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The Inexorable Future

When discussing the future, both mild and robust opinions abound. Most are best countered with an admonition to ‘review the data,’ which allows one to remain generally free of the many traps associated with putting stakes in the ground. Arguing about what may or may not be predetermined often promotes conflict and discord – neither of which proves useful by any measure.

On the other hand, what is more important than the future? It comes careening towards our communities whether we like it or not, rarely offering enough time for proper preparation. Of course, the tendency toward procrastination plays a role, allowing us to admonish others (and our young) with the ‘woulda, shoulda, coulda’ adage that does little to curtail or preclude events after the fact.

An investment in data would seem to be wise. For instance, we know that Greenland and Antarctic glaciers are annually losing over 50 and 24 cubic miles of ice respectively. Satellite images prove that a huge portion of sea ice the size of Luxembourg recently broke free from the coastal ice plain, joining other enormous ice floes spawned by warmer seas and an evolving atmosphere. Arctic sea ice has declined from 2.7 million square miles to 1.9 million square miles since 2000. As ice melts, the seas rise…that’s science you can measure.

According to the American Society of Civil Engineers (ASCE), close to $2 trillion is required merely to bring road and water system infrastructure up to basic standards. This number does not consider seaports, airports, waste treatment, air traffic control, and public transit – all systems and services taken for granted. Numbers associated with infrastructure maintenance and refurbishing are staggering, yet are dwarfed by numbers tied to defense, Medicare and Social Security. By the way, the U.S. defense budget has grown from $316 billion in 2001 to $693 billion in 2010 – more than the world’s 20 next largest national defense budgets combined.

Nationally, education ranks far behind many other developed nations yet is struggling to gain traction. Funding shortages are forcing tough choices; triage has become the standard fare of legislatures, commissions and city councils, yet many seem to have neither clear direction nor established criteria on which to base priorities. As we dawdle, the years roll by and the hole gets deeper, as Thomas Friedman noted this past week in his New York Times article. K-12 schools, universities, roadways, airports, water systems and even basic administrative services cannot be maintained without adequate financial support. And clearly, the ability to sustain long-term support at current or even previous levels is now questionable.

Referencing the recent and very simple argument about the federal deficit…it is a matter of arithmetic. A business cannot spend three dollars while generating two and expect to survive for very long. Yet the U.S. has done this very thing for 30 years. If you’re curious or masochistic, review viable data from the Congressional Budget Office, the ASCE, U.S. Treasury, and various non-partisan data sources. Looking at the data, you will be appalled, while wondering, ‘who the heck is in charge?’

So, here’s the deal: the future is coming. It is ours and it is our turn at the helm. We are the big kids who make (and break) the rules, make the decisions, and take the risks. Unfortunately, those decisions and risks will have a profound impact on future generations. The old adage, ‘Risk what you can afford,’ has merit here. GDP will end up at around 2.8% for 2010 and remain about the same for 2011. It’s not great, but it represents growth while the economy is re-centering. Unemployment will edge downward, interest rates will edge upward and generally, it will be a time of global recalibration. 2011 will offer opportunities to re-think old habits and preferences. Collectively, communities must reconsider how they spend, save, plan, and manage. When feeling the spin that comes with re-thinking, consider the Amish. They are virtually untouched by the economy. They eat well, collaborate, raise decent families, understand business, are amazingly efficient, and save money. Not saying everyone should pack up and move to Ohio or Pennsylvania, but at least consider the long view and establish a thoughtful plan to achieve a prudent community vision.

Times are changing, so look forward, chart a path, and focus on a destination that serves the common interest of all citizens. These are not dark times; but they are challenging us to rethink how we manage community affairs and how decisions are made. We can do this. We don’t have a choice.

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. Among other articles and essays, 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).

Sowing and Reaping

Discussions about earmarks have taken an interesting turn this past week as newly, and some previously, elected members of Congress have indicated support for ending this practice that has cost taxpayers $15.9 billion this year. While this is only 1% of a $3.7 trillion budget, it represents funds that could be better allocated and less prone to cries of favoritism. The best thing about the recent earmark conversation is that it may portend greater opportunity for collaboration on deficit reduction.

