per these three men were brought to bear upon the great issues of effective organization for the Federal Government. Their recognition of the need for a dynamic role for the U.S. Bureau of the Budget, in administrative management as well as in other fields, was adopted, and is a landmark of progress to this day. Their recommendations for the strengthening of the President's immediate staff, and for the Executive Office of the President, have helped to give the President better tools with which to carry out his constitutional responsibilities. Their proposals for more positive management of the Federal sonnel system were not adopted in full, and might well be reexamined in the light of present needs in this field. CED's policy statement on "Improving Executive Management in the Federal Government," issued in July 1964, recommended major changes concerning upper level, managerial personnel. Improvements have been made since then, but much more remains to be done. An Office of Executive Personnel, in the Executive Office of the President, was proposed, with an Advisory Personnel Council. Changes in departmental and agency practices were urged, to apply the best modern approaches to recruitment, development, and utilization of executive talent. No structural organization will suffice without qualified managerial and other personnel to staff it. The Brownlow-Gulick-Merriam report recommended a continuing emphasis on national resource planning. This concept was rejected by the Congress at that time, but here-again-is a field deserving new attention. I may say that American business enterprise has learned to make good use of the concept of forward planning, both in recognition of broad trends of the economy and in terms of internal organization and techniques. PRIVATE CITIZENS SHOULD SERVE ON COMMISSION The point is that these three men had, in addition to the qualities of breadth and vision, a thorough knowledge and long experience with the workings of our National Government. At the same time, they were able as private citizens without current affiliation with any agency or any segment of the Government to form objective judgments. They could concern themselves solely with the public interest, letting the chips fall where they might. The two Hoover Commissions performed a very useful service, but there is a serious question in informed circles whether they might not have had even greater value without all of the congressional and administrative ties binding some of the members. A Cabinet member serving on such a commission could hardly ignore his departmental interests. A Member of the House or Senate serving on an Appropriations Subcommittee or on a committee concerned with authorizations for a particular function of Government will find it difficult to be completely objective. Moreover, demands upon members with key leadership roles are already quite burdensome. These are considerations you may wish to weigh in formulating the plan for a new commission. Responsibility for appointment of the members of the new Commission is important, also. Since full Presidential support will be required to execute significant administrative changes, it may be argued that the Commission should be appointed by the President. On the other hand, the concern of Congress in these matters is clear, and it might be wise to require Presidential consulation with leaders of both parties in both Houses before announcing his appointments. COMMISSION MEMBERSHIP SHOULD BE LIMITED The number of members of the Commission should be held to a bare minimum, on the ground that the strongest and most able men would be more readily attracted to the assignment under that condition. Three members or five might be best. If really effective work is to be done, the absolute maxmium would be seven. All my experience confirms this observation. I might say, Senator, since I left the Government I have served on several commissions in New York State, as well as in Washington. In 1960, the Governor appointed a commission of three to study higher education in New York State. He appointed Mr. Gardner, who was then the head of the Carnegie Corp., and Mr. Heald, of the Ford Foundation, and myself. We had very little difficulty, the three of us, agreeing what ought to be done. And we came out with a very strong, definite, concrete statement. As a result, about three-fourths of the recommendations have been carried out. If we had had a large commission with all the various groups represented, we would have had to compromise, and not been hard hitting in our recommendations. The Governor also appointed me a member of a committee on hospital costs. He asked me if I would be chairman. I asked him how many would be on the committee, and he said, "fifteen." I said, I do not want to serve on a committee that big, if you get it down to seven, I will serve," and we got it down. We did not have all the various groups, so no one had an ax to grind. Hence, we did a much better job because we did not have to compromise so much. That is why I feel that a maximum of seven members should be on your commission. A purely advisory commission-such as the Social Secruity Advisory Councils-might have larger membership, but not when it has responsibility for making major recommendations. And it should consist of people who are not tied up with anyone. It is going to be hard to get that type of person, but they are available if you go after them. TOP STAFF PERSONNEL SHOULD BE AVAILABLE There is one last point that seems to me to be crucial. Such a commission will require full access to the best staff resources available in this country. The commission should be able to command the services of the finest authorities from American enterprise, the university world, and the fraternity of management consultants--as well as from governments at all levels. The commission should be able to contract for services, as well as to employ staff for special assignments. This implies the need for freedom on the part of the commission to make such financial commitments as may be required, without inhibition by statutory restrictions. Another illustration from my own experience. I was staff