Recognizing the people  element in these initiatives and implementing strategies to help individuals  maximize their full potential in the new environment are key to a  successful transformation of the intelligence community and related  homeland security organizations. They require fundamental  changes in strategic human capital management approaches, particularly in  defining, aligning, and integrating key institutional, unit, and individual  performance management and reward systems to achieve desired  outcomes. Experience shows that successful major  change management initiatives in large public and private sector  organizations can often take at least 5 to 7 years to help to create the  accountability needed to ensure that long-term management and  transformation initiatives are successfully completed. For example, while the FBI Director has a 10- year term appointment, most of the intelligence agency heads have shorter  term appointments. In his August 2004 testimony on the proposed 9/11  Commission reforms, the Comptroller General suggested that the Congress  may want to place attention on lengthening the period of time served by the  directors of the other intelligence agencies to provide the continuity and  management needed to make the tremendous changes that occur during  organizational transformations. Using Performance Management Systems Is Another Key Practice to Help Transform the Intelligence Community

A central theme of the 9/11 Commission report was that one of the major  challenges facing the intelligence community is moving from a culture of a  “need to know” to a “need to share.”   The Congress and the President are  separately considering a series of important structural and policy changes  that would facilitate this shift. Human Capital Flexibilities Are Also Essential Tools for Intelligence Community Transformation

Significant changes have been underway in the last 3 years regarding how  the federal workforce is managed. For example, the Congress passed  legislation providing certain governmentwide human capital flexibilities,  such as direct hire authority. While many  federal agencies have received additional human capital flexibilities, others  may be both needed and appropriate for the intelligence and other selected  agencies. FBI Is Using Strategic Human Capital Management to Transform and Meet Post 9/11 Challenges

Human capital challenges are especially significant for the intelligence  organizations, such as the FBI, that are undergoing a fundamental  transformation in the aftermath of September 11, 2001. For the last 3 years,  we have been monitoring the FBI’s progress as it transforms itself from its  traditional crime enforcement mission to its post September 11 homeland  security priorities—counterterrorism, counterintelligence, and cyber  crimes. These initiatives included realigning, retraining, and  hiring special agents and analysts with critical skills to address its top  priorities, and taking initial steps to revamp its performance management  system. Many Factors Must Be Considered in Approach to Government Security Clearance Process

The 9/11 Commission also raised concerns about minimizing national  security policymaking disruptions during the change of administrations by  accelerating the process for national security appointments. The  Commission recommended that a single federal agency should be  responsible for providing and maintaining security clearances and for  ensuring uniform security clearance standards, including maintaining a  single governmentwide database of clearance information, as a way to  address this concern. In prior work, we have found that many factors must  be considered in addressing the government security clearance process. 2). The large number of requests for security clearances for service members,  government employees, and industry personnel taxes a process that  already is experiencing backlogs and delays. The limited number of investigative staff available to process requests  hinders efforts to issue timely clearances. Human capital considerations, such as the recruitment and retention of key  skills and competencies, performance incentives to share information, and  more flexible approaches to the management of human capital, are crucial  to the success of the intelligence community reforms envisioned by the  9/11 Commission, and agencies involved with the intelligence community  will need the most effective human capital systems to succeed in their  transformation efforts.
Why GAO Did This Study

GAO has performed extensive work and gained experience on government transformation and the critical role that human capital management can play in driving this change. Valuable lessons from these efforts could help guide the proposed reforms in the intelligence community envisioned by the 9/11 Commission. This statement focuses on (1) the lessons GAO has learned from successful mergers and organizational transformations; particularly the need for committed and sustained leadership and the role of performance management systems in these changes; (2) human capital flexibilities that can be used as essential tools to help achieve these reforms; (3) how the Federal Bureau of Investigation (FBI) is using these lessons and human capital flexibilities to transform to meet its evolving mission in the post 9/11 environment, and (4) GAO's findings to date on the factors that must be considered in the approach to the government's security clearance process, as a means to accelerate the process for national security appointments.

What GAO Found

Recognizing that people are the critical element in transformation initiatives is key to a successful transformation of the intelligence community and related homeland security organizations. GAO's work in successful mergers and transformations shows that incorporating strategic human capital management approaches will help sustain any reforms in the intelligence community. Successful major change management initiatives in large public and private sector organizations can often take at least 5 to 7 years to create the accountability needed to ensure this success. As a result, committed and sustained leadership is indispensable to making lasting changes in the intelligence community. Accordingly, the Congress may want to consider lengthening the terms served by the directors of the intelligence agencies, similar to the FBI Director's 10-year term. One of the major challenges facing the intelligence community is moving from a culture of a "need to know" to a "need to share" intelligence information. The experience of leading organizations suggests that performance management systems--that define, align, and integrate institutional, unit, and individual performance with organizational outcomes--can provide incentives and accountability for sharing information to help facilitate this shift. Significant changes have been underway in the last 3 years regarding how the federal workforce is managed. The Congress passed legislation providing certain governmentwide human capital flexibilities, such as direct hire authority. While many federal agencies have received human capital flexibilities, others may be both needed and appropriate for intelligence agencies, such as providing these agencies with the authority to hire a limited number of term-appointed positions on a noncompetitive basis. Human capital challenges are especially significant for the intelligence organizations, such as the FBI, that are undergoing a fundamental transformation in the aftermath of September 11, 2001. For the last 3 years, we have been using the lessons learned from successful transformations to monitor the FBI's progress as it transforms itself from its traditional crime enforcement mission to its post 9/11 homeland security priorities--counterterrorism, counterintelligence and cyber crimes. For example, the FBI has undertaken a variety of human capital related initiatives, including major changes in realigning, retraining, and hiring special agents and analysts with critical skills to address its top priorities. The 9/11 Commission recommended that a single federal security clearance agency should be created to accelerate the government's security clearance process. Several factors must be considered in determining the approach to this process. The large number of requests for security clearances for service members, government employees, and others taxes a process that already is experiencing backlogs and delays. Existing impediments--such as the lack of a governmentwide database of clearance information, a large clearance workload, and too few investigators--hinder efforts to provide timely, high-quality clearance determinations.