However, greater depth is needed if there is to be realistic planning and preparation for a costly future – one with huge and growing costs associated with infrastructure repairs, Social Security and Medicare deficits, iconic subsidies, and an enormous defense budget that in the future may prove to be overly bloated and misallocated. Bottom line, virtually all sensible pundits, economists and academics have continued to advocate a movement toward rational thought relative to future needs and the value of righting the financial ship. As with any business or family, a combination of spending less and generating more are the twin pillars of financial planning. These, along with other foundational elements characterized by prudent choices, comfort with less, prioritization, and a commitment to live within reduced means, seem to be genuine guideposts to economic sustainability.

To prepare for the future, where huge costs are unavoidable, America’s leaders must focus less on politics and election year rhetoric and more on simple arithmetic. As some have said (loudly), you can’t spend $3 and take in $2 for very long before you are bankrupt, and, even if you borrow (if you can find the cash), after a while, no one will lend to you. At that point, it caves. And, when it caves, it will cave fast and hard.

So…we are reasonably intelligent people. Why don’t we decide what services are required and at what level, establish priorities that have the greatest value for the most people, and determine what they will cost? Government budgets must be established to preserve the highest level of common good for a community. How is that defined? We live in a country that has experienced 60 golden years when compared to Europe, Africa, South America, and Indonesia. We have had a wonderful run and it can continue. But it is in jeopardy unless we rein in spending and establish the means of funding the most essential programs and services.

The co-chairs (Alan Simpson and Erskine Bowles) of the bi-partisan presidential commission to review the federal deficit outlined a proposal to reduce the deficit by nearly $4 trillion by 2020. This would be accomplished by eliminating $1.1 trillion in sacred tax breaks, adding 15 cents per gallon to the gasoline tax, reducing the federal workforce by 10 percent, reducing the number of overseas military bases and slashing farm subsidies by $3 billion per year. In addition, they suggested raising the age for full Social Security benefits to 68 by 2050 and 69 by 2075.

Response has been heated and negative. While their recommendations represent a ‘stake in the ground’ for those who are serious about deficit reduction, polarity and resistance have remained profound. Post-campaign rhetoric about cutting the federal budget has remained hot and heavy and public sentiment supports bold action to both reduce and preserve. Again, it is simple math. You can’t have it both ways. Major cuts are required and higher taxes (of some sort) are essential. The U.S. cannot survive with its current spending level. It either seriously reduces spending among historically sacred entitlements and critical programs or it increases revenue. Due to the level of pre-existing interest payments, entrenched public programs, entitlements and defense, it would cause great socio-economic harm to cut too much too fast. But, doing nothing is a mistake. The reluctance to act is primarily why we are in this mess.

State and local governments are precluded from running deficits. Budget and program reductions are therefore being annualized according to economic fluctuations and local requirements. This bodes well for much of the country, even though it continues to be difficult. As society and the economy transform, each is finding a new center that is more sensible and sustainable. State and local government will arrive at a solution long before the federal government and could very well illuminate the path forward. There is not a single applicable equation but it is clear that the way forward requires collaboration, a can-do spirit and a willingness to sacrifice during the transformation. The progress I see in state and local government reflects these necessary attributes and many cities and counties are beginning to recharge. The real question is whether members of Congress will follow the lead of state and local leaders and quit wasting time before it is too late.

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. Among other articles and essays, 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).

A Redundant Confrontation

The headlines could read: “Reality strikes… again!” The phenomenon of predictable surprise comes to mind when I read of continued actions dedicated to reducing the cost of government. The overriding theme during the run-up to this mid-term election has been the not particularly subtle accusation that people in government have purposefully bloated programs for unaccountable reasons and that the citizenry must now retrieve control to restore order. It almost plays like a B movie that has an untenable plot…thin and unsupported by reality. Remember, when you poll citizens and ask if they would like lower taxes or intact Social Security and Medicaid, world-class defense, sound schools, safe water, good roads, and a secure homeland, they say YES! We want it all…we just don’t like the price.

There have been and continue to be recessionary impacts to global and U.S. economies. The dominos will continue to fall. It has been predicted that any recovery will take three to five years and its vitality depends on complex uncontrollable variables. States and communities that tended toward austerity have been hurt less than those that pushed the envelope during good times. Deceleration from a high rate of development can breed unintended consequences – many of which were not considered until it was too late. (Scenario planning anyone? Anyone?)

