In this excerpt from his new book, The Price of Government, he calls for leaders who can deliver on government's traditional ends based on their willingness "to fundamentally alter the means: the structure and operation of public systems."

When Peter Hutchinson was superintendent of the Minneapolis public schools, his favorite activity was visiting classrooms. One day, in a fourth grade classroom, the teacher stopped the class to introduce him. She explained that he was the superintendent of schools and asked the class if anyone knew what a superintendent was.

Hands flew into the air. (Fourth graders are so enthusiastic about learning that they will take a stab at any question.) The teacher called on an eager young man who proudly announced that the superintendent was the guy in charge of Super Nintendo. The teacher acknowledged the very creative answer, then explained that the superintendent was the leader of the schools.

"Does anyone know what a leader is?" she asked. Hands flew again. The teacher called on a young girl in the back who was raising her hand so hard and high that Peter was afraid it might become detached from her body. She stood very straight and tall as she answered, "A leader is someone who goes out and changes things to make things better." Hutchinson was stunned: A fourth grader had articulated perfectly what government needs -- and what people expect.

If the path to "making things better" were not strewn with so many obstacles, more people might rise to the challenge. But today, our public institutions are mired in the worst fiscal crisis since World War II, citizens are cynical and the media is worse. The political process alternates between banalities and vicious personal attacks, and many politicians actively campaign against the very institutions they say they want to lead. Who in his or her right mind would want the job of leader?

Unfortunately too many of those who step forward are driven either by ego or ideology. They come in a number of flavors. There are those who want to be something more than they want to do something. They have had a burning desire to be a "leader" since they were lunchroom monitors in grade school. The trouble is, this type will rarely risk their political popularity to actually reform the systems they lead.

Others are more complacent. They have secured a comfortable position of leadership and they want to keep it, so they say that government is good enough, or that we're working as hard as we can, or that the problems are someone else's fault. They are in serious denial. Their objective is to further secure their own position, but every day they let down that fourth grader, along with everyone else who looks to leaders to "make things better."

Then there are the traditional liberals who promise to make things better but aren't willing to do what it takes to change them. They are motivated by their concern for others, but they won't take on their friends in the teachers' unions and public employee unions, who so often block change. Nor will they risk alienating voters who benefit from programs that work poorly or waste money. They fight tooth and nail against reform of programs -- like public housing and the old welfare system -- that are clearly producing terrible outcomes, for fear that reform will hurt some of the poor. We do not question their motives, but they too are in denial: They don't recognize that the system is fundamentally flawed. Many still believe that throwing money at the system and trying harder will produce results. They too let down that fourth grader, by talking about big dreams, then not being willing to shake off their liberal straitjackets to get results.

Finally, there are the ideological conservatives. Many of them want to change the system, but they don't want to make it better, for fear that people will want more of what government has to offer. They let down that fourth grader by telling her that government is the enemy. They urge us to "starve the beast" financially so it will be too weak to impinge on private enterprise. They are in denial about the essential role of government as the referee in a market economy. They are so fixated on the ideas of individual initiative and freedom that they ignore the equally compelling role of community and collective support in a market economy. With 20/20 tunnel vision, they disparage the contribution made by public education, public health, Social Security, Medicare, Medicaid and environmental protection in maintaining a decent society. At the same time, they take for granted -- and therefore vastly undervalue -- the essential role of government in creating and maintaining our roads and highways, our air travel system, our legal system, our banking system, our system of corporate finance, and the other regulatory systems that help sustain the economy by tempering its excesses.

In the end, all of these "leaders" merely perpetuate the crisis because perpetuating the crisis is in each of their interests.

To get ourselves out of this mess, we need leaders who abhor the status quo but are not prisoners of ideology; leaders who are driven to deliver better results at a price citizens are willing to pay; leaders who are willing to charge citizens the real price of government in return for real value; leaders who have the common sense to dismount the dead horse of bureaucracy but the courage to search out a stronger steed.

The kind of leadership we need comes from the "radical center." Ideologically neither left nor right, this is not split-the-difference centrism. The leaders we need do not inhabit the mushy middle. They have staked out an entirely new political paradigm -- the "Third Way" that President Clinton, Prime Minister Tony Blair and other modern leaders have popularized. They take a common sense view of the world but have the gumption to foment radical change. To deliver on government's traditional ends, they are willing to fundamentally alter the means: the structure and operation of public systems.

