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Respect the Agency’s Culture

Not many people have run OMB and Treasury and worked at the State Department. Here’s the advice of one who has.

By Jacob Lew

Tagged Biden AdministrationcabinetOMB

This is the fifth article in our “Beyond 1600” series, in which we asked some Obama-era Cabinet officials to write essays to explain to our readers—and to the Biden-era counterparts—the challenges they encountered in their positions and the keys to success they discovered. Journalist Jonathan Alter, who has written acclaimed accounts of three administrations, wrote the overview. Jason Furman wrote about being the chairman of the Council of Economic Advisors. Ernest Moniz wrote about being energy secretary. Sally Jewell wrote about being Secretary of the Interior. Today, to close the series, Jack Lew offers advice from his time in multiple departments, including as Treasury Secretary.

The orderly transfer of power from one presidential administration to the next is a hallmark of our constitutional system of government. Every four or eight years, this momentous event reaffirms our nation’s bedrock democratic principles. The inauguration of a new President may seem like a conclusion rather than a beginning, and after a grueling campaign and frenetic transition there is much to celebrate. But that January 20 event marks the beginning of the most difficult and urgent work of all: that of governing. The immediate post-inauguration sprint is a dynamic time when a new Administration sets the tone and direction for the next four years. The importance of that initial period is difficult to overstate, particularly in a time of crisis, such as President Obama confronted when he took office, and as Joe Biden faced with the country suffering from the COVID pandemic, and the enduring economic pain it has caused.

A key priority is appointing the roughly 4,000 individuals who will serve at the pleasure of the President. From Senate-confirmed Cabinet officials to the more junior positions, a new Administration faces the daunting task of staffing a government overnight with people of integrity and ability to carry forward the President’s agenda across a stunning array of functions and disciplines. The challenge is to do this without missing a beat where continuity is essential, and with marked change where appropriate to match the new policy direction.  And while appointing officials who share the Administration’s values and goals is important, it is likewise vital that they quickly harness the extraordinary capability of their career staff, where the vast majority of resources reside. To drive the new President’s agenda, new appointees from the Cabinet down need to master the details within their organization, learn the culture and win the respect and confidence of the whole team.

The first priority of new department heads is to quickly get their bearings across several dimensions. Time is a senior appointee’s most scarce resource, and finding the proper balance between policy development and execution is critical. The policy development process must quickly turn toward execution, which makes settling in quickly that much more urgent. A new Cabinet agency head must rapidly determine immediate priorities, identify and establish allies, and assess risks and potential trouble spots within the agency and across the government, including Congress. But, above all when settling in, a new official must pay close attention to two key relationships—that between the appointee and the President, and between the appointee and his or her own agency.

To be effective, a senior official must know the President’s priorities and have his trust and confidence. A nuanced understanding of the President’s philosophy and objectives must undergird the process of establishing independent leadership within your agency. Enjoying the President’s trust, especially when that trust is widely recognized, is an asset in negotiating and implementing policy within your agency, across the U.S. government, and around the world. My first overseas trip as Secretary of the Treasury was to China, where my counterparts knew that I spoke for the President, which gave me critical credibility to negotiate contentious economic issues. Given the deep relationships that President Biden has with key economic and national security appointees, I am confident that when our nation’s top diplomatic or economic official speaks, the world will know that their word is backed by the President. And at times, action is needed to back up words. When I became President Obama’s director of the Office of Management and Budget, I was already a known counterpart to key members of Congress, but the clarity of my role was assured early on when the President told congressional leaders, “When Jack speaks, he speaks for me because he shares my values.”

Other than ensuring a mutual relationship of trust and understanding with the White House, the most important connection for a senior appointee to make is with the bureaucracy of their own department. No policy or personnel decision is more important than learning the building: the culture, traditions, and priorities of dedicated career staff who have the institutional memory that is key to effective policymaking and its execution. These civil servants have deep expertise and the ability to both identify opportunities to succeed—and risks to avoid. At the Department of State, George Schultz would advise new secretaries to acknowledge how important the institutional capacity is and demonstrate from day one a commitment to leave the department stronger than they found it. That is sound advice that I have often repeated.

Forged over decades or even centuries, the core of an institution’s DNA survives from Administration to Administration in its traditions, priorities, and personnel. Sometimes that culture expresses itself in jargon or jealously guarded bureaucratic turf; but more often it emerges in how relationships between career and political staff are structured, and in a quiet devotion to mission and duty. At OMB, State, and Treasury, I experienced three very different cultures, but in each instance benefitted greatly from the invaluable support of career staff. At the same time, I insisted that issues be demystified, and that insider language not be used to make issues harder to understand or assess independently. At one point, I asked that no memos use acronyms until I learned the department’s language—a good rule even when one becomes more fluent, because public communication should whenever possible be free of the private language that, while efficient, makes transparency very challenging.

Every agency has its own culture. OMB, where I served as director in the Clinton and Obama Administrations, defines itself as serving the presidency as much as the current President; The Department of State, where I served as the inaugural deputy secretary of state for management and resources, has a storied tradition of rotating assignments and communication by memos still known as cables; Treasury sees itself as the guarantor of clear-headed economic analysis in a world where political considerations often circumscribe the possible pathways. In each case, the challenge is to appreciate the history and culture that is so important to the morale and effectiveness of the career staff, while directing both resources and policies toward the objectives of the new Administration and the exigencies of the moment. In short, approach each organization and its career staff with the deep respect they have earned, and challenge them to meet the demands of the day. Use the knowledge they possess and their analysis as you make the tough policy tradeoffs, and make sure the team understands why these tradeoffs are needed. In each culture, career staff understand that they may not always agree on policy, and when decisions might go in a different direction, make clear that even when their recommendation is not followed precisely, the outcome was informed and shaped by their work.

As you learn your department and win trust inside, do not forget that each agency of government works best as part of a team. Guide the leadership to look beyond the jurisdictional lines and demonstrate a willingness to collaborate with other agencies and accept help in return. Institutional turf battles will always exist, but if you lead by example and show that it is a sign of strength to accomplish better outcomes by working together, you will avoid the pitfall of defending control over substance, and thereby define what it really means to be strong.

Finally, the need to deal with the unexpected should be expected. The test is to react swiftly and effectively when the unexpected occurs, which demands preparation. In a crisis, it is essential to react with appropriate urgency, and whenever possible to cause minimal disruption to work already underway. It may even be necessary to dedicate specific resources to the crisis, so that others are able to continue with their ongoing efforts, even if it means adding supplemental resources for a period of time. At the end of the crisis, it is important that the scarcest of resources—time—has not been lost on the core mission. Maintaining the ability to do multiple important things at the same time is essential.

As I have watched President Biden nominate individuals to fill key White House and Cabinet posts, I have been heartened by their talent, experience, and diversity. I have worked closely with many of them, and have tremendous confidence in their ability, individually and as a team, to articulate and execute a policy agenda that will leave our nation stronger and more prosperous, and share that success more equitably. Our country needs leadership with vision and integrity, and I look forward to watching the Biden Administration tackle the challenges we face and make our nation stronger and our world safer.

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Jacob Lew served as the 76th Secretary of the Treasury and is now managing partner at Lindsay Goldberg and on the faculty of the Columbia University School of International and Public Affairs.

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