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Mckunsey

&company

July2026

PublicSectorPractice

BuildingAmerica’s

innovationengine:AninterviewwithDavidLebryk

TheformerUSTreasuryofficialshareshowgovernmentcandeliverin

momentsofcrisisandhowAmerica’spublic–privatesectordynamiccanhelpfuelitsnexteraofgrowth.

DavidLebrykspentmorethan35yearsattheUSTreasury,servingsixadministrationsand12

treasurysecretariesandholdingnumerousseniorpositions,includingactingsecretaryofthe

treasuryin2025.From2014to2025,hewasthefiscalassistantsecretary,thedepartment’s

mostseniorcareerofficial.Duringhistenure,LebrykmanagedtheBureauoftheFiscalService’s$6trillionannualpaymentoperationandledtheefforttodeliver480millionCOVID-19

economicimpactpaymentsinrecordtime.Healsoledthedepartment’sfinancing,collections,andgovernment-widereportingoperations.

AsAmericamarksits250thanniversary,we’resittingdownwithpublic-andprivate-sector

leaderstoexploretheideasandopportunitiesthatwillshapethecountry’snextchapter:fromcompetitivenessandinnovationtoresilienceandinstitutionalrenewal.Inthisinterview,

McKinseySeniorPartner

TomDohrmann

talkswithLebrykabouttheingenuityandleadershipthathasenabledAmericatoovercomesomeofitsgreatestchallenges,whatmakes

public–privatepartnershipsocentraltoAmerica’sabilitytoinnovate,andwhypeoplearemission-criticaltomakinggovernmentwork—andworkbetter—forall.

TomDohrmann:AsAmericacelebratesits250thanniversary,whataresomeoftheuniquely

Americantraitsthathavecontributedtoourabilitytoinnovateandreinventourselvesovertime?

DaveLebryk:Iwouldfocusprimarilyontheintersectionbetweengovernmentandtheprivate

sector.GobacktotheManhattanProject,theinterstatehighwaysystem,theApolloSpace

Program—andmostrecentlytheresponsetoCOVID-19,includingOperationWarpSpeed.Whenthenationputsitsmindtoit,wecandoveryremarkablethings.

Isawthatrepeatedlythroughoutmy35-yearcareer.Whenacrisishit,thegovernmentactedasacatalystandwasquiteeffectiveinaddressinggenuinelytoughproblems.Thatmeantworkingateverylevelofgovernment—federal,state,andlocal—andwiththeprivatesector,academia,nongovernmentalagencies,andnonprofits.Whenthoseentitiescometogether,bigproblemscanbesolved.

Thatcollaborativedynamicisauniquefeatureofourcountry.Youhavetheprivatesector,fromindividualsworkingoutoftheirgaragestoorganizations—largeandsmall—innovatingand

creatinginavibrantway.Atthesametime,thegovernmentisconductingandfundingimportantresearch,oftenbasicresearchthatisfoundationaltoprivatesectorinnovation,andhelping

citizenswhentheyneedit.Thatintersectionofastrongprivatesectorandaneffectivepublicsectoriscriticaltoournationalsuccess.

TomDohrmann:You’vesaidinthepastthatthegovernmentdoesn’thaveaninnovationproblem;ithasaninnovationadoptionproblem.

DaveLebryk:Ioftenaskthequestion,“CouldthegovernmenthaveproducedtheiPhone?”Andasimilarquestion,“CouldApplehaveproducedtheiPhonewithoutthegovernment?”Andtheanswerisnotobothquestions.ThebasicresearchthatwentintotheiPhonecamefrom

government-fundedwork,sothereisagreatdealofinnovationbeingdrivenbythepublic

BuildingAmerica’sinnovationengine:AninterviewwithDavidLebryk2

BuildingAmerica’sinnovationengine:AninterviewwithDavidLebryk3

sector.

Atthesametime,governmentoperatesinsilos—andsilossometimesgetabadname.Buttheycanbesilosofexcellencewhereverygoodworkisbeingdone.Inmyworldofpayments,wherewewereresponsibleforissuing75millionbenefitpaymentspermonth,wehadgreatexpertiseinthatsilo.Wewerereallygoodatmakingpayments;Iwouldsaybestinclass.Butwewerenotparticularlygoodatroutinelylookingoutsidethesilotoexaminedifferentandbetterwaysof

doingourwork,andwehadtobeveryintentionalaboutmaintaininganoutwardfocus.

WhatIlearned,oftenthehardway,isthatwhenyouaretryingtoimplementnewtechnology,itisoftenmoreeffectivetodoitoutsidethesilo.Youseethisintheprivatesectorafairamount;

small,agile,cross-cuttingteamsthatarelookingatproblemsdifferently.Governmentdoesn’tdothataswell.Leadersshouldmoreregularlyask,“HowdoIexploreandassessanewidea?HowdoIsetupteamssotheyareunencumberedbythedaytodayandcantest,incubate,and

deploynewtechnologywiththegoalofscalingit?”