Public leadership has never been easy, and in days ahead, it will only get more difficult. Fortunately there are examples in our midst of leaders who have succeeded, or who are succeeding. These leaders can serve as sources of hope and guidance. From them we can learn essential lessons about winning the battle for public support in an age of permanent fiscal crisis.

First, Tell the Truth

Twenty-five years of spin doctors, pollsters and thoroughly managed media has only increased the public's appetite for the truth. Voters are sick of platitudes, weasel words, equivocations and outright lies. In 1976, after the lies of Watergate, Jimmy Carter was the first modern candidate who won by pledging to tell the truth ("I will never lie to you"). In 1992, both independent Ross Perot and Democrat Paul Tsongas positioned themselves as leaders who brought us the hard truth, unvarnished. In 2000, it was John McCain's turn, with his "Straight Talk Express" in the Republican primaries. The same phenomenon occurred in state and local politics: Jesse Ventura in Minnesota, Angus King in Maine and Lowell Weicker in Connecticut all won governorships as independent candidates who rose above politics-as-usual to confront the hard realities. The late Minnesota Senator Paul Wellstone became a hero to some for saying things politicians normally don't say. And in the run up to the 2004 primaries, Howard Dean surged beyond far better known candidates because of his straight talk and outsider status. Only when the other candidates began to imitate him did they catch up.

The carefully manicured phrasing of typical political discourse has become so pervasive, and so numbing, voters respond with eager delight to the novelty of a candidate simply speaking his mind. Americans crave leaders who will speak to them as mature and thoughtful adults. They do not want their leaders to flinch from open discussion of fiscal reality when voters are "in the room." They can deal with bad news. They simply want leaders who will level with them. And more often than not, they can tell when talk is on the level and when it is smoke and mirrors.

"Never fall into the trap of selling the public short," says Roger Douglas, a radical centrist leader in New Zealand. As finance minister for New Zealand's Labor Party, Douglas faced a fiscal crisis that makes ours pale by comparison. His nation had been in decline for a generation. In 1950, New Zealanders had the third-highest per capita income in the world; by 1984, they were 21st. Their national budget alone consumed more than 40 percent of their GDP. Heavy borrowing had driven annual inflation up to 15 percent, and interest on the national debt ate up almost 20 percent of the budget. Upon coming to power in 1984, Douglas's Labor government came within a hair's breadth of defaulting on the national debt. The Reserve Bank of New Zealand had to suspend foreign-exchange transactions, and the government had to devalue the national currency by 20 percent. Over the next six years, it proceeded to lead the most radical transformation of a modern democratic government ever undertaken.

And yet Douglas and his colleagues did not gild the lily, sweeten the medicine or soften the blow. As Douglas advises:

Structural reform does not become possible until you trust, respect and inform the electors. You have to put them in a position to make sound judgments about what is going on.

Tell the public, and never stop telling them, right up front:

* What the problem is and how it arose.

* What damage it is doing to their own personal interests.

* What your own objectives are in tackling it.

* What the costs and the benefits of that action will be.

*Why your approach will work better than the other options.

Ordinary people may not understand the situation in all its technical detail, but they have a lifetime of experience at work and at home to help them sift the wheat from the chaff. They know when key questions are being evaded. They can sense when they are being patronized or conned, and do not like it. They respect people who front up honestly to their questions.

As Douglas suggests, the ways of government can be arcane. The numbers politicians talk about are huge, and the programs are often clouded by jargon and acronyms. But if you can't state your case in plain language, citizens will believe that you don't know what you are talking about -- or worse, that you don't want them to know.

Most citizens have what Ernest Hemingway once called a "crap detector." It operates according to a very simple algorithm:

Do I understand what the politicians are saying?

Does it mean anything?

And if so, do they mean what they say?

Telling the truth in plain language is how we communicate that we have a grip on what we are facing. Getting a grip is the first step in changing things to make them better. Without a grip on the facts -- even the brutal facts -- leaders fall back on unwarranted hopes or outright deception. If you don't have a grip, you shouldn't be leading.

Make Your Purpose Clear and Pursue It Relentlessly

On January 18, 1994, Peter Hutchinson was returning from the movies with his wife. A month earlier he and his colleagues at PSG [Public Strategies Group] had been appointed superintendents of the Minneapolis public schools. A private company leading a school district under a contract that paid them only if student achievement actually improved? This had never been done before. And the jury was still out.

