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REMARKS BY :	DONNA E. SHALALA, SECRETARY OF HEALTH AND HUMAN SERVICES
PLACE:		Phi Sigma Alpha Lecture-American Political Science Association, Washington, D.C.
DATE:		August 28, 1997

You call this a lecture.

But I prefer to think of it as an opportunity to share knowledge - because Phi Sigma Alpha represents the collected wisdom of each generation's brightest young political scientists. The President told me he was a member of Phi Sigma Alpha when he was at Georgetown.

As you know, I spent many years studying and teaching political science and public policy. But I must admit that what I learned didn't fully prepare me for the mysterious ways of our nation's capital. So, I've tried to combine my knowledge of political theory with practical experience in managing the Department of Health and Human Services.

Thinking about a large organization like HHS reminds me of the movie Sunset Boulevard, in which Joe Gibbs says to aging actress Norma Desmond. "You used to be in silent pictures. You used to be big." To which Norma replies: "I am big! It's the pictures that got small."

I quote this bit of movie trivia to illustrate that there are many big things Americans like: Cars. Open spaces. Movies. But we don't like big bureaucracies. Americans think that large government organizations are too complex, too impersonal, too inefficient, and cost too much.

And without doubt, they're partly right.

This was very much on my mind in 1993 when the President asked me to become CEO of one of the largest government organizations in the world.

As many of you know, I had already served in the Carter administration and two leading public universities. But I knew that taking over the leadership of HHS - a Department whose budget, at that time, consumed 40 percent of federal spending - would be unlike anything I ever did before.

Because of its size and complexity, HHS is one of the most difficult jobs in the world for a public official. It is also a Department whose policies touch the lives of every American. We have not accomplished everything we wanted to. All of us have taken some wrong turns, and endured the hard lessons of that great teacher: Experience.

Let me start by knocking down two myths. The first, described by Hargrove and Glidewill, is that my job - and others like it - are simply impossible. Too many difficult clients. Too many internal conflicts. Too little public confidence.

It's not true. Managing a large organization is the art of the possible. And, as I'll describe shortly, with some common sense lessons, it can be done.

The second myth goes back to the theories of Frederick Taylor.

That organizations are essentially machines. Pull the right levers in the right way, and you'll get the right result.

Were it only that easy.

In complex organizations there will be failures for any number of reasons: poor communication; impractical or unclear goals; lack of public or congressional support; lack of sufficient expertise or resources; too much - or too little - oversight. And too much work.

Between these two extremes: That nothing works or that everything can be made to work, lies some basic truths about large modern organizations.

So, in the spirit of David Letterman, but without the drum roll, I offer you Donna Shalala's Top Ten Lessons for Managing a Large Complex Bureaucracy.

Some of these lessons are well established norms for administering large public and political organizations. You've read about them. You've written about them. And some of you may have even practiced them. Others are borrowed from recent scholarship, such as Doig and Hargrove's analysis of what makes an innovative and successful leader in government. And some of the lessons are from two decades of experience as a sub-cabinet official in the Carter Administration; as a student of government and politics; and as a leader of large public universities. Finally, some of these lessons are well known. Others less so. But I believe they are all applicable to large public organizations.

Number One: Know the Cultures of Your Organization.

I said cultures, not culture.

Organizations are usually made up of many smaller units - each with its own history, needs, culture and constituencies - but working toward a larger objective. That is certainly the case at major research universities. The goal is the same: well educated students and quality research. But different colleges, schools, and departments often take very different roads to reach that goal.

So, Levin and Sanger are right when they emphasize the importance of understanding these cultures and constituencies. NIH is a good example. Have you ever tried to apply standard personnel rules to hiring scientists? I can tell you right now: They don't work. Scientists have their own language and traditions. And their own measures for assessing merit.

When I became Secretary, personnel managers in the Office of the Secretary had overall responsibility for hiring scientists for NIH. These personnel officers were highly skilled, but they weren't used to hiring first rank scientists in a competitive market place. I thought the scientists at NIH were best able to judge scientific competency and credentials.

There are also times when it's actually helpful for an organization to have more than one identity.

