If the experiences of DHS and ODNI are any guide, the success or failure of reorganization may depend on dynamics and relationships that transcend the immediate borders of the new department or agency.

A new government enterprise does not exist in a vacuum, but must operate within a super system of sister departments, White House councils and czars, and congressional oversight
committees. While these institutional actors are rarely taken into account by those who design a new agency, they can have a profound impact on those charged with building and running the organization.

In short, while structure is important, the organization’s super system may be more so.

These observations emerged as the last of four Management Lessons of 9/11 highlighted in a report released this week on the creation of and subsequent problems within the Department of Homeland Security and the Office of the Director of National Intelligence.

The report from the Partnership for Public Service and Booz Allen Hamilton 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, Lesson Two and Lesson Three

“A lot of this really depends on taking the time to select leaders who know how to navigate (federal bureaucracy) but not to the detriment of the organization,” said Ron Sanders, Chief Human Capital Officer at the ODNI during the reorganization and now works for Booz Allen Hamilton.

The PPS report identifies the “crazy-quilt” congressional oversight of DHS as a striking example of the outside political forces that reflect and perpetuate the fragmentation of responsibility the executive branch reorganization was meant to cure. The current congressional arrangement of some 88 committees and subcommittees with jurisdiction reflects the old order, not the new alignment, and at times can undermine the formal authority of the DHS secretary.

The Intelligence Reform and Terrorism Prevention Act of 2004 also left unresolved the fledgling ODNI’s relationship with its super system, preserving various management authorities of the intelligence agencies over critical levers such as personnel and budget, and making the success
of the DNI largely dependent on personal relationships within the government, particularly when it comes to the president.

According to the PPS report, there was broad agreement among leaders interviewed during the investigation that an agency or department reorganization requires simultaneous congressional reform to create more focused oversight and direction and minimize conflicting demands from Capitol Hill.

Congress has been reluctant to change, however. Approximately 88 Capitol Hill committees and subcommittees have authority over DHS, and there has been no move toward consolidation of oversight.

Still, savvy and connected leaders can navigate the system. McConnell states in the PPS report that a smart legislative strategy is not to view lawmakers as the enemy, but to cultivate and engage them, and build allies.

“I see the Hill as a source of money, and if you’re going to be successful, you’ve got to have money. I’d rather go up and make my case and have a relationship and be trusted instead of treating them like the bad guys,” said McConnell. “If they see you as an honest, trusted adviser
who will speak truth to power, they are much more willing to engage with you and meet you half way.”

But it doesn’t always work that way.

A number of those interviewed by PPS and BAH also cautioned that leaders of a reorganization should not to expect instant success or create unrealistic expectations in Congress once a new agency opens its doors or hold out the promise of saving money right from the get-go. They suggested having a long-term strategic plan and priorities, and establishing a small set of achievable short-term goals that can be presented to Congress as marks of progress and that can be built upon in the future.

“It’s a high-wire act,” Sanders told Breaking Gov. “The best mix is to find things that can and should be done quickly and then get up to speed on the rest. You’ll see fits and starts but you’ll eventually get to the goal line.”

Backing of the president also helps, the report notes. Yet, even with direct access to the president, Ridge found that various interveners in the super system, from White House staff to other Cabinet secretaries, could undercut his agenda and effectiveness at DHS.

In “The Test of Our Times,” Tom Ridge’s book about his tenure as homeland security adviser and DHS secretary, he asserted that he did not have the kind of clout that he needed at the
White House. For example, Ridge said he lobbied the White House prior to Hurricane Katrina to replace Brown as head of FEMA and to open a homeland security regional office in New Orleans, but was rebuffed in his effort to assert authority over his own department and its operations.

Stephen J. McHale, former deputy administrator for the Transportation Security Administration, notes another example in the report. The White House intervened on behalf of the Secret Service after Ridge made the decision that all DHS criminal investigative authority would be controlled through ICE, meaning that the Secret Service would lose its authority to investigate counterfeiting and some financial crimes.

“That lasted about a week,” said McHale. “Ralph Basham, the director of the Secret Service, made one phone call, and the secretary got one phone call, and that decision was reversed.”

With regard to ODNI, McConnell had not been part of President Bush’s inner circle, but he was able at times to leverage his daily access with the president to further his agenda as DNI, including convincing the president to back spending billions of dollars on the cybersecurity threat, the report states. McConnell also had previous ties and a good working relationship with Robert Gates, the defense secretary at the time.

Sanders said: “Gates asserted ODNI wasn’t needed, but still served as an ally to McConnell. He understood bureaucracy and in-fighting was a detriment.”

In contrast, Dennis Blair, the third DNI, did not have strong backing inside the Obama White House and lost power struggles when the president backed then-CIA Director Leon Panetta on a number of important issues, according to a New York Times article.

At a Mar. 30, 2011 hearing before the Senate Homeland Security and Governmental Affairs Committee, Collins said that the situation today suggests that John Brennan, the assistant to the president for homeland security and counterterrorism, has more leverage with the president on intelligence matters than James Clapper, the current DNI and formerly the Pentagon’s undersecretary for intelligence,,

McConnell said having clearer authority for the DNI written into law would be helpful, but he added that getting the support from the president is an entirely different matter.

“The president is going to talk to whoever he or she pleases, and you can say ’til the cows come home that the president shall consult with so and so,” McConnell said at the public forum in June. “If the president really doesn’t want to take that advice, that person may walk into the
Oval Office, and the president can sit and go, ‘Uh-huh, uh-huh,’ and it’s not going to make a difference,” said McConnell.