Max Stier, President and CEO of the Partnership for Public Service Joins Denver Frederick

The following is a conversation between Max Stier, President and CEO of the Partnership for Public Service, and Denver Frederick, Host of The Business of Giving on AM 970 The Answer.

 

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Max Stier

Denver: Some of you might recall the advertising slogan of a German chemical company called BASF which went “We don’t make the carpet. We make the carpet better.” Well, that very slogan could just as well apply to the Partnership for Public Service as it pertains to the Federal Government and their mission: to make that better and more effective. And here to tell us how they go about doing that is the President and CEO of the Partnership for Public Service, Max Stier. Good evening, Max, and welcome to The Business of Giving!

 

Max: Thank you so much. You’re the first person to raise that old advertising jingle, and it’s one that speaks to me because I think, in fact, that’s what we do. So thank you.

Denver: Give us some of the history of the Partnership and a bit more about your mission and goals.

Max: Great. So we are 16 years old. We were actually founded by an amazing businessman in New York named Samuel J. Heyman, who got concerned a while back that top talent wasn’t going into the government in the same way as it had when he had come out of Harvard Law School in 1963. I met up with him about 16 years ago, and he made me an offer that I couldn’t refuse… which was if I put together a business plan, he would commit $25 million over the next five years to set up an organization. And I had come out of government. Basically having worked in all three branches of government, I knew the power that government could have when it was done right. Sam Heyman was a contrarian. There was no such effort extant.. You’ve got a nonprofit sector that has literally more than a million representatives that cover every issue in multiple forms. For what we do, we’re unique, and that’s actually a problem.

Denver: Having come from all three branches of government, provide us with some context as it relates to the size, the breadth, the scope of the Federal Government. Just how big is it?

Max: Well, it’s the largest, most important organization we have in this country and, I would argue, on the planet and even in history. You have  — just in terms of the workforce itself — over two million career civil servants.  You have four million total people if you count the military and the postal service. Interesting and very important to note, and that is that two million people is essentially the same size as the federal workforce was in numbers of workers in the 1960s. And that was an era in which the government was doing a lot less than it is today — think about TSA as an example.

The country has grown enormously. So per capita, actually the number of federal workers has gone down substantially over the years. So you’re talking about multiple trillions of dollars, upwards of four trillion dollars of budget. Again, it’s the only tool we have that has the imprimatur of the American public and the taxpayers’ resources to address our most critical common issues as a nation. So it is fundamental to everything that we care about that is collective in action, and it is in trouble right now. It’s a government that was built for a different era. It was a government that performed very, very well when it was constructed. The time has changed, but government has not yet kept up.

Denver: Well, then if you were asked to give a word or a phrase that would best describe the government of today, what would that be?

Max: I would say it is a legacy institution. It’s an organization that was again created at a different era. For example, the rules that govern talent acquisition and management in the government, which is vital, were put together in 1949 with little change since. So when you think about the organizations that are thriving today, none of them are operating under the same rules as they did in 1949. That’s what I mean when I say “legacy.” We have an institution that needs to be refreshed. We have an institution that needs to be better connected to the broader talent market in which it resides. The government isn’t the market setter in the same way as it used to be. The nature of work that is required in the government has changed. It used to be a largely clerical institution, and now it’s like all really top organizations. It is a knowledge-based organization. As a result, we need to see some substantial change.

We create a ranking. We call it “The Best Places to Work Rankings” where we measure agencies against themselves over time.

Denver: Looking at the size and scope of government that you just described, — two million people, four million with the military, four trillion dollars — those organizations are very, very difficult to change. They’re almost like trying to turn around the Queen Mary in a bathtub. How do you go about doing that? How do you make change in institutions which are both old and just enormous?

Max: It is a great question. And I think the answer is: you’ve got to be smart about it. It’s really a question about finding the right leverage points. And it begins with understanding why we have what we have and what’s broken about it. I would say that one of the great challenges that exists in government is that management is not as easy as it is in the private sector for a variety of reasons, including the fact that you don’t have  real good performance information, and it’s by necessity in some levels.

