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Developing
and managing human capital is a strategic imperative not only for
commercial enterprises, but also for public sector institutions
striving to become more productive, accountable, and attractive
to the next generation of workers in today’s “war for talent.” Some
would say that public sector institutions face an even greater challenge
than other organizations because the pace of change of the New Economy
has forced them to play an even more arduous game of “catch up.”
On
behalf of LiNE Zine, I recently had the opportunity to participate
in a conversation on public sector human capital management with
David M. Walker, the U.S. Comptroller General and head of the General
Accounting Office (GAO), and Bobby Yazdani, CEO of Saba Software,
provider of human capital management technology solutions. Appointed
in 1998, Walker has been an outspoken champion for change—“to bring
modern human capital management practices into the U.S. federal
government.” He has made landmark speeches on the topic over the
last two years and testifies frequently in Congress on the subject.
Yazdani, whose company is the founding sponsor of this ‘zine, has
been developing a vision for the future of human capital management
based on hundreds of conversations with senior executives in large
commercial organizations, as well as an increasing number of governmental
entities and defense agencies. The meeting, which took place Feb
21, 2001 in David Walker’s gracious office, was an interesting exchange
of public and private sector perspectives. Walker’s and Yazdani’s
comments provide yet another set of insights about the opportunities
and obstacles faced by leaders looking to bring their organizations
into the next generation of managing people in the knowledge age.
Yazdani:
David, what’s been your special interest in driving an agenda about
human capital management?
Walker:
I’ve
been in and out of government during my career. GAO is the third
federal agency I’ve headed. Before I came here, I was head of the
human capital services practice at Arthur Andersen—so I’ve seen
a lot and I have a lot of passion for this topic. The GAO’s mission
is to maximize the performance and assure the accountability of
the federal government for the benefit of the American people. As
Comptroller General of the United States, I’m effectively the “Chief
Accountability Officer” for the U.S. Government. The GAO has made
a lot of positive changes for the government over the years, but
it hasn’t done much about the people issue until recently. The policies
the federal government has in place for managing people are just
not sensible anymore in a knowledge-based economy, and they need
to change.
Manville:
Which policies specifically?
Walker:
All
over. Rewards and promotions are currently based more on the passage
of time and they are inflation adjustments rather than for an individual’s
skills, knowledge and performance. The government uses language
about “performance,” but it’s not competency-based or results-oriented.
Too often, it’s like Garrison Keillor’s Lake Wobegon, where “everybody
is above average.” Government has all too often treated its people
as a cost to be cut instead of an asset to be valued, something
that many progressive companies in the commercial sector figured
out a long time ago.
Yazdani:
Well, yes, but there are still Fortune 500 companies that haven’t
really made the shift, either. We’re seeing the interest in competency-management
and structured approach to performance management growing, but it’s
not as universal as it needs to become. Companies are at different
stages of maturity; only the best are really thinking holistically
about overall human capital management and development.
Walker:
Still,
relatively speaking, the private sector is way ahead. The government
needs a major paradigm shift, to bring in modern business practices
for managing its performance and people. The government has the
major disadvantage of “big P” politics—every four years, a new administration,
people come in, try to make their mark, change things—but, there’s
little to no continuity to take on the tough issues like “change
management.” This requires sustained attention by top management
over a period of years.
We’ve
put strategic human capital management on our high-risk list, to
shine a spotlight on the seriousness of the problem. In the next
five years, one-third of all federal workers will be eligible for
retirement, and one-third of the senior executives are likely to
leave, as well. There have been reductions in the size of the workforce
in the past, but without any strategic plan, and little succession
planning. Short term and politically popular policies have ended
up mortgaging the future.
Manville:
Corporations went through some of the same problems as a result
of excess reengineering in the 1980s—which ended up spawning a lot
of the “knowledge management” initiatives in the following decade.
Yazdani:
We think the time is right for bringing together various dimensions
of this challenge, people, processes, and technology. Our view is
we need to take an integrated approach.
Manville:
What do you see to be the most important reforms for the government?
Walker:
The
government needs an entire cultural transformation. Certainly, integration
among efforts is part of it. Many government organizations are hierarchical,
process oriented, siloed, and internally focused organizations.
We need more “partneurial,” results oriented, integrated, and externally
focused entities.
Yazdani:
How’s the GAO itself changing?
Walker:
I’ve
insisted that we lead by example so we’re changing our own workplace.
