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Tilting at Windmills?

As we enter the second quarter, there remain counter-positions fueled by equal measures of optimism and pessimism. These dueling camps continue to joust for public attention, one offering every reason to fear the future, the other countering with rationale emanating from reasonable data that indicates recovery. When studied with some attention to detail, it becomes clear that there are merits to both perspectives, but progress will be elusive if built on a foundation of doubt, gloom and lost confidence. While I see the need to remain calculating and careful, I also see the value in forward thinking.

Tilting at windmills has become a platform for much of the national economic, political and social debate. From a very oblique and diverse Tea Party membership to a Washington establishment mired in self-serving tradition and partisanship, there seems to be more focus on following a negative course than finding one that leads, through obviously rough terrain, to a more promising future. Taking the negative has apparently become the standard, but it is a standard that citizens of every community find unsettling and certainly less than motivational.

A review of available data tells us that unemployment is hovering around 8.8% and that overall GDP should approach 3% for 2011. While this progress is not occurring at the desired pace, the seeds of a steady economic transformation have been sown and could very well blossom into tenable opportunity. What must be considered is that much of the recovering world economy is also struggling and many economies are flat-out broke. Their foundations were never strong and only endured because they were carried by the global economic surge. The U.S. economy is beginning to see broad-based hiring, growing orders, and cautious optimism from the investment community.  As the world’s largest economy, the U.S. has the staying power, experience, creativity and spirit to lead the global recovery. At stake is much more than its economic vitality; this country must also model the art of recovery and the maintenance of reason during a very difficult transformation.

But, having courage means facing both knowns and unknowns. Once the facts are known, the burden of action passes to the knowledge holder; there are no excuses for inaction… especially now, when the financial data are becoming clear. While one may be accused of tilting at windmills, the truth is, the U.S. is facing enormous difficulties. We know that unfunded entitlements (Medicare and Social Security) dwarf public debt and programs by almost 9 to 1. The numbers are staggering; there are obligations of close to $100 trillion in unfunded long-term entitlement payments. The meager diddling that is now being done by Congress is not nearly enough. In fact, it is pathetic when measured against what is at stake for America.

Mary Meeker’s historic (and frightening) slide show, entitled USA, Inc., highlights a Congressional Budget Office alternative case that reflects that, by 2025, U.S. government spending on entitlements and interest payments will consume 100% of government revenues.  This assumes that the Bush tax cuts remain in effect through 2020 except for a modest increase in the high-income tax rate. Given these circumstances, we’re totally upside down.  Unfortunately, as with home or business, when revenues are less than expenditures, as they are now by a considerable margin, we’re already bankrupt…surviving only on credit.

While data can be manipulated, good raw data tells the story. But it is one of situation and circumstance. It is a snapshot of current reality.  It has little to do with the future, unless the present course is maintained. Every state and local government has reached hard decision points. It is now or never. Most economists encourage a multifaceted approach involving some tax increases, elimination of unwise programs, and a complete restructuring of entitlements, pensions, and the healthcare system. The guiding principle must be founded on what is in the best common interest of the country and every community. What is important to keep, eliminate, or redefine? As with home and business, it is not always pleasant, but decisive, thoughtful people can reach wise decisions. We must decide where we want to be in 10 years and chart a path to reach that destination. An arduous path perhaps, but one most of us have traveled before.

My position remains firm: create sensible strategic plans, define a new era of operational efficiency, develop prudent implementation strategies, create fact-driven long-term scenario plans, serve constituents with passion, and remain progressive as you consider emergent new options. Maintaining a bunker mentality will stifle perspectives that lead to long-term community success. Attention to long-term planning, coupled with internal employee and organizational development will pay huge dividends as the recovery continues and there is more clarity about options and opportunities. Take time to heal your community and organization, focus on efficiency and productivity, and establish a collaborative path forward. This is no time to hunker down or polarize. There is much to do and we must do it together.

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 http://www.futurescorp.com).

City of the Future

Futurist Thomas Frey and others have written about the city of the future, with descriptions of amazing cityscapes, confluences of lovely people, and an emerging richness of life after peak oil. Echoing Richard Florida’s declaration that great cities emerge around great people who work in superior organizations, he advocates establishing magnetic incubators that attract talent. Those geographic areas and existing cities that are successful making the transition are those that will have the greatest opportunity for long-term sustainability.

