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Vision and Common Sense

Posted on May 26, 2012 by Dr. John Luthy

Gathering information for this Blog created a confusing torrent of points and counter points around the central theme of preparing for a challenging future. Going back to a decent article in the June 2008 issue of Public Management Magazine, I found a reasonable discussion on setting community priorities. The article, by Chris Fabian, Scott Collins and Jon Johnson, provided both rationale and structure for identifying and establishing priorities but also raised deeper questions about what constitutes true crisis and what is merely social evolution.

The opening question pertains to whether our top concern should be the fiscal crisis. Progress made during the intervening four and a half years since 2008 has not reduced the relevance of such queries but one might wonder if there are larger questions that might contribute to better governance and more thoughtful policy formulation. While the recession has created a service contraction in many communities, it has also raised questions regarding long-term value, contribution and what constitutes quality of community life. After 30 to 50 years of expansion, federal, state and local governments have experienced considerable contraction. This has hurt some constituencies that have grown comfortable with various support systems, but contraction has also raised questions about the ideal level of fiscal support for parks, recreation, the arts, preschool, halfway houses, and literally hundreds of services that have become elements of the American landscape. I don’t judge the merits of any program, but have spoken freely about the challenge of triage left to community leaders and elected officials. Theirs is no easy task.

The 2008 article in PM, Getting Your Priorities Straight, concluded that prioritization is a better way to deal with the fiscal crisis. My response when I first read it and as I read it again, is ‘duh!’ Much of the rationale shared by the authors was lifted from Hammer and Champy’s book Reengineering the Corporation (1993) and Osborne and Hutchinson’s The Price of Government (2004). Both are good books and have relevance today. However, retreading accepted management theory does not bring the necessary level of direction or solutions to current challenges or those expected the remainder of this decade. Yes, measurement is essential; yes, program value must be ascertained; and yes, outcomes must be desired and tracked.

My perspective has always been tempered by a commitment to simplicity. In Chapter 11 of my book, Planning the Future, I offer a simple diagram that will drive planning and priority setting for any program of government. The ultimate questions inherent in the model are, “What is too high that must be reduced? What is too low that must be increased? and , What is at acceptable levels that must be maintained?” By assigning metrics to every program element, subject matter experts can determine what needs to be done, by how much and by when. The question then becomes one of value and where the community (or agency) gains the most by achieving an established goal. Frankly, many pages of charts and academic models are attractive, but too time consuming, confusing and beside the point.

With global interconnectivity increasing, foreign labor costs rising, economies struggling, re-shoring escalating, and world governments looking for leadership, America stands at a crossroads. Rethinking old ways is essential. However, we need simple, thoughtful approaches to community development and economic vitality. New York Times writer David Brooks has championed the need for American communities and business leaders to broaden their perspective and embrace a vision of a nation fully capable of leading in the 21st Century. This nation is connected to the world, it has exceptional universities, and a deep commitment to research; it is creative, has rules of law, and protections for entrepreneurs; and, the U.S. has capital funds for new ventures, new enterprises, and new opportunities.

Planning at the community level must have two platforms. One is local/ regional; the other is national/ global. As a nation and in most communities, the greatest value will be derived from matching vision with practical planning and implementation. The question is, Who will connect the dots and not get caught up in the process? As globalization morphs into its next form, the U.S. and her communities have enormous opportunity to rethink government service delivery while fulfilling a broader agenda of national growth, stability and sustainable vitality. Recasting old systems and processes won’t deliver the desired outcomes. Let’s get on with the tasks required to rebuild infrastructure, strengthen the educational system, reform the tax code, and welcome back business that wants to come home. Triage must still be accomplished. However, it will be driven by a new vision of what communities truly need to build and sustain programs and systems for a challenging and transformative era.

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal government long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). His 2010 book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders, is being hailed as the best book for public managers and community leaders who are committed to building a sustainable future.  An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at www.futurescorp.com).

Filed under: Response To Crisis | Leave a Comment »

The Great Contraction

Posted on May 6, 2012 by Dr. John Luthy

Perhaps a more appropriate title for this commentary would be “The Great Contradiction.” Expectations and comparisons to historic norms continue to generate demands that cannot possibly be met. Blaming government, Wall Street, the EU, China and global warming has become underpinning for virtually every talk show and faux news report.  Fanned by political rhetoric, various factions point to elected and business leaders as primary causative factors of economic and social discord, when neither seems to have the vision nor power to implement remedies. Not to say there are no remedies; they are abundant, driven by reality and some are even plausible. The problem? There is a larger game afoot.

Noted often in this Blog, the U.S. and all European countries are in a major systemic correction. After years of growth, over-extension, competition, graft, and greed, a natural re-alignment is underway. In some ways, why it is occurring matters little. Certainly, academics and politicians want to know, either for intellectual enlightenment or as ammunition for political gain, but, as with global warming, all that truly matters is the short- and long-term impact. The Romney/ Obama road show is just getting underway and will accentuate the polarity between expectations and reality. Along the way, I guarantee that the message of ‘confronting reality’ will be obfuscated by finger pointing, senseless data, and visions founded on quixotic views of what should be.

While I remain optimistic about the long-term future, this decade will be characterized by precarious economics, slow re-engagement, timid investors and lagging job growth. Especially in America, where there is a consistently weird demand for low unemployment and rapid return to economic vitality, this will take time.

