Arlington, Virginia Monday, May 1, 2000 Mr. Lawrence: Welcome to The Business of Government Hour, conversations with government leaders. I’m Paul Lawrence, a partner at PricewaterhouseCoopers and co-chair of the PricewaterhouseCoopers Endowment for the Business of Government. The Endowment was created in 1998 to encourage discussion and research into new approaches to improving government effectiveness. To find out more about the Endowment, visit us on the web at www.endowment.pwcglobal.com. The Business of Government Hour focuses on outstanding government executives who are changing the way government does business. My special guest tonight is Jack Kelly, director of the National Weather Service. Good evening, Jack. Mr. Kelly: Good evening. Mr. Lawrence: In this first segment, I would like to ask you a little bit about the National Weather Service. I understand it dates back to 1870, which tells us that the weather has been on people's minds for quite some time. Could you tell us more about the National Weather Service and its mission? Mr. Kelly: You are right, Paul, the National Weather Service has been around since 1870. If you trace the history of it and how we have moved from government department to government department, you get an idea of how, while our mission hasn't fundamentally changed, interest has. We started off in the Army, in the War Department, in 1870. The reason we were in the War Department was that they wanted us to collect observations about what was happening around the country with the weather. The view was that to do so required a very disciplined approach and the logical place was the War Department. We spent 20 years in the War Department and then went into the Department of Agriculture because of the impact of weather on agriculture. We stayed there until the early 1940's when we moved to the Department of Commerce. We moved to the Department of Commerce because the view was weather impacts U.S. competitive advantage and therefore was better in the Department of Commerce. What we really do is two things: We issue forecasts and we issue warnings, warnings for those extreme weather events that impact this country. And we are, as continent, the most prone to have severe or extreme weather. We average in this country over 1,000 tornadoes a year, thousands of floods, tens of thousands of severe thunderstorms. In the last ten years, 90 percent of all the Presidential-declared disaster declarations were, in fact, weather-related. So the warning business that we do is very important. We provide forecasts for the FAA, Federal Aviation Administration, so they can safety and efficiently operate the National Air Space System. And then we provide generic forecasts for the citizens of the country. In addition, a not well understood part of our mission is that we operate the observation network. We operate 120 weather radars. We get data from weather satellites. We operate 1,000 automated surface observance stations. We run computer simulations of what the atmosphere is going to do and we made all that information available to the private weather sector and to the broadcasters that you see on TV. So, while we are a small agency, about 5,000 people, we really do touch the fabric of the American citizen. Mr. Lawrence: Now you have 33 years of experience in the weather, both in the public and private sector. Can you tell us about the various positions you have held in your career? Mr. Kelly: Well, I spent 31 years in the United States Air Force. As most Air Force officers do, I did a number of different jobs, most of which were in the weather business, but I did do some work with information technology automation. I got the fortunate opportunity to lead a number of organizations. I retired from the Air Force and went to work for the private sector for a few years running a weather business. Then I came to work for the government when the secretary of Commerce asked me to apply for the Director of the Weather Service job. Mr. Lawrence: What are the differences in culture you have described, the military culture, the private sector, civilian culture, and now the federal government? Mr. Kelly: There is a tremendous similarity between the military culture and the culture of the average employee in the National Weather Service. In the military, the culture is a service over self. You see that in the National Weather Service also. When there is bad weather that is expected to hit an area, the average Weather Service employee comes to work early that day. We have had Weather Service employees spend nights in forecast offices because floods have cut them off or the highways have been covered with snow. So, the service-servant ethic is very, very similar between both of them. Love of what they do, the forecasters and hydrologists in the National Weather Service, those in the forecast offices, love what they do. They love trying to forecast what Mother Nature is going to do for us. You see that in the military. Differences? The military tends to move faster, I think, than the civilian world does. Also, in the military, when you tell people to do things, they do it, particularly in the business setting. That was a big adjustment I had to make, when you tell someone to go do something, you had to work to get consensus. A simple order doesn't get things done. So, there are some differences, but there are a lot of similarities. Mr. Lawrence: In terms of the private sector, were there any other differences in the management style between the private sector and the public sector? Mr. Kelly: Well, certainly in the private sector one focuses on generating profit. One goes after