"Acceptance of what has happened is the first step to overcoming the consequences....” ~ William James
Utah cities just started a new fiscal year and counties are currently developing next year's budgets as they enter the fifth year of dismal revenue projections due to the great recession. During this period of time, leaders and decision makers have employed the traditional short term and stop-gap approaches for dealing with temporary economic down turns and fluctuations-- across-the-board budget cuts, layoffs, furloughs, reductions in salaries and benefits, hiring freezes, deferred maintenance, delaying capital expenditures, and urging public employees to "do more with less."
The fundamental yet unspoken assumption behind all these tactics, which have been successful in the past, is that the crisis is temporary and that recovery is just around the corner. While the economy has shown signs of improvement, there is no evidence that the economy and tax revenues will ever recover to pre-recession levels. In fact, many have concluded that a fundamental change in the funding of state and local government has occurred. Experts are calling the current situation the "new normal" and the "new fiscal reality".
If this is true, and all indications are that it is, the reductions, freezes and deferrals of the past five years only represent a tenuous and temporary holding action against the forces of the new fiscal reality facing local governments. These legacy ploys and tactics are not sustainable into the future. In fact, continued reliance on what has worked so well in the past is likely to create permanent and structural damage to the physical and organizational infrastructure of jurisdictions including the public workforce. Perpetuating and extending these temporary measures cripples the ability of government to deliver services at levels expected by the citizens. There are plenty of indications that damage has already occurred and that services have declined which combine to erode public confidence in government.
More of the same as the last five years is not a promising solution to the dilemma of the "new normal" although it is likely to be the default action of many counties and cities. Repeating past behaviors and expecting different outcomes is not rational. A new approach, a long term and sustainable approach, is needed to address the new reality.
Based upon two decades of personal experience in streamlining operations and saving millions of dollars for local government, I offer the following as components of a strategy to act on the "new normal" rather than to continue to be acted upon by today's constraints.
Accept the reality of the "new normal" and embrace the need for a new approach.
Just as recognition and admission are the first steps in addiction recovery programs, so it is also in the process of recovering from the recession and government addiction to continual revenue growth. A new approach requires the rejection of simplistic, expedient or one-time reductions as strategies. A new approach acknowledges that budget cuts without a business rationale are counter-productive. A new approach recognizes that when one-time or across the board cuts are imposed, organizations often cut muscle and bone while leaving fat untouched resulting in inefficiencies being perpetuated, and in some cases, exaggerated, through future budget years.
Inventory and prioritize functions and services.
A new approach analyzes an organization's service delivery requirements, priorities and processes to yield recurring savings without jeopardizing service levels. It requires an investment in thoughtfully analyzing each agency's core functions, services and processes. It requires a willingness and ability by leaders and administrators to set and adhere to priorities. It requires scrutiny of an organization’s basic purpose and the assumptions that underlie existing activities. It may even require changes in how, when and which services are delivered.
Evaluate and re-engineer business processes.
A new approach is based upon the essential assumption that savings are to be gained by changing the way a government agency does business. When budgets are growing and predictable, there is little need or incentive to review how and why things are done the way they are. This is such a truism that the standard response to the question of why things are done in a certain way is "We've always done it that way." A new approach requires a better answer. A new approach asks the question of "why?" for all essential functions and is never satisfied with an answer that does not cite the reason the function is performed, articulates the expected result of the activity, provides a rationale for the process and that provides empirical evidence that the process is effective. After meeting this standard, a new approach evaluates, eliminates, combines or revises every essential process and function to increase effectiveness and efficiency.
Adapt organizational structures and responsibilities.
The organization of public entities seems to naturally gravitate towards a specialized, insular, silo-like structure in which decisions, communication and processes are closely held within a work unit. While decisions and processes controlled inside a work unit might result in localized efficiencies within that unit, this type of organization nearly always results in the creation of bottlenecks and inefficiencies for the organization as a whole. Planning, coordination and communication occur almost uniquely within these silos with little consideration of the organization as a whole. A new approach requires the dismantlement of organizational silos and artificial divisions of labor and responsibilities and fosters-cross functional coordination and communication.
Plan strategically and act with confidence.
The new reality of chronically flat or declining revenue is outside the experience of most elected officials, public administrators and managers in the same way that the decline of the housing industry, banking and stock markets has revealed industry-wide inexperience with down markets. For this generation of public sector management, the fiscal environment has previously been relatively benign and temporary solutions were adequate to bridge any temporary budgetary fluctuations but that is no longer the case. A new approach requires leaders to develop or bolster the confidence, skills, experience and ability to take a long term approach. Few of today's leaders plan and act strategic terms because of systemic, organizational and cultural disincentives. Our culture of instant gratification rewards immediate action, even if the response or actions are not effective or bring unanticipated outcomes. This same culture tends to punish the deliberation and extended consideration of issues required for long-term solutions. Too often, leaders lack the confidence to proceed deliberately and yield to the expediency of immediate and short term responses.
Create and foster organizational cultures that adapt and embrace change.
A new approach is not sustainable nor adequate if its result is a one-time effort to evaluate and reform. A new approach must be based upon the acceptance of the reality that the status quo is an illusion. The world and the environment in which local government operates is in a state of constant flux and healthy government has the ability to continually adjust to changing needs, requirements and expectations. Bureaucratic cultures are anchored in a static world that no longer exists. New, adaptive cultures must replace government's traditional aversion to change. Cultures are modeled upon the attitudes and behaviors of leaders and the norms of a culture are enforced, not from the top, but rather by peers and co-workers.
The adoption and application of a new approach such as the one described here may represent a monumental shift behaviors and attitudes for some. For others already embarked in a new direction, these adaptations may simply need to be recognized, formalized and reinforced. Regardless of a organization's starting point, to succeed, it must accept the reality of a "new normal" and craft constructive responses to it. The good news is that the wheel does not need to be reinvented- there is a body of proven "best practices" which is easily adaptable to cities and counties of every size and demographic. Those who deny, delay and balk at charting an adaptive course risk becoming road-kill to the wheels of change and progress.