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Focus, Engage, and Manage – Supporting the Federal Workforce through the Fiscal Crisis

Posted on  3 June 13  by 

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The federal government is in crisis.  This isn’t new, budgets uncertainty and resulting challenges have plagued federal agencies for years.  But now, with furloughs, the retirement wave, and hiring freezes, the crisis has taken another toll – the workforce.

Lessons learned from the 2008 financial crisis show that organizations need to double down on employee engagement and support the workforce transition into the new organization reality.  Utilizing three critical imperatives can support organizations to drive engagement capital*, enable employee agility, support agency commitment, and enhance performance:

  1. Focus Efforts – High impact engagement efforts can drive up to 23% improvement on performance against mission goals.  Using the FedView 2012 data, start now and build an action plan that focuses on the 3-5 initiatives that will have the most impact on your workforce.
  2. Manage Change – Workforce agility can increase performance by over 17% in times of uncertainty.  Support your employees using change management techniques to manage through the budget uncertainty.
  3. Engage Often – Workforces with low engagement fail to fully recover following major change efforts. Communicate frequently with your employees, through multiple channels, to enhance engagement and improve the workforce connection.

CEB best practice research, tools, and templates can help members understand current challenges, shape communications efforts and manage the workforce through transitions.  Contact CEB for more information.

*Links Connect to Member Only Pages

Using Outcome-Oriented Metrics to Show EA Value

Posted on  17 January 13  by 

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A May 2012 Office of Management and Budget (OMB) report on “The Common Approach to Federal Enterprise Architecture” directs agencies to develop outcome-oriented metrics, which aim to demonstrate the overall value to the business that specific services provide. However, according to a September GAO report on Enterprise Architecture value, while nearly all agencies have successfully defined goals or purposes for their enterprise architecture, most struggle to define EA metrics and measure the impact of EA on achieving agency mission outcomes.

The reports highlight a disconnect: on one hand, OMB has requested that agencies develop EA metrics for some time, but on the other hand, agencies continue to cite “a lack of guidance as a key reason why they have not established methods and metrics for measuring outcomes and benefits.” This disconnect has generated a holding pattern in which agencies submit what the GAO considers incomplete enterprise roadmaps to OMB.

This struggle to assess and communicate the EA function’s value spans both the public and private sectors, according to CEB’s yearly peer polling of EA groups. Many EA functions lack a consistent way of measuring EA value, and when asked about the greatest challenge in measuring EA value, 40% of respondents identify “coming up with quantitative measures of EA’s value” as the main impediment. “Communicating the value of EA to business stakeholders” and “determining what portion of the credit for a certain outcome should be attributed to EA” are additional top-of-mind challenges. As a result, scorecards and metrics programs are unable to serve as early warning systems to effectively drive action before problems become acute.

Instituting actionable performance measurement through the development of outcome-oriented metrics:

-   Drives fact-based decision making

-   Provides resource allocation insight

-   Serves as a communication tool to effectively influence your agency

-   Evaluates and demonstrates compliance progress

Given these significant benefits, CEB has created a set of targeted resources to enable EA teams to more strategically select outcome-oriented metrics and communicate value. The most progressive organizations apply three key tactics to get the most out of their metrics program:

  1. Derive EA metrics by cascading IT and business strategic objectives to activities EA controls or influences. This process ensures that EA’s performance measurement activities align to the priorities of your agency.
  2. Define key parameters for metric collection and reporting (ex. A metric’s unit of measure, ranges of acceptable and desired performance) to validate the relevance, actionability, and measurability of EA metrics.
  3. Develop ‘frontier’ metrics to extend EA measurement efforts beyond a static and retrospective view of performance.

How has your agency progressed in developing actionable EA metrics? What are some additional challenges that you have faced along the way?

How “Agile” Are Your IT Projects?

Posted on  14 December 12  by 

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It’s no secret that more budget cuts are on the horizon, and in preparation executives will be reassessing and re-prioritizing IT spending. One critical challenge in doing so is the lack of assurance that budget and schedule forecasts are accurate. In fiscal year 2011, nearly 3 out of 4 major IT investments in administrative and programmatic areas were over budget, and roughly 2 out of 3 were behind schedule. This proof of forecasting inaccuracy, along with a rise in project value leakage, gives us reason to go back to basics and focus on the fundamental topic of IT project management.

