It’s Time for a Health Check Up!

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Note: This column was first published in Government Executive and is republished here with its permission. A related backstory behind the development of the OMB memo can be found here.

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OMB recently directed agencies to update their work environment plans created during the pandemic that deal with telework and work schedules. But the directive went much further. It asked agencies to conduct “health checkups” on an ongoing basis, focusing on “issues related to organizational health and organizational performance.”

These periodic health checkups mean agencies will have to create a set of internally-developed indicators “for measuring, monitoring, and improving organizational health and organizational performance.” While this is new, it has a long history. It also has some potentially long-term implications for “delivering results for the American people,” as OMB management deputy Jason Miller noted upon the release of the directive.

What Does the OMB Directive Say?

Most of the early headlines about the OMB guidance focused on the first part of its three-part directive to agencies, which requires agencies to update their post-pandemic operational plans related to telework and employee work schedules. On that point, the guidance stressed that “agency workforces are generally expected to increase meaningful in-person work,” with an emphasis on “agency headquarters and equivalents and customer-facing units and personnel.” It also encouraged the continued use of “flexible operational policies as an important tool in talent recruitment and retention.”

However, the next two parts of the guidance have longer-term implications for the future of the federal work environment.

The second part directed agencies to establish ongoing routines to assess, monitor progress and diagnose issues relating to organizational health and performance matters, such as improving employee engagement, customer service and employee-to-contractor ratios.

In developing these “health checkup” routines, agencies should build on existing administrative routines such as agency and component-level strategic plans, agency priority goals, human capital operating plans and learning agendas. The goal is to create and use a portfolio of evidence to inform improvements and identify emerging organizational trends at the operating unit level.

The third part of the guidance directs agencies to develop an “organizational health and performance framework” that encompasses a set of indicators to measure, monitor, and improve organizational health and performance.

When developing these frameworks, OMB says organizational leaders in major operating units “should have the autonomy and flexibility to select the organizational health and organizational performance indicators” that best align with their specific missions and workforce cultures.

These indicators would leverage existing indicators of organizational health (mainly from the existing governmentwide annual employee survey) and organizational performance (as reflected in agency performance plans). OMB said that when developing these indicators, agencies “should be informed by meaningful engagement with key counterparts in agencies as well as stakeholders” such as customers, delivery partners and unions.

OMB defined organizational health as: “an organization’s ability to drive performance results collectively in support of its mission, deliver programs and services, and meet stakeholder needs and priorities on an ongoing basis.” It noted that this “may include considerations such as resilience, capability and capacity.”

Likewise, OMB defined organizational performance as: “an organization’s effectiveness in delivering mission-aligned results.”  It said that this can be measured by “a range of indicators and evidence, both internal and external to the organization.”

The interesting key element in the guidance, though, is that OMB asked departments and major agencies to develop these measures at the major operating unit level, not at the department-wide level. So, for example, the Treasury Department’s health and performance will be measured by its operating units such as the Internal Revenue Service, the Mint and the Fiscal Service. This makes great sense since the operating units are quite diverse in most departments.

Who’s in Charge?

OMB said the President’s Management Council will be responsible for helping coordinate the overall implementation of the guidance. Agency deputy secretaries or equivalents—who make up the council—are to be held accountable for ensuring the overall implementation of their respective organizational health and performance frameworks. They are to be supported in their efforts by the agency’s performance improvement officer, the OMB guidance said.

To help support them, OMB and the Office of Personnel Management will create an interagency community of practice around organizational health and performance. This community will share leading and promising practices across agencies, and provide resources and training to develop assessment routines and indicators for measuring and monitoring progress. They will work with the existing employee engagement community of practice to disseminate tools and resources. In addition, OMB, OPM and the General Services Administration will conduct a joint review across the federal government to identify key trends and organizations that are positive and negative outliers. Agency leaders can then incorporate these into their management reviews.

What’s the Timetable for Action?

OMB’s guidance laid out a series of deadlines. Thirty days after the guidance was released (by May 15), deputy secretaries have to identify senior leads for this initiative for each of their major operating units (about 350 governmentwide). By that date, agencies must also provide to OMB updated headquarters-level work environment plans describing their current policies, including those on telework and in-person work schedules.

In 60 days (by June 14), agencies must provide OMB updated work environment plans for customer-facing units and personnel. In addition, OMB will work with OPM and GSA to conduct organizational scans at the major operating unit level that assess trends of employee engagement and performance confidence. These scans will be based on annual survey data they already have in hand. The results of these scans will be shared with agency leadership as part of the summer annual Agency Strategic Review process and will highlight areas in need of improvement.

In 90 days (by July 17) each agency’s performance improvement officers must present to their deputy secretaries agencywide guidance and consistent approaches that would be useful to support operating unit-level efforts. These recommendations are to be developed in concert with the newly-designated senior leads from their agency’s major operating units. The performance improvement officers should do the same with leaders of agency-wide mission support functions, such as the chief financial officer and chief data officer.

Subsequently, agency performance improvement officers should outline a process to regularly coordinate and convene with agency leadership, operating unit leads, and other officials (mainly mission support functions) to continually improve, and use data-driven routines to review progress on organizational health and performance.

Beyond the Memo

To make the guidance effective, there needs to be a set of high-level champions, a cadre of enthusiastic working-level evangelists, and a small team at the center of government that keeps the wheels rolling.

The guidance seems to suggest that the President’s Management Council will be the high-level champions. The memo also talks about creating communities of practice. These could be the convenors for the enthusiasts. And the “small team at the center” that supports implementation will be run out of OMB.

I think early concerns about the OMB guidance generating a lot of compliance activities could be a real issue if the implementation is left to agencies to puzzle out on their own.

OMB (or another forum) should champion agency staff who are enthusiastic about creating a new workplace culture in the federal government. This was the approach taken in the 1990s by the Clinton-Gore Reinventing Government initiative: focus on the willing, not the recalcitrant, and showcase those that are the bright lights. What the reinventors in the 1990s found was that oftentimes these were staff in the field, not headquarters. The recently reinvigorated Federal Executive Board network could be a key element in the implementation of OMB’s guidance.

A strategy that boosted the success of the “data and evidence” movement has been the active involvement of external advocates. In that movement, organizations such as the Data Foundation and Results for America became its champions and showcased individuals and agencies that are making a difference. They also have engaged congressional staff in ways that OMB might not be able.

Potential external advocates for the organizational health and performance initiative could be the National Academy of Public Administration, whose report was mentioned in the OMB guidance, the Volcker Alliance, and the Partnership for Public Service, which already showcases agencies that are “Best Places to Work” and has prototyped agency performance dashboards.

In addition to internal champions and external advocates, OMB and agencies will need to enlist many others when developing agency-specific “organizational health and performance frameworks.” Success will require collaboration between the champions on the President’s Management Council, agency chief human capital officers, employee representatives and many others. Indeed, the Senior Executives Association recommends that “OMB actively engage stakeholders during the implementation of this guidance and be responsive to relevant feedback.”

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