Reinventing Government
Price of Paradise · Hawaii Public Radio · aired 1994-09-04
Guests: Ted Gaebler (author, Reinventing Government); Robbie Alm (former government official)
Duration: 1:09:15

[00:00:00] Randall Roth: Welcome to the Price of Paradise Radio Show. Some folks say government efficiency is an oxymoron, that government bureaucracies are by nature laden with fat. My guests today are two former bureaucrats who have thought a great deal about the nature of the problem and are doing their best to solve it. One of my guests, Robbie Alm, was born and raised in Hawaii and was for six years the head of the Department of Commerce and Consumer Affairs in the State of Hawaii. Currently he is a vice president at First Hawaiian Bank. He is on a number of community boards and has won some awards including the Hawaii Public Administration Award in 1992, which is given by the American Society of Public Administrators, the Freedom of Information Award in 1989 from the Society of Professional Journalists and he was a member of the interim commission on government redesign in 1993.
[00:00:57] Randall Roth: Our other guest, Ted Gaebler is now a a world known figure and we'll hear more about that in just a bit but Ted has been a city manager in a couple of places on the mainland and is most known as co-author of a bestselling book entitled Reinventing Government. It explores the new methods by which people across America have begun to do the public's business. The book provides snapshots of entrepreneurial governments and outlines the 10 principles upon which they are constructed. The book provides a map, a simple, clear outline of a new way of conducting the public's business. Ted and Robbie, welcome to the Price of Paradise Radio Show.
[00:01:41] Ted Gaebler: Thank you.
[00:01:55] Robbie Alm: Thank you very much.
[00:02:09] Randall Roth: I thought I would start, Ted, by reading something from an excerpt of your book Reinventing Government and just get your reaction to it. It says, our thesis is simple, the kinds of governments that developed during the industrial era, with their sluggish centralized bureaucracies, their preoccupation with rules and regulations and their hierarchical chains of command, no longer work very well. They accomplished great things, or they accomplished great things in their time, but somewhere along the line they got away from us. They became bloated, wasteful, ineffective, and the world began to change and they failed to change with it. Tell me just a little bit about how well this book has done and then let's see if we can get into some detail about that thesis.
[00:03:07] Ted Gaebler: Randy, much to my surprise, the book has been out now 2 and a half years and in that time has sold 300,000 copies and been translated into 10 different languages across the world, with Chinese and Russian being among the very first because clearly they are interested in reinventing their governments as well.
[00:03:22] Randall Roth: Did did you seek that out and talk them into it, or how did that happen?
[00:03:36] Ted Gaebler: No, the book is written because I was a local government administrator and David Osborne of course, my co-author is a journalist. The book was written in a style that is neither left nor right nor republican nor democratic. It talks primarily about the administration, the bureaucracy, not the policies. So because it is absent of US-centric policies, it has universally been accepted worldwide to talk about how to change the bureaucraticness of governments.
[00:04:05] Randall Roth: So these other countries, regardless of the the type of of political structure and control, they have the same problem and that is bureaucracies?
[00:04:19] Ted Gaebler: That has been a surprise to me. I thought I as a city manager had all the bureaucratic problems on earth and I go to Kuala Lumpur, Malaysia, or Jakarta, or Manila, or the Netherlands and I find exactly the same problems with bureaucracy. Interestingly enough, it's not just governments of course that have bureaucracy. IBM has found the same thing, Apple computer, General Motors, a lot of the big private companies also have their problems with bureaucracy. That's why Tom Peters books were so successful.
[00:04:34] Randall Roth: So the book has been translated into 10 other languages and is selling in all sorts of other countries including China and Russia. How's it doing here in the United States?
[00:04:48] Ted Gaebler: Well it's doing very well. In this last 30-month period, I have met now with 31 different governors and their cabinets, of course doing the same thing here in Hawaii. I've met with the new mayors of New York, and Los Angeles, and St. Paul, and Seattle and others, met with lots of government officials across our country, because there is a great interest in not too much the policies of government because that of course is a political process. But once the policies have been decided, what people's frustrations usually are with are with how those governments work, not so much what their policies are.
[00:05:17] Randall Roth: Now Robbie, you've been a bureaucrat here in the State of Hawaii. You've headed up a department for six years. How would you say this book has been received by fellow bureaucrats here in Hawaii? Is it been embraced or is it something that they see as as the enemy?
[00:05:31] Robbie Alm: Well, I think for most of the people that have had a chance to look at it, this whole issue is one that inside the system is welcomed. I mean, most of the people who who are in the system, frankly are frustrated by its own bureaucracy. You know, they want to come to work and go home at the end of the day feeling as if they accomplished something. And if all they accomplished was treading water or keeping things no worse off than when they arrived, that's not a a feeling that's going to generate great satisfaction. So I think there's a great desire inside system and certainly inside the Hawaii system to change but like lots of bureaucracies, there's a lot loaded in there. The process of changing that is not a matter of walking in one day and saying, okay, let's, let's just turn it all over and it'll all be different.
[00:06:15] Robbie Alm: You can certainly change an attitude and come in with a fresh perspective and idea, but there's an awful lot of the system that you have to work yourself through.
[00:06:29] Randall Roth: Well let me let me read something from Reinventing Government, and then Ted, maybe you can start telling us about these 10 points. The quote from the book says, but waste in government does not come tied up in neat packages. It's marbled throughout our bureaucracies. It is embedded in the very way we do business. It is employees on idle, working at half speed, or barely working at all. It is people working hard at tasks that aren't worth doing, following regulations that never should have been written, filling out forms that should never have been invented. And Robbie is telling me that those folks are as frustrated by this system as are the folks who are paying for the system.
[00:06:58] Randall Roth: Could you tell us a little bit more specifically about how this book takes that apart and explains what we as as a community, whether we're thinking of the the local community, the state community, the national community, how people, the citizens, how we can somehow turn this around?
[00:07:12] Ted Gaebler: There's no question that the greatest frustration with with government is from the 18.4 million Americans who work for government. More than that six Americans work for government and they are the most frustrated, the citizens think they are. But it's the people on the inside, who can't get their parking ticket reimbursed because they forgot the receipt for seven months. It's the uh chipping away at their pride and chipping away at their self-esteem because of these archaic rules. And the overwhelming conclusion that David Osborne and I reached in doing the research of more than 600 governments, was that we have good people in government trapped in bad systems. I don't I don't want to imply that every single one of those 18.4 million employees who work for government is Sterling. Maybe there's one or two bad ones. Right, but but we have a bell curve, like the private sector does too. 5% of our employees should be fired in the public sector, just like in the private sector and 1% are stealing from us. No question about that. That's a study after study shows that.
