Management Reform: Status of Agency Reinvention Lab Efforts
Published: 1996-03-20T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: GAO reviewed the National Performance Review's (NPR) initiative to establish reinvention labs in federal departments and agencies, focusing on: (1) the labs' developmental status; (2) factors that hindered or assisted their development; (3) whether the labs were collecting performance data; and (4) whether the labs have achieved any results.
section_title: What GAO Found
paragraphs: GAO found that: (1) more than 2 dozen federal agencies and other entities have developed a total of 185 reinvention labs; (2) the labs deal with a variety of issues, from personnel management to improving operations using technology; (3) almost all of the labs consider customer service as their primary goal, and consider other government organizations to be customers; (4) while labs considered management support to be important to lab development, the use of regulatory waivers and communication about the labs' progress were rarely needed or used; (5) other federal reform efforts, such as downsizing and the implementation of the Government Performance and Results Act, had both positive and negative effects on the labs' development; (6) labs experienced difficulties in sustaining efforts that crossed agency boundaries or challenged agencies' existing cultures; (7) over two-thirds of the labs had collected some type of performance data, ranging from information on unit outputs to informal comments from staff and customers, but some lab administrators refused to collect performance data because they believed it was unnecessary or not worthwhile; (8) the performance data are inconclusive, since there are no previous data for comparison and the nature of the data is subjective; (9) the labs have yielded results by improving customer service, increasing unit productivity and employee morale, and reducing costs at some federal sites; and (10) the value of the labs will be realized only when lab efforts proven to be effective spread beyond the lab sites.

section_title: Letter
paragraphs: One part of the President’s National Performance Review (NPR) initiative has been the establishment of reinvention labs in a number of departments and agencies. This report on the reinvention lab effort was prepared as part of our ongoing body of work examining NPR-related issues.
We are sending copies of the report to the Vice President and the Director of the Office of Management and Budget. Copies will also be made available to others upon request.
If you have any questions about this report or would like to discuss it further, please contact me on (202) 512-8676. Major contributors are listed in appendix XV.
subsections: section_title: Introduction
paragraphs: The National Performance Review (NPR) was begun by the President in March 1993 and is a major management reform initiative by the administration under the direction of the Vice President. In September 1993, the Vice President published 384 NPR recommendations designed to make the government work better and cost less. We have commented on these recommendations and discussed their implementation in two previous reports.
“to pick a few places where we can immediately unshackle our workers so they can re-engineer their work processes to fully accomplish their missions—places where we can fully delegate authority and responsibility, replace regulations with incentives, and measure our success by customer satisfaction.”
In response to the Vice President’s request, dozens of federal agencies have established reinvention labs throughout the government.
subsections: section_title: Origins of the Reinvention Lab Concept
paragraphs: Although similar in some respects to pilot projects that have been used on numerous occasions in federal agencies to test new procedures, the reinvention lab concept originated at the Department of Defense (DOD) during the mid-1980s. DOD’s model installation program was initiated by the then Deputy Assistant Secretary of Defense for Installations (DAS/DI). The program focused on reducing the amount of regulation governing administrative functions at certain military installations. Through this program, DOD identified hundreds of pages of regulations governing military installations that it believed did not make sense or wasted time and money. The DAS/DI waived as many DOD regulations as possible and allowed the base commanders to operate the installations in their own way. According to an NPR official, the program was enthusiastically supported by the installations, which began to improve not only administrative operations but also mission-related functions. The model installations program became so successful that DOD opened the program to all military installations in March 1986.
In early 1993, the DAS/DI was appointed the Director of the overall NPR effort. According to an NPR official, the Director suggested to the Vice President that “reinvention labs” similar to the model installations be established within all federal agencies as part of the administration’s governmentwide effort to improve government operations and save money.
section_title: NPR Task Force Supports Lab Effort
paragraphs: The NPR effort is headed by the Vice President, but the day-to-day operation of the effort is the responsibility of an NPR task force that comprises staff from various federal departments and agencies. The staff are assigned to the task force for a temporary period of time, usually 3 to 6 months. The total number of staff assigned to the task force has varied over time but has usually been between 40 and 60. About 10 of these staff have worked on the NPR task force since it was established in 1993, but even they technically remain employees of their home agencies.
The NPR task force has attempted to advertise and promote the reinvention lab effort in a variety of ways. For example, the task force has sponsored or cosponsored several reinvention lab conferences (with another scheduled for March 25-27, 1996) and has periodically published information about the labs. It has also developed a lab database using information voluntarily submitted by the labs identifying their agencies, location, contact persons, and other general information about the reinvention efforts.
However, consistent with its overall philosophy, the NPR task force has avoided control mechanisms and has consciously taken a “hands-off” approach to the development and oversight of the labs. NPR officials said it is up to each agency to decide whether it will have any labs and, if so, how they should be structured and operated. The NPR task force has not required agencies to notify it when labs are created or to report to NPR on their progress. In fact, the task force recommended that labs not be required to file progress reports with their agencies’ management. Overall, agencies have been allowed to operate reinvention labs as they believe appropriate, without top-down control or interference from the task force. The task force views its role as encouraging federal agencies to establish reinvention labs and highlighting those labs that are “success stories” and that focus on customer service.
The Office of Management and Budget (OMB) has played less of a role in the reinvention lab effort than the NPR task force. OMB has not been involved in the labs’ designation or their oversight and does not collect or disseminate information about the labs. However, OMB officials said that OMB program examiners are generally aware of the existence of labs in the agencies for which the examiners have responsibility.
OMB is responsible for providing management leadership across the executive branch and therefore can be important to the implementation of NPR management improvement ideas. In fact, OMB has already begun to play that role in some areas. For example, during the fiscal year 1996 budget cycle, OMB stressed agency downsizing plans and the use of performance information—key elements of the overall NPR effort—during its reviews of agencies’ budget submissions. OMB itself was “reinvented” as part of the NPR effort when its budget analysis, management review, and policy development roles were integrated into a new structure designed to improve the decisionmaking process and the oversight of executive branch operations.
section_title: No Specific Definition of a Reinvention Lab
paragraphs: After the Vice President’s April 1993 letter, each federal agency was made responsible for designating organizational units, programs, or new or ongoing initiatives as reinvention labs. Although their comments in the intervening period provide some indication of what kinds of reinvention projects they envisioned, neither the Vice President nor the NPR task force has established specific criteria defining a lab.
“e hope this process will involve not only the thousands of federal employees now at work on Reinvention Teams and in Reinvention Labs, but millions more who are not yet engaged. We hope it will transform the habits, culture, and performance of all federal organizations.”
In October 1993, representatives from reinvention labs at a number of agencies attended a conference in Hunt Valley, MD, at which they discussed their ideas and experiences. One of the key topics of discussion at the conference was, “What is a reinvention lab?” The conference proceedings stated that a lab “is a place that cuts through ’red tape,’ exceeds customer expectations, and unleashes innovations for improvement from its employees.” The proceedings listed five areas of consensus about the characteristics of a reinvention lab: (1) vision (continually improving value to customers); (2) leadership (unleashing the creativity and wisdom in everyone); (3) empowerment (providing employee teams with resources, mission, and accountability); (4) incentives (offering timely “carrots” for innovation and risk-taking); and (5) accountability (ensuring the customer is always right). The Vice President said that reinvention labs were doing the same things as the rest of the agencies, “only they’re doing them faster.”
Several of the Vice President’s and NPR officials’ comments about the reinvention labs centered on the labs’ ability to avoid complying with regulations that could encumber their efforts. As noted previously, the Vice President told agencies in his April 1993 letter that regulations should be replaced with “incentives” in the labs. NPR officials also told the reinvention labs that they should be provided freedom from regulations. A number of the comments at the Hunt Valley conference focused on eliminating red tape and unnecessary regulations.
Another recurring theme in the Vice President’s comments and NPR publications has been the need to communicate about lab results. At the Hunt Valley conference, the Vice President said that reinvention labs “will need to share what they learn and forge alliances for change.” A 1993 NPR report also voiced support for spreading reinvention ideas.
section_title: Several Contemporaneous Reform Efforts
paragraphs: Reinvention labs are but one of a number of efforts initiated in recent years by the administration or Congress to reform the operation of the federal government. Because these other reform efforts were being implemented at the same time that the reinvention labs were being initiated, they may have affected the labs’ development.
