The Golden Touch

Stephen Goldsmith shares his secrets to successful e-government.

by / April 16, 2002
Stephen Goldsmith is the ultimate multi-tasker.

The former mayor of Indianapolis and chief domestic policy adviser to President George W. Bush during his campaign now has three full-time jobs - and half-a-dozen part-time jobs. He is a senior vice president of the State and Local Government Division of Affiliated Computer Services Inc.; faculty director for the Innovations in American Government program at Harvard's Kennedy School of Government; and chairman of the Corporation for National Service, which oversees AmeriCorps, Senior Corps and other national service initiatives. If that's not enough, he's also a senior fellow and chairman of the Center for Civic Innovation at the Manhattan Institute for Public Policy.

As mayor of Indianapolis, Goldsmith earned a national reputation for initiatives to introduce competition, performance budgeting and activity-based costing into city government. He also was one of the first major politicians to see how the Web could transform government. The city's site,, won Government Technology's Best of the Web award and the Global Internet Infrastructure award in 1998.

Goldsmith had a hand in shaping many of Bush's signature policy initiatives, including the education, faith-based and, of course, e-government proposals. He remains an adviser to the president on faith-based and community initiatives and is spearheading an initiative to use digital technology to strengthen civil society.

Government Technology: Last summer, within a week of each other, two major candidates for president of the United States gave speeches focusing on e-government. This was the first time in history that it had ever been mentioned in a presidential campaign. How significant is that?

Goldsmith: It's clear that President Bush considers e-government an integral part of government reform, not as just a stand-alone facade into government. The fact that both candidates referenced it shows how much has changed. But the way in which President Bush mentioned it demonstrated for the first time a chief executive's awareness of the transformational capacity of e-government.

GT: You have said: "Information itself is now a product. In a complex society, the Internet facilitates government's role in aggregating and distributing information about access, quality and price." How are governments doing this now and, more importantly, where are the opportunities for government to act as an information aggregator and distributor in the future?

Goldsmith: Absent the Internet it is very difficult for any consumer, let alone the non-influential consumer, to have enough information to make intelligent purchasing decisions. Purchasing could mean where your child goes to school, who your doctor is, what is the rate of return on your Social Security, what is the best insurance policy in a Medicare reform environment. What the Internet will do is allow information to be configured and personalized in a way that enhances the purchasing decisions of the citizen.

GT: You have seen e-government from the private and public sides. How is the view different from the vendor's side?

Goldsmith: Most progressive elected officials don't believe vendors really understand what they need. It's very difficult for an elected official, or even the CIO/CTO to know if what the vendor promises is worthwhile. You can see the screen shots and hear the pitch, but you can't figure it out. I couldn't figure it out and I've been doing it for 15 years. So, the acquisition decision is difficult and then there's the suspicion that what the vendor is trying to do is not solve the problem, but just make some money. You've got this little bit of tension and suspicion, and a big capacity issue.

On the vendor side, they look at the customer and think, 'This mayor or governor may want to do this, but the IT bureaucracy won't let them buy outside,' or 'They don't understand modern tools' or 'They are behind the curve.'

Both sides need each other. We're not going to get there without public and private partnerships, but there's a long way to go in terms of trust.

GT: What can be done to improve that situation?

Goldsmith: On the government's side, a little more effort by independent third parties either helping in training or consulting services on the acquisition side would be helpful.

The government official who wants to find out who is really good at affordable housing can do it a lot more easily than they can find out who is really good at Web-enabling service orders in the street department. Whether it is the Center for Digital Government or the Manhattan Institute for Public Policy, or other third parties that are relatively independent, we can elevate the purchasing knowledge at the city and state level.

GT: Given what you said earlier about information as a product, isn't there a way to use the Internet to provide better purchasing information to CIOs and others?

Goldsmith: There is absolutely a role for that, but we need some smaller group of experts who are organizing and discerning and posting and providing input about where to go look. It is very difficult. If a city or state makes a bad decision with a vendor nobody has any interest in broadcasting that mistake. This is unfortunate because some of the mistakes actually make the vendor better the next time, but there just is not a very good process right now for learning from the mistakes.

GT: Local governments provide the most direct services to citizens, but they have not made nearly as much e-government progress as states and some federal agencies. Why is this and what advice do you have for local jurisdictions?

Goldsmith: With some notable exceptions, New York City and a couple of others, I think your conclusion is accurate. Here's why:

First, there have been some very strong gubernatorial leaders in this effort - some led by the governor, himself, like Gov. [Tom] Ridge from Pennsylvania; and some led by a combination of the governor and the information officer, like in Virginia. I think that's had an effect.

Second, until this year, states have had a lot of money. Thirty million dollars here or there was not impossible to come up with. Cities have not had as much loose change from the good economy, and they have had a lot more day-to-day pressures.

Third, I think really good governors or department directors at the state level can see the enormous savings possible in enterprise solutions when you are dealing with multi-billion dollar programs - child health care or motor vehicles. These are huge state systems and I think that people can see the opportunity for cost savings from integrated case management, e-procurement and personalized service. There is a lot of opportunity for local governments. The challenge is how you take the successes of the states and provide those tools to local governments so that they can catch up.

GT: Many state CIOs say the federal government delivers few direct services so its role in e-government is circumscribed. What role should the federal government play in bringing about intergovernmental collaboration?