Of course, what of the mayors who approached me some months back, asking what other options they had if their cities were not close to water, did not have an adjacent major highway, no airport, and no natural scenic wonders or national parks that might appeal to travelers or conventioneers?  This group was concerned about the difficulty of attracting the best and brightest, along with new enterprises when their communities had little to offer, based on the latest criteria for sustainable cities. What if these smaller cities are just great places to live and raise a family? What if one can find peace, harmony, space, and friendship there? Does that count for something? Certainly, but the question was about creating growing, vibrant, sustainable cities. Can you have it both ways? Not always.

Ten years ago, Governing Magazine published a story about Loudoun County, Virginia entitled, Rendezvous with Density. This cute title did not fully reveal deep issues imbedded in that county’s struggle to attract commerce while balancing quality of life associated with its rural nature. As noted by author Christopher Swope, the only thing people like less than suburban sprawl is urban density. Especially those suburbanites who have grown up on cheap gas and a willingness to make the trek to work from rural settings, the idea of urbanizing the rural landscape remains a foreign concept.

However, as Daniel Pink noted in his landmark book, Free Agent Nation, more people will telecommute and more will work as free agents. Technology allows more freedom to choose how one earns a living, which in turn may offer opportunities to either hunker down in the suburbs or travel while working remotely at various locales. More than anything, technology has brought latitude and choice (along with efficiency, capability and capacity).

Frey reminds us that technology allows (but does not necessarily encourage) greater collaboration among free agents or distributed employees and more shared tasks. Significant questions arise when one ponders how all of this can be managed effectively and what other than central support or service organizations can operate under this model. Do those working remotely contribute as much as those on site?  Do they collaborate as readily and are they as efficient? And, of course, how will performance be measured?

The larger question seems to be about evolving to a model using a complex equation that factors in higher transportation costs, defines quality of life, and establishes parameters that are proven to attract commerce. Growth must be sustained as citizens move or die. What keeps people around? Good schools, opportunity, harmony, good neighbors, beautiful landscapes, or fear?  All might apply here, but one set of criteria does not fit all communities.

In 1820 the population of Loudoun County was 23,000; it was only 24,549 in 1960. It is now 288,556 (2010).  Growth has been equated to its proximity to Washington D.C., the beautiful countryside, Dulles International Airport, and growth in new high tech businesses. But it is also attributable to the balance achieved between its rural DNA, evolution toward more urbanism, and sensible collaboration that attempts to meet the greatest common interest. Using contemporary marketing and economic development language, note how Loudoun characterizes itself:

  • A young, affluent, family-oriented, highly educated, and fast-growing population
  • A breadth of housing options including contemporary master-planned communities, historic homes, rural estates, and family farms
  • Schools that consistently rank among the best in the state and nation
  • Beautiful rural landscapes and open countryside that include DC’s Wine Country and Virginia horse country
  • A full spectrum of amenities including hotels, retail shops, restaurants, wineries, bed-and-breakfasts, pick-your-own fruit and vegetable gardens, historic small-towns, golf courses and equestrian facilities
  • Easy access to Washington, D.C., a culturally rich world capital

Pretty sweet place! It has a lot to offer…unlike other areas that may have fewer attributes to showcase.

The message here is complex. Communities are evolving. Some will devolve over time due to their inability to meet citizen and business needs. While somewhat Darwinian, communities suffer the same fate of species unable to adapt to a changing world. It’s not good or bad…it just is.

Has your community conducted assessments and scenario planning to determine various preferred futures? This is far different than comprehensive planning, which often plows forward with unsustainable plans that are bound to disappoint. Is there ample collaboration in your community? Are all players at the table and are they taking the long view? There is change in the air and the next three to five years will be critical.  Are you Prepared for 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 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 http://www.futurescorp.com).

Government as Business?

There has been encouragement over the past twenty-five years to manage government like a business, but there are some characteristics that do not translate. Anyone who has worked in both government and business can attest to the fact that these two sectors are hugely different and, in many cases, what works for one will fail miserably in the other.