For example, the Government Performance and Results Act (GPRA), enacted in August 1993, was designed to improve the effectiveness and efficiency of federal programs by establishing a system to set goals for program performance and to measure results. GPRA requires federal agencies to (1) establish 5-year strategic plans by September 30, 1997; (2) prepare annual plans setting performance goals beginning with fiscal year 1999; and (3) report annually on actual performance toward achieving those goals, beginning in March 2000. As a result of GPRA’s requirements, greater emphasis is to be placed on the results or outcomes of federal programs. OMB is responsible for leading the GPRA implementation effort and has designated more than 70 programs and agencies as pilots.
As noted previously, the reinvention lab effort was initiated in 1993 at about the same time that the original NPR recommendations were being developed. As part of that effort, the 1993 NPR report said that the civilian, nonpostal workforce could be reduced by 252,000 positions during a 5-year period. The report said these cuts would be made possible by changes in agencies’ work processes and would bring the federal workforce to its lowest level since the mid-1960s. In 1994, Congress enacted the Federal Workforce Restructuring Act, which mandated an even greater 5-year workforce reduction of 272,900. The September 1995 NPR status report estimated that more than 160,000 jobs had already been eliminated from the federal government.
In December 1994, the administration launched a second phase of the NPR effort, referred to as NPR II. One aspect of NPR II was an agency-restructuring initiative in which the Vice President asked the heads of each agency to reexamine all of their agencies’ functions and determine what functions could be eliminated, privatized, devolved to state or local governments, or implemented in a different way. The agencies developed a total of 186 agency-restructuring recommendations, which were aggregated and published in the September 1995 NPR status report. For example, the Department of Housing and Urban Development (HUD) proposed consolidating 60 grant programs into 3, giving greater flexibility to governors and mayors.
There have also been several recent congressional proposals to reform the federal government. For example, in May 1995, the Senate Committee on Governmental Affairs held hearings on proposals for the elimination of the Departments of Commerce, Housing and Urban Development, Energy, and Education. In February 1995, the House Committee on Economic and Educational Opportunities proposed merging the Departments of Education and Labor and the Equal Employment Opportunity Commission into a single department. There has also been a proposal to combine elements of the Departments of Commerce and Energy with the Environmental Protection Agency and other independent agencies to create a Department of Science.
section_title: No Comprehensive Review of Lab Efforts Has Been Published
paragraphs: Although reinventing government and the NPR effort have been frequently discussed in the professional literature, relatively little has been written about reinvention labs. In the Brookings Institution’s Inside the Reinvention Machine: Appraising Governmental Reform, one author briefly mentioned several agencies’ labs and said they were but one component in the agencies’ reinvention efforts. She also said the labs frequently were “bottom-up” reform processes, sending a message to the staff that we’re all in this together. Another author in this volume said that the labs “represent exciting innovations in the federal government” and that they were generating “an impressive amount of fresh ideas and information about how government workers can do their jobs better.”However, he also noted that there had been no systematic survey of what the labs had accomplished.
An article exclusively about reinvention labs described the lab effort as being a struggle between advocates for change and those individuals with power within the agencies. The author describes labs at several agencies (e.g., the Departments of Agriculture and Education and the General Services Administration), noting that in some cases entire agencies have become labs (e.g., the Agency for International Development and the Federal Emergency Management Agency). Other articles have briefly discussed the activities of a few reinvention labs, but no research efforts have systematically collected information about all of the labs.
section_title: Objectives, Scope, and Methodology
paragraphs: We initiated this review of the reinvention labs as part of our ongoing body of work examining NPR issues. The objectives of this review were to determine (1) the focus and developmental status of the labs, (2) the factors that hindered or assisted the development of the labs, (3) whether the labs were collecting performance data, and (4) whether the labs had achieved any results.
We addressed all of these objectives by conducting a telephone and fax survey of all of the reinvention labs. However, to design and conduct the survey, we had to obtain preliminary information from the NPR task force, agencies, and some of the labs themselves.
We obtained information from the NPR task force’s database about the labs’ locations, their developmental status, subject areas covered, and a contact person at each of the lab sites. As of February 1995, NPR’s database indicated that there were 172 labs. However, NPR’s database did not include some labs and double-counted others. After contacting officials responsible for the labs in each of the agencies that the task force reported had ongoing efforts, we later concluded there were 185 labs active as of early 1995.
The NPR task force told us that the regional labs were further along in the implementation process than the labs in the Washington, D.C., area. Therefore, we conducted a structured interview of the regional labs by telephone in the summer of 1994 to obtain information on their status, the type of procedure or process being reinvented, and any results the labs had produced. Using the information obtained from these contacts, we selected 12 labs to visit on the basis of two criteria: (1) labs that represented a variety of procedures or processes being reinvented (e.g., procurement, personnel, financial management, or general operations); and (2) labs that had generally progressed to at least the planning stage. We visited each of these 12 labs and obtained detailed information concerning each of our objectives. We developed case studies on each of the 12 labs and subsequently sent them to both the lab officials from whom we gathered the data and the agencies’ headquarters for their review and comment. Their comments were incorporated into the final version of the case studies. (For a list of these labs, see app. I. See apps. II through XIII for the full case studies.)
We then conducted two surveys of all 185 of the labs—first a telephone then a fax survey—and received responses from 181 of the labs (98 percent). The telephone survey was primarily designed to obtain a general description and overview of the labs’ operations. We sent the second survey to the respondents by fax after the completion of the telephone survey. If a lab focused on more than one area for reinvention (i.e., the lab was engaged in multiple lines of effort), we asked the respondent to focus his or her answers to the fax survey on the lab’s primary line of effort. (See app. I for a list of the labs by agency and subject category.)
The fax survey consisted primarily of structured multiple-choice items that focused on each of our objectives. (See app. XIV for copies of the telephone and fax surveys.) Questions focused on such issues as the lab’s developmental status and the nature and extent of performance data being collected. We also asked questions about a number of factors that could affect the labs’ development—e.g., waivers from certain regulations, communication with other labs and the NPR task force, and agency management support. On the basis of comments made by lab officials during our site visits, we selected these factors for specific follow-up in the survey phase of our work. They may not cover all possible factors affecting lab development.
We did not independently verify the information we received from any of the information sources—the NPR task force, the site visits, the telephone survey, or the fax survey. For example, if a survey respondent said that his or her lab had collected performance data or had communicated with other labs, we did not assess those data or check with the other labs. However, we did collect some relevant documents or data regarding these issues during our site visits to the 12 labs.
We conducted our work between June 1994 and August 1995 in accordance with generally accepted government auditing standards. The telephone and fax surveys were administered between April and July 1995, so the survey data are as of those dates. Although we attempted to survey all of the reinvention labs in the federal government, we cannot be sure that the 185 labs we contacted included all agencies’ labs. Others may have been active at the time of our survey, but we were not aware of them either because of the lack of a specific definition for reinvention labs, the NPR task force did not keep an accurate record on the number of operating labs, or we were denied access to agency officials. In one instance, we were unable to verify the existence of a lab appearing on NPR’s list as being at the Central Intelligence Agency (CIA) because a CIA official said that it was their standard policy to deny GAO access to CIA reinvention activities. Also, other labs may have been developed since the survey was conducted.
We submitted a draft of each case study to the relevant lab and agency headquarters officials for their review and have incorporated their comments into the final version of each appendix. On December 27, 1995, we submitted a draft of this report to the Vice President (as head of the NPR effort) and to the Director of OMB for their review and comment. Their comments are described at the end of chapter 5.
section_title: Overview of the Reinvention Labs
paragraphs: In the reinvention labs, agencies were supposed to experiment with new ways of doing business, and the NPR task force purposely gave agencies wide latitude in how the labs could be structured and what topics they could address. Agencies were also free to build on existing management reform efforts or to start their reinvention labs from scratch. Aside from the general parameters of customer service and employee empowerment, few restrictions were placed on the labs’ initiation or development.