The Challenge of Recalibration

Recalibration during difficult times requires leaders who are clear, direct, and speak truth. I would also add that inclusion is now a critical element of this transformation. Recovery and transition requires many talented, dedicated and invested people at the table. More critically, it requires the ability to employ long-term strategic thought directed at creating stable, sustainable communities. In a recent statement, Ronald Loveridge, the mayor of Riverside California, said,

“This historic recession has forced city officials to make difficult decisions that impact the social and economic fabric of their communities. This recession is making city officials fundamentally rethink and repurpose the provision of services in their communities. Some are innovating and finding creative solutions but, regrettably, without the necessary resources, cities will continue to have a difficult time assisting their residents through these trying economic times.”

The message is clear – these trying times will continue for awhile. However, as I noted some time ago, these are not the worst times in U.S. history. Difficult and trying, yes, but not insurmountable; it just takes time and dedication to a longer-term vision.

A National League of Cities research brief recently stated that 87% of city finance officers report their cities are worse off financially than in 2009.  The report stated that city revenues generated from property, sales, and income taxes, will decline 3.2% in inflation-adjusted dollars. The report states that cities will continue to struggle for several more years, which I predicted in this Blog many months ago (as have many others). Bob Herbert has written a superb article in the New York Times entitled, ‘The Corrosion of America.’ (NY Times 10/26/10) Pertaining to water systems, it expresses not only the need for a totally renovated U.S. water system but also that such an effort would generate a combination of jobs, greater security, and contribute to a social/ structural underpinning that is rapidly declining. In most surveys, people express a willingness to pay higher fees to ensure safe water; the cost is growing every day we defer needed maintenance.

This signals a new period in American governance. Especially in this educated democracy, citizens can certainly understand what is at stake, IF they have the information. What contributes to quality of life? To sustainability? To safety and security? What services are first tier, second tier and, just perhaps, unnecessary? Noted economist Paul Krugman’s recent NY Times article Falling Into the Chasm (NY Times, 10/24/10) again made a clear case that, after every serious financial crises, there is a period of very high and protracted unemployment, as society and the economy re-center. This was predicted and is occurring. What’s the mystery? It was predicted by virtually all celebrated economists based on historic response to crises. The question is, What is the best method for every federal, state and local government agency to respond to the crises and the need to evolve?

Within all the rhetoric, there seems to be one constant.  Those individuals, institutions and governments that carefully plan according to a long-term vision that is based on prudent, sustainable progress have done pretty well. This is a time to seek a path of progress based on moderation. It is a time to decide on central community platforms that sustain quality of life, safety, social harmony and economic vitality. We may have to reduce expectations for a short period, but the future will come whether we’re ready or not.  Are you simultaneously confronting short- and long-term realities? And are there signs that your community is prepared for the challenges ahead?

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).

Times are Changing…Slowly

The news media seems committed to stirring an already boiling pot, asserting in various forms that ‘another recession seems inevitable’ or that ‘attempts to revitalize the economy are just not working.’ How many times must it be said that the entire world is transforming? Tom Friedman (The World is Flat, 2005, Farrar, Straus & Giroux) tried (vainly, it appears) to explain the phenomenon of emerging cultures and economies. He expressed with remarkable clarity that times are changing. Fueled by enormous amounts of accessible information, other cultures are actively seeking growth and development. In that effort, many are stumbling and bumbling, but are dead set on positive change. This was beautifully presented in Fareed Zakaria’s book, The Post-American World (2008, W.W. Norton).

I continue to remind readers that the current transformation will take much of this decade. The volume of change required to move entire cultures from their previous, long-term status to a better place is enormous. And, change is a messy process. For some time, progress in the U.S. will come in smaller increments; major leaps forward will be few. This troubles most of us who have grown up experiencing massive change that introduced a cornucopia of opportunity. For early- to mid-career Americans, that opportunity is still there, but it is more elusive than ever. And, the competition for opportunity is staggering. Times are indeed changing…and, whether fast or slow, the pace seldom appeases.

Time has a way of bringing equal doses of humility, fear, anxiety and anticipation. In the fourth quarter of every year, as collective eyes turn toward the New Year, most of us feel this innate mix of emotion. This year is compounded by mid-term elections that promise to be, well, interesting. In the midst of so many converging variables is another problematic condition that reflects the difficulties associated with economic corrections.

