Reinventing Government

David Osborne and Ted Gaebler
New York: Addison-Wesley, 1992
405 pp., $22.95 hc

Steve Lockwood
Northern Montana College

[The reviewer thanks Governor Racicot for agreeing to a phone interview about this book and the university system's restructuring. The book is being reviewed in relation to its potential impact on Montana's university system.]

In the preface to their book, Osborne (author of Laboratories of Democracy, Harvard Business School Press, 1988, and consultant to state and local governments) and Gaebler (president of "a public-sector management-consulting firm," says the book jacket) state that the purpose of their book is to describe present governments that are responding to the new challenges of the "post-industrial, knowledge-based, global economy" (xvi) and to show what these governments are trying to accomplish. This focus differentiates their book from others spawned by Americans' dissatisfaction with government, most of which books, they say, offer policy corrections, or plans for what government should do. Reinventing Government "focuses on all levels of government--federal state and local--and its subject is not what they do, but how they operate" (xxi).

From these examinations of different governments, Osborne and Gaebler describe ten principles common to successful experiments in reorganizing the techniques of governing. Their reason for doing so is to provide a rough "map" of tested procedures for others who wish to reorganize their own governments (xvii). In this endeavor the authors seem sincere; they make clear that they believe in the necessity for government, for effective governing (which Americans mostly lack), for revising governmental systems rather than the people who work in them, for a departure from traditional conservative and Iiberal politics which have little relevance to today's problems, and for equal opportunity for all Americans (xviii). They also believe that all these needs can be met in large part by entrepreneurial government, which uses choice and competition as motivators for government employees to ply "resources in new ways to maximize productivity and effectiveness" (xix).

The book devotes a chapter to each of the ten principles, then in a final chapter shows how, on the basis of previously discussed examples, these principles might be applied toward reforming America's health care, education, and penal systems. Two appendices explain Alternative Service Delivery Options for governments, and the Art of Performance Measurement. Research seems extensive; it depends primarily on management literature and government-sponsored studies.

Since these ten chapter titles are descriptive, listing them here may give a good indication of the blueprint they will provide for change in Montana's government agencies, including the university system. (1) Catalytic Government: Steering rather than Rowing, (2) Community-Owned Government: Empowering rather than Serving, (3) Competitive Government: Injecting Competition into Service Delivery, (4) Mission-Driven Government: Transforming Rule-driven Organizations, (5) Results-oriented Government: Funding Outcomes, Not Inputs (6) Customer-driven Government: Meeting the Needs of the Customer, Not the Bureaucracy, (7) Enterprising Government: Earning rather than Spending, (8) Anticipatory Government: Prevention rather than Cure (9) Decentralized Government: From Hierarchy to Participation and Teamwork, and (10) Market-oriented Government: Leveraging Change through the Market.

How do these mostly self-explanatory titles affect Montana's university system? Perhaps a book-jacket quotation from then-presidential-candidate Clinton will help clarify the ways. "This book should be read by every elected official in America. Those of us who want to revitalize government in the 1990s are going to have to reinvent it. This book gives us the blueprint." Governor Racicot agrees. In light of these endorsements, a closer look at what Osborne and Gaebler say will provide some guidance in assessing the outcomes of the impending university system merger.

At the outset, Osborne and Gaebler praise governments that use competition, customer choice, and other nonbureaucratic means to accomplish tasks, stating that "these models are our future" (2). The parts common to entrepreneurial organizations include competition, power decentralization, outcome measurement, planning for problems, and generally preferring "market mechanisms to bureaucratic mechanisms" (20). Since successful experiments in government have built on these features, Montanans may expect revisions in the university system to follow them.


Of all the concepts in their book, the authors say the most important is competition (79) because it implies choice for customers. Competition may need to be managed to equalize competitors' chances; among grade schools, inner-city locations may need more subsidizing than suburban ones, at least initially. As others have noted before them, Osborne and Gaebler cite the successes of schools in East Harlem which compete with one another for students. Teachers rather than administrators run these schools; class sizes are kept small because students learn more quickly with more individual attention; and courses and procedures change in response to parents' suggestions. The single greatest contributor to these successes is parental involvement with their children and their children's schools (94). In any reform, constituent involvement must include the effort to learn what choices exist before intelligent ones can be made. This dictum must certainly hold true if Montana's university system is to be restructured productively.

The question of competition and choice may prove trickier than Osborne and Gaebler and the regents think. The authors apparently assume that parental choice in East Harlem depends on which schools provide the best education. But how do parents determine who provides it? Standard international test results (e.g., see the Special Report in the American Educator, Winter 1992, "US Education: The Task Before Us," 26-28) show that American students at the elementary and secondary levels trail, often by significant amounts, their Asian and European counterparts. Yet while Asian parents generally are dissatisfied with their children's performance, American parents are generally satisfied. (See, for example the review of Stevenson and Stigler's 1992 book The Learning Gap in American Educator, Summer 1993, 47; and "The Great Divide," a summary of data from the Committee for Economic Development, in American Educator, Summer 1992, 35.) As AFT national president Albert Shanker noted during this July's conference on Quality Educational Standards in Teaching in Washington, D.C., the evidence from other industrialized nations shows that secondary students are capable of much more complex tasks than American schools require of them. Evidently, American parents value the acculturating roles of schools above their educational missions.