To say the least, local, state and federal government is not as nimble as business. Comparatively, change occurs at a glacial pace in government, whereas in small business the velocity of change is embraced and new products are quickly calibrated to consumer desires and capricious markets. I think of government as ‘pre framed.’ For those of us who have joined a city, county or state government as new employees, the government and agency structure existed long before we became part of the workforce. For good or ill, new employees inherit structure, policies, and protocols that were most likely in place for decades. In political science, these entrenched systems are typically termed, ‘folkways’ and define how things are done in each venue. Are these inherited systems highly adaptable to forces of change? Hardly. Joining a new business start-up is a far different proposition than joining county government.

The concept of strategic thinking in public agencies is not new. Creating mission statements, identifying a vision, establishing goals, and formulating general strategies and specific actions are common elements of most plans. However, contemporary strategic thinking and planning for public agencies requires an entirely different perspective. Public agencies exist to provide services; they do not exist to generate profit for stockholders. They do not compete for markets and do not experience the win-lose environment of market competition. Some would argue that public enterprise agencies do indeed exist to generate profit; I would respond that these agencies are not competing against other service providers and additional earnings above operating costs must not far exceed the cost of providing that service or citizens would soon protest.

Ideal readers of this blog understand that government exists to serve its citizens, to provide a framework for society, to ensure the desired level of public health, reasonable public transportation, safe roads, clean water, disposal of wastewater and solid waste management. It exists to protect communities against harm caused by natural or man-made disasters, crime, or social injustice. It educates our young, provides national defense, and ensures some level of security for the disadvantaged and elderly. Above all, we expect public employees to maintain the essential foundation of society, allowing citizens to pursue that elusive and very personal prize we term ‘quality of life.’

During the past thirty-five years I have had the pleasure of evaluating hundreds of strategic plans prepared for city, county, state and federal agencies. Most are marginal at best. While this sounds judgmental, the genesis of my perspective has its roots in the variety of plan formats, language, and content I have seen. Most are merely aggregations of activities that are improperly termed ‘goals’ or ‘objectives.’ Many mission statements are actually visions or statements of values. Most plans provide a collage of good intentions without a clear data framework that leads to a point of departure for actual implementation and measured performance. Is this observation too harsh? Not really.

Many books on strategic planning were written by business writers who have tried to convert business planning language and process to public administration. While many terms, such as mission, values, goal, and objective seem immune to errant interpretation, this is not the case. Some variations are subtle, others are very different. Frankly, there is enormous value in standardized language and process that properly represents the challenges faced by public employees in public agencies.

Much of a manager’s effort must now be dedicated to public sector strategic thinking and planning. My book, Planning the Future, is dedicated to elected public officials, professional administrators, senior and middle managers, supervisors and employees who in so many profound ways are responsible for the future of our communities. It describes a fundamental future planning perspective that is unique to government. It is a process founded on identified issues and challenges, clear data, projected outputs and desired outcomes. It relies on sensible measurement and calibrated performance with a commitment to five basic operating parameters – efficiency, effectiveness, quality, productivity and cost.

2011 brings a new year with renewed promise and opportunity, but also ushers in new challenges, with budget shortfalls, eroding infrastructure, declining immunization rates, climate change, costly wars, lost programs and decimated services. This year will be difficult for many public agencies. Stimulus funds have been spent and additional funds are unavailable. States are on their own – isolated by the mere fact that they alone are accountable for balanced annual budgets. Years of expansion have dulled the ability of many managers to effectively conduct meaningful triage at a time when elective reductions are essential. And, many budding challenges were sown with promises that could not possibly be kept.

Strategic thinking must emerge as a new, more appreciated creative process. There are answers to the questions. But, understand going in that none will be easy and 2011 begins an era of sacrifice and prudent contraction.

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 http://www.futurescorp.com).

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 http://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 http://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 http://www.futurescorp.com).

The Good Times

Last year I wrote a Blog entitled, We Don’t Know Hard Times (March 2009) that addressed the public lament connected to economic frustrations. Barely a few months into recovery, there was fear of a serious depression approximating the 1930s and many signs pointed to hard times ahead.

My premise then and now is that things aren’t so bad. In that Blog I referenced Timothy Egan’s delightful book about the American dust bowl years (The Worst Hard Time, Mariner Books 2006). From a comparative perspective, there is no reasonable comparison of today’s situation to the dust bowl years. Los Angeles Times writer Michael Shermer has recently noted that these are the good old days. He reported that the average ‘urbanite’ in America earns approximately $40,000 annually and over 25 percent of American families earn over $75,000. Homes have doubled in size since the 1950s, the air and water are cleaner, and the average American has four times as much leisure time as in the 1880s. (A cynic might assume, however, that this number is inflated due to all those leisurely souls who are out of work.) But in almost every category, people living in the U.S. (citizens and visitors) enjoy a pretty good life, even if poor. Have you seen the many recent programs on the plight of Haitians? Even before the earthquake, life for most of the people in Haiti was difficult. The same is generally true for two thirds of the people on this stressed planet.

