Arlington, Virginia

Wednesday, October 4, 2000

Mr. Lawrence: Good evening, and welcome to The Business of Government Hour, conversations with government leaders. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and the co-chair of The PricewaterhouseCoopers' Endowment for The Business of Government. The endowment was created in 1998 to encourage discussion and research into new approaches to improving government effectiveness. Find out more about the endowment by visiting us on the web at endowment.pwcglobal.com.

The Business of Government Hour focuses on outstanding government executives who are changing the way government does business. Our special guest tonight is Tom Ferguson, director of the Bureau of Engraving and Printing. Welcome, Tom.

Mr. Ferguson: Thanks, Paul. It's a pleasure to be here.

Mr. Lawrence: Well, let's start by finding out about the Bureau of Engraving and Printing. Could you tell us about it?

Mr. Ferguson: Sure. The bureau is basically the government's security printer. We produce printed security products. The most notable and obviously the most recognized is United States currency. We also print postage stamps and other security documents such as I.D.s, invitations to the White House, and other high-quality printed material.

Mr. Lawrence: What drew you to a career in public service?

Mr. Ferguson: I'd love to have an altruistic answer to that, but when I graduated from college I took the federal service entrance exam. I did well on standardized tests. I was offered a job at the bureau. I came here with an idea to get some experience, and then move back out into the private sector after a year or two, but I found a home. It was an interesting career, a very interesting place to work; fascinating people, fascinating products, and I've been there ever since.

Mr. Lawrence: Do you think it would still be a good entry-level career for a young person now?

Mr. Ferguson: I think the government is a fascinating place to work for people out there who are looking to actually make a difference, to have a lot more authority and a lot more impact in areas than quite often in the private sector, I believe. People come into government, the pay may not be quite as good all the time, sometimes it may be better, but we have an opportunity to do things that affect everyone in the country.

We at the bureau produce a product that in fact touches everyone every day, or at least everyone wants to touch it every day, not only in the United States, but literally around the world. Our product is recognized as the world's currency. When we change that currency it affects everybody. It's a system. So it is an opportunity to have an impact, to do things, that when you're in the private sector you may not. So I strongly recommend the government. I think it's a good place to work.

Mr. Lawrence: Could you describe your career for us?

Mr. Ferguson: Certainly. I can certainly try. It's been very, very interesting. It certainly was not a field I expected to ever be in. As I tell other people, I've become an expert in a very little field. I know a lot about a very little. But I entered the government at an entry level GS-5, and they were kind enough to teach me and give me some experience in the security printing world.

I started in quality control. I moved into supervisory roles, management roles, ended up running the currency production area. I eventually got into counterfeit deterrence, which is changing the design of currency, a program that's exposed me to people around the world. I've traveled around the world. It's been fascinating. It's an area that I really have enjoyed. As I said, every time I thought about leaving, I got a new assignment, something new to do, some new challenge, so that it's been an ever-growing career.

Mr. Lawrence: What challenge has provided you the best opportunities to develop as a leader?

Mr. Ferguson: Several different types of developments. I think the first one, and probably the most eye opening, was the first time I was a supervisor. When I was just an employee or was an employee -- I shouldn't say just -- but I thought I knew a lot more than I did when I became the supervisor and had to make all those decisions, which I thought were easy. But supervising people, trying to get others to do work is much different than actually doing the work. Breaking from doing it yourself because you think you know it better to encouraging, inspiring, providing the resources to others to get it done was a lot to learn and helped me a great deal.

I was fortunate to do that early in my career and a low enough level that the mistakes that I made weren't too glaring and other people corrected them. I do think it's one of the things as we've compressed organizations that's a concern, that quite often people don't get that experience of supervising and managing until they're fairly high in the organization because there's not as many levels. Those mistakes, which are inevitable, are much more glaring. They're harder to cover up. They're harder to be corrected before they become known outside the organization. So I think sometimes we are not providing that opportunity to grow and learn.

The other thing that's been extremely helpful to me in the area of currency design and counterfeit deterrence is my involvement outside the bureau with Congress, with Department of Treasury officials, Federal Reserve, Secret Service, and international. It has allowed me to focus outside the organization, as opposed to just inside and really has helped my career, helped my perspective, and has been a lot of fun.

Mr. Lawrence: When you look back at your 26 years of government service, what qualities have you observed as key characteristics of good leadership?

Mr. Ferguson: I think two things, which are paramount. One is a vision. One is for the leader to be able to provide the employees, the customers, the shareholders in the organization with an image of where they want to go: what is the long-term goal; what will we look like when we get there; what will it look like when we succeed.

