Charles Rossotti’s management strategy at the Internal Revenue Service has produced effective changes that were crucial in improving services to taxpayers and the revenue-collection system, as a whole. Rossotti stepped into the IRS when the agency was languishing in negative reputation for both internal and external inefficiency. Like any strategic mind, his first impulse was to determine the extent of the negative image.
The status quo prior to his tenure did not do much to correct the agency’s bad reputation. The recommendations for improvement from six congressional committees and multiple oversight organizations and advisory committees made Rossotti conclude that his task of transforming what was the most unpopular and controversial agency in government was more than intimidating.
Rossotti’s biggest legacy is the long-lasting change he instituted with the organizational structure of the IRS. The modernizing plan proposed reorganizing the agency into four new ‘customer-oriented’ operating divisions that replaced the 50-year-old structure of geographic districts and regions.
He reduced the bureaucracy at the IRS by eliminating half of management crust, streamlining the job by redefining job descriptions, and establishing professional reward for competitively merited posts. The new IRS structure involved four new operating divisions, each oriented to serving a particular type of taxpayer. This structural redesign supported the increased emphasis on service and support for taxpayers. In the process, it also removed the district directors and their high levels of autonomy.
For Rossotti, the old structure at the IRS was its most intrinsic flaw and the biggest source of its operational problems. Because tax collection management really means the use of massive databases, Rossotti and his management team undertook what they called ‘business systems modernization.’ He upgraded and reorganized the agency’s IT resources to better suit the new changes.
Rossotti’s leadership was founded on his vision. As stated in the IRS report entitled ‘Modernizing America’s Tax Agency,’ the new approach to taxation stressed ‘service, support, and information for honest taxpayers rather than the threat of being caught and penalized for noncompliance.’
Via Access My Library/Harvard Business School Working Knowledge