As they drove home the radio announced that it was cold -- record cold -- with a wind chill that made it feel 60 to 70 degrees below zero. Hutchinson said to his wife, "I wonder what superintendents do when it's this cold?" He found the answer when he got home: 54 messages demanding that he close schools the next day, with more calls coming in by the minute.

PSG had been hired for one simple reason: The school district was in trouble. Achievement gains were shrinking and finances were in a shambles. PSG was expected to fix both -- and fast. As Hutchinson and his colleagues prepared for this work, the question of how to decide whether to close or open schools had never come up. Luckily they got a reprieve when the governor ordered every school in the state closed.

The next day was another matter. Hutchinson made his way to the superintendent's office and spent several hours answering the phones -- first from the police, who reported hundreds of immigrant children waiting for buses without coats or mittens because they had not gotten the word. Then more calls from parents, students and teachers clamoring for another day off tomorrow, since the record cold was forecast to continue. Then calls from the press, who wanted to know if the schools were being led by a bunch of wimps. Closing school in Minnesota because it's cold?

As the day wore on, the mix of calls began to change. Increasingly Hutchinson heard from distressed parents who expected him to "get these damned kids back in school." By the end of the day, the calls were split and emotions were high. One faction saw opening the schools in such hostile weather as something only a fool would do, while the other saw keeping kids home for another day as an attack on parental sanity and a huge hassle for those without daycare alternatives.

As Hutchinson contemplated what to do, he had an epiphany. It didn't matter what he decided; either way he was going to be ripped apart. In that realization was his liberation. He saw clearly that in the face of polarized opinion, a leader is free to do what he or she believes is right, since criticism will follow regardless of the choice. All that really matters are the eventual results of his or her decision.

This is not a license to act arbitrarily -- quite the opposite. It requires that leaders embody the mission and goals of the organization they serve -- and reinforce them with every decision they make.

On his second day at the district, Hutchinson had asked his assistant to get him a copy of the mission statement. A couple of weeks later, someone had unearthed it from a dusty file. It was several pages long, and to Hutchinson's dismay, it lacked focus. Nowhere did it say what difference the schools would make for the children they served. With the support of the school board, PSG crafted a new statement of purpose: "The mission of the Minneapolis Schools is to ensure that all children learn." That mission statement became the foundation for every action PSG took. Hutchinson and his colleagues repeated it and interpreted it relentlessly for three and a half years. They challenged everyone -- teachers, custodians, bus drivers, aides, administrators, board members, parents and community leaders -- to figure out how they would, in fact, ensure that all students learn.

This relentless focus on "ensuring that all children learn" produced a turnaround in student achievement. The average annual gain in reading scores, for example, was on the decline when the mission statement was written. Students were still gaining ground, but the rate was slowing. On norm-based tests, if a student starts the year at the 50th percentile, it takes a year's worth of growth to stay in the 50th percentile by year's end. Minneapolis students were gaining about two percentiles a year, on average, which was not bad for an urban district. But given that they were starting out below the national average, it was not good enough for the board or the community. Four years later the rate had tripled to a six percentile gain. Attendance rates were up, and suspension rates were down. On a 1996 referendum to increase property taxes by $160 million for the schools, 70 percent voted yes.

So on that cold day in January, what first appeared as a tough choice was, in fact, very easy. If ensuring that all students learn was the mission, being in school was the means to that end. School would be open for business.

Frame Everything in Terms of Results

After defining their mission, leaders need to flesh out that statement by identifying the key outcomes they are trying to produce. They need to ensure that progress on those outcomes is measured, and they need to frame everything they do in terms of that mission and those results. In the Minneapolis school district, PSG's contract was based on results: All but $65,000 a year depended upon improving student achievement, public confidence in the schools and other outcome goals. At Hutchinson's prodding, the district created a set of high learning standards for all students, and testing aligned to those standards. The district generated reports on achievement gaps between students of different racial and socioeconomic groups (something done in few other places but essential for accountability), and quarterly reports on performance in the areas of student achievement, the learning climate, family involvement, community confidence, the attraction and retention of students, instructional effectiveness, suspensions and disciplinary events, graduation and dropout rates, and management. Every school got an annual performance report, spelling out its students' average annual gain in reading and math, its suspension and disciplinary rates, its graduation and dropout rates (for high schools), and its turnover rate for students. All of this was public information, and Hutchinson talked about it constantly.