In 2005, the Office of Management and Budget mandated that government agencies implement Earned Value Management Systems (EVMS) – a Waterfall methodology that calls for long-term tracking and looks at projects as a whole – into their IT project planning processes. While this project management methodology has led to some operational success, it has fallen short in driving forecasting accuracy. Some agencies have replaced EVMS with a newer methodology called Agile Development, which calls for the splitting of large projects into smaller “iteratives” that rely more heavily on cross-functional collaboration and an end-user test-and-learn approach.

While Agile projects are not necessarily a faster path to project completion, they are faster to overall value delivery and can improve project return on investment by approximately 25%. Incremental progress allows for either re-direction or termination of a project while still retaining the value from those iteratives that have already been completed. A successful implementation of Agile will also lead to a workforce that is prepared for change and innovation and focuses more on collaboration and teamwork.

With that being said, it is common for organizations to meet challenges along the way when moving to an Agile approach. CEB has identified three key components of Agile Development that executives fear:

  1. Portfolio Management – Breaking rigid project boundaries to optimize benefits
  2. Cultural Change Management – Readiness of the project manager community for transition to large-scale Agile implementation
  3. Agile Competencies – Making sure staff have, or can develop, the skills required for Agile to be repeatable across varying team and organizational contexts

CEB has identified effective solutions for PMO Executive Council members aimed at addressing the challenges above to help organizations embed Agile practices in IT workflow. How has your organization adopted Agile?

Deconstructing the Best Places to Work

Posted on  14 November 12  by 

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Over the past few weeks, scores from the latest round of the Federal Employee Viewpoint Survey (FedView) were released by OPM. These results will not only help inform agency priorities for 2013, but also serve as the basis for the much-anticipated 2012 Best Places to Work Index.

Many executives follow their agency’s placement on this stack ranking, which can have a noticeable impact both on employee engagement and candidate attraction. Strong or improving scores can bolster an agency’s brand and reputation, and serve as a badge of honor for employees at all levels of the organization. Declining scores on the other hand can confirm employee suspicions of worsening conditions, and encourage top talent to explore job opportunities elsewhere.

Though the index is widely followed, relatively few are clear about how these rankings are calculated, or what they actually show. The Partnership for Public Service derives the index using three FedView Survey questions that indicate employees’ job satisfaction, organization satisfaction and agency advocacy. While these questions are helpful indicators, they are more aligned with outcomes than inputs – and are not instructive about what agencies can do to improve their scores.

To better understand the top drivers of the Best Places to Work Index – CEB used regression analysis of the 2011 FedView Survey results to uncover which workplace attributes have the greatest impact on agency rankings. After assessing the impact of each workplace attribute on the index, a few imperatives stood out as having an outsized influence on index scores.

1.       Recognize Work Unit and Agency Accomplishments

Perceptions of agency mission success and the quality of work completed by an individual’s work unit have the strongest impact on employee satisfaction. Low scores in these areas do not necessarily mean that agencies are missing their goals – but could be a result of limited visibility into work unit or agency successes. FedView results suggest that this lack of transparency may be widespread across the public sector. According to the survey, half of Federal employees are not satisfied with the information they receive from management on what’s going on in their organization, while a third do not agree that managers evaluate organizational progress toward meeting its goals.

To ensure that employees at all levels are aware of agency accomplishments – managers and leaders alike must recognize and share the successes of their own work unit, as well as those taking place across the organization. Everyone likes to feel like they’re part of the winning team – and highlighting these achievements can pay large dividends in employee morale.

2.       Solicit Upward Feedback

Employee involvement in the decisions that affect their work is another top driver of agency rankings. Involving employees in decision-making does not mean catering to their every wish – but does entail proactively asking for employee opinions, and acknowledging and empathizing with their perspectives. Since some employees are more reluctant to share their opinions than others, tapping into direct report insights may require proactive effort. Equally important to asking for feedback is a manager’s receptivity to the feedback provided. FedView results suggest that there is room for improvement in many managers’ listening skills, as one in four employees do not agree that their manager listens to what they have to say.

As workloads increase and resource constraints intensify, managers will increasingly be tempted to make quick decisions and ask questions later. Though soliciting direct report feedback can lengthen the decision-making process – benefits such as surfacing risks, improving decision-making and increasing employee engagement can more than make up for the extra time spent.

3.       Reinforce Workplace Inclusion 

Manager/supervisor ability to work well with employees of different backgrounds also proved highly influential in agency scores. While agencies have traditionally focused diversity efforts on getting diverse talent in the door, CEB research shows that workplace inclusion actually has a greater impact on employee engagement and satisfaction than workforce diversity alone.

