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Surprise!

Brutal drought has captured much of the Midwest and Southern U.S. as record temperatures threaten crops, health and already struggling economies. For those who take time to discuss the probability of future events the 2011 drought is hardly surprising. While this does not diminish its potential to bring great harm to the 17 states that are being affected, it does underscore the power of predictable surprise.

Reviewing meteorological trend data, it was clear some time ago that a very strong La Nina would shut down the moisture ‘pipeline’ that typically runs through the Midwest and South. This abnormal cooling of Pacific water normally follows El Nino, an abnormal warming of the same waters. A similar pattern was recorded in the early to mid-1950s, which remains a record-breaking period that impacted the economy with higher prices while reducing the availability of produce and beef.

With the recovery still bumping along, this does not bode well for state and local economies. People and enterprises remain in various stages of assuming or living a bunker mentality and many have been left with few resources to weather this storm. This is a sad play on words except, of course, when clashing weather patterns bring horrendous downpours and flash floods, or provide germination for tornados that decimate entire communities. We were told the climate is changing and would grow more violent, extreme and unpredictable. Are there any believers? Anyone? Anyone? By the way, similar weather is predicted for 2012.

The phenomenon of predictable surprise occurs when people cannot accept facts that would allow them to properly prepare and plan for anything other than immediate disasters. It is easier to react to a flood or tornado than to prepare for weather that may or may not happen. Even when the data and attendant probability calculations begin to tell us that it is a reasonably good idea to get ready, we often choose to wait to see what happens. By then, of course, it is often too late.

Recent news stories have trumpeted that, due to weather-related issues, hope for strong economic recovery is all but tabled for another year. Business vitality is declining along with optimism and cash. Many ran out of savings a long time ago and struggling banks are more unwilling than ever to assist. In Texas alone, 213 out of 254 counties have been designated as natural disaster areas. They are eligible for aid, but it most likely won’t be enough to sustain every farm, ranch, business or community hit by various elements of this disastrous weather pattern. Similar scenarios are playing out in Nebraska, Kansas, Oklahoma, Georgia, Florida, New Mexico and other states at a time when the federal government is reeling from Congressional budget ping-pong. States are receiving aid, but it will probably be insufficient to counter predicted impacts, much less energize recovery.

Folks, it was clearly predicted that more jobs would be lost and that job recovery would be the slowest aspect of economic recovery. We are not merely recovering; we are transforming a global economy. With government downsizing, around 660,000 public sector jobs have disappeared in the past 12 months.  You can’t rant for reduced government then gripe that jobs are being cut…you can’t have it both ways. Virtually all economists predicted that unemployment would stay high. So why do so many people seem surprised that unemployment has not declined? While there has been a net job gain, it was only around 18,000 jobs last month – not enough to move the needle much. Certainly, this is a political tool for those seeking office, but the reality is that nothing can be done about jobs until the transformation is close to complete. 

Housing prices and sales remain low and may even drop more this year. In terms of economic recovery, if you toss in the impact of severe weather, banks continuing their reluctance to lend, Congressional diddling, and an abundance of consumer discontent, we will see slow growth into 2012. In fact, count on slow growth through 2014.

When you review all the converging variables – the level of deferred maintenance (for roads, sewer and water infrastructure, airports, ports, buildings, and various federal, state and local systems,) an educational system under fire, Medicare and Medicaid issues, questions about the longevity of Social Security, escalating health care costs, and the ongoing total cost of dubious wars – you have the ingredients for predictable economic struggles. There should be no surprise.

I do not wish to imply that one can fully prepare for weather disasters. But I do encourage a commitment to data analysis to determine reality. Once you and your community understand what IS occurring and what might occur with some predictability, sensible preparations can be made. Don’t be surprised if the river floods when engineers have emphatically stated that a certain rainfall or snowmelt would produce flows that would overwhelm existing levees. And, of course, when meteorologists have explained new weather patterns that will bring three times as much rain to the area in heavy downpours. Pay attention and take heed.  Don’t be surprised when conditions change or challenges emerge when they were clearly predicted and/or predictable through simple analysis and scenario planning. I wonder- is your community confronting reality? Is it prepared for the predicted 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 http://www.futurescorp.com).