Federal agencies responded to the Vice President’s call for the creation of reinvention labs in earnest. Labs were designated in dozens of agencies and in virtually every region of the country. Our survey indicated that the labs varied widely in terms of their origin, their stage of development at the time of the survey, the number of reinvention efforts addressed by each lab, and the subject areas covered by the labs. Also, although many of the labs shared a common customer service focus, they differed in who they defined as their customers. Finally, the survey indicated that a number of the labs’ efforts actually began before the NPR effort was initiated.
subsections: section_title: Labs Were Designated in Various Agencies and Regions
paragraphs: As table 2.1 shows, the 185 reinvention labs that had been designated at the time of our survey were spread across 26 federal departments, agencies, and other federal entities. DOD had the most labs (54), followed by the Department of the Interior (DOI) (28). The number of labs in each agency was not always related to its size. Some large agencies had relatively few labs (e.g., the Department of Veterans Affairs); while some comparatively small agencies had initiated a number of labs, e.g., the General Services Administration (GSA). Some agencies that serve the public directly and that had been the subject of both the 1993 and 1995 NPR recommendations had not started any labs at the time of the survey (e.g., the Small Business Administration).
Figure 2.1 and table 2.2 show the number of reinvention labs at the time of our survey within each standard federal region. As the figure illustrates, labs had been established in virtually every federal region, but the mid-Atlantic region (region 3) had over two-thirds of the labs. Most of these labs were located in the Washington, D.C., area, but some affected operations in other areas. Relatively few labs were located in the northeast (regions 1 and 2) or the northwest (region 10). Some of the labs were operated in multiple locations within a single region. For example, one HUD lab effort had several sites that included HUD’s offices at Chicago, Milwaukee, and Cleveland. (See app. VIII for a discussion of this lab.) Other labs had multiple sites located in different standard federal regions. For example, GSA’s Federal Supply Service lab was headquartered in New York City (region 2), but some aspects of the lab were being implemented in Boston (region 1). (See app. VI for a discussion of this lab.)
section_title: Origins and Status of Labs
paragraphs: We asked the survey respondents why their labs were initiated, allowing them to designate more than one closed-ended response category and/or add additional reasons. They indicated that the reinvention efforts were generally focused and uncoerced. As shown in figure 2.2, nearly two-thirds of the respondents said that they were trying to address a specific problem, and over half indicated that they volunteered to become a lab.Only 13 percent of the respondents reported that they were told to pursue their labs by agency officials. Forty percent said their labs were an outgrowth of quality improvement efforts in their agencies.
We also asked the respondents when their labs’ efforts actually began, regardless of when the labs were officially designated as labs. The lab start dates varied widely, ranging from as early as 1984 to as recently as March 1995—1 month before the start of our survey. About one-third of the respondents indicated that their labs’ efforts began before the announcement of the NPR effort in March 1993. The early beginning of so many lab efforts is not surprising given that 40 percent of the respondents said that their labs originated in their agencies’ quality improvement efforts—efforts that started in some federal agencies in the early 1990s.For example, lab officials at the sites we visited told us the following: • GSA’s reinvention labs in two regional offices originated with the offices’ quality assurance programs that began in 1988 and 1989. (See app. VI and app. VII.) • The Internal Revenue Service’s (IRS) reinvention lab in Helena, MT, began as a joint quality improvement process launched in 1988 by IRS and the National Treasury Employees Union. (See app. XI.) • The United States Department of Agriculture’s (USDA) lab on baggage inspection operations in Miami started in 1989 as an effort to improve productivity as staff resources declined and the workload increased. (See app. II.) • DOI’s efforts to improve information dissemination at the U.S. Geological Survey began in 1986 when it attempted to establish a more efficient and responsive order entry, inventory control, and distribution system. (See app. X.)
Officials from 14 of the labs we surveyed said that they sought lab designations for existing management improvement efforts because the officials thought such designations would give them more latitude to make changes and provide greater visibility for their efforts. For example, one of the survey respondents said that reinvention lab designation provided the lab team with the momentum needed to overcome common barriers to change. During one of the site visits, an official from HUD’s lab on reinventing the field operations of the Office of Public and Indian Housing said that before its lab designation “we could not get in the door at headquarters.” However, he said that after the lab’s designation “the waters parted” and that headquarters officials became interested in the new oversight approach. (See app. VIII for a discussion of this lab.) Other respondents said that being designated as a reinvention lab provided the mechanism by which they could seek waivers from cumbersome rules and regulations that had been an impediment to previous management reform efforts.
section_title: Lab Officials Reported Significant Changes Focused on Customer Service
paragraphs: The 1993 NPR report called for a new customer service contract with the American people—a new guarantee of effective, efficient, and responsive government. The report also stated that federal agencies were to provide customer service equal to the best in business. In his April 1993 letter calling for the creation of reinvention labs, the Vice President said the labs were to measure their success by customer satisfaction. Consistent with this goal, 99 percent of our survey respondents said that customer service improvement was a primary goal of their labs to at least “some extent”; 93 percent of the respondents said this was true to a “great” or “very great” extent. (See ch. 4 for information on the labs’ collection of performance data.)
The survey respondents frequently indicated that the changes that were occurring in their reinvention labs represented a substantially different mode of operation, not simply a minor change in procedures. Over 65 percent of the respondents said that their reinvention labs involved changing the way staff in their agencies did their work to a “great” or “very great” extent. Over 20 percent said that changes in work processes occurred to a “moderate” or “some” extent.
Lab officials reported the following examples: • The Defense Logistics Agency’s (DLA) lab on inventory management made significant changes in its work processes and staff roles. DLA officials said they shifted from acting as a wholesaler who buys, stores, and sells inventory to acting as a broker who obtains the most efficient and effective military support for its customers through any appropriate mechanism—including the use of private-sector vendors to store and distribute inventories. (See app. IV.) • The U.S. Geological Survey’s information dissemination lab improved internal communications and job processes by combining the organizational unit that took map purchasing orders with the unit that filled the orders and by cross-training staff. (See app. X.) • GSA’s mid-Atlantic regionwide lab improved customer service in the region’s Public Buildings Service office by shifting staff from working as teams of specialists responsible for moving projects through their segments of a work process to working as multidisciplinary teams made up of specialists responsible for processing one project. (See app. VII.)
About two-thirds of the respondents who said that their labs were involved in changing the way staff did their work indicated that the changes improved customer service to a “great” or “very great” extent. However, only 20 percent of the respondents indicated that these changes required substantial alterations in their agencies’ personnel systems.
The labs’ definition of their customers varied depending on the lab. Given the opportunity to choose more than one response category, the respondents described their labs’ customers as the general public; their agencies’ constituencies; another government organization (e.g., federal, state, or local); and/or other offices within their own agencies. Almost two-thirds of the respondents said their labs’ customers were both internal and external to the government. For example, officials in HUD’s lab on reinventing the field operations of the Office of Public and Indian Housing said that their lab’s customers included the residents of the public housing units and the local governments’ public housing authorities who operated the housing units. (See app. VIII.)
Overall, the two most frequently selected response categories for customers were “another government organization” and “other offices within the lab’s agency”; 18 percent of the respondents said that these were their labs’ only customers. For example, the Department of Commerce’s reinvention lab in Boulder, CO, defined its customers as the scientists and engineers working within the department’s scientific laboratories. (See app. III.)
section_title: Reported Stage of Development, Scope, and Subject Areas Covered by Labs Varied
paragraphs: We asked the survey respondents to characterize their labs’ stage of development in one of five categories: (1) planning stage (no implementation begun), (2) implementation begun but not completed at the lab site, (3) implemented at the lab site only, (4) implemented at the lab site and planning or implementation begun at other sites, (5) implemented at the lab site and at other sites, or (6) other. As figure 2.3 shows, the respondents were equally divided between those who said that their labs had been at least implemented at the lab site (responses 3 through 5) and those that had not gotten to that stage of development (responses 1 and 2). The most common single response (35 percent) was “implementation begun but not completed.”
Planning stage or implementation incomplete (49%)
Implementation at or beyond site (49%)
We also asked the respondents whether their labs were focused on a single effort or multiple lines of effort. Nearly two-thirds (63 percent) of the respondents said that their reinvention labs had only one line of effort. As figure 2.4 shows, DOD labs reported they were much more likely to have multiple lines of effort (58 percent) than were civilian labs (29 percent).