As organizations continue to refine diversity and inclusion strategic plans stemming from Executive Order 13583 – it is important not to discount the importance of workplace inclusion. CEB research demonstrates that investments in workplace inclusion need not be costly to be effective. Simple practices such as assessing job candidates on inclusion competencies or amplifying returns on diversity training by reinforcing these lessons across the employee lifecycle cost little, but can make big strides in building an inclusive culture.

One Caveat

The Best Places to Work Index is a useful tool that enables agencies to track improvement or erosion in employee morale. However, it is all too common to see agencies miss out on the value of these rankings – with perennial low scorers dismissing the validity of the index, or perennial high scorers using the scores for self-congratulation only. When agencies fail to reflect on why their scores go up or down, then the usefulness of this ranking system is lost. Like any metric found on a management dashboard, the Index should be used to monitor progress over time, and to help agencies evaluate where they have been, and what progress still needs to be made. Only then will agencies become and remain a Best Place to Work.

Collaboration’s Role in the New Work Environment

Posted on  14 November 12  by 

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The work environment is changing rapidly, but how these changes affect employee performance and productivity is not well understood. To grasp the realities of new work environment, CEB surveyed 23,000+ employees across industries and geographies to find out what these major shifts are, and how they impact employee contribution.

One notable finding of the study is that the nature of collaboration has changed. More than two-thirds of employees report that their job requires more collaboration today than three years ago. Moreover, employee networks are expanding and becoming increasingly cross-functional. Of those surveyed – 60% of employees report that the number of employees involved in their day-to-day work is 10 or more, while two-thirds report regular coordination with employees from different work units and supervisory levels.

However, accompanying this greater need for collaboration are new barriers that impede it. According to the study, employees are more geographically dispersed than ever before due to trends like telework – which removes the “water cooler effect” that allows for effortless collaboration. Rising workloads coupled with shrinking budgets and staff similarly jeopardizes collaboration, causing employees to focus on their individual responsibilities over group initiatives. Results from the Federal Employee Viewpoint Survey (FedView) suggest that these factors, among others, have actually reduced collaboration levels within Federal work units. Since 2008, agreement that employees cooperate to get the job done and share knowledge have declined by 9% and 2% respectively.

While many heads of HR recognize that collaboration is important, few appreciate the impact it has on employee performance relative to HR’s more traditional areas of influence – such as recruitment, performance management and manager training. Using the “Employees in my work unit share knowledge with each other” question on the FedView Survey as a proxy for collaboration – CEB was able to derive three insights about the impact of collaboration on the work environment:

  1. Collaboration has an outsized impact on team performance – Using regression analysis of FedView data, CEB identified that levels of knowledge sharing have a greater impact on work unit performance than levels of performance differentiation, manager quality, and the skill level of new hires.
  2. Collaborative work environments foster innovation – Employees who agree that employees share knowledge with each other are 2.5x more likely to report feeling encouraged to come up with new and better ways of doing things compared to those who disagree.
  3. Collaborative work environments have higher intent to stay – Employees who agree that employees share knowledge with each other are half as likely to consider leaving their agency in the next year as those who disagree.

While data shows that collaboration has great potential to improve performance, indiscriminately calling for more of it is not the right approach. Since some projects are better-suited for collaboration than others, leaders should selectively encourage collaboration when projects meet the following criteria:

  • Goal Alignment – Participants must share clear and similar goals for collaboration to be productive.
  • High Potential Impact – Benefits of collaboration must outweigh the opportunity cost of time and resources required.
  • Wide Project Scope – Projects that require knowledge spanning across multiple domains benefit from tapping outside sources of expertise.
  • Stakeholder Quantity and Diversity – Projects that affect a large or diverse set of stakeholders are well-served by the contribution of multiple perspectives.

In addition to choosing the right projects and tasks to collaborate on, managers and leaders can further ensure that collaborative effort is productive by avoiding common pitfalls:

  • Universal Inclusion – Ensure participants have the proper combination of knowledge, skills and authority to collaborate productively. Quality of dialogue trumps the quantity of participants.
  • Failure to Establish Ground Rules – Drive consensus around goals, limitations and what success looks like before inviting participant contributions.
  • Tackle Project in One Fell Swoop – Deconstruct collaborative projects into smaller milestones, and systematically direct attention towards each objective until solutions to all agenda items are met.