The Economic Recovery Act provided over $830 billion in funds meant to incite growth. The federal government assisted the banking and elements of the automotive communities, and spread money around willy-nilly to other sectors through grants, contracts and loans. Even as recently as this morning on Meet the Press, Diane Swonk, Chief Economist for Mesirow Financial, noted that TARP funds did indeed save the economy and remarked that most economists agree that it was a prudent strategy.  Los Angeles Times reporter Jim Puzzanghera wrote a fine article (May 3) in which he cited a Fitch Ratings study that concluded that, without the stimulus the U.S. would have been mired in depression and the severity of decline would have been much worse. The article also cited studies by the Congressional Budget Office and economists Mark Zandi and Alan Blinder, both of which concluded that the stimulus had positive economic impact.  What is left unsaid in every study is that there are inherent issues in the U.S. workforce and the overall economy that will continue to hamper recovery.

In a world of rapid prototyping, global competition, and technological advancement, U.S. workforce readiness is seriously inadequate. As markets and products have evolved, driven by product and delivery technology, workers seem more interested in the European model of ‘retire early and just hang out with a great pension.’ Far too many people are either not interested in or incapable of keeping pace with escalating knowledge and skill requirements. Instead, they demand to be treated ‘fairly’ based on historic contributions and expectations that may be no longer viable. While many Baby Boomers have worked diligently for decades and have contributed to this country’s economic progress, that alone cannot be a platform for future policy.

In addition, too few young people have the work ethic, technical skills and initiative to provide positive gain for employers. As Baby Boomers begin to retire, regardless of their enormous contributions or demand for fair treatment in retirement, they have limited options when considering succession. Therefore, a stalemate exists: Boomers want to check out, private and public employers need bright, capable replacements and the public wants growth, vitality, opportunity, efficiency, low taxes, security, great infrastructure, and abundant jobs. Talk about a ‘can’t get there from here’ scenario!

Another corollary is that economic stimulus and Federal Reserve policies drove down interest rates, which kept the economy alive but reduced investor gains, which in turn created a less optimistic investment climate as people and institutions holding money adopted a wait and see mentality. Within two years, this compounded into a bunker mentality, which endures today. So, these converging variables have created an environment that cannot possibly generate desired levels of growth until bad debt is slowly flushed from financial institutions, Boomers adapt to new, contracted expectations about their retirement, the educational system produces more capable replacements for those who are retiring, young people adapt to reasonable income and spending levels, organizations (private and public) focus more on professional development, and the overall culture calibrates to reality.

My questions pertain to the role of public leaders in this enormous conundrum. Who will speak the truth to our communities? Who will take time to understand the complexities of a recalibrating economy and have the skill to express it to citizens? The U.S. has encountered difficulties many times in the past 200 years. However, they were typically more straightforward. People could grasp causation, significance, and the path forward. While previous challenges were no more personal, this time they are more subtle, more complex and deeply systemic. As always, it is a question of leadership. But it is also about the ability to rally our communities to common interests that are founded on purpose, vision and sensible expectations. This is a critical role of government, its employees and its leaders. Time will tell if they are prepared for the challenge.

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal government long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). His 2010 book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders, is being hailed as the best book for public managers and community leaders who are committed to building a sustainable future.  An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at www.futurescorp.com).

Filed under: Preparing for the Future | Leave a Comment »

Foresight

Posted on April 15, 2012 by Dr. John Luthy

The path forward is often illuminated by a clear vision that both directs and energizes required effort. This nation entered spring fueled by a recovering economy and the promise of a return to vitality and stability. Signs continue to point to new options and opportunities, albeit with fluctuations indicating entrenched caution and timidity. Emerging opportunities are especially alluring if balance can be achieved among competing economic, nationalistic, political, social and cultural forces that can simultaneously energize or inhibit. The challenge is one of application, which requires foresight – a precious commodity these days.

As community and business leaders stand on their tip-toes seeking enlightenment about the future, it is wise to consider the destination. Vision requires some idea about where we are going rather than wallowing in detailed analysis of the anticipated journey. The underlying questions to all planning are: Where are we going? and, How will we know we’ve arrived?

Human nature leads us to action plans that describe the strategies and initiatives required to achieve progress. Unfortunately, there is rarely enough time dedicated to understanding current status and considering an ideal vision based on where we are and where we want to be. This nation and many institutions are struggling with the concept and purpose of clear vision…the pursuit of which requires a commitment to foresight.

A vision is not a mission. Very simply, a mission expresses why the organization or institution exists and perhaps what it does. A vision reveals an organization’s heart and soul, while sharing information about its desired destination. In a sense, vision is somewhat spiritual, in that it reflects the idealistic aspects of both leadership and institutional purpose. From a practical standpoint, a vision defines aspiration and helps distinguish between where we are now as opposed to where we want and intend to be.

While some would argue that a vision, whether personal, community or corporate, should reflect some grand design, I see it differently. Irrespective of origin or purpose, visions should be practical and mirror reality. This is not to say you cannot have a grand, idealistic vision, but at least temper it with foresight steeped in reality.

As we look forward, I encourage every public and private business leader to consider the future in a context that includes the authentic aspirations of an entire community. Whether personal, professional, organizational, or financial, take time to quietly reflect on a vision that defines and constitutes sustainable business and community prosperity. Consider where you want your organization and community to be in clear, specific terms. And, of course, consider where you would like to be relative to health, capability, financial well-being, relationships, and self fulfillment. Once again, I am talking about legacy…your vision of the future, what you wish to leave behind, and your role in making it real.

Foresight is a learned skill that requires a combination of reflection, good data, experience, and intuition. Taking time to think about community, personal and organizational futures and to clarify visions that define the various aspects of your legacy will perhaps be one of the best investments you ever make.

You are not here merely to make a living. You are here in order to enable the world to live more amply, with greater vision, with a finer spirit of hope and achievement. You are here to enrich the world, and you impoverish yourself if you forget the errand.

                                                -Woodrow Wilson

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). His new book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders, was released in October 2010. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at www.futurescorp.com).

