When it comes to carrying out the work of the federal government, few initiatives have held greater promise or importance than the Senior Executive Service.

Commissioned by Congress more than three decades ago, the SES program was envisioned as a way to attract and develop an elite corps of America’s highest caliber executives and deploy them across the federal government to address both immediate and longer term management needs within federal agencies.

Instead, for a variety of reasons, the SES program became hampered by the independent nature of the agencies the program was designed to help, ultimately falling short of the potential many envisioned for it. Agencies welcomed the top-shelf talent; but they often had little motivation to see those executives move on to other assignments.

The lack of mobility and the resulting limitations that put on the SES program as a whole were highlighted in a Feb. 29 report released by the Partnership for Public Service and McKinsey. The report found that only 8% of 7,100 current career senior executives had ever changed agencies–and almost half had been in the same job–since joining the SES, as of last March.

At the root of the program’s constraints, as many executives and chief personnel officers saw it, was a performance appraisal and incentive system that had grown as inequitable as it was unwieldy. It gave agencies a way to game the system, allowing them to hoard senior executives, and provided executives little incentive to move to new assignments.

“Agencies can weigh (performance evaluations) any way they want,” said Carol Bonosaro, president of the Senior Executives Association, about the existing evaluation system. As head of the trade group which represents the interests of SES executives, Bonosaro has seen first-hand how the system has short changed even the most outstanding leaders–as well as the agencies they served.

But in an unusual turn of events for Washington, a group of senior agency officials from roughly 30 federal departments and agencies succeeded in overhauling the SES performance appraisal system during a rapid series of meetings last summer. The new plan not only won widespread agency support but could be a long-needed catalyst for rekindling the vision for executive mobility across the federal government.

How that appraisal system came together and succeeded in winning the support of traditionally turf-minded officials from so many federal agencies and departments is a story not often heard in or outside the corridors of Washington.

In this case, it’s also the story of how lessons borrowed from the Intelligence Community, some savvy leadership within Office of Personnel Management and the Office of Management and Budget, and a bit of lucky timing produced a rare degree of inter-agency collaboration and ultimately a solution that won the blessings of the White House in a Jan. 6 announcement.

“It’s as good a document as any I’ve seen in the private sector,” said Paul Rowson, a human resources and compensation expert who has held senior HR positions at Fannie Mae and Marriott and is now managing principle at Totally Engaged Workforce Solutions.

The new appraisal system is “a substantial accomplishment,” concedes Bonosaro. By restoring a long-lost degree of consistency and standardization to the process, she said, the new evaluation methodology “surely will help mobility, depending on whether it is fully implemented.”

In Search of a New Solution

The plight of the SES system, and the seeming inability to fix it, had been brewing for years.

Not long after a new Obama Administration took office, however, it became clear from members of the President’s Management Council (staffed by the chief operating officers from executive departments) that any plans for improving the management performance at federal agencies depended in no small way on deploying top executive talent–and somehow, revitalizing the Senior Executive Service.

That task landed in the lap of Jeffrey Zients, who became President Obama’s chief performance officer in June 2009 and chair of the President Management Council as then-deputy director of OMB, which he now leads. Zients in turn tasked a project team and several work groups that would include another Obama appointee, OPM Director John Berry (pictured at right above), and others, to make recommendations.

The intent of the project, recalled Stephen T. Shih was “to invigorate the SES service, focusing on three areas: recruitment, performance management and executive development.”

Shih (pictured with Berry, and above) is OPM’s deputy associate director for executive resources and employee development and proved to be an instrumental player as the executive in charge of hammering out the SES appraisal plan.

A lawyer by training, Shih had served as chief of OPM’s equal employment opportunity center before joining the Department of Homeland Security in 2008 as deputy–and later acting–officer for Civil Rights and Civil Liberties. But Berry persuaded Shih to return to OPM in August 2010 and take charge of the office responsible for senior executive personnel programs at OPM–and to begin tackling the SES revival efforts coming out of the President’s Management Council.

Shih’s calm demeanor deflects his steely determination as a public servant. The father of three sons, each of whom he coaches during football and soccer seasons near his home in Loudoun County, Shih appears to relish leading teams and moving policy balls up the competitive playing field that comes with doing the government’s business in Washington.

It helped, he said, that Director Berry “empowered me to lead the project and to move forward very expeditiously.”

Shih quickly got to work, assessing what had been learned so far and what it would take to deliver a new and more meaningful appraisal plan.