We’ve developed a strategic human capital plan, prepared an electronic
inventory of the status and knowledge of our people, and are moving
to a new competency based performance appraisal system linked to
our overall strategic plan. We’ve also put in place a mentoring
program, employee feedback mechanisms, an employee relations committee,
and stepped up our recruiting, college relations, and training efforts.
We’re giving employees a voice and a share in our strategy, and
helping to build them up with the capabilities to deliver on it.
We also have a much more transparent and participative environment.
New
legislation has allowed us to create career paths based on knowledge
and competencies, and to help re-align the agency based on the skills,
knowledge, and performance of individuals involved. These represent
huge changes in how the government and this agency have historically
operated.
Yazdani:
We see competency-management and the linkage to performance and
workforce planning as a critical program in the leading companies
that we work with. Your vision is very similar to that of the best
senior executives who are our customers. As a taxpayer, this is
also “music to my ears”!
Manville:
How much of this is really a paradigm shift, as opposed to just
more of the trends that have been building?
Walker:
This
is not just about automating or improving antiquated processes.
Looking back, I see distinct eras where we’ve gone from “personnel”
to “human resources” and now we need to talk about “human capital.”
Human capital is truly strategic, not administrative. It’s high
value added, not low value-added like HR and personnel functions
have tended to be.
Manville:
How do you tackle the enormous change implied in all this?
Walker:
Well,
a lot of it is classic change management: small wins, build momentum,
get alignment with key leaders, and so on. I’ve done this in the
private sector, and I have time on my side—since my appointment
is for a fifteen year term, so people can’t wait me out! Also, the
GAO is in the legislative branch, so it’s easier for Congress to
give us the leeway we need.
Actually,
the vast majority of what needs doing can be done without changing
laws—but we have to fight a lot of behind the scenes battles with
various parties who don’t want change.
The
overall target for government is pretty clear: we need less hierarchy,
fewer but better-skilled government workers, earning higher pay
based on their knowledge, skills and performance.
Manville:
What’s the top of your agenda for your overall change program?
Walker:
First,
get Human Capital management on the radar screen of top leaders
across the government—the OMB (Office of Management and Budget)
and the secretaries and deputy secretaries of every cabinet agency.
Second, we need to do some basic things that are successful—moving
from “rules to tools,” empowering people, and linking overall agency
strategic planning and goal setting with individual performance
measurement and reward systems
Eventually
this will take off, if we have a few leaders showing the way. We
at GAO intend to lead by example and to help others help themselves
in this important area.
Yazdani:
What’s the role of unions in the government? We find, in places
like Ford where we’re working and also in a big government project
we have in Norway, that unions are now collaborating with management
about human capital development.
Walker:
Organized
labor, in general, has less clout than it used to, but in the government,
things are going in the opposite direction. They’re getting more
powerful in the federal setting. They’ve tended to be wary of performance
metrics, but in fairness, they’ve had to face a lot of vague and
fuzzy systems that were overly subjective.
My
view is that employees and their authorized representatives must
be included in the change process. In general, people are more likely
to buy into change if they can really participate in the development
of the process and metrics. We all have a stake in the related outcomes
and hopefully, by working together in a constructive manner, we
can share many successes.
Yazdani:
In the customers we work with—which by the way, now include some
federal agencies and also some countries such as Norway, and the
Netherlands—we’re seeing a real shift from “learning” to “learning
and performance.” Twelve months ago, the conversation was really
only about learning—everything was “a training problem,” whereas
now it’s much more about “How do I develop the right workforce for
the challenges I face? Do I have the skills and competencies I need?”
The objective for us is to bring together learning and performance
to create the right experience for the knowledge worker as well
as for the manager. If you build the systems right, it’s a win for
both. We need to take both an individual perspective and an organizational
perspective in this new world.
Walker:
We
are certainly doing that here at GAO. We’re setting real performance
targets and involving all our people throughout the process—thinking
both about our overall institution and the individuals who comprise
it.
Manville:
Well, it certainly sounds as if both government and business
are moving towards greater focus on human capital development and
management. I suspect the coming years will provide opportunities
for both sectors to continue to learn from one another.
David
M. Walker is Comptroller General of the United States, and head
of the U.S. Government’s General Accounting Office. Bobby Yazdani
is Chairman and Chief Executive Officer of Saba Software, a leading
provider of human capital development and management software. Brook
Manville is the Publisher of LiNE Zine.
VDWBYBM031901GR
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