As we turn toward 2011, the wild card is the proletariat, i.e. us folks. Most tend to get a bit conservative during difficult times and the savings rate (fluctuating between 4 to 6 percent) is evidence of that tendency. Companies, NGOs and government agencies are run by people, who, true to human tendency, order less, save more, hire less, and hold the line on just about everything. In the meantime, the economy can’t get traction…nobody is willing to risk too much. Is this bad?  No. But it is uncomfortable for those who want an immediate return to the halcyon days of rampant ‘anything goes’ prosperity. And a government that provides all the services we feel entitled to.

The old saying, ‘Moderation in all things,’ is applicable here. Patience is another virtue that seems to have been misplaced or eroded by political polarity so intense it has become both comical and frightening. My message remains clear: focus on the future, with moderation and a balanced approach; understand that government policy merely provides a framework for recovery.

In a single edition of a local newspaper, I recently found two conflicting articles. One lamented program reductions and expressed great concern for constituents who would bear the brunt of those lost services; the other advocated service reductions as various cities try to avoid bankruptcy. You can’t have it both ways. If the community desires various programs or levels of service, it must agree to pay the cost. The media must express more clarity about choices. Finding a thoughtful means to express those choices will continue to challenge decision-makers.

I continue encourage more emphasis on the common interest…what is best for every facet of the community. With eroding infrastructure, underfunded education, and the enormous dual challenges of Social Security and Medicare, now is not the time for hubris and posturing. Now is the time for collaboration and leadership. Decide what the community needs to sustain core service levels and maintain quality of life – and take time to define what that means. Then, and only then, can decisions be made about cost of service and what programs will sustain the community through a tedious and often confusing transformation.

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).

Predicting the Future

I am often drawn into discussions about predicting the future. Without reservation I concur that much of the future is unpredictable. However, from a planner’s viewpoint, given the correct data, we can predict many things. Why do I say this? Let me relate a short story.

During a program I presented to a group of highly technical public employees, an engineer quite heatedly expressed his frustration with the program, stating that predicting the future was impossible and that they were wasting their time. I asked his permission to explore his view through a series of simple questions. Reluctantly, he agreed. I proceeded to ask him the following questions:

Question 1: In your community, if the population grows by 30 percent over the next decade, do you think water consumption will increase, decline or remain the same? He replied that water consumption would probably rise.

Question 2: If the population increases by 30 percent in that same time period, do you think that, without any new alternatives, traffic congestion in the city core will increase or decrease? He replied that it would most likely increase. By then, there was a faint change in his demeanor.

Question 3: With the increased traffic, would you say that street surfaces and reflective striping will deteriorate faster, slower or at about the same rate? By then he was squirming a bit but answered that roads and streets and various painted surfaces would probably deteriorate faster.

I looked at him and, with some drama said, “Well, you can predict the future!” Along with some laughter there was obviously renewed vigor among participants. Being a good sport, he joined in an active discussion about how knowledge and data can drive predictability in many areas of public management. Within a few minutes, the audience had grasped the basis of my belief about the value of predictability.

Practical Predictions

As populations grow, we can predict an increase in service demand – more licenses, building permits, immunizations, inspections, water use, solid waste and waste water generated, etc. We can also predict detrimental impact – if water supplies are contaminated (potential for cholera, typhoid), restaurants are not inspected (food poisoning via salmonella, e-coli) or immunization levels drop below 65 percent among children in the kindergarten – third grade age group (epidemics of preventable childhood disease, such as diphtheria, whooping cough, measles and mumps). Those in law enforcement can provide equations proven accurate over time that reflect the need for more patrol officers, more jail cells, correctional officers and even more judges if a city expands significantly. History provides sound health, epidemiological, engineering, public safety, administrative, and a variety of other data that, in the right combination, promotes predictability.

The point I am making is that it takes a change in perspective to become a strategic thinker and futurist. As public leaders and managers begin to blend their tendency to ‘operationalize’ every aspect of government with a process of strategic thought, they will gain an entirely new ability to predict, plan and budget for predictable and already known events. Those who argue that the future is unpredictable forget that forecasting occurs annually as budgets are being prepared. The level of predictive expertise and foresight in public agencies is enormous…it merely has to be tapped.

