1. Brigadier General John J. Kelly, Jr., United States Air Force (Ret.) Deputy Under Secretary for Oceans and Atmosphere NOAA Leadership Seminar 08.29.2006

2. 2 NOAA Leadership: Creating One NOAA Overview NOAA’s Mission and Vision Current Environment How DOC views NOAA Transformation Business Model FY07 Budget Leadership Challenges Recapitalization Five Tier Labor Relations

3. 3 NOAA Leadership: Creating One NOAA NOAA’s Mission

4. 4 NOAA Leadership: Creating One NOAA Eye On The Mission “Every business, if it is to succeed, must have a sense of direction and mission, so that no matter what you are doing, you know how you fit in, and that what you are doing is important.” former IBM CEO Louis Gerstner

5. 5 NOAA Leadership: Creating One NOAA NOAA’s Vision

6. 6 NOAA Leadership: Creating One NOAA Eye On The Vision “Everything you do is for a reason and that reason is contained within the vision.” Merck & Co chair, president and CEO Raymond Gilmartin

7. 7 NOAA Leadership: Creating One NOAA NOAA Organization

8. 8 NOAA Leadership: Creating One NOAA Fiscal Year 2005 Audit Findings and Recommendations (NFRs) Major Conclusions: Unqualified audit opinion last seven years. Improvement in the number of NFRs. Personal property, Construction Work In Progress, reimbursable agreements and grants recurring issues.

9. 9 NOAA Leadership: Creating One NOAA Fiscal Year 2005 Audit Information Technology Security OIG Evaluation: Good: Security Plans and Risk Assessments Not so Good: Testing FY06 Activities More Rigorous Testing Authorizing Official review all IT Security Plans

10. 10 NOAA Leadership: Creating One NOAA Transformation to “One NOAA” Holding Company Ad Hoc Subjective Decisions Talk Corporation Process Fact-based Decisions Execution

11. 11 NOAA Leadership: Creating One NOAA NOAA “Business” Model

12. 12 NOAA Leadership: Creating One NOAA Organizational Assessment President’s Management Agenda HUMAN CAPITALStatus Progress Union negotiations regarding the multi-tier performance appraisal system continued on schedule. Manager and employee training for the new system began in 3rd quarter. Completion is expected by September 1st. COMPETITIVE SOURCINGStatus Progress NOAA completed 3 feasibility studies during 3rd quarter and plans to complete 5 more during 4th quarter. FINANCIAL PERFORMANCEStatus Progress On track. E-GOVERNMENTStatus Progress NOAA needs to continue emphasis on improving certification and accreditation processes and documentation for information technology security, and on meeting negotiated deadlines. BUDGET & PERFORMANCEStatus Progress NOAA is undergoing PART reviews of OMAO, Navigation Services, and Pacific Salmon (PCSRF) with results expected August 15th. NOAA also provided OMB proposed efficiency measures for PCSRF, CZMA, NMFS, and Navigation Services, and a marginal cost measure for Navigation Services. R&D INVESTMENTStatus Progress NOAA solicited proposals for a new cooperative institute for the northern Gulf of Mexico and for renewal of the cooperative institute for the Great Lakes. NOAA plans to complete a final external report on Ecosystem Research and Science Enterprise during the fourth quarter.

13. 13 NOAA Leadership: Creating One NOAA Organizational Assessment PART SUMMARY ProgramYearScoreRating Ecosystem Research200563Adequate Weather & related services200576Moderately Effective NOAA Protected Areas200468Adequate Climate Research200478Moderately Effective Coastal Zone Management Act200346Results Not Demonstrated Navigation Service (re-PARTed in 2006—score pending) 200383Moderately Effective Commerce Small Business Innovative Research (SBIR) 200327Results Not Demonstrated National Weather Service200289Effective Pacific Coastal Salmon Recovery Fund (re-PARTed in 2006—score pending) 200245Results Not Demonstrated National Marine Fisheries Service 200255Adequate Office of Marine & Aviation Operations 2006N/APending

14. 14 NOAA Leadership: Creating One NOAA Organizational Assessment Funding Summary NOAA is spending at a rate of 81% of the planned amount, having spent 63% of its FY2006 budget as of the end of the 3rd quarter. ($ thousands) Total Funding$4,189.5 Estimated Spent$2,644.4 +/- Total$1,545.1 % of Total Spent63%

15. 15 NOAA Leadership: Creating One NOAA Secretarial FY2006 Priorities Execute NOAA Elements of the Integrated Earth Observations System Exercise Global Leadership in Ocean and Ecosystem Science, Policy, and Management Complete the Planned 2006 US Climate Change Science Program Actions Ensure Public Safety and Economic Security through Improved Weather and Water Information Advance Navigation and Transportation Continue Implementation of President’s Management Agenda

16. 16 NOAA Leadership: Creating One NOAA NOAA Funding Trends (Constant Dollars in Billions) Total2.43.03.13.23.43.53.43.22.83.8 Other00.20.1 0.00.1 PAC0.60.70.8 0.9 0.80.9 ORF1.82.12.22.32.42.52.42.22.02.8 Data Sources: DOC “Summary of Enacted BA” and “2007 Congressional Action”

17. What do you want us to do, Boss?! Leadership

18. 18 NOAA Leadership: Creating One NOAA Leader’s 7 Essential Behaviors 1.Know your people and your business. 2.Insist on realism. 3.Set clear goals and priorities. 4.Follow through. 5.Reward the doers. 6.Expand people’s capabilities through coaching. 7.Know yourself.

