Thank you for the opportunity to appear before you this morning. I am grateful to Senator Kay Bailey Hutchison and Congressman Martin Frost for their kind introductions, and to you for the warm welcome you have given me and my family. Speaking of my family, I would like to take this opportunity to introduce my wife, Karen, and my twin sons, John David and Matthew Nicholas.
I also wish to thank the President for nominating me to this position, and express my gratitude to Committee members and their staffs for the many courtesies extended to me during my visits with you over the last month. In addition, I extend my gratitude to Secretary of Commerce Don Evans and his staff and to the staff at EDA for the support and assistance they have given me since my arrival here in Washington.
I was born and raised in a rural farm community in southern Indiana, so I was exposed firsthand at a young age to the economic challenges that confront many of our nation's communities even today. I witnessed the economic dislocation caused by significant swings in farm commodity prices, drought and flood, the relocation of manufacturing facilities outside of the midwest, and the loss of population due to lack of economic opportunity.
I am passionate about economic development. I believe economic development is of critical importance because it supports two important public policy objectives: creating wealth and minimizing poverty. The creation of wealth enables people to be economically self-sufficient and provides the resources needed for building safe, healthy, convenient and attractive communities in which people want to live and raise their families. Minimizing poverty is important because poverty is not only de-humanizing, it is extremely costly in terms of underutilized human and capital resources, welfare transfer payments, soaring public health care costs, crime, and declining neighborhoods that lose their value. Thus, the public sector has a legitimate interest in supporting those efforts to bring economic opportunity to all segments of our society. As President Bush said last week in a speech before the World Bank, "A world where some live in comfort and plenty, while half of the human race lives on less than $2 a day is neither just, nor stable."
But while I am passionate about economic development, I also realize it is not the public sector that creates wealth and minimizes poverty, but the private sector. Therefore, the public sector role is to foster a positive environment where the private sector will risk capital investment to produce goods and services and increase productivity, thereby providing the high-skill/high-wage jobs that offer opportunity for all Americans.
I have come to understand the nature and importance of economic development over the past decade, during which I was actively involved in addressing economic development issues at the local level. First as a staff member and later as President and CEO of the Arlington, Texas, Chamber of Commerce, I was directly involved in local economic development efforts because the Chamber functions as the City of Arlington's economic development department under a public-private partnership agreement that has brought significant growth and opportunity to the City.
Arlington, Texas, is an interesting blend of old and new economy with a significant amount of tourism-based economic activity mixed in for good measure. In addition, the City has an economically diverse workforce and population, and faces most of the economic development challenges confronting the nation's cities. During my tenure as President and CEO, the Chamber's economic development efforts on behalf of the City of Arlington resulted in the investment of $2.4 billion in private capital and the creation or retention of 28,465 jobs. This level of achievement was possible because of an effective public-private partnership, a bi-partisan working relationship with local, state and national officials, the outstanding team of professionals we had working on economic development in Arlington, and the strong performance-based management system the Chamber and City established to guide the economic development program.
I have also been involved in a number of economic development activities at the state level in Texas at the appointment of then Governor, now President, Bush. I served as the Vice Chairman of the Texas Strategic Economic Development Planning Commission when we developed a ten-year strategic economic development plan for Texas. That effort was charged by then Governor Bush to ensure the plan developed would help all regions of Texas achieve their highest economic potential and share in the economic prosperity of the state. I subsequently chaired the Texas Council on Workforce and Economic Competitiveness where we worked to implement the state's plan to integrate its economic development and workforce development efforts. This experience provided me a greater understanding of the need to integrate economic and workforce development efforts in order to support more efficient use of both sets of resources. It also provided me with an appreciation of the potential and promise of the Workforce Investment Act and the role it can play in bringing increased opportunity to Americans.
I believe these experiences and my prior experience with community-based organizations have prepared me to take on the duties of the position of Assistant Secretary for Economic Development. I am committed to leading EDA to become the premier standard bearer for economic developers across the country. I believe that EDA's programs provide an appropriate and critically needed service to America's distressed communities. But, I am equally committed to the belief that the Government is accountable for the funds it spends and the programs it carries out. I believe that EDA must be able to demonstrate, through tangible outcomes and measures, how it is performing and the value of its programs. And, as the premier economic development partner, EDA must set the standard for excellence with its own operations and management.