When NIH, CDC, FDA and the Public Health Service all line up in favor of a particular policy, say, banning the marketing of tobacco to children, that policy will more likely be accepted by Congress, the public - and, we hope - the courts.

Unique cultures within a department can also increase credibility.

That's why a cabinet secretary is not always the best salesperson for a departmental policy. In criminal investigations, the FBI is usually called on to speak on behalf of the Justice Department. If there's a major fire, the local Fire Commissioner may have more credibility than the mayor.

And at HHS, I like to let the experts - especially physicians and scientists - speak directly to the public, because the great scientific agencies - CDC, FDA, NIH, NCI and the Public Health Service - are institutions trusted by the American people. The physician-scientists who head them, while appointed by a President, have enormous credibility. They must be the re-assuring voice - and face - explaining the Hanta virus outbreak; food borne illnesses; AIDS transmission; and the age women should start having annual mammograms.

Finally, the press provides its own cultures and traditions.

That's why there is no substitute for a public affairs staff with Washington experience. And I've had the best.

Number Two: Make Sure the Right Hand Knows What the Left Hand is Doing.

There's a scene in the movie Ben Hur, where Ben Hur is trying, without success, to get his four new chariot horses to run. The Bedouin who owns the horses tells him that each horse has its own personality, and they must be harnessed together in a way that allows them to run as a team.

The same holds true for any large organization. The sum has to be greater than the parts.

The different agendas of smaller units have to be melded or modified - and a belief in the larger team built. What can an administrator do to promote teamwork and a corporate identity?

When I first became Secretary, I encouraged my top appointees to distinguish the HHS forest from their particular tree by asking each of them to participate in each other's budget hearings - and to prepare a budget for the entire Department. In other words, to look at the Department from my perspective.

When they took a look at the big picture, some senior administrators recommended cuts in their own budget requests. We are still using that process.

There are, of course, other ways to share information, build cooperation, and keep an organization the size of HHS speaking with one voice. One, described by Roger Porter as "centralized planning," has been rejected by most leaders, even very forceful ones like Richard Darman. A second, which Porter calls "multiple advocacy," lies between centralized planning and ad hoc decision making, and generally uses existing systems, some of which, in the case of HHS, I've been fine tuning.

For almost any public organization, the primary system for melding a team and an agenda is the budget process - which is increasingly important in an era when money is tight and budgets have to be balanced. In fact, in this new era, the budget process has the potential of being divisive and competitive - instead of a road to team building and unity.

But at HHS, and other public agencies, there are other ways to build a team.

At HHS, the Executive-Secretariat controls the enormous paper flow.

But more important, Exec-Sec is the honest broker. It ensures that ideas are considered throughout the Department - and that everyone is brought to the table. That way, I get the benefit of every viewpoint. And when a decision is made, every participant owns it.

The Assistant Secretary for Policy and Evaluation runs the numbers, evaluates the likely consequences of a proposed policy, and makes recommendations to the Secretary.

And there are some units within the Office of the Secretary that are designed to coordinate what the entire Department does, especially in an emergency.

When Mad Cow Disease was discovered in England, we wanted to avoid panic by getting out accurate information about the steps that had been taken to protect American beef - years before. The Assistant Secretary for Health did that. Overseeing the work, and the public statements, of the FDA, NIH, CDC and the Public Health Service - and coordinating with the Department of Agriculture.

On to Number Three: Don't Overlook the Needs and Abilities of the Career Public Service.

My first day of work started with many top jobs in the Department unfilled. And it stayed that way for some time. So what did we do? We ran the Department with the top civil servants - the people who are responsible for most of our day to day leadership. It was fun.

Hugh Heclo in his 1977 book, A Government of Strangers wrote this: "If democratic government did not require bureaucrats and political leaders to need each other, it might not matter so much when in practice they discover they do not."

I don't agree. The two sides do need each other.

I also don't share Heclo's belief that career civil servants resist the leadership and policy turns of political leaders.

I think the relationship is reciprocal. That both institutional and political guidance are needed. And that trust can be built by using the experience and institutional memories of career civil servants. In fact, when I became Secretary, I wanted to send a very strong message to the civil service - that they were important. That we were going to be a team. So my first appointment was from the Senior Executive Service - a career person of both great competence and experience. We need to make sure we respect the integrity of the civil service in words and action. In fact, relying on career professionals is especially important in the age of downsizing.