19. 19 NOAA Leadership: Creating One NOAA Life’s Paradoxes Centralized efficiencies vs. decentralized responsiveness Being disciplined vs. being innovative Taking risks vs. avoiding mistakes Knowing the details vs. delegating responsibility Fast decision process vs. correct decisions Respect for the individual vs. criticism

20. 20 NOAA Leadership: Creating One NOAA Performance Measures Understandable and meaningful Organizational culture — achievement important Performance measures at several levels Information guide to action to improve performance

21. 21 NOAA Leadership: Creating One NOAA Strategy … Metrics … Leaders … Actions Strategy Mission Goals Stakeholders Metrics Report Rationalize Resources Align Effort Manage Accountabilities Manage Processes Manage Capabilities Decide Implement Strategy Improve Performance

22. 22 NOAA Leadership: Creating One NOAA Execution Leaders are central to execution. Know yourself. Be engaged in both the “whats and hows.” Be honest about all realities. Promote ongoing honest dialogue. Create and maintain an execution culture Translate visions and goals into tangible deliverables and actions.

23. 23 NOAA Leadership: Creating One NOAA Execution Put the “right” people in the “right” places. Be involved in selections. Reward the doers. Expand the capabilities through coaching. Put processes and mechanisms in place to effectively operationalize execution. Strategic plan – stretch goals. Strategy reviews. Operating plans. Realistic resources and budgets.

24. 24 NOAA Leadership: Creating One NOAA NMAONWSOARNOSNMFS NESDIS Keys to Creating “One NOAA” Remove the Stovepipe Culture Improve understanding of how Line/Staff Offices impact/benefit each other

25. 25 NOAA Leadership: Creating One NOAA Keys to Creating “One NOAA” Improve Communication

27. 27 NOAA Leadership: Creating One NOAA $788M shortfall Recapitalization Facilities Construction and Maintenance 800 owned and leased facilities Current replacement value of nearly $4 billion Average age of NOAA- owned facilities is 25 years More than 5% (23) of NOAA facilities more than 60 years old FY 09 -12 POP Requirements

28. 28 NOAA Leadership: Creating One NOAA $97M shortfall Recapitalization Aircraft Replacement No funding in current program for new aircraft Average age in FY 11 is 30 years Aircraft aging beyond planned service life Aircraft becoming less reliable and increasingly difficult to maintain FY 09 -12 POP Requirements

29. 29 NOAA Leadership: Creating One NOAA $169M shortfall Recapitalization Fleet Replacement Lack of replacement ships… ages the fleet and technology increases maintenance costs reduces effectiveness FY 09 -12 POP Requirements

30. 30 NOAA Leadership: Creating One NOAA Recapitalization Polar Orbiting Environmental Satellites (POES) * FY 08 OMB Budget Submission $2.7B

31. 31 NOAA Leadership: Creating One NOAA Recapitalization Geostationary Orbiting Environmental Satellites (GOES N-P, R) * FY 08 Budget Submission $3.7B

32. 32 NOAA Leadership: Creating One NOAA Personnel Matters Five Level Performance Management System Component of the PMA— Human Capital Component Many DOC Organizations using the system. Exceptions are NOAA, Census, EDA and Office of IG DOC-wide Oct. 1, 2006 Timetable for Implementation: 11/05 – Present: union briefings, negotiations via group effort (OGC/NWS/NMAO/NESDIS) 04/06 – 08/06: training 09/30/06: closeout of two-level system Challenges Employee Acceptance Impact and Implementation Negotiations - Ongoing Training Development of Measures Consistency

33. 33 NOAA Leadership: Creating One NOAA DEMO NWSNMFSNOSNESDISOARNMAOCO’sTotal Employees Currently in DEMO (Includes Vacant FTE) 51197507726970253520 Employees Planned for DEMO 096311570321586832993 Total 51293811577727291587086513

34. 34 NOAA Leadership: Creating One NOAA Labor Relations REQUIREMENT FOR ALL NOAA MANAGERS WITH LABOR RELATIONS OBLIGATIONS: BEFORE making any decisions regarding changes in conditions of employment or engaging in discussions with the union and employees regarding prospective changes in your organization, you must FIRST contact your servicing Workforce Management Office to obtain guidance and assistance in communicating with the union and your employees.

35. 35 NOAA Leadership: Creating One NOAA Labor Relations Changes in Working Conditions Four Required Steps Mgmt. decides on the particular change Mgmt. consults with WFMO to determine whether these changes rise to the level of whether notice is required to the union Mgmt. provides notice of change to the union – with WFMO concurrence on substance of notice If the union responds, Mgmt. consults with WFMO on all further correspondence – including the negotiation process

36. 36 NOAA Leadership: Creating One NOAA Labor Relations Types of Working Conditions Personnel policies:Example—Five Level Performance Management System Practices:Example—Overtime Assignments Other Conditions: Example—Operational (Method, processes, and/or technology used by employees to complete their assigned duties.) Example—Work Related (Work space, breaks, safety)

37. What do you want NOAA to look like in 15 years?