This attitude travels with these students to college. In an On Campus article (Sept. 1993), Shanker repeats testimony (7) familiar to any college teacher in America: students, concerned with GPAs, overwhelmingly choose courses (often this means teachers) which offer high grades for everyone. In these cases market mechanisms promote watered-down education and penalize rigorous courses. Under pressure for high grades, students have learned they can exert their own pressures. William Cole, instructor in romance languages and literature at Harvard, notes in a Chronicle of Higher Education article (6 Jan 1993) that non-tenured faculty are especially susceptible to student and parental pressure for undeserved grades; they fear (often legitimately) that poor student evaluations will damage their careers (81-2). Professors know that grade inflation is a response to customer demand. In another Chronicle article (24 Feb. 1993) Edward White, professor of English at California State University-San Bernardino, warns that this demand helps fuel the burgeoning plagiarism problem in higher education (A44). Unfortunately, as Shanker says in his article (7), what college customers want are good grades without much work. Hardly any evidence shows that they want a rigorous education.

According to Osborne and Gaebler (79), competition between policy-making agencies results in turf war and inefficiency, but competition between service providers fosters lower costs and better efficiency. It would seem, then, that MSU and UM would not become policy agencies; presumably that job will remain the province of the commissioner's office. Where does the system need more competition between units? In Montana's higher education system, as elsewhere, student customers have enjoyed choice for years. The regents' plan and the public's uninformed opinion is that program duplication within the system should be eliminated, but this move seems to abolish rather than nourish competition. The regents need to show how their restructuring plan improves the competitive benefits that Montana college students now enjoy.

Osborne and Gaebler warn (80) that among public employees, competition between individuals undermines morale (one of their examples is merit pay for teachers, because it pits one against another). However, competition between teams (schools, departments) builds morale--so long as it does not threaten participants' job security (84). This idea would certainly revise the competition among academic capitalists (see Paul Trout's review of Harold Fromm's Academic Capitalism & Literary Value in the spring 1993 Montana Professor).


Decentralizing power is a concept that W. Edwards Deming started preaching in the late 1940s; the Japanese auto manufacturers applied his ideas which insist on shared power, specifically reducing management power and increasing line-workers' power. Deming's quality circles consist of teams of workers and managers who constantly test and revise procedures with the goal of revising the procedures. Assignment of individual fault is prohibited. As Osborne and Gaebler note (159), Deming's total quality management concept must be implemented totally, not piecemeal. Organizations that have ignored unpalatable parts of the plan, such as equalizing management and worker power, have floundered. Further, the authors say (253) that the effective use of "knowledge workers" such as specialists, teachers, and environmental officers depends on not treating them like robots on an industrial assembly line; they must have authority to make decisions. Yet the regents' plan (as distributed by fax to all campuses on August 19) gives no indication that faculty will decide, let alone participate in discussions about, their own workloads or program review.

Strategic planning presumably has been a function of the regents all along. Perhaps they will explain how this new plan fits with the Commission of the Nineties report from several years ago, and certainly they will offer some version of a five- or ten-year plan. If based on Osborne & Gaebler's recommendations, such a plan would support decentralization and a flattening of the power hierarchy. The authors (265) use Fox Valley Technical College as an example of pushing power into teachers' hands; over three years the school eliminated one vice president and six middle manager positions through attrition. Administrative revision came to the Chicago public school system in the late 1970s because, for the same number of students, it had 42 times more administrators than Chicago's Catholic school system (262).

Reform in Montana's university system may indeed be possible at the administrative level. This system, however, has not decentralized its power; many have pointed out the increased number of administrators in the system and in the commissioner's office over the past fifteen years. As Governor Racicot says in his Open Letter in last spring's [1993] Montana Professor, "our university system has as many administrators earning more than $50,000 as the rest of state government, which is three times larger" (2). The regents' current (August 19) document does state (3) administrative staffing "will be reviewed and recommendations prepared," but gives no guidelines and assigns no reviewers. Such haziness contrasts sharply with the academic review section (7) which says that "criteria are being proposed to campuses for review of all programs" so that "a list of programs considered for elimination will be prepared for the Regents as soon as possible." This sounds much more like the regents have a definite commitment to cut product and faculty rather than administrators. Paradoxical as it may seem, downsizing often applies solely to workers; the last retrenchment at NMC (1989) actually saw administrative numbers increase in order to help plan which faculty to eliminate.

