Can our state, county and municipal budgets be reduced in a rational way that preserves current service levels, provides on-going savings in future years, and does not require any group to bear a disproportionate share of the reductions? My experience tells me the answer is “yes”- and the savings may be considerable, immediate, and relatively simple to identify. Not, however, so simple to implement.
In many ways, the current recession and the resulting budgetary impacts on state and local government are outside the experience of many current leaders and managers. For this generation of public sector management, the fiscal environment has been relatively stable, and temporary solutions proved adequate to bridge any budgetary fluctuations that occurred in their experience. So, predictably, our current, more significant revenue shortfalls have resulted in a range of reactions and short-term stop-gap measures that proved sufficient in the past. Measures like across-the-board budget cuts, layoffs, furloughs, and reductions in salaries and benefits.
But I suggest these tactics are not practical solutions particularly because they are short-term. Doing what you’ve always done is very ingrained in public sector management, regardless of the practicality of the act, or the likelihood of success. After all, the success or failure of these kinds of decisions is not criteria for measuring the performance of public sector management. They get paid either way – agonizing as the work might be.
Another Option
Any approach to budget reduction must acknowledge that budget cuts without a business rationale are temporary. When one-time or across the board cuts are imposed, organizations often cut muscle and bone while leaving fat untouched, resulting in inefficiencies that are perpetuated, and in some cases, exaggerated, through future budget years.
There is another approach which continually escapes our leaders. A long-term approach anticipates that an analysis of service delivery requirements, priorities, and processes will yield recurring savings without jeopardizing service levels. It requires the rejection of simplistic, expedient, and one-time reductions, and demands an investment in thoughtfully analyzing, then optimizing, core functions, services and processes. This long-term investment requires a willingness and ability to set and adhere to priorities. The work begins, always, with scrutiny of an organization’s basic purpose, desired outcomes, and the assumptions that frame existing processes. When that is accomplished, it becomes possible to change how, when, and which services are delivered.
Compliance versus Commitment
So why don’t more leaders and organizations seek long-term fiscal, operating, service and quality-of-work-life solutions? My best answer is that they lack the competency (knowledge, skills, and aptitude), confidence, and commitment to take a long-term approach. These shortcomings are not specifically individual or personal, but rather organizational, cultural, and systemic. The culture of public service rewards immediate responses, even if they are not effective or bring unanticipated outcomes. On the other hand, this culture tends to punish (at worst), or simply not support (at best), the teamwork, collaboration, and testing required to successfully re-engineer processes. Leaders often lack the confidence to proceed without support, and yield to expediency instead.
The system of rewards and incentives for the management of public entities balances more on the side of encouraging (intended or not) passivity, maintenance of the status quo and risk avoidance. Positive, tangible rewards for innovation, efficiency or effectiveness, are rarely found. For example, public managers, leaders, and staff are paid the same regardless of the quality of their performance.
Influence of Hierarchy
The organization of public entities leans toward the traditional hierarchal structure, which works best with specialized, insular silos, in which decisions, communication, and processes are closely held within a work unit. And, while decisions and processes controlled inside a work unit often result in localized efficiencies within that unit, this type of organization nearly always results in the creation of bottlenecks and inefficiencies for the organization or system as a whole. And government does have a difficult time seeing itself as a system –
particularly a system that provides service. Citizens and customers almost always have a better view of the system than the individuals working in that system.
An example might be the “obvious” relationship between and among the fire, police, building and land use, public works, transportation, and utility departments. Citizens experience and see the relationship since they are forced to move through all these departments to negotiate building permits or nuisance complaints. Inside those departments, however, they see their individual processes as separate and distinct from each other, framed by different rules, codes, logic and policies that may often conflict.
Long-term solutions require dismantling organizational silos and the artificial division of roles and responsibilities to even begin a serious analysis of functions, services, and processes. Leaders must expend considerable time and energy to challenge these organizational barriers. These barriers (silos) proliferate regularly and widely in a hierarchy to maintain the personal control and power of a supervisor, manager, or work unit. The positive side of this dynamic is the recognition of the personal investment and self-interest tied to this type of structure. The downside is that attempts to reform the organization are often met with fierce resistance. Leaders find it more expedient not to “rock the boat” and tolerate the status quo.
A Summary
Populations have grown, challenges are more complex, the tools and technology are more sophisticated, and expectations are higher for state and local government now than a generation ago. Few would argue that point; yet, today’s public management (generally speaking) has been hired from job descriptions dating back a generation or more, and many of them haven’t worked outside their current department or their current specialty. Given public sector lack of investment in improvement and innovation there are few opportunities for public managers, even those who are professionally trained, to acquire the training and skills needed to envision and achieve long-term solutions to today’s problems.
From my perspective, however, there are “islands of excellence” that challenge the status quo. These are public sector organizations, leaders, and managers that have successfully found long-term solutions, who continually rethink and re-engineer their processes, who find significant savings while increasing the quality and quantity of services, and who do overcome bureaucratic inertia. The lessons and experiences of these “island of excellence” can be used to inform, teach, and groom others to achieve the same or greater successes.
Public sector decision makers can choose to continue down the current path of short-term tactics (across the board budget cuts, layoffs, furloughs, reductions in services) which will replay themselves year after year, or they can embrace a long-term and systematic approach. They can continue to embrace expediency or they can invest in the training of their people and reform of cultures, organizations, and systems that impede long-term solutions. They can seek out and leverage the knowledge and experience of those who have found success in long terms solutions… or not. After all, it all pays the same – for them.
By working collaboratively to determine the organization’s core values and vision, every individual involved can work toward developing the culture they want at their workplace. In another article, I came across a very helpful example of how powerful a shift in culture can be. They use the case study of how Chrysler turned around through a dramatic cultural change, including some of the snags and backtracking along the way. One of their main points is one we come across quite often through consulting:
Throughout the month of February, Demarche will be bringing you the tools you need to implement some effective strategic planning, develop a solid strategic plan, implement your ideas, and measure your progress. Armed with the appropriate gear, you will get to jump into 2011 with the confidence of taking your organization toward established goals on purpose.
