Saving Taxpayer Dollars With Moneyball

More for less. The movie Moneyball opened last weekend, telling the story of Oakland A’s General Manager Billy Beane.  Beane knew he could never match the payroll of the Yankees, so he turned to analytics to win more games and do more - much more - with less.

There may never be a movie about the management of the federal government, but the Administration has been taking its own Moneyball approach to management, driving performance and, ultimately, saving money.

Like Beane, who understood that his goal was to win games – not hit the most home runs, government agencies must learn to be clear about what they want to accomplish and not get stuck in the rut of doing what they have always done. That means setting real, achievable goals that align with agency mission, and sticking to them. For some agencies or programs, that means staying focused on preventing bad things, like accidents and pollution, from happening and reducing their costs when they do – rather than focusing on process goals like completing plan reviews. Processes can be important in achieving the goal, but we should never confuse them with the ultimate goal. To achieve more, government agencies need a clear understanding of the goals each wants to accomplish, focusing on the ultimate goals rather than intermediate process steps. That’s why the Administration has set high priority performance goals to focus our efforts in the near and medium term – and right now we are working on setting agency and cross-agency goals for 2012 and 2013, which will be incorporated in the President’s next budget proposal. This is why the Administration expects agency leaders to be clear about their priorities.

The second lesson government can learn from Beane, who figured out that a player’s on-base percentage was more important to winning than was his batting average, is the value of analytics – constantly looking at relevant data to identify factors most critical to progress and those most likely to cause problems and increase costs. Agencies need to know those factors to identify the levers of change an agency can push up or down to achieve more with less.  Some government agencies already do this. The Department of Transportation, for example, analyzed its data and found that 20 percent of motor vehicle crashes that resulted in injury in 2009, and 5500 deaths, were associated with reports of distracted driving. This highlighted distracted driving as an area for priority action. DOT is working aggressively to help parents, states, local governments, and others understand the problem, and supporting research to identify strategies that successfully reduce distracted driving, which it then promotes for adoption. The Social Security Administration uses analytics to identify criteria it can use to qualify applicants for disability payments more quickly and accurately, even as demand goes up, running predictive scenarios and models to understand how the use of different criteria will affect the error rate, cost, and the time to process a decision. And, based on prior analysis to identify the most promising practices, the Department of Health and Human Services recently announced $224 million in grants to states to provide evidence-based, voluntary home visiting programs that will yield better results and, ultimately, savings to federal, state, and local governments. 

Using all the relevant data we can find to do more with less must be the rule, not an exception, in government. That is the message the President and Vice President delivered to the Cabinet when they launched the Campaign to Cut Waste, a stepped up effort to make government work more efficiently and effectively and root out waste across the agencies. That is also why the Administration asked agency leaders to run quarterly data-driven reviews on their priorities, an expectation now legally required by the Congressional passage of the Government Performance and Results Act of 2010, which the President signed into law in January 2011, shifting the emphasis of the earlier law from performance reporting to increased agency use of performance data to improve outcomes and reduce cost. And it is why agencies need to build their analytic capacity even as they cope with budget cuts by tapping and deploying analytic expertise to help program offices and project managers identify opportunities to accomplish more with less.

Of course, statistics are not everything. A manager needs to know how to use them – how to ask the right questions, to allocate resources and negotiate agreements, and when to address a program or staff member that looks good on paper but is not delivering results. Digging into data is both an art and a science that, admittedly, sounds pretty geeky. But it’s critical not just for winning pennants, but for delivering for the American people.          

Shelley Metzenbaum is OMB’s Associate Director of Performance and Personnel Management