Nancy Killefer’s mission: Make Uncle Sam efficient

Complete coverage of the election, transition and new administration of Barack Obama and Joseph Biden

She is a complete unknown to most politicians and journalists.

But President-elect Barack Obama says that Nancy Killefer will be one of the most important people in his new administration.

Killefer, a senior partner at McKinsey & Company, and an assistant Treasury Secretary during Bill Clinton’s administration, will be the nation’s first “chief performance officer” - a new post charged with the Herculean task of making the government more efficient at a time of trillion-dollar deficits.

Part of her job will be overseeing the “line-by-line” scrutiny of the huge federal budget which Obama talked so much about during his campaign – a task that is often about political horse-trading as much as power-point presentations.

But if McKinsey white papers are any indication, Killefer will focus on improving transparency and building government productivity metrics. As Killefer and her colleague Lenny Mendonca, wrote in a 2006 Business Week column, the Bureau of Labor Statistics stopped measuring productivity in 1996.

“We think a radical new approach to transparency of how government programs are performing is required,” the pair wrote in Unproductive Uncle Sam. “Only this will push Congress to exert performance pressure on government agencies.”

They go on to suggest a Morningstar-like body called “Gov-Star” that would provide “completely independent measurement of government program performance.”

A longtime management guru, Killefer served in the Clinton Administration as the assistant secretary for management, chief financial officer, and chief operating officer of the Treasury department from 1997 to 2000.

Before helping launch McKinsey’s public sector practice, she consulted with a range of consumer goods and retail companies on strategy, marketing and organizational effectiveness. She was the chairwoman of the IRS Oversight Board from 2002 to 2004.

Some, however, question how much Killefer will be able to use the consulting firm’s playbook. While she was instrumental in building up the public sector practice at McKinsey after she returned from her job at Treasury, the firm hasn’t traditionally been a government consulting powerhouse in the U.S., industry observers and firm alumni told Business Week. The main reason – their rates are too high.

However, the firm has a huge business advising governments abroad. And it does have a number of high-powered alumni in U.S. public life, among them Louisiana Gov. Bobby Jindal and former Federal Reserve Vice Chairman Roger Ferguson.

One thing that’s almost sure to change for Killefer, an avid bicyclist and mother of two, is her own well-ordered life. On an online McKinsey careers Q&A, she said she has “always kept my weekends sacred. I am highly productive during the week, but I can count on one hand the weekends I’ve worked in more than 25 years with the firm.”

The press pool is betting she will lose count of how many Saturdays and Sundays she gives up to her new job.

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