The realignment of power and funding between the federal, state and local governments has often been accompanied by a new emphasis on performance, autonomy, accountability and change. In the following article, David Osborne and Peter Plastrik, co-authors of the new book Banishing Bureaucracy: The Five Strategies for Reinventing Government, tell how a dying Virginia city brought itself back to life.

Copyright (c) 1997 by Governing. Reprinted with permission.


City employees in Hampton, Virginia, didn't always do their jobs last year.

Instead of tending to her desk work as assistant city manager, Mary Bunting dug ditches with a city sewer crew.

The heavy construction team in the Public Works Department spent weeks developing a new city park for another agency.

Donald Gurley, the chief housing inspector, put in time to organize an exhibition about city services for the Neighborhood College, the city's training program for residents.

Kevin Gallagher, who runs the city's recycling programs, helped street crews clear away snow and ice.

Most of the city's 1,300 employees participated in one or more of its 115 task forces, advisory groups, self-directed teams, committees and councils --- doing work that was not their job.

Why did Hampton's employees behave in these ways? In part it was because Bob O'Neill, the city manager, wanted his assistants to know more about how various agencies really worked. Bunting says the field work changed her assumptions about city sewer employees. They were much more skilled and flexible about taking on new responsibilities than she had expected. The job rotation experience also helped prepare her to run the agency temporarily when Ed Panzer, the public works director, retires.

Motivation was different for the heavy construction team. Under Ed Panzer's stewardship, they took on the park development project when the parks director asked for help. Panzer knew the park was a community priority.



The redeveloped waterfront of Hampton, Virginia.

Donald Gurley ran the exhibit for the Neighborhood College because, as he puts it, "I opened my big mouth." Two years earlier, he had attended a Neighborhood College session in which department heads made speeches to attendees. "It didn't keep their attention," Gurley says. "I suggested we do something like a career day, letting people rotate around to work stations for each department." People seemed to like the idea. Gurley volunteered to make it happen.

Kevin Gallagher turned up during snowstorms to help clear the streets for the simple reason that it needed to be done. "My job description is recycling manager, but my duty is customer service for the citizens of Hampton," he says. Gallagher enjoys working on teams because it connects him to other employees. "It lets me know who's who in the organization. I invite people into my world, and I dabble in theirs."

Hundreds of employees seized the chance to work elsewhere within the city. The informal networking and connecting with people "means we're more than just organization charts and boxes," says Tharon Greene, director of human resources. "A lot of us feel that by working this way we have a voice in where the organization is going."

In short, an extraordinary number of Hampton employees collaborated avidly with one another and routinely went the extra mile for citizens because they wanted to.

Hampton employees weren't always so flexible. City government used to be a standard issue bureaucracy: The city manager was the boss. Assistant city managers told department heads what to do. The department heads protected their turf, hoarding decisions and information. They commanded middle managers and supervisors, who controlled the day-to-day work of employees.

Managers and employees focused on complying with detailed operational procedures. Communications followed the chain of command: up, over and down. Most people stayed in their institutional boxes and worried about pleasing their bosses. They waited for orders or permission to act. The organization prized loyalty, stability, certainty and control.

Things began to change in 1984, when the mayor and council reviewed the city's condition. Its population was stagnant at 130,000. Taxes were among Virginia's highest. Home values and per-capita income were the lowest in the region. The budget was strained by debt repayments. The city was losing business to nearby communities.

"The statistics scared us," says Mayor James Eason. Hampton was dying in slow motion.

When this realization sunk in, the politicians developed an aggressive economic development agenda, including the acquisition and development of land, improvements in the city's physical appearance and tax cuts. To implement it, they needed a city government that was more responsive to the community's needs, innovative, flexible and action-oriented.

When the city manager retired, Eason and the council went looking for a successor who would change things. They found someone right in town. Bob O'Neill knew the bureaucracy from the inside.

A dozen years earlier, he had begun working for the city as a young intern and risen quickly to the post of assistant city manager. But he was also an outsider: In 1979, he had left government to work as a business consultant.