Once you have a common vision, it's easier for people to understand why iterative steps have to be taken. It's much more difficult to see the whole picture internally when you're just seeing little pieces if you don't know the ultimate goal. So I think establishing a vision is the biggest thing.

The other very, very important thing is communications skills, being able to get that vision out, being able to talk about it, write about it, express it in ways that the various shareholders, stakeholders, can understand, can clearly se that picture.

Mr. Lawrence: Have these qualities changed over time?

Mr. Ferguson: They may have. They probably haven't. Certainly my perception of them has changed as I've gone from one end of the spectrum to the other. Certainly what I've seen that has probably changed the most is in our world now is the need to be much more external, much more externally focused. My view, I think, is correct of the bureau prior to this 20 years ago, it was able to be fairly internally focused. Yes, we produced a product, but we pretty much controlled all of that, and we didn't have to really focus externally. We didn't have as many issues outside. Now everything is so integrated. Changing something in currency affects so many different people, you have to be able to integrate all of those into the system.

You have to be able to identify the issues beforehand, be able to interact with those people, get their support, build a team, build a network. So I think that what's really changed, and I think this is true with other organizations in the government, not just ours, is that it is more outwardly focused than it used to be.

Mr. Lawrence: How about future good leaders and managers? What will you think are the top qualities that they will have?

Mr. Ferguson: Well, I guess the vision issue remains as the most for me. I think there is a huge difference as I've kind of experienced it between being a manager and being a leader. The managers are managing to get something done that is part of that. The leader has to be the one to set the agenda, has to be creating that vision to everyone knows where to go and the people can manage to, the workers can work to, and everyone knows when they've succeeded.

I think that's going to remain. Certainly the leaders and the managers and the government executives of the future are going to be operating in an information technology world, which is probably beyond anything that we can comprehend. When I started I had an adding machine and a telephone, and if I wanted to multiply ahead, I held the plus key down and counted how many times it clicked.

Ten years later there were PCs, but no one had their own. The computers were held by the information people, and they might let you come over and play with one, but you couldn't have one because then you would have your own database and your own information. Now, everyone has multiple computers. You have your desktop; you may have your laptop. So it's going to be something where they're going to have to operate in some way more than we even can think of and be faster, quicker, smarter, better.

Mr. Lawrence: It's time for a break. We'll be right back with more of The Business of Government Hour. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and tonight's conversation is with Tom Ferguson, director of the Bureau of Engraving and Printing.

This year the bureau has revamped paper money. What was the process for redesigning and issuing new bills?

Mr. Ferguson: Well, Paul, actually we started the most notable change to currency in 1996 with the introduction of the $100 note, and we've just completed it down through the five and 10 which were introduced in May this year. That's actually the first major change or noticeable change to the currency in over 70 years. It's something that the United States does not do lightly. It's something that the United States does only when there's a real need to change. We are used to our currency, we like our currency, and quite frankly, we're very conservative in our currency designs. It represents stability, it represents our economy, and it's something that we take a great deal of pride in.

But the decision to make the change was based on the growing threat of technology, color copiers, computer printers and scanners, which can reproduce pretty pictures of currency and, quite frankly, are now used more and more to counterfeit currency, not only in the United States, but around the world. So in order to combat that, to stay ahead of the technology, a decision was made in the early-'90s to change the currency. We set up a task force, involved the Federal Reserve, the Secret Service, and the Bureau of Engraving and Printing, under the direction of the Department of the Treasury to determine what features should be added to make the currency harder to counterfeit.

It was really a fascinating study. It involved several different tracks. One was a contract we had with the National Academy of Sciences that had a blue ribbon panel. They reviewed all the potential features and recommended a certain menu. In addition to that, we advertised in the "Commerce Business Daily," and received about 125 submissions of security features and techniques that we evaluated.

We ended up buying about 25 of those as far as small quantities, put in the production, tested adversarial analysis, and evaluated and determined those that would be the most effective, most cost effective, durable, they have to last as long as the note lasts, and that we could manufacture billions of times a year. We ended up selecting the package that you see on the notes hopefully that you have in your pocket.

They incorporate: a watermark that's embedded in the paper; a security thread, which is a strip that says "USA" and the denomination embedded in the paper; color-shifting ink down in the lower right-hand corner that changes from green to black; the large portrait, which is very high quality, hard to reproduce; and several machine-readable features that are used by vending machines and also by bank machines to authenticate the currency.

