While in the throes of merging multiple agencies and thousands of employees nearly a decade ago, DHS and ODNI leaders became so focused on the mission — keeping Americans safe — that key management functions often fell through the proverbial cracks and ultimately weakened capabilities.

Management, it appears, is central to mission. That’s Lesson Three in a report released this week by the Partnership for Public Service and Booz Allen Hamilton detailing four lessons from the creation of and subsequent problems within the Department of Homeland Security and the Office of the Director of National Intelligence.

Securing the Future: Management Lessons of 9/11 provides a behind-the-scenes look at the reorganization efforts of a decade ago. The report is based on exclusive interviews with major figures in the reorganization efforts, including Judge Michael Chertoff, former Director of National Intelligence Mike McConnell and General Michael Hayden.

While acknowledging key differences in these organizations, the report uncovers common management lessons in four key areas Breaking Gov summarized Monday and is detailing throughout the week. Authors hope the report serves as a guide for the Obama Administration in government reform and similar pursuits currently under way.


Read our reports on Lesson One and Lesson Two

Processes and systems matter, the report concludes for Lesson Three, because they involve critical issues such as who gets money and staff and what that money is spent on as well as promotions and decision-making authority. Reorganization leaders must e-engineer processes and systems for greater efficiency and establishment of the new order.

“Given the choice between management and operations, operations always wins,” said Ron Sanders, Chief Human Capital Officer at the ODNI during the reorganization and now works for Booz Allen Hamilton. “What’s important (in management) is effectiveness, finding out what can flip an organization by 90 degrees.”

This means leaders of a new or reorganized department must pay special attention to the basic management functions such as procurement, information technology, human resources and financial operations. They must also create an integrated, enterprise-wide approach connecting management and business systems, communicating across the entire department and holding managers accountable.

Instead, DHS got bogged down in processes, Sanders said.

For example, in the PPS report, former DHS Undersecretary for Management Janet Hale states that the early days involved dealing with the basics, including getting the list of all 180,000 employees who were transferred into the department and making sure they were paid. She said they had to determine all the assets and the services that were coming to the department and negotiate memorandums of understanding with each component of what functions would be taken over and which would stay in the old departments and for how long.

Strategic planning attempts were made at DHS, even amid the enormous range of issues and management challenges. But the Government Accountability Office (GAO) said by early 2007 the plan still did not link resource requirements to goals and objectives, and did not involve key personnel to ensure that resources were being used to address the highest priorities.

“In the back room, I became sort of the prince of broken crockery, because I had to break a lot of crockery to convince agency heads and elements in the new organizational structure that optimizing utilization of taxpayer dollars was part of our responsibility,” said Admiral Jim Loy, former commandant of the U.S. Coast Guard and deputy secretary of DHS.

The leaders of DHS also tried to bring coherence to the department’s information technology systems, but the task proved quite difficult.

“Because they didn’t set up a separate implementation team and structure to manage the department and run the small stuff at the bottom, the chief information officer got called
when a senior leader’s BlackBerry didn’t work,” said Admiral Thad Allen, former commandant of the U.S. Coast Guard. “You’ve got the CIO that probably needs to be thinking about how they are going to share intelligence on the border and TSA screening actually having to manage setting up the phone system, get pagers and BlackBerries.
You needed the equivalent of a mission support command. They didn’t have one.”

Allen also said that building department-wide IT systems takes resources. But instead of seeking additional funds to assist DHS in improving its information technology systems, Allen said the Office of Management and Budget proposed “taking $100 million, collectively, off
all the agencies for IT consolidation savings.” He said this was counterproductive.

When Jackson came to DHS as deputy secretary in 2005, he met with the chief financial officer, the undersecretary for management and the inspector general, and told them he wanted to have a clean financial audit the following year. Jackson said he was “laughed out of the room.”

“I was told it’s too complex and there’s too much broken and it will take too much money and too much time, and that we would not get there for many years,” Jackson recalled.

Chertoff said part of the problem integrating the management systems at DHS was the “resistance from the components to give up their control over their own IT and their own finance and their own procurement. And part of the difficulty is recruiting people to do these jobs, because now you have a lot of competition in the private sector.”

ODNI suffered from lack of management oversight in the acquisition process that was noted in a 2008 inspector general’s report.

The report said ODNI’s acquisition oversight efforts, which were one of the management authorities most hotly contested by the other Cabinet departments in the intelligence community, lacked formal policies and processes, and suffered from instances of noncompliance, cost and schedule overruns.

In addition, the report said ODNI had not been able to deal with many financial and IT inadequacies plaguing the intelligence community. Officials at ODNI were well aware of these problems, and set goals and timetables to deal with a range of issues that included improving business practices, technology and acquisition.

Senator Susan Collins, however, is quoted in the PPS report one of her biggest surprises regarding ODNI was how “difficult it has been across the intelligence community to work out the information technology, just the technology, much less the information-sharing protocols.”

She said there are no integrated search capabilities, and people still are not getting access to information they need.