Integration of mission, organization, budget, and performance form the basic loop that drives success. EDA must reestablish its strategic context and focus by re-affirming the mission and vision of the Agency. We will work with a broad cross-section of experts, private and public, in the field of economic development, to analyze trends and developments. We will work with our partners to develop a coherent and comprehensive vision and strategy to meet the challenges of the 21st century, and we will be poised to address economic development issues as they begin to emerge. EDA will be pro-active in addressing economic development in the future, not reactive.
The strategic vision and mission of EDA will, in turn, dictate the organization necessary to achieve that vision. EDA commissioned a workforce analysis study at the end of FY 2000 so the Agency could plan strategically for long range human resource requirements, to effectively align the workforce with organization goals and objectives, and to provide a foundation for focused cross-organizational placement, training, retraining and recruitment.
The study identified key work functions and activities, analyzed gaps between workload and workforce, detailed managerial, technical and core competencies, and specified the competencies in which deficiencies exist. The study also found that 60% of EDA's workforce is eligible for retirement. Three key recommendations were made. First, analyze work processes in greater detail, from a qualitative and redundancy perspective, to streamline for greater efficiency and effectiveness. Second, reestablish the strategic context and focus for EDA by re-affirming the mission and vision of the Agency. Third, implement a competency-based Human Resource System to tie employees' competency and behaviors to the mission and strategic goals. Such a competency model incorporates succession planning, recruitment, selection and training and development.
If I am fortunate enough to be confirmed for the position of Assistant Secretary, EDA will aggressively move forward to implement the recommendations of the study. Let me assure you, however, that the findings of the study will not be used to support requests for additional staff resources, but rather will help us make optimum use of available staff within current personnel ceilings. We will assess EDA structure to ensure that we flatten management structures so there are fewer layers between customers and senior policy makers. We will define the role of headquarters and align and deploy resources to best serve the needs of communities. We will streamline our processes, align competencies with activities, and explore new opportunities for technological solutions.
After vision and organization comes budget and performance. EDA will derive its budget requests from the outcomes it hopes to achieve, and I assure you that if we can't demonstrate the value of an EDA program's investments, we will not seek funding for that program. I am convinced of the importance of performance-based management systems and that program budget requests should be supported by documented results. Whatever activities we are going to undertake with public dollars must be able to demonstrate benefit for the funds expended through measurable, quantifiable performance measures. EDA is assessing its performance measures, and is focusing resources to develop and define tangible outcomes and performance measures for our capacity building programs, planning and technical assistance. It is fundamental that solid, substantive planning is a prerequisite for sustainable economic development, but it is incumbent upon EDA to tangibly document specific outcomes to be achieved, and then to measure our achievements.
The final recommendation from the workforce analysis study addressed the need for a competency based Human Resource System that ties employees' competency and performance to the Agency mission and goals and performance. A competency based Human Resource system develops succession planning, recruiting, selection and performance measurement around a competency model. I am a strong proponent of The Balanced Scorecard, which is a performance management approach that assesses customer satisfaction, financial results, and internal processes in a way that is practical and measurable and that reinforces the organization's critical competencies, goals and objectives.
Lastly, my view of management is that an organization functions best on the basis of teamwork and partnerships. We can move EDA forward as long as we do it as a team, and it would be my intention to work in a collegial manner with EDA's staff. Let me say that in the short time I have been serving as the Secretary's Senior Advisor, I have been most impressed by the competence and dedication of the EDA staff, and I look forward to joining them should I be honored by being confirmed as Assistant Secretary. The workforce analysis study highlighted that, "The commitment to facilitate economic development and provide superior customer service is pervasive throughout EDA." It is important that the EDA team work in partnership with local, regional, state and federal economic development organizations, along with Members of Congress and their staffs, in order to maximize the benefit derived from all our efforts. No one program, agency, private non-profit, or governmental organization has all the resources or knowledge needed to meet the nation's distressed areas' economic development needs. By working cooperatively, however, we can make efficient use of all our resources to leverage greater private sector investment and more businesses and jobs for those Americans who have not been full partners in the nation's economic growth.
In closing, I would like to thank my family for allowing me to uproot them from Texas. I consider it a great honor having the opportunity to serve President Bush and my country in this position. I appreciate the opportunity to appear before you today and the courtesies you have shown me, and will be pleased to answer any questions you may have.
7/23/01