Goldsmith: I've been involved in child support for about 20 years and the federal government has spent billions on child support technology, which has made the system better. But there have been lots of mistakes and lots of replication of the mistakes (not just the successes), because federal policy is delivered 50 different ways in the states.

You almost can't answer this question without a three-dimensional graph, because you've got this problem of the federal government doing very little across its own verticals and very little horizontally. You've got food stamps doing very little with job training, which is doing very little with child care, which is doing very little with child support. Then you've got the absence of systems integration on the devolution side from federal to state. You've got boundaries that are geographically horizontal boundaries. You've got vertical boundaries between the federal government and these geographical horizontal boundaries. Then you've got this dimension of an awful lot of private players and confusion about the boundaries between private and public players.

The best thing that could happen would be federalism working groups to look at solution sets that go horizontally across programs, and go across the verticals, but also go up and down federal, state and local.

GT: How will technology advance civil society and the faith-based initiative?

Goldsmith: Hopefully, technology will play an enormous role in advancing civil society. People talk about how impersonal it is, but if we concentrate on providing the right tools to community groups and faith-based groups, they can knit that information together in a way that provides cohesiveness inside their community of interest. People will depend more on the neighborhood center for information or they might have their own kind of ISPs, if you will. It's just using the Internet for micro-segmentation at the neighborhood level, whether it's around interest groups or issue groups, and I think it can help civil society.

GT: You've said that the current structure of government, particularly the federal government, is incompatible with the New Economy. What needs to change? Will we see a much different looking government in five to 10 years?

Goldsmith: We have a networked society and economy and an industrial-age government. They need to be a little bit better matched. Government needs to operate in a less autocratic way and a more networked way: Employees should be allowed to have more discretion. They should be organized around problems, moving from project to project, year to year, and be rewarded for performance - things you'd expect from an information society.

Will we get there? I hope so. It will take congressional leadership, as well as presidential leadership. The president talked about how to get there during the campaign. There is leadership in Congress today, senators [George] Voinovich and [Fred] Thompson and others who are interested, but there still is a tendency to preserve the status quo because that's the way Congress is set up. It'll be slow going to change it.

GT: Wouldn't that mean that Congress would have to change its committee structure because they are now funding the silos?

Goldsmith: Yes. The committee structure reinforces the outdated organizational bureaucracy.

You almost need another Hoover Commission. There is so much wrong with the civil service, it inhibits the performance of public employees. You have the committee structure in Congress and you have the antiquated civil service work. You need big, bold changes to make this work.

GT: Will the huge improvements in government efficiency and service quality that we expect to see from e-government increase citizens' trust in government institutions?

Goldsmith: It should. Accountability in government is one of the top reasons that citizens want e-government. It is certainly true in terms of procurement, if it is done right.

GT: If more government transactions are done online, what will happen to the tens of thousands of government field offices that dispense Social Security checks and farm payments, sign people up for welfare, handle Medicaid and unemployment insurance, etc.?

Goldsmith: It is the same as any other business. Some people will retire, some will be re-trained, some will be employed in the private sector, some will actually be moved to more meaningful work. Instead of determining whether people are eligible for a service, their job would be to actually help them.

GT: A lot of people predicted massive cost savings from e-government, but so far they have not materialized. Will we ever see these billions of dollars of cost savings?

Goldsmith: First of all, I don't think each case of whether to do an e-government project should depend on whether it can result in a billion here or a billion there saved. There is certainly a case to be made for higher quality service delivery. Having said that, I think over time we'll save money, but the question is how many years do you want to amortize your up-front investment.

E-government at the front end is not less expensive; you save money over time as you redeploy people. So, the savings will come over time with a leaner workforce. It doesn't have to be dramatically fewer people, because if you can provide better services to more people, with a slightly reduced workforce, you're in good shape. Fifteen years ago in child support, when my collections went from $900,000 to $40 million using a lot of computer technology, the office grew only slightly. That kind of result is equally acceptable.

GT: Digital government is supposed to dramatically reduce the friction that exists when businesses interact with government. How will this affect the entire government/business relationship?

Goldsmith: It is certainly true that regulatory burdens will be imposed, hopefully, in a more "humane" way as a result of Web-enabling reporting and monitoring systems. And that government will be able to torment employers in a less obnoxious way. I don't think, however, that that takes the place of eliminating outdated systems and regulations and determining what is important in the regulatory environment. So, I think on the procurement side, it certainly will be the case. On the regulatory side, it takes the commitment to more broad-based regulatory reform.

GT: What role can technology play in enhancing public/private partnerships, outsourcing and managed competition?

Goldsmith: This is a totally unappreciated opportunity. As government moves to more intelligent contract managers - with better training and more interesting jobs - they'll be able to use Web tools and information technology to better manage the day-to-day, hour-to-hour, minute-to-minute performance of their vendors. It won't be, 'Fill out a 100-page report and submit it quarterly.' It'll be what's happening in real time.

GT: Will it also reduce the transaction cost in outsourcing and forming partnerships?

Goldsmith: The Internet can actually reduce transaction costs and make oversight easier, but it could also make it harder. It really depends on how the government contract monitor wants to operate. If the goal is to create a partnership, a non-burdensome partnership where the government monitors quality and provides advice on how to achieve quality, the Internet can play an absolutely critical role. If the government monitor wants to micro-manage the vendor, then he or she could do that, regardless of the tools.
William D. Eggers Contributing Writer