A line of effort is not the same as a subject category. For example, a lab with only one line of effort can address a variety of subjects, including personnel management, procurement, information technology, and financial management. Nearly three-fourths of the survey respondents indicated that their labs were focused on more than one subject area. The most commonly cited subject area was operations (72 percent), followed by information technology (60 percent), personnel (45 percent), procurement (45 percent), and financial management (39 percent). Examples of these subject areas include the following: In an operations lab, USDA officials examined ways to improve the operation of their airport baggage inspection program by permitting more self-direction by employees and allowing them to identify ways to improve procedures. (See app. II.) • An information technology lab explored the use of electronic media, such as the Internet, E-mail servers, fax on demand, and the Worldwide Web to disseminate information on the latest medical research from sources around the world. • A procurement lab established teams of customers, contractors, and contract administration officials to identify areas for process improvements. The lab was also trying to develop a “risk management” approach to contract administration in which the lab’s level of contractor oversight would be linked to an assessment of the contractor’s performance.
section_title: Crosscutting Themes Reported in Labs
paragraphs: In addition to the traditional subject area categories previously mentioned, analysis of survey respondents’ comments in the survey and during our site visits indicated three crosscutting areas of interest: (1) marketing services and expertise; (2) using electronic commerce (EC) and electronic data interchange (EDI) to improve operations, such as procurement and benefit transfers; and (3) developing partnerships with other levels of government, the private sector, and customers. (See app. I for a complete list of these reinvention labs.)
subsections: section_title: Marketing Services and Expertise
paragraphs: The 1993 NPR report advocated creating competition between in-house agency support services and what it termed “support service enterprises”—federal agencies that offer their expertise to other agencies for a fee. Officials from 20 reinvention labs said that their labs were planning or implementing these kinds of reforms, using marketing techniques to expand their customer base. Examples of marketing services include the following: • Two of the labs were department training centers that were attempting to become self-sufficient by charging fees for their services. In addition to marketing their training courses, officials from both centers said they were contracting with other agencies to provide consulting services. • One respondent said that his lab was experimenting with franchising its contracting services to civilian agencies. Lab officials developed a standard rate to be charged for their services and had signed agreements with other agencies to provide those services. • One respondent said that his lab had successfully marketed its organic waste disposal services to other federal, state, and local agencies. He also said that the lab generated additional income by recycling these wastes for resale as compost.
One DOD official said that existing statutes had prevented his lab from marketing its duplicating services to non-DOD agencies. He said Congress requires federal agencies to contract printing and duplicating to the private sector via the Government Printing Office (GPO), which applies a surcharge. However, he said that one of our recent reports noted that some of the agency’s in-house duplicating services were about 57 percent cheaper than GPO’s prices.
section_title: Using Electronic Commerce and Electronic Data Interchange
paragraphs: The 1993 NPR report recommended that federal agencies adopt EC and EDI techniques that the private sector had been using for some time because, NPR said, they can save money. Respondents for 38 labs said that their labs were in the process of implementing EC and EDI systems to enable them to easily transfer information on financial and procurement transactions and on client services and benefits. For example, DLA officials said the agency was using EC and EDI to develop a paperless, automated system for critical documents in the contracting process, including delivery orders, requests for quotations, bid responses, and awards. They said that this system would ultimately provide a standard link among DLA, its customers, and suppliers in the private sector. (See app. IV.)
section_title: Establishing Partnerships
paragraphs: At the time of our survey, 54 labs reported attempting to develop partnerships with other levels of government, labor organizations, contractors, and/or their customers. Several of these partnership efforts focused solely on intra- or intergovernmental relations. For example, one official said his lab was working with other federal agencies and state and local government agencies to design an ecosystem management strategy.
Another lab was focused on developing an automated prisoner processing system for use by five federal law enforcement entities.
Officials for 16 other labs also said that their labs were developing partnerships with contractors, academia, or the private sector. For example, at the Department of Energy’s (DOE) Hanford reinvention lab, the department entered into an agreement allowing a private company to disassemble and use excess equipment, saving the government $2.6 million in disposal costs. In another lab, agency officials and contractors formed teams to rework contracting processes and shift oversight from an adversarial position to a team approach so that both the agency and its contractors could lower oversight costs.
Nine respondents said that their labs were establishing partnerships with employee unions. For example, officials at the Commerce Department’s Boulder reinvention lab said that their efforts had built a strong union-management relationship by changing the rigid work environment so that skilled workers would be able to work together as teams and supervisors could perform more as coaches than managers.
section_title: Factors Affecting Labs’ Development
paragraphs: Reinvention labs were intended to be agents of change in the federal government. As such, they have faced many of the same challenges as other change agents—eliminating rules that stand in the way of progress, ensuring top management support, communicating with others attempting similar changes, and coping with cultural resistance. However, some of the challenges the reinvention labs faced were difficult, such as attempting to initiate new ideas or new work processes while their organizations were shrinking and while other management reform efforts were being implemented.
We asked the survey respondents to provide information on a variety of factors that could have hindered or helped the development of the labs, and some of the results were contrary to our initial expectations. For example, many of the lab officials said they had not sought waivers from regulations, even in labs that were fully implemented at the lab site. Few reported substantial communication with other labs or with the NPR task force. However, over 80 percent enjoyed top management support. Analysis of the survey responses also indicated other factors that the respondents said affected the development of their labs.
subsections: section_title: NPR Encouraged Labs to Seek Waivers
paragraphs: One of the NPR effort’s recurring themes is that regulations and red tape stifle the creativity and ability of federal workers to solve problems and improve service to the public. At the Hunt Valley reinvention lab conference in October 1993, NPR officials encouraged the labs to request waivers from requirements imposed on them “which are barriers to reinvention.” The Vice President said that he was looking to the reinvention labs to identify “barriers that stand in the way of getting the job done in the right way” and to “drive out rules and regulations that just don’t make sense anymore.” A September 1993 NPR report noted that carefully crafted waiver requests and prompt review of these requests can be “experiments for government’s reinvention.”
Regulations can come from a variety of sources. Some regulations are promulgated by central management agencies—e.g., OMB, GSA, or the Office of Personnel Management (OPM)—and apply to all or virtually all federal agencies. Other regulations are issued by line agencies and apply only to the issuing agency. In the reinvention lab effort, the entity that establishes a regulation is to receive and rule on any waiver requests.
subsections: section_title: Majority of Labs Did Not Request Waivers
paragraphs: Although they were encouraged to seek regulatory waivers, 60 percent of the survey respondents who answered the question said that their labs had not sought such waivers. Of these respondents, about half said that they considered seeking a waiver, but they did not do so; half said they had not even considered seeking a waiver. When asked why their labs did not seek waivers, the respondents most commonly indicated that waivers were not needed to accomplish their labs’ goals (54 percent) or that it was too early in the reinvention process to seek waivers (30 percent). (Respondents were allowed to select more than one response category to this question.)
The relationship between the labs’ stage of development and their propensity to seek waivers was supported by other data in the survey. As figure 3.1 shows, labs that were at least fully implemented at the lab site were almost twice as likely to have requested a waiver than labs that had not reached that stage of development. However, nearly half of the fully implemented labs had not sought any regulatory waivers at the time of the survey.
Over two-thirds of the respondents for the fully implemented labs that had not sought a waiver said that a specific waiver was not needed to accomplish their labs’ goals, and they cited a variety of reasons. For example: In some labs, the agencies reported that constraints on pre-lab operations were nonregulatory and that removal of the constraints did not require a waiver. For example, officials from one reinvention lab planned to request a general waiver from using GSA’s supply schedule to enable the site’s supply room to seek the best value for each product it provides. According to an official, this request was dropped because lab officials discovered that procurement rules allowed agencies to ignore the supply schedule if a local source can provide the product at a lower price.
