To Better Serve You

The Senate’s bipartisan review of FEMA’s response to Hurricane Katrina’s devastation came out late last month. If you had read the business pages, you would have been able to predict the outcome.

Official Washington has been in a corporate-style mergers and acquisitions frenzy ever since 9/11 kicked off the creation of the Department of Homeland Security. That move was designed to centralize the multitude of national security agencies and efforts that protect our borders and our people from terrorist threats. Another spawn of 9/11, coming more recently, was the so-called “intelligence czar,” an attempt to coordinate the multitude of intelligence agencies that feed the decision-making of the White House and Pentagon. And don’t forget about another 9/11 spin-off, the “USA Freedom Corps,” which coordinates the multitude of government-sponsored volunteer agencies and efforts that, according to their materials, “strengthen the non-profit sector, [recognize] volunteers, and [help] to connect individuals with volunteer opportunities.”

See a trend? It’s easy to spot. Whenever there is more than one outfit working on something important, they all get folded into one agency and are given a new, very important boss who reports directly to the head honcho. These new agencies (really Frankenstein amalgams of other already-existing organizations) will create “synergies.” Indeed, the first Homeland Security secretary, Tom Ridge, spoke of developing “new synergies” and forming “robust partnerships” in his inaugural speech. But what the new government organizations really seem to do best is duplicate the work of other agencies: just ask yourself why we needed a USA Freedom Corps when we already had AmeriCorps.

This is all very new-economy. How many times have you read in the business pages about a company’s reorganization to allow it to “better focus on its core competencies” or some other, similar buzz-language? Such moves often increase “shareholder value” in the short term and stock prices rise. CEOs line their pockets and receive praise from other plutocrats for their clever decisions.

Problem is, lots of times these things fail. Think about one famously hare-brained merger. A darling of the new Internet economy married an august, respected and multifaceted media company, creating a vertically-integrated behemoth. This would produce “synergies.” That may have been true, but AOL/Time Warner just never got it together. The innovative merger fizzled. Now, the deal’s chief architect wishes it had never happened. In 2003, the company switched to calling itself simply TimeWarner, but not much else changed. It still hasn’t regained its footing, notwithstanding a positive recent earnings report.

When it comes to government, the stakes are just a bit higher than they are in the boardrooms of America. Lives are involved, not simply money. Bold restructurings may generate praise from the pundit crowd, but the business of government is not to be efficient or to turn a profit. It’s to provide for the American people that which they cannot provide for themselves. These new organizations, headed by new czars, must perform. If they fail, consequences can be dire.

FEMA failed. America got caught asleep at the switch and Katrina had its way with us. Evidence suggests that one chief reason it failed is that its purpose got diluted when it was merged into an organization – Homeland Security – that didn’t care too much about its function. The Congressional panel that reviewed FEMA’s performance has suggested a set of reforms that amount to a small-scale reorganization. They stop short, in deference to the president, of calling for FEMA’s decoupling from DHS. Instead, they say it should be “dismantled and rebuilt” within DHS – and given a new name.

They should go further. Whatever it’s called, FEMA should be on its own. Truth be told, it had no business being part of a Homeland Security department in the first place. The logic for incorporating it into DHS at the time was that FEMA has to clean up messes, and terrorist acts will produce messes, so FEMA should be part of DHS. By that logic, so should hospitals and fire departments, both of which will have to clean up messes in the event of terrorist attacks on our soil.

A friend once quipped to me that the most pervasive lie told by companies to consumers was that some move was designed “to better serve you.” New ATM fees? To better serve you. Voicemail instead of human receptionists? Ditto. My friend said that, whenever he heard that phrase in a press conference, his first thought was to hold onto his wallet.

Washington’s M&A mania in the earliest part of this century has been meant “to better serve Americans.” Each move was touted as a smart response to very real failings. But, given the track record of high-profile corporate mergers, Americans may be excused for harboring some small amount of skepticism that this will really come true.

In FEMA, we are beginning to see the shortcomings of our devotion to clever management moves. One hopes we are also beginning to see a renewed interest in performance over process. Hurricane season is coming.

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