To be effective in today's world, leaders have to go beyond good intentions, wishes and excuses that there isn't enough money. Virtually every government and every school district is squeezed for money -- and will continue to be. Budget cuts and tax increases are the currency of the day. As a consequence, the public is cranky, and incumbent executives are at great risk -- whether they are elected or appointed by elected officials.

The only way out of this trap is through a door labeled results. Leaders need to frame every debate and every decision in terms of the results they are trying to achieve -- not needs, not wants, not the way it has always been, but results. Framing the discussion this way lets everyone know -- both citizens and government insiders -- what is most important. It also reinforces a culture of accountability throughout the public sector.

Gov. Gary Locke learned this lesson last year in Washington state. After six years, in which he had earned an image more as a technician than a leader, he confronted the fiscal crisis head on. The tool he used was an Outcomes Budget, framed around the 10 results he felt were most important to the citizens of Washington. This act, and the decisions that flowed from it, changed his image, gave him new stature with the public and new power with the Legislature, and reinvigorated his administration.

Beverly Stein spent eight years focusing on results as county executive and chair of the Multnomah County Board of Commissioners. As a Democratic state legislator, Stein had been a leader in creating the Oregon Progress Board and the Oregon Benchmarks, a set of long-term outcome goals for the state. When she was elected county commissioner and executive in 1993, she was determined to do the same for Multnomah County -- but also to use those benchmarks to transform the entire county government. Stein and her fellow commissioners first chose 85 county benchmarks, then narrowed it down to 12 "urgent benchmarks," then narrowed it further to three real priorities, called "long-term benchmarks": increasing high school completion rates, reducing the percentage of children living in poverty and reducing crime.

Stein redesigned the budget around the benchmarks, presenting outcome data on every program and identifying which programs aligned with each benchmark. She cut every department's budget, but told them they could earn money back by developing new strategies to achieve the benchmarks. She launched a quality initiative with the acronym RESULTS, which we describe later. She hired coordinators to focus on specific benchmarks, such as teen pregnancy. She convened meetings between the board and department heads to help choose "key results" for all 300 county programs. She published reports on progress against the benchmarks in her budgets. She asked each of her fellow commissioners to take ownership of one long-term benchmark, in partnership with a larger group (the County Commission on Children and Families, the Community Action Commission, and the Public Safety Coordinating Council). She and they sponsored public forums on each of the three benchmarks, at which board members, staff, and others reviewed current strategies to achieve the benchmark; examined information about best practices elsewhere, demographic data and other research; and discussed new strategies for the county.

When a tax limitation initiative forced budget cuts, she and the board targeted their cuts on programs making the least contributions to the benchmarks. She also moved money into new strategies to achieve long-term benchmarks, such as a major initiative that was successful in boosting school attendance. She and her fellow commissioners even used the benchmarks to develop criteria for granting tax abatements to recruit and retain businesses.

For eight years Stein framed everything in terms of the results she was trying to achieve. In virtually every speech, she talked about the county's three most important benchmarks. And when she resigned in 2001 to run for the Democratic nomination for governor, the Portland Oregonian, the state's largest-circulation newspaper, summed it up this way:

In eight years running the county government, Stein has increased its efficiency, effectiveness and sensitivity to its children in particular. She achieved this at a time when Oregon's counties took the biggest hit from Measure 5 of any level of government.

... Stein can fairly claim to have given county taxpayers more for their money -- and more for their children.

Wherever she goes next, Multnomah County residents can be glad Bev Stein was here.

Multnomah County has 1.5 million residents. New York City has 8 million -- and a decade ago it was widely considered almost ungovernable. But Republican Mayor Rudy Giuliani proved otherwise. "I tried to run the city as a business, using business principles to impose accountability on government," he says in the preface to his book, Leadership. "Objective, measurable indicators of success allow government to be accountable, and I relentlessly pursued that idea."

Giuliani's excellent book is organized around 14 lessons about leadership. The third is, "Everyone's Accountable, All of the Time." In his career, Giuliani says, accountability for performance "is the cornerstone." In trying to build an accountable government, he "decided to start with the highest profile agency, one whose performance could be measured not just in the savings of dollars, but in the saving of lives."

"The centerpiece of our efforts," he writes, "was a process called Compstat."