Filed under: Thinking & Planning | Leave a Comment »

Coming Home

Posted on March 28, 2012 by Dr. John Luthy

A new tsunami is heading toward these shores. It has already begun and its impact will be felt in communities across America. To be sure, it remains subtle, but is gaining momentum and power as it races eastward.

For some time, various sources have reported the growing costs associated with doing business in China. Shipping costs are up over 15 percent and wages in Chinese factories have risen 15 to 20 percent annually for the past four years. Harold Sirkin (Boston Consulting Group) has predicted that overall business costs in the U.S. and China will converge around 2015, meaning there is no sensible reason to move manufacturing to China when there is no real cost advantage.

Combining transportation, storage, labor, and general operating costs, the playing field is becoming more level. And, with more delivery and quality issues now being identified, there is a growing case for relocating back to the U.S. Coupled with these justifications are even more reasons to consider a shift.

The U.S. remains the world’s largest economy and, even though it remains in a tenuous recovery, there are signs that the current careful, deliberate approach is beginning to pay dividends. The population continues to grow, consumer confidence is increasing, unemployment is drifting downward, and new jobs are being introduced. These are all good signs and, when combined with expedient business decisions, signal an emerging environment that will support robust manufacturing growth.

Much of our work at The Futures Corporation involves mapping ‘converging variables.’ We are currently watching fuel, container, and labor costs, along with community willingness to share some portion of new plant startup investment and provide long-term incentives. But another variable has emerged that is just as potent: the innovation/ design/ manufacturing/ shipping/ purchasing cycle has accelerated. Due partly to the desire to avoid large inventories and to accelerate product turns, many outlets want just-in-time ordering, which requires fast response times from proximal manufacturers. Cycle times between China and the U.S. have grown too long and require too much transportation and storage to meet growing demand for rapid turnaround AND decent pricing. Retail and wholesale outlets want smaller inventories and rapid resupply, neither of which is possible with plants in China, unless larger inventories are kept on shore. This, of course, is exactly what most managers want to avoid.

Innovation and rapid prototyping has also added to the equation. Many firms are concerned about accelerating development cycles to keep pace with competitors. This translates into a formula that requires proximity, small inventories, fast delivery, and quick response to market fluctuations.

Most observers have recognized that the entire equation has begun to shift and accelerate. Those who wait too long to re-shore manufacturing may miss rapidly evolving markets, causing delays that could cost hundreds of millions of dollars. Delay could also cause a serious loss of market share or a repositioning of market leaders. Consequently, there is a burgeoning interest in finding suitable community locations to build or relocate manufacturing plants. Communities that recognize this phenomenon can reap enormous rewards IF they create suitable value propositions that match industry needs.

This raises a key question: Are communities throughout the U.S. recognizing this major trend and preparing for the next 10-to-20 year cycle? This one trend could very well be the essential event that will boost the U.S. economy out of its post-recession doldrums and launch the next boom cycle. Are communities prepared? Do they recognize what is occurring and are they making plans to attract emerging enterprises seeking optimal locations?

Economic development requires insight, prescience and a dedication to trend analysis. The data are clear: this is a major shift that will have enormous consequences to American business, consumers, and the economy. As the U.S. labor force becomes more realistic about wages and benefits, relocating manufacturing to American communities becomes the fundamental factor in a new economic equation. Proximity, reduced manufacturing costs, rapid response and pride in American goods are potent forces for change.

Unfortunately, the question remains, do community leaders, planners, and economic development professionals recognize the trend and are preparations underway? The communities that recognize this major shift and plan accordingly will prosper. Those that fail to perceive the opportunities or to prepare accordingly may continue to struggle. This would be unnecessary. It would also be a shame for those communities.

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal government long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). His 2010 book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders, is being hailed as the best book for public managers and community leaders who are committed to building a sustainable future.  An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at www.futurescorp.com).

Filed under: Preparing for the Future | Leave a Comment »

Excused From the Table

Posted on March 4, 2012 by Dr. John Luthy

Three years ago I had the opportunity to keynote the national EPA Conference on Water System Sustainability, held in Atlanta.  During the conference, I met with members of the Congressional Budget Office (CBO) who made it clear that the federal government could no longer fund local water systems at previous levels. Even more disheartening, CBO staffers noted that many programs related to water, wastewater, health, recreation, and community development that had enjoyed historically strong support would see reduced funding. I was encouraged to share this news with local officials during my travels and work with cities and counties. When I suggested that this was the role of professionals in D.C., I was told that it was not politically expedient to share such bad news and that the CBO and other Washington agencies had been told to avoid any public announcement.

For those who subscribe to Bloomberg News, you may have seen the February 28 article reporting that Stockton, California has filed for bankruptcy. The article reported that Governor Brown refused to discuss the situation, which in many ways signals the current fiscal environment, but also the growing schism between federal, state and local government. While some states are seeing some revenue growth due to a broad (but weak) US economic recovery, aid to cities and counties continues to decline. In a very real sense, it is ‘every man for himself.’ There is some humor here, in that this phrase can be partially attributed to the 1924 Our Gang short film of the same title, in which the Gang generates revenue through a combination athletic club and shoe shine emporium. The ensuing high jinks resemble many contemporary economic development ploys, most of which fail to embrace reality.

As stark illustrations of actions taken to avoid bankruptcy, Pontiac, MI has eliminated its police force and Cleveland, OH has demolished thousands of already condemned structures in a effort to sustain or improve property values. Unfortunately, for every reported action taken by local government, there are hundreds of critical actions taken to reduce costs while preserving historic values and service levels. As noted many times in this Blog, there is a major re-centering occurring in America. For close to 60 years, money has flowed freely, and was particularly apparent during the early days of New Federalism, during which block grants flourished.

