NANCY KILLEFER MAY BECOME THE MOST IMPORTANT PERSON IN WASHINGTON

OBAMA HASN'T APPOINTED A SINGLE BUSINESS-PERSON TO HIS CABINET.

BUT FINALLY HE'S AT LEAST APPOINTED SOMEONE WHO DOES KNOW ALL ABOUT COMPETITIVENESS AND EFFICIENCY:

BW:

George W. Bush may have been the first President with an MBA, but President-elect Barack Obama is filling the role of the country's first "chief performance officer" with a partner from one of the world's top management consulting firms.

Obama announced on Jan. 7 that Nancy Killefer, a senior partner at McKinsey will fill the newly created position, aimed at improving efficiency and stamping out government waste. Killefer has worked in Washington before, serving in the Clinton Administration as the assistant secretary for management, chief financial officer, and chief operating officer of the Treasury Dept. from 1997 to 2000. Before helping launch McKinsey's public sector practice, she consulted with a range of consumer goods and retail companies on strategy, marketing, and organizational effectiveness. She was the chairperson of the IRS Oversight Board in 2002-04.

Line-by-Line Budget Scrutiny

The task ahead of her is exceptional. Even as Killefer is charged with making government more efficient, her new boss has warned of trillion-dollar deficits for years to come. Killefer will oversee the "line-by-line" scrutiny of the vast federal budget Obama mentioned frequently during his campaign.

HERE'S WHAT SHE WROTE IN 2006:

Unproductive Uncle Sam

The past decade has been one of America's finest in terms of productivity growth. Yet a crucial 20% of our economy appears to have been left behind: government. Despite numerous attempts at management reform and a panoply of opportunities to transfer best practices between the private and public sectors, government seems to have missed out on the productivity boom seen in the private sector. That's a shame, because while there are important differences between the public and private sectors, government does an abundance of grantmaking, procurement, property management, customer service, and other jobs ripe for productivity improvement.
So just how far behind is government? We can't say with any certainty because the Bureau of Labor Statistics, which used to measure its productivity, stopped in 1996. Our analysis shows that government kept up with the private sector until 1987, when a gap emerged. It went on widening until 1994, when the data ran out. We believe it has widened further still.

This public productivity deficit couldn't come at a worse moment. Americans today say they want to limit the cost of government, but they also want more homeland security, better-managed borders, more disaster readiness, extra help in the face of global trade, cheaper health care, and better public schools. These demands sit uncomfortably with our budget deficit and our natural desire not to pay more taxes. In short, we are stuck in a productivity bind: We want more output but no more input.

In a white paper our firm, McKinsey & Co., published this week, "How Can American Government Meet Its Productivity Challenge?", we map out an agenda inspired by lessons from the private sector. Having studied productivity growth around the world for over 15 years, the McKinsey Global Institute has shown that competitive intensity at the industry sector level is the prime catalyst for productivity growth. It forces managers to improve performance and allows innovation to diffuse quickly across the sector.

Make no mistake, government is a sector -- structured and regulated in ways that can foster or stunt productivity growth at its "firms" (agencies). And while it may not be possible to use competition in government to exert pressure to perform, Congress and the White House or state legislators and governors have plenty of tools to improve public agencies.

The most natural tool is the budget process, but the reality in Washington and many state capitals is that performance remains a secondary factor in budget decision-making. Congressmen fight for their district or their passions, and accordingly, agencies privately admit that you budget for what you can get, not what you need or deserve. Yet when government performance, or the lack thereof, is highly visible (witness the response after Katrina), everyone takes action.

That's why we think a radical new approach to transparency of how government programs are performing is required. Only this will push Congress to exert performance pressure on government agencies.

RTWT.

• IT SOUNDS GOOD TO ME.
• MAYBE SHE CAN HELP PUT A BREAK ON OBAMA'S SOCIALIST AGENDA.
• WHY WOULD HE PICK HER, AND CREATE A DECENT ROLE FOR HERE - IF SHE'S REALLY THAT GOOD!?
• MAYBE BECAUSE IT GIVES HIM AN "OUT".
• OR MAYBE BECAUSE SHE WILL PUT A "GOOD-HOUSEKEEPING SEAL" ON HIS NEW PROGRAMS...
  

STAY TUNED...