O.K. so I am human; I love when hard research supports my predispositions and life experience. The ICMA Alliance for Innovation, led by a team from Arizona State University, has published the seminal white paper on “Navigating the Fiscal Crisis: Tested Strategies for Local Leaders.” The authors report that qualities of well-run organizations that help them manage in good times “are important factors in why some organizations succeed and others decline” when cutbacks occur. Among the qualities listed: an early-warning system to discern which trends and factors will affect strategy and timing; and defined service delivery areas with performance indicators to measure results. “Rigorous analyses determine whether programs are working. If cuts are needed, the government can identify relative program and service effectiveness.”
With 35 years of government service, I have seen the good, the bad and the ugly and even a bit of excellent. ICMA got it right. Excellent is using data on community needs and priorities and program effectiveness to make difficult decisions on budget cuts. One excellent city thought a unit completely dedicated to answering residents’ complaints and inquiries was important to customer service. That was until three years into the program when, under fiscal pressure, they looked at the utilization data. Folks still preferred dealing directly with their contacts in the operating departments and the numbers just weren’t there to justify the unit. It was cut. Another “Center of Excellence” ran the numbers on a “records unit” that was part of sacrosanct Public Safety. With police reports being done by the officers on laptop computers, it was possible to cut this unit from the Police Department budget. Vacancies were not filed and the incumbent employees were reassigned to a Code Enforcement which was struggling to keep up with the Foreclosure epidemic.
So much for the good and the excellent; there was clear evidence in a county I worked with that departments “horded” budget authority to deal with inevitable January across-the-board cuts. Fiscal crises were pretty much an annual event based on inflated revenue projections that tamed the summer budget hearings. Victory went to the crafty and powerful; the impact on the public was known only to the elderly who lost home health services during cut backs. Lack of impact data meant lack of scrutiny, lack of visibility, and accountability only to organized interests.
However, in the ugliest of times I have seen some of the cleverest of savings come from organizations at all levels of “maturity.” As the ICMA paper points out, austerity can push creativity and efficiencies that are politically unacceptable in good time. However, the well-run outfit knows where those opportunities are and is ready with well-documented proposals when the climate is hospitable to cost savings.
Back to the ICMA opus. Figure 4 in the paper -- “Actions to Promote Constructive Change” -- provides the following checklist of best practices during hard times:
- Cut quickly, avoid delay
- Take a long-term view
- Focus on core mission, purpose, and highest priorities
- Invest in innovation and continuous improvement
- Manage revenues as carefully as expenditures
- Examine and improve organizational design and process
- Foster stewardship and cost containment
- Create a sense of inevitability, devise a workable schedule, and stick with it
- Commit to communicating with all stakeholders
Of these nine best practices, two cannot be done at all without performance measurement; and five cannot be done well without it. All, and I mean all, methodologies for continuous improvement and process management begin with knowing what measurable outputs and outcomes you are getting from the status quo. If you don’t know that, you can’t tell if you have improved.
Now imagine quick budget cuts, long range planning, establishing priorities, fostering cost containment and communication with stakeholders without measurement. What you get are arbitrary reductions with no knowledge of the impact -- what I call "government by war lords” -- the strongest get more money.
Enough of my rants and back to our academic advisors. The ICMA white paper concludes, “in economic downturn, lessons from past downturns, research, and practice show that we know what works and what does not to cope with crisis and position local government organizations for strong, long-term development and change. Local government should make cuts in strategic, programmed ways and look for ways to improve the organization while making changes forced by reduced resources.” “Right-on” to our academic brethren.
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