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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 http://www.futurescorp.com).

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One Response

  1. Stellar work there eevrnoye. I’ll keep on reading.

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