business development. When you are doing a job you are thinking about where is the next job going to come from. I saw a difference here. The bottom line is very, very important in the private sector. Both in the military and in the government you tend to be thinking of what is best for the citizen of the country. You certainly do worry or concern yourself about whether you are making the best use of the stuff you have, whether you are operating the most efficiently and effectively you can, but you are not trying to generate a profit. That is a big difference. Mr. Lawrence: How do you think the military prepared you for both of these different jobs? Mr. Kelly: In the military, when you start off as an officer, as a Second Lieutenant, you concentrate on honing your leadership skills. And that is the job I am in now, I am in a leadership job. I should say there is another difference between the civilian world and the military world, an awful lot of the civilian world talks about managers. The military doesn't talk about managers. It talks about leaders. I am in a leadership position. I am the one who is supposed to work together with my employees, set the mission, get them the resources, get them the tools, and then help them to achieve that vision. So, the military, through the professional military education, through the jobs, through command jobs they put me in, allowed me to develop my leadership skills. I really think that prepared me for the job I am in currently. Mr. Lawrence: When you were a senior advisor to the Department of Commerce, you conducted a bottom up review of the National Weather Service and then you became the director and were charged to implement some of those recommendations. Did you ever think you would actually get to work on the project that you helped create? Mr. Kelly: No. And I think it is a unique experience for Washington. This is a city where whenever there is a problem, the solution is you bring in an outside team to do a study. The team writes a report and hands the report to the Secretary. Everyone smiles and you implement some of the recommendations. But the team that put the report together rarely is in the position of implementing the recommendations in the report. Well, I did that. I did a study. I did a study because in 1997 there was some question about the resources that were required to operate the National Weather Service. The secretary of Commerce and the administrator of NOAA asked me to determine what resources were required. When I was doing that study, I discovered that there were some management challenges in the weather service which helped contribute to the questions that were being asked about the resources that were needed. I am now implementing the recommendations that we put together and I am discovering it is more difficult to implement than it is to write them. Mr. Lawrence: What were some of the management challenges you discovered? Mr. Kelly: I think that the National Weather Service was not unlike many other government organizations. It tended to try to centralize control and authority over the organization, and in the course of doing so, it had really not empowered the employees. It tended to be top down as opposed to bottom up. For the past couple of years we have been trying to change that structure. We have also attempted to focus more on financial and technical measures and introduce the concept of accountability. Mr. Lawrence: Great. It's time for a break. We will be right back with more of The Business of Government Hour. (Intermission) Mr. Lawrence: Welcome back to The Business of Government Hour. I am Paul Lawrence, a partner at PricewaterhouseCoopers and tonight's conversation is with Jack Kelly, director of the National Weather Service. Well, Jack, you were named director of the National Weather Service in 1998. What was the organization like when you arrived and what are some of the biggest changes you have initiated since you have been there? Mr. Kelly: Well, there are two different facets of the organization. The first facet is our ability to issue weather forecast initial warnings. That was really good and it was getting better. The area where we in fact had some challenges were in what I will call management of acquisition programs. We had an information technology program called The Advanced Weather Interactive Processing System. It is a great system. We couldn't do our job today as well as we do it without it. When I took over the Weather Service, that program was suffering schedule delays, cost overruns. So, we put in place stronger program management, we put in place more focus and we determined some matrices to track what we were doing. We put in place a program control function to get that program under control because it was in the limelight and it was getting us a lot of bad press. Congress wasn't happy. The Secretary of Commerce wasn't happy. So we got that program under control. The other things, and I mentioned it earlier, in the organization I wanted to change the leadership and management culture which tended to be top down. I wanted to push decision-making to the lowest practical level in the organization. We put in place some metrics in terms of where are we in terms of execution of our budgets. We put in place some metrics in where are we in terms of our technical performance. I wanted to essentially give up control of most of the decision making, to push it down to lower levels in the organization. At the same time, I wanted everyone to understand that we were going to start holding him or her accountable for both what they did and what they didn't do. Because once you give people the