[00:07:56] Ted Gaebler: But overwhelmingly good people trapped in bad systems, that makes them look like they're doing dumb things.
[00:08:10] Randall Roth: So while we use the word bureaucrat almost in a in a negative pejorative way, uh a person who is a bureaucrat is going to end up being inefficient because of that system, as opposed to who that person is.
[00:08:25] Ted Gaebler: Oh, indeed. We have we have budget systems for instance, that incentivize public employees to spend money when all of us citizens want them to save money. But there's no incentive for them to save it because A, they don't get to keep it in the department, so what's the point? Secondly, they don't get as much next year if they don't spend it all this year. So 40% of all governmental spending occurs in the last quarter of the fiscal year, not because of the employees fault, because that's what the systems reward. And finally, they get yelled at for asking for too much last year. So the the system incentivizes all those millions of government employees and all of our 87,000 governments across the US to spend money. Uh it's not their not the employees fault, I assure you.
[00:08:53] Randall Roth: Well let's take a look at this roadmap that you and your co-author set out in uh in Reinventing Government, the book. The first uh category is uh catalytic government, steering rather than rowing. What do you mean by steering rather than rowing?
[00:09:08] Ted Gaebler: About 10,000 years ago, the citizens living in various countries at that time created various institutions to help them preserve and maintain their quality of life. We created first the family, then the clan, then churches, then finally mercantile opportunities, labor institutions, education institutions and yes, by the way we created governments somewhere along the line in the last 10,000 years. For most of that 10,000 years, governments have not been the best funded or the most important of all those institutions that we citizens created, but about 150 years ago, to correct the abuses of rampant capitalism in an industrial era with women and children being locked in sweatshops working for 20 hours a day not doing much not getting much pay and with the industrialists in my own home city of Cleveland, Ohio, the Carnegies and the Rockefellers so polluted the Cuyahoga River that it burned for 3 days in 1969, with those kind of abuses, we citizens of the world, first in Europe and then of course in our country, asked governments to step in and do more.
[00:09:51] Ted Gaebler: And so for the last 150 years, our citizens' perception is that government's job is to take taxpayer's dollars and provide services. But that of 10,000 years is a very short period of time that we've been in the service business. What's happening is that now citizens have other choices. They don't have to buy from government and so the percentages of GNP, Gross Domestic Product, or Gross National Product, is dropping worldwide. It's dropping in Russia, it's dropping in Canada, it's dropping in the US. It's dropping all over the world. And so citizens are less willing as we go into the 21st century to have government have their money because they have other choices. They don't use the mail anymore, they use Federal Express or DHL or other kinds of services.
[00:10:34] Ted Gaebler: And so, governments now need to look at not necessarily being in the service business, but being a catalyst broker and facilitator to help citizens use their total amount of GNP to provide whatever services they want, not just government providing services.
[00:10:49] Randall Roth: Let me ask Robbie, um you know, government is particularly pervasive here in in Hawaii. Our state government provides services that aren't provided by governments in in a number of other states. Robbie, what are your thoughts upon that in the context of what Ted was just saying?
[00:11:03] Robbie Alm: I think I think you're exactly right and I think what's happened in Hawaii is frankly we've had a longer honeymoon with government than most other places uh in the country. Uh so we're fed up now. Other places got fed up long ago. Well, well, we're fed up but very selectively. Uh you go to the legislature and there are still five or six or 700 bills brought by interests outside of government asking for more government. Hawaii is still dominated by people, people desiring someone to step in and fix the problem. And Probably the same people who complain that government is inefficient. In other respects, right, they don't like the welfare system, but particularly, for example, in the government regulation business where I was in, every year, there were at least 40 new groups that sought some kind of regulation, either greater regulation or regulation of their area. Uh it it always amazed me the number [unintelligible — audio glitch] people who would come in who I know in other context, would say, let's get government off our backs who would then turn around and say, but I want government to come in and do this in my industry.
[00:11:47] Ted Gaebler: Robbie, that's why it's such a awkward time to provide leadership in government today. I always wonder why people run for president or prime minister or premier or governor, because you have these crossing these two historic trends right now. You have seven generations of Americans, uh and worldwide as well, who have been trained if they have the slightest hang nail to ask for a government program and so the demand is continuing to increase. At the same time, a bare majority of citizens, in all countries are now saying, no more. We're not paying the bill. And that's created a very awkward time. Mitterrand's government in France has been repudiated, coal in Germany has disappeared from the world scene, Thatcher is gone from England, major, almost gone. Uh Gorbachev is gone from Russia and and Yeltsin hanging on with the thread, Keating's government in Australia has been uh largely repudiated, we've had seven prime ministers in Japan in six years, three in Canada in just the last 12 months.
[00:12:30] Randall Roth: A lot of people have been saying some bad things about Clinton too, if I recall.
[00:12:44] Ted Gaebler: Actually, he stands pretty tall among those uh those uh folks in that world scene. It's a very awkward time to provide government leadership.
[00:12:59] Randall Roth: Right, and and the and the real issue and I think you put it well, is is that the it sort of the bottom line bill is unacceptable. But assisting the process of figuring out what should come off that chart, nobody really wants to do all that much of. At least every time you try to take something off the boards, there's a huge lobby to retain it. So you you sit there with with the public saying, okay, the bottom line bill here, whatever it is, I don't want to pay anymore. I want you to cut that bill by 20%. But then as you sit there and say, okay, what 20% do we take off, it you know, there there's no consensus for that.
[00:13:42] Randall Roth: And that's one of the toughest things that we're going through right now.
[00:13:56] Ted Gaebler: And I think Ted in your book you said something about how oftentimes we go at it as though we're cutting off fingers and toes rather than putting the program on a diet of some sort and in a regimen of exercise. What what do you mean by that? Well, I think [unintelligible — audio glitch] point is that it's very difficult as Robbie was saying, to get the citizens to give up things. They generically want to complain about the cost of government, uh but when you get down to cutting specific programs, closing specific schools, cutting back on postal services for rural delivery, uh people kick and scream. The fact of the matter is today the postal service delivers 67% junk mail, Christmas cards and bills. I can't remember the last time I sent anything through important through the mail. I fax, I modem, I hand carry, I satellite uplink, I use other alternative methods. And citizens are finding they have alternatives. They don't have to buy from government. But you try to cut a program, you know, a very specific program, and you get all those people who want that program to continue, uh to to give up. So it's a very, uh, difficult time and we need the citizens to think through.