Mr. Lawrence: What's been the public reaction to the new bills?

Mr. Ferguson: Well, as I said, we are hesitant to change our currency. People have grown up their entire lives, you and I spent our entire lives with that old design, and suddenly overnight we changed it. Any change was going to cause people to react. The common reaction was it looks like Monopoly money. I often carry a Monopoly 20 in my pocket to demonstrate to people it looks absolutely nothing like Monopoly money. Monopoly money is small, all one color, and no picture of a person on it. But it is different, and I think that was the comment.

I think the most noticeable comments are it looks different, it looks fake because it in fact is different, and it's that subliminal acceptance of our currency. Most people don't know whose picture is on a $10 bill. It's the same person who's been on there every day of our lives. If it was a different person, you would notice, but you don't have to focus on it. It's always been the same. You subliminally know whether or not it looks right.

Suddenly, we changed that subliminal picture, so people had to get used to it. That's a long way to say a lot of people didn't like it. Younger people tended to like it. They thought it was modern, it was changed. They were a little bit more ready for a change. Internationally, people like it. They see their currencies change. In fact, they still think ours is a little dull. It's all one color, all one size.

Mr. Lawrence: How much of a threat is counterfeiting, and how does the bureau combat it?

Mr. Ferguson: Counterfeiting is an economic problem. Last year there was approximately $40 million counterfeit currency passed on the American public, and that's out of about $560 billion of currency in circulation. Most of us -- including me -- have never received a counterfeit note in a normal transaction and lost any money on it. So, for most people, it's not a problem.

The concern is to stay ahead of that, to keep it that way. You can't afford to let counterfeiting become such a large issue that people lose confidence in their currency. That subliminal acceptance I was talking about, that face and confidence in your currency is essential to the smooth transaction of business. We readily accept a piece of paper in exchange for goods or services every day and don't think anything of it. Once people start to question that and to be concerned about that, then the system starts to balk and not work smoothly. So we need to stay ahead of it, to be thinking of techniques to combat counterfeiting prior to their becoming an economic issue.

So we combat counterfeiting literally every day by looking at ways we can redesign the currency, add security features, make it easy for the general public to recognize and authenticate their currency; make it easier for vending machines to recognize and authenticate the currency; make it easier for bank machines to recognize and authenticate the currency; and make it easier for law-enforcement people to be able to investigate crime, be able to detect counterfeit, be able to find the counterfeiter, arrest them, and hopefully put them in jail.

Mr. Lawrence: Before you became director of the bureau, you chaired the task force in 1996 that recommended the different security measures. I'm curious, how has counterfeit deterrence technology evolved in the last 4 years?

Mr. Ferguson: Well, it's evolved considerably in areas that we don't necessarily even see. What's really changed a lot is for example when I started in the business even prior to that, back in the '70s and '80s, currency was primarily used person to person. You went to the cashier in the bank and cashed a check at the teller window, and you received cash, and you spent it at a cash register and gave it to the cashier; they looked at it and put it in the drawer.

More and more now people get their currency from an ATM. They spend it at a vending machine or other types of machines, gaming machines, fare card machines. So it's machine to person, person to machine, and I guess some day machine to machine. So there are a lot of things that have to be built into those notes that allow those machines to authenticate and denominate.

In addition to that, in this technological world of computers and digital information, now we're looking at digital ways of combating counterfeiting, building codes in the counterfeit so that computers can recognize and not reproduce. So it's moving even a simple document like current notes into the computer age.

Mr. Lawrence: It's time for a break. We'll be right back with more of The Business of Government Hour. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and tonight's conversation is with Tom Ferguson, director of the Bureau of Engraving and Printing.

Tom, you've been there 26 years. How has the organization and the business changed during this time?

Mr. Ferguson: Well, the entire security printing business has changed greatly. The number and variety of products that we produce has been greatly reduced. When I started we printed all the Treasury notes, bonds, and bills that were issued. We printed the red strip stamps that used to go on liquor bottles. Some of us still remember those.

Mr. Lawrence: People told me of them.

Mr. Ferguson: Yes. They're no longer used. Treasury notes, bonds, and bills now are book entry. You go in and you buy it and you get a receipt that you've bought one and there's an entry on the computer with your name saying you've lent the government X number of dollars. When I started, we printed the very fancy engraved certificates, similar to stock certificates. Stock certificates have also gone the way of the horse and carriage, so to speak. So a lot of the products that we used to produce no longer are done.