authority to make decisions, they have to act. I wanted them to understand that. I wanted them to understand that, one, they were accountable for making a decision, and, two, if they didn't make a decision when they should have been making a decision, there was some accountability about that. So, I don't think we were doing anything different when I took over from the current view of today's management. If you look at what Jack Welch tried to do in GE, we tried to do some of those things. Mr. Lawrence: Can you tell us more about the Advanced Weather Interactive Processing System and how it changed operations? Mr. Kelly: One thing that has happened in the Weather Service the last ten years since it has been modernized, is that we have significantly increased the amount of data that the forecaster has. The forecaster then needs some tool to turn that data into information so he or she can use that information and their brainpower to make a weather forecast. The heart and soul of our Forecast Office today is this computer system called the Advanced Weather Interactive Processing System. It takes that data and allows the forecaster to manipulate it, take a look at different representations of how the atmosphere might unfold and then make a forecast. It is a good system. But as I said, it had a history of some problems. It was not unlike other information technology systems that are out there. But it is in place. We put the last system in last June. It has done great for us. Mr. Lawrence: Now, I know that technology is becoming an increasingly important part in terms of your success. The Weather Service was recently given a government technology leadership award from Government Executive Magazine for AWIPS. I am wondering how all of this technology is improving government service. Mr. Kelly: Actually, we got an award from Government Executive. We also got an award from the Smithsonian for the Advanced Weather Interactive Processing System which proves one of Kelly's adages, "Nothing succeeds like success." We took a program that had a checkered reputation and turned it into one that is now used as an example. What all the new technology has enabled us to do is increase the lead-time and the accuracy of our weather warnings. We have doubled our tornado lead-time. We have more than tripled the lead-time on our flash flood warnings. In doing so, we are giving the citizens of this country more time to know that adverse weather that could cause destruction or actually prove fatal is coming. They can then make an informed judgment as to what action to take. The technology has enabled us year by year to improve the accuracy of our track forecast for hurricanes. What the citizens of this country see are more accurate forecasts as a result of that technology. Mr. Lawrence: How are the employees of the Weather Service adapting to all this technology? Mr. Kelly: While we focused on the new technology that was going in, we did two other things, too. Across the board, we raised the educational level of the forecaster and hydrologist or the worker of the Weather Service. Also, we spent more than $85 million in training, because our view was that without training we would not be able to use all this new technology. The reason that the work force can use the new technology is that we have invested a fair amount in training. And we continue to invest a lot of money in training to continually refresh the knowledge of our forecasters. Now, if you go talk to the work force of the Weather Service, they will tell you that we don't do enough. I am not quite sure you can ever do enough, but we do recognize we need to do that. Each year we have distant learning courses that people can take. We have a National Training Center. We send our forecasters to Boulder, to the University Corporation of Atmospheric Research, where we have a cooperative with the Navy, the Air Force, and the FAA Cooperative Training Program. Mr. Lawrence: What feedback do you get from customers on these improvements? I guess an average person like me would never get to report on how great the weather forecasts I see are, but in terms of the airlines and those types of organizations. Mr. Kelly: I think the best feedback we get is the feedback we get from citizens who tell us, "Had it not been for your warning, I would have lost my life." We get feedback in testimonials like that. We had last week what we call a Partners Workshop. We brought in emergency managers, the private sector, the FAA, to sit down and talk with them about how we are doing and what we can do better. At the American Meteorological Society, we held a national meeting in January where about 9,000 people who work in the weather field together. We had a town hall meeting on Sunday, a two-hour session where we spent a little bit of time telling them where we are going in the next year and then got feedback. Tomorrow, I am going to a meeting with the Georgia emergency managers. Trust me, I am going to hear from them about how well we are doing or how well we are not doing. Mr. Lawrence: Well, great. It is time for a break. We will be right back with more of The Business of Government Hour. (Intermission) Mr. Lawrence: Welcome back to The Business of Government Hour. I am Paul Lawrence, a partner at PricewaterhouseCoopers. Tonight's conversation is with Jack Kelly, director of the National Weather Service. Jack, in this third segment, let's talk about managing the Weather Service. I know that one of the goals of the Weather Service is to provide seamless information about weather and water and climate and things like that. How are you working toward achieving that