The latest incarnation of New Federalism is the largely unannounced policy to reduce funding to the locals until they are forced to either forego or reduce service, or find new revenue sources. Whether by increasing taxes, private-public partnerships, new enterprise mechanisms, or bake sales, local government is now facing a major shift in operating philosophy, described in my book, Planning the Future. That is, communities must decide what is essential and what should be eliminated, reduced, maintained or expanded. Demand is NOT declining, so the prospect of conflict is high as expectations grow for both service expansion and reduction. Within five years, even if local government expands to meet demand, this trend will fully bloom into more frugal government, better strategic planning, and highly accountable public operations.

The number of communities that are tamping down budgets is enormous. Not to say I am an advocate of reducing services while demand for those services is expanding, but I do believe in careful planning that attends to programs and services that serve the greatest common good. The key is to get ahead of the curve and begin the process now, before community fabric is so frayed that recovery is difficult. Through proper planning, public leaders can recognize critical issues, evaluate impact, establish goals, then identify strategies that allow remediation and define new options. Now is not the time to blame state and federal government but to recognize universal trends that affect all communities. This is a new era. Most communities are facing local realities that are forcing them to confront conditions that seem too harsh or punitive. This new era is neither temporary nor nebulous. And, it is not punitive. It is the new norm…at least for quite some time.

Consolidation, collaboration, and contraction require careful planning. What is happening locally? Are grand plans being made that cannot possibly be funded long-term? Are strategic plans grounded on carefully articulated issues and are the impacts of those issues clearly stated?  Are there clear discussion points and decision points? Have a series of If-Then scenarios been developed by local stakeholders and government leaders? Do you know what’s at stake for every decision? Time will tell…

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal government long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). His 2010 book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders, is being hailed as the best book for public managers and community leaders who are committed to building a sustainable future.  An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at www.futurescorp.com).

Filed under: Leading The Future | Leave a Comment »

More Truth and Consequences

Posted on February 14, 2012 by Dr. John Luthy

I may have gotten in a bit deep last week when discussing the continual and unrelenting global warming joust that permeates the Internet. While impact and consequence remain my focus, there are those who take issue with both data and their interpretation. I continually encourage the investigation of outcome- the actual changes that have occurred and are occurring this year. Of course, causation remains essential if we are to intervene with any hope for mitigation. But it appears to be a separate debate.

Continuing my review, I again read Singer and Avery’s 2007 bestselling book, Unstoppable Global Warming, which is a very thoughtful and insightful repudiation of many myths and overstatements associated with climate change (Rowman & Littlefield, updated in 2008). I also reviewed various reports from 2011, especially those addressing patterns of drought and desertification.

I first look for what is actually occurring before I seek causative data because it would appear that confronting reality begins with actual affect. For instance, in early December the Associated Press reported that most of Mexico, Texas, Oklahoma and much of Kansas, Louisiana, New Mexico and Arizona experienced lengthy patterns of exceptional, extreme, or severe drought during 2011 and that the pattern would likely continue through much of 2012, depending on what happens during the rainy season, beginning in June. The article, by Francisco Salazar and Olga Rodriguez, reported that farms that typically harvest 10 tons of corn and beans from Mexican fields were getting only one ton. The hardest hit Mexican states had received only 12 inches of rainfall, resulting in 2.2 million acres of crops lost and the deaths of 1.7 million farm animals directly related to heat and drought. Among the poorest, starvation and malnutrition are constant companions. The agricultural impact to U.S. states is just as distressing, especially when coupled with huge wildfires across windswept prairies made tinder dry by the relentless heat.

This is but one example of reviewing what is, rather than debating causation, natural cycles, and the value of policy remedies that may or may not drive up business costs. Singer and Avery cite the 1,500-year cycle that seems to occur regardless of what else is happening on Earth. Gerard C. Bond of the Lamont-Doherty Earth Observatory at Columbia University, was the lead author of the paper published in 1997 that postulated the theory of 1,470-year climate cycles in the Holocene, mainly based on petrologic tracers of drift ice in the North Atlantic. Interestingly Singer and Avery cited Willi Dansgaard of Denmark, Hans Oeschger of Switzerland, and Claude Lorius of France, who also postulated that the Earth’s climate has naturally fluctuated for millions of years and that overlaying anthropogenic causation is foolish. The book cites considerable data and is well-annotated. I like this book. What I don’t like is the disregard for what is occurring and how it is impacting countries, economies and cultures. Whatever the causation, things are happening and they are happening fast.

Another little conundrum is why annotated and well-sourced data found in this book is different than data found in other books and papers…all with reputable scientific citations. As my friend Mike said in a recent comment, who and what can we believe? My answer? Begin with what is actually occurring and how it impacts the community, state, region and country, and sort out causation later. It is what it is.

Can interpretation of data vary? Certainly. But outcomes are events or conditions that can be witnessed. More and more frequent snow- or rainfall, more violent weather, increasing drought, melting glaciers, and warming oceans are all measureable events or conditions. In the Arctic, there is either more sea ice, less sea ice or an equal amount of sea ice. Once this is determined, we can determine the impact, whether positive, negative or neutral. As future thinkers, government officials and managers need more data about what IS and to consider various highly probable outcomes that might prove harmful to their communities. To haggle about who said what and what caused what may be entertaining, but erodes public confidence, wastes resources, and distracts decision makers from their most essential work – planning the future.

Wise people will ultimately address causation and prevention. But they must first recognize impact and consequence and work collaboratively to mitigate affect. Who is right is not important, but what is right is critical at a time when every resource and every minute counts.