Now we concentrate more on the security value of currency as opposed to just the volume. We have many more features incorporated in our notes. The notes are all different. The materials are different. The requirements for them to be machine readable and detectable require us to maintain them within very strict specification that we get right most of the time, but occasionally we don't; partnering with the Federal Reserve much more so that the notes will work efficiently in their system. They've become very highly automated and mechanized. They have to rely on machines to sort, authenticate, determine note denomination and whether it's fit or not to go back out, and they require us to maintain very close requirements and specifications on those features.

So we no longer just look at the notes. We have to look at them with machines. We have to verify all the different characteristics. So it's a little different, in fact, a lot different, as far as that end of the business. Certainly, as being part of the government, much more interaction with other agencies, much more an integrated system.

Mr. Lawrence: One of the challenges for some government organizations is the lack of a tangible product. The bureau does have an output that's more easily recognizable. Can you comment on this difference and how having a tangible product or tangible products has impacted the management of the bureau?

Mr. Ferguson: Certainly. It's something that we think is a great advantage to us. Certainly, in the areas of being able to measure productivity, to being able to control costs, being able to determine our staffing levels, having a product and being able to measure the output of that product and the quality of that product makes management probably much easier. That's certainly my experience in that role.

The other thing that makes us different is that we sell that product. We're not appropriated. We don't receive any appropriations from Congress. We receive all of us funds on what's called an industrial revolving fund. So we sell currency. We sell postage stamps. All the funds that we get that cover our salaries, direct material, indirect materials, direct labor, indirect labor, general and administrative costs, building; all of our capital equipment, capital investment in equipment in the future; all of that is covered by selling a product. So very much like a private-sector firm we have to cover all our costs, and that is a very good control over us. If we don't sell a product, if we don't manufacture a product, we don't exist.

Mr. Lawrence: You said that having a tangible output made management easier. I wonder if you could describe how that is.

Mr. Ferguson: Well, it allows us to be able to establish goals. We use a standard costing system, so we know every day of every week each shift, we run three shifts a day, what we should be manufacturing; what our output should be on each step through. We can evaluate if we're doing well, if we're not doing well very quickly. At the end of the day if you haven't moved a pile of material from column A to column B on your spreadsheet you have a pretty good idea that there's something wrong in the system where you need to be getting in there.

So it provides easy-to-recognize measures. Everyone understands those. We meet to go over those quite often, and everybody has a good picture in their mind about what's going to be happening and whether or not they've accomplished it. It's one of the issues about the higher you go in management, sometimes you get further away from those easy to measure things, and it's harder at the end of every day to know whether or not you've had a good day or not. It was nice in the early days when you moved the big pile from one side of the desk to the other and you knew you were doing better than everybody else or worse. But when you get into management sometimes that is one of the frustrating points is to have that self-measure, but organizationally we have very good measures.

Mr. Lawrence: The House Banking and Financial Services Subcommittee on Domestic and International Monetary Policy recently approved a measure that will allow the bureau to print other countries' currencies. I wonder if you could tell us more about that.

Mr. Ferguson: Certainly, Paul. Currently the bureau is chartered to produce products for federal agencies, so we can print for the Federal Reserve or the Postal Service or the Department of Interior, or any of those. We can't print for state, local, or foreign governments, and we've asked to be able to do that.

The primary reason for that is as we're looking to change currency more in the future, to add new techniques, new manufacturing processes, it's very difficult to go from zero to literally 100 right away, to be able to go from not running a particular type of equipment at all to running it three shifts a day 5 days a week in two facilities; we have a facility in Washington, and in Fort Worth, Texas.

What we would like to be able to do is to be able to ramp up these techniques, be able to train our personnel, be able to bring on these new technologies, test them, evaluate them, develop our people, while we're manufacturing some products with the rigor of having to produce them to specification, meeting customer requirements and doing them at an acceptable cost at acceptable productive rates. In order to do that, we need some customers of sizes, which are a lot different than the United States; and, quite frankly, we don't like the issue of putting out some of these new things -- the first time we do it -- billions of times on U.S. currency in a system that's worldwide.

So being able to sell some of that work to other people and provide them with, again, a very good product at a very good price competitively, we think would be good for us, good for the American public, and good for our customers.

Mr. Lawrence: Let me ask you about just managing large numbers of things. The bureau produces 9 billion federal reserve notes and 20 billion postage stamps. How do you assure efficiency with these large numbers?