If centralized bureaucracy and hierarchy are no longer feasible in government (II), then the regents' goal of creating "a single unified system of higher education" may be a move in the wrong direction.


For the past few years everyone has heard about outcomes assessment; endless discussions (at least in administrative meetings) revolve around the terms "accountability" aud "performance." Osborne and Gaebler identify one reason (141): technology now exists to "generate, analyze, and communicate a thousand times more information than we could just a generation ago." Most teachers can agree that their institutions generate more data (fill mailboxes with more paperwork) than they did even five years ago. Whether this data is properly analyzed is the issue. Osborne and Gaebler recognize the difficulties of assessment; presumably that is why Appendix B concerns the art (rather than science) of performance measurement. Pitfalls abound; rule-driven organizations, including most government agencies (and universities), tend to measure and analyze quantity but not quality or vice-versa. About numbers they give a special warning, citing the director of Massachusetts' Industrial Services Program: "Our Worst centers are those that are numbers-driven" (355).

And agencies often measure outputs or processes rather than outcomes, or the goals the processes were designed to meet. That is, managers often measure how well they carry out administrative processes, such as how many people they serve in what time period, and with how many workers. But they often fail to measure whether all these people they have served are somehow better off for having been processed. A local driver-examination station could conceivably process hundreds of 12-year-olds successfully, but they couldn't drive (legally anyway) on Montana roads for several more years. The authors also note that not everything that government does can be measured successfully; their example is the performance of diplomats in the State Department. Does higher education belong in this category? Richard Ferguson, president of the American College Testing Service, says (On Campus, Sept. I993) that his organization has worked 17 years on instruments to assess college outcomes. But because widespread agreement about what to assess does not exist, so far "it is not possible to define what a college degree means" (3).


Reinventing Government contains many examples of successful innovation in public agencies, and deduces much practical advice regarding implementation of changes. For example, they agree that the best way to secure AFT cooperation is to adopt a policy of no layoffs (264), though personnel may be shifted as needed; and they list (307), among the misdirected efforts of business to help education, the donating of computers and providing awards to outstanding teachers. But while Osborne & Gaebler recognize many of the dangers of applying market principles to public institutions, their assumptions about the mission of education seem at times perilously venal, at times breathlessly idealistic. If higher education assesses its outcomes by counting jobs graduates fill in areas of their academic majors (as Fox Valley Tech College does), then colleges will have to change their missions to concentrate on training students for particular careers. Since the federal Department of Labor predicts that today's graduates will switch careers five to seven times during their lives, changing missions might guarantee colleges an endless supply of (the same) students. But is getting a better job the raison d'être for higher education?

As noted, Osborne & Gaebler several times mention the necessity of informed constituent participation in revising government. Widespread participatory democracy in America would indeed revolutionize the country, and the successful changes Osborne & Gaebler report--especially in schools--have occurred because they had voter participation as well as voter support. The authors also say that crisis, often fiscal, usually spurs reforms, and Montana's university system apparently faces fiscal crisis. But to assume that crisis will engender voter participation may be a mistake. Nationally, the last publicized fiscal crisis, the $700 billion savings & loan scam, was foisted onto the public by Congress, at a cost of about $2500 to every American. Several years later, no public outcry has developed, no grass-roots reform movement.

Montana faces this same dangerous apathy. Will Montanans educate themselves about university system choices and their consequences? The danger is that they will simply accept opinions like those of the Great Falls Tribune, which says (editorial, 23 August 1993) that even though consolidating Western and UM didn't quite work, the regents have to "make sure it works this time" by "forcing greater efficiency." This is exactly the command-and-rule strategy which Osborne & Gaebler say does not work. And teachers in the system will not derive much comfort from the state's list of cost-saving measures that appeared in the Tribune 24 August 1993 (2A). Under education, the single greatest savings (estimated at $84 million) will come from increasing faculty workloads; this is speedup, in anyone's language.

Governor Racicot seems sincere in his desire to reform the university system along the lines of the best experiments that Reinventing Government presents. But Osborne & Gaebler warn that strategic planning assumes a rational environment which "never exists in government" (235), largely because politicians are concerned only with the next election. In an interview for this article, Governor Racicot said that a successful restructuring of the university system will depend on trust among the reformers; good faith collaboration among faculty, administrators, and regents; a willingness to reexamine education outcomes; and empowerment of faculty in university governance issues.

Evidently, restructuring is coming. College teachers will benefit from remembering that in the private sector, restructuring usually means laying off workers. Osborne & Gaebler mention General Motors' downsizing which eliminated 75,000 workers, and since their book went to press, IBM has downsized at least 30,000 workers, Apple 2,500, and Kodak some 11,000. Faculty had better involve themselves in this restructuring. Otherwise what they are likely to get is administrative rhetoric and pink slips.

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