So when you’re thinking about what the government does, it is seeking public goods, public ends… like the non-profit sector. You don’t have financial metrics where you can boil down your performance. So, one of the things we’ve done, as an example to try to address that issue, is we got a law passed that requires every federal agency to conduct an annual employee survey. And our notion is pretty straightforward. In the private sector, where you have financial metrics, it’s still the case that employee views are a great proxy for the performance of the organization. And there’s tons of research that shows high employee engagement is equated to higher stock price, better P&L statements, better performance.

Same goes for any knowledge-based organization. Our view was you would never know how to measure that or actually manage towards it if you don’t have the measurement tools. We got the law passed, and it’s been fascinating to see the response in leadership in government. We create a ranking. We call it “The Best Places to Work Rankings” where we measure agencies against themselves over time. We measure them against their peer agencies. We measure them against the private sector. Pretty much every cabinet secretary knows where they are in our ranking. And it is amazing how that has influenced leaders that would otherwise not pay a lot of attention to management to pay some attention to it.

So one, is lack of real-time performance information. Second, is you have this real challenge around leadership. You have short-term leaders that aren’t aligned to the long-term needs of the organization that they run. Again, an odd aspect of our system of government is that there are over 4,000 political appointments that are made by a new President, which I assume  we’ll come back to— But in this case, the fact of the matter is that because they’re around for a short period of time, they don’t typically invest their energies in the management of the organization, and that’s another big problem. So you ask: How do we change something like that? We focus on leadership. We focus on performance information. We focus on the basic rules that govern the system of government. And we focus really on talent. We see that as the major leverage point for influencing our government.

Denver: Speaking of talent, is there a healthy balance in government between policy makers and people who are experts in a particular field or subject, and operators– people who are really good at implementing things and getting things done?

Max: You’re leading me in the best of all directions here. This is really the distinguishing element of the Partnership as an organization. Every sector — nonprofit sector, universities, business — they all interact with government around their policy preferences. And almost nobody pays any attention to that latter group: the operators, the operations, the management. We all know that ideas are only as good as your ability to get them done. And if you ask me: what is the most major deficit our government has today, and that is it has an execution deficit. It is engaged on the policy level.  No one invests or pays attention to: The management. The execution side. And as the result, our government isn’t delivering from the management side the things that we want and need from it.

On the talent side, the same thing goes. So if you look at that political group of leadership, they’re selected almost inevitably because of policy expertise, or alignment; and very rarely because of their management capability. And when they arrive, they generally don’t pay enough attention to the management side. The rules are set up such that they don’t actually reinforce the need to focus on management either.

These are all things that are changeable. I am describing something of a bleak picture. And I want to come back to why people shouldn’t feel that all is lost here. But what is fascinating is relatively small things can be changed that would have a very large impact. The impact side is impossible to overstate. There’s no organization that has more weight. Again, I said in the nonprofit side, you’ve got millions of nonprofits focused on any issue you can think of: the environment, national security, children. The Federal Government will be the 800-pound gorilla in each one of those areas. And so I posit… and this is our proposition: you focus on making the government better on all of those issues?  And your leverage is better than any kind of nonprofit investment that is possible. And if you don’t have that central core capability from the government happening right, no matter what you do on the nonprofit side, it won’t get you to where you needed to go.

And the truth is there’s lots to complain about. It doesn’t get better if all you do is complain.

Denver: My experience on that has been– I’ve dealt with a lot of social entrepreneurs who are absolutely fed up with government because they just can’t get anything done and moves too slowly. And what they’ve done, they’ve gone off on their own to try to make things happen. And invariably, 36 months later, they are back… recognizing you really can’t change anything without having government at the table.

Max: You need it. And the truth is there’s lots to complain about. It doesn’t get better if all you do is complain. It’s fascinating. We run a program where we recognize innovators in government. We did a study with the Hay Group, a well-known private sector entity that does a lot of research on innovation in the private sector. This comes to your point about the social entrepreneurs. What they found when they looked at the comparison group — federal versus private sector, or government versus private sector — is that a lot was the same in terms of what it took to be just a phenomenal innovator. One of the differences was that the government innovators stuck with the organizations. They didn’t give up on them. Whereas the private sector person was like: Forget it. I’ll start my own organization. I’ll go to another place. But making the institutions of government work, to get something important done… it was one of the defining aspects of their work, and it has huge consequence. It ain’t easy, but the impact is unbelievable.