As reported several times in this Blog, times are different more than they are difficult. America and its communities are in transition. Over the next decade there will be conflicting inflationary and deflationary trends that will both define and reflect a new ‘normal.’ Resources are being consumed far too fast for any thoughtful person to argue that commodity prices will not increase. While there were many new oil field discoveries in 2009, many of those reserves are hard to reach and exhibit conditions that make extraction difficult and expensive. And, many are in countries that are not friends of the United States; they will not sell us cheap oil. Minerals, water, oil, and manufactured products will grow more costly. Inflation will occur; it is being kept in check by careful monitoring and manipulation of interest rates and other market constrictions. Is this bad? No. In fact, it is good because it buys this country time to decide on a course of action.

Public servants in Greece have violently demonstrated to protest a proposal that their pay be reduced to help the government recover its economic footing. Would the same happen in the U.S.? If every public employee took a 3 percent pay reduction for three years, would it help the recovery? What if every new car purchased by an American was made in America? Would that help? What if there were restrictions on how much Wall Street can skim off deposits and earnings from funds that were earned and deposited by working people? What would the increase in returns do for the average investor?

Economists quietly report that the cost of living in this country is generally exacerbated by citizens’ insistence that they have larger homes, better food, two cars, selected toys, a lot of recreation, and government programs for every conceivable service. If we were more self sufficient and could eliminate the more arcane services, would that help?

The point here is that we are not in new territory. But for most of us, we are merely in an unfamiliar place. For those of us who were born after 1945, we have never seen really tough times. We need to learn about ourselves and the Country needs to evolve to a model that fits a new global, hypercompetitive age. These are not necessarily hard times…but they are indeed challenging.

Do we have leaders who understand this new world and its emerging challenges? Will they prepare us for the challenges ahead? And, more critically, will we prepare ourselves for those same challenges? We will not return to ‘normal.’ We must define an entirely new concept of normal and do so before we actually experience hard times.

John Luthy is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. With over three decades working in and with federal, state and local government, he is known for his real world, straight talking style and understanding of public agencies.  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 http://www.futurescorp.com).

Accelerating Socio-Cultural Shifts

New Urbanism is rapidly accelerating to a pace that promises to transform many of the cultural norms that have been in place for a half-century. Since the 1950s, when urbanism gave way to the rise of suburban communities, there has been an outward rush to open spaces, larger homes, and more acreage, facilitated by President Eisenhower’s vision of a national highway system. Along with cheap oil, this movement was also fueled by burgeoning post-war personal independence and the belief that the American Dream was defined by home ownership; suburbs flourished as cities floundered.

This is changing. James Kunstler’s book, The Long Emergency (Atlantic Monthly Press, 2005) has become somewhat prophetic in its depiction of a declining suburban culture as people grapple with growing cost associated with transportation, land, and housing, along with the social disconnection that comes with five acre home sites and Stepford neighborhoods. This was just as evident in Kunstler’s 1993 book, The Geography of Nowhere (Simon and Schuster, 1993) which also predicted the ultimate failure of the suburban movement due to cost, connectivity and convenience challenges.

Whether the current slow but promising economic recovery will impact the urban resurgence is yet to be determined. Trend data indicates that more young people are gravitating to urban landscapes offering vibrant social, vocational, and recreational environments. But so are older citizens who are weary of driving an average of 15,000 miles annually just to get around the extended suburban landscape. If this trend continues, it must energize an entirely new vision for government services. Even in the current economy, rebuilding downtown or semi-urban landscapes is moving rapidly and is transforming many urban centers as more people return from the countryside. This ‘centripetal’ social force is bringing populations back toward urban centers and, in my view, will accelerate in a fluctuating pattern linked to the costs related to living further from work, services, friends, school, etc. If the cost of gasoline escalates, the movement away from suburbs will accelerate.

