Air Date: October 29, 1996 Program 9644

BETTER VALUE, BETTER SERVICE

Guest:
Joseph Connor, Under-Secretary-General for Administration and Finance, United Nations

(This text has been professionally transcribed. However, for timely
distribution, it has not been edited or proofread against the tape.)

KEITH PORTER, producer: This week on Common Ground, turning the United Nations into a modern organization.

CONNOR, Under-Secretary-General for Administration and Finance, United Nations: This organization grew up at a time of central management. And it became expert in all of its staff members' lives, they became experts in delegating upward. Always raise the decision level, increase the number of signatures that you need before the final magic one is applied, and that's at a pretty high level. Reversing that process and decentralizing it, pushing the responsibility closer to the point at which service is delivered to the member state is the better direction to go.

PORTER: Common Ground is a program on world affairs and the people who shape events. It's produced by the Stanley Foundation, I'm Keith Porter.

Joseph Connor has decades of experience in the corporate world, where he was Chairman of Price-Waterhouse, one of the largest accounting and consulting firms in the world. But since 1994, Connor has served as the top financial officer of the United Nations. He has worked to bring some semblance of order to the UN's, often chaotic, administration. To address part of the problem, Connor has put together something called the UN Efficiency Board and they have just released their first report.

CONNOR: Let's take a look at that. Some people confuse a financial crisis, which we had in great abundance with a budgetary crisis. Let's take a look at the budget. We're now operating on a zero nominal growth budget, meaning that the budget for this year is the same as the budget last year, which was the same as the budget for the year before. And looking forward, we plan to achieve the same budget in 97 and in 98 and in 99. It's pretty good over a period of say five, six, seven years to be operating exactly at the same dollar level that you started with. That's a good record.

How do you do that, when everybody is faced with more demands. For example, the human right's monitoring in Guatemala, we've got a lot of people down there doing that. We didn't do it last year. That's an add-on to the budget. So we've got to contain, absolutely contain, spending for a new laudatory purpose within, in effect, no growth in the budget. And growth occurs even when we don't add new things that the member states ask us to do, just from inflation.

So I think that you have to start first by saying, we don't really have the budget crisis. As a matter of fact, even countries that are critical of the UN in other respects generally can see we've got the budget under control. The efficiency effort that has gone on for about a year here, was launched by the Secretary General. He made a public announcement of that, it happened to be a speech at Yale. He gives lots of speeches. Basically he was focused on how do I contain my costs. But more than that, how do I at the same time deliver better value to the member states, at of course, a better price. And the answer, through better management.

That's what we tagged our project here. We didn't invent this wheel ourselves. We turned to the member states, 25 of them came up with people from their national governments, and this includes the United States, who had gone through the exercise of re-engineering the way we do things, how we do things. And this project was focused on how we do things, not on what we do. What we do is determined by the member states. How we carry out that request, that's our business. And we've gotten our business into a remodeling phase.

Let me tell you some simple things that I think most of the listeners can perhaps relate to. This place has been labeled a paper factory. Fair enough. But the inter-governmental system, the parliamentary system, the legislative system, that's what we are, moves on paper. Capitals, the embassies and missions here in New York and our other locations, they've got to read the parliamentary documentation that backs up the actions that have to be decided. They don't have to do it by looking at paper.

This week we launched the UN homepage. Push a couple of computer buttons, you have access to everything that's going on in the United Nations. What's going on in the security counsel, is there a rainfall situation in Brazil that you want statistics on, it's all there. We're on the Internet. We will put onto the Internet 270,000 UN documents, going way back when in all official languages. That means we don't need as much paper. We've hooked up our optical disc system to the Internet. That's just a fancy word they're saying that we've got technology that allows somebody in the State Department in Washington to understand the documentation and have access to it that the UN has produced. As a matter of fact, the largest customer for the optical disc system is the US State Department. We're ahead of most organizations that way.

Let me give you another illustration. These are simple. They're kind of like in an exercise what we call the low hanging fruit. They were efficiencies just waiting to be plucked. We have 11,000 vehicles on peace keeping missions. But would you believe, those 11,000 represent 900 different makes and models. If we standardize, we save $2,500 a vehicle. If we buy 4,000, which is not an infrequent purchase during a year, we save ten million dollars. If we time-charter ships for the peace keeping missions, we save twenty-one million dollars. There are small things and there are large things, but there are many things that add up.

We've been able, for example, to replace the standby crews of interpreters and translators and conference servicing people. We had groups of those people in the Secretariat Building every Saturday and every Sunday and most nights waiting in case there was an emergency session of the Security Counsel. Fair enough, we don't want the Security Counsel ever to be in want of the backup resources when an emergency arises. But we bought those same people $50 beepers, we sent them home, and we've never missed a crisis situation. That's an enormous cost saving. And somebody thought of it.

I think we want to expand those. Let me give you another illustration. We've gone into businesses we weren't in. Have you ever seen a UN postage stamp?

PORTER: Yes.

CONNOR: It's good for mailing something out of this building.

PORTER: And often times they're beautiful too.

