Article 92. Article on Downsizing by Donald Rumsfeld
“Five Ways to Downsize Government” By: Donald H. Rumsfeld
Published In: Heartland Perspectives Publication Date: August 4, 1995
Publisher: The Heartland Institute
“As Congress grapples with the challenge of downsizing or eliminating bureaucracies that haven’t been critically reexamined for many decades, its Members would do well to consider some of the lessons learned by the businessmen and -women who made their companies more competitive in the 1990s. I have a somewhat unusual perspective on this issue, having spent roughly twenty years in the federal government and another twenty in the corporate world. Here, based on my own experience, are five guidelines for members of Congress:
Define the “Core” Business
We must ask whether a problem is truly a federal responsibility, or can it be handled better by voluntary organizations, local governments, or state governments. For the federal government, the four basic departments–State, Defense, Justice, and Treasury–have a solid basis for existence. The others were either more narrowly based, an afterthought, or both. These latter departments should be scrutinized for elimination, downsizing, reorganization, movement to state and local governments, or privatization.
Cut Sharply and Rapidly
Cut sharply and rapidly. Don’t wait. Whatever it is you do, the odds are overwhelming that you should have done more–rather than less–and that you should have done it sooner, rather than later. There are so many pressures in Washington, D.C. to preserve the status quo that the most frequent mistake is to make too few changes or to cut too little. Do it once. Do it well. And then let people get back to work. Don’t try to cut the dog’s tail off one inch at a time, hoping it won’t hurt as much.
Eliminate Bureaucracy
Congress should move swiftly to cut management and get personnel costs under control. It is guaranteed that there are more managers and more staff in the federal government than are needed. In less than seven months, Scott Paper Company eliminated 11,200 people, one-third of its workforce. The company cut 71 percent of the headquarters staff, 50 percent of management, and 20 percent of the hourly employees. If the national government is as overstaffed as was Scott Paper, some 140,000 government managers could be cut immediately, saving taxpayers billions of dollars.
Reorder the Organizational Chart
Probably one-half to two-thirds of the non-central departments are no longer needed in their current form. For example, the Republican proposal to close the 93-year-old Department of Commerce seems reasonable to me. That department lacks a clear sense of mission, and it duplicates the work of dozens of other departments and agencies: a sign that taxpayers could do without it in its present form. The same likely could be said for other departments, such as Energy, Housing and Urban Development, Education, Transportation, and Veterans Affairs.
Sell Unessential Assets
Why is the federal government borrowing over $200 billion a year to cover its deficit when it is sitting on billions of dollars of assets that could and should be sold to the private sector? Some twenty years ago, I chaired the Property Review Board in the Nixon Administration, which supervised the evaluation of hundreds of federal real properties for movement to their highest and best use outside of government. The resistance in both the Executive and Legislative branches was enormous. That opportunity is still there and, given the current budget situation, must be seized.
As Congress goes about the business of putting meat on the bones of the balanced budget plan passed earlier this year, it will have to make tough decisions. I recognize the difficulty of that task, having once served in the House. But I’ve learned that decisions made every day in the corporate world are sometimes even more difficult because the very survival of a company can be at stake.
The choices to be made affect real people with careers, mortgages to pay, and families to raise. But Congress oversees an enterprise facing bankruptcy, and the consequences of not acting now, swiftly and firmly, will be devastating for a far greater number of people. The right decisions made now, however tough, will help restore the long-term health of the government, our economy, and our country.
Donald H. Rumsfeld has served as a member of Congress, U.S. Ambassador to NATO, chief of staff to President Ford, and, from 1975 to 1977, Secretary of Defense. Between 1977 and 1985 he was CEO of G.D. Searle, and from 1990 to 1993 he was Chairman and CEO of General Instrument Corporation.”
Comments by Lawrence Rosier
My readers will note that this article was written before 9-11 and the mid-east wars in Afghanistan and Iraq. Without getting into what has really happened in the Bush Administration in the article Rumsfeld does give advice that is typical among CEO’s in industry. His approach to determining what really needs to be done the elimination of redundant organizations is a necessary first step and is commendable. However I disagree with some of his Departmental choices for elimination. I agree with Rumsfeld that his advice to “Cut Sharply and Rapidly” and “eliminate Bureaucracy” will bring significant savings to the government but the real question becomes how much do you cut and how do you eliminate bureaucracy.
What you have here is the typical top-down approach to downsizing but I prefer the bottom-up approach through work measurement. The advantage is that while you may get some efficiency in government from the top-down approach you will be able to eliminate all the inefficient activities through the bottom-up approach. I propose two ways of doing this using Work Improvement Teams (WIT) and the Cost and schedule method. This approach is specially useful where an entrenched bureaucracy is unwilling or incapable of reforming itself. I have discussed in detail both of these approaches in several of my articles. The implementation of either of these approaches with links to performance budgeting will bring efficiency to the organization and budgetary control.
A significant difference occurs when reducing staff during budget cuts. The top down method tends to lay-off those at the bottom usually the most recently employed. The government reform method using WITs keeps in tact those employees that are actually doing the work and eliminates management staff.
In all cases where the bureaucratic organization is more approachable I recommend using the Work Improvement Team (WIT) method which I have described elsewhere.
My first job out of college was also my first encounter with a rigid bureaucracy. I was soon told this little story: “If you put your hand in a five gallon bucket of water and then pull it out. The hole you leave is the measure of your importance to the organization”. This demonstrates the little impact that a person has in promoting change from within a bureaucratic organization.
To carry this analogy further if the bucket is the bureaucratic organization and the water is the staffing. In some cases it is only the level of tolerance of the legislature that limits the size of the bureaucracy. The more the staffing grows the larger the bureaucracy needed. Mr. Rumsfeld’s reduction of bureaucratic staff can be seen merely as splashing some of the water out of the bucket. This will have no lasting effect on the bureaucracy which will simply replace the staffing when there is less pressure on the budget.
When the government reforms which I recommend are put in place Work Measurement is used to determine the proper staffing level. In this example, if the Functional staffing level is found to equal only one gallon of water then the five gallon bucket bureaucracy will stand out as being much too large. This can be reduced to a Steering team bucket of one gallon matching that required by the staffing.
For an overview of my WIT reform approach see:
Article 103. Reforming Bureaucratic Government the Subtle way by Bringing Innovation to Government
Article 104. Down Sizing State Government the Easy and Safe Way
Article 106. Where do the Government Reform Savings Come From?
Article 113. Private Versus Public Budgeting Practices
For a complete detailed review of my methods with examples of calculations read my book “TEN STEPS TO JUMPSTARTING GOVERNMENT REFORM”.