Denver: They call it “grit”. You need a lot of grit.

Max: Persistence is an undervalued virtue.

Denver: Absolutely. Another deficit that you are addressing too is that the officials and policy makers of one branch of government really have so little understanding or appreciation of how the other branches operate… Tell us what you’re doing in that regard.

Max: We talked a little a bit of root causes, lack of performance information, short-term leaders, and  the third one here is Congress. And again we have a relatively unique system where you have a separation of the executive and legislative functions. Congress, by and large, does not meet its fiduciary duties in managing the executive branch. We actually did a report not long ago that the Hewlett Foundation supported on  Congress’ contributions to management’s dysfunction in the executive branch. That was not the title. That was my title. The Congress has four ways that it influences the executive branch, or is responsible. One is budget. So again, people will say, “Hey, government is ill-managed. It’s not doing its job.” Well, look, you tell me any organization that’s going to be able to actually operate in any real way without having any idea what its budget is. That’s what the federal workforce has to deal with. They rarely, if ever, have a budget for a full year. They’re in essence given slices of bread when they know they’re going to eventually consume the whole loaf. It makes it more expensive. It makes it really hard to plan. That’s a big difficulty.

There is the appointment’s piece, which is another story which we’ll come to, I assume. The third is, in oversight and, again, Congress doesn’t really understand the executive branch and so their hearings are rarely getting to the core problems that exist and finally, there’s the underlying legislation. But to fix this system, I have to influence Congress. One of the things we’re working on is trying to educate legislators about what the real issues are. They want to do the right job, but they do need to have more information; there needs to be more connectivity, more understanding.

Denver: In the Federal Government, are there any shared critical services? And the one that immediately comes to my mind is payroll. You would think from the outside that there would probably be one payroll system that pays all federal employees. Is that the way it works?  Or does every single agency pretty much do it alone?

Max: So, this is — you put your finger on — a major approach that we have to try to change government, and that is to think of it as an integrated enterprise rather than the collection of 100+ independently organized and operating entities. And that is true both for back office function like payroll, but also for mission. So there’s a lot of conversation about: Oh, we know you have overlap, duplication. We had the creation of the Department of Homeland Security because people thought: Oh, we’ve got all these entities, and yet we have one key need. Let’s just put ’em all under one roof and fix everything by doing that. That’s not what happened.

We do need to actually organize government as a complete enterprise. There is way, way too much in the way of individual payroll systems. When you think about technology more generally, there’s a big problem. Federal government spends $80 billion plus a year. Almost 80% of that goes on operations and maintenance, basically keeping old systems alive. Some of those systems are over 50 years old. But there is no capital budget. This comes back to the budget piece, so there’s no forward investment to actually create new systems that will cost less over time, or not enough of that. If you look at the federal workforce, there are almost five times as many people over the age of 60 as under the age of 30.

Denver: That’s not good.

Max: It’s not good. Not, not, not, not, not with technology or anything really. But certainly technology. There is a lot of problem there, but there is a big opportunity to treat it as an enterprise. It’s something again that we are pushing very hard on.

Max Stier and Denver Frederick at the AM970 The Answer Studio

In many ways, government has lost track of the customer, and that’s something that can change and be improved. Truth is that the Federal Government isn’t getting worse. It is simply not keeping up with the world as it is changing around it.

Denver: Well, people do seem to be very frustrated and angry with government. Probably more today than they have been for quite some time. Government, as you said, doesn’t seem to be responsive in a world where an Amazon drone is dropping a package at your door about an hour later. And this really isn’t just limited to America. This seems to be across the world, across democracies. People are just fed up and are really angry. What do you think is going on across the globe in this regard? And is there anything that we can do to address these needs that citizens are clamoring for?

Max: So, I think there is absolutely stuff that we can do, and we have a whole agenda of items. I think you put your finger again on something that is pretty essential, and that is that the best in class… and this is not advertising to say: the private sector is the best. But the best in class in the private sector has done a phenomenal job of improving their customer experience… that customers have.  That’s the place where the Federal Government has some places that are unbelievable. Just to give you an example, and this is going to sound like a strange one. But at the VA, the cemetery services — this is for the families — they had the highest customer service rating– not just in government, not just in the private sector– but that had ever been measured before. They’re an outlier.