There are serious questions regarding municipal government’s readiness for this migration. Are service centers properly located? Are there adequate roads and parking facilities? Is public transportation sufficient for the potential in-migration? How will public safety be impacted? If we hope to avoid the landscape depicted in the 1982 Ridley Scott science fiction movie Blade Runner, an entirely new vision for planning must evolve. The first question is, ‘Do we believe that, as transportation and living costs rise, there will be a steady stream of people congregating in the urban environment?’ And if that is true, do we also calculate that the suburban landscape will transform due to loss of population while the urban environment is being transformed by a huge inflow of people needing housing, entertainment, recreation, services, and safety? Both environments must be considered NOW. Given the converging variables that will impact these environments, both will have serious challenges. Are we prepared?

The suburban world is losing its luster. While close-knit neighborhoods still provide a measure of connectivity, costs are still rising and the time associated with driving everywhere is higher than ever. People are recognizing the value of more compact, mixed-use communities that foster relationships, reduce cost and preserve time. The trend will accelerate and offers new opportunities for business and government reform. What are you doing in your community to strategically think about this impending future?

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 http://www.futurescorp.com).

The Next Few Years

With due regard for Black Swans and variations of unforeseeable events, I have made several recent predictions about the coming year and a few to follow (assuming we weather the Mayan end of the world on December 21, 2012). The recurring theme in most recent predictions involves economics. While there are sure to be meteors, tidal waves, hurricanes, tornados, earthquakes and massive storms, most people (and hardy economists) fear economic decline.

I suppose when you add up all the converging variables and weigh them against whatever good things are happening, there is a definite mood shift. The Great Recession lingers even while it is supposed to be in retreat. Some signs indicate that things are improving. But its aftermath has perpetuated a ripple effect that will continue for some time. Unemployment will continue to be close to 10 percent for at least through 2011 and perhaps won’t decline past 8 percent until after 2014 – if then. According to Bureau of Labor Statistics, for every open job in the U.S. six people are actively seeking work.  More people appear to be giving up. They are ‘retiring’ early or casting about for menial work to survive. Combining the un- and underemployed, a staggering 17.4 percent are in those categories – the highest since the 1930s. At least 44 percent of families have experienced some form of job loss, a reduction of hours or pay cuts since the beginning of 2009. And it is not looking much better for the remainder of 2010 and well into 2011. Frankly, we all knew recovery would take time, so why are so many people so concerned?

Cultural norms are sensitive. Over time people tend to give up or settle for less. Maslow’s hierarchy becomes an alter on which to celebrate survivorship – not the desired growth, innovation, enterprise and social vitality. As more people begin to deplete their emotional and financial resources, the social and economic underpinning will begin to erode. There are those who are counting on the American Spirit to ignite a transformational era of green economics, social stewardship, and global commitment to a healthy planet. Unfortunately, the scales are tipping in the other direction because the masses are impatient and spoiled. If most people had saved plenty over the past 25 years, do you think the level of panic would be so great?

The U.S. economy is now 10 million jobs below the desired 5 percent unemployment figure. Even if we produce 600,000 new jobs each month, it would take two years just to get back to square one. And, that number of new jobs is double what the country was producing in the 1990s, when things were flying high. We can’t reach those numbers…GDP growth is just not there.

Much of this would not matter if savings were robust and home values had remained strong. Or the financial industry had not tanked then continued to exhibit rampant mismanagement. One must wonder if too many pieces of the economic puzzle are either gone or too battered to provide a firm foundation for the next generation. An article by Don Peck in the March issue of The Atlantic raises serious concerns about the impact of this lingering recession on Generation Y and to some extent on Millennials. As with post Depression decades, will the long-term effect be the loss of will, reduced motivation, and a decline of creative spirit? So many variables are negative…college costs are out of sight and are eliminating many from higher education; home costs are coming down but credit is beginning to be much more difficult to acquire; there are fewer jobs and wages will continue to be static or even deflate. Not a lot to celebrate if you are between 18 and 32.

So, what are we to do? For government and business, employee development is essential. Dedicate resources to developing people and engaging them in meaningful enterprise. In my new book on Planning the Future, I emphasize the value of working on major issues to strengthen every community. Get people involved with solving problems and facilitate collaboration in every way possible. Planning must focus attention on a process of triage that will allow communities to sustain at least moderate growth while maintaining critical services. Quality of life may be redefined by communities as they get closer to bare essentials.  Both here and abroad others have faced tougher odds and come through stronger than before. The danger is allowing employees and community organizations to withdraw in these difficult times. Yes, we are in a transformational time, but it may take us to a place that is better suited to prepare us for a more realistic future.