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). His new book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders, was released in October 2010. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at www.futurescorp.com).

Filed under: Leading The Future | 1 Comment »

Truth and Consequences

Posted on February 2, 2012 by Dr. John Luthy

There is both humor and idiocy in the constant Internet joust dedicated to global warming. I recently received a forwarded article from the Wall Street Journal (No Need to Panic about Global Warming, Opinion, January 27), claiming, “There’s no compelling scientific argument for drastic action to ‘decarbonize’ the world’s economy.” Okay…but the notion of ‘decarbonizing’ is merely one among many suggestions pertaining to issues related to climate change. The sender’s intent, it seems, was to reinforce that there are countervailing positions advocating a more natural acceptance of a warming planet where, among other things, plants would flourish in a greater concentration of CO2. Further, the intent implied in the transmittal email appeared to be a counter-position to those advocating preemptive action before the tipping point is reached (most data indicates that point has been passed).

My response to this article and to the sender was that there once again is very little data in the Wall Street article, and, even though it is signed by many illuminaries, even a cursory review would suggest that this posse is not revealing any new information or solutions. We already know that the earth has experienced many climate evolutions over millions of years and that fluctuating CO2, warm and cold spells had various causes – everything from mega volcanoes to coal burning during the early stages of the industrial revolution (continuing today in many countries). I once again suggested that a review of the data was in order. While merely reviewing verified data may not explain causation or provide a linear path to specific remedies, it does allow the reviewer to verify what is occurring.

According to the Earth Policy Institute (EPI), an independent non-political, non-affiliated group, the global average temperature in 2011 was 58.14 degrees Fahrenheit. According to NASA scientists, this was the ninth warmest year in 132 years of recordkeeping, despite the more recent cooling influence of the La Niña atmospheric and oceanic circulation pattern. Records clearly demonstrate that, since the 1970s, each subsequent decade has gotten hotter and 9 of the 10 hottest years on record have occurred in the twenty-first century.

According to the EPI, “In the continental United States, summer 2011 was the second warmest in history. Nearly three times more weather stations hit record highs than lows in 2011, in keeping with a trend of increasing heat extremes. Whereas in the middle of the 20th century there were close to the same number of record highs and lows — as would be expected absent a strong warming trend — in the 1990s highs began outpacing lows. In the first decade of this century, there were twice as many record highs as record lows.”

“Worldwide, seven countries set all-time temperature highs in 2011: Armenia, China, Iran, Iraq, Kuwait, Republic of the Congo, and Zambia. Kuwait experienced the year’s highest temperature, with thermometers reaching 127.9 degrees Fahrenheit, the highest temperature ever recorded on Earth during the month of August. Even more threatening than daytime highs are extra hot nighttime minimum temperatures, which do not allow respite from daytime heat. The world’s hottest 24-hour minimum ever –107 degrees Fahrenheit — was recorded in Oman in June 2011. “

“Even the Arctic had a notably warm year, with the 2011 temperature a record 4 degrees Fahrenheit above the mean for the period 1951–1980. Barrow, Alaska, the northernmost U.S. city, spent a record-breaking 86 consecutive days at or above freezing, well above the previous record of 68 days set in 2009.  The data clearly shows that, over the last 50 years temperatures in the Arctic have risen more than twice as fast as the global average, melting ice and thawing permafrost. Arctic sea ice has been shrinking more rapidly, falling to its lowest volume and second lowest area on record during the 2011 summer season. With the summertime ice loss outpacing wintertime recovery, Arctic sea ice has thinned, making it increasingly vulnerable to further melting. Scientists expect a completely ice-free summertime Arctic before 2030.”

My interest, as noted in my book, Planning the Future, is rooted in the question, ‘So What?’ While the 16 signers of the Wall Street Journal article caution against panic (I concur), they focus only on CO2 and nothing else. I advocate knowing truth through data. Show me a picture of a glacier taken in 1970 and another taken today. If it is ¼ its previous size, I conclude that something (warmth, perhaps?) is causing the glacier to melt. I am also interested in the probability that a warmer climate will impact communities throughout the U.S. and globally. Everything distills down into ‘If-Then’ scenarios. IF it’s getting warmer, what might happen? According to compiled data by the EPI…

“Worldwide, 2011 was the second wettest year on record over land. (The record was set in 2010, which also tied 2005 as the warmest overall.) Heavier deluges are expected on a warmer planet; each temperature rise of 1 degree Celsius increases the amount of moisture the atmosphere can hold by about 7 percent. Higher temperatures also can fuel stronger storms. As is expected on a hotter planet, while some parts of the globe were overwhelmed by rain in 2011, others were distinguished by dryness. A severe drought in the Horn of Africa that began in 2010 devolved into a crisis situation in 2011, characterized by crop failure, exorbitant food prices, and widespread malnutrition. Exacerbated by chronic political instability and a belated humanitarian response, the death toll may have exceeded 50,000 people.

“In North America, a drought that began in late 2010 and worsened over 2011 led hundreds of farmers from northern Mexico to march to that nation’s capital in January 2012 to draw the government’s attention to their suffering. Nearly 2.2 million acres of farmland and 1.7 million head of livestock were lost due to the dryness — the worst in Mexico’s 70+ years of data collecting.”

Scorching heat, drought, and wildfires across the U.S. Southern Plains and Southwest caused farm, ranch, and forestry damages that exceeded $10 billion in 2011. Wichita Falls, Texas, experienced 100 days over 100 degrees Fahrenheit — far more than the previous record of 79 days set in 1980. Oklahoma and Texas had the hottest summers of any states in history, breaking by a wide margin the record set in 1934 during the Dust Bowl. James Hansen, director of NASA’s Goddard Institute for Space Studies, writes that the likelihood of such extreme heat waves ‘was negligible prior to the recent rapid global warming.’ Texas also had its lowest rainfall on record. Invigorated by the heat and drought, wildfires burned across an estimated 1.5 million hectares (3.7 million acres) in the state.”