goal? Mr. Kelly: The very fact that we have a goal of a seamless suite tells you that we have reached a point in weather services where we are no longer just a service organization but a service organization that is based on science. We use science to develop our weather forecasts. One really exciting thing that has happened in the science world is the disciplines of climate prediction, oceanography and hydrology are all merging together, so we are now able to issue forecasts from a minute, an hour, out to seasonal. About six weeks ago, we released our first, which will be a series now, drought outlook. Because of the research that has been done and the proven skill that we now have in our ability to forecast months ahead, we were able to work with the Department of Agriculture and the Department of Interior. And we issued a three to four-month outlook on what we think are those that are going to experience a drought, particularly in the Southern tier states and in the nation's heartland. So when we talk about a seamless suite, we are talking about an organization that can tell you whether there is going to be a tornado in eleven minutes or twelve minutes from now. And at the same time tell you three to four months in advance what we think is going to happen. Next week we will issue our second -- we did it for the first time last year -- our second hurricane outlook where we will talk about what we expect in terms of numbers of hurricanes and tropical storms this hurricane season. That is less of a management challenge than it is the fact that science has now given us the ability and skill to do that. That is what we are trying to do with this organization. Another thing that we are trying to do with the organization is, citizens in this country are fascinated with weather. If you doubt it, the April issue of the New Yorker Magazine had a story about weather. Scientific American published a special segment, the entire issue was devoted to weather. The Weather Channel has 800 employees, give or take a few, 700 to 800 employees. Their job around the clock is talking about weather. So, the citizens of this country are interested in weather. I tell our employees that the citizens of this country don't want any surprises. That is why we have adopted as our vision to try, and we are not yet, to become America's no-surprise weather service. The challenge is from a technical point of view to alert people to what is going to happen such that they are not surprised when it really does occur. Actually, we have come a long way. This is the year of the anniversaries, if you think about it. This is the 100th anniversary of the Galveston hurricane. As a matter of fact when I said the American population is interested in weather, there is a popular book out called "Isaac Storm," all about the Galveston hurricane. We knew there was a storm out in the Gulf of Mexico, but nobody knew where it was in the Gulf of Mexico. We have come a long way since then. I don't think there will ever be another Galveston where the hurricane just comes in and totally surprises. Contrast Galveston to Floyd last year. Floyd did a lot of damage, bought a lot of precipitation, but no one was surprised that Floyd was moving up the East Coast. A lot of people were surprised at the turn of the last century, when the storm hit Galveston. From a managerial challenge, the issue is technical, how we use technology. From a managerial side, the challenge is, we are a government organization, how do you balance the American citizens' desire for more products against the fact that there are only a finite number of resources? How do you maintain what you are currently doing and find ways to issue new products in essentially a budget-neutral environment where there is not quantum growth in my budget? Our real challenge is, and I keep saying it in a very inelegant way, "How do you make the best use of the stuff you have? How do you add new products without an infusion of massive amounts of new dollars?" We are constantly looking at how we use the current systems we have, how we get some efficiencies and economies out of them so we can add new products. Just this past year we have introduced a relative host of new products. We issued last year a drought monitor where in one unit now we can show you where drought is occurring across this country and give you a short-term forecast, about a ten-day forecast. As I said, a month or six weeks ago we came out with the Drought Outlook. We are going to start on the first of June issuing a product that I will call an extreme heat event. We are going to give you, weeks in advance, an outlook of where we think there is going to be combinations of very high temperatures and high humidity. People will start being aware of the fact that this summer there may be heat waves which is of particular importance to the big cities because heat tends to kill people when you get these big heat waves. So we have added that. We have just worked with the FAA and added a new forecast product in an attempt to try to reduce delays associated with thunder storms as you fly across the country this summer. We did all of that without any money for those products because we have looked at how we could better organize the way we are doing things and generate some efficiency. Mr. Lawrence: Let me ask about that organization and the link with technology. When the new computer system was implemented, AWHIPS, the Weather Service was restructured. Can you tell us about that restructuring? Mr. Kelly: The Weather Service has been on a ten-year path of modernizing and restructuring. The reasoning behind modernizing, bringing