In other labs, a blanket waiver of internal regulations, or a delegation of authority, provided by agency headquarters eliminated the need for individual waiver requests. In blanket waivers, agency headquarters typically granted labs the authority to make their own decisions on which agency-specific rules to eliminate without asking for prior permission. For example, GSA gave the Mid-Atlantic Regional Administrator a blanket waiver from nonstatutory internal rules and regulations that might hinder the development of the region’s lab. (See app. VII.) In another lab, officials told us that passage of the Federal Acquisition Streamlining Act removed the legislative barriers to the lab’s reform efforts. Therefore, lab officials said they did not need to go forward with their proposals to waive contracting rules and regulations.
section_title: Waiver Requests Most Commonly Directed at Agency-Specific Rules
paragraphs: The survey respondents indicated that their labs had requested nearly 1,000 waivers from regulatory requirements. Some respondents said their labs had requested only one waiver, but other labs reported requesting dozens of waivers. The respondents also indicated that their labs’ waiver requests involved regulations in a range of subject areas. One-third of all the waivers requested involved agency work process rules or regulations, with the remaining two-thirds about equally divided between personnel rules, procurement rules, and other rules. Examples of agency work process regulations include the following: • Officials from GSA’s office products lab requested a waiver from an agency work process regulation requiring the use of a certain quality assurance technique so that they could replace it with another, reportedly better, technique. (See app. VI.) • The reinvention teams at the U.S. Bureau of Mines’ reinvention lab proposed 21 changes to departmental procedures, such as altering the review process for computer equipment acquisition, removing restrictions on the use of local attorneys to process patent paperwork, and eliminating one level of supervision within the lab’s research center. (See app. IX.) • Contracting officials from the Department of Veterans Affairs’ (VA) reinvention lab in Milwaukee requested nine waivers from both departmental regulations and governmentwide Federal Acquisition Regulations (FAR). Eight of these waivers were pending at the time of our review, including an authorization to remove annual contracts from the current fiscal year cycle and to permit the lab to participate with private-sector purchasing groups in best value purchasing. (See app. XII.)
As shown in figure 3.2, over half of the waivers the labs sought were reported to be from agency-specific rules issued by the respondent’s own agency, and nearly one-third of the requested waivers were from governmentwide rules issued by central management agencies. The respondents said the remaining 16 percent of the waiver requests focused on rules from other sources (e.g., executive memorandum), or the respondents were unsure of the source of the regulation from which the waiver was requested.
section_title: Lab Officials Reported Difficulties Getting Some Waivers
paragraphs: The survey respondents frequently said that it was difficult to obtain waivers from both governmentwide and agency-specific regulations, but they indicated that waivers of governmentwide rules issued by central management agencies, such as GSA, OMB, or OPM, were the most difficult to obtain. More than three-fourths of the respondents who offered an opinion said it was difficult to obtain a waiver from governmentwide rules, with nearly twice as many choosing the “very difficult” response category compared with the “somewhat difficult” category. Only 7 percent of the respondents said it was “easy” to obtain waivers from governmentwide rules. In contrast, 50 percent of the respondents who sought a waiver from rules issued by their own agencies said such waivers were “difficult” to obtain. Of these respondents, most said obtaining agency-specific waivers was only “somewhat difficult,” and 31 percent said it was “easy.”
The difficulty survey respondents reported in receiving waivers from governmentwide regulations was also indicated by waiver approval rates. As shown in figure 3.3, lab officials said that over 60 percent of their labs’ requests for waivers from agency-specific rules had been approved at the time of our survey, compared with only about 30 percent of the requests for waivers from governmentwide regulations.
Lab officials also reported other types of problems when they requested regulatory waivers. For example, officials from the Pittsburgh Research Center lab in the U.S. Bureau of Mines said the lab team spent a substantial amount of time concentrating on waiver requests that were beyond the scope anticipated by NPR officials. The lab team said they were not clearly warned by DOI management that “overturning statutes was off-limits” when requesting waivers. (See app. IX.)
Officials from three different reinvention labs said that they found it difficult to use the delegation of authority to waive regulations that had been given to them by their agencies’ headquarters. For example, officials from these labs said that they had to obtain approval from legal counsels to use that authority and that getting this approval proved to be just as time-consuming as it would have been to get a specific waiver from headquarters.
Officials from the Commerce Department’s Boulder reinvention lab said that they tried to use their waiver authority to develop alternative procedures to abolish three staff positions. In keeping with one of the lab’s areas of emphasis to build management and labor partnerships, field managers worked with the local union president to develop an alternative procedure that was less disruptive than the traditional one. However, one lab official said that even though the lab had been given authority to deviate from procedures, headquarters officials required extensive documentation and heavily reviewed the proposal. The lab official said as many as 19 headquarters officials were involved in reviewing and approving every aspect of these procedural changes. (See app. III.)
section_title: Respondents Report Top Management Support
paragraphs: Top management support is crucial to the successful management of changes within organizations, particularly changes of the magnitude envisioned by the Vice President. Top management can provide needed resources and remove barriers that may stand in the way of organizational changes. On the other hand, managers can also negatively affect changes by withholding needed resources and erecting barriers that effectively prevent changes from occurring.
Eighty-three percent of the survey respondents who expressed an opinion said top management in their agencies (i.e., Office of the Secretary/Agency Head) were supportive of their reinvention labs, and 77 percent said that upper level career managers were also supportive. In some cases, lab officials said that top management was the leading force behind the reinvention labs. For example, staff developing DOI’s U.S. Geological Survey lab said their lab proposal was approved by headquarters because of the active support of the department’s leadership. (See app. X.) DLA officials said that their top management pushed for a total overhaul of the agency before the start of the NPR effort and that the reinvention labs provided a vehicle for enhancing the visibility of these reforms. (See app. IV.) An official from IRS’ reinvention lab said that IRS management expressed its support for that lab by approving a memorandum of understanding between the lab and its regional office. Included in the memorandum was a commitment from the regional commissioner to provide oversight and program support to the lab, to reduce the reporting requirements on front-line managers, and to offer assistance in implementing the reinvention ideas. (See app. XI.)
However, in a few cases labs reported that they were adversely affected by a lack of top management support or attention. For example, one lab official said his lab initially had a high-level supporter in headquarters who could get waivers and delegations of decisionmaking authority approved. However, he said that when the lab lost this supporter, other headquarters officials began to actively resist the lab’s efforts, and some even engaged in what he termed “pay-back.” Another survey respondent said managers in his agency were inattentive to the agency’s lab. The respondent also reported that management was unconcerned about the lab’s progress; did not provide needed resources (e.g., relieving the reinvention team of their usual duties); and did not direct field offices to participate in the lab.
Survey respondents also related examples of resistance to their reinvention efforts from nonmanagerial staff in headquarters. One respondent said that the lab was set up in such a manner that staff members at headquarters, whom he said were threatened by the lab’s goals, could obstruct its progress. Another respondent said that staff at her facility had been “frustrated with the NPR experience” and questioned the point of the labs. She said that the lab staff had submitted a proposal to their headquarters that would have allowed them to buy fuel oil from a local supplier at a cheaper price than from their in-house supplier. The headquarters staff sought feedback on the idea from their in-house supplier, who naturally objected to the proposal. On the basis of this response, the headquarters staff denied the request.
section_title: Substantial Communication About Reinvention Labs Was Rare
paragraphs: “We will transform the federal government only if our actions—and the Reinvention Teams and Labs now in place in every department—succeed in planting a seed. That seed will sprout only if we create a process of ongoing change that branches outward from the work we have already done.”
If the reinvention labs are to “plant seeds” for organizational change, communication of information about what they have tried and how it has worked is essential. Therefore, we asked lab officials about communication with other reinvention labs and with the NPR task force.
The respondents who offered an opinion indicated that substantial communication among labs or between the labs and the NPR task force was relatively rare. Only 11 percent of the respondents said that their labs had communicated with other labs to a “great” or “very great” extent, and only 18 percent reported that level of communication between their labs and the NPR task force. Twenty-three percent of the respondents said they had communicated to a “moderate” extent with other labs and with the NPR task force; the stage of lab development had little effect on their responses. Officials in fully implemented labs were no more likely to have communicated with their colleagues in other labs or with NPR staff than officials in labs that had not gotten to that stage of development.
Nevertheless, over 70 percent of the respondents who said they had at least some communication with other labs said it was helpful to the development of their labs. About 68 percent of the respondents reporting that level of communication with NPR staff said it was helpful. For example, one respondent said that DOD held a reinvention lab conference in March 1995 that allowed the agency’s labs to share experiences and exchange ideas. According to lab officials from DOE’s Hanford site reinvention lab, NPR staff assisted them in seeking a waiver enabling DOE to privatize some laboratory services. (See app. V.)
There were clear differences in the responses in this area between DOD lab officials and respondents for the other labs. Where over two-thirds of the DOD respondents said that they had at least some communication with other labs, only half of the non-DOD labs indicated this level of lab-to-lab communication. Similarly, DOD lab officials were much more likely to report that this communication had aided in the development of their labs (83 percent) than respondents from other agencies (59 percent). Interestingly, DOD and non-DOD labs did not differ in the degree to which they communicated with the NPR task force (62 percent for both responses) or the extent to which they believed that the communication had assisted in their labs’ development (62 percent for DOD labs versus 60 percent for non-DOD labs).
section_title: Downsizing Had Both Positive and Negative Effects on the Labs
paragraphs: As noted in chapter 1, many of the reinvention labs were initiated or were being implemented at a time when federal agencies were being reduced in size. The September 1995 NPR report estimated that at least 160,000 positions had been eliminated from the federal workforce since early 1993. Because they were operating in this environment, we asked the survey respondents whether agency downsizing had a positive, negative, or other effect on their reinvention labs. (The respondents were allowed to check multiple categories.)
