President Obamas State of the Union address signaled his intention to explore reorganization as a solution to resolving long-standing management and efficiency problems in government.

He should be congratulated for recognizing that reforming the management of the sprawling federal bureaucracy deserves to be on the table when we think about reducing the costs of government. Many governors also have convened efficiency commissions during times of deep deficits.

The public management community must now take the Presidents high-minded statement and convert it into a useful initiative. Reorganization is but one tool among many to address the problems that have plagued our federal system for years. It is a metaphor for the need to re-examine how the federal government designs and manages its far-flung programs.

Reorganization: The Challenge

It is difficult for reformers to demonstrate the need for change in management processes and program design. These concepts and ideas do not fit easily on Twitter messages or the nightly news. In a world where the urgent often drives out the important, management reform often doesnt stand a chance.

The case for reorganization is compelling and easily visualized. Who cant be outraged to hear that there are 17 agencies involved in food safety, more than 60 job training programs, and a confusing welter of higher education subsidies that families have difficulty navigating?

Organizational chaos is easily presented on PowerPoint slides and social media sites. There is a certain sense of organizational aesthetics that informs the case for reorganizationthe governments org chart should feature clear lines of authority with common programs and purposes being grouped under the same agency. The public should be able to understand who to hold responsible.

Reorganization as Serious Reform

Beyond the metaphor, reorganization is a serious strategy to reform government by shaking up the responsibilities of government agencies. The premise is that if I change the location of a set of programs, I can change the outcomes of those programs as well. Those who would dismiss this as a mere bureaucratic paper exercise are wrong. The political noise surrounding reorganization proposals makes evident the high stakes associated with changing organizational addresses for programs and employees alike.

Reorganization is powerful medicine. There are at least three questions about the reorganization cure:

1| Which malady is reorganization best suited to solve?

2| What are the costs and are there more cost-effective solutions?

3| What unintended side effects can occur?

Reorganization: The Poison Pill

With 20-20 hindsight, we now know that reorganization is a daunting venture that presidents, cabinet secretaries, and members of Congress should enter with caution.

Reorganization is politically expensive. Powerful bureaucracies, interest groups, and congressional committees stand ready to protect their turf. A popular president can make the case for reorganization by pointing out too many agencies, as George W. Bush did with the U.S. Department of Homeland Security (DHS), citing that more than 20 agencies dealt with national threats.

But political capital is scarce, and presidents often prefer to spend it on substantive policy reforms and more politically compelling initiatives. To those of us who believe in management, this is a depressing but familiar scenario indeed. Those who would dismiss this as a mere bureaucratic paper exercise are wrong.

The following constitute the poison pills of reorganization efforts:

No magic bullet. Reorganization guarantees no managerial or programmatic benefits. The management of DHS has made the Government Accountability Offices (GAOs) high-risk list of those areas most vulnerable to fraud, abuse, and mismanagement. GAO found that the agency has yet to congeal as an integrated department, and it ranks near the bottom in surveys of federal employee satisfaction.

Glacial change. This points to another pitfall of reorganizations. They take many years to mature and fulfill their original promise. The U.S. Department of Defense, created in the late 1940s, finally became a more integrated department with the passage of the Goldwater-Nichols Act in 1986, which strengthened the departments authority to establish commands and to provide incentives for personnel to move across the services.

No single right way. Another challenge is the decision about which dimension or unit of analysis will dominate in determining the nature of the new organization. Agencies can be organized by purpose, client, and geography, among many other dimensions.

And there is no right way to reorganize. If we take veterans job training programs and reorganize them under a single training unit in the U.S. Department of Labor, this also disrupts the ability of the U.S. Department of Veterans Affairs to weave a web of interrelated social programs targeted to veterans.

The law of conservation of problems.

For every problem that reorganizations solve, they create new ones. Each program and bureau that is folded into a new agency, in fact, has multiple objectives and faces. So, when they are reorganized, one face is highlighted to the neglect or even exclusion of other competing goals and values.

For example, lifting transportation security out of FAA and putting it into DHS helped coordinate homeland security programs, but at the price of fragmenting federal presence at airports formerly provided under the FAA umbrella. No reorganization plan will eliminate fragmentation and overlap. Rather, it is a question of which kind of overlap and fragmentation we want.

The mirage of cost savings. Reorganizations are often undertaken with the rationale of saving costs. Ultimately combining formerly separate programs and bureaus may do just that. But it is equally, if not more likely, that reorganization will cost more certainly in the near term.

The inevitability of complexity. Reorganizations simplify in one sense but add complexity in another. While agencies can be combined, it is rare for Congress or interest groups to follow suit. Defense may be the best example where congressional committees and oversight followed the contours of the broader agency. DHS, on the other hand, reports as many as 108 panels, according to NPR.

Vertical Collaboration: The Key to Performance

When one looks at how our complex federal system accomplishes public goals, the shifting of boxes in Washington horizontally is far less important than the tools and networks deployed vertically by federal, state, local, nonprofit, and private officials in solving wicked problems that spill over the boundaries of our federal system.

The central federal performance challenge is how to design policy tools and networks to promote national goals. The real business of the federal government is accomplished not by federal employees in Washington, but by the thousands of third parties who are enticed or mandated to implement federal programs on our behalf.

The final poison pill of reorganization, then, is its assumption that the organization of federal activities can make the crucial difference in program delivery in a decentralized federal system of government. Indeed, there are times when reorganization can overcentralize programs and cause their own implementation problems. The managerial disasters in the response to Hurricane Katrina offered tragic testimony to the effects of the deconstruction of these relationships under DHS.

Where Do We Go from Here?

Painting a broader picture of the federal performance challenges helps put reorganization in better perspective. Given the many poison pills associated with this strategy, the federal management community also needs to consider other ways to address the endemic and perennial fragmentation characterizing many federal programs:

  • Portfolio budgeting. The OMB could consider selected cross-cutting areas in the budget process where related programs would be reviewed and compared to common performance goals.
  • Collaboration across agencies. Watershed governance has called for collaborative initiatives by a number of federal agencies working with states and other interests to craft cleanup initiatives for such watersheds as the Great Lakes and the Chesapeake Bay.
  • Cross-cutting councils. The Office of National Drug Control Policy and the Office of National Intelligence are two examples of cross-cutting initiatives that involve numerous agencies coordinated and led by a key presidential-level advisor.
  • Decentralized flexibility. Federal agencies have initiated agreements with states to provide them with greater authority to coordinate and even combine federal funding streams to achieve broader national performance goals.

It is no wonder that author Harold Seidman likened program coordination to the search for the philosophers stone in his book Politics, Position and Power. Seidmans admonitions should be uppermost in our minds, for they can deter us from false promises and blind alleys of self defeating reforms. However, those of us in public administration have no choice but to prepare our case for intelligent reforms when the window of opportunity opens. We may never find the philosophers stone, but marginal change is an important legacy nonetheless.