Part II Strategic Thinking – No Laughing Matter

Commentaries continue to offer various rants about the federal budget, debt ceiling, infrastructure decline and the growing feeling that Afghanistan is a lost cause. Imbalance of trade, job loss, a slow recovery, and a wary public are variables converging on decision makers as 2011 moves into the second half. Wiser and more cogent thinkers suggest that the path forward, while paved with cautious optimism, must have a foundation of consistent, careful consideration. Measure twice, cut once; tortoise and the hare…easy does it seems to be the ticket.

 Having vision conveys the ability to see the future through a prism forged from experience and analysis. What we want is not always in concert with available resources, existing policy or public support. Far too many continue to follow a path based on a narrow, short-term view, when other cultures learned centuries ago to take it slow and proceed carefully during a transformation. This takes us back to the value of an entirely new pattern of strategic thought.

 Strategic Planning

 For public agencies a Strategic Plan is strategic in nature because it addresses only the major issues and challenges the agency (and ultimately the entire state, county or community) is facing, along with goals, objectives, strategies and actions. It is issue driven and pertains to existing or predicted problems that are encountered by agencies responsible for dealing with them. Some issues will be shared among multiple agencies but application of strategies (how issues are addressed) will differ.

 Operations Plans are different because they define for each department and its component parts the various missions, operating (as opposed to strategic) goals, planned annual outputs and expected outcomes for general operations. Hard performance metrics are included for each output and clear outcomes are stated. This plan answers the question, ‘What are you doing and what is the community or taxpayer getting for the dollars spent?’ It is typically a summary document that describes the various operating elements of each department along with a description of what is being provided for an annual budget established to maintain current operations. Why is this so confusing?

 For many years our research and work with public agencies has shown that properly crafted strategic and operational plans naturally lend themselves to internal improvement planning. They foster a concise report that describes internal issues or circumstances that inhibit the agency from achieving its mission, then offers remedies with estimated costs if new money is required. Once identified, most internal issues are addressed with already appropriated and allocated funds. They are merely re-allocated to address specific high priority internal issues. This simple report generates significant management commitment to continuous improvement and demonstrates to executives that each agency is invested in reviewing and addressing problems that impact the quality or efficiency of internal operations. Its inherent value is that it formalizes internal improvement through a process that offers great latitude but still focuses resources on agency development.

 The above reports are different than annual reports, which summarize the major elements of Strategic, Operations, and Improvement plans. These have many formats; some are quite extensive, others are summaries. But all provide the chief executive, board, council, commission, and public with an overview of what each agency is facing, its general operations, how it is improving, and what it is accomplishing for the funds expended.

 I can hear what some readers are thinking – ‘That is too much! We don’t have time for all those plans and reports!’ Here’s the interesting thing. After working with many state agencies, cities and counties over the years, most already have a variety of required plans and reports. Rarely, however, do I find a comprehensive executive planning approach that even partially connects key planning efforts to one central process. Done well, it is much faster and efficient, generates less heartburn and provides better overall reporting. The genesis of the many forces contributing to the need for evolved planning systems matters little. What does matter is that the magnitude of restricted funds and growing needs now confronting state and local government demand greater commitment to comprehensive executive planning and resource allocation.

 Unfortunately, of the many strategic plans we review every year, most are hybrids containing various characteristics of both operations and strategic plans with some aspects of annual reporting tossed in. Our research has shown that far too few public agencies take time to develop and maintain either strategic or operations plans. Quite often, there are no formal (or even informal) internal plans describing the activities of various departments, the programs and activities for which each is accountable, or the basic outcomes each is expected to produce.