Learning to Lead as a Strategic Thinker

Strategic thought, when taken as a whole, is a combination of vision, reflection, analysis, honest appraisal, and a willingness to suggest bold action. It requires dedication to look over the horizon, consider the value or possible impact of major events or situations and facilitate collaborative approaches that improve process, product, or quality of life. Some encourage planning for its value as a means of celebrating accomplishments and contributions. Others advocate planning as a management tool that both calculates and ensures measured performance. And many practitioners would merely say strategic planning is the best means of integrating tangible current reality and projected future needs with the conceptual aspirations of a multidimensional community. Good planning deals with the finite while considering the enormously diverse expectations of a nation, state, county or city. To say the least, it is important; it is vital; and it is often difficult.

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, will be available in fall 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).

A Crisis of Confidence?

Many recent periodicals seem to express similar sentiments when describing the lack of energy associated with ‘the recovery.’ Most cite a lack of consumer confidence as the primary missing ingredient, and seem especially exasperated when noting that interest rates are low, housing costs are at all-time lows and deals are available everywhere. Further, there are signs that business is picking up, albeit slowly. The Kiplinger Letter still forecasts a stronger second half, with some promise of a mild acceleration into Q1 2011. So, why aren’t the good citizens out buying?

In virtually every geographic area of the United States, new rounds of budget reductions are being contemplated in state and local government. Programs are being reduced or eliminated, hours are being limited, layoffs continue and furloughs are commonplace. Whether the current economic doldrums are caused by a lack of confidence is debatable. Fundamentally, people are hunkered down, waiting…

Traveling as much as I do, I have an opportunity to visit with a lot of talented, thoughtful people. For the most part, confidence is not the issue. Rather, what appears to be happening is an awakening; there is a dawning realization that we have come to expect far too much, desire more than necessary, and, just perhaps, don’t need anything right now. I have suggested many times in this Blog that the economy is ‘re-centering.’ A primary element of this process is facing the reality that perhaps the car is acceptable for another three years, the house will suffice for another ten years, and we just don’t need that four-wheeler or motor home. For America’s vast middle class, the past three decades has been a time of plenty. Most have homes, furnishings, cars, TVs, and all types of assorted toys. It would appear that many folks are achieving a new comfort level with what they have and are delaying any expenditure that is not essential.

For our communities, the news is good and bad. Economic growth and vitality will be subdued for some time. Conservative communities that have great strategic and financial planning, are exceptionally efficient, and committed to resource integration will weather the storm. Those with efficient operations, interagency cooperation, and well-trained employees are most capable of understanding how this re-centering impacts the community and how it will ultimately produce a stronger, more collaborative, and sustainable culture.

Leadership requires an understanding of this phenomenon. It is difficult to address all the immediate challenges while embracing new strategies based on evolving social, economic, and cultural norms. As noted to a group in Washington State last week, state and community leaders must look to the broader horizon to seek an understanding of what is occurring and how it must be addressed. Doing the same old things will not work and will merely produce overstated expectations.

Keep in mind that during a transformative time people need clarity, direction, truth, and a calm, nurturing leadership style. Elected and appointed officials, along with managers at every level must understand that we have entered a new era. It is happening on our watch and will play out according to how we address current challenges while preparing for a future that could very well be positive, more sustainable, and governed by prudence. Focus on planning, resource sharing, consolidation, and employee development. Strategic thinkers who have a vision for a ‘community of the future’ will prevail. Are you prepared to lead in this new age?

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, will be available in fall 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).

Public Employee Compensation

Recent Fox News commentary about compensation turmoil in Bell, California reached an almost manic crescendo, with pundits making hugely misleading generalizations about the compensation of all public employees. Frankly, it made me ill.  While no one can condone a Chief Administrative Officer of a city with 40,000 residents making $787,637 annually or an Assistant City Manager making $376,288, this is far from common. In fact, it is so outrageously uncommon it is outside the realm of reality. In the Associated Press report, it appears that, in addition to the enormous salaries of the CAO and his assistant, the Police Chief made $457,000 and part-time council members were making between $90,000 and $100,000 a year for part-time work. All three of the appointed officials have resigned and some elected officials may be next; the Council has called an emergency session for tonight in the face of continuing public outcry.

I have grave concerns about anyone so blatantly ripping off taxpayers, but I also have concerns about why there was no transparency and oversight. An even greater frustration is that various right-wing conservative groups are extrapolating this situation and making a case that all public salaries are too high. This is worrisome because most public employees do not make big bucks and, while there are some pensions that are totally unfair, most hard-working public employees will not make much in retirement. I know hundreds of city, county, state and federal employees and the vast majority are concerned about their ability to cobble together enough to make it through retirement years.

