Monday, January 19, 2009

Obama's Missing Management Theory

Dr. W. Edwards Deming taught management theory to Japanese business leaders after World War II. Near the end of his career, the leadership guru distilled his teachings into "profound knowledge." It covered systems, variation, psychology, knowledge and their interactions.

President Barack Obama's management knowledge comes from the legal/political sphere, yet he will be Chief Executive of America's huge federal arm. His political appointees are a combination of basketball buddies, friends, and Clintonites. However, he did hire a Chief Performance Officer, Nancy Killefer, an executive with McKinsey & Co., a giant consulting firm.

They plan to revamp the federal government with efficiency, transparency, and accountability. Without means, those are hollow platitudes. By what method?

Barack Obama and Joe Biden will create a focused team within the White House that will work with agency leaders and the White House Office of Management and Budget (OMB) to improve results and outcomes for federal government programs while eliminating waste and inefficiency. This unit, a SWAT team, will be composed of top-performing and highly-trained government professionals and be headed by a new Chief Performance Officer (CPO) who will report directly to the president.

The CPO will work with federal agencies to set tough performance targets and hold managers responsible for progress. The president will meet regularly with cabinet officers to review the progress their agencies are making toward meeting performance improvement targets."

Wall Street leaders applied the very management practices cited above. What did that bring America? Greed, abysmal quality and an imploded financial sector.

Leaders throughout government need theory and methods to improve. Efficiency, transparency and accountability are insufficient. Pay for performance is a proven distorter. The White House joins corporate America in the race to the bottom, ignoring profound knowledge at our nation's peril.