Today, political staffs are doing more work, with less help, and in less time. This is an open invitation for policy mistakes and failure. But many of these potential mistakes and failures can be avoided by using the career civil service to identify hidden minefields from the past - and to help plan, not just implement, policies for the future.

Which bring me to Number Four: Choose the Best and Let Them do Their Jobs.

The days of political appointments as a spoils system are over.

A large organization is complex; its programs difficult to manage; and their purpose almost always vital to the well being of the American people. That's why political appointees must be experts in their fields - and skillful leaders and managers.

They must be adept at both policy and politics.

Otherwise they will not get the respect and cooperation they need from career staff. So, while we've worked to create a team, I believe that the most important thing any public administrator can do is choose the right top management.

At HHS, the President nominated many leading experts in their field. They were Democrats - and our party was ten deep in talent for each position.

Some even compared our team to the incomparable 1927 Yankees: Phil Lee and Jo Boufford at Public Health; Mary Jo Bane at Children and Families; Harold Varmus, Rick Klausner and Ruth Kirschstein at NIH; David Satcher at CDC; David Ellwood at Planning and Evaluation; Bruce Vladeck at HCFA; Melissa Skolfield at Public Affairs; Harriet Rabb as General Counsel; June Gibbs Brown as Inspector General and we retained David Kessler at FDA and brought Claudia Cooley from OPM to the Executive Secretariat.

Each of these leaders had years of academic and - or - professional experience in their areas of expertise - not to mention a deep sense of mission. But we also worried about the next generation. I always try to remember that we are replaced by those we recruit.

Which brings me to: Number Five: Stitch Together a Loyal Team.

I've always thought that you need to instill loyalty in both professional and personal ways. We worked hard to make everyone feel a part of a team. That they are listened to.

I talked about how proud I am of our appointments - and their diversity of skills and experience. But that core team showed up with different agendas, different approaches to achieving their agendas - and often without knowing much about their new colleagues.

So I encouraged a healthy debate in private, but made it clear that I didn't want arguments in public. I can't say we were always successful. But for the most part we put together a loyal and cooperative team of very nice people who liked each other. And I encouraged that by creating events for my top staff where they could get to know each other better.

At Hunter, the top administrators and faculty once did a play with the students. Although Hunter is a big commuter school, the play bonded us for years.

Which brings me to: Number Six: Stand up and Fight for the People Who Work for You.

People behave in large organizations pretty much the way they behave outside of work. They are motivated by friendship, support and loyalty. That's why showing the people who work for you that you really care about them pays dividends.

I had a unique opportunity to do that during the government shutdown.

The shutdown actually strengthened HHS because it gave people a renewed sense of loyalty to each other and the Department. I sent everyone a letter saying: We're fighting for you. And to show my support, I was very visible - making the case in the media about the devastating impact of the shutdown.

Then we did something almost no other agency thought of.

During the shutdown, pay checks were supposed to be half the normal amount. We found a legal way not to cut pay so drastically. We put off taking out deductions in our employees checks until after Christmas. So they were made whole - and they appreciated our caring.

We also managed our budget with considerable skill to avoid RIFS - the entire Department held vacancies and helped to absorb cutbacks.

Number Seven: Set Firm Goals and Priorities - and Stick With Them.

The old saying is still true: To govern is to choose. But in a large organization, with a limitless number of decisions to make - and a very limited time with which to make them - how do you choose?

Let me start by saying that Larry Lynn was correct when he wrote, "public executives need a frame of reference to aid them in skillfully allocating their time, attention, and political influence." But they also need a reality check.

Managing is not the same as coming up with a wish list. And if you try to do everything, you'll accomplish nothing. You need to set priorities.

I have six secretarial initiatives.

And I have asked all the agencies within HHS to not only focus on those initiatives - but to do cross-cuts. Share information. Pool money and other resources. Work in teams. Don't duplicate efforts.

Setting priorities doesn't mean choosing only what's easily achievable.

When the President first came to office, we set a goal of increasing child immunizations. We established targets, and as the President recently announced, we met them.