About 44 percent of the respondents reported that downsizing had a positive effect on their labs, but about 53 percent reported that downsizing had a negative effect. The respondents mentioned such negative effects of downsizing as slower implementation of lab efforts; loss of corporate memory; and morale problems (e.g., fear, stress, and uncertainty) that resulted in less interest in and support of management reforms and less risk-taking. In addition, some respondents said that downsizing had jeopardized their labs’ ability to achieve desired outcomes and raised concerns that decreasing manpower, coupled with the same or increasing work requirements, would reduce the amount of time respondents had available to focus on lab activities.
The respondents who said downsizing had a positive effect on their labs commonly indicated that it was a catalyst for real change in their agencies. Several of the respondents noted that downsizing forced management and staff to rethink agency operations, support reforms, adopt NPR efforts and labs, and work more collaboratively. A few of these respondents also noted that downsizing led to greater innovation and creativity. Five other respondents said that their labs benefited from the downsizing of other agencies. For example, one lab reported that reductions in other agencies’ contract administration staff increased interest in the contract administration services that the lab was marketing.
Thirty-three percent of the respondents reported both positive and negative effects from agency downsizing. For example, one respondent said that although downsizing had forced staff to consider radical changes that would have otherwise been rejected, it had also reduced the amount of staff, time, and resources available for concentrating on making these improvements.
section_title: NPR II and GPRA Effects on Most Labs Unclear
paragraphs: We also asked the survey respondents what effect, if any, the implementation of GPRA and the agency restructuring initiative in the second phase of the NPR effort (NPR II) had on their reinvention labs. Compared to their views on downsizing, the respondents were less clear about the effects of GPRA implementation and NPR II’s restructuring on their labs. They were more likely to say that they did not know the effects of GPRA or NPR II on their labs, perhaps because these reforms had not been fully implemented at the time of our survey.
However, the survey respondents were much more likely to indicate that GPRA had a positive effect on the development of their labs (33 percent) than a negative effect (6 percent). For example, they said that GPRA • complemented and reinforced their labs’ ongoing reinvention efforts; • promoted the development of performance measures and results-based management systems that were a part of their labs’ goals; forced their organization to focus on performance, redefining mission, corporate goals, and objectives; • compelled management to think about how to integrate various management reform legislation, such as the Federal Managers’ Financial Integrity Act of 1982 and the Chief Financial Officers Act of 1990, with the reinvention labs; and • provided a driving force for interest in, and design of, a new operations evaluation process for the lab.
At least one of the labs was also participating in a GPRA pilot program. As a pilot site, VA’s New York Regional Office’s claims processing lab developed a new system of measures, including one that VA officials said enabled teams to determine how productive they were by comparing the dollar value of the claims they processed to the relative salary of the team. (See app. XIII.)
Officials from six labs said that developing performance measures and complying with GPRA requirements were integral parts of their reinvention efforts. Labs’ performance-based reform initiatives included (1) developing GPRA performance measures and defining a matrix program of performance-based management techniques, (2) building GPRA requirements into the lab’s strategic planning effort, and (3) integrating planning and performance measurement requirements into a standard agencywide system. However, two survey respondents said that the implementation of GPRA had little effect on their labs because they were already developing and using performance measures.
Less than 6 percent of the respondents said that GPRA had a negative effect on their reinvention labs. These respondents typically said that GPRA was perceived as “busy work” or as having increased the staff’s workload.
In contrast to the respondents’ comments on GPRA, the proportion of positive and negative responses about NPR II restructuring was relatively close—31 and 24 percent, respectively. One respondent said that agency restructuring had resulted in greater cooperation between his lab and OPM on personnel issues. Another respondent said that restructuring provided the framework to take the lab initiative to the next level of improvement. Yet another respondent said that officials at his lab viewed NPR II restructuring as basically a budget exercise.
section_title: Other Issues Affect Labs’ Development
paragraphs: In their comments, the survey respondents also mentioned three other barriers to the development of their reinvention labs—lack of interagency coordination, existing legislation, and organizational culture. Several respondents provided examples of the difficulties they experienced in undertaking management reforms that crossed agency boundaries, even when those agencies are within the same department. Other respondents said that existing statutory requirements, which would require an act of Congress to change, had hindered their labs’ performance. Still other survey respondents said that implementation of the reforms in the lab required changing the organizational culture within their agencies—that is, the underlying assumptions, beliefs, values, practices, and expectations of employees and managers.
subsections: section_title: Interagency Coordination
paragraphs: Many governmental functions are performed by more than one agency or level of government. In some cases, the federal government is addressing very broad issues, such as environmental degradation or the need for job training, that fall within the missions of several agencies. Therefore, similar programs have been established in different federal agencies. Other federal programs require the cooperation of state and local governments. Federal agencies also have similar administrative responsibilities (e.g., personnel, procurement, and contracting) that require the provision of resources in each agency to fulfill those functions. In all of these areas, opportunities exist for greater cooperation and sharing of resources.
As noted in chapter 2, at the time of our survey, 54 labs were attempting to develop partnerships with other levels of government, labor organizations, contractors, and/or customers. Other labs were attempting to consolidate activities among different federal organizations. The survey respondents provided several examples of the difficulties involved in enacting management reforms across agency boundaries. For example, one respondent said that statutes requiring the use of different contracting procedures in different agencies were a significant barrier to his lab’s goal of consolidating multiagency programs. The respondent said that one agency had to use competition when awarding contracts, while other agencies were required to set aside a percentage of contract awards for minority contractors. Officials at the Commerce Department’s Boulder reinvention lab said that they established a multiagency team to address the issue of funding for administrative services. However, they said the team was ultimately disbanded because it could not reach consensus on proposed funding alternatives. According to one lab official, the team lacked sufficient authority needed to push a proposal forward. (See app. III.) Other difficulties that the lab officials described in such multiagency efforts included (1) nonparticipation in or withdrawal from the lab by some relevant agencies, (2) resistance from top management at one or more of the agencies, and (3) failure by some agencies to send staff to NPR-related training courses.
section_title: Statutory and Regulatory Constraints Reported by Labs
paragraphs: Some of the survey respondents said certain statutory requirements had a negative effect on their labs. For example, some respondents mentioned federal contracting laws as a constraint on reinvention labs. In one case, a lab official said it was difficult to determine the extent of the lab’s authority to reform contracting procedures because of the myriad of different contracting statutes. Another respondent noted that the FAR was designed to prevent close relationships from developing between federal contracting units and contractors. The respondent said this FAR-required “arms length” relationship prevented sharing costs and resources with contractors and was not conducive to cost savings and cycle time reductions.
Lab officials at VA’s Clement J. Zablocki Medical Center in Milwaukee provided an interesting example of how such constraints affected the lab’s performance. The officials said VA classifies eyeglasses as a prosthetic device, and statutorily based regulations state that prosthetics can be provided only to veterans with nonservice-related medical conditions who have been admitted to the hospital. Therefore, patients having outpatient cataract surgery must be admitted to the hospital for a 2-day stay in order to receive corrective eyeglasses. Medical center officials said this is an unnecessary and costly requirement, and they have sought a waiver from the regulation.
section_title: Changing the Federal Culture
paragraphs: According to the President, one of the goals of the reinvention effort is changing the culture of the national bureaucracy “away from complacency and entitlement toward initiative and empowerment.” A 1993 NPR report stated that traditional cultural values in the federal government resist change, preserve mistrust and control, and operate within a rigid and hierarchical structure. The report also said that this segmented system creates artificial organizational boundaries that separate staff within and among agencies that work on related problems.