What became clear was the need to fix a fundamental disconnect. The process and criteria used to evaluate and hire senior executives-the so-called Executive Core Qualifications, which focus on leadership experience and skills-were invariably replaced with a hodgepodge of agency goals and other of criteria of success. Leadership ability-and the skills executives were outwardly hired for-often took a back seat to other priorities and were assessed using drastically different approaches, noted Shih.

Over the years, those differences had multiplied into more than 50 appraisal systems that, though approved and certified by OPM, meant that an executive’s performance evaluation within one department involved varying levels of rigor or was often viewed with skepticism, or of limited value, by hiring officials at other departments.

That, and the inconsistency of annual bonuses tied to the evaluations, bred major inconsistencies in the management of senior executives, as well as a long-standing mistrust by executives and hiring officials for the appraisal system as a whole.

That mistrust was reflected in the difficulty the workgroup had in recruiting SES members to participate in focus groups about the new plan. There was the hardened belief among SES members that their views wouldn’t really matter–that political leadership “will do what it wants to do,” said an executive familiar with the discussions who agreed to comment only if not identified.

Lessons from the Intelligence Community

To Ron Sanders, who served as associate director of National Intelligence, and chief human capital officer from 2005 to 2010, the lack of consistency he saw in how senior executives were evaluated reflected more than a system that had become splintered and ineffectual. It was also undermining efforts to find senior leaders and move them into critical positions.

“When we stood up ODNI, and tried to bring about greater intelligence community integration, one of the ways to achieve that was to have the ability to move executives around to have a broader perspective, taking page from the military for general officers,” said Sanders, now senior executive adviser and fellow at Booz Allen Hamilton.

With intelligence activities being conducted in six different departments, the need for executives who could help integrate functions and intelligence streams was seen as a strategic imperative, said Sanders.

“We found first hand that inconsistency in appraisal evaluations was something no one had really looked at or worried about,” he said. “So we went through a year and a half-it took a lot of cajoling–to bring about that consistency,” he said.

Sanders was a long time colleague of Shih, from the days when Sanders worked at OPM as associate director for HR policy. So not long after Shih returned to OPM, Sanders shared some of the hard lessons he and his colleagues had learned at ODNI and the importance of standardizing the leadership appraisal process. “It was worth all that pain and suffering,” he told Shih.

Shih, fresh from DHS, knew first-hand that the route to standardizing management practices across federal agencies is more a like a road through Kandahar Province than a slog around the Capital Beltway. But Shih also saw an opportunity in working with the President’s Management Council and those who served on it, to tap a deep-rooted desire at most agencies to reinvigorate the SES.

By late May 2011, Shih’s workgroup recommended to Zients and the PMC that the best path forward was to develop “one system, with consistency and clarity,” for evaluating senior executives, Shih said.

Shih then asked for the PMC’s support in getting “representation of each of (the cabinet departments and agencies) in an interagency workgroup to design the new system,” he said.

“I wanted it to be a broad and inclusive effort,” he said. “It was the only way to get the support for the system, and ensure it would have the type of quality and broad applicability for it to be effective for all federal organizations.”

Better Postpone Your Vacation

Fast forward to July 22, 2011. An extreme heat wave was toppling heat index records up and down the East Coast and it had Washington in its grips.

Inside OPM’s Foggy Bottom district headquarters, representatives from the heads of 30 cabinet level departments and agencies in the Executive Branch had gathered around a big round table in the executive conference room near Director Berry’s office on the 5th floor. Also present were representatives of the Defense Department, ODNI, the Inspectors General community and the Small Agency Council along with a professional facilitator from the private sector, whom OPM officials declined to identify. Everyone understood there would be no vacations during the next few weeks.

Mike Kane, chief human capital officer at the Department of Energy, was among those settling into his seat at what would be the first of five, intensive four-hour meetings scheduled over the balance of the summer. Like his peers, Kane had several motivations for participating at the meeting and for trying to fix the ailing SES system.

“From a CHCO perspective, I personally dreaded the month of February (each year) when you saw the bonuses (of government executives) published in Federal Times,” he said. “Everyone started looking at, ‘Why is this agency at that level and we give out less?’ It just said, ‘Your senior executives are not part of a corps; you’re doing things differently. If we are part of that corps, shouldn’t we be graded the same? If I leave here and I go somewhere else, my 4.0 here is not really a 4.0 there,'” he said.