As collaboration takes on a larger role in employees’ daily workflow, agencies have the opportunity to enhance productivity and innovation – so long as these activities are used and managed effectively.

Using Phased Retirement Programs to Avoid the Retirement Tsunami

Posted on  4 October 12  by 

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Agencies across government are coming to grips with a stark reality – the federal workforce is relatively old.  The median age of federal employees is 48.  Further, workers in government have nearly double the tenure of their private sector counterparts (7.8 versus 4.2 years).  These statistics conspire to create an imminent danger in the form of retirements.  With wages frozen for the third year running, those that are at or near retirement eligibility, now nearly 30% of all federal employees, are increasingly saying “adios”.  This development threatens continuity of operations for many agencies, as experienced employees with irreplaceable knowledge depart and create an institutional risk in their wake.

For years, private sector organizations have engaged in creative practices to mitigate this risk.  Phased retirement programs, in particular, have helped organizations successfully bridge the experience gap that inevitably exists between departing employees and their successors.  Unfortunately, just 11% of federal employees say their agency has a phased retirement option and another 50% indicated that they aren’t aware of one (Government Business Council).

Clearly, the option of phased retirement is a relatively new idea in government.  In fact, it was first formally introduced on July 6, 2012 in the “Moving Ahead for Progress in the 21st Century Act”.  While the act and complementary guidelines published by OPM focus on the mechanics of the program from the compensation and pension perspectives, much ambiguity remains regarding just how to implement phased retirement within a team.  Who is eligible?  What does it look like (i.e. how does the retiree interact with his or her successor)?  What responsibilities does the retiree have?

CEB has done extensive profiling of the approaches deployed at best practice organizations.  Invariably, these organizations engage in 4 steps:

  1. Conduct a formal demographic analysis to understand retirement eligibility projections by department and employee level.  Compare this with internal churn and turnover data and hiring goals and achievements.  Evaluate the historical and estimated “take-rates” (percentage of employees taking retirement as soon as eligible) and apply to future retire eligible populations.
  2. Determine employee eligibility by using formal criteria and/or approval processes.  Progressive organizations outline the formal decision criteria to increase transparency, they utilize an HR-led approval committee to ensure consistent application of the criteria and they expedite and document the administrative process by creating a form-based application process.
  3. Use mentoring and toolkits to integrate knowledge management into phased retirement.  Organizations use mentoring to explicitly train employees that are replacing retirees.  However, the process should also produce greater sustainability, so as not to repeat the same lack of “institutional memory” when faced with future departures.  For this reason, managers should be required to capture corporate knowledge in the form of simple toolkits that another employee could pick up and learn from.
  4. Measure program effectiveness through focus groups, exit interviews, or metrics.  At its best, phased retirements can enhance knowledge management and provide more time for succession planning.  But these outcomes shouldn’t be assumed.  Regular monitoring through qualitative and quantitative means will ensure that the agency gets the most from its investment.

Varying Degrees of Centralization

Posted on  27 September 12  by 

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A recent blog (read it here) shows that working capital funds are growing at a faster rate than appropriated funds and suggests this represents a government-wide trend in centralizing administrative services. But is working capital the only way for government to centralize? Certainly not. Conversations between CEB and dozens of US federal government executives over the past 12 months have suggested agencies are experimenting with a number of different ‘centralizing’ options. Here are a few:

1.       Technology Share—For a number of reasons, implementing new systems in government can be a challenge. The net result is that some agencies are simply more efficient than others at conducting the same task because they have the right tools to do so. Instead of trying to re-create those same systems in-house, some agencies are now simply asking to ‘rent space’ on those that are already up and running.

2.       Co-Located Technology Share—This looks a lot like the Technology Share option, but staff from the agency that is renting space are physically located with the provider’s team and system. The benefit here is that staff can learn from their peers, but executives do not have to make as many formal changes to their function’s organization chart.

3.       Centers of Excellence —Instead of renting space on a system, agencies fully outsource a specific transaction or administrative task to a peer organization (most commonly to a peer agency within the same Department). This enables functions, such as finance or HR, to become highly proficient at one particular task, and provide that task to a broader community in a more efficient way.

4.       Department-Led Centralization—Backed by deep analysis and likely external benchmarking, Department leadership prioritizes areas for focused efficiencies. While recommendations can support any of the three methods outlined above, Department-led centralization often migrates more services to a centralized shared service center. In order to ensure success, these centers generally operate in a matrixed management structure and measure themselves against very tangible performance objectives.