Reviewing recent job announcements, for cities the size of Bell, I see CAO and assistant jobs advertised from anywhere from $85,000 to around $125,000, with some over $150,000 depending on cost of living in that area. Curiously, Bell’s CAO started at $73,000 in 1993, which was within reason. How it got so far out of line is beyond me and, as the AP noted, it appears that city residents didn’t pay attention.

There are several messages here. First, there are always anomalies in the world of compensation and this, no matter how outrageous and wrong, should not be used as a hammer to punish other public administrators who are on call 24/7 365, and deal with some of the most complex issues in America. Second, the vast majority of public employees are not overpaid…not even close, and have less security than ever. Let’s not forget that there have been massive layoffs of city, county and state employees over the past two years. The remaining employees might (and might not) have more security in these dark economic times, but that is what is keeping many from bolting for more money elsewhere. Third, there is a sad and misleading overreach being perpetrated by various conservative groups and news sources, and, generally, their data does not match reality. How these folks can rage on for 30 to 60 minutes (especially the convened panels of ‘experts’) with far-ranging accusations borders on a witch hunt.

I believe in fair wages and reasonable pension plans. Government employees endure what their corporate counterparts typically do not – incessant public scrutiny, constant complaints, insufficient budgets, growing expectations and demand, being constantly on-call, and limited opportunities. It is about service…not profit. Yes, there are those who have profiteered in this case and I’m sure there are others (some union pensions come to mind), but generally, compensation is not out of line and should not be used as another vehicle to malign public employees.

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, Community Leaders and Public Administrators, will be available in fall 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).

Leadership and Motivation

Having had the pleasure of presenting a leadership program to participants of the Northwest Community Development Institute this week, I was reminded again how much is known but forgotten about motivation. My ‘enlightened frustration’ did not come from Institute participants, who are a motivated and aware group, but from reading an article on motivation in the April 12 edition of Fortune Magazine.

Written by Telis Demos, the article cited work by the Boston-based company Globoforce, which consults on employee motivation, among other things. The article implies that the firm’s experts have discovered that the secret to motivating employees lies not in compensation but in small, unannounced, and frequent rewards that recognize contribution and involvement. The article praises this approach, implying that these ‘theories’ are new and innovative. I am both amazed and troubled by this.

Historic contributors to leadership and motivation science include Maslow, McGregor, Lewin, Herzberg, Senge, and, more recently, Daniel Goleman, who gave us Emotional Intelligence (EQ). We have known for over 60 years what motivates, what satisfies, and what diminishes workforce performance. As far back as the 1920s there were studies that revealed the value of inclusion, involvement, and appreciation. The Hawthorne Effect was founded on such principles over 80 years ago. So why is Demos lauding Globoforce ‘theories’ when they are merely restatements of well-known and accepted workplace social science? There is no doubt that this company’s key element for motivation is the element of surprise, but this too is well proven and for decades has been cited in various academic studies.

Unexpected praise is a good thing. Recent studies by professor Hayagreeva Rao at Stanford seem to indicate that the element of surprise is more important for the recipient than the size or nature of the reward. Keep this in mind as you develop your workforce…the most compelling and critical element of every public agency or government. However, be aware of the wealth of information that underpins the rationale and premise for employee motivation. Having this knowledge provides insight and a mirror that reflects not only your style but your inclination to reward. This is critical because many senior managers choose to not recognize or reward employees for work they consider part of normal job duties. This is a mistake. Showing appreciation pays huge dividends and creates a culture that cherishes accomplishment.

I suppose the message for public leaders is that motivation still relies on established factors that include frequent praise, small rewards (often non-monetary), showing appreciation, inclusion, and establishing a sense of team. Virtually none of this is new to seasoned public managers; the key question pertains to whether we are properly executing accepted social psychology principles in a manner that, especially for these challenging times, builds dedicated teams that are resilient, collaborative and productive.

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, Community Leaders and Public Administrators, will be available in fall 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).

Raving About Debt

Kevin Williamson, a crafty and talented writer for the National Review has recently presented a case for fear and dissention in his article The Other National Debt. Citing the currently published (but estimated) federal debt, amounting to $14 trillion, he piles on more numbers until the sheer numeric weight encourages flight to the hills and a simpler life in the deep woods.