technology on board and the restructuring was, "let's create a smaller number of more capable forecast offices." The restructuring was essentially the part of closing the 164 forecast offices and replacing them with 121 more capable forecast offices. The next gain is, it depends on how you look at it, the net change will be that we will close 164 forecast offices. We have closed 148. We are in the process of getting congressional agreement to close another seven. We have nine more to go. They really are the very contentious ones. There is an honest disagreement on the remaining ones as to whether or not the system we proposed will or will not degrade forecasts support. We believe it won't. There are the citizens who say it will. We are in the process of working our way through those nine. But by any measure, closing 148 federal offices is quite an accomplishment. Mr. Lawrence: In your strategic plan you talk about change in the Weather Service's organizational culture. How are you approaching this cultural change? Mr. Kelly: Well, the first way I am approaching it is to learn that it is not dictatorial. I have come in and I have said we do need to change the culture. What I am trying to do is get teams together, you might call them integrated work teams, call them what you want, but we just did a strategic plan. I didn't like that strategic plan. We had the union. We had employees. We had management. We had teams working and we also brought in academics and people from the private sector to help talk about where we ought to go. We have had what I would call bottom-up input into the strategic plan. We spent time clarifying our mission. We spent time trying to articulate what values the organization holds important. Now, we have clarified our mission, values are stated. Each year I enter into an agreement with my bosses in the National Oceanic and Atmospheric Administration on an annual operating plan, which I then had my regions develop an annual operating plan with me. At the beginning of each fiscal year, my regional directors and I sign an agreement. This is what they are going to deliver. Just like I sign an agreement with my superiors, this is what I am going to deliver and then I have taken excerpts out of the operating plan and put it into the performance plan of all my senior executives. In this organization, as I said a couple of times earlier, we try to take decision making and take it away from Silver Spring, the headquarters, take it away from the corner office on the 18th Floor. And we put it in my office directors, put it in my regional directors, and put it in my forecast offices and let the meteorologists in charge and the hydrologists in charge be more involved in the decision making. So, we are trying to make it a learning organization, trying to make it more participation. Mr. Lawrence: Great. We will be back with more of The Business of Government Hour. (Intermission) Mr. Lawrence: Welcome back to The Business of Government Hour. I am Paul Lawrence, a partner at PricewaterhouseCoopers. Tonight's conversation is with Jack Kelly, director of the National Weather Service. Well, Jack, we were just talking about cultural change and employees. I would like to follow up. What do you want to do differently in the future with regard to your employees? Mr. Kelly: If you contrast where we were ten years ago to where I would like us to be ten years from now, I would like to have more of the work force involved in making the key decisions as to the direction that this organization goes in. I would also like the employees to understand how important we all think they are. Mr. Lawrence: How is that going to happen? Mr. Kelly: Well, I think it is going to happen in a couple of ways. I will tell a little anecdote. When I first took over as the director, a couple of my senior leaders said to me, "The only thing employees in this organization recognize is if you give them a cash award." I come out of the military wherein generally speaking you don't get cash awards. What I started doing early on in my tenure was, if I saw an employee doing something really good, I would write them a personal note. I didn't understand the powers that act had until an employee wrote me a thank-you note for writing him a thank-you note for something that they did. He said to me, "It is the first time in my history in this organization that someone took the time to take pen in hand and write a personal note." What I also have discovered as I travel around the organization, both in headquarters in the building I am in and in the 121 forecast offices, I see my handwritten notes now up on bulletin boards or in cubicles. I think that is sending a powerful message. The other thing that we did, we created, the Department of Commerce is very good, NOAA, they have a whole host of awards. They have gold medals, silver medals, bronze medals, NOAA Administrative Awards. I discovered they didn't have any National Weather Service Awards. So now we have the Klein Award. There are about seven categories. In all the categories, one of the criteria is teamwork. To win the award you have to foster team work. You have to do other things, too, to win the award, but even when you win individual awards, there is a teamwork aspect of it. So, we have created National Weather Service Awards, the Klein Awards named after a preeminent meteorologist at the turn of the century, and we have infused teamwork as criteria and we have also infused innovation into the award. That helps bring the work force together. Mr. Lawrence: We hear from other leaders in the government that attracting employees and keeping them is getting