Thislastpiece—successfullyintegratingnewtechnologyintostandardworkflows—iswhere

mosteffortsfail.McKinseyhasdonealotof

researchaboutchangeinitiativesandintegration

,whichfailnotsomuchbecauseoftheunderlyingtechnologybutbecausesuccessfuladoptionandintegrationisinherentlyapeopleissue.Youcangettheunderlyingtechnologyright,but

howpeopleactuallyusethattechnology

isultimatelythedeterminingfactor.AndonethingI’veobservedingovernmentthatisnotwellunderstood:Thefrontlinesupervisoristheonewho

makesorbreakslastingchange.Youcanarticulateavisionattheseniormostlevel,butifyou

don’thavethefrontlinesupervisortranslatingthatvisiontotheemployees,changedoesn’ttakehold.

TomDohrmann:HowdidyoudriveinnovationattheTreasuryDepartment?

DaveLebryk:It’sgenuinelyimportantforseniorofficials,oranyoneinanorganization,tobe

outwardlooking.Forme,innovationwasalwaysabout:“Howcanwebealearningorganization,constantlyscanningthehorizonfornewopportunitiesandevaluatingwhatwecantake

advantageof?”

Thatsaid,therearedifferencesbetweentheprivatesectorandthepublicsector.Wecan’t

affordtofailfastinpublicsector.Weneedtoensurethatthemission-criticalsystemsdeliver

andthatimportantworkcontinuestogetdone.Governmentfailuresaredifferentfromprivate

sectorfailures;thestakesaremuchhigher;wedon’twantourairtrafficcontrollerstofailfast.Atthesametime,weneedtobethinkingconstantlyabouthowtodothejobbetter,todayandin

thefuture.

Oneofthethingswedid,andMcKinseywasagenuinehelphere,wasperiodicallystepbacktoscanemergingtrendsandthinkaboutwherewewereheadedoverthecourseofthenext

decade.Indoingso,wewouldidentifyahandfulofhigh-impactinitiatives,thenprioritizeandsequencethemcarefullytoensurewewerewellpositionedforthefuture.

BuildingAmerica’sinnovationengine:AninterviewwithDavidLebryk4

TomDohrmann:What’sanexampleofoneinnovationthatyou’reespeciallyproudof?

DaveLebryk:Thereareseveral,butonethatsticksout—becausewelookedattheproblem

differently,leanedintoemergingtechnology,andchallengedexistingprocesses—wasourefforttodigitizealargenumberofsavingsbondsrecords:overtwobillionofthem.Fiveorsixyears

previously,wepurchasedopticalscanningequipmentthatwaseffectivelyobsoletebythetimeweaccepteddelivery.Sowhenitcametimetoscaletheeffort,werantheprocurement

differently.Wegaveanumberofvendorssamplefilesandsaid,“Youhavesixmonthstoshowuswhatyoucando.”

Thefirmweultimatelychoseputtogetherasmallteamthatusedmachinelearningto

accommodatethenumerousformatsofsavingsbonds.Theirsolutionwasfaster,higherquality,andsignificantlylessexpensivethaneveryotherproposalandasignificantimprovementovertheoldapproach.Weendedupsavingtensofmillionsofdollarsandcompletingtheprojectatleastayearaheadofschedule.

TomDohrmann:WhenIthinkabouttheopportunityforAI,Ithinkofalloftheservicesthatwedointhepublicsector,fromrenewingadriver’slicensetoapplyingforsocialsecurityor

Medicare,toairtrafficcontrol.AndIlookattheseandsay,“Howcouldtheyworkbetter?”Thesearerealopportunitiestodramaticallychangethingsandincreasethespeedofadoption.

DaveLebryk:Iagree.Manyofthechallengeswefacearestructural.ManyofourITsystems,

someofwhichgoback50years,havebeenlayeredandcobbledtogetherinoftenunimaginableways.Changingthosesystemsisnotamatterofhavingagreatideabutamuchmore

complicatedundertaking.Thisiswheregreenfieldisoftenabetterapproach.

Whenyou’reworkingwithinanembeddedinfrastructureandentrenchedskills,therunwayfor

changeismuchlongerthanwhenyou’rebuildingsomethingneworrespondingtoapressing

need.Crisestendtomeanyouacceptmoreriskandbreaktherulesalittlebit.Thechallenge

thenbecomes:Canyoutakethoselearningsandapplythemintoyourday-to-dayoperations?Aharderthingtodo.

Wewouldalsobenefitfromusingtechnologytoimprovethecitizen’sexperience—andindoingso,strengthentrustingovernment.McKinseyhasdoneimportantworkonthis:

Thebetteryour

experiencewithgovernment,themoretrustyouhave

intheinstitution.Whetherit’stax

collectionorpassportapplications,orarangeofservicesdelivereddirectlytothepublic,weneedtodobetteratunderstandinghowcitizensusethoseservices.Flexible,user-centric

technologywouldmakeameaningfuldifference.