[00:14:40] Ted Gaebler: That's one of the reasons why our book focuses not on the policies, not on the programs, but on making government much more effective by letting the public employees work through [unintelligible — audio glitch] marbling of the fat throughout. If you give the public employees a budget system that allows them to keep the money they save in their department, not personally of course, they will turn around savings from 0.8% a year to 10% a year, just the employees, if they have an incentive to save the money. But we haven't had legislatures who have been willing to give uh departments lump sum total budgets. They want to micromanage with line items.
[00:15:23] Randall Roth: In case you joined us late, you're listening to the Price of Paradise Radio Show. I'm Randy Roth, and my guests are Ted Gaebler, co-author of Reinventing Government, and Robbie Alm, former Director of the State Department of Commerce and Consumer Affairs, sometimes known as DCCA. Well as I was listening to the two of you just now, I was thinking of the word privatization. Is it possible that we can continue to provide services and yet not have this inefficient government providing of the services, instead the private sector doing so? What do you think, Ted?
[00:15:52] Ted Gaebler: Privatization has come at us uh from two directions. The first is from the ideal logs, the Thatchers and the Reagans, the people who stated many times they hated government. Uh what the hate one of the institutions that we citizens created to help us provide a quality of life doesn't seem to make sense. The the Thatcher and Reagan philosophy, uh just espoused many times was that any idiot in the private sector can run things better than I can as a master's degree 30-year trained public sector manager. And that's insulting to me and all other public sector managers to somehow assume that we don't have managerial skills uh to be able to compete with uh the my colleagues who I went to the Wharton graduate School of Business with, somehow thinking that the I can't I don't have can compete. That's silly.
[00:16:21] Ted Gaebler: Particularly when you think that public sector employees start with a 22% inherent advantage running anything because we don't have taxes or profit to pay. And so I would be able to run a shoe store or a Lexus dealership better than anybody in the private sector. If you've got the right system, right? And the right incentives and all that. But I give up my 22% inherent advantage pretty quickly when you start putting on all the social costs and all the other programs and all the other restrictions that legislators put on government. Uh pretty soon, we're carrying around a burden that is more than 22%. And so privatization's second entree, uh is looking at the economics. The fact is, 90% of governments do not know what their services are. They know what their departments are, or their ministries, but they don't know what their services are. 92% do not know what their direct costs are, 94% do not know what their indirect costs are and only 2% of governments know what their services are, the direct costs or indirect costs from the corporate overhead.
[00:17:04] Randall Roth: And you're saying that's not the the fault of the individuals, it's the system that doesn't make that obvious to you.
[00:17:18] Ted Gaebler: Because there have been no incentive with governmental accounting systems to identify what the cost of a government program is. If if we knew what our costs, that's why most governments outside the US are now demanding that if a government is going to retain a service, it must compete with the private sector.
[00:17:33] Randall Roth: So maybe even if we have a service that we're happy with, you know, here in Hawaii, I think everyone is very happy with trash collection, for example, it's conceivable that it's costing a fortune, but we don't know that.
[00:17:47] Ted Gaebler: Correct.
[00:18:02] Randall Roth: Robbie, what are your thoughts about what Ted has just been saying?
[00:18:16] Robbie Alm: Well, I I agree, and I think in addition, you you have the problem that because of a variety of extra things that we've laid on government, the process of doing the business of government is more expensive. For example, if if I'm running a government and want to acquire supplies, I have to go through a procurement process, which at best is is going to take some time and and is going to leave a lot of bidders out. If I'm in the private sector, I can pick up the phone and make my acquisition within 24 hours and probably do some job owning back and forth and some things that you couldn't do in a government sector.
[00:19:00] Ted Gaebler: create a procurement system to ensure fairness and that nobody cheats and and that there's no kickbacks and all of those, but it also creates a system unlike what you have to deal with in private sector. The other thing I want to say [unintelligible — audio glitch] privatization is it tends to be focused as an all-or-nothing issue. And I think that that's a real weakness to this debate. that you know, in a lot of areas of government it isn't should the private sector take over the entire government operation, but instead we should start looking at operations and saying you know, in this whole process of delivering this service, can't we break down the process and some portions be delivered by the private sector and some portions be delivered by the public sector?
[00:20:51] Ted Gaebler: Because particularly where there are important social interests involved, we're not going to be willing to give it entirely over to the private sector. We do have as a society some reasons why we want government in there, but again it's all been all or nothing. We don't ever divide it up. Ted, how do we turn that around? How do we approach it more intelligently? How do we make these things happen?
[00:21:58] Randall Roth: We've tried to change government in five ways, four of which haven't worked and maybe that would be helpful for the listeners in Hawaii to know.
[00:22:21] Ted Gaebler: Now when you say we've tried to change, you're saying society? Society, right.
[00:22:43] Randall Roth: American society. First of all we tried to change governments by bringing in the all knowing private sector. We did that right after World War Two with the Hoover Commission, then during the Reagan administration with the Grace Commission and we've had many governors with many Hoovers or many Graces or the Donovan Commission and others.
[00:23:05] Ted Gaebler: Because those people are smarter than people in government.
[00:23:28] Randall Roth: The underlying logic is that everybody in the private sector is smarter than everybody in government. If we just bring in those all knowing private sector people, they'll straighten us out and we'll see the path to righteousness.
[00:23:50] Ted Gaebler: And as a government sector person, you don't think that was enlightened?
[00:24:12] Randall Roth: I think it's nonsense because nobody in democracy wants government to be run like a business. We do not want our important policy and service decisions to be made by one person behind closed doors, overnight, strictly for the basis of profit. In a democracy, we want our service decisions made much more openly, by more people being involved over a longer period of time, with profit being one of the motives, but not the only one.
[00:24:57] Ted Gaebler: What was our second mistake?
[00:25:20] Randall Roth: The second mistake was bringing in the do-gooders, bringing in the the academics. Now wait a minute.