Although many people in city government knew O'Neill, they weren't sure what to expect from him. The council wrote him a performance contract that spelled out specific goals for city government. It emphasized what Eason calls "the Noah Principle" of management: "No more prizes for predicting rain; only prizes for building the ark."

O'Neill didn't have a blueprint for the ark he was supposed to build. The only grand plan he had was a belief that city government had to anticipate and adapt to future changes. "The issue is whether one can be excellent over time, not whether you can do it one time," he says.

To make the organization more adaptable, O'Neill would have to find the levers that would fundamentally change city government's bureaucratic behaviors and instincts.

O'Neill began with what we call the "control" strategy. He told his assistant city managers to stop micro-managing their departments and to work instead on long-term strategic issues, such as the city's relationship with the local schools. He gave directors full control over their agencies.

Then O'Neill created a handful of interdepartmental task forces to focus on major common functions, such as physical infrastructure, public safety and citizen services. He told his directors to build cooperative relationships with those who could support their department's mission. Department heads decided who should participate in the groups and chaired them. The task forces had the power to allocate resources across departmental lines.

For a while, employees weren't sure what to do in the task forces. When O'Neill told department heads that they could structure the task forces any way they wanted, they hesitated. "They said, 'What's the answer? Tell us what you REALLY want,' " O'Neill recalls. His answer was to assign Assistant City Manager Mike Monteith to help the new groups but not to tell them what to do.

Eventually, the task forces evolved into problem-solving groups. "Someone would say, 'I've got a problem,' and the group dealt with it," O'Neill says.

The change in atmosphere was noticeable. When Walt Credle joined city government as social services director in 1990, he found that the task forces had fostered a great deal of work across departmental lines and created an environment that was like nothing he had seen before. "There's no sense of competition, of hidden agendas, of politics," he says.

For Don Gurley, the change in control was inspiring. "Information was filtering down to my section," he says. "They wanted my input. That wasn't done before. I was becoming more involved with the process because I was being consulted on different things."

The city government also began pushing control out into the community. When city officials became worried about the number of Hampton youths who were not succeeding in school, they asked the community what should be done. The answers surprised them. "We ended up with a conversation about how the whole community was part of raising a child," says Monteith. "It was all about the importance of neighborhoods and family." The city organized a community-wide coalition of parents, businesses, community groups, youth advocates and teenagers. More than 5,000 people helped develop recommendations that became part of the city's strategic plan.

Again, when city leaders worried about the health of Hampton's neighborhoods, they shared control of the city's planning process with neighborhood groups. The planning agency also required developers to meet with neighborhood groups before they requested zoning changes and use permits. Then the city created a Department of Neighborhood Services, as recommended by the community coalition, to meet the unique needs of each neighborhood. It provided small grants for neighborhood development, launched an institute to train neighborhood leaders, helped develop neighborhood groups, linked neighborhoods to each other so they could exchange services, and leaned on other city agencies to support neighborhoods.

O'Neill also worked with the city council to set clear goals. This is what we call the "core" strategy. He put department heads on performance contracts that spelled out the results they were expected to produce, then tied their bonuses to their achievements, using the "consequences" strategy.

These efforts began to change the culture. But O'Neill, Mayor Eason and the city council decided that employees also needed what the mayor calls "a compelling vision of a desired state of affairs." Since Eason deems vision "the link between dream and action," he wanted Hampton's elected officials, city managers and public employees to share the same mental picture of the organization's purpose.

O'Neill, the council and hundreds of city employees worked together to develop vision and mission statements that described the purpose and role of city government. The final vision statement pledged that Hampton would become "the most livable city in Virginia." The new mission statement said the city would "bring together the resources of businesses, neighborhoods, community groups and government" in order to realize that vision. The mission embodied the council's view that government should become a broker of the community's resources, not just a provider of services and regulations. The council embraced both statements, and O'Neill used them to develop measurable objectives and action plans for the departments.

"'The most livable city in Virginia' -- everybody knows those words," says Kevin Gallagher. They were hard to miss when he started his first city job. Not only were the words plastered in all city offices, they were "even on our paycheck stubs."