 It has become critical that progressive cities and counties require departments to have at least rudimentary operating plans that explain what services are offered to whom, what outputs are delivered, and how outcomes are measured. Municipal governments must tie performance measures to budget allocation and create a “triage” system based on what services are most essential to sustain an economically vibrant, safe, and harmonious community. Unfortunately, the annual budget appropriation and allocation process is too often a battle among departments that pitches director against director and occasionally elected officials against each other as they collectively grapple with service priorities.

 Strategic thinking requires process; it requires a sensible approach that fits state and local government. More importantly, it requires a vision founded on good data, a reverence for community legacy, and the willingness to proceed at a measured, consistent pace. There are communities that are doing well during this challenging time. What are their attributes? Why are they solvent, harmonious and economically sound? Is there a pattern and does it offer a strategic approach?

With almost four 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).

Strategic Thinking – No Laughing Matter

At a time when so many variables are converging on public agencies, has the ability to think strategically become less consequential? Top managers, executives and elected officials still seem convinced that planning has merit, and certainly, many professionals are exceptional planners. But is seems that the most common theme among employees is “Why do we have to do this?  It is a waste of time.”

As evidenced in previous discussions about possible and probable futures, strategic thinking and planning have become the most critical elements of public management. Even though we have witnessed the advent of multiple planning activities over the past three decades, it is clear that overall strategic thought has become a key success factor that must be built into the fabric of every organization. In terms of professional development, the ability to think and plan strategically is one of the principal skills every responsible manager should possess and integrate into every work team, no matter how large or small. As often noted in this Blog, it is important to understand that strategic planning is a process and not a program.  While the central elements of a plan can be taught, it is the process of collaboratively planning and implementing that pays the greatest dividends.

The Concept of Executive Planning

It dawned on me one day that, from the early 1970s through the first decade of this new millennium – over the 39 years I have worked in and for state and local government, I have never seen a fully integrated executive planning system – especially one formulated for government. Having done planning for Fortune 500 companies and many smaller firms with revenues ranging from $1 million to over $3 billion, as well as for state and local government, I have become familiar with many planning approaches – often finding them merely retreads of previous processes. I would imagine that many readers have enjoyed using and incorporating various elements of Systems Theory, Malcolm Baldridge National Quality Award criteria,  Balanced Scorecard, Six Sigma, Total Quality Management, Management by Objective, ISO 9000, its applications and updates (quality standards from the International Organization for Standardization in Geneva), and other continuous improvement approaches.

 Many senior managers have experimented with the older-style SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats), as well as PEST reviews (Political, Economic, Social, and Technological), and STEER analysis (Socio-cultural, Technological, Economic, Ecological, and Regulatory). All have merit if applied properly, but do they provide a complete executive planning system for government? Not really. While various components have value, when used alone they don’t connect all the dots.

 Many state and local agencies have annual plans (some strategic, some not), operations plans, and annual budgets; communities are responsible for developing multi-year comprehensive plans; utilities are required to have solid waste, water and wastewater system plans; and public safety has annual plans that detail disaster response, crime prevention and homeland security measures. Even with this volume of planning activity I have only occasionally seen a local government that has an aligned planning system with guidelines, internal training, linkages, templates, shared measurement, and a summarized annual reporting process.

 In my view, the absence of comprehensive planning systems is one of the multiple factors that inhibit the progress, adaptability and stability of state and local government. This is especially critical now in an era of declining revenues, greater public scrutiny and the importance of transforming to leaner, more accountable government.

 It seems apparent that for practical reasons and to promote efficiency it is essential to pursue more integrated planning at the executive level of state and local government. That typically means involvement by all executive department directors as well as by commissioners, city managers and mayors who serve as chief executive officers. Generally, elected officials receive plans but are not instrumental in their development. To properly plan, develop, and operate essential community services, local governments need an overall executive planning process that includes strategic planning, operations planning, organization improvement planning, and financial planning.

 Even though public planning has evolved considerably over the past decade, those efforts will be consistently driven and defined by four factors:

1. The importance of understanding current and emerging issues and preparing for future challenges that have high probability of significant community impact.