5.       Outsource within Government—Partially driven by supply and partially driven by demand, agencies are increasingly looking to outsource administrative services to other government entities. In these instances, the department might centralize services first via working capital and then outsource that service to an external provider, or agency executives may outsource directly to the provider. Some of the most common providers include the National Business Center, the National Finance Center, the Administrative Resource Center and the Program Support Center, to name a few.

Has your organization tried any of these? What do you think works best?

Do Tighter Budgets Mean Centralization?

Posted on  24 September 12  by 

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As federal budgets continue to face Congressional scrutiny, will government agencies respond with increased centralization? My thoughts are yes, but with a caveat.  Federal agencies will increasingly sift toward centralization of administrative services first, and fast. Programmatic services, however, will remain a challenge to centralization.

Over the past 9 months, CEB Government Practice conducted an in-depth analysis of US federal working capital, supply and franchise funds that accounted for $134 Billion in FY 2011. These funds enable a wide range of administrative services including Information Technology, Finance, Human Capital, Procurement, Security, Facilities, Printing, and Legal, among others. And, while on average these funds account for roughly 2% of a Department’s or Independent Agency’s total budgetary outlay, some make up as much as 10%.

They’re also growing faster than appropriated funds. Since 2009, the compound annual growth rate (CAGR) of a Department’s or Independent Agency’s working capital fund has outpaced that same Department’s or Independent Agency’s total budgetary outlays CAGR by 4%. This fact is probably the underlying cause of many fund customer CFO concerns that centralized services aren’t “taking their fair share of the cuts.” However, it probably also represents the centralized service provider’s response that “customers aren’t asking for less, they’re asking for more.”

Conversations with CFOs, CIOs, and CHCOs across government tell me that regardless of who is right, more—not less—will be funded via working capital moving forward.

Do you interact with your organization’s working capital, franchise or supply fund? Do you have ideas of new services that could benefit from the economies of scale working capital provides? If so, please share them below as everyone in government can benefit from another cost-savings opportunity.

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Management Reform = Corporate Transformation?

Posted on  13 August 12  by 

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CEB was recently invited to share our perspectives on ‘management reform’ opportunities for the governmemnt.  In some ways, management reform in the public sector can be thought of as a corporate transformation on grand scale (with some very obvious differences.)   When transformation efforts fail, talent issues are often to blame – for one – or both of two reasons.  First, organizations can’t recruit the volume or caliber of talent necessary to achieve their missions due to gaps in employment branding, hiring process or selection strategy.  Unable often to use the blunt instrument of performance based down-sizing, arcane and time-consuming procedures dictate how talent must be redeployed.  Moreover, the public sector struggles to create and fulfill a clear, resonant talent brand  — especially in an age of political dysfunction and austerity.  Many executives discount employment branding, hoping that mission attachment will continue to attract the best and brightest to public service (although the data suggest otherwise.)   

Second, disengagement in the existing workforce prompts escalating departure of key talent and low productivity in those that remain.  In particular, budgetary uncertainty and substantially reduced resource levels serve to reduce, if not eliminate altogether, precisely the types of behaviors that are vital to transformations – collaboration and innovation. 

To the good, there are low cost ways to advance both recruiting and employee motivation and retention.  On the recruiting front, more rigorous application of science based selection and assessment tools can substantially improve the likelihood that scarce hiring dollars result in high-impact new hires.  On the motivation/retention front, there are huge returns from both enhanced two way communication strategies and “activation” of the middle management layer as strategies for engaging the broader labor force.  At a time when many agencies are thinking about elminiating positions in the ‘middle layer’ of management, progressive executives are wondering how best to use those individuals as force multipliers.

Is Your Agency Measuring the Right Activities?

Posted on  8 August 12  by 

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A recent CEB study found that over  60% of employees believe they do not have the full set of technologies they need to be productive in their jobs.   Part of the challenge is that while IT departments have done well at delivering on foundational activities, like document storage and remote support, they have struggled with evolving mobile capabilities beyond device deployment.  Most agencies continue to struggle with “BYOD” and other security constraints that impede more rapid deployment of mobile and collaboration technologies.    The net result is that barely one half of employees are productive while outside of the primary place of work. 

One solution is for IT departments to expand the permiter of what they measure to include four important aspects of employees’ work performance:  mobility, collaboration, work efficiency, and work quality.  CEB has synthesized these attributes into the CEB Technology-Enabled Productivity Barometer – contact us to find out how to tackle this at your agency.