Reorganizing Management Functions: A Manager's Checklist

Sometimes GAO does terrific work but couches it in ways that its value may not be immediately obvious to busy readers.  Here’s a very practical report that looks at eight recent consolidation efforts undertaken by federal agencies and identifies five sets of questions that managers should be able to answer if they find themselves in charge of an initiative to consolidate infrastructure or management functions.  Since these kinds of reorganization efforts will likely be more common in coming years as agencies look for strategies to cut costs, it is a report worth looking at.

Because GAO is an oversight agency for Congress, it framed its report to help congressional committees do better oversight.  But its real value may be to agency managers facing the task of developing a reorganization strategy.  The report is based on stories from real reorganization efforts and gives a good flavor of the dynamics agency leaders face when undertaking an administrative consolidation of functions.

The Checklist.  The bottom line – the handy checklist – can be found in Appendix II (p. 44).  Here are the top line questions the report is organized around:

• What are the goals of the consolidation?  What opportunities will be addressed through consolidation and what problems will be solved?  What problems, if any, will be created?
• What will be the likely costs and benefits of the consolidation?  Are sufficiently reliable data available to support a business-case analysis or cost-benefit analysis?
• How can the up-front cost associated with the consolidation be funded?
• Who are the consolidation stakeholders, and how will they be affected?  How have the stakeholders been involved in the decision, and how have their views been considered?  On balance, do stakeholders understand the rationale for consolidation?
• To what extent do plans show that change management practices will be used to implement the consolidation?

The Case Studies.  GAO brings the checklist to life with vignettes drawn from case studies of recent consolidation initiatives:

• The Census Bureau’s 2011 initiative to consolidate its 12 regional offices into 6.
• The Defense Department’s Base Realignment and Closure (BRAC) process, most recently undertaken in 2005.
• The Internal Revenue Service’s consolidation of 8 paper processing centers into 3 sites, beginning in 2000.
• The Environmental Protection Agency’s discussions to consolidate its science labs (the conversations started in 1994 and are still ongoing, according to GAO).
• The cross-agency Federal Data Center Consolidation Initiative, announced by the Office of Management and Budget in 2010, which started with a goal of cutting the number of data centers in half.
• The cross-agency payroll consolidation initiative, which consolidated 26 payroll systems into 4.  This effort began in 2001 and was completed in 2009.
• The cross-agency International Cooperative Administrative Support Services system, where 40 agencies with offices overseas share the costs of common administrative services in overseas posts.
• A 5-year joint Defense and Veterans Affairs pilot effort to integrate medical care at a joint facility, which began in 2010.

The report is worth a read if you think a reorganization is in the near future for your organization!

POSTSCRIPT:  Here's a thoughtful piece by Babak Armajani in Governing Magazine on this same topic, with interesting parallels in terms of practical advice, "What Price Consolidation?"