This combined two techniques, neither of which had previously been implemented. First, crime statistics were collected and analyzed every single day, to recognize patterns and potential trouble before it spread. At the Compstat meetings, we used that data to hold each borough command's feet to the fire -- a hundred police at a time, from brass to officers, joined by others from throughout the criminal justice system, would be convened in a big room in which every one of that command's statistics faced scrutiny...

Even after eight years, I remain electrified by how effective those Compstat meetings could be. It became the crown jewel of my administration's push for accountability.

Giuliani talked constantly about Compstat. It became the best-known public management initiative in the country. He replicated it in 20 city agencies.

In September 1990, three years before Giuliani was elected, Time magazine ran a cover story with the headline, "The Rotting of the Big Apple." It reported that according to polls, 59 percent of residents would leave the city if they could.

When Giuliani left office, things were different. The crime rate was down by 57 percent, shootings by 75 percent, robbery by 62.5 percent. Inmate-on-inmate violence in the jails was down 93 percent. The welfare rolls had fallen by 60 percent. The rate of home ownership had risen by more than 10 percent. Citizens rated 85 percent of city streets "acceptably clean." The city had reduced or eliminated 23 city taxes, saving individuals and businesses a total of $8 billion. The city payroll was down by 20,000 full-time employees, but the number of teachers and uniformed police were both up. Tourist visits had risen from 25.8 million a year to 37.4 million, and Zagat's had named New York as the best city to visit in the nation. More than 200 new businesses had opened in Harlem. In 2000, for the second time in four years, Fortune magazine named New York City the No. 1 place for business in North America. And despite the Sept. 11 terrorist attacks, every city resident we know felt there had been a renaissance.

That renaissance happened because Mayor Giuliani focused relentlessly on results. If it can be done in New York City, it can be done anywhere.

Get Back to the Core

In a time of crisis, whether fiscal or otherwise, smart leaders bring everyone's focus back to what really matters.

Mission creep is endemic in government. The job of the legislature, in the eyes of legislators, is to pass laws. So they do. A good way to help people -- and distinguish oneself as an effective legislator -- is to create new programs, so they do that too. For a political resume, passing laws and creating programs is far more appealing than repealing laws and killing programs, so the statute books thicken. Often, if one program is not quite working, the response is to add another, and another and another. But each new law and each new program adds new work.

While no single change may be that dramatic, the accumulation of add-ons can cause an organization to completely lose focus. It can end up creating a flurry of activity but missing the central point.

Washington state faces permanent limits on revenue and spending growth, and rising costs for the core activities of the state: "education, medication and incarceration." Gov. Locke decided the time had come to ask the big question: What should state government do, and what should it stop doing? He and his staff defined 10 outcomes most important to the citizens, decided which state activities contributed the most to those outcomes and left the rest out of the budget. They made some hard choices, but because they chose clear priorities rooted in results, the public, the media and the Legislature supported most of their decisions. Most citizens understood that it was time to define the state's priorities and let the rest fall away.

Mayor Giuliani puts it well:

The reality is that there's only so much a city government can do -- or should do. A dollar spent on a benevolent-sounding program is a dollar not spent somewhere else. A good leader establishes priorities and sticks to them, backing them with resources to carry them out. Sometimes the best way to fulfill those priorities is to remove the distractions -- and expenses -- that keep them from being fulfilled ... One of my immediate goals was to streamline the government to allow us to focus on our major priorities.

Be Intensely Driven by a Passion for Your Customers

Any serious consideration of core purpose leads leaders back to the question: Who are our customers, and what do they want from us?

Some people are still thrown by the use of "customer" in the context of government. Obviously government has very few instances in which a consumer comes in with $5; hands it to the person behind the cash register; and walks out with a loaf of bread, a carton of milk and a dozen eggs. And we agree that the concept of "citizen" is more important, in a democracy, than the concept of "customer." Citizens are government's owners. By voting, they elect representatives to steer the ship of state. But citizens are also government's customers, when they use public services or benefit from compliance activities. Voting rarely gives them much leverage over the quality of those services and activities. The truth is that leaders can fully address the needs of their citizens only if they also pay attention to what the customers of specific services want.

In government, the primary customers of an organization are the principal intended beneficiaries of its work. If you are a schoolteacher, your primary customers are your students and their parents. If you are in law enforcement or environmental protection, your primary customers are the public at large. While you may spend your time interacting with criminals or businesses, these are not your customers. They are, instead, compliers: those who must abide by the laws and regulations that you enforce.

