The Management Landscape

"As Secretary of State, I wear two hats -- one as CEO of the Department, the other as the President's principal foreign policy advisor. And being successful in both roles is important because we must be properly organized and equipped and manned to conduct America's foreign policy, as well as formulate good policy." Secretary of State Colin L. Powell

To achieve the strategic goals and ultimately provide benefit to the American public, the Department must have an effective organizational structure, established management capabilities, and core infrastructure in place to ensure the diplomatic readiness of the entire Department.  Unlike other federal agencies, this capability is made increasingly complex by the Department’s presence in more than 150 countries.  Nevertheless, the Secretary and the entire leadership team always have maintained that better management is a critical element in the Department’s overall effectiveness and remain committed to successful implementation of all its management initiatives.

While the Department has always been committed to success on a broad range of management priorities, the President’s Management Agenda (PMA) has focused the Department’s efforts across five government-wide initiatives to improve management.

Management also is focusing on several other key priorities, three of which are depicted below.

Three Key Management Priorities

People: Diplomatic Readiness Initiative

The Department’s Diplomatic Readiness Initiative represents a new strategic human capital plan designed to ensure the availability of adequate human resources through a more streamlined and aggressive hiring process from recruitment to intake.  The Initiative requires seamless coordination between every element of the HR system: Office of Recruitment, Evaluation and Testing, Diplomatic Security, Medical Services, Foreign Service Institute, and Office of Career Development and Assignments.  This three-year initiative includes the hiring of 1,158 people over attrition from FY 2002 through FY 2004.

Training: Leadership and Management Initiative

The Secretary’s Leadership and Management Training Initiative, started in FY 2003, will have the initial training rollout completed by the end of 2006.  The goal is to ensure that all employees, especially those who are supervisors, receive appropriate specific training in leadership and management skills. 

Security: Diplomatic and Homeland Security

The War on Terrorism has brought a heightened awareness of the need for good preventative and protective security measures.  The Bureau of Diplomatic Security works throughout the Department and with other USG agencies to provide increased security and safety for American citizens and interests at home and abroad.  These efforts include coordination with U.S. overseas posts to provide more secure facilities abroad, with the Bureau of Consular Affairs to combat passport and visa fraud, and with the Bureau of Information Resource Management to ensure protection of U.S. technology and communication assets.  The Department will work closely with the new Department of Homeland Security in these efforts.

The President’s Management Agenda

In August 2001, President Bush outlined the President’s Management Agenda (PMA) which focuses on five initiatives designed to improve USG management.  According to the Office of Management and Budget (OMB), the Department made progress on each of the five President’s Management Agenda (PMA) initiatives.  As of March 2003, the Department achieved three green and two yellow scores for progress on implementation.  With respect to overall status, the Department has made improvements in several areas, even though the overall scores for status remain red.  During FY 2004, the Department will continue its efforts to address the PMA initiatives.

Strategic Management of Human Capital
Progress = Green
Status = Red
 
Overview: This initiative aims to build, sustain, and deploy effectively a skilled, knowledgeable, diverse, and high-performing workforce that is aligned with mission objectives.  The goal is to have a workforce whose composition, size, and competencies can quickly adapt to changes in mission, technology, and labor markets.
 
Progress :The Department successfully implemented the first year of the Diplomatic Readiness Initiative, designed to ensure adequate human resources through a more streamlined and aggressive hiring process. The Department also has implemented a mandatory leadership and management training initiative and emphasized those skills in performance requirements.  The Department revalidated the Overseas Staffing Model, completed the first phase of the Domestic Staffing Model, and began to develop a Civil Service Succession model that will provide a comprehensive approach to determining the optimal size, allocation, and organization of domestic and overseas personnel.  These models will facilitate analysis for competitive sourcing decisions. An integrated strategic workforce plan will be developed and integrated with the mission- and bureau- level strategic planning processes.  Use of OPM’s Human Capital Assessment and Accountability Framework (HCAAF) to assess human capital activities will help ensure management accountability and evaluation of progress in this area.
 
Upcoming Action and Potential Challenges : The Department will continue to work with OPM and OMB, as well as use the HCAAF as its basic guide. The Department also will continue to implement the Diplomatic Readiness Initiative and expand the leadership and management training initiative.  Plans are also underway to complete Phase Two of the Domestic Staffing Model and a draft Civil Service succession planning model.
 
Improved Financial Performance
Progress = Green
Status = Red
 
Overview: This initiative will improve accountability through audited financial statements, more accurate benefit and assistance payments, improved management controls, and installation of financial systems that produce timely, accurate and useful financial information.
 