[00:25:42] Ted Gaebler: All right. Go ahead. I like to finish before I disagree with you.
[00:26:04] Randall Roth: Bringing in the the legal women voters or the foundations and while they're very pleasant people to have around, they didn't leave a long-lasting legacy of change. The third way we tried to change government in America that hasn't worked is to bring in the the big six firms to study government.
[00:26:27] Ted Gaebler: And big six, those are the accounting firms.
[00:26:49] Randall Roth: Oh yeah, we brought in the Arthur D. Littles and the Arthur Andersens and all the other Arthurs. I'm an accountant also by the way so two out of three I scream things up. Okay. The studying government hasn't worked because we bring in the consultants to put disparate facts in a logical order and then give us you know, 32 copies with a nice cover on it and somehow think government is going to change, and two thirds of government studies sit on the shelf and are never implemented. Because nobody makes their decisions about consolidating agencies or eliminating different districts or eliminating jobs on the basis of facts. Those are visceral decisions made in our hearts and our tummies.
[00:27:34] Ted Gaebler: I'm curious, we've got somebody who was a department head in in the state for six years, Robbie, would you agree with that last statement that those studies sit on the shelf? Oh yes, very. You know, that they're done by an outsider who comes and visits for a little while and then drops this big report on you. Yeah with a stop watching the hands and that sort of thing. Right. It does it there's no life to it. It has no life at real. No credibility with your people.
[00:29:03] Randall Roth: I'd be embarrassed to tell you how many millions of dollars of taxpayers money I personally have wasted on on studies because I finally figured out that doesn't work.
[00:29:25] Ted Gaebler: What's our fourth screw up?
[00:29:48] Randall Roth: The fourth screw up is to have and I think it's appropriate at this time of year in Hawaii to be talking about this, is to have outsiders run as politicians with the idea of friends and neighbors if you elect me, I'll go down to city hall or state house or the county courthouse or school district and I'll control those mindless bureaucrats. I'll put rules on them and regulations and I'll stop them from whatever it is we think they're they're doing that's evil and and mean. And the bureaucrats have a system of concrete bunkers to hide under that would make Saddam Hussein jealous, when faced with a frontal attack by a governor or a mayor we hide and we know how to do that, and we just outweight people. You say these people aren't going to be here eight more years, we'll just wait.
[00:30:32] Ted Gaebler: Only eight more years. Or we we have long times of longevity. And so when we're faced with a frontal attack. So none of those ways have worked. Let me let me ask our state bureaucrat, Robbie, do you just kind of smile at the at the governor who not you, but do the bureaucrats smile at the governor and nod, yes, but just keep on doing things the way they've been done? I think that depends place to place and I think a lot of But is it possible? Oh sure it's possible. One of one of our colleagues in the cabinet and I'll leave her name off, uh, called them the B team. I'll be here when you leave. You know, so I mean it's you know, it's a well known Okay, all right. You've convinced me.
[00:31:40] Randall Roth: Now, the fifth way the fifth way, the only way that we really know how to work change government is to empower the public employees at all levels, managerial levels, middle management levels, the supervisor levels and the line levels. Not just management but at all levels, recognizing that when we built bureaucracies 100 years ago as the answer to the problem of corruption and nepotism and patronage and those kind of things, we built bureaucracies to stop all those kind of things. We built the budget systems to control, we built the accounting systems to control, we built the purchasing systems to control, not to enable people to do things.
[00:32:02] Ted Gaebler: How tell me give me some examples of how you would empower a government worker?
[00:32:24] Randall Roth: Well first the easiest thing to change, what most state governments are changing now is their budget system. They're doing away with line item controls controlled by the state legislature, controlled by the executives, in giving lump sum totals. Texas has totally done away with any line item controls from the legislature in their budget. Massachusetts the same thing, Minnesota the same thing, it's under consideration in Florida.
[00:33:09] Ted Gaebler: Let me ask Robbie. It's my understanding that generally speaking we've not done that in Hawaii, but a major exception, I think, is with our public school system, which quite recently we've gone more in the direction of giving them a lump sum budget. Is that accurate? Yes, that's accurate and that's where the experimentation has taken place, the not only the DOE, but the UH, the University of Hawaii has been given greater autonomy. Uh, but there is a lot of resistance to the release of that, in some ways, that's coming because of the the sense of frustration, I think over over where the education system is and a feeling that, okay, we'll pass on total accountability to these folks.
[00:33:54] Ted Gaebler: Um, you know I my worry from having sat in government, it is that that move seems more related to the topic of education than it does to really fundamentally re-examining what we're doing with government, because there's nothing that makes the education system different than any other state department in terms of making that move to help make the system function better. See, the the you can see how silly it is for grown up adult legislators and city council members to be pouring over some police department or education department or public works department line item budget. They don't know the difference between a piece of asphalt and a in a truck. It's a very awkward thing for lay legislators and city council members and citizens in general to be trying to control these 30-year experience master degree bureaucrats are proposing.
[00:34:38] Ted Gaebler: It seems obvious to me. Why do they hang on to that control?
[00:35:01] Randall Roth: Ah, the reason two reasons. One is they that's something that's familiar to them. First of all, they think their job is to stop the bureaucrats, forgetting that the whole purpose of government, like all other institutions, churches and families and others, was to enable us to do things, not to stop us. But through the years as the reputation has gotten worse, people thought they could have accountability by screwing down the rules, [unintelligible — audio glitch] then complain about the fact that there's too much red tape. I mean the citizens can't have it both ways. The second reason, and more important, is because nobody has ever asked the bureaucrats the outcome questions, we bureaucrats have never developed outcome answers. And so we had an experiment several years ago when we sat down and the mayor and council in the city that I was managing asked the police chief to come up and sit at the table, the budget table, all by himself, without his entourage and his computers and his PCs and stacks of computer paper, just to sit there by himself and they said, chief, we've given you $18 million of taxpayer's money for each of the last three years, how are the citizens of this community better off because of that? The chief didn't have a clue. He had no idea how to answer that question because that's an outcome question, a trend lined over turned time. And so we as an industry and government, because nobody's ever asked us those kind of questions, don't have answers. And so we need to have the politicians and the citizens and the media be patient with us as we develop outcome answers and I guarantee you, we'll get much more effectiveness in government if we start focusing the bureaucrats' attention on the long term goals and expected outcomes in terms of the change of our quality of life than we ever will by micromanaging and sitting down and determining whether they need to have a particular PC or particular magazine or particular training program.