Organizations that lose sight of their customers inevitably will lose sight of their core purpose as well. Organizations also lose their way when they put the needs of other stakeholders -- contractors, unions, special interest groups, politicians -- ahead of the needs of their customers. They have lost their way:

* when a school board spends more time on union issues than reading scores;

* when a Department of Transportation's employees think their customers are the contractors who build the roads rather than the people who drive on them; or

* when a city builds plush new offices but cannot repair its streets or pick up its garbage.

When organizations lose sight of their primary customers, they also lose sight of their core passion. Given that the driving force for public employees is not profit but a desire to serve, few losses could be more devastating.

When this happens, the solution is to re-establish focus on and connection with customers: to listen to them, provide the quality they demand, and give them the control and choices they want. We cannot win the competition for public support if we lose sight of the public we are supposed to serve.

Early on in his tenure at General Electric, CEO Jack Welch described his company as one "with its face to the CEO and its ass to the customer." The Office of Federal Student Aid was a public-sector organization with much the same orientation. FSA runs the student loan and grant programs of the federal government. When Greg Woods took over the FSA, in late 1998, it was struggling with high defaults, high costs and low morale. As the federal government's first "performance-based organization," it had been granted freedom from some internal rules in return for increased accountability. For Woods and his team, that meant a five-year contract to perform.

Early on, Woods recognized that the central problem at the FSA was confusion over whom it served. For many employees, it looked and felt as if the banks were the customers and the students were a pain in the organization's posterior. Almost immediately, Woods created a customer service task force to develop a strategy to transform the organization. The task force struggled until its leader, Stephen Blair, decided to load all 50 members on a bus and take them to some nearby college campuses. He told them to go talk with students about their experience with the financial aid system. They heard some scathing responses, and they learned firsthand the power of financial aid to change a student's life. They came back highly energized, with scores of ideas about how to improve the system. Five years later, many of them still pointed to that bus trip as a seminal moment.

The task force developed a series of recommendations to improve service by making the loan and grant process more customer-friendly. The tools included Web-based applications, simplified forms, readable language and help desks.

Woods launched the new strategy in a huge auditorium, with FSA employees on folding chairs, facing a stage. He took the stage and began the traditional talk-fest that passes for a strategy session within a bureaucracy. He hadn't gotten far when he told the assembled staff that the key to the FSA's "turnaround" was to ... turn around ... and see their customers. He literally asked them to stand up and turn their chairs around. When they did so, they faced the real front of the room, where a panel of students sat ready to talk about how student loans could change a life and how the loan process could be improved. The effect was electric.

Thus began years of hard work, challenging every aspect of the FSA to make it serve its customers. The results have been as dramatic as the "turning point" Woods staged in that auditorium.

Be Willing to Change Everything but Your Values

If the job of a leader is to "change things to make them better," everything must be open to question -- everything but the organization's basic values.

This is easy to say but hard to do. Resistance to change can be fierce; it is deeply embedded in every organization. The first law of organizational inertia proclaims that an organization will stay as it is unless compelled to change -- whether by inspired leadership, stepped-up competition, dramatic economic decline, the encroachment of a disruptive technology or some other external threat.

Much of this resistance is driven by people's fears that their values are being threatened. Citizens and those who serve them expect that governments will be fair, honest, equitable, efficient and accountable, and that they will make decisions based on merit, not favoritism. These are the core values on which public services are based. Employees will accept, and in fact, initiate much more change if they can see how it will both make the customer better off and preserve these values. If serving customers is what ignites someone's passions, then maintaining integrity with core values sustains the burn.

To drive change, effective leaders seize on -- and sometimes even invent -- external threats. The most powerful of these, of course, is the threat of extinction. The University of Minnesota's campus at Crookston, a two-year agricultural school 100 miles south of the Canadian border, resisted change until the statewide system closed one of its other satellite campuses and the university president began eyeing Crookston with the same notion. In the twinkling of an eye in university time, Crookston embraced change and remade itself into a high-tech outpost, at which every student had a laptop computer. It was so successful that it dramatically increased its enrollment even while it raised its price. Once known affectionately as Moo U, it soon had a new nickname: Thinkpad U.