Progress : The Department is aggressively addressing the implementation of improved financial performance standards and has completed and reported on a detailed plan of action that includes milestones and measures referenced to the OMB established core criteria.  The new Regional Financial Management System (RFMS) is well underway with the conversion of 107 posts (53 percent of total posts) through March 2003.  This new system complies with federal financial systems requirements and replaces the two legacy overseas accounting and disbursing systems.  Progress is also being made on consolidating and streamlining worldwide financial operations.  The Department will transfer the remaining functions of the Paris Financial Service Center (FSC) to the Charleston and Bangkok FSCs by December 2003.
 
Upcoming Action and Potential Challenges: Future actions include full worldwide implementation of RFMS by the end of FY 2003, continued timely issuance of the annual combined Performance and Accountability Reports containing an unqualified (“clean”) audit opinion of the Department’s financial statements, and issuance of timely quarterly financial statements for FY 2003.  The Department and USAID will conduct a feasibility study to assess integration of their financial systems and to determine how they can expand their financial management collaboration.  
 
Budget & Performance Integration
Progress = Green
Status = Red
 
Overview: This initiative aims to improve the performance and management of the federal government.  One of the most challenging initiatives, it seeks to link performance to budget decisions and improve performance tracking and management. The ultimate goal is to have better control over resources and greater accountability over results.
 
Department Progress: The Department reorganized its budget and strategic planning staff to create the Bureau of Resource Management.  Focusing on the PMA, the new bureau is developing a process that requires information on budgets and human resources to be tied to performance planning.  The Department also has started to utilize current budgeting databases and applications to enhance the integration process.   
 
Upcoming Action and Potential Challenges: The Department continues to develop attainable goals and tangible performance measures that accurately track progress.  The Department has restructured and strengthened the FY 2002 Performance and Accountability Report with key improvements that evaluate results more effectively.   It also will examine more closely the linkages between foreign assistance funds and performance. The Department and USAID are integrating their strategic plans into a consolidated FY 2004-FY 2009 plan to ensure closer collaboration on policy and management issues.  Development and implementation of the Central Financial Planning System will be a critical step in tracking and verifying actual performance data and linking them to Department-wide financial resources.
 
Competitive Sourcing
Progress = Yellow
Status = Red
 
Overview: This initiative aims at achieving efficient, effective competition between public and private sources; simplified and improved procedures for evaluating sources; and better publicity for activities subject to competition.
 
Progress: With OMB approval, the Department completed a Competitive Sourcing Plan that targets competing 11-15 percent of the commercial positions in its FAIR Act inventory.  In FY 2003, the Department will fund a "Quality Sourcing" initiative and establish an Executive Steering Committee that will provide technical support for program offices to manage two key Administration initiatives: competitive sourcing and performance-based service contracting.  The Department gave initial union notification, is seeking a Competitive Sourcing Plan manager, and is revising the Foreign Affairs Manual.
 
Upcoming Action and Potential Challenges: The Department is proceeding to implement its Competitive Sourcing Plan.  Study groups for identified commercial activities are being formed.  Immediate challenges include obtaining technical support for carrying out the studies, integrating employee labor organizations, and establishing milestones for each study group’s implementation plan.
 
Expanded Electronic Government
Progress = Yellow
Status = Red
 
Overview The goal of this initiative is to expand the federal government’s effective use of electronic technologies (including support of information technology projects that offer performance gains across agency boundaries, such as e-procurements, e-grants, and e-regulation), so that Americans can receive high-quality government service. 
 
Department Progress The Department is focusing on improving IT security by certifying and accrediting all systems no later than the end of FY 2004, developing enterprise architecture to guide IT investments and improve business processes, and improving the capital planning process for IT investments.   The Department and USAID also are exploring how to collaborate and improve coordination on parallel IT systems.  The Department has revised its submission of the FY 2004 Agency Capital Plans and Business Cases (OMB Exhibit 300s) to reflect budget decisions and strengthen those considered "at-risk.
 
Upcoming Action and Potential Challenges: Following completion of the Unified Data Collection Effort,the Department will ensure that it conducts National Institute of Standards and Technology security evaluations on all Department programs and systems. The Department also will develop security corrective action plans for any programs and systems with security weaknesses, and submit to OMB a Plan of Action and Milestones to correct those weaknesses. The Department will complete the Certification and Accreditation plan to improve system certification progress and submit it to OMB. The Department and USAID will develop a plan for joint Enterprise Architecture and identify opportunities to collaborate on and consolidate their financial management and IT systems. The Department will use OMB’s detailed assessment and roadmap to develop and submit to OMB a PMA e-government scorecard improvement plan.
 
Management Challenges
 
The Government Accounting Office and the Department’s Office of the Inspector General have identified several Management Challenges that represent areas where the Department must improve operations.  The table below shows the Management Challenges and the corresponding actions that the Department is taking in response to them.

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