Mr. Ferguson: We would say it's easier with the bigger numbers. As with most manufacturers, volume is our friend. The bigger the volume, the more you spread your fixed costs, so that it lowers unit cost. Having more volume is something that makes us look like geniuses; having lower volume tends to make us look less like geniuses. Having volume is just simply setting up the manufacturing system, choosing efficient systems, choosing good equipment, training the people, and staffing them and running them.

We run, as I say, three shifts a day 24 hours a day. We overlap so that we don't have to shut the equipment down. Those are things that are actually very good for us. It takes advantage of using very expensive capital equipment. It's better to run it in our view three shifts continuously maximizing the output out of that high expense equipment and perhaps maximizing our labor force that way as far as you pay a little bit more for differentials for the off shifts. But it's cheaper than in fact having three times the floor space for three times the capital equipment in investment. So it sounds like a lot, and it is a lot, but it is something that we're used to, and until you mentioned it I didn't think of it as an issue.

Mr. Lawrence: How has technology improved the printing process?

Mr. Ferguson: Well, what technology has done in the printing process we use is basically taking the same process that we used 100 years ago and doing it much faster. The printing process itself, intaglio printing, uses an engraved plate. Ink is placed on it, wiped off, ink remains on the lines, push the paper in the lines and you get that three-dimensional print that you would find on currency and like a high-quality invitation or business card.

Taking that technology from being four notes at a time on a hand press to 32 notes at a time, 10,000 sheets an hour on a very expensive capital piece of equipment, doing that, and what's really changed is the materials and the support in order to be to do that, have it dry, have it meet all the environmental requirements which have really been -- although we didn't change currency for 70 years, it seemed we were constantly having to change inks, materials paper, in order to have them comply with the environmental regulations; we have a very clean product and a very safe product.

Mr. Lawrence: You collaborate with the Secret Service to combat counterfeiting. What are the keys to effective collaboration between the two organizations? Mr. Ferguson: Well, it's actually I think of it more as a triumvirate that's us, the Secret Service, and the Federal Reserve. We work very, very closely together. In order to have a good counterfeit deference program you need a good design, good law enforcement, and good public education.

Mr. Lawrence: That's a good point to stop on as we go to a break. We'll be back in just a minute with more of The Business of Government Hour. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and tonight's conversation is with Tom Ferguson, director of the Bureau of Engraving and Printing.

Tom, one of the main challenges in the minds of managers and leaders in both the public and private sector is the need to hire and retain high-performing employees. How does the bureau attract and retain these types of people?

MR. Ferguson: Well, the bureau has kind of two sides in this issue. In both sides, both our direct labor and our support labor. Certainly the goal of hiring the best people, training them well, allowing them to operate, giving them the resources they need is important.

On our direct labor side in the actual printing side of our business, we tend to have people come into the bureau and stay their careers. They are jobs that are extremely specialized. We train them in a specific craft, and that craft is not necessarily used a lot outside. A good example would be portrait engraver. It's a 10-year apprenticeship. It's a person who has artistic values already, but we're going to teach to be able to engrave that image of Ben Franklin line for line with a sharp piece of steel cutting it into a soft piece of steel. Those kinds of people are going to be probably staying at the bureau because it's the major employer of that craft.

On the support area, especially in the areas of engineering, accounting, and IT, we, like everyone else, are going to have to compete, try and make our jobs more attractive, try and make our environment more attractive in order to recruit and retain the highest-quality people. It's very difficult. It's a challenge in all of government. You, on the private-sector side, sometimes have a little bit more latitude, at least we think you do. You probably think we do. But we probably are being whipsawed by the same employees back and forth.

But it is a challenge. It's something that I think is going to be an area that government as a whole is going to have to look at, look at how it's going to be competitive, and in the end make a decision: are we in fact going to be able to compete in these areas or are we going to have to look at buying some of these services, and what is in the end the best for the public?

Mr. Lawrence: Technology is constantly changing and enabling the bureau to do more in different ways. What new technological advances are on the horizon?

Mr. Ferguson: So many. It's incredible -- the explosion in technology. In the area of pre-press, which is the design and the creation of the images, the use of computers where we used to draw them literally with pen and pencil and paint and then engrave. We like to maintain the craftsmanship of the engraving, so we still have that Old World artisanship, but marry into that the technologies of the computer so we get the best of both worlds. So that will be a big change in that area.

The speed of our equipment makes it so we can produce more with less. Our ability to examine and inspect products, we use computers in optics, has been a major change in the ability to check all those machine characteristics of the notes. That's going to be a big area. On the information technology side, our ability to communicate with the world -- it's actually a fascinating time to be in this business.