While it was the threat to the school's existence that made this transformation possible, it was an entrepreneurial chancellor who led it. The chancellor was Don Sargeant, and his key concept was "self-directed learning." His key innovation -- the disruptive technology -- was the laptop computer. In 1993, Sargeant and his colleagues required every student to lease a laptop for $750 a year -- a 25 percent increase in the price students paid. Nonetheless, in three years the number of full-time students increased by 22 percent -- from 927 to 1,133.

Pervasive use of computers required that Crookston remodel classrooms to include power sources and network connections at each seat and provide all dorm rooms and common rooms with network access. But the true transformation took place in the minds and methods of the staff. Upon realizing that their students would be armed with laptops come fall, faculty members spent the summer "cramming" about computers. When the students showed up, the faculty was about a week ahead of them. All year they sprinted to stay ahead of their customers -- a process that had a huge impact on the culture.

On surveys completed in 1996, more than 80 percent of the faculty said the laptops had stimulated changes in how they taught and the resources they used. Nearly 60 percent said they had become better teachers as a result. But perhaps the most fundamental change was in how faculty viewed their students and the learning process. "Where before they tended to think teaching was about them doing the best job of presenting information to the student -- it was in their control -- now they realize a lot of the process is actually in the student's control," Sargeant told us. "It requires more projects, more interactivity."

But change need not always be compelled by threat. It can also be powered by reigniting an organization's passion for its customers, within the crucible of its core values. When the customers demand improvement, those who care about serving them will drive the change themselves. That's the energy Greg Woods galvanized when he put the FSA's staff face to face with their customers.

Create an Organization of Leaders

Leadership is not just about the top of an organization. Obviously the more power the top leader has, the easier it is to make changes. But top leaders can't move organizations unless they have leaders throughout who buy in and help them. The late Gen. Bill Creech, who reinvented the U.S. Tactical Air Command, called this "distributed, bottom-up leadership."

Effective leaders champion and support leaders at every level of their organization. They en "courage" them, they coach them, they remove the obstacles that stand in their way and they help them when they have trouble. Again Creech said it best: You have to "find the way, show the way and pave the way."

When Beverly Stein was elected chair of the Multnomah County Board of Commissioners, she was determined to transform the county's dysfunctional politics and bureaucracy. The first thing she did was ask one of her staff to research what made initiatives to improve quality successful. Her staff member reported back that the literature on change identified "leadership from the top" as the most important ingredient.

Stein took that to heart. For the next eight years, managers and line workers had no doubt that quality and results were her priorities. But Stein also understood that leadership meant more than just her -- that she needed leaders everywhere in the organization committed to change. So she created a steering committee, made up of a diagonal slice of the organization, to develop a five-year transformation plan she called her "Results Roadmap." At the committee's suggestion, she convened the first ever meeting of 200 top managers from across department lines to explain the roadmap and enlist their help.

Stein launched a quality initiative called RESULTS (Reaching Excellent Service Using Leadership and Team Strategies). From the beginning, she stated that it would be her only slogan. For the next eight years, she used it to drive her focus on results down through the organization to line workers, the grassroots of the organization.

RESULTS was built around Total Quality Management (TQM). The first step was a $50,000 minigrant program, in which teams of county employees could apply for grants to buy the training and technical assistance they needed to learn TQM methods. "What this did was get the message down to the line level that something was happening, and you could participate," says Stein. Some 200 "process improvement teams" were given training while they worked improving work processes, and Stein visited many of them to show her interest and support. Dozens of improvements resulted:

* A team figured out how to retrofit a building to temporarily hold prisoners for $25,000, rather than the $200,000 that had been quoted by contractors.

* Community and Family Services redesigned the county's contracting process, bringing down the number of contract specialists from nine to five while decreasing the error rate by 22 percent.

* Central Stores cut the number of required forms for purchasing from 14 to five.

* The Health Department reduced the two- to four-hour waiting time to speak to a nurse to 3 minutes or less, while reducing the number of triage nurses from 13 to seven.

To maintain support for the initiative among her fellow commissioners, Stein asked that a process improvement team report on its efforts to the board every three weeks. This gave board members concrete information on what was happening, but it also publicly recognized the leadership of employees. "Our consultant would teach them how to present it in a clever way," remembers Stein. "We often had skits that showed how they saved money and were more efficient. For most of these line workers, it was the only time they had ever presented before the Board of Commissioners, so they were very nervous."

