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Department Updates


HHS Addresses its Greatest Management Challenges

HHS is enormous. It touches the life of every American every day with a broad array of services that range from regulating the safety of prescription medications, providing health insurance to the poor and elderly, finding new ways to fight diseases, to making sure that families have the assistance they need in tough times.

Managing all of these services under many different umbrellas is a challenge, but we are trying to engrain in everyone here that no matter what our job is in the Department, we are all part of "one HHS." The President's Management Agenda has helped push us in this direction, and we are succeeding already in many aspects of the Agenda. But we've had to overcome significant challenges in order to make progress.


Learn what HHS is doing to address its greatest management challenges.
Challenge:    More than 2,000 websites
Solution:    Consolidated multiple web sites into one coherent, centralized site.
Challenge:    Overlapping and Duplicative Administrative Functions
Solution:    Consolidating and streamlining overhead activities, consolidating personnel offices, eliminating unnecessary management layers, and establishment of Emerging Leaders Program.
Challenge:    Over 900 performance measures
Solution:    Eliminated over 200 performance measures, while still measuring more outcomes. Changed focus of remaining measures.
Challenge:    Twelve different financial management systems
Solution:    Consolidating into one web-based financial management system
When I got here I was amazed to learn that we had over 2,000 web sites with no way for the citizens to access centrally the wide range of health and human services information throughout this department. We commissioned an agency-wide team to redesign a citizen-centered web site. What the team found is that we had over 280,000 hits a month to the HHS site - good news - but that 60 % of the people left our site without finding what they were looking for. Now we have a new site:

This new site has easy access to a wealth of HHS information. We now have a web site that can link our diverse operating agencies into one coherent web site. Citizens now can actually find the information they have been looking for. And while the project was to redesign the Internet access to the department, what developed was a dedicated team from across HHS that has significantly modified how we will do business. And this is just the first phase. We will apply these lessons learned to our intranet by making it easier for employees to break out of their organizational "silos," and share their knowledge with others across the Department.

HHS also leads one of the Government-wide e-gov projects: developing a single, unified grant application for organizations, state and local governments, and citizens to use for all grants. This project involves 26 federal grant making departments and agencies. Getting senior agency commitment was difficult in the beginning, but our leadership convinced folks in other agencies of the potential of this project, and we are now making significant progress.

Strategic Management of Human Capital

One of HHS' greatest challenges is making sure we retain a highly skilled and motivated workforce. HHS is not organized in the most efficient way. It has overlapping administrative functions and unnecessary management layers. It's tough for people to adjust to organizational changes, and we had to do a lot of convincing that we are doing the right thing in consolidating and streamlining overhead activities, so that resources could be redirected to programs.

One of our major initiatives in this area was to reduce 40 personnel offices to 7, resulting in a savings of approximately $10 million. We will reduce the remaining offices further -- to 4 personnel offices by the end of FY 2003. Consolidating these personnel offices allowed us to reduce duplication, and to redeploy staff to more citizen-focused programs.

We are also eliminating unnecessary management layers, so that there will be no more than four levels from the front-line worker to the top decision-makers. Our senior political and career leaders have signed performance contracts pledging their commitment to improve the management of our programs and the vital services we deliver to the public. These contracts hold senior managers accountable for concrete outcomes tied to the overall departmental goals.

We have also created the Emerging Leaders program to recruit the brightest college graduates to become the cornerstone of our future workforce. Over 8000 recent college graduates applied for the 62 slots in the first Emerging Leaders class. The Emerging Leaders Program exposes participants to high-level officials of the Department, introduces them to the inter-relatedness of work within the operating divisions through rotational assignments in offices throughout the department, and provides them an opportunity to become familiar with the overall environment of the Department.

Budget and Performance Integration

When I went through the first review of the FY 03 budget development, and literally read over 900 performance measures we had for our programs, I couldn't understand what a manager would do with these reams of paper and how a manager would sift through this to find the key information necessary to make program decisions. It appeared that every program manager got "his or her measure" in the plan. We had too little outcome information to tell us whether we needed to make decisions about our programs effectiveness, how to prioritize our financial resources, or what changes to our programs were needed to meet the needs of citizens.

We've made a good start - we've eliminated over 200 measures while increasing the number of outcome measures we want to hold our managers responsible for. We have changed the focus of our performance measures so that we're now getting information indicating that we are limiting disease, enhancing medical safety or reducing dependence on illegal drugs. Not just information on how many grants we provided.

I am pushing to make certain all our senior managers and agency leaders take a hard look at these measures - prioritize and start using them for programmatic improvements. And that we actually use this as a tool for managing, as well as a tool for budgeting.

Competitive Sourcing

Competitive Sourcing is integral to our effort to better manage our human capital. Almost half of the HHS' employees are subject to the competitive sourcing initiative and appear on the Department's FAIR Act inventory. In FY 2002, the majority of HHS agencies used the "direct conversion" approach available for small functions. Thankfully, HHS has not experienced any adverse personnel actions by converting vacant positions and by using retirements and reassignments. The competitive sourcing initiative will grow in complexity and breadth in FY 2003, with more HHS component agencies using outside help under consultant contracts for A-76 expertise. The Department will also move towards more cost comparisons instead of direct conversions.

Improved Financial Performance

Our financial management system is a microcosm of the problems that exist throughout HHS. Twelve of our agencies have different financial management systems. Now, HHS is integrating these systems into the largest single financial information system in the federal government. This new web-based system will bring financial information from the 12 HHS agencies into one, allowing management simple and timely access to information.

The goal is great - the execution of the design through implementation is tough, hard sledding. I've insisted that it not just be a financial system - but that our program managers understand that this is a vehicle for change. We will not buy an off-the-shelf system and find out that our senior managers didn't know they couldn't get their old "tried and true" reports. We are changing our business practices and need to have buy-in from the agencies and their staff. This summer, we took what we called "a pause" to be sure we weren't in such a rush to complete this project that the project managed us rather than us managing the project. It was a tough decision, but one we felt was important to get the foundation right, so that we will actually implement a system our department can and will use.

Claude A. Allen

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