While many factors produced by 7 billion people and their competing economies have led to global warming, what truly matters is impact. Those who quibble over whose data are best or who said what in an email are missing the point and wasting time. Facts are facts. The truth is that the planet is warming and consequences are beginning to mount. We shouldn’t panic. But we also should not waste time diddling around with senseless debate about word usage, causation, affiliation, or policy origin. It’s warm, it’s getting warmer, and we are reaping the consequences.

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). His new book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders, was released in October 2010. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at www.futurescorp.com).

Filed under: Trends and Data | Leave a Comment »

Focus on the Long View

Posted on January 22, 2012 by Dr. John Luthy

I have a natural antipathy toward politics, but more so toward the political parties that comprise America’s polarized landscape this election year. I typically avoid any discussion about subjects that hint of even slight political overtones, but a recent article provided enough encouragement to at least nibble around the edges.

Newsweek’s January 23 issue contains a cover story written by Andrew Sullivan that raises questions about the deeper contributions made by President Obama. While Sullivan admits his distaste for many actions that have and have not been undertaken, he points out that, to understand this president, one must understand the art of the long view.

When Obama was elected in 2008, the US was losing approximately 750,000 jobs per month, annualized growth had declined by close to 9%, and debt was at an all-time high (soon escalating further due to a $787 billion bailout). However, as Sullivan points out, since the low point in 2010, 2.4 million jobs have been added, which is more than during the eight years under Mr. Bush. In 2011, 1.9 private sector jobs were added while there was a net reduction of 280,000 public sector jobs. Overall, government employment has been reduced by 2.6 percent, more than the 2.2 percent during President Reagan’s first term when he was flexing his conservative muscle.

During the recent chaotic recession, the auto industry was bailed out but is now doing reasonably well, and most TARP funds loaned to banks have been paid back with interest. Sullivan seems to advocate and perhaps celebrate the common management approach of putting First Things First, which ranks #3 in Stephen Covey’s list of habits of highly effective people.

While Mr. Sullivan makes a reasonably strong case for all the good that has been done, he also makes a somewhat oblique case for embracing the value of the Long View. Peter Schwartz, co-founder of the global business network, twenty years ago made a potent case for scenario planning and a focus on a longer-term future in his book, The Art of the Long View (Doubleday, 1991). I share this view because the future is all that really matters. It is what the present is all about – providing a platform for sustainable growth, economic development, cultural normalcy, and social harmony that serves the common interest of all citizens. Sullivan describes a minor epiphany wherein he recognizes that maybe, just maybe, this president has a broader view and deeper commitment to the future than previously suspected. Perhaps he does indeed have an eye on national long-term strength and more sustainable well being while the nation is struggling to re-center after a horrific downturn.

Conor Friedersdorf, a writer for The Atlantic has responded (January 22) that, while much good has been done, there is a litany of negatives ranging from indefinite detention, the continuation of policy that allows spying on citizens, TSA expansion, escalation of drone warfare, reauthorization of the Patriot Act, and failure to prosecute Wall Street criminals. In all, he lists 14 negatives that he attributes to this president. All warrant discussion and critical analysis. But, I see a common theme that seems to elude far too many planners…the need to let some things go while working on broader, more essential foundational activities. Of course, the value of any and all such activities can be endlessly debated, and most will evoke deep emotion and even conflict.

But the broader view must turn to where we want this country to be in five, ten or twenty years. We cannot immediately fix the economy or produce millions of jobs overnight. These are long-term strategies that require a steady hand, clear vision, and an understanding of First Things First. Ratcheting down spending and taking a more conservative approach to how we buy, live and plan will allow most Americans to prepare for anticipated challenges. Pay down debt, save more, spend less, get healthy, collaborate more, and invest in things that have long-term value; these represent an approach that worked well for our parents and grandparents.

Gregg Easterbrook wrote The Progress Paradox (Random House) in 2004, with the subtitle, How Life Gets Better While People Feel Worse.  In it, he expresses the revelation that, while life has gotten remarkably better for virtually every American, something is missing. Expectations are off the charts, recreation seems to be the greatest motivator, and few seem to care much about the future. Myopic vision is endemic; we are fascinated with electronic gadgets, travel, staying in touch, and celebrity. Educational performance has declined, savings have been depleted and the search for gratification continues to escalate. Life is good, but, intuitively, many people sense they are on the wrong path.

Circling back to Sullivan’s article, he seems clear in his factual comparison of the eight Bush years against what was inherited by the current administration, and what has been done to date. Friedersdorf is just as accurate in his assessment and is not unkind to Sullivan, his former boss. The underlying message is essential for all public managers, regardless of party affiliation or beliefs. Those who are currently in control have an obligation to mobilize available resources to achieve the greatest long-term value. In this Blog, I have raised rhetorical questions about why the art of triage will become more critical. What has the greatest value, in a new park or additional school funding? More law enforcement or better roads? Safe water or more economic development activities?

Whoever wins in November inherits the collective past with all its detritus and promise. There must be more attention paid to the evolving world and America’s role in it. I predict that more manufacturing will return to these shores as costs soar overseas; we’ll see more foreign companies building plants here to be close to our markets; Europe will struggle and even decline due to broad mismanagement and societies that have vacationed and celebrated their histories for too long. A major shift is occurring; there is a huge game afoot and most don’t even recognize it.

