Less than a week after a 2014 SBA restructuring came under fire during a House Committee hearing, the agency’s chief operating officer presented Administrator Linda McMahon with recommendations meant to correct many of the problems.
As part of a larger reorganization, the SBA is targeting work force skills and knowledge transfer issues largely ignored by the earlier effort. That initiative relied on early-retirement buyouts, authorized by the Office of Personnel Management, and meant to replace obsolete competencies with up-to-date ones. Among other things the agency failed to create a timely skills-gap analysis; identified buyout targets based on age rather than ability; and made little effort to protect institutional knowledge, according to an audit by the SBA’s Office of the Inspector General released in late May.
The SBA is best known as a federal agency that administers a variety of loan programs to help companies, particularly small businesses, grow.
SBA COO Joseph Loddo, who took over that post last year, says roughly 54 positions were eliminated based on employees’ eligibility for early retirement rather than on their skills. “That is the kind of deviation from the OPM’s planning and guidelines and our planning that caused us to go astray,” says Loddo. “Coupled with the fact that they only put a month into the planning, which really would take much closer to four to eight months to plan… appropriately.”
The new restructuring plan–which an executive advisory council began to formulate in March–focuses on bringing in new blood versed in areas like cybersecurity and IT and on improving knowledge transfer in the interest of leadership development and succession planning. A resource planning board would review and revise job descriptions so that new hires do not simply replace retirees “in light of the fact that we have moved rather dramatically in the last couple of years,” says Loddo. In addition to challenges around things like technology, the SBA must manage the recent expansion of its mentor-protegee program, which pairs large and small companies vying for federal contracts, to all small companies, rather than limiting it to 8(a) businesses.
The agency is already working on programs–including formal and informal mentoring, a weekly knowledge-sharing hour, and more rigorous onboarding–to improve knowledge capture and transfer, which took a hit in the earlier restructuring. The SBA has also hired a chief learning officer. “We have the opportunity to address that institutional learning that has been lost,” says Loddo.
Loddo says the agency does not anticipate additional buyouts in fiscal 2018. But he is adopting for the new proposal many guidelines proposed in the audit to improve goal-identification, communication, and monitoring. “Certainly what happened [with the 2014 initiative] would not happen under my watch,” says Loddo.