Adding another $2.5 trillion for state and local government debt and up to $3 to $4 trillion to bail out bankrupt state pension funds, (which, in 31 states will be upside-down by 2025 even with six percent annual returns) the negative numbers accrue pretty fast. Professor Joshua Rauh of the Kellogg School of Management at Northwestern University offers additional insight in his recent paper, Are State Public Pensions Sustainable?

We all understand that Social Security and Medicare are the big ticket items, having a combined liability of $106 trillion, based on numbers presented by Williamson. Even if less, the number is staggering. The most chilling aspect of this massive combined liability is that the Social Security trust fund actually has no money to back liabilities. It is pledged money; it is not a fund that holds assets or resources of any kind. Bruce Bartlett of Forbes has noted that an 81 percent tax increase would be necessary to meet these obligations alone.

Before you depart for the hills, please understand that many pundits forecast ‘doom for affect.’ Many of the TARP funds have been repaid and acquired assets alone have already returned over $21 billion in fees and dividends. Not to say the situation is not troubling, but there are other variables to consider. Even from a conservative perspective, there will be some growth. Foreign trade driven by global economic development will strengthen the national economy. There will be tax increases, but, based on other developed Western countries, our tax standards are low. Even small increases would begin to balance obligations…paying for updated infrastructure and desired services that otherwise would drain state and local coffers even further. There will be service consolidations and new efficiencies conceived by talented public employees and new collaborations with area businesses and non-profits. We will see more integrated planning and wiser use of available funds and, hopefully a reduction in the cost of foreign wars. In many ways, the current situation is good because it forces innovation, creativity and clear choices.

Debt is debilitating. It is a sign of profligate living and an unsustainable American lifestyle. We all know it has to change…so let’s change. I have surmised in this Blog that we can have superior quality of life for a lot less money – both at home and in our communities. It is a matter of recalibration. But that takes time and careful planning. Strategic thinking has never been more critical…

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, Community Leaders and Public Administrators, will be available in fall 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).

Government as a Learning Organization

A previous National Commission on the Public Service survey indicated that the best and brightest prospective new employees seek the following from their jobs:

-Challenging work

-Personal growth

-Pleasant working conditions

-Good social relations

-Job autonomy

-Service to society

-Job security

-Professional recognition

-Opportunity for advancement

-Pay and other financial rewards

-Prestige

 In itself, this list is not remarkable; these survey results are virtually identical to surveys conducted over the years by Fortune, Forbes, Inc. and other magazines as well as the Society for Human Resource Management, American Society for Training and Development, McKinsey, and various universities. What IS remarkable is that this particular survey was conducted in 1988. And, in the intervening 22 years, government has retreated from quality training and failed to establish potent learning environments where talented employees can thrive and contribute.

Of the cities and counties I visit, by far the most successful are those that value training and employee development. There is a commitment to development and in celebrating individual and group contributions. I find it deeply disturbing that so many public agencies choose to eliminate employee development and training programs at a time when productivity, efficiency and quality are critical. Job sharing requires cross training; multitasking to cover new service gaps requires higher knowledge and skill levels. These do not magically appear.

I propose that renewed effort be made to create a learning government by:

-Restoring employee training and education budgets

- Creating a new skills package for all employees

- Basing pay increases on skills and job performance, not time in grade

-Insisting on a new kind of problem-solving public manager…not paper passers

-Encouraging a new style of labor-management communication

 This list is not mine. It was originally published in the First Report of the National Commission on State and Local Public Service in 1992! I add the exclamation to emphasize that these recommendations were made 18 years ago and in the interim virtually nothing has changed OTHER than a further decline in employee and professional development. This must be addressed.

We have found that, done properly, employee development is not expensive, yet can positively transform the workplace. It can add stability while boosting efficiency, productivity, and quality. In turn, this can reduce costs and more than compensate for budget dollars dedicated to training and mentoring. 

Being prepared for current and future challenges requires competence in team development, greater communication and problem solving skills, and the ability to mobilize talent across departments and entire communities. High performing public agencies are committed to quality services. Outputs and outcomes are carefully planned and measured. Skill requirements are known and developed as a foundation for the future. What is happening in your agency or area of government? Is employee development and training a formal, respected, and integrated facet of the overall organization?  If not, why not?  After all these years, there has never been a better time.

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). 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).

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