Another reason was the desire to address the deeply rooted dissatisfaction surrounding the evaluation process that troubled administrators as much as the executives they evaluated in the federal workforce.

“For human capital officials, there was a desire to get a process that’s more transparent, that’s transferable in terms of improvements and (captures) best practices,” he said. And one that did a better job of measuring leadership attributes. Agencies tend to “prioritize performance based on achieving technical objectives,” said Kane. Yet “leadership attributes had less of an impact on the final grade,” than most everyone agreed they should, he said.

The SES Performance Management Workgroup that Kane became a part of and an interagency design team of technical and legal experts had until Sept. 9 to come up with a better, more transparent model. It was Shih’s goal to get the system accepted and broadly endorsed by October in time to implement in the new fiscal year.

The workgroup quickly established a steering committee and began sifting through leading practices from federal and private sector organizations. The steering committee included representatives from OPM, OMB, the Departments of Defense, Energy, Labor, Health and Human Services, Veterans Affairs and from ODNI, Nuclear Regulatory Commission and the Federal Energy Regulatory Commission. Among those consulted were leaders representing the President’s Management Advisory Board, the Chief Human Capital Officers Council, the Senior Executives Association, including Bonosaro, the National Academy of Public Administration and the Partnership for Public Service, the Small Agency Council and the Council of the Inspectors General on Integrity and Efficiency.

What began to emerge, according to Shih, was a model for evaluating senior executives that was more closely aligned with the broader missions of the federal government.

“That’s sometimes very difficult,” Shih said. “When you look for a product for your agency, you’re looking for it to be tailored, including the look and feel,” said Shih. “So we had people who were really amazing, providing the expertise of good performance management with an unwavering focus” on a common framework, he said.

Pillars of Leadership

That framework increasingly began to reflect, and ultimately became a logical extension of the five executive core qualifications used in hiring senior executives, Shih said.

In Bonosaro’s view looking back, that proved to be a smart move for building consensus and getting buy-in. “If those are the requirements for entry, how could you argue not to use them?” she asked.

What finally took shape was an appraisal plan where agencies were to focus on five common core criteria for judging executive performance, while still having the option to include additional performance components. According to notes supplied by Shih, those core elements boiled to:

  • Leading Change – How well did that executive develop and implement organizational vision that integrates key organizational and program goals, priorities, and values? Assess and adjust to changing situations? Implement innovation solutions? Balance change and continuity? Create a work environment that encourages creative thinking, collaboration, transparency; and maintain program focus, even under adversity?
  • Leading People – How well did that executive develop and implement strategies that maximize employee potential? Connect the organization horizontally and vertically? Facilitate collaboration, cooperation, and teamwork? Hold employees accountable for appropriate levels of performance and conduct? Recruit, retain, and develop the talent needed to achieve a high quality, diverse workforce?
  • Business Acumen – How well did that executive assess, acquire and administer human, financial, material, and information resources to accomplish the organization’s mission? Use technology to enhance decision making? Execute the operating budget and manages resources?
  • Building Coalitions – How well did that executive solicit and consider feedback from internal and external stakeholders or customers? Explain and advocate ideas in a convincing manner? Negotiate with individuals and groups? Identify the internal and external politics that affect the work of the organization?
  • Results Driven – How well did that executive perform in achieving specified outcomes and results tied to the organization’s goals and objectives?

Working Through The Differences

Reaching agreement on what common evaluation criteria agencies should use may have turned out to be the easy part. Resolving how much weight agencies would be allowed to attach to these criteria generated far more debate. So did the grading system, and defining what separated an “outstanding” performance from one that “exceeds fully successful” or is simply “fully successful.”

Much of the debate reflected the natural differences between the missions of each agency and duties within agencies.

“In (the Department of) Energy, where you have very highly technical programs, they lend themselves to milestone schedules and major technical achievements,” Kane said. “In other parts of the department, you have others who are worried about energy policy–how it impacts all corners of the globe. That’s more subjective. So one of the things we wanted to do was to get more of a balance,” he said.

As a participant, Kane described the process for hammering out differing views and the weekly sessions in general, as “very facilitated, very intense,” but collegial. “When we had disagreements, we put them on the table. If 85% of us were good with (a point), we’d ask, is there something unique (about the exceptions) to this set of agencies? Then we’d provide the ability to work within (the consensus view) –or we’d recognize the need to work through the differences,” he said.