TomDohrmann:SomehistoricalcrisesledtosomeofthegreatestmomentsinAmerican

government:theManhattanProject,thecreationofNASA,OperationWarpSpeed.Whatweretherulesyoubroketomanagecrisessuccessfullyduringyourgovernmenttenure?

DaveLebryk:TheEconomicImpactPayments,atthestartoftheCOVID-19pandemic,is

BuildingAmerica’sinnovationengine:AninterviewwithDavidLebryk5

somethingIwasveryintimatelyfamiliarwith.Thelasttimewetriedsomethingsimilar,ittookussixweekstogetthefirstpaymentout.Toputitincontext:Wewereheadingtoward20percent,30percentunemployment,andGDPwascollapsingdomesticallyandinternationally.Therewasanurgentneedtomovefast.

Itwasoneofthemostmemorablemomentsinmycareer:Weweregatheredinthe[treasury]

secretary’sconferenceroomwhenSecretaryMnuchinwalkedin,lookedatme,andsaid,“You’reresponsibleforgettingthosepaymentsoutintwoweeks.”Ithought,“Istheresomeoneelse

herehe’stalkingto?We’veneverdoneanythinglikethisbefore.”

Whatitreallymeantwasgettingtheseniorcareerleadership—me—andapoliticalappointee

togethertoworkcloselywiththeIRSandtheBureauoftheFiscalService,andwewereall

forcedtothinkdifferentlyabouttheproblem.Weissued80millionpaymentswithintendays

and163millionpaymentswithinfiveweeks—atimelinethat,toputitinperspective,wasfasterthanwegotoutthefirstpaymenttheprevioustime.Inthesecondround,wewereabletoissue110millionpaymentswithinadayofthepresidentsigningthebill.

Wematchedpaymentrecordsagainstexistingaccountstospeedupelectronicdelivery.We

increasedourcapacitybyrunningourcheckingproductionfacilitiessevendaysaweek,duringaperiodwhenverylittlewasknownaboutthevirusandmostemployeeswerenotcominginto

work.Andweissueddebitcardstomanypeople,includingthosewithoutabankaccount.

Itwasacollectivewilltogetsomethingdone,andtheresultswereextraordinary.The

remarkablethingisthatthe163millionpeoplewhoreceivedpaymentsdidn’thavetodo

anything.Thepaymentssimplyshowedupintheirmailboxorbankaccount.Andinthethird

round,throughtheChildTaxCreditprogram,weissuedpaymentsthatbysomeestimates

reducedchildhoodpovertyby50percent.Whenyoulookatthatimpact,onboththeeconomy

andmillionsofchildren,youthink:Governmentcandobig,impactfulthingswhenitputsitsmindtoit.

TomDohrmann:IfyouthinkabouttheleaderswhohaveshapedAmerica’shistory,perhapsthebestknownleaderofthetreasury—whereyou’veservedasacareerofficial—isSecretary

AlexanderHamilton.Whatlessonsdidyoudrawfromhimandotherleaderstobesuccessful?

DaveLebryk:Earlyinmycareer,IwascalledintoameetingwithSecretary[Robert]Rubin,andheturnedtomeandaskedformyopinion.Ilookedaroundtheroomandsawsomeremarkablepeople,manyofwhomarehouseholdnamesinthefinancialworld,andwondered,“HowamI

goingtoaddsomethingofvaluetothediscussion?”MyrecollectionisthatIdidallright.ButItooktwolessonsawayfromthatexperience.

Thefirstwastoalwaysbeprepared.Youneverknowwhenyoumaybeaskedtocontribute.Thesecondwas,asaleader,it’scriticallyimportanttoactivelyengagepeople—includingyounger

staff—whendeliberatinganimportantissue.IhadnoexpectationthatSecretaryRubinwouldtakemyadvice,butIwasstruckbythefactthathewasdrawingfromawiderangeof

BuildingAmerica’sinnovationengine:AninterviewwithDavidLebryk6

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perspectivesbeforemakinghisdecision.Whenitcametimeformetolead,thatapproach

servedmewell.Throughoutmycareer,whenIwasfacedwithadifficultdecision,Iconsultedavarietyofsourcesbeforeacting.Itneverfailedme.

AnotherformativebosswasFrankNewman,theformerCFOofBankofAmerica.WhenIworkedforhimhewasapoliticalappointeeattheTreasury;heunderstoodthathistenurewaslimited

andthatsuccessrequiredfocus.Sohefocusedonthreeorfourprioritiesandwasvery

disciplinedinfilteringoutthenoiseinpursuitofthose.Andhewasenormouslyeffective:Five

piecesoflegislationthatwererelatedtodomesticfinancepassedduringhistenure,inlargepartbecausehestayedfocusedonahandfulofissues.

Finally,fromanotherearlymentor:the

roleofcharacterinleadership

.SeveralyearsafterthismentorlefttheTreasury,heofferedathoughtt

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