Avoiding the 'Doom Loop' in Agency Consolidation

Original broadcast 3/16/25

Can the Government Consolidate Agencies Without Losing Mission Effectiveness?

The federal government is once again exploring agency consolidation as part of broader efficiency efforts. But how can agencies be merged or restructured without sacrificing their core missions?

On Fed Gov Today with Francis Rose, Chris Mihm, former Director of Management Issues at the Government Accountability Office (GAO), and Loren DeJonge Schulman, former Associate Director for Performance at the Office of Management and Budget (OMB), shared their insights on the challenges and opportunities of agency consolidation.

Beyond Budget Cuts: Why Consolidation Needs a Bigger Vision

According to Mihm, one of the biggest mistakes in federal consolidation efforts is viewing them solely as cost-cutting exercises. While financial efficiency is important, the true goal should be improving mission effectiveness.

"Successful consolidations aren’t just about cutting staff or reducing costs," Mihm explained. "They need to be part of a broader reform package that improves institutional culture, fosters cross-agency collaboration, and enhances service delivery."

Schulman added that without strong leadership and implementation teams, many consolidation efforts fail to take hold. "You can’t just announce a restructuring and expect it to work," she said. "You need a team focused on execution, ensuring that reforms align with long-term strategic goals rather than short-term budget fixes."

Stakeholder Engagement: The Key to Successful Change

Both experts emphasized the importance of two-way communication with stakeholders. Too often, consolidation plans are dictated from the top down without input from the employees and external partners who will be most affected.

"Public servants dedicate their careers to a mission," Schulman noted. "If we expect them to embrace change, we need to make them part of the process—not just tell them what’s happening after the fact."

Similarly, Mihm pointed out that consolidation doesn’t happen in isolation. "Federal programs touch state and local governments, universities, contractors, and the private sector," he said. "A successful consolidation effort considers these partnerships and ensures that key services continue without disruption."

What’s Next for Federal Agency Consolidation?

As discussions about restructuring continue, Mihm and Schulman offer a roadmap for smart, effective consolidation:

✔ Focus on mission outcomes rather than just cost-cutting
✔ Ensure dedicated leadership and implementation teams
✔ Engage employees and stakeholders in decision-making
✔ Preserve collaboration across agencies to maintain service delivery

The federal government has a long history of attempted consolidations—some successful, many not. The key to getting it right is ensuring that restructuring enhances mission effectiveness, not just financial efficiency.

Key Takeaways:

• Reform Must Be More Than Just Cost-Cutting – Agency consolidation should be about improving effectiveness, not just downsizing.
• Strong Leadership & Implementation Teams Are Critical – Without a dedicated team overseeing execution, reforms often fail to materialize.
• Stakeholder Engagement Ensures Success – Effective communication with employees and external partners prevents disruptions to public services.