[00:35:23] Ted Gaebler: Well, in fact, there's there's something in your book that caught my attention. You say, rewarding failure creates bizarre incentives and you go on to explain how we have been rewarding failure with the police, with the schools, with the welfare departments or what have you. Tell me a little bit about rewarding failure. How how would there be a reward for failure?
[00:35:45] Randall Roth: If a department saves money, it gets ripped off by the central Budget and Finance Department.
[00:36:08] Ted Gaebler: They obviously don't need it next year, they didn't spend it this year. So you did that and they give it to the department that is overspent their budget, the least efficient, so you you bail them out. Okay, I've got a bureaucrat nodding agreement. Tell me Robbie, what's your experience on that level? I think that that's exactly true. If you don't spend your money the first question you're going to be asked is you must have asked for too much the prior year. I mean it's not you know. So if you get to the 11th hour, you better spend it even if it's not something you would normally spend money on. Or the other thing you do is spend into the next year. I mean you buy your first quarters as much of your first quarter as you can to save a reserve for the trouble you may have. So you know, you end up playing these very complex budget games that have more to do with your total lack of control [unintelligible — audio glitch] using whatever means at your disposal to give you some flexibility, some ability to handle what's coming down.
[00:38:00] Ted Gaebler: universities, we have streets, uh, we have garbage collection facilities, a food treatment plants, airports. Uh governments are actually very asset-rich, uh but we never present that to the public. The public forgets uh that we have acquired, uh in previous years, a lot of assets. And so as a company, over a long period of time, and governments are all corporations, uh they have, they're they're very balanced and look pretty good. But our accounting system doesn't ever allow us to do that.
[00:38:35] Randall Roth: You know, I feel like, um, for the most part [unintelligible — audio glitch] bashing the way things are right now and I'm saying to myself, you know, I know they're screwed up and when you tell me the the the, uh, unsuccessful ways we've tried to turn it around, I I can see why those didn't work. And I'm just saying to myself, there's got to be something tangible that I can look to for for reason to hope that this isn't going to always be this way. How specifically do people turn this thing around? Is it done by someone who gets elected governor of a state, let's say? And then I say to myself, yeah, that's the answer, but then I hear you say that the bureaucrats can just go into their their bunkers for eight years, or four years, or whatever and and survive. How do we really get to the core of this, Ted?
[00:39:11] Ted Gaebler: Our book uh of course, came out uh in 1992 uh before Bill Clinton and Al Gore started talking about reinventing government uh at the national level. In fact, I'd waited 52 years to have a president who ever utter the word management. Uh we never had one who did that.
[00:39:46] Randall Roth: They have given you credit by the way for that term reinventing government.
[00:40:22] Ted Gaebler: They have indeed. Uh yeah. No no question. Um, so we did not write about Bill Clinton, uh or the success that happened at the national government level in this country. Uh we wrote about uh the police chief in Madison, Wisconsin, and the public works director in Phoenix, Arizona, and the Deputy Superintendent of schools in Harlem, New York and the uh Deputy Finance Director in Fairfield, California. Because you thought those were success stories.
[00:40:58] Randall Roth: Because you thought those were success stories?
[00:41:33] Ted Gaebler: Right. In question, they were success stories. And the point is that in answer to your question of how citizens go about doing it and how government's doing it, it's it's to encourage and foster, uh, a change in the corporate culture, a change in in the the restrictions that we've put on uh to encourage, if we could get the business community in every state and every city to support and demand creative change, believe me, the bureaucrats would start marching in that direction. But now, uh I'm always amazed that in the private sector, people walk up and say, "Joe, what's new with your store? What's what are you selling now? What's going on? How's the new cars look? What what's new with the clothes?" But in government, if anybody starts to do anything new, we all look up in the gassed and say, "Oh my gosh, we can't do that. That's illegal, immoral, or against the constitution." If people outside government would ask people in government always, "What's new? What's new? What's new?", pretty soon the bureaucrats would get the idea to have some new things.
[00:42:09] Randall Roth: Have some new things.
[00:42:45] Ted Gaebler: But right now, anytime we do anything new, like I was a part of the city in Vice and California when we bought and owned a minor league baseball franchise and people just thought that was terrible. Governments doing that kind of thing. Um and so if we could get some support uh for looking at new things, new ways of raising revenue, we could actually increase services and lower taxes uh by changing the way governments are financed and what we do.
[00:43:20] Randall Roth: Robbie, what do you think?
[00:43:56] Robbie Alm: I also think we need [unintelligible — audio glitch] look at change in in two ways. Uh you know, I think it's great when leadership comes along and creates an environment for significant change. And and some of the things [unintelligible — audio glitch] Ted's book outlines [unintelligible — audio glitch] entrepreneurial government are are examples of where government leaders at various levels have have really helped foster uh significant opportunities. There's a second area though, [unintelligible — audio glitch] that's the one I also think we need to not lose focus on and that is that that [unintelligible — audio glitch] bureaucrats, the public servants uh on a day-to-day basis can make a significant level of small change, um every day. And they need to be encouraged to do that. I think
[00:44:31] Randall Roth: Who does that? I mean, is that political leadership? Who do we look to for that?
[00:45:07] Robbie Alm: I think everybody, including citizens. I I think when when citizens trash government or government workers generally, [unintelligible — audio glitch] play a role in demoralizing that workforce and making people just go to work and just treat it as as something they do for eight hours a day. Uh I think having some pride in a government worker and and having some expression to them about about our sense [unintelligible — audio glitch] they're in there doing the business on our behalf and we'd like them to do a good job and anything we can do to help them do that, we'd like to know about it. Um it means businesses offering assistance to government. There are lots of business programs that that could be offered uh to government, whether they're training or materials, uh just just to help government learn something or be exposed to something different, you know, done in a in a colleague sense.
[00:45:43] Randall Roth: See, this all makes great sense to me. And and I really do have hope because of a book like Reinventing Government and the fact, Ted, that you're out here talking to a group of bureaucrats etcetera. But then I see, for example, here in Hawaii, we had this interim commission on government redesign, which I think was the local reinventing government effort, and it looks to me like that just fell off the end of the earth. Robbie?