director of the House of Representatives Post-War Planning Committee back in 1944. They gave me what they said was a large appropriation at that time for a special commission, and said I could come back later on if I needed more money. But we were able to operate 3 years and turn back some of the original money for the simple reason we received all sorts of free help. We got economists from the Federal Reserve Board, and several other agencies. There were also a lot of people available on a part-time basis who were well informed. Some university people came in on this basis, from time to time, and they gave us very valuable service. So, there is an awful lot of talent available in this country, and I think this commission could find it. COMMISSION SHOULD HAVE BROAD RANGE OF RESPONSIBILITY Finally, I would reemphasize the thought that the charter of the new commission should be stated in broad terms. Government serves vital purposes, and the need for close cooperation between public and private sectors in solving thorny social and economic problems is increasing. Financial and administrative relationships have grown closer between cities, States, counties, school districts, and the National Government; they require better organizational patterns if we are to get optimum results from these joint efforts. The structure of the executive branch-and the tools of management available to those responsible for its effective operation should be reexamined and reconsidered in the light of serious challenges and great opportunities confronting the people of this country. Particularly it is true now. We have got to work in much closer relationship between the Federal, State and local governments. We are doing it in some way but not enough. It has not been as wellplanned and coordinated as it should be. Along these lines, the body you propose to establish might be deemed the commission to modernize the executive branch. Its charter should embrace the full range of executive responsibility to optimize the use of public resources: for the solution of complex new problems, for the fulfillment of rapidly changing social needs, and for the provision of long-established services and functions. This requires better organizational patterns, designed to achieve the Nation's functional objectives. It also requires that the President, the Cabinet, and all executive officials have the most advanced tools of management at their disposal-for planning purposes, for close coordination, for staffing, and for budgetary and financial control. Efficiency and economy will depend in the longer run upon the effectiveness of management, and may be measured best in terms of achievement of those objectives that have been set by Congress in statute law. Mr. Chairman, since the preparation of my statement, I have received a communication from Dr. Luther Gulick which bears directly on this hearing. Dr. Gulick had an active share in the work of both Hoover Commissions, in addition to his leading role in the BrownlowGulick Merriam Report of 1938. As a university student in 1913, associated with the New York Bureau of Municipal Research, he assisted some of those who had a major role in the Taft Commission's pioneering work. Probably no person in the country has had a share in all four other great commission efforts. As you know, Dr. Gulick is chairman of the board of trustees of the Institute of Public Administration in New York City. He is an authority in the field of public administration with worldwide renown. I offer some of his thoughts on this subject for inclusion in your record. Senator HANSEN. Without objection, it will be incorporated in the record in its entirety. With his wide experience I think his suggestions will be more valuable than anybody I know. Well, we appreciate having it, and thank you very much for bringing it. Mr. FOLSOM. Thank you very much, Senator, for the opportunity to appear before your committee. (The comments of Mr. Gulick follow :) EXHIBIT 22 COMMENTARY BY LUTHER GULICK, CHAIRMAN, BOARD OF TRUSTEES, First, may I say that it is unquestionably necessary from time to time to make broad outside investigations of the efficiency, economy and general managerial effectiveness of any complex and important enterprise, be it private or public. I think we would all agree that the test of need for such commissions is not the number of years which may have elapsed, but (1) the rapidity of the changes and (2) the nature of the changes which may have come about in the available managerial technologies. Three obvious forces, given time, make a shambles of any large governmental structure. These are inertia, which resists changes even when they are clearly needed; second, empire building which adds to each agency new programs, even when they duplicate or conflict with what others are doing; and third, the inevitable tendency to build new structures on the foundation of temporary political slogans. And you know what I am talking about. The only cure for these infectious diseases of big government is the periodic, independent, highly competent and comprehensive examination of the total situation, and the presentation to the President, the Congress and the nation of systematic reorganization plans. And I emphasize comprehensive, competent and independent, because even the President is inhibited from the kind of a review which is required because he is under personal commitment to the men who are working for him in the top appointive positions. In the business world, it is recognized that changes in technology, changes in products markets and sources, and changes in competition are the fundamental factors determining how often broad reconsideration of organization and management may be in order. By these tests, I think it is clear that the time is approaching when the government of the United States needs comprehensive, top-side reexamination and reorganization to enable that government to serve the nation more effectively. It is clear that the government is now behind the times in many ways and that many of our greatest difficulties and inefficiencies stem directly from this failure to restructure our government. Therefore, I commend