Mr. Lawrence: I understand you actually use the Internet to sell directly to the public. Could you tell us about that?

Mr. Ferguson: Sure, Paul. Yes, you can go to moneyfactory.com, and it is the bureau's Web site. Part of what we do is we support the numismatic field. That's money collecting. Most people think of it as coin collecting, but it does involve currency notes also. We sell sheets of currency. We sell sets of currency. We sell a number of different products that allow people to learn about their currency.

The money that we make from that venture supports our public education campaign. It supports the public tour at the Bureau of Engraving and Printing in Washington, which is open free to the public. It's the third most popular tour in Washington. And we will be adding in the next few years a public tour at our Fort Worth, Texas facility also.

Mr. Lawrence: You mentioned earlier and we talked about the bureau printing postage stamps, and I think the move is towards electronic indicia, and I'm curious if you worry that one day you won't be printing stamps.

Mr. Ferguson: Well, certainly we worry about printing everything. As a manufacturer, we're always jealously guarding our products. Certainly in the world of postage stamps, we've seen some changes. I would note that in the postage stamp business -- unlike currency -- we do compete directly with the private sector. Approximately half of United States postage stamps are printed outside by private-sector firms. So the Postal Service rightly looks at who can provide them with the best product at the best cost, and they're out deciding that on a stamp-by-stamp basis, on a year-by-year contract basis. So we compete for that work, and we're very proud of the stamps that we do.

We do see that there are moves into e-mail electronic funds transfers that would reduce the amount of stamps, and potentially also the amount of currency. We watch that very carefully. We've seen the introduction of checks at one time, credit cards, debit cards, smart cards, e-cash, as moving in and taking their place in the currency side, currency still remaining king, and we see that also on the stamp side. So as I mentioned, one of the big changes in our business is the amount of products that are printed. But I would guess the best defense I have for our products are that just like in the paperless office, the advent of faxes and e-mail actually in the end generates more paper.

Mr. Lawrence: What additional changes and challenges do you foresee in the future at the bureau? In particular, do you think we'll change our currency more frequently?

Mr. Ferguson: Actually, two very separate questions. Second one first, yes. We went 70 years without changing our currency, and we have predicted that we'll change it every 7 to 10 years. Whether or not that happens is going to be determined by the level of change in technology. But we can't stay static. We can't wait until there is a problem. We have to stay in front of it. It takes a number of years to design a currency. It takes a number of years after you introduce it in order to roll over the existing stocks. There are $560 billion worth of currency in circulation. It takes a number of years to get that back and replaced. So you need to be several years ahead of a problem with a change.

We would expect that potentially our goal now is to have the next design ready to be started to be implemented as early as 2003 if the policy makers decide that. That's not our decision. We'll have it on the shelf for when they want to introduce it from any time after 2003.

As far as the bureau's concern on other changes, I think that we're a very highly unionized work force; we have 19 separate bargaining units, and our partnership with them and our relationship with them has improved over the years. I think that's going to continue to improve. I think we have to partner with our work force, we have to partner with our customers, and we have to actually partner with the public in order to ensure this system continues to work.

Mr. Lawrence: How about advice for people who will one day be leaders of large organizations in government in terms of what they should be doing now and thinking about in their careers?

Mr. Ferguson: Well, first, they shouldn't be too anxious to move into my job. I need it for a few more years. But other than that, I think that to the degree that they can focus externally as well as internally. It's sometimes easy to get too narrow in your vision. You focus on your specific position and you job, which is very good, but you need to be conscious of the environment, looking at where it's going. There are some clues always as to how things are going to be evolving, and it's the person who is kind of ready for those evolutions that is going to be recognized. It's the people who have great communications skills. Knowing something is one thing. Being able to explain it is another. So working on those, I always tell people and I try to tell my own children, they don't always listen, but that's the kind of things that they should be looking at, being able to communicate, being able to set the vision, and explain it.

Mr. Lawrence: Thanks, Tom, for spending so much time this evening. I can't believe we're out of time. I've enjoyed our conversation very much.

Mr. Ferguson: I have also, Paul. It's been fun.

Mr. Lawrence: This has been The Business of Government Hour, conversations with government leaders. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and the co-chair of The PricewaterhouseCoopers' Endowment for The Business of Government. To learn more about the endowment, visit is on the web at endowment.pwcglobal.com.

See you next week.