Again I ask, ‘Where is your community?’ What is happening with re-centering and re-thinking various institutions? Is evolution proceeding in a thoughtful or chaotic manner? More than ever, the lead must be taken by state and local government, while political parties focus on the wrong things, eviscerate each other and escalate senseless blathering and blame. The great challenge is to make real progress while the national political spectacle once again distracts and de-unifies a struggling nation. This very serious game is ours to win or lose. Visionaries from either party can surely see that.

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal government long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). His 2010 book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders, is being hailed as the best book for public managers and community leaders who are committed to building a sustainable future.  An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at www.futurescorp.com).

Filed under: Leading The Future | Leave a Comment »

Embracing the New Year

Posted on January 2, 2012 by Dr. John Luthy

As I begin this New Year, I am drawn to a comment made by the extraordinary Christopher Hitchens, who succumbed to cancer on December 15. With his typical mix of droll wisdom, disdain and brilliant articulation, he promised to address the prospect of death as an active participant- one who ‘did’ death almost as an elective activity and not as a passive recipient of fate. If you haven’t read much of Hitchins, I encourage you to do so…but be prepared for his incandescent honesty and towering intellect.

Regarding 2012, it seems that there is a message for us in Hitchins’ final joust. The underlying message is about facing inevitabilities with passion and spirit, while also finding the will to resist the malignant forces building against humanity. Believing we can change the future is fundamental to changing it. And, for the most part, it is not too late.

Just the number 2012 brings a mix of apprehension and allure that is both troubling and somewhat mystical when compared to other years. It an important election year that bridges a confluence of cultural, social, generational and economic norms, but is also a reference point for the 2,500 year-old Mayan calendar that predicts the end of an age. If we thought 2007-2011 were landmark years, we haven’t seen anything yet.

As Europe struggles with solvency, it also struggles with a much deeper and more complex challenge: a formula for accommodating evolving globalization, religious nationalism, cultural integration and historic patterns of dissent. So much is in flux in Europe and throughout the Pacific Rim, it is difficult to comprehend. Add the rapid development of India, Brazil and Argentina, the continued success of Canada, New Zealand and Australia, and a growing chasm between developed and developing countries, you have the ingredients for chaos, growth, prosperity, conflict, and rampant confusion.

As we analyze current status, we see declining unemployment, growing consumer confidence, and more decisiveness among EU members. There seems to be greater commitment to long-term stability in Pacific Rim and European countries and several major economies continue to provide the foundation for slow but steady growth. Globally, an emerging middle class will steadily improve markets throughout this decade, with slightly more upward acceleration during 2012. Not to say we’ll turn the corner, but a turning point will be more apparent within 12 months.

Technology will drive progress and global integration in more ways than we can possibly imagine. People are talking; entire cultures are now able to bear witness to atrocity, innovation, celebration, and misfeasance in real time. People seem to know things, care about things, desire things, and understand more than ever. How this flight from ignorance will drive the future is hard to fully imagine, but the amount of globally generated social energy is enormous.

Outdated institutions (U.S. Post Office) will continue to fade while new institutions (ASEAN) will seek broader economic growth and stability. Prepared and prescient businesses and public organizations will morph and prosper; those refusing to interpret patterns of change will struggle and many will die. This New Year is a transitional year. While many are tired, confused, and enamored with the past, those who embrace new challenges and seek to understand new opportunities will reap tremendous rewards during this decade.

The huge IF that is associated with the previous statement depends on a single element: leadership. Far too many leaders in our political, government and corporate institutions are driven by various combinations of avarice, control, power, ego and a compulsion to perpetuate historic norms. The great thing about Generations X and Y is that they, for the most part, seek newness. Among this very large complement of society, many realize that capitalism does not necessarily equate to avarice and that ego can be a good thing. Most seem to be driven by a sense of community, collaboration, and living a ‘good’ life. If they can establish these elements as essential norms while energizing an entirely new culture that preserves the best American values, there may be a more positive future than some would predict.

It is time to understand that foolish decisions, greed and myopic planning led to the current predicament. Virtually all celebrated economists encourage patience during this 6 to 10 year re-centering period. Careful, deliberate, and prudent community planning, along with deeper market understanding and commitment to value will generate growth. Critical questions center around what constitutes leadership and what this country needs during such a transitional period. Vision, insight, purpose and planning must integrate with value, equity and the common interest. The ultimate questions must pertain to what is in the best common interest of all citizens, not only in this country but in every culture. Who will work for the common good? Who will confront reality and have the courage to speak the hard truth?

As 2012 dawns, keep these questions, and your own private answers, in mind. Above all, believe in the future…it will be challenging but bright for those who choose to make it so.

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). His new book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders, was released in October 2010. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at www.futurescorp.com).

Filed under: Leading The Future | Leave a Comment »

Deep Breath, Step Forward

Posted on December 14, 2011 by Dr. John Luthy

The admonitions to pay attention, remain vigilant, and confront reality have never been more relevant as 2012 begins. To retain a reasonable measure of optimism, one almost has to ignore ominous signs and focus on those with less potential of tipping us into the abyss. However, because time is relentless, we must remain just as relentless in our commitment to emerge stronger than ever. It’s not merely the American Way; it is also the best alternative.

As we seek a rationale for believing and committing to an optimistic vision, we must first face reality. There remain major obstacles to global and national economic, physical and social health. Aside from Europe’s enormous interconnected fiscal crisis, resources are dwindling at an increasing rate, promising higher prices and more competition. The global population is now over 7 billion and is driving demand. There are 313 million people in the United States and the number living below the poverty level is approaching 50 million. It was ‘only’ 36 million five years ago. Immunization rates are declining and formerly vanquished childhood diseases are escalating as more people follow fictitious warnings driven by irrational and unsupportable Internet rants. Diabetes is predicted to impact up to 30% of the population and add trillions to heath care costs within twenty years if the national obesity epidemic is not curtailed.