The mission and vision statements were the opening shots in O'Neill's application of the "culture" strategy. The statements began to reshape employees' thinking about how to get their jobs done. For example, the city was under pressure to create community centers in several neighborhoods. But instead of building and operating new centers (the old service role), the city brokered two centers into existence. In one case, officials enticed the YMCA to establish a branch in the wing of a closed high school. The YMCA rehabilitated two gyms and the outside athletic fields, then began raising money to build an extension with an indoor swimming pool. In a second neighborhood, the city renovated a facility, then turned it over to the neighborhood to operate.

The overhauls throughout city government created both anxiety and enthusiasm among employees. Many were unsettled by the new emphasis on performance, autonomy, accountability and change. "For a long time there would be lines of people outside my door who wanted to come in and say, 'Is it OK if we do this?'" recalls Human Resources Director Tharon Greene. Others, including a few top managers, couldn't survive in the new environment.

Most employees liked the changes, though. A majority, O'Neill reports, feel like they have been freed of constraints and can finally do their jobs the way they've always dreamed of doing them.

Nonetheless, as O'Neill's efforts took hold, employees raised all kinds of issues. They were, in effect, testing whether the city was going to be consistent about building a new culture. Some complained, for instance, that there was no way of recognizing people who did extraordinary work over time. The city reacted by creating a program that allowed each department to develop awards for employee innovations and productivity improvements. The agencies shared 10 percent of annual savings with employees and provided awards such as office equipment, dinners and premium parking spaces.

Employees also complained that their compensation did not reward them for customer service. That's when O'Neill instituted an annual bonus based on citizen satisfaction surveys -- a version of the "customer" strategy.

Each challenge employees threw at him O'Neill saw as an opportunity to reinforce the culture he was trying to develop. "Once you pass these tests enough times and people see things happening differently, they build a commitment to the new culture. The way they think about things and the way they behave changes dramatically."

By the mid-1990s, Hampton was a big success story. The city's financial indicators remained strong even during the recession of the early 1990s. Downtown development had leaped forward. Property taxes, once high, were now among the lowest in Virginia.

Debt payments had been cut in half. Mayor Eason had been reelected three times, and his allies on the council had also worn well with voters. Citizen satisfaction with city government hovered around 90 percent. Employee morale, measured annually, was consistently good. Many employees believed a new culture had emerged.

The drive to perform had, however, left the organization exhausted. People were getting tired of change. "People were feeling wrung out," says Tharon Greene. "We'd been doing more with less for years."

In 1995, O'Neill met with his department directors to talk about the problem and to rally the troops. He told them he was just as worn out as they were and wouldn't mind taking a break either. But their world was changing rapidly. If the city wasn't prepared to stay in front of the curve, it would lose its edge. "As much as we'd like to take a break," he told them, "it's not doable."

Then he launched a new wave of changes.

O'Neill had his eye on two challenges. One was problems the city faced that could not be solved within its perimeters. A whole range of issues, such as air quality standards and employment, for instance, transcended city boundaries. The other challenge was that Hampton's citizens still didn't think city government was responding adequately to their neighborhoods' needs.

The city was not well prepared to deal with either challenge. It didn't have strong connections with other entities in the region, and its departmental structure got in the way of creating healthy neighborhoods. "We had trouble getting department heads to buy into the fact that [neighborhood service] was their priority," says Joan Kennedy, who ran the fledgling unit created to help neighborhoods. "They viewed it as an add-on to the regular job."

As a result, she spent most of her time "jumping organizational hurdles."

In response to these concerns, O'Neill asked his department heads to figure out the make-or-break issues the city faced. They came up with five major challenges: creating healthy families, healthy neighborhoods, healthy businesses, a prospering region and delighted customers. They recommended permanently dismantling the remaining walls between departments and shifting resources to these strategic goals. "We're talking about department boundaries disappearing within a year," says Greene.

No one knows where the process will lead. But in Hampton, this is not unusual. "It's just the next big change," says Assistant City Manager Monteith. "Given that we are continually looking for the better way to make things happen, this organization is going to keep on changing."

Issues of Democracy
USIA Electronic Journal, Vol. 2, No. 2, April 1997