Don't Just Cut Government, Reinvent It

Extrait de: Across-the-board reductions will not improve efficiency, By LOUIS V. GERSTNER JR., The Wall Street Journal, JANUARY 31, 2011

The hottest topic in Washington, D.C., and many state capitals is cutting the cost and size of government. Understandably so—we are living way beyond our means, and the future of our nation is at stake.

Nevertheless, after a 40-year business career that included numerous restructurings, cost-management programs and "downsizings," I've learned that it's not always enough just to cut costs. Sometimes an organization needs a new vision. And today, in this country, that is what we desperately need.

Americans do not want only a smaller government; they want a more productive government. We do not want simply to decrease our taxes by, say, 5%, as nice as that sounds. We also want 100% of our tax dollars to be working as effectively as possible. In short, we need to reinvent government. Here are some principles that will allow us to do so:

Do not impose "across-the-board" cost reductions. This is a simple and tempting remedy for an organization in fiscal trouble. But it is almost always unproductive. A truly effective organization needs incremental investments in programs that drive innovation and higher productivity. Moreover, I've learned that across-the-board cuts are almost guaranteed to reduce morale, promote short-sighted choices, and encourage accounting gimmicks that send people looking for loopholes instead of creative solutions.

Focus on programs, not costs. The greatest productivity gains come from asking questions such as:

1.      What things are we doing now that we do not need as much in the future?

2.      Can we eliminate them?

3.      Reduce their size?

4.      Provide them in a totally restructured fashion?

A good example would be the U.S. Postal Service. Simply cutting it back to, say, 2008 levels means missing the opportunity to reinvent an organization that could develop over $20 billion in annual losses, according to projections by the U.S. Postmaster General. No one wants the postal service to disappear. The focus should be on reinvention—forcing the organization to become more competitive in the information age.

Is the current departmental structure of our federal government appropriate for today's challenges? For example, would we be better off merging the Departments of Labor, Education and Commerce into a more focused Department of Skills and Economic Growth? These are the kinds of questions that we should be asking.

Allow no exceptions. To drive a truly effective restructuring program, everything must be on the table. There can be no sacred cows—no part of the organization that is exempt from scrutiny. Every unit of the organization may not face a cut, but every unit needs to be rethought.

If you allow exceptions to this principle, three debilitating things happen.

The first is that the energy of people within the organization—the government, in this case—is channeled into getting on the exception list instead of looking for honest and important ways to improve productivity.

Second, those parts of an organization that are excepted are often the most costly. Excusing them a priori diminishes the potential value of the whole reinvention program. It creates dangerous pressure to overdo the reductions in smaller but vital programs.

Finally, a sense of shared sacrifice, a common purpose of reinvention for all members of an organization, is completely lost when some are allowed to opt out. Restructuring, reinvention, transformation—whatever you want to call it—is hard and joyless work, and successfully convincing people to stand by this vision can only be done when there is a shared sense of urgency and commitment. We are all in this together, or we are all trying to get out separately.

Mr. Gerstner, a former CEO of IBM, was chairman of the Teaching Commission (2003-2006), which reported on ways to improve the quality of public school teaching.