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

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.
Page 2 GAO-03-192SP The Chief Operating Officer Concept

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

Page 3 GAO-03-192SP The Chief Operating Officer Concept

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

Page 4 GAO-03-192SP The Chief Operating Officer Concept

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

Page 5 GAO-03-192SP The Chief Operating Officer Concept

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

Page 6 GAO-03-192SP The Chief Operating Officer Concept

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

Page 7 GAO-03-192SP The Chief Operating Officer Concept

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

Page 8 GAO-03-192SP The Chief Operating Officer Concept

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

Page 9 GAO-03-192SP The Chief Operating Officer Concept

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

Page 10 GAO-03-192SP The Chief Operating Officer Concept

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)