But the thing is: almost everything that should be happening in government is happening somewhere. We are trying to create a common metric around customer experience similar to the employee “Best Places to Work” rankings. Because we think that good performance information will help drive the kinds of behaviors we want in government.

In many ways, government has lost track of the customer, and that’s something that can change and be improved. Truth is that the Federal Government isn’t getting worse. It is simply not keeping up with the world as it is changing around it. You asked about the global situation, and I think you’re correct that there is frustration… not just in this country, but globally. It is not just about governments; it’s about all institutions. I think that is something that we need to be concerned about… that people are losing trust in institutions. I do think that trust in our government is a fundamental to the health of our democracy. The government has to earn that trust. We need to create a virtuous cycle where government is doing better. The public better understands the government. And then we wind up, I think, with a stronger democracy, stronger government, and a stronger country.

Denver: Let me move on to the current administration, and you very well may be the leading expert in the country on Presidential transitions. These transitions are big time jobs. I think about 1,100 appointees actually have to get Senate confirmation. When you fall behind as the Trump administration has at the very outset, it can be mighty, mighty tough to catch up. Are they catching up? And what does the current state of affairs look like today?

Max: Great question. Transitions are, I think, a little-understood activity. It’s fascinating. You always hear as a child: peaceful transfer of power is one of the hallmarks of our democracy. No one tells you: it’s peaceful, but it’s been ugly. And the transitions- what’s interesting to me about it is no one has ever actually created a learning system around transitions. And that’s what we’ve done with our Center on Presidential Transition. It’s been a Groundhog Day exercise. For every transition, they at best have gotten an oral history from prior people who have been involved. We’ve created a whole resource center, so that transition teams can learn from prior practice.

One of the most important things that a transition does is put in its leadership team. Again, it’s all about people. And as you said, there are 1,100 of those- the top people in the agencies that have to go through Senate confirmation… and the Trump team has not done so well. I would argue that no administration has done this well, but the Trump team has demonstrated an ability to get below even that low bar. Just to get a sense of some numbers right now, the Trump team, we said, has 1,100 Senate-confirmed positions; they’ve got 48 of those in, and we are closing in on six months into their term. Same time, eight years ago for President Obama, he had 200. I would posit that 200 was too low; clearly, 48 is. And it’s a big problem because if you don’t have your team on the field, it is very hard to run the organization effectively. To be clear about this, there are acting individuals in all those key jobs. But for me, it’s akin to a substitute teacher, maybe a wonderful educator, but they don’t take the long-term view. They know they are not around for the long term. They are not perceived as having real power.

Denver: No one will listen to them– the fact they just sit there as a placeholder. That’s a whole different dynamic.

Max: I think that’s exactly right. And that’s a challenge, and all of us ought to be concerned about it, mostly because of natural security issues. I mean, the truth is that the most fundamental thing our government does for us is to keep us safe. We need leadership that is in place, that is informed, and is working well as a team.

Denver: Let me ask you something you mentioned already once or twice. And that is… perhaps, your most anticipated publication which is the Best and Worst Places to Work in the Federal Government. And before we get to the list, what are you looking at and measuring that allows you to make this kind of determination?

Max: Well, we have from the law that we were able to get Congress to pass, an incredible data set. We essentially have hundreds and hundreds of thousands of federal employees that answer an 80+ question survey. And this is to be clear about it: it is not about happy employees — I think it is important for me to stress that — it is about whether or not they are engaged.

There are all kinds of information that’s asked actually by the government because we’re not able to do the survey ourselves. Everything from whether they’re getting the information they need to do their jobs well. Whether good talent is coming in… whether their leadership is actually motivating them… whether they would recommend the work environment for other people. It’s a very deep and rich set of information. It is very powerful.

So quick anecdote on that: when we did our first ranking of this — this is before the creation of the Department of Homeland Security — FEMA was the lowest-ranked agency. And this was in 2003. Then in an interview, the then-Director of FEMA who has become well-known, Director Brown, said it was just a few disgruntled employees… Now, looking at his numbers, you could have predicted that the organization would not respond well to a crisis. Obviously in 2005, we had the Hurricane Katrina… and FEMA did not respond well. So it matters. What employees- if they are engaged, again back to the private sector, you get better performance. It is about whether they are going to give their discretion and energy. Especially in a knowledge-based world, that becomes incredibly important.