But at least some of my six initiatives will be more difficult. For example, reducing teen pregnancy.

One reason is - and this is another reality check - the roots and solutions are often beyond any government's control. Which means whether you work for a mayor, a governor, or a President, you need to set ambitious - yet realistic goals; figure out your role in meeting them; and then team up with partners outside of government to accomplish them.

The reverse side of goal setting is delegating responsibility and demanding accountability - from both political appointees and career staff. You have to show confidence in the people who work for you - and at the same time have a system for obtaining timely information and measuring results.

One caveat: Delegation is not the same as abdication.

When I became Secretary, there was a move to delegate all departmental regulations to the individual agencies. Literally hundreds every year. I didn't want to go that far. So I set up four criteria.

If a regulation fell under any one of them; for example, it's impact on the economy was 100 million dollars or more, that regulation would have to be approved by the Secretary.

Which brings me to: Number Eight: Don't Forget Politics is Always Part of Policymaking.

There is no way to succeed in the world of government without paying attention to that other world: politics.

For HHS, that means primarily the White House and Congress.

None of us, whether we're political or career, can operate in a vacuum. All of these external pressures - from the economy to the press, from the governor's office to, yes, regulators in Washington - affect government decisions and raise questions for which there are no simple answers.

I have two rules of thumb in politics. One, be fiercely loyal to the President on policy and appointments. Two, be skillfully bi-partisan in the administration of the Department.

When I go up to Capitol Hill to testify before Congress, I present the Administration's case as vigorously as I can. When I return to the Department, it doesn't matter to me if a Medicaid waiver request, or any other request, comes from a Republican governor or a Democrat governor. They get the same professional consideration. And when there is a threat to the public health in a particular state, the politics of that state never makes a difference in how HHS responds.

Which brings me to Number Nine: Look for Allies Where You Don't Expect to Find Them.

To manage a large organization in this age of instantaneous communication, it always helps to look beyond the usual borders - and to reach out to non-traditional allies. That's why I believe in being nice to Republicans - and spending time speaking to newspapers like The Washington Times and Wall Street Journal.

Two papers not exactly known for supporting Democratic causes.

That's why we work hard to make friends out of adversaries; to cooperate with the leadership of both parties; to disagree without rancor; and to build on areas of agreement. And that's why if it will help me communicate better, I enlist help from people who don't expect me to come knocking on their door.

Number Ten: Be Flexible. Be Realistic. And Don't Expect to Win Every Time.

Perhaps the biggest mistake the manager of a large organization can make is to stand in one place for too long. Change comes. And as NASA's Jim Webb once noted, these changes come from both inside and outside the organization.

That doesn't mean there shouldn't be a strategic plan and systems in place for caring out the operations of a large organization. But it does mean that governing is as much art as it is science.

We must expect the unexpected. And be nimble enough to change course - even in mid-sentence - if that's what it takes. In other words, keep moving.

In 1994, we lost on universal health care - in part because the other side organized quickly and framed the debate. By 1996 we were flexible enough to find a slower more incremental - and successful - approach. Last year we passed Kassebaum- Kennedy. This year we passed a budget that will provide up to 5 million uninsured children with coverage. A great victory.

The unexpected can also mean having something removed from your plate. In 1993, the Social Security Administration was part of HHS. It no longer is. Downsizing in the federal government - unheard of in 1993 - became the norm in 1994 and 1995.

The unexpected can mean a changing economy. Low unemployment is helping to lower the welfare rolls.

But with unexpected change comes unexpected opportunity. The opportunity to be creative. To find more efficient and less costly ways to deliver services. To find new partners and break new ground. To be - in the words of Mark Moore - an "explorer commissioned by society to search for public value."

I've certainly felt like an explorer since becoming a member of a remarkable President's Cabinet.

This trip of discovery - although risky, difficult, and once in a while disappointing - has been the trip of a lifetime. I wish I had time to tell you how much fun public service is most of the time. My dream is that a young member of Phi Sigma Alpha who today is preparing for a career in the academy will have similar opportunities to spend some time in government.

I also believe that the disciplines of political science and public administration will be enriched as more students of government have a chance to be practitioners.

Thank you.