The Evolving Role of CXOs in the Federal Government

Co-Author:  Dan Chenok, Executive Director, IBM Center for The Business of Government

The CFO Act of 1990 authorized Chief Financial Officers as the first statutory mission support function in government.  These types of specialized leadership roles have grown over time, along with calls for greater authority for their functions.  Today, the proliferation of statutory and non-statutory C-Suite mission support functions has created a complex web of government reformers. Can or should this web be unraveled?  What might the future hold?

Part of the challenge involves naming the role, variously referred to as back office functions, administrative support, mission support, the C-Suite, or functional offices. “CXO” reflects a commonly used term for this level of leader – in this post, we use both CXO and mission support leader.

Did you know that a quarter of the federal workforce is classified as mission support? Learn more! - John Kamensky describes.

These functions matter for the success of any effective agency or program.  They are often described as the grease that makes the wheels of government turn, and represent about a quarter of the federal workforce. Many of these functions have influenced government reform stories over the past several decades– which is why we saved this story for the end of our Business of Government Stories series!

Background.  A landmark 1983 Report by the National Academy of Public Administration, Revitalizing Federal Management:  Managers and Their Overburdened Systems, describes dysfunctions in various mission support functions in federal agencies.  Its authors, legendary federal executives Dwight Ink and Charles Bingham, called for more effective and professional mission-delivery leaders with flexibility from administrative requirements, who could delegate discretion over administrative process to functional experts.

Ultimately Congress took action, but not necessarily as envisioned by Ink and Bingham. Following persistent management failures and a lack of clear leadership in mission support functions, Congress has imposed its own approach on management of the executive branch over the past three decades by centralizing responsibilities for mission support functions within departments via a series of laws that raised their profile, formalized leadership roles and defined their authorities.  In sum, legislation has reflected a gradual philosophical shift from “letting managers manage” to “making managers manage.”

Initially, formalizing these roles mirrored similar trends in the private sector, by creating chief financial officers, followed by chief information officers, chief acquisition officers, and chief human capital officers. These “chiefs” have commonly been referred to the as comprising the “C-Suite,” a common term in the private sector. Each major agency has one of these chiefs, but the reporting structure for these chiefs varies across agencies.  Some report directly to the agency head or deputy, while others report to a chief operating officer-type role that includes Undersecretaries for Management or Assistant Secretaries of Administration.

Over the past decade, Congress continued to designate more agency-level chiefs.  New laws formalized the role of chief operating officers and performance improvement officers, chief data officers, program management improvement officers, and chief evaluation officers.  In addition, OMB and sometimes agencies themselves designate other chiefs: chief risk officers, chief learning officers, chief information security officers, chief innovation officers, chief technology officers, and more.

These various “chiefs” come from different professional disciplines, the distinctiveness of which has been reinforced by the creation of cross-agency “chief” councils, such as the Chief Financial Officers Council, Chief Information Officers’ Council, Chief Acquisition Officers’ Council, and Chief Human Capital Officers’ Council –- councils authorized by statute -- are generally chaired by the Deputy Director for Management at the Office of Management and Budget (OMB).  These statutory councils -- and other councils of Chiefs not defined by law -- often spearhead governmentwide initiatives, such as the CIO Council’s development of an inventory of all data centers, which enabled CIOs to commit to greater efficiencies by cutting the number of data centers in half.  The councils also share best practices across agency boundaries.

In addition, the President’s Management Council (PMC), which as discussed below serves as a cross-agency executive management committee (comprised of agency Deputy Secretaries and other Chief Operating Officers), provides a senior forum for discussing high-level and cross-cutting mission support issues. The PMC’s depth of involvement with the other CXO Councils has varied over the years, in large part based on the extent of the President’s interest in agency management issues.

The trend over the past 30 years to designate “chiefs” or “CXOs” of various mission support functions has led to more professionalization of mission support functions and a focal point for accountability for specific mission support activities.  However, these chiefs often serve multiple masters, making the role difficult to navigate and contributing to divergent “reform” efforts.

Mission Support Chiefs Serve Multiple Roles. Mission support chiefs reflect different professional disciplines that have their own communities and ways of defining success.  While they generally report to the head of their agencies.  But in reality, they wear at least three different hats:

• Providing services to internal agency customers (such as hiring or installing computers or providing office space by providing services directly vs. shared services vs. contracting out),
• Ensuring compliance with governmentwide requirements (such as merit principles, or capital investment guidelines by collecting and reporting on required submissions), and
• Providing strategic advice (such as strategic workforce planning or financial risk management, and “running interference” with OMB, the General Services Administration (GSA), or the Office of Personnel Management (OPM).