2. Greater attention dedicated to accountability through efforts that assess program value and contribution to the community, and the explicit requirement that every program show measured performance, progress toward planned outcomes and value for resources expended.

3. Greater clarity about agency and program missions (why they exist), long-term goals (expected outcomes), measureable annual objectives, tangible performance indicators and scheduled strategies/ actions that will be undertaken to achieve goals and objectives.

4. Detailed reports that describe agency and program efforts toward continuous internal improvement. Regardless of funding levels, the question must be posed, How is this agency improving its efficiency, effectiveness, productivity, and quality while keeping costs as low as possible? 

The basic question is, ‘What does Executive Planning for state and local government entail?’ I recommend that every governor, mayor, city manager, municipal board, county commission, etc. establish a series of plans and reports that address specific aspects of public management. Four annual documents should be required from all agencies:

  • Strategic Plan
  • Operations Plan or Summary
  • Internal Improvement Plan
  • Annual Report

My next Blog will explain each of these documents and why, when developed as one integrated system, they will build more efficiency, productivity, quality and performance into public agencies. Executive planning is a cornerstone of good public management and is clearly described in my new book, Planning the Future, released in October 2010.

 With almost four 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 Evolution of Normal

As we plow through the second quarter of 2011, there remain signs of progress tempered with counter-admonitions ranging from the end of days to a return to deep recession. As always, nothing is ever as gloomy as some would have us believe, and facts indicate a cautious return to equilibrium. The country is still on a course that will generate around 3% GDP, unemployment is inching downward, and concern over federal debt and deficits seems to be getting genuine attention.

There is less financial leverage in the overall system, but there is also less foolish risk taking and more oversight. It would also appear that there is less fraud, but it remains to be seen if that particular pattern will continue. Government and industry are both concentrating on realities associated with greater productivity, fiscal accountability and innovation. And, there are signs that new seeds of innovation and creativity are being sown in virtually every sector, with the promise of significant returns just around the corner.

For those who do not understand the role of government, this has been an especially trying period. While it built enormous debt, the federal government has also been the great stabilizer. Through various means, it has stabilized financial services, brought elements of the auto industry back from the brink, and opened new dialogue on the subjects of fraud and misrepresentation. The result since 2007 has been less systemic leverage and more government…both of which must slowly seek an evolved state of balance that will accommodate the requirements of a revitalizing economy. Some news here, folks: With a growing population, demand for federal, state and local government services will increase – not decline. So, it is not the size of government that matters most, but its ability to operate efficiently while providing essential services. (And who defines essential?)

Overall, we are seeing more people begin to understand that there will be no return to any previous ‘normal’ but an evolution to a new economy – parts of which will seem alien and contrary to historic American capitalism. But for those who study such things, it is clear that levels of U.S. consumerism were unsustainable, as were income growth patterns, the number of new businesses and new jobs, and the range of entitlements demanded by the majority of citizens. Something had to give.

For the remainder of this decade, America’s GDP will be tied to the growth of global partners and its ability to both compete and collaborate on the world stage. Brazil, China, Argentina, Mexico, India, Canada, and many other countries are seeking global enterprise partners. After so long at the top, there is real concern whether the U.S. can strategically cooperate to take advantage of emerging markets, new enterprises, and the global thirst for development. Science, engineering, agriculture, communications technology, energy, education and healthcare can all be engines of community prosperity. Enterprise is a global and local driver…not politics or military strength. It is not capitalism so much as it is the advent of ‘free market democracy,’ that drives all nations and people to seek betterment and progress. It is happening; it is accelerating; and, it is impacting every community in the United States.

There will be other crises. However, as a society, we will be better prepared as debt is reduced, people become more cautious, savings increase, and accountability is restored. More critically, as young people join the workforce and mid-career professionals begin to more actively seek their fortunes, a new era of creativity will emerge. Watch carefully as other cultures adopt social media, cell phones and the Internet…then really begin communicating. Enormous