Going Public

Three GE executives bring public-sector thinking to North Carolinas Department of Health and Human Services.

by / February 12, 2001
The difficulty of recruiting and retaining IT personnel has been an on-going story within the industry. Nowhere has this challenge been greater than in the public sector. The exodus of IT personnel from the public to the private sector has been highlighted by the turnover of nearly 30 percent of state-level CIO positions nationwide within the past year.

In that environment, it is hard to fathom why three top-level IT professionals from the financial services arm of General Electric would join the Division of Information Resource Management (DIRM) of the North Carolina Department of Health and Human Services (DHHS).

Finding a Challenge

By the mid-1990s, the Raleigh-based subsidiary of GE Financial Services had become a huge success. In some ways, it had become too successful. The division aggregated significant market share -- significant to the point that the GE "parent" made a strategic decision to cap market growth of the local business unit. Future profit increases would have to come from enhanced efficiencies within the operation. For three entrepreneurial risk-takers within the company -- Bill Cox, Rick Moore and Vince Batts -- the fun was gone and the routine lost its challenge.

In 1995, DHHS was searching for a director for DIRM, a division that had largely been viewed as a support service for departmental administrative needs. Cox thought it might be interesting to try some of the things he had done as an IT professional at GE in government. After nearly 30 years in the private sector, he also thought it was time to make a more direct contribution to the community.

Before Cox accepted the position as director of information resource management of DHHS he talked to Moore, now DHHS chief technology officer, and Batts, now chief information architect and manager of enterprise system development of DHHS, about his plans and convinced both men to join him. Cox was eager to apply many of the approaches and techniques that had worked so successfully at GE to the health and human services enterprise of North Carolina, and he knew he would need help to orchestrate such a dramatic change in the organization.

What made DHHS attractive to these high-energy entrepreneurs? They performed a kind of informal environmental assessment of DHHS -- a large public enterprise comprised of 15 divisions, 22,000 employees, annual revenue of more than $10 billion and 150 critical information systems - and identified a number of factors that made it both a challenge and an opportunity. As Moore explained it, "First, welfare reform was about to transform the way in which the social services organization would deliver benefits and services to citizens. The department, legislature, governor and local communities were talking about moving to a client or customer focus, driven by outcome measures and objectives. Second, North Carolina had just begun to focus on developing a statewide information technology infrastructure. Finally, the department had a large, visible project that badly needed fixing. This provided both the initial tactical success target and a strategic jumping-off point into more fundamental changes coming within DHHS."

Still, GE is generally acknowledged to be one of the best-managed companies in the world. How would they apply what had worked for them at GE to DHHS?

Bringing the Team Together

All three men knew they could make IT work and add value to the organization, but it was only in hindsight that they became fully aware of the unique perspective, skills and values that they were adding to DHHS. They each give credit to GE for the invaluable training and education they received there, even if they were not completely aware of it at the time. "At GE, everyone you worked with had these skills or developed them quickly; you just took them for granted because they were necessary to the way we did business," said Moore.

For example, they each understood that:

* IT functions as an integral part of the business;

* IT professionals are organizational change agents;

* chaos is a way of life;

* process mapping (business process re-engineering) is essential to understanding where you are and where you want to be;

* speed to market (or customers) is an essential metric; and

* risk assessment is a constant aspect of your perspective.

Cox now had the GE component of his team assembled. Batts represented application projects and methods; Moore represented technical architecture and support. Cox added expertise in technical infrastructure deployment and management with Joe Lithgo, service delivery manager, who came to DIRM out of private-sector experience in the insurance industry. Together, the four covered the operational side of IT. All they lacked was knowledge of how operating in the public sector was different than the private sector. Donna Gregory, assistant director and chief of information resource management and policy planning, brought that experience to the team. A career government employee, Gregory helped ground the team in the political realities of state government and understand how government bureaucracies function.

Together, they began determining DIRMs positioning within DHHS. They were surprised to find key leaders with a fundamental understanding of the drivers for change acting on the department and an acute awareness of the gap between where DHHS was and where it needed to be. Both former Secretary Robin Britt and, for the past four years, Secretary David Bruton, understood that technology offered more than a means for doing more with less. They each saw IT and DIRM as tools for facilitating fundamental change within DHHS. They also understood that technology was neither the end-all nor the cure-all, but simply the means to accomplishing the organizations rapidly evolving purpose. Technology could enable them to not only do what they had been doing faster, but to do it in a way that was customer/client focused, outcomes driven, with empowered employees supported by shared, timely information and a fundamental technical infrastructure adaptable to an ever-changing business environment.

"The forces for change operating on government are similar to those operating on private business," Batts said. "You need leadership that sees that similarity and can identify and understand the key drivers for change and how technology can facilitate adapting the organization to that change. Key people in the department and state had that understanding, and without it we would not have been able to accomplish nearly as much as we have."

Welfare reform offered the first clear imperative and opportunity to apply the lessons learned in the private sector to DHHS. At this juncture, the support of key executives such as Peter Leousis, assistant secretary of human services and education policy, and Kevin FitzGerald, formerly director of Social Services, was essential. Leousis is North Carolinas point man for welfare reform. His vision and leadership have been crucial in defining the states approach and in sustaining a course of process re-engineering and the management of organizational change. FitzGerald, now the director of the Institute of Governments Center for Public Technology at the University of North Carolina at Chapel Hill, was an enthusiastic supporter of the importance of information technology as an enabler of the organizational change imposed on social services by welfare reform. Jim Edgerton, deputy secretary of DHHS, to whom Cox reports, has been vital in positioning the role of DIRM as a means to both organizational change and technology leadership. As a result of such leadership, DHHS is considered a technology leader among the various state agencies in North Carolina.

Making a Difference

The transformation of the role of IT in DHHS is epitomized by Bruton, who often tells people "information is our business." IT has greatly improved customer service, made delivery of services efficient and effective and improved the ability to measure outcomes across organizational boundaries.

In describing the difference between the private and public sectors, Moore explained, "Politics, and therefore government, is not a cohesive whole. In the public sector, particularly in a department as large, diverse and complex as DHHS, the vision is a mosaic of individual programs, projects and initiatives that serve the needs or expectations of specific constituencies. In the private sector the vision can be more unified and be driven from the top down and throughout the organization."

"Contrary to what many citizens think, organizations in the private sector are not more rational than those in the public sector," Batts said. "The major difference is the role of the market. In the private sector, if you do not make the right decisions, you will go out of business. Businesses close every day; governments only go out of business over the course of centuries."

"The important point is that service-delivery processes cross many organizational boundaries," Batts continued. "We must be able to streamline those processes to provide integrated services to our clients and to make excellent customer service easier for service-delivery professionals. An IT architecture developed from an enterprise perspective greatly assists in implementing such processes. It enables executive management to reorganize around those processes."

Batts describes his and Moores roles as, "serving as mediators between business/service delivery and technology." To which Moore added, "By solving technical needs while enabling/advising the strategic vision."

Charles Taylor Grubb is the Government Technology Conference Southeast Regional Director and a Visiting Associate Professor of Public Policy Studies at the Terry Sanford Institute of Public Policy at Duke University.