Interview with Jeff Zients

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Jeff Zients has a successful track record as a leader and manager in the private and public sectors. After graduating from Duke summa cum laude in 1988, he began his career as a management consultant at Bain & Company. In 1992, Mr. Zients joined the Advisory Board Company, where he eventually became CEO and Chairman. Mr. Zients later established and led an investment firm focused on business and healthcare service companies.

In the public sector, Mr. Zients filled various positions in the Obama Administration from 2009-2017, including Director of the National Economic Council (NEC). In that role, Mr. Zients was President Obama’s principal economic policy advisor, responsible for coordinating the development and execution of policy regarding all domestic and international economic issues. Before leading the NEC, Mr. Zients served as acting Director of the Office of Management and Budget (OMB) and also spearheaded the turnaround of the failed healthcare.gov website launch.

Mr. Zients recently returned to campus on March 7 to talk to students at the Career Center about jobs in public service, and especially about how to combine public service with business and entrepreneurship. Afterward, he spoke with DPR’s Zach Fuchs.


 

DPR: Talk about your career in public service. What positions have you held and what have been the highlights?

Zients: I had never stepped foot into the public sector until I came into the Obama Administration in June of 2009 when I was confirmed as the deputy at the Office of Management and Budget, and also as the nation’s first Chief Performance Officer. When President Obama—then candidate Obama—was campaigning, he promised to create for the first time the position of Chief Performance Officer to help improve the operations and management of the federal government. The federal government has pockets of excellence, in terms of management and technology, but there are a lot of places where the federal government needs to catch up with the private sector in terms of technology and productivity. The Chief Performance Officer job is intended to close the productivity gap between the private sector and the public sector.

I eventually became the acting director of the Office of Management and Budget for a couple of years, and then I got pulled into help with healthcare.gov when the launch of the website underperformed. I helped lead the turnaround of healthcare.gov and then I became the director of the National Economic Council, which is a sister policy council to the National Security Council that helps to coordinate economic policy for the President. That job was actually in the White House in the West Wing.

DPR: With healthcare.gov, what was your role?

Zients: It was really leadership. The President and Chief of Staff asked to come in and help assess the situation. Eventually, across a few days actually, that led to them asking me help lead a turnaround effort, which lasted several months and fortunately resulted in a turnaround of the website. We were able to do that because a great team came together—the best of the private and public sector working together on a very accelerated timeframe to fix the hundreds of software glitches and hardware inadequacies in the system. We set a deadline, after our initial assessment, that we’d have the website working smoothly for the vast majority of users by December 1, and through great teamwork, ruthless prioritization, and probably a little bit of luck, we were able to turnaround the website. But again, the reason that happened was that a great team of people from the public and private sectors came together and worked 24/7 for several months to turnaround the website.

DPR: Having been so close to healthcare and healthcare.gov, what do you think of the new American Health Care Act that was introduced in the House Monday evening? Is it a viable replacement for the Affordable Care Act?

Zients: It just came out, but I am very concerned that the new Republican health plan is not a viable replacement for the Affordable Care Act. There are more than 20 million people who now have health insurance who did not have it before because of the Affordable Care Act, and with the Republican plan it appears that millions of people could find themselves paying more because it’s got less generous tax credits for people in the individual market. Then secondly, millions of people who lose coverage both in the individual market and because the plan appears to roll back the expansion of Medicaid, which is very important for low income people—that also affects everyone else because the people who go without insurance, their care goes uncompensated and we all pick up the tab as hospitals and other providers are obligated to offer them care. Lastly, it weakens the mandate for people to purchase coverage, so it could make insurance markets work less well with fewer healthy people signing up, and that means that insurers won’t choose to offer coverage. The Affordable Care Act has been very successful in expanding coverage, controlling the annual cost inflation of healthcare, and making sure that people get the services that they need in healthcare. Of course, there are ways to make any bill better, but what the Republican plan does here is really roll back much of the progress that’s been made on healthcare.

