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entitled 'Highlights of a GAO Roundtable: The Chief Operating Officer 
Concept: A Potential Strategy to Address Federal Governance Challenges' 
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By the Comptroller General of the United States: 

United States General Accounting Office

GAO: 

October 2002: 

Highlights of a GAO Roundtable: 

The Chief Operating Officer Concept: A Potential Strategy to Address 
Federal Governance Challenges: 

GAO-03-192SP: 

GAO Highlights: 

Highlights of GAO-03-192SP: 

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. 

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. 

* 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. 

The full special publication is available at http://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. 

[End of section]

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. 

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 first-phase 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. 

Signed by: 

David M. Walker: 
Comptroller General of the United States: 

[End of section]

Appendix I: 

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 
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 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 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 long-term 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 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 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. 

[End of section] 

Appendix II: 

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): 

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): 

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