“Bringing in professional facilitation was helpful,” in resolving those kinds of issues and in moving the discussions forward, said Shih. “But the credit really goes to the participants. They kept an emphasis on what would be good for the federal government, not just their own interests and agencies.”

As Labor Day passed and the Sept. 9 deadline approached, the group reached what Shih described as “broad and inclusive” agreement, with a “common framework of an applicable solution which also allowed appropriate customization.”

The new plan would allow agencies to assign weight values to each of the critical performance elements, with the total weights adding to 100 points. The Results Driven criteria would have a weight of no less than 20%; the other four elements would each be assigned a minimum weight of 5% percent; and no single performance criteria could be assigned a greater weight than the Results Driven element.

“We would have preferred a 10% minimum,” on those elements, said Bonosaro, speaking in a recent interview on behalf of the Senior Executive Association. “We ended up at 5%,” which gives agencies “a lot of wiggle room.”

Bonosaro nonetheless recognized the importance of the new system –and Shih’s efforts in getting it accomplished. “He did a great job herding those cats,” she said, adding “Everyone felt they had a chance to be heard.”

Closing the Deal

Shih still had much to do: Next came a two-day series of focus groups with SES members, beginning Sept. 13 to get feedback on the new design. There was the important step of briefing Congressional staffers in a meeting that took place Sept. 28. And there was the need to review the plan with agencies and reconcile final comments by Sept. 30.

There would of course be the need for training agency leaders and preparing for the inevitable rain of questions about implementing the new plan that agencies were certain to shower back upon OPM.

But the heavy lifting and much of the hard sell had all–in a remarkably few weeks–been accomplished.

On Nov. 4, at a lunchtime meeting of the President’s Management Advisory Board (captured in a video), OPM’s Berry, accompanied by Shih, presented a summary of the program and the progress that had been made.

“We’re still working on some of the labels,” Berry said. “Vocabulary really does matter,” he said, suggesting agencies need to find a better way to show leaders they’re valued than by telling them their hard work “exceeds fully successful.”

Berry, however, made clear that the top-down support among agency heads was in place and that it was just a matter of time to complete the rollout of the new program. The game plan then was to “have the president drive this and have the buy-in down through the Cabinet levels and down through the COOs”-all of which came to fruition in an announcement to agency heads by Berry and Jeff Zients on Jan. 6.

Efforts since then to begin implementing the new system are expected to be the lead item of discussion at the President’s Management Council meeting March 30. So far, seven agencies are currently in the process of implementing the new system. The remaining agencies will be encouraged to implement the new system on a rolling basis in fiscal 2013, according to Shih.

Lessons Learned

Looking back at how so many diverse players succeeded in agreeing on a common framework for something as complicated and ill-fated as the SES appraisal system, several lessons seem worth noting.

Ron Sanders, who was an outsider observer to the process but got periodic reports, said unequivocally, “The one thing that was singularly important in the progress that was made was the sanction and support of the President’s Management Council and the participation of the (Executive department) deputies.”

“That’s something we didn’t have in the Intel community,” he said, which made his job that much harder during his days at ODNI. “When senior leaders, like (former Director) Mike McConnell at ODNI, (former Secretary) Robert Gates at DOD, and (former DHS Secretary) Michael Chertoff– when they got involved…that was the game changer,” Sanders said. “All of the planets came together-despite a history of headaches, from almost total inconsistency, to realizing you need more consistency.”

Sanders credits Berry and Shih both for their leadership in seizing the moment and pushing through the changes that were needed.

So does Paul Rowson from Totally Engaged Workforce Solutions, who has worked with Shih in connection with the Presidential Rank Awards. “In an election year, this isn’t the time to take this on,” Rowson observed. “I think this shows incredible leadership on the part of OPM,” he said.

Another factor, from Kane’s point of view, was the fact that “OPM looked at this as a partnership with OMB…and that they were very strong in getting the chief human capital officers to come and work on this-and that they actually wanted the practitioners.

Sanders also points to the importance of words.

There will always be implementation challenges,” said Sanders, recognizing the new appraisal system will face some bumps. “The changes here are subtle, but they’re pretty powerful,” he said.

“It will take an appraisal cycle (or two) for these to settle in,” said Sanders. “But once you have performance review boards that know nothing of the old language, and only the new language, this will gain traction.

“Over time, those words are going to solidify; they’re going to grow roots. And because the words are consistent, and (have the support of the Chief Human Capital Officers Council), everyone will do their part. There are too many examples where consistent words have led to consistent actions to worry about the short term headaches.”