Several lab officials indicated that this traditional culture had hindered the process of change in their organizations. In an attempt to change their units’ culture, several organizations combined organizational restructuring with changes in individual performance measurement systems as a way to reinforce new employee behaviors. This type of organizational restructuring typically involved moving from hierarchical, specialized departments that were responsible for the performance of a single component of a work process (commonly known as stovepipes) to multidisciplinary work teams responsible for the performance of an entire process. To ensure that incentive systems were aligned with restructured operations, labs were evaluating the use of self-directed work teams by • creating business contracts with built-in product delivery and customer satisfaction targets, with both the customer and the team evaluating the team’s overall performance and each member’s contribution; • having the team leader conduct evaluations rather than the management of the functional units; and • creating an award system that ties group awards to the team’s contribution to the achievement of the agency’s goals.
By creating work teams within their organizations, these labs have tried to address the Vice President’s goal to change the culture of the federal government.
section_title: Measuring the Labs’ Performance
paragraphs: The collection and analysis of performance data are key elements in changing the way the federal government operates, particularly when those changes are initiated as pilot projects. At the most basic level, performance data are needed to determine whether the changes being implemented are producing the expected results. If the data indicate that the changes are successful and merit wider implementation, performance data can be used to make a compelling argument for changing what may be long-standing policies and practices.
Because reinvention labs are intended to explore new ways of accomplishing agencies’ existing missions, often on a small scale before broader implementation begins, data about the labs’ performance can be crucial to the labs’ long-range success. Without such data, decisionmakers will not know whether the changes are an improvement over existing practices. Also, without performance data, lab officials will find it difficult to obtain support for full-scale implementation within their agency or for diffusion beyond their agency to other federal entities.
The survey respondents frequently said their labs were collecting various types of performance data. Those labs not collecting data were commonly described as not being sufficiently developed to do so. Where data were collected, the respondents indicated that it showed the labs were improving productivity and customer service. However, the respondents also frequently said that their labs did not have pre-lab data against which post-lab data could be compared. Some respondents also indicated other problems with their labs’ data collection efforts.
subsections: section_title: Most Labs Were Reportedly Collecting Performance Data
paragraphs: As figure 4.1 shows, over two-thirds of the respondents said that their labs had collected or were collecting some type of performance data. Even those respondents who said data were not being collected generally recognized its importance. Over 80 percent said their labs planned to gather such data in the future.
We asked the survey respondents who said their labs were collecting performance data to identify the kinds of data being collected from the following categories: (1) informal, ad hoc comments from staff or customers; (2) customer opinion survey data; (3) staff opinion survey data; (4) output data reflecting the unit’s level of activity or effort (e.g., the number of claims processed); (5) outcome data indicating the unit’s results, effects, or program impacts (e.g., changes in infant mortality rates); and/or (6) some other kind of data. (Survey respondents were allowed to identify more than one type of data for their labs.) The respondents most commonly said their labs were collecting data on the units’ outputs (77 percent) and/or were collecting informal comments from staff or customers (69 percent). Other frequent responses were customer opinion survey data (57 percent), outcome data (52 percent), and staff opinion survey data (40 percent). Many of the labs (88 percent) reported collecting more than one type of data.
Of those respondents who said their labs were not collecting performance data, over three-fourths said that it was too early in the reinvention process to do so. Analysis of the labs’ stage of development and whether or not they collected data supports the lab officials’ opinion that it was too early in the reinvention process to be collecting performance data. As shown in figure 4.2, nearly 90 percent of the labs that were at least fully implemented at the lab site said they had collected or were collecting performance data. In contrast, only about half of the labs in the planning or beginning implementation stages of development had collected or were collecting such data.
A more detailed breakdown of the responses from fully implemented labs further demonstrates this relationship between stage of development and data collection. As figure 4.3 shows, although more than three-fourths of the labs implemented at only the lab site were collecting performance data, over 90 percent of the labs implemented at the lab site and beyond were collecting such data. Therefore, the more developed the lab, the more likely that it would have collected performance data.
section_title: Some Respondents Indicated Data Not Needed or Used
paragraphs: Although most of the survey respondents indicated their labs were collecting performance data, 14 percent of the respondents who said their labs were not collecting such data said they did not do so because gathering performance data was not seen as essential to their labs’ efforts. For example, lab officials from GSA’s Mid-Atlantic Regional Office and the Commerce Department’s Boulder reinvention lab said that efforts to measure “obvious improvements” were unnecessary. One official from the Boulder lab said that data collection efforts should be concentrated on those changes in which outcomes are more dubious. Other officials from this lab said that they had planned to use the agency’s Inspector General to monitor the lab’s progress, but the Inspector General told them that many of the lab’s changes were based on common sense and, therefore, did not require measurement to prove their worthiness. (See app. III.) Another 12 percent of the respondents said that they had not collected performance data because they had experienced difficulty in identifying and/or developing appropriate performance measures.
To be valuable, performance data must not only be collected but also be used by decisionmakers to assess the changes being made in agencies’ operations. However, not all of the data the labs collected appear to have been used. For example, officials from USDA’s lab reinventing the baggage inspection operations in Miami said that they had collected data that could have been used to judge the lab’s performance, but the data were never used by anyone in the agency or the lab for that purpose. (See app. II.)
section_title: Respondents Reported Improved Productivity and Customer Service Through Labs
paragraphs: Eighty-two percent of the respondents who said their labs had collected or were collecting performance data said that the data had allowed them to reach conclusions regarding the performance of their labs. Of these respondents who offered an opinion, 98 percent reported improved customer service, nearly 92 percent noted improved productivity in their units, and 84 percent said their labs had improved staff morale. Examples of customer service improvements follow: • VA’s New York Regional Office claims processing lab said that the average amount of time veterans had to wait before being seen for an interview had been reduced from about 20 minutes before the lab to less than 3 minutes after the lab was established. Lab officials also said that VA employees had greater control and more authority and found their jobs much more satisfying. (See app. XIII.) • VA’s reinvention lab at the Zablocki Medical Center in Milwaukee said two surveys—one of physicians and the other of patients and their family members—indicated that customer satisfaction had improved as a result of the lab’s effort to coordinate veterans’ outpatient and inpatient care by teaming social workers with primary care physicians. (See app. XII.) • DOE’s reinvention lab at the Hanford site in Washington State said that the lab had reduced the safeguard and security budget by $29 million over a 4-year period by changing the installation’s security operations from a large paramilitary organization that supported a national defense mission to an industrial-style organization that supports environmental cleanup. (See app. V.) • HUD’s reinvention lab in Chicago, Milwaukee, and Cleveland said that by developing partnerships with public housing authorities the lab had improved the satisfaction of the public housing residents. Lab officials also said that an overall measure of the public housing authorities’ management performance in such areas as rent collected, condition of the housing units, and operating reserve had improved since the lab was initiated. (See app. VIII.) • DLA’s lab said the lab reduced the agency’s overall pharmaceutical inventories by $48.6 million and achieved similar inventory reductions and cost savings at DOD medical facilities. (See app. IV.)
section_title: Respondents Said Labs Often Did Not Have Pre-Lab Performance Data
paragraphs: Respondents frequently said that performance data allowed them to conclude that their labs had improved units’ productivity, customer satisfaction, and staff morale. However, conclusively documenting these improvements may be very difficult. As figure 4.4 indicates, many of the respondents who said their labs were collecting performance data did not collect similar types of data before the start of the lab to serve as a baseline for documenting the labs’ effects.
The most common forms of pre-lab performance data (baseline data) that respondents indicated existed concerned a unit’s outputs (53 percent of the respondents) and informal comments (57 percent). Labs reported that they were least likely to have such data on customer (24 percent) and staff (17 percent) opinions.
section_title: Conclusions and Recommendation
paragraphs: At the time of our survey, 26 agencies and other federal entities had designated a total of 185 reinvention labs in various parts of the country. The survey respondents indicated that the labs generally were established to do what the Vice President suggested in his April 1993 letter to federal departments and agencies—improve customer service; address specific problems; and, ultimately, improve the operation of federal agencies. Because many of the labs had not been implemented at the time of our review, it is too early to tell whether they will accomplish these goals. Even for the labs that the respondents said had been fully implemented, it may take years before it can be determined whether the changes will have a long-lasting effect on federal agencies beyond the lab site. Also, because there is not a specific definition of a reinvention lab or guidance from either the NPR task force or OMB as to how labs should operate, few clear criteria exist against which to judge the labs’ performance. Nevertheless, some preliminary observations about the labs are possible based on comments the Vice President and others have made about the labs and the information developed during this review.