CONNOR: They are very distinctive. And the commemorative one on the Olympics was particularly so. But we had not maximized the sales opportunity. So we've now entered into discussions with national post office systems—the US; the Chinese, they're big collectors of postage stamps in China; the Netherlands; the UK. We're going to sell UN postage stamps as collector items through their national post office systems and we're going to split the revenue with them. We had no cost, we just have profit on that.

Why would they do it? We give them more product to sell. We're not competing with the desirability of collecting Chinese postage stamps. We're giving somebody the opportunity to buy a Chinese stamp or a UN stamp. It's a win-win situation.

That's the type of thinking that went into this efficiency board. All of the member states were asked to contribute people with experience. And working collaboratively with the UN staff members, we identified 400 particular projects. I just mentioned five or six to you, but they're 400 in total. It was a big help in downsizing our budget this year by 250 million real US dollars. And it will be a continuing help as we pursue the embedded efficiency process when we start tackling the 1998-1999 budget, which has a bogie out there of further real cost reductions of just in excess of 200 million.

Remember, efficiency is not an event, it's a process. We've embedded the process.

PORTER: It sounds to me, it's implicit to me at least in the report, that it's not just the money. So often we've heard that the UN problem is the money, there's not enough money. But what you're saying is, it's not just the money. There is a money problem, but there's also a spending problem.

CONNOR: It always helps to be in need. You work a little bit harder. And so that when we agreed on the budgetary downsizings, that I just mentioned, we could of approached it as just cut costs. And that would have produced some good results. But if you can challenge the members of this organization to rethink what they're faced with, obviously a request for a less costly operation.

But let me illustrate the focus it can give you. It may seem a little bit inconceivable, but with all the rules and regulations that we have here all of the transparency, it took 99 weeks to actually go through all the process before we hired somebody. Now we've re-engineered the process, a little while ago it dropped down into the low 20s, by way of weeks. Our target now is to get it to ten. Ten is not bad, that's reasonable with the openness that we have to go through.

How did we do it? We took a look at the 19 steps that you go through to hire a person. And we decided that all but seven of those were dispensable. We threw them away. We don't do those 12. The world is not going to collapse by not doing those 12 steps. But we sure compressed the recruitment interval and the people who do the recruiting are happier. They're also happier that they don't have to have face-to-face interviews by traveling around the world. We now do that by close circuit video interviewing. And the person on the other side is quite happy too.

PORTER: We think that in those 400 cases, you're saying that we've not only saved money but we've also figured out a better way of doing each of those 400 activities.

CONNOR: Figured out not only a better way, but sometimes the end product was we ended up with more capacity to do something in addition.

PORTER: We're talking in this edition of Common Ground with Joseph Connor. He is the United Nations Under-Secretary-General for Administration and Finance. Printed transcripts and audio cassettes of this program are available. Listen at the end of the broadcast for details. Common Ground is a service of the Stanley Foundation, non-profit, non-partisan organization that conducts a wide range of programs meant to provoke thought and encourage dialogue on world affairs.

I noticed in the first report the chapter headings, things like; better service, better value, better management, managing people, managing information, it sounds like something from the corporate world, which you're familiar with. Was there a corporate model in mind here in this restructuring?

CONNOR: Not really. What was in mind was, that over the last several years most national governments have gone through the same process. The US government, for example, has cut from its payrolls 273,000 people in the last several years. About 10% of the workforce. Now we've done 15% and we still have another 5% goal. I'm very reluctant to say to the US, we did you one better. But if you'd say that I wouldn't mind hearing it. And we have had enormous help from the United States. The National Performance Review under Vice-President Gore has achieved very fine result. And we borrowed on their experience.

But we also borrowed from the UK, as to their methodology. From New Zealand, from Singapore. Deputy Defense Minister from Singapore worked with, in our budgeting area. And the first day that he arrived he said, "You know we never show at the cabinet level a budget paper that's more than two pages." I have seen budgets here that go 300 pages. The closing gap is going to be an interesting experience. I think that rather than the corporate sector, we borrowed the methodology from the public sector, but we did borrow one key component from the private sector. If you don't serve your clients well in the private sector, they go find somebody else. Embedding the idea that we are a service organization and our clients are the member states whom we serve in the General Assembly or in the peace keeping missions or when we distribute humanitarian supplies—food and refugee situations—the member states are our clients, we're doing a job for them. A job that they want us to do and because they think we can do it better. Sometimes we disappoint them, but if we can focus our staff members' attention on the fact that the organization exists to serve the member states, not the other way around. Then I think that alone would have justified all the effort that went into the efficiency task forces.

PORTER: You gave us some examples, is there anything else you need to tell us about the conclusions or recommendations from the first report of the UN Efficiency Board?

CONNOR: Yes. There'll be a second report.

PORTER: There will be.

CONNOR: There will be.

PORTER: What you said, it's not an end product, it's a process. What is the process?