The rankings have provided a measurement and management tool that has really driven attention to that core issue about whether the employees are engaged.  And what do you need to do to actually help them do the stuff that they really want to do? Because what you’ll see across the board is huge numbers on mission commitment. No matter where they are in the government, they want to be there to serve the public. But it’s the system and the leaders that are failing them… and that comes across all the time. Agency goes up = good leadership. Agency goes down = bad leadership. And it’s that clear.

Denver: There you go. Well, you ranked these based on the size of the organization, the big and the mid size and the small. Here is a drum roll. Give us: What are some of the best places to work in the Federal Government?

Max: Interesting. It won’t be a surprise, I think, to a lot. NASA has consistently been at the top for the last few years. People will say: Of course, NASA because it’s space. It’s exciting, etc. But it’s not because of that. It’s because of good leaders. They actually had their budget cut. They had their employment cut. Their whole mission changed with the loss of the shuttle. It  really was because of amazing leadership. Charlie Bolden for eight years, who just did a terrific job. You see the same thing again across the board, whether it’s the General Services Administration, or the SEC. You name the organization. When they have good leaders, they excel.  When they don’t; they go down.

Look at the Secret Service right now. It’s near the bottom of our list. Terrible fact here, but only one out of three Secret Service members or employees will say that they can raise a violation of law or ethics without fear of retaliation. That’s one of the questions on the survey. Imagine that law enforcement, only one out of three believe they can raise an issue of law or ethics without fear of retaliation. That’s the kind of data that is really powerful. And to my view again, that’s the kind of thing that leaders need to pay attention to because they are fundamental to the health of their organization, whether they’ll deliver in the ways that we want them to.

Denver: It’s a fascinating list. I saw the Peace Corps there, the National Endowment of the Arts, the Smithsonian, the whole bunch of them really near the top. FDIC, I believe.

Max: Yes. Although FDIC- And again, I love this one which is the SEC and the FDIC maybe seven-, eight-, nine years ago, they were — SEC was near the top and FDIC was near the bottom. Sheila Bair came in as the FDIC head. She said, “I want us to be number one.” She took them to number one. SEC, I will argue, had terrible leadership and they basically swapped places. It took a few years, but leaders can drag an organization down, and they can raise one up.

Denver: Leadership, as you said. What is often overlooked in Federal Government, as you mentioned before, is an appreciation and recognition of some of the remarkable contributions that they make. They are not even recognized by their fellow employees very often, but you have a program that really addresses that. Tell us about it.

Max: Yes. I think one of the key insights is that no organization is going to be healthy if all you do is kick it. That’s typically what we do to the Federal Government. If you look again at the survey data for the federal workforce, you see that there’s over a 20-point gap… Twenty point percentage gap between what federal employees say as to whether or not they are recognized for good work… and what good organizations in the private sector employees will say. We created a program called The Service to America Medals. It’s the Samuel J. Heyman, named after our founder Service to America Medals Program. We identify the most innovative federal employees who are making a real difference for the public. These stories are eye-watering. An example of a finalist for this year is the team that actually took Volkswagen to court and was able to find out that they were lying to their customers about their pollution controls and was able to get $17 billion plus from Volkswagen for payment for dealing with some of the environmental problems that they caused. So that would be a pretty good example.

Another one, the IRS actually put behind bars a team of individuals that were scamming the public… over a million calls to people. I had received some of these saying they are from the IRS and that you need to send money in. Some 10,000 people actually did send the money, but they rolled that conspiracy up and stopped it. The PEPFAR Program; the AIDS support that we give globally. Eleven million people are alive today because of the US government’s work, and the individuals involved in that program are finalists.

As are the people who were helping in Syria and dealing with the number of millions and millions of displaced individuals who are at risk in many, many ways. It’s a phenomenal array of individuals who are doing things that you cannot do anywhere else because you have the biggest platform, the US government, as your base for making these actions. The resources. Again, the public sector imprimatur. And there’s no substitute for it. You need, I believe, to give these people the lift if you want more people to follow in their footsteps. They say they feel like Cinderella, and the carriage has come.