attention to this problem, and hope that current deliberations will lead to a new comprehensive outside examination of the management system of our government. My second observation goes to the nature of the duties and responsibilities assigned to the proposed commission. Both of the bills refer to "efficiency," "economy," "duplication of activities." "lack of coordination" and similar matters. These are significant; nobody wants government to be wasteful and bungling in its work. But for every dime lost on these traditionally defined inefficiencies, tens of thousands of dollars are lost annually because our government has not been modernized to make the governmental organism appropriate for the work which has been assigned to it by the Congress and by the people of the country. The general structure and the operating procedures of our government have been changed only slightly in the past 30 years. We have belatedly set up a single Defense Department, and have created new departments for Health, Education and Welfare, for Housing and Urban Affairs, and for Transportation, though these new agencies are still groping to find their appropriate spheres. We have greatly strengthened the budget system, and have found highly useful the new structures in the Executive Office of the President including the Council of Economic Advisors. However, new federal and state-aid arrangements are changing management drastically, both nationally and locally. Some call it "the New Federalism," but as far as I can see, few understand what is happening or know what is desirable. And the poverty program, with an independent administration, has been superimposed as though a permanent fact like poverty is a temporary emergency situation. We not only have the dramatic and absorbing NASA program, but from the standpoint of management the even more significant new administrative policy of government by contract both for research and for direct administration as well. Some use is now being made in the government of electronic data processing, chiefly in clerical operations, in spite of the much more important managerial possibilities. However, in most activities the government clings to the old heirarchical bureaucracy, while the advanced business world is discovering the multiplier effect of participation in the higher managerial processes. This is one area in which government, with its fundamental involvement in human values, should lead the way, and would unquestionably find important advances in productive efficiency. When you compare what we have done to modernize government in the past generation, with what we have done in the business world, the record of government is tardy, episodic, unsystematic and unimaginative. I do not share the view of some businessmen that private enterprise and government are so similar that they will necessarily benefit from the same types of organization and the same managerial process. There are vast and fundamental differences. But this I do know: It it even more important for government to be modernized than it is for private business to be, because government does not have the curative influence of competition to get rid of the dead wood and substitute more effective approaches. And the test of efficiency and economy in government must be not so much eliminating the little obvious inefficiencies; it must be the test of the appropriateness of the total system for performing the functions which we depend on from our government. We need to make an honest and expert outside examination of the general performance of our government to ask if the “system” is the best that can be devised to handle the vastly changed present and future work, design and interrelate the programs, make the required decisions, set priorities and allocate restricted resources, employ the new managerial processes, technologies and personnel, and finally to monitor the results achieved continuously so as to correct this performance in the light of the targets set and the goals determined by our political processes. The thing which is now needed goes far beyond the time-honored and somewhat hackneyed demand for "efficiency and economy" and reaches into the fundamental managerial concepts of system analysis. It might even be suggested that the internal efficiencies are of minor significance for the proposed commission. Perhaps these should be the responsibility of the Budget Bureau and of the management arms of the several agencies, while the proposed commission would then be free to devote its attention to the fundamental task of making our government from top to bottom, including the administrative relations of our federal system, a modernized organic structure with procedure adequate to carry the vastly changed responsibilities of the modern national state. I am not suggesting that the commission should reconsider the goals of our government, as did the Hoover Commission in its closing (and less successful) days, or the immensely helpful Eisenhower Commission on the National Goals. I think this kind of goal-making must be handled by our political system, chiefly through the President and the Congress acting politically. The commission should therefore start with the decisions which have been made by the President and the Congress and should then consider how adequate is the organism and the functioning of our governmental system to perform this important and changing work load. And the major test would be not the bits and pieces, but the broad system, the comprehensive managerial system, under which we are operating. This leads me to a final suggestion. With such a "mission" for the proposed commission, I am convinced that all of its members should be from outside the three branches of our government, executive, legislative and judicial. This exclusion of men from the executive and the bureaucracy, from the courts, and from the Congress is designed not alone to secure the "outside" detachment which is so important. but also to leave the President and the members of the Congress, and the judges, uncommitted in advance in reacting to the recommendations which will emerge from the study and from the recommendations |