CONNOR: Its basically to change the management direction and culture of the organization. This organization grew up at a time of central management. And it became expert in all of its staff members' lives, they became experts in delegating upward. Always raise the decision level, increase the number of signatures that you need before the final magic one is applied, and that's at a pretty high level. Reversing that process and decentralizing it, pushing the responsibility closer to the point at which service is delivered to the member state is the better direction to go. And we're trying to reverse that. That's phase two. Meaning, that the central function will become one of setting policy, giving out some guidelines, asking or answering some tough to solve questions, providing a little oversight of the action in the administrative side should take place where the real action and operations take place, down close to the member states' point of service. That's phase two.

Phase three, we'll find one. Embedding the process. Making sure it stays in place is probably the long-range objective. So that every so often you'll forget that there is an efficiency objective because it becomes second nature. One ambassador told me that he was in charge of downsizing the military in his country, and he went through 14 budget reductions in a row. He said the first one was greeted by responses of outrage, surprise, hurt. And about the fourth, fifth, or sixth it became a way of life.

There are ways to do things better. Procurement can be done better. We can buy cheaper, we can use just in time inventory methods, all sorts of things. So we'll be borrowing and we'll be implanting and we'll be continuing the process to the point where it becomes second nature. So maybe the third phase of this will just fade away.

PORTER: Are you talking about a leaner, meaner United Nations?

CONNOR: Um, leaner certainly. We hope though that the mean looks disappear. You know, it was somewhat invigorating to start this process by involving UN staff members. Asking them to contribute their ideas as to how to fix their jobs so that it worked better. First response, nobody ever asked us before. And the second response, we had a flood gate of suggestions. One department setup an electronic bulletin board. In that process they became owners of the changed management process. Issues became their issues. The implementation of which they were actually very anxious to bring on. That sort of participation rather than forced participation, that I like see.

PORTER: Even with the latest recommendations these changes will not satisfy some of the critics in the US. And I'm sure you've seen the article in Foreign Affairs by Senator Jessie Helms, he calls for a 50% cut in UN bureaucracy. He says the Secretary General should be limited to quote, "bare bones budget of some 250 million dollars and UN activities should be funded on a voluntary basis," end quote. What's your reaction to those kind of demands?

CONNOR: I think it's fair for critics to say, I want you to do your job better, I'm your client, I demand performance. I also think it's fair for them to say, I'm willing to pay a fair price. I spent 40 years in the private sector satisfying people that the service was right and the price was right. I tried to get the first element out on the table before they brought up the second. I don't have any idea where those numbers that you quoted came from. I know what our numbers are. I think they're well priced, they'll get better. The service will increase. That's the master I answer to.

PORTER: Finally, the United States has been behind in its payments to the UN. At times has withheld payments as a method of encouraging some change. What's been the effect of the US handling of their payments to the UN?

CONNOR: The withholding has been very severe. And it's the principle cause of our needs to borrow. As of today 75% of the money owed to us on the regular budget or owed by the United States and 55% of the peace keeping debt to the organization is owed by the United States. So, you put them all together and you probably got about a 55 to 60% debtor overall. That really does cripple the organization to respond. Some of the requests that the US has made over the years have in fact become the way of life here. An Inspector General was added, it was a US pushed idea, but it was not a new idea. It came about by the initiative of a Secretary General and then got changed around a few times so that there was legislation instrengthen??. But basically, I don't think there was any disagreement on that.

The withholding of funds clearly has exasperated the relationship among member states. I'll just give you one illustration of that. Ninety-one member states are waiting to be paid for their troops and equipment. And the only source of payment is from the amounts owed to us, which in overwhelming proportion, are due from the United States. In an organization where cooperative international action is required, that's an impediment.

PORTER: Let me conclude with this, as you talk to people who work here, international civil servants, what did you, did you get a sense for how they feel about being international civil servants, for working at the UN. Is there a certain sense of fulfillment or achievement or pride in working for the organization? A common understanding of what the organization stands for and a sense of being part of that?

CONNOR: People come to this organization with stars in their eyes. It's a very tough competitive entrance examination. We truly get the best and the brightest. And they do it because they believe in the purposes for which the organization was created. I think we've short-changed some of our employees along the lines. We haven't spent the money we should have to train them. We haven't given them new skills. And so some of the fault lies with our past practices, which we hope to be correcting now. But if you purposely choose a life of international service, because this is a fulfilling role, this is what you want to do with your life, and you except the fact that you're never going to be a millionaire from doing it. It hurts with, to hear the constant bashing of the organization. You know, there're 20 million refugees under UN protection throughout the world. Diseases in many of the African countries, seven or eight of the prime killers have been irradiated in large or small measure. But who else thought of the term environmental protection before the UN in 1952 conference. There's been criticism of the women's conference in Beijing in many quarters. But the whole world knew that there was a gender problem. Whether you were for that gender problem or against it, it was there. UN does a lot of good things.

One time I spoke to a group of congressmen and they had some complaints about the UN's performance. And the meeting concluded with one last comment by one of them. And he said, "You know, I guess the organization isn't perfect, but I was born in the UN Refugee Camp and I owe my life to the organization. I guess I can live with some imperfections." That's the sort of service that attracts our new staff members. And at this point, a lot of them are a little bit under the weather on moral.

PORTER: That is the head of the United Nations Efficiency Board, Under-Secretary General Joseph Connor. For Common Ground, I'm Keith Porter.

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