[The following article appears in the August edition of _Pub- lic_Service_Quality_Report_.] GOVERNORS OUTLINE REDESIGN AGENDA The National Governors' Association assigned four "study groups" to research and identify model strategies and best practices in what it defined as four critical areas of state government: human services delivery systems, outcome-based performance, reforms to "reinvent" government, and privatizing government services/assets. More than 30 U.S. governors and their staffs participated in the process, sharing experiences from their own states while also investigating practices from other states and agencies. The goal was to develop a model states can follow to "redesign" their operations. Following is a brief overview of the NGA's report, including the governor who hosted/chaired each study group and a sampling of the group's findings/recommendations: PERFORMANCE-BASED GOVERNANCE (Gov. Barbara Roberts, OR): The report calls for government to treat results, not inputs, as the most important gauge of performance. It notes that performance-based governance should be based on a vision of a state's future that is shared by citizens and government leaders. Iowa, Minnesota, Oregon, and Montana are states whose "visioning" efforts are offered as examples. Factors considered critical to successful visioning include: objective research and analysis methods; ownership among "key decision-makers;" involvement of citizens and the private sector; bipartisan political, and cross-branch governmental, support; personal leadership by the governor. Beginning from a shared vision, the report says, governors can use performance measures and performance-based budgets as tools to steer the state toward goals identified in the vision process. Oregon, Texas, Ohio, and Idaho are mentioned as states making progress on performance measures and budgeting. Critical factors to such an effort include: extensive education and organizational/cultural change; involvement/ownership among a broad spectrum of agency managers and elected officials; a phased-in approach; effective communication to employees, the public, and the media. HUMAN SERVICES CONSOLIDATION AND COORDINATION (Gov. John Engler, MI): The study group described human services delivery as "one of the most difficult challenges facing state government." The group says increasing demand for services and state fiscal crises suggest the time is ripe for reforming fragmented, categorically structured services. The report calls for policies (both at the local and state levels) which would: empower state and community staff to design services that meet local needs and priorities; promote individual responsibility, break the cycle of intergenerational dependency; offer seamless services that respond to the diverse needs of a person or family, and foster collaboration between agencies. The report describes "local collaboration models" which channel the delivery of services through a single agency or council charged with planning, administration, and coordination. At the state level, the report describes South Carolina's effort to reduce the number of agencies, boards and commissions involved in human services, and instead consolidate greater responsibility with the governor and the executive branch. Other state approach- es include consolidating related services into a single agency, such as New Mexico's new Children, Youth, and Families Depart- ment. To make reform happen, the report advises that all stakeholders be involved in the restructuring; that in any consolidation close attention be paid to workforce issues (in- cluding a detailed personnel transition plan); and that a public relations strategy of reasonable expectations be developed. PRIVATIZATION OF GOVERNMENT SERVICES AND ASSETS (Gov. William F. Weld, MA): The report notes that privatization is fraught with compli- cations and concerns for each governor and state because it entails fundamental questions about the nature and proper role of government. However, in light of escalating service costs, federal mandates, and growing demand for new services, the group calls privatization an "innovative alternative to traditional methods of organizing, financing, and delivering public servic- es." The group describes a "new paradigm of state government," one in which leaders critically examine existing or potential activities to determine whether government or the private sector is best suited to the job. The group noted a recent survey which found that 90 percent of state agencies already use some form of privatization, while 85 percent said it would be a major management tool in the 1990s. The group noted that privatization covers a range of activities, including: contracting for goods and services, selling assets, negotiating lease arrangements, privately financing infrastruc- ture work, etc. The report cited Massachusetts, New York, and Pennsylvania as states with noteworthy privatization efforts. Michigan also was cited for its PERM (Privatize, Eliminate, Retain, or Modify) model, which gives managers a process for evaluating all functions as to their candidacy for privatization. Among other suggestions, the group said successful privat- ization hinges on: a designated "focal point' organization, perhaps best based in a budget or management agency; an analyti- cal model that allows for civil service considerations and other risk/reward factors in weighing privatization decisions; a strong effort by top leaders to build a positive image around privatiza- tion; and inclusion of employee groups in the planning process. MANAGEMENT SYSTEMS REFORM (Gov. David Walters, OK) The management group paints a picture of spiraling decline in government effectiveness, citizen confidence, and public employee optimism. The group's report states, in part: "The demand for and the cost of state services have increased, but state government's ability to pay for them has not. The resulting squeeze creates an ever-building pressure to cut services, increase taxes, or incur deficits. As government taxed more, legislated more, and spent more to respond to the demand to solve problems, more and more citizens began to voice a counter demand -- that government stay out of they way, cost as little as possible, and allow private forces to work freely. "At the very time when the best efforts of public employees are needed, their cynicism is rampant....Public managers are frustrated by the task of meeting the demands of the public in the face of ever-declining resources. Public employees are frustrated by working in a system that no longer works. Simply put, it is impossible to restore public confidence in a system the system itself does not believe in." Meanwhile, "The American people expect government to serve them, but many believe that it has failed to do so. For many Americans, the 'service' is gone from public service. Government must rebuild the fundamental framework of public service." The group goes on to advise changing "the fundamental systems by which state government manages its most critical resources: people, money, and information." The group lauds Arizona, Arkansas, Texas, and New York for their total quality management initiatives, aimed at developing customer-serving cultures and continuous improvement. It also calls for more flexible, decentralized personnel systems, citing Florida, Iowa, and Oklahoma as states where innovation is occur- ring. Redesign of purchasing, budgeting, and accounting systems also is advised. The full report, An Action Agenda to Redesign State Govern- ment, was unveiled at the NGA's August 14-17 annual meeting in Tulsa, OK. A copy, which includes more detailed descriptions of state initiatives, costs $27.50. Send a check made payable to the National Governors' Association to: NGA Publications, P.O. Box 421, Annapolis Junction, MD 20701. CONTACT: Doug Champion, National Governors' Association, (202) 624-7872. [For more information or to subscribe, contact: Public Sector Quality Report 17733 Kingsway Path Lakeville, MN 55044-5209 Phone: 612-898-5058 Fax: 612-892-7710]