Denver: That is really sweet. As a matter of fact, I think that the Do Not Call List started with the federal…

Max: Do Not Call List was one of our first winners. The gentleman who helped eradicate polio in India. You just think about these things. They are massive. They are just phenomenally important. They go unnoticed as you said, either by the public or, frankly, even by their own leadership inside the government, which is a problem.

Denver: And this year’s is September 27 with John Dickerson, right?

Max: John Dickerson will be our emcee. The stories again are awesome. People can go to servicetoamericamedals.org. They can see the whole list of all the honorees. You just roll over, and you’re just like: Oh my god, oh my god, oh my god. One thing I will note is: I said that these people stick to their organizations. They also are the most modest people. When we announced the finalists, there were 29 of them in the room in May. They were all sitting in the room saying, Oh that’s an amazing story, that’s an amazing story, I’ll never win. Look at that! It didn’t matter. They all said the same thing because that’s part and parcel of who they are.

Denver: Right. Well, they’ve got to get over that a little bit.

Max: That may be true. That maybe true.

Denver: Let me close with this Max. I’m old enough – I hate to say, to remember JFK’s call to public service. It was amongst the most noble of callings. And it’s really what the best and the brightest did, as you said in the very beginning. That unfortunately is no longer the case. The perception is that Washington is petty. It’s contentious. You can’t get anything done. Special interest and money dominate and get in the way of doing the people’s business. What case would you make, Max, to a young person today, perhaps graduated from college or graduate school, that a career in public service just might be the most attractive choice that they could make?

Max: I think that the number one calling card for government is the one that I stated earlier, and that is that, for anyone who cares more about making a difference than making a dollar, there is no better place to do it. It is the largest stage that has the best opportunity for having a huge impact for people here in United States or abroad. It doesn’t matter where. I think that we have an opportunity to excite and engage the next generation coming up through government service in a way that is special because this generation does so much care about making a difference.

Now, the truth is that government doesn’t make it easy. The hiring processes, they take too long, they’re too difficult, they don’t always select the right people. My point would be, Guess What! Doing important things sometimes is harder than it ought to be. If you really care, again: persistence is an undervalued virtue, and you need to go for it. We have resources on our website: http://www.ourpublicservice.org where we provide some information for people about how to get through the system. It ain’t easy, but the difficulty is worth it. There is no better way to make that difference. That said, you said “career in public service.” I would argue: no one really thinks that much about careers these days. I think the opportunity is to spend whatever it is… two, three years in government. My bet is that if they do that, they will come back to it. You’ll be hooked. It’s actually good for government to have people come in and out. I think that part of the challenge is that government has become a bit of an island insulated. It needs to actually have talent flow back and forth, more than that’s been a historical model. But again, want to make a difference? The best place to do it!

Denver: Well. Max Steir, the President and CEO of the Partnership for Public Service. I want to thank you so much for being here this evening. Give us that website address one more time. Tell us what’s there of particular interest to our listeners and how they also can help support the organization.

Max: Thank you. So it’s http://www.ourpublicservice.org. We have subsidiary sites on Best Places to Work and our Service to America Medals. There is a ton of information there. For those who might want to enter government, for those who were interested in understanding what’s going on in government, and for those that are interested in trying to improve our government.

In terms of support for our organization, we are a nonpartisan/nonprofit organization; we depend upon donations. One of our biggest challenges is that there is no field of giving for what we do, and that’s been difficult. On the plus side, there really isn’t anyone else doing what we do. On the negative, there really isn’t a set of donors that have been supporting this kind of work. Sam Heyman was a contrarian. He understood that this was a point of immense leverage. We need some more of those contrarians to support us. Especially today, a lot of people see what’s going on, as you suggested, in Washington. Note: 85% of the workforce is outside of Washington, so you don’t have to  go to Washington. It’s our government. No matter who is the President, it’s still our government. We need to care about it. It’s a vital institution of our democracy.

Denver: Thanks Max. It was a real pleasure to have you on the show.

Max: Thank you.

Max Stier and Denver Frederick


The Business of Giving can be heard every Sunday evening between 6:00 p.m. and 7:00 p.m. Eastern on AM 970 The Answer in New York and on iHeartRadio. You can follow us @bizofgive on Twitter, @bizofgive on Instagram and at http://www.facebook.com/BusinessOfGiving

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