[00:46:18] Robbie Alm: I yeah, I was a member of that. I I think the problem was that that it was a, it was created by a resolution that was a product of a last minute flurry at the, um at the session, too much got packed into it, no budget, no the whole process was not really looked at. And so here was this interim group set up with with no staff and a very generalized mission and started to solve government and submitted it 20 days prior to the convening of the next session. It was it was absolutely unrealistic. I think the only the only thing we felt we could honestly do as a commission, and we did do that, was to try to gather as much public sentiment about government and then outline for the legislature what the process of reinventing that other states, um entities have used to give them a sense of if you really want to go down this path, this is the commitment you need to make. If you really want to do this, this is not passing a resolution that says fix it. This is this is a good hard piece of work that needs a great deal of commitment to to carry it forth and a great deal of political support in order to carry it forward at the scale that people seem to want it carried forward, and unless and until you do that, don't expect the kind of results. Ted?
[00:46:54] Ted Gaebler: But Randy, I think the, you know the the price of paradise uh model which as I understand it is very much of a grassroots, uh, movement is really where change needs to occur. Uh a lot of people are fed up with the institution of the government. Uh local governments in America have a 23% approval rating. The national government has a 14% approval rating. Uh interestingly enough, the media has a 15% approval rating. So, uh, Does anyone have an approval rating? teachers or accountants or something? Supreme court has a pretty good one than others. The question is, why don't since we citizens created the institution of government, uh along with the institution of churches and business and families and clans and labor unions and education, why are we continually bashing uh this institution that we created? Why don't we just change it, uh and make it into something that we can all be proud of? Why can't and there are places where citizens are extremely proud of their governments or extremely proud of their counties or their uh school districts?
[00:47:30] Randall Roth: What's the difference between them and us? Because Robbie, I think I'm safe in saying, we don't feel that way here. Would you agree?
[00:48:05] Robbie Alm: There's Oh yeah, there's an awful lot of people who don't feel that way.
[00:48:41] Randall Roth: And and there are a lot of people you're telling me in other locations who do feel that way. What's the difference between them and us?
[00:49:16] Ted Gaebler: Oftentimes they're proud of not just their institution of government, they're proud of their institutions of churches and the way their institutions come together. What's happening is as we approach the 21st century, we're getting into a more virtual society. We're getting into where there's more permeable boundaries. We're not going to have the the silos anymore of the federal government and the state governments and the local governments and and then the church is separate from that, and schools separate again and the families separate again. We're going to have a in businesses is totally separate. We're going to have a much more permeable, uh mixing and blurring and blending of the resources uh today. We're going to have a cop services provided partially by professional cops, uh at the at the local level, partially by some funding from the federal government, partially by uh supplemented by 2.5 million private sector cops in this country, partially supplemented by neighborhood watch, community-organized policing. And so That sounds like competition. Well, it's not it's cooperation, it's collaboration. Uh it's all institutions once again doing their part. Rather than just saying, "Policing can we can leave to the paid professionals," uh and uh raising families we can leave to the the kids. We're now learning that the schools and in non-profit institutions and business providing day-care programs. It's a much more permeable complex society. And the whole idea, and it's one it's wonderful, it's very exciting. We're breaking down these silo mentality barriers and we're having citizens uh lead, I think in this state by [unintelligible — audio glitch] price of paradise uh concepts. Uh once again, not allowing the legislature to set the tone, but having citizens come together with their town hall meetings and setting agendas for what will be done. For when suggesting that the churches maybe should go back to work after 100 years of resting uh and suggesting that others elements of society uh do things. Reinventors today come kind of in four categories. We've had people said, Ted, you should have written a book about reinventing politics [unintelligible — audio glitch] those are the term limits people and and the changing the campaign financing folks. The second group of of people who said we should change the structure. We should have the parliamentary system, the Westminster uh government system, or we should have the strong mayor or the city manager plan or somehow change the structure of government. Move the boxes around. Uh the third of the people like David Osborne and me, who say we should change the systems of government, but there's a fourth group that says we should change citizenship. That the in a democracy, citizenship is not a spectator sport. A democracy is not a spectator sport. You got to register, you got to vote, you got to be informed, you got to run for office, you got to do your part. And so we're again combining the politics, the structure, the systems and reinvented citizens.
[00:49:52] Randall Roth: That's interesting, as I was listening to that, that last category can kind of be broken down between the uh the the guru and the commissar or whatever and Robbie, I was thinking of your group, Live Aloha. Why don't you tell us a little bit about Live Aloha?
[00:50:28] Robbie Alm: You know I was about to say I think the other thing that we need as a society is to have people get out of the mentality of government does it for them and and reassert our responsibility as individuals to do a great deal of the work our ourselves, to to do the work of being citizens, to have government as a partner, not as someone we just dump everything on.
[00:51:03] Randall Roth: And when you say do the work, you're not just talking about delivering public services, you're talking about taking your shopping cart back or picking up litter when you see it. Pick up the litter. Um, you know, exercising responsibility for each other in traffic, so that we aren't just looking to the engineer to create the traffic solution, but we create some of the traffic solutions by our behavior with each other. Maybe smile at one another, Smile at one another as they cut in front of us. All of this is is just a a part of of stopping this notion that it's all for government or all or the cure for all of our ills is simply a government institution and and yet we have that group [unintelligible — audio glitch] gotten going with this Live Aloha idea as as really just a symbolic phrase of of the idea that we're going to live our lives as responsible citizens in this community.
[00:51:39] Randall Roth: So instead of bashing government, whether it be the people in government or the system of government or whatever, it's kind of looking to the inside and it's the Yogi and the Commissar rather than the Guru. The Yogi who looks inside and says, "How can I change myself?" And there's the assumption that that's going to somehow give us a stronger community.
[00:52:15] Robbie Alm: One once all of us start engaging in more behaviors that make us responsible for the outcome, I think what's going to happen, it's going to be a lot easier to form the kind of partnerships with government that really make sense, where citizens and government have the right sort of boundary of where my need for your service begins and where my responsibility uh really is comes to an end and I give it to you.
[00:52:50] Randall Roth: Ted, you're the the world expert on this, does that make sense to you?
