring that high- quality CFOs would be selected. These participants
felt that
Appendix I GAO- 03- 192SP The Chief Operating Officer Concept Page 6 the
Congress* approach with regard to CFOs should be considered for broader
application.
Establish Accountability for Results
The participants also widely agreed that augmented accountability
mechanisms were needed to help assure the success of key management and
transformational change efforts. The participants discussed a number of
possible mechanisms intended to help provide the continuing, focused
attention essential to successfully completing multiyear transformational
change. Such change typically takes longer than the tenures of political
leaders.
First and foremost, there was widespread agreement that the effective use
of existing mechanisms is critical to ensuring positive outcomes and
appropriate accountability. The important role that congressional
oversight has played and can play in fostering improvements was
acknowledged. Likewise, public reporting, such as the annual performance
plans and performance reports required by the Government Performance and
Results Act and audited financial statements under the CFO Act, can
provide useful information on agencies* progress in meeting goals and
addressing mission- critical management challenges.
The use of performance contracts for senior leaders was also recognized as
being a potentially important mechanism for clarifying expectations,
monitoring progress, and assessing accountability. Such performance
contracts can be implemented administratively, as was done in the
Department of Transportation since the mid- 1990s, or by statute, as has
been done for selected performance- based organizations.
While there was discussion concerning the possibility of term appointments
for key management positions, no overall agreement emerged. For example,
some participants said that a term appointment would have to extend beyond
the tenure of a typical political appointee. A term appointment lasting
perhaps 5 to 7 years for a senior management official would help to create
the accountability needed to ensure that longterm management and
transformation initiatives are successfully completed. Other participants,
on the other hand, expressed a strong concern that agency heads must have
a central role in selecting their top leadership teams and that a term
appointment for the senior management official could undermine, rather
than enhance, accountability. While there was no agreement on the merits
of term appointments for senior management officials, there was
recognition that the length of time it can take to nominate and confirm
officials for such positions can hamper efforts to initiate changes and
sustain the momentum needed to successfully complete reform initiatives.
The view was expressed that opportunities to streamline the nomination and
confirmation processes for executive branch management positions need to
be explored.
Proposals For Further Exploration
The discussion at the roundtable generated several ideas that could be
explored further in close coordination with the Congress to address long-
standing management
Appendix I GAO- 03- 192SP The Chief Operating Officer Concept Page 7
challenges, accelerate movement to a more results- oriented government,
and help to
transform agency cultures. These ideas included the following.
With respect to the elevation and integration themes, there was
considerable discussion on whether the senior management official in an
agency should be a presidential appointment requiring Senate confirmation,
while Senate confirmation would not be required of those officials who
lead specific management functions (for example, financial management,
information technology, or human capital) and who report to that senior
management official. While there was interest in considering such an
arrangement, it was also acknowledged that it would likely require
amending existing legislation, for example the CFO Act, and, therefore,
would need careful analysis to ensure that any legislative changes result
in augmented attention to management issues and do not inadvertently lead
to a reduction in the authority of key management officials and/ or the
prominence afforded a particular management function. On the other hand,
consistent with the desire to integrate responsibilities, it also was
suggested that the creation of a senior management position needs to be
considered with careful regard to existing positions and responsibilities
so that it does not result in unnecessary *layering* at an agency. An
additional suggestion requiring statutory changes would be to allow senior
management officials in each agency to assume full authorities and
responsibilities once they were nominated but before their confirmation.
However, it was understood that such an approach would be viable only if
the senior management position was restricted to the professional and
nonpartisan *good government* responsibilities that are fundamental to
effectively executing any administration*s program agenda and did not
entail program policy- setting authority.
With regard to the institutionalization theme, many participants felt
that the Congress should give the President*s Management Council (PMC) a
statutory basis to help ensure governmentwide attention to management
issues and the needed transformational change in federal agencies. The
Bush administration, using the approach initiated under the Clinton
administration, has administratively created a PMC. The PMC has served as
a vehicle for developing policies and initiatives that are sensitive to
implementation concerns, building consensus, and providing for consistent
follow- through across the executive branch. A statutory basis for the PMC
would ensure that it continues to exist without the necessity of being
rechartered by each administration. Consistent with this approach, it was
suggested that the Congress may wish to consider requiring the President
to submit an annual management agenda* with appropriate performance
measures* to accompany the President*s budget submission to the Congress.
Such an approach could also facilitate more direct linkages between
management issues and resource allocation decisions. Importantly, both the
Bush and Clinton administrations have articulated such management agendas*
providing a statutory requirement would help to ensure that this
beneficial approach continues with future administrations. It was also
suggested that requiring annual assessments of the progress made in
Appendix I GAO- 03- 192SP The Chief Operating Officer Concept Page 8
implementing the management agenda would serve as a major catalyst for
institutionalizing accountability. -- --- -- -- - In summary, the
participants at the roundtable were in broad agreement that there is a
compelling need to elevate, integrate, and institutionalize responsibility
for certain key management functions and transformational efforts within
federal agencies. There also was broad agreement that the best approach to
use in any given agency must be determined within the context of the
specific facts and circumstances surrounding that agency and its own
challenges and opportunities. Beyond that, the roundtable participants
offered a variety of suggestions for consideration as the executive branch
and the Congress seek to address the federal government*s long- standing
management problems and the need to move to a more responsive, results-
oriented, and accountable federal government.
Appendix II
GAO- 03- 192SP The Chief Operating Officer Concept Page 9
The Chief Operating Officer Concept: A Potential Strategy to Address
Federal Governance Challenges
Participants
Melissa Allen Assistant Secretary for Administration Department of
Transportation
Charles W. Culkin, Jr. Executive Director Association of Government
Accountants
Ed DeSeve Director, Management, Finance and Leadership Program University
of Maryland
Mortimer Downey Principal Consultant, PBConsult (Former Deputy Secretary,
Department of Transportation)
Mark W. Everson Deputy Director for Management Office of Management and
Budget
Mary R. Hamilton Executive Director American Society for Public
Administration
Dwight Ink President Emeritus Institute of Public Administration
Kay Coles James Director Office of Personnel Management
Clay Johnson Assistant to the President for Presidential Personnel The
White House
John A. Koskinen Deputy Mayor/ City Administrator Government of the
District of Columbia
Marcia Marsh Vice President, Strategic Human Resources Planning
Partnership for Public Service
Patricia McGinnis President and Chief Executive Officer Council for
Excellence in Government
Richard M. Moose President, Institute for Public Research, The CNA
Corporation (Former Under Secretary for Management, State Department)
Appendix II
GAO- 03- 192SP The Chief Operating Officer Concept Page 10 Sean O*Keefe
Administrator
National Aeronautics and Space Administration Bob O*Neill President
National Academy of Public Administration A. W. Pete Smith President and
Chief Executive Officer
Private Sector Council Elmer B. Staats Former Comptroller General of the
United States
U. S. General Accounting Office Tom Stanton Fellow, Center for the Study
of American Government
Johns Hopkins University Max Stier President and Chief Executive Officer
Partnership for Public Service (450162)
*** End of document. ***