increasingly more difficult. They point to the dot com economy and the lure of other options. I am wondering how that is playing out at the Weather Service. Mr. Kelly: It is a challenge at the Weather Service. I would say it is less of a challenge with the meteorologists and the hydrologists. They love what they do. They get an opportunity to forecast the weather or to forecast the state of the nation's rivers. Retention of our meteorologists and hydrologists is good. However, it is very difficult to attract information technology people, financial people, and budget kind of people. At the senior level, it is a real challenge because the truth is that the government, while it is rewarding and you get a chance to serve the citizens of the country, from a financial point of view, you can make more money with the dot coms. Mr. Lawrence: Are you concerned about that? Mr. Kelly: Yes, I am concerned. If everything goes right, we are going to bring on board in the next few months someone from the private sector. It is a rare individual. That individual is going to take a substantive pay cut to come to work for the government. When we asked him why he wants to do that, he said, "I have a chance to serve and I will enjoy doing that." I am concerned about that. We are science-based and we use information technology. It is hard at times in our organization to say where information technology stops and the forecaster starts. They are so intertwined and it is getting very difficult to recruit information technology professionals. We have a network service organization. We have people come to work for us for about three years and they leave. When they leave they say, "It isn't that we don't like working for you. It is just that there is this much bigger pay I can make in the private sector." It is particularly difficult in Washington, too, given all the dot coms that are around here. Mr. Lawrence: Let's just shift gears here and look out to the future. What are some of the key issues that the Weather Service will be facing in the future years? Mr. Kelly: Well, I think that the constant one that the federal government faces in terms of how do you meet the demand for more products without having budget growth? How do we work with the private sector, particularly those commercial companies that produce weather forecasts? How do we meet the rising expectations of the American public? The better we get with our skill, the higher the expectation. I have said we have gotten better at forecasting hurricane tracks, and we have. Yet, more and more of the American population is moving to the coast and it is taking more and more time to evacuate areas. How do we keep pace with that? How do we keep pace with the speed of change that is happening in the information technology arena. I mentioned we deployed the Advanced Weather Interactive Processing System last June, the last system. The hardware will be obsolete in about three years. Hewlett-Packard is the hardware. It was one of their front line pieces of hardware last summer. It isn't today. So how do you keep pace? How do we infuse that technology? They are the real challenges that we face. Mr. Lawrence: Can you describe the relationship between the Weather Service and its two parents, NOAA and the Department of Commerce? Mr. Kelly: Yes. The National Oceanic and Atmospheric Administration is part of the Department of Commerce. We are one of what I would call the line organizations in NOAA. NOAA has a research arm, a satellite and a data arm, the National Weather Service, and then they have what is called the Coast and Ocean arm, the Marine Fisheries. It also has the National Ocean Service. So, what NOAA gives us is the overall strategic direction. NOAA provides what I will call the common services, legislative affairs, public affairs, and acquisition and contracting, those people are all in NOAA. I am kind of the service delivery. I work closest with the Oceanic and Atmospheric Research and the satellite, although the Weather Service does work with the National Ocean Service. Then you get further strategic items from the Department of Commerce. Of course, the Department of Commerce has a lot of different organizations, the Census, the Patent and Trademark office, Export Control, NOAA in it. But again you get your strategic guidance and your budget goes through the Department of Commerce. Mr. Lawrence: I know there has often been some debate about the Weather Service in terms of whether it should be in Commerce or not. Do you have any thoughts on that? Mr. Kelly: You have to be somewhere. Where else would you be, the Department of Commerce. The Weather Service is too small to be a direct reporting organization to the President. My boss works for the secretary, so I am one step away from the secretary of Commerce, a cabinet official. The secretary of Commerce is very supportive of the National Weather Service. So I am not begging any of these sandbox kinds of issues. The secretary of Commerce is interested in the Weather Service operating efficiently, economically. The Department has always been supportive, at least the two years I have been here, so I don't know where else you would put it. NOAA has to be somewhere. It is a question of where. Mr. Lawrence: Well, I am afraid we are out of time. I want to thank you very much, Jack, for spending some time with us this evening. I have very much enjoyed our conversation. This has been The Business of Government Hour, conversations with government leaders. To learn more about PricewaterhouseCoopers Endowment for the Business of Government, visit us on the web at www.endowment.pwcglobal.com. See you next week.