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Chapter Summary

Osborne, David, and Ted Gaebler. 1992. Reinventing Government: How the Entrepreneurial Spirit Is Transforming the Public Sector. Reading, MA: Addison-Wesley.

Chapter 4: Mission-Driven Government: Transforming Rule-Driven Organizations

The authors in this chapter argue that public organizations should be driven by their mission, not by their rules and their budgets. Rules on operations, budgets, personnel, procurement, and accounting are embedded in rule-driven systems, resulting in wasted time and inefficiency in government. On the other hand, mission-driven organizations free their employees to pursue the organization's mission, resulting in systems that are more efficient, effective, innovative, and flexible.

To create mission-driven governments, the authors argue that the dead weight of accumulated rules, regulations, and obsolete activities should be scraped off. Governments have so far tried some methods, including sunset laws, review commissions, and zero-based budgets. Two major areas, budgeting and personnel, are especially important to overhaul. Budgeting procedures should be changed to give employees an incentive to save money, free up resources to test new ideas, give managers the autonomy they need to respond to changing circumstances, create a predictable environment. Simplifying the budget process would save millions of dollars on auditors and budget officers and free legislators to focus on the important issues.

Personnel systems should also be changed. In current systems, pay and status are based on longevity, not performance. Promotions are controlled by personnel department, not managers, and ineffective employees cannot be fired while capable ones may be subject to unfair layoffs. Personnel systems should be restructured to offer broad job classifications and pay bands, market-rate salaries, performance-based pay, promotions and layoffs by performance rather than seniority, hiring systems that allow managers to recruit and hire the most qualified people, and a streamlined appeals process for employees who are fired.

Government agencies should create mission statements, and then create a culture around the mission. In order to achieve this, the authors argue government should overcome the "We've always done it this way" mindset and the desire by some elected officials to retain control.