Depending which hat they wear, they may have different customers or stakeholders.  For example, if the chief wears a “customer service” hat, their customer may be line managers and employees.  If the chief wears a “compliance” hat, their customer may be OMB or OPM.  And if the chief wears an “advisor” hat, their customer may be the agency head.  These hats are not mutually exclusive, and chiefs often face the challenge of balancing the differences.

The roles of the various mission support chiefs have become clearer over time, and their structure has become more organized across agencies.  In fact, GSA now leads a common support office for all the cross-agency CXO councils, and sometimes serves as a convener across the different councils around specific issues.

Mission Support Chiefs Face Competing Objectives. Over time, the newly enfranchised chiefs became perceived by some mission delivery counterparts as self-serving.  For example, they viewed the CFO priority around a cross-governmental goal of clean audited financial statements as less important than providing timely financial information to agency program managers.  And they viewed various chiefs as more focused on governmentwide goals, such as the 25-point IT modernization plan during the Obama years or “shrink the footprint” plan for agency real estate executives, than on agency objectives.

This tension between serving different masters has been exacerbated by the perception that different chiefs within each agency created their own “fiefdoms” and separate stovepipes, making it more difficult for mission delivery components of their agencies to coordinate across mission support services. For example, a new mission requirement around COVID response might require the coordinated efforts of contracting, hiring, and technology to stand up a contact-and-tracing initiative.

Mission-oriented line managers in agencies have similar perspectives.   Mission managers deliver services to the public, such as air traffic control, environmental cleanup, export assistance, disability benefits, or immigration enforcement at the border.  These mission managers do rely on mission support functions.  However, one former mission manager recently noted that in his experience, “The CXO community is the biggest obstacle to success.”

In a series of discussion sessions organized by the National Academy of Public Administration on the role of the CXO community in 2015, several mission delivery managers said that they perceive mission support functions as trying to “punish people and push them around” when CXOs serve in their role as ensuring compliance with governmentwide requirements, or they see mission support as “turf conscious, not solution-oriented, and offering poor customer service,” or even “lacking commitment to mission or a collaborative ethos.”

Can the Chiefs Better Integrate Their Services to Benefit Mission Leaders?  A 2009 study from the National Academy of Public Administration recommended creating cross-bureau governance structures within the Department of Energy to coordinate mission-support activities, such as an undersecretary for management, an operations management council, and a mission-support council.  Similarly, the designation of another chief – chief operating officer (or undersecretary for management) – is a solution favored by the Government Accountability Office.  This role has now been enshrined in the GPRA Modernization Act of 2010, and serves as a nexus between policy and management.

But new structures and roles alone do not change tendencies to act independently.  Chiefs have to connect with one another through formal and informal means, and balance their “three hat” roles. In that context, an operations management council can address cross-functional internal services and compliance functions. For example, mission support executives in the Department of Veteran Affairs hold weekly meetings around common initiatives and address strategic questions such as “do we have the right skills sets?” and “will this training lead to changes in mission performance?”

Likewise, a mission-support council can focus attention on the needs of key mission initiatives.  For example, during the Obama administration, the Department of Housing and Urban Development regularly convened a series of meetings around its priority goals and strategic objectives every quarter.  These forums, often led by the secretary or deputy secretary, regularly focus leadership attention on implementation – such as to enable place-based programs in communities.

Implications of Trend to Expand Use of Mission Support Functions. In sum, the trend towards greater formalization of various mission support functions has both pros and cons:

Pros of trend:

• Greater professionalization, certification
• Seat at the table as a strategic advisor
• Governmentwide learning networks
• Best practices and rapid diffusion of innovations
• Joint action
• Greater efficiency (e.g., via use of shared services)

Cons of trend:

• Perception by mission managers of more burden than benefit – creating monopolies that are unresponsive to mission managers’ priorities
• Removing/fragmenting the authority of mission managers and their accountability
• Stove-piped and uncoordinated actions between CXOs and their independent priorities
• Perceived as process- and compliance-focused, not mission-focused.

Various reform proposals – both in Congress and in the executive branch – would address these tensions, but open questions remain about which direction makes the most sense.  In addition, current proposals focus on individual functions, not how they work as an integrated whole.  These issues are addressed in a subsequent blog post.