[00:53:26] Ted Gaebler: Oh, indeed. The, but I need to caution uh all of us that uh government employees are not skilled right now at uh developing cooperative partnerships with citizens or volunteer groups or businesses or anybody else. You know, remember we were hired to do a service, would do it well with taxpayers dollars, and that's our mindset. We take our orders through the hierarchical chain of command and we work for somebody else, so we pay attention only to the politicians if if we do that. Uh we're not used to forging collaborative relationships with boy scouts and neighborhood leaders and rotarians and seroptomists, uh we're not used to forging alliances with people from across the world.
[00:54:01] Randall Roth: You know I I got to tell you, I really was heartened when I I first um uh heard from Sharon Mia Shiro, who's the head of the Department of Human Services development here in Hawaii, the state agency, that they were bringing you out and that you're working with bureaucrats here in Hawaii. That that strikes me as as a good sign that the bureaucrats in Hawaii would be seeking the kind of uh guidance that you are providing. Is is this is this going on everywhere, Robbie? Is this just Sharon's department or are there other departments here in the state that are looking to these new ideas, these new ways of doing it?
[00:54:37] Robbie Alm: Oh it's been going on and I think it's been a building process internally. I think that that clearly the events of the last few years, particularly with the with the with reinventing government and some of the things [unintelligible — audio glitch] have been done, you know, by Bill Clinton and Al Gore, have focused a lot of attention on it and and given a you know have raised the the level of awareness here. But I think you know, one of the things [unintelligible — audio glitch] during all my time at at DCCA, we did, was spend a lot of time unpackaging what was there and trying to remake that. Uh you know we we found terribly inefficient systems and and mostly the employees fixed them during that period by their own work. So I I you know, and that's the non, that's the less glamorous stuff, that's the day-to-day stuff, that's the that's the breaking down of of long backlogs into consistent routine, quality service on a timely basis. You know, that's been going on for a long time. Well frankly we need to have a way that it is not something where you have to talk about specific incidents of it, which is unfortunately still much still too much the truth. Yeah, well be able to say it's happening everywhere because that wouldn't be truthful. I mean it is more something that you can pick out the special places that it's happening more than you can say it's a general phenomenon across government.
[00:55:13] Randall Roth: In case you joined us late, you're listening to the Price of Paradise Radio show. I'm Randy Roth, and my guests are Ted Gaebler, co-author of Reinventing Government, and Robbie Aum, former director of the State Department of Commerce and Consumer Affairs and currently a vice president with First Hawaiian Bank. Uh Robbie, earlier I was asking you about your thoughts on on reinventing government and you said that something that you feel strongly about that you thought was a little bit outside of of the book was this need to declare victory. Uh and and I'm not sure exactly what what your point was, but I'd like you to make it and then see what Ted's reaction to it is.
[00:55:48] Robbie Alm: Partly because [unintelligible — audio glitch] all of the public feeling about government. That there's a there's a tendency I think by by leaders and particularly political leaders to adopt um reinventing as as part of their program, as part of what they're going to do as a leader. And one of the real dangers that I think happens sometimes is there's a rush to declare victory. to to outline their program for reinventing and then call that the victory as if it self executes. And one of the dangers with that is what happens to the people inside is they look at the whole thing as simply a political exercise. They don't look at the person who's raising that as really being meaningful about it or really wanting real change. They just want that hit on the front page of the newspaper. They just want some credit politically for it and I think that if instead of rushing to declare victory, they would go back and and go into the system and try to convince the system, [unintelligible — audio glitch] public servants, that the desire is for meaningful change for their participation in meaningful change, and for government to really be a better place both to serve the public and to work in uh and do that work first before the press conference to say, guess what we won folks, we're reinventing the government. So you're saying the people on the inside, if they know that it really hasn't worked that well, it it erodes credibility and and affects that that attitude that they have? Well if they see the announcement that we're going to do this as a declaration of victory then the whole thing just lacks credibility. It's a political exercise done for external results. Ted, what do you think about that?
[00:56:24] Ted Gaebler: Well that's always a problem when you try to exert leadership. You try to get people excited about an idea and sell an idea. That's what leadership is all about. And in that process, because people have done that so often and results are, you know, maybe 10% or 15% of what's promised, people get discouraged with that. Uh but we need to to you know, go back to basics, uh understand that we society has built all these institutions, we can change them. We've always been changing them. They've been changing throughout uh hundreds and hundreds and thousands of years, and it's our turn uh to do that. I keep trying to tell people uh inside government and and the business community leaders that none of us are 22 years old anymore, most of us, uh you know, we're we're not still struggling with who we are and raising a family and those kind of things. A lot of us are senior uh veteran, uh you know, 45 to to 75-year-olds, who uh realize that it's our turn to help build society, to leave behind a legacy of uh positive change uh to leave behind a better government, a government that we can all be proud of, and and churches that are better and in families that are better and uh to work on the building of society and in fostering our our time uh here as a species. I think it's very important and we have to first of all break down the cynicism that people inside government have that the pure, that
[00:57:00] Ted Gaebler: bureaucrats who have been burnt and burnt, and the citizens who feel like they've been burnt, is you have to stop that cynicism and get a few small victories and build it. Now, politicians, let me just comment on that. Politicians have a very dangerous role here because for every initiative for change, for reinvention that you start, it usually ends up being like a bell curve. That is, at the upper end of the bell curve, you have some very, very spectacular successes, most of them are very average and and pabulum like, in the middle, and some of them are so incredibly stupid, you wonder how human beings could ever be involved in them. Well, the politicians can never afford to be associated with the stupid ones.
[00:57:38] Ted Gaebler: And so they truncate themselves and cut themselves off from the successful, [unintelligible — audio glitch] good ones. What we need from politicians is somebody to say, to the staffs, go ye forth and reinvent. But not have the politician, the mayor, the governor, the state legislator, standing there at the at the ribbon cutting, you know, of every new initiative. Because some of them are going to end up not being good. We're going to fail our way to success. Just like the private sector has failed their way to success, uh, in many things. We live through the Edsel to get to the Mustang, we live through new Coke, we may yet live through Euro Disney. Private sectors have made a lot of horrendous mistakes, and we've lived through it. The same thing, government needs to make more mistakes, so we can get on to getting those behind us and get on to the good things.
[00:58:56] Randall Roth: Robbie Om, you're nodding agreement. Uh, tell me, I, because I'm not sure I completely understand, we're failing our way to success, What does that mean to you?