In the U.S. alone, infrastructure has eroded to the point it will take an estimated $2.2 trillion just to return various systems to functional, safe levels. And, though most assume the discussion is about roads and bridges, it entails a much more comprehensive report card involving sea ports, airports, air traffic control, levees, dams, power grids, water systems, waste water systems, and pipelines carrying steam, gas and oil. The American Society of Civil Engineers has given this country a ‘D’ grade for virtually every aspect of infrastructure. It is old, it is failing, it is dangerous and repair costs will be huge.

Climate change is becoming more apparent and the data seems conclusive that major shifts can occur within a single decade. The combination of horrendous drought (Mexico and Texas come to mind) or historic rainfall (Southeast and Eastern U.S.), record-breaking tornados and streams of hurricanes are wreaking havoc with communities, local economies and the insurance industry. The impact on agriculture is growing more severe as crops or livestock either wither or drown. On the bright side, even though the cost of food is escalating, farming and ranching have entered a new era of profitability, which appears to depend as much on new weather patterns as on markets and expertise.

As of this writing the DOW is slightly over 12,000, but seems to fluctuate weekly. The mess in Europe erodes market confidence and makes prediction difficult. Germany has become the EU ‘parent’ economy. In a remarkable turn of events, Polish Foreign Minister Radek Sikorski just last week encouraged Germany to take a greater lead in Europe. To a largely German audience in Berlin he stated, “You know full well that nobody else can do it. I will probably be the first Polish foreign minister in history to say so, but here it is: I fear German power less than I am beginning to fear German inactivity.” Italian leaders have made similar statements…Germany is the EU’s largest and most potent economy and is probably the best organized, most prudent and insightful. A remarkable shift since the mid-20th Century.

As unemployment dipped to 8.6% about ten days ago, NPR guests David Brooks (NY Times) and E.J. Dionne (The Washington Post) noted that, while this is good news, it is not enough. It helped rally Wall Street, but, with around 320,000 people dropping out of the job market, many question the value of the announced decline. I found their comments somewhat myopic and perhaps disingenuous. Historically, whenever an economy experiences major recessions, the result is re-centering that involves workforce evolution. Losing a portion of the workforce is a natural phenomenon…many just retire and others who are ill-prepared for new realities give up. Economists have predicted this for some time. So, it is silly to say an unemployment decline to 8.6% is irrelevant. It is merely another sign of economic re-centering that will continue for several more years.

Real estate is following a similar course. During this past decade, the U.S. overbuilt residential and commercial real estate, so, at some point, correction had to occur. Financial factors tied to mortgage shenanigans finally ignited an explosive mix of greed, ignorance, regulation and hedonism. It led to the current predicament, but it will correct within another five to eight years (some sectors will take longer).

So, with this dose of reality, what can 2012 possibly bring?

I recently met with a group of 15 business owners and found that every company is now or will be hiring in 2012. All are proceeding with care and deliberation according to their strategic plans, demonstrating cautious optimism. Their main concern? Finding people with a work ethic who can do the job.

GDP growth will be around 2% in 2012 but inflation should remain low – also around 2%. Manufacturing will continue its resurgence, as more firms bring production back from China due to growing labor, transport and storage costs. Interestingly, some foreign companies are relocating to the U.S. to take advantage of an abundant skilled labor force and imbedded technology and to avoid escalating operating costs. This is a remarkable turn of events that bodes well for the U.S. economy. New firms are also emerging, as population growth builds demand in various sectors. While there will be growth, unemployment will hover around 9% due to the long-term specter of economic re-centering. This will just take time and people need to get over it. Folks, there will be jobs.  The question is, can the unemployed qualify for them?  Unfortunately, many cannot without retraining.

Due to the enormous numbers of people in Generations X and Y (born since 1964), there is a huge positive real estate bubble waiting for the right opportunity. With several million young families and individuals seeking homes, when the dam breaks, it will break with a torrent of buying. It appears that 2012 may see some of this occurring, but look for much more to occur in 2013 and 2014. My question is whether anyone has learned the critical lessons from this Great Recession. I encourage careful, moderate growth that follows a sustainable path.

Construction will grow in 2012, as more infrastructure projects are funded and more investors see returning values. Private-public partnerships will contribute to this resurgence. Power plants and grids will get more attention as energy demand escalates, but balancing clean air standards will be challenging.

My greatest concern is the lack of congressional leadership. Problems do not reside with government agencies, but with those making rules and budgets. As noted previously in this Blog, regardless of one’s party preference, the call for strong, decisive and collective leadership is needed if America is to recover its global status as an economic, academic, social, and cultural power. The imbalance between revenues and expenditures is ludicrous and dangerous. Difficult changes must be made immediately. There will be politically inspired movement in 2012. I fear it will be ill-conceived, illusory and driven mostly by political gain.

Final Thoughts

Planning holds the key to 2012. Especially if you are a Baby Boomer or early-stage Generation X, give thought to your personal vision for your life and work. What is your destination and timeline?  How do you define success? What path will take you to your goals with the least amount of turmoil and uncertainty? Take time to consider these and other questions. As always, communities must pay more attention to what is occurring globally and nationally. Transitions will abound in 2012 and beyond, so mayors, councils, commissions, and managers must prepare to take advantage of new options and opportunities. This coming year will be a barn-burner.

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal government long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). His 2010 book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders, is being hailed as the best book for public managers and community leaders who are committed to building a sustainable future.  An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at www.futurescorp.com).

Filed under: Preparing for the Future | Leave a Comment »

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