Knowing the initiative could be undermined by any sign that it was just another flavor of the month, Stein worked hard to "walk her talk." She brought the unions in as partners, for instance. Though AFSCME, the main union, had not supported her candidacy, she doubted RESULTS would ever really penetrate the organization if the unions opposed it. So she approached the AFSCME local president and told him what she wanted to do. His initial reaction was defensive: He said county workers were already doing a good job. But he agreed to read some books Stein suggested. He came back and told her that he thought his members would benefit if public perceptions of government workers improved, so he would help. From then on, RESULTS was a labor-management project.

Stein agreed to give union stewards paid release time to attend a quality management conference. She met with the union president monthly to troubleshoot any emerging issues. And the union inserted a statement of support for results in its collective bargaining agreement. "AFSCME also sponsored me to go to work sites to hear directly from employees about their concerns," she says. "I would always talk about RESULTS and quality when I did that. And it gave employees direct access to me."

At some point, the top leader has to hand other leaders real power and step back so they can lead. Stein did this with her department heads. When the Results Roadmap was done, she disbanded the steering committee and gave responsibility for deploying it to her department heads:

I met with department heads every other week. One of the agenda items was always a rotating report from one of the seven department heads on how they were deploying RESULTS in their department. There was a RESULTS committee in every department -- a committee of employees responsible for leading this.

Another big part of empowering leaders throughout an organization is teaching them -- training them, helping them find coaches and helping them learn from failure. To sharpen leadership skills, Stein had the county's training programs redesigned around the RESULTS goals and dramatically increased their budget. She engaged a coach to hone her own effectiveness and recommended that department heads do the same. She and her chief of staff coached those who chose not to.

Distributed leadership also involves celebrating when your leaders succeed -- both to reward them and to publicize the behavior you want. Stein wrote congratulatory notes to employees who demonstrated effective leadership, and whenever a department held an event to recognize employees, she appeared and spoke. But she learned, from a regular employee survey, that employees wanted more recognition, so she put a team together to develop more systematic efforts. And when the organization itself won a big award, she threw a huge party:

We went through a year-long process of applying for the Oregon Quality Award, which used the Baldridge criteria. When we won, we had a big party. I remember going to that party, and my face hurt from smiling so long. People felt really acknowledged because we had it in a Hilton Hotel ballroom. The message was that government isn't second class -- we can have a party in a nice hotel too.

At some point, enabling leaders throughout your organization also means protecting them at unhappy moments. The leader is like the point bird in a formation of geese, hitting the wind first and breaking the path for others. When bad news hit the press, Stein knew she had to support her troops:

If something went wrong, we would immediately talk to all the commissioners and give them all the context so they wouldn't battle us back. The care and feeding of commissioners is really critical. I tried my best to back the employees up without being an apologist for stupid things. When really bad things happened, I said they were mistakes and we were going to learn from them and move on.

Over eight years, Stein says, she learned just how indispensable creating an organization of leaders is:

I learned that this was the bottom line, if you're really serious about making changes. The research we had done that said you had to have leadership at the very top is really true. That's where distributed leadership starts -- you have to distribute it from the very top. And that person has to constantly send waves down through the organization -- otherwise it falls down people's list of priorities.

It's like oil and water: To get that oil emulsified and down into the water takes really hard work. But it's the only way that transformation will really work because you have to change the hearts and minds of every employee, down to the janitors.

It has to be an organized deployment. It's not enough to just have meetings and tell employees this and that. You have to have a strategy. How are you going to engage the department heads? Then they have to engage their second level, and they have to figure out how their second level is going to engage the middle managers, and the middle managers have to figure out how to engage the employees. It has to be a thought-out engagement strategy. It can't just be a bunch of different activities.

Ultimately, Stein says, "the goal is to transform the culture of the organization so it's just the way we do things -- so everyone feels like this is important, that 'I want to be doing this.'"

"One of the things I am most proud of is hearing that a janitor in one of our facilities told the director, who was praising his work, that his goal was improving customer service. That day I knew we were different in fact -- not just in theory."

Bio: David Osborne is the author of four books, including the best seller, Reinventing Government. In addition to being a prolific author, he is a managing partner with Public Strategies Group, a consulting firm that helps public organizations develop and implement long-term change strategies. In 1993, Osborne served as a senior adviser to Vice President Al Gore to help run his government task force.

David Osborne  |  Contributing Writer