[00:59:34] Ted Gaebler: Yeah, I think there's a the the flip side of what I was saying is is that, we we have this demand that all progress be successful. And and if you if you've been behind an unsuccessful program, you have to fear that the legislature will call you be before them in front of the glare of TV lights and say, how could you idiots have done this, it didn't work. You know, not every idea works. And
[01:00:13] Randall Roth: So, don't be afraid to make a mistake.
[01:00:52] Ted Gaebler: But we have to tell people it's okay to make mistakes. And that it, Ted, it's okay. Oh, now I understand. I tell my kids that all the time. How about the billions of dollars that Coca-Cola invested in a product called New Coke? Uh, you know, we all lived through it. We all paid for that, all paid for that experimentation, and that massive failure. Uh, we've lived through lots of mistakes that institutions other than governments and governments have made. It's impossible to think you're going to make progress without making mistakes. The quicker we get over that idea that government somehow should be immune and never make a mistake, uh, the quicker we'll get on to building a better society.
[01:02:09] Randall Roth: Yeah, punish government for corruption, punish government for And the private sector for corruption. Right. Right. But but don't punish for for making a good effort to do something and having it not work out as originally intended. Right.
[01:02:48] Ted Gaebler: Because if we do punish them, then what happens is they hire an army of PR people and try to make every failure sound like a success, or Right. And the people people know better than that. They're too smart for that. Or they engage in very mediocre efforts to change that are so marginal as to almost guarantee success, but mainly to avoid failure. Just to avoid failure. You know, speaking of of doing things new or different, one of the specific stories that you told in your book, Ted, that uh I I guess I kind of knew about, but it it really, reading it in your book, brought it all together for me, was the 1984 Olympics. How I guess the Olympics right before that, they had spent something like a billion dollars and created a real problem for the city of Montreal. And the folks in LA said, uh let's do it privately. Let's let's not just spend money as a government. Tell us a little bit about that.
[01:03:27] Ted Gaebler: Actually, in 1994, Montreal is still recovering from their 2.4 billion dollar debt for the 1976 Olympics. Uh they've got it down now to just about a billion, uh here this many years later. Uh the Los Angeles organizing committee, of course, didn't have the luxury, they were organizing it right after Prop 13, and it passed, and there was no local or state money that was going to be available for them, uh in any significant amounts, to underwrite the 1984 Olympics. So they went onto a private uh kind of uh funding source using lots of advertising for the first time and uh using corporate sponsorship to build pools and and those kind of things.
[01:04:05] Randall Roth: And trying to make a profit?
[01:04:44] Ted Gaebler: Oh indeed. And they made $700 million profit off of the 1984 Olympics. So it wasn't a better people, that somehow the system, somehow the approach was different. They they realized they were not going to have the the safety of net of having federal, state, or local government money available to them. And so, in spite of that, uh, or maybe because of that, they went out and found new ways of financing. So they had no money from the state or federal or local government? I I'm not absolutely sure that they didn't have any money because I think there was some public facilities that were refurbished. I think there were some roads that were redone or repaved. But for the most part we're talking about But for the vast majority of the cost of the 1984 Olympics, there was no federal, state, or local government money in it. And the system evidently worked. The newer approach there worked. Indeed, that's why Well, we've got just a couple of minutes left and I would invite each of you to tell me what haven't we talked about having to do with reinventing government that uh really our listeners ought to know about.
[01:06:40] Ted Gaebler: Ted? I'd like to touch a little bit on the the accountability because it, uh, I think it might be easier for some of your listeners to think that we're suggesting we eliminate all controls, uh, and let the bureaucrats do what they want. And of course, that's not what we're talking about. What we're saying is that over the last hundred years, because of the boss tweeds and and the daily machine in Chicago and the Pendergast machine and the Hague machine and all these other things, we've installed bureaucratic systems to stop, uh, the patronage, the nepotism, the the funny procurements that people do. And, uh, we've put 14, 15, 16 layers of controls, federal controls, court controls, local controls, citizen voted controls, attorney generals of controls, I mean, just incredible number of controls, and it has created the red tape. Over a hundred years, no one person has been responsible for it, no one agency, no one administration. And what what we're suggesting is we need to give the ship of state an acid wash, you know, cut off the barnacles, get back down to the solid, smooth, bare metal so we can go once again have a government that we can pride of, that goes smoothly through the water. Uh, nobody's suggesting that we do away with all controls, but 16 layers of controls is a bit much. Well, then, make clear who's accountable, make clear who's responsible. Is that it? Well, and be accountable more for outcomes rather than for inputs. And there would be much better. Now, again, as a manager in government, I assure you that we need to have some kind of controls and, uh, I we've learned how technologically to control those easily. The idea is that even in church, you notice the usher when they pass the basket still watches you to make sure you put in more than you take out. And so we're not suggesting that we do away totally with controls. And I think about it, you're right. Uh, Robbie, you've been, uh, described as the, um, Governor Whae's cabinet philosopher, and I'm not a sure, not sure exactly what that means, but you've got about 30 seconds to share your thoughts on this. I guess since my last thought would be that, that as we head into a political process this this year, and we're all going to hear a lot of dialogue about how government's going to be fixed by by one of our our new leaders is is not to is not to let us get caught up in a in a debate over a few sort of, um, hotspot issues. Government is not a matter [unintelligible — audio glitch] changing a few hotspot issues like the way that the bishop estate trustee is selected. I mean, that may be worthy of debate, but that's not the fundamental job of fixing the way government operates and we ought to in in looking for a new leader, be looking for someone willing to tackle the hard core work that's not going to try to get away with a few sloganey, uh, a sloganey sort of approach to fixing government.
[01:07:19] Randall Roth: Mhm. Mhm. So, don't, don't give me the slogan. Tell me exactly what you're going to do.
[01:07:58] Ted Gaebler: And [unintelligible — audio glitch] recognize that it is good, hard, tough work that just takes a lot of time and a lot of work, and there's no magic wand, and there's no quick fix. No quick fix.
[01:08:36] Randall Roth: Okay. Well, I want to thank my guests, uh Ted Gabler, who's the co-author of a an extremely successful book, Reinventing Government. I recommend it to to all of our listeners. And Robbie Om, who's the former director of the State Department of Commerce and Consumer Affairs and currently a vice president of First Hawaiian Bank. This is the Price of Paradise radio show. It was produced by Susie Roth with technical support from Mark Wagner. Thank you for listening and Aloha.