DPR: Going back to the intersection of the public and private sectors, it seems that this administration has more people from the private sector than did the previous administration and that more than ever there’s a revolving door of people going between the two. Is that arrangement positive for government?

Zients: First of all, I want to make it clear that post-healthcare.gov, the President created the U.S. digital services, which has rotations of the best technologists in the country—many from Silicon Valley but from around the country—coming into government for periods of time to work on the most important IT projects across the federal government. And that’s working really, really well, so I hope the Trump Administration and all future administrations continue to build on the progress the President made in creating these rotations, bringing the best and brightest into government for periods of time to help work on important problems.

I am a fan of people with private sector experience coming into government. I think we need more of it. I think it’s a good thing. At the same time, one has to recognize that the public sector and private sector are quite different, and I think it’s important that business leaders at all levels who come into government recognize the differences. In the private sector, you have one bottom line. For most companies, it has to do with profitability, however they measure profitability—whether it’s earnings per share or operating income. In the public sector, there is not that one single metric. It’s a more complex terrain, and one has to recognize that while a lot of private sector management practices and other breakthrough techniques are important, they’re not directly transferrable. So it’s important when private sector people come into the public sector that they recognize that there are differences, learn about those differences, respect those differences, and also surround themselves with people who have public sector experience. Again, I want to emphasize where I started. I’m a big fan of people with private sector experience spending time in the public sector, but at the same time the leaders need to recognize the differences and create high-performing teams that blend the best of the public sector and private sector experience.

DPR: Can you elaborate on the differences between the public and private sectors?

Zients: There’s a big gap in productivity. Productivity is a combination of efficiency and quality. If you think about private sector productivity across the last several decades, it has compounded at 1-2 percent per year, and that has created quite a big improvement in productivity. There’s not a perfect measure of productivity in the federal sector, but McKinsey estimated that productivity gains in the public sector are about one-third of those in the private sector. So there’s a big productivity gap and we need to close that gap. Technology has been the driver of a lot of the productivity gains in the private sector, so I think the federal government getting better at technology is really important to improving both efficiency and service quality of federal government services. Also, I come back to the importance of high-performing teams. Central to high-performing teams is having the best and brightest individuals from diverse backgrounds working together, so we need to continue to work on recruitment and retention of the very best and brightest to work into federal government.

DPR: How do you incentivize people to work for the federal government when they would otherwise be drawn to the private sector?

Zients: There’s no [other] place where you can be part of a team and make a small contribution to a policy—be it the formulation of that policy or the implementation of that policy—and impact potentially millions of people. I love the private sector, I was in the private sector for more than 20 years, and I am likely to spend more time in the private sector going forward, but there’s nothing that will ever compare to the eight years in the Obama Administration where I was able to participate in policymaking, implementation, and execution on policies like the Affordable Care Act that are impacting millions of people. So I think the draw into public service is the possibility of contributing to millions of peoples’ lives and making them better. As much as I love the private sector, the scale of the potential impact in the public sector is unmatched.

DPR: That’s a good reason to join the public sector, but how do people go about doing that? What is the best advice you have for Duke students who want to have a career like yours?

Zients: There are lots of entry points into the public sector. I think people should think through, if they’re interested in both sectors, where to start. A lot of that is where the best opportunity is to work with great people. Participating at the local, city, or state level can be very interesting as a first job in the public sector. Working on the Hill with Congress—there are a lot of great entry-level jobs there. And then there are great entry-level jobs coming straight into the federal government in the Executive Branch. I think my number one piece of advice for people who are coming off campus into a job is make sure that you are working with and for people that you can learn a lot from, who you respect, and that their values and goals align with yours. It’s also great to be part of an organization that’s a meritocracy where you’re going to advance based on your performance—where there aren’t set goals, but rather that if you do your current job really well, you have the opportunity to get promoted and stay on a very steep learning curve.




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