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 http://www.futurescorp.com).

Employee Development – Investing in the Future

Declining revenues due to economic woes have had another detrimental effect on state and local government – employee layoffs are at new highs and the depletion of key programs is having a huge impact on service delivery. While there are some who point to government ‘bloat’ as a causative factor in recent and projected layoffs, data suggests that the reduction of government chub began to occur long ago. And, recent cuts have done nothing but eviscerate important capabilities that will again be required as populations grow and demand escalates.

As a proponent of lean government, I can also say I am a proponent of the dual dynamics of data-driven performance management and employee development. As state and local workforces shrink, greater demand is placed on those left behind. Retirement of Baby Boomers is also weighing heavily on local programs that rely on deeply experienced workers to chart a course through these difficult times while providing adequate, if reduced, services.

Due to the changing nature of government jobs and the fact that training and development is typically the first organization element to be cut, we are facing a growing gap in the skills required to manage and provide services. Populations are still predicted to grow. And, compounded by the growing number of poor and disadvantaged, expanding infrastructure needs, the potential for escalating crime, and the general trend toward deferred maintenance, state and local government agencies will be taxed far beyond their ability to meet public needs and expectations. This is in addition to public education, which is seeing staff and services eliminated to the point that mandates and missions cannot be achieved. Is there an easy fix? No. There has been such a huge increase in government programs over the past forty years that constituents feel entitled to their continuance. Unfortunately, balanced budget statutes trump public demand. Certainly, the future holds interesting opportunities for debate and conflict.

Job gains may be slower than originally predicted because many companies and public agencies will first rely on automation and knowledge-centered jobs to satisfy demand. However, basic skill development is needed in many critical but traditional positions, including fire, police, waste treatment, water treatment, solid waste, administrative services, public health, building inspection, recreation, assessment, engineering, surveying, and literally dozens of essential public services. Without adequate planning for future needs and commensurate professional development, the skill gap will be enormous – and not easily overcome.

The oldest Baby Boomers turned 60 in 2006. According to the Social Security Administration, close to 80 million Americans, equating to 10,000 per day, will be eligible for social security benefits. While many are delaying retirement (a recent survey by Watson Wyatt Worldwide indicated that 44 percent of respondents 50 or older plan to postpone retirement and half of those will delay three years or more). Bottom line, we will be losing some of the most experienced and talented technicians in many areas of federal, state and local government and few agencies are equipped to counter this trend. Without remedy, look for operational efficiency, productivity and quality to decline. While the ‘Net Generation,’ i.e. those who have grown up using the Internet, can assume jobs requiring information and knowledge acquisition skills, they will be unable to compete for more technical positions and few will have naturally occurring leadership or management skills.

The American Society for Training and Development cites the fact that 79 percent of surveyed organizations say a skill gap currently exists in the organization. Various sources cite multiple reasons why skill gaps persist – retirements, lack of training dollars, inability to attract talent, and the specter of instability.

For every segment of government there must be a vision for the required workforce. That is not to encourage the build-out of large employee bases, but merely to advocate matching the realities of predicted demand with necessary skill sets.

Cowlitz County, Washington has recently approved the development of an employee and professional development curriculum. The Futures Corporation will be ‘framing’ the curriculum and helping to develop the internal capability to provide ongoing training services. After working with state, city and county government for so many years, one of my greatest frustrations has been the lack of quality employee development and training. This is now catching up to those who eliminated training services. The pace of change and technological advancement, especially in technical fields, will quickly surpass current knowledge and skill levels once Boomers retire. Without organized and formally supported training, many government agencies will not be able to sustain basic services and will see a corollary reduction in response capability, program quality and efficiency, and employee productivity.

Leadership and management development coupled with technical training holds a very important key to preparing for future challenges. Unfortunately, those challenges are not in the distant future. They exist now. What level of support does training and development have in your agency, state, city or county? Done well, employee development and training services need not be expensive. But it must be organized, formal, supported by decision makers, and have a place at the budget table. This one element of public management can have a profound impact on lean but capable government.

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)