For example, the Vice President said that the labs should ideally be initiated where the government serves the public in a highly visible way. Although virtually all of the survey respondents indicated that improving customer service was a primary goal of their labs, they did not always define their labs’ customers as the public. In fact, lab officials most commonly viewed their labs’ customers as other governmental organizations, and, for some of the labs, a government organization was their only customer. Although the linkage of these labs to the public may not have been as direct as the Vice President envisioned, the public or the agency’s constituency appeared to be at least indirectly served in virtually all of the labs.
Although the survey respondents indicated that the labs’ changes represented a substantially different mode of operation, the scope of the reforms being developed in the labs was relatively narrow compared to the sweeping changes contemplated by GPRA, the NPR II agency-restructuring recommendations, and the congressional proposals to consolidate agencies’ functions or eliminate agencies entirely. However, the labs’ comparatively narrow scope is a natural consequence of the Vice President’s charge that they “reengineer work processes.” Agencies and employees were not asked to suggest macro-level changes, such as whether entire agencies or programs should be abolished or whether multiple agencies should be merged into a single structure. Ultimately, though, the diffusion and widespread adoption of the labs’ reengineering proposals could lead to the “fundamental culture change” that the Vice President envisioned in 1993.
At the beginning of the lab effort, a number of observers indicated that a key factor in the success of the effort would be the labs’ ability to obtain waivers from federal regulations. Although the respondents said many labs sought and received regulatory waivers, a large number of the efforts were able to be implemented without such waivers. Some lab officials said they believed waivers would be needed, but they later discovered that they already had the authority needed to change their work processes. Although some impediments to the labs were clearly real, the experiences of those officials suggest that at least some barriers to organizational change may be more a function of perception than reality.
Most of the survey respondents said they were collecting performance data to measure the effect of their labs’ reinvented work processes. However, some of the respondents’ comments raised questions about their commitment to measuring performance or the quality of the data being collected. Some lab officials said that either they or other agency officials did not believe that the collection of performance data was necessary or worthwhile. Other lab officials said that they had difficulty developing measures of performance or that data had been collected but had not been used by decisionmakers. One of the most common types of data reportedly being collected by the labs was informal comments from customers or staff—anecdotal data that are not measurable and, therefore, may not be convincing to skeptics of the reinvention process.
Of particular concern to us are the labs that were reportedly collecting data about their reinvention efforts but had not collected similar types of data before the start of their labs. Without such pre-lab data, lab officials have no baseline for documenting a lab’s effects and therefore will find it difficult, if not impossible, to reach persuasive conclusions about the lab’s effects. The absence of both pre- and post-lab data will also make it difficult to support expanding a lab’s changes to the rest of its agency or to other organizations. Development of pre-lab performance measures is particularly important for the substantial number of labs reportedly still in the planning stage.
Nevertheless, the reinvention lab effort has produced hundreds of ideas to reengineer work processes and improve agencies’ performance—ideas drawn from employees with hands-on experience in operating government programs. Many of the labs are addressing issues that are at the cutting edge of government management, such as how agencies can use technology to improve their operations; how they can be more self-sufficient in an era of tight budgetary resources; and how agencies can work in partnership with other agencies, other levels of government, or the private sector to solve problems. This progress notwithstanding, even more innovations are possible in these and other areas as agencies review and rethink their existing work processes.
subsections: section_title: Moving Beyond the Labs
paragraphs: The labs we surveyed were at varying stages of development. About half had not been fully implemented at the lab sites and were still in the planning or developmental stages. The rest of the labs had been fully implemented at the lab sites, and some had proven that the innovations being tested can save money, improve service, and/or increase organizational productivity. However, relatively few of the labs’ proposals had been implemented beyond the original lab site.
The types of assistance the labs need depend on their stage of development. Labs that are in the planning or developmental stages need the support, encouragement, and, at times, the protection that a “change agent” in a position of influence can provide. Governmentwide, the Vice President and the NPR task force have attempted to perform that role. There have also been change agents within particular agencies that have encouraged and supported the labs’ development.
Labs that have been fully implemented, particularly those that have demonstrated ways to save money and/or improve federal operations, need a different type of assistance if the ideas they represent are to spread beyond the lab sites. Nonlab organizations both within the labs’ agencies and in other agencies need to become aware of the labs, recognize the applicability and value of the ideas the labs represent to their own organizations, and learn from the labs’ experiences. As the Vice President said, for the labs to achieve their full potential they “will need to share what they learn and forge alliances for change.” The real value of the labs will be realized only when the operational improvements they initiated, tested, and validated achieve wider adoption. Also, by learning from the labs’ experiences, other organizations can avoid the pitfalls that some of the labs experienced. Sharing this information will keep other organizations from having to “reinvent the wheel” as they reinvent their work processes. If the changes the labs represent end at the lab sites, a valuable resource will have been wasted. Therefore, communication about the labs is crucial to the long-term success of this part of the overall reinvention effort.
However, the survey respondents indicated that relatively few labs have had substantial communication either with other labs or with the NPR task force. Also, although it has encouraged the labs’ development and made certain information available about them, the NPR task force has not actively solicited information from the labs, has encouraged agencies to focus on reinventing rather than reporting, and has not systematically contacted the labs to provide them with information or direction. As a result, the NPR task force was not able to provide us with an accurate listing of all of the labs. The task force’s “hands-off” approach to the reinvention lab effort was a conscious decision by NPR officials not to micromanage the labs and impose a top-down “command and control” structure. This approach, while appropriate to encourage and empower employees and agencies to find the solutions they believe most appropriate to reengineer their work processes, may not be the best strategy for moving the labs’ results beyond their experimental environments. Furthermore, there is no certainty that the NPR task force will still be in existence when some of the labs reach maturity.
Therefore, we believe that some type of information “clearinghouse,” placed in a relatively stable environment, is needed to allow other organizations to become aware of the labs and to learn about the labs’ experiences. The clearinghouse could, among other things, provide information and guidance to labs on the development of appropriate performance measures, including baseline data against which the labs’ performance could be judged. A number of federal organizations could conceivably perform this clearinghouse role. For example, OMB’s responsibility for providing management leadership across the executive branch makes it a candidate to serve as the clearinghouse. Other possible candidates include OPM, GSA, the President’s Management Council, or an executive agency interested in tracking innovations.
section_title: Recommendation
paragraphs: We recommend that the Director of OMB ensure that a clearinghouse of information about the labs be established. Working with the NPR task force, the Director should identify which agency or other federal entity can effectively serve as that clearinghouse. The clearinghouse should contain information that identifies the location of each lab, the issues being addressed, points of contact for further information about the lab, and any performance information demonstrating the lab’s results.
section_title: Agency Comments
paragraphs: We provided a draft of this report to the Vice President and the OMB Director for their review and comment. On January 17, 1996, we met with the Senior Policy Advisor to the Vice President for NPR issues and the Deputy Director of the NPR task force. On January 22, 1996, we met with OMB’s Deputy Director for Management. All of the officials indicated that the report was generally accurate, interesting, and helpful. The OMB and NPR Deputy Directors said the report was the most comprehensive analysis of the reinvention labs to date. Certain technical changes the officials suggested were incorporated into the report as appropriate.
In the draft, we recommended that OMB serve as the clearinghouse for information about the labs. All of the officials expressed concerns about this recommendation. The Senior Policy Advisor and the NPR Deputy Director were somewhat concerned that the recommendation might be read as implying that OMB, rather than NPR, should have had responsibility for initiating and promoting reinvention labs. They pointed out that OMB’s historical role, its budget responsibilities, and its statutory management responsibilities compete with its role as a “change agent” fostering innovation. We explained that our recommendation was intended to emphasize OMB’s responsibility to facilitate the dissemination of work process innovations beyond the lab sites, not make them change agents responsible for initiating the labs. The Senior Policy Advisor and the Deputy Director agreed that this innovation dissemination function is important and agreed that OMB was one place where this responsibility could be placed.
The OMB Deputy Director for Management suggested that the recommendation be changed to allow for options other than OMB itself as the clearinghouse. He said that although OMB has a leadership role to play in this regard, OMB may not be the best candidate to collect and provide information about the labs. Other possible candidates, he said, include the President’s Management Council, other central management agencies, and the Chief Financial Officers Council. We agreed to change the recommendation to state that the OMB Director should ensure that a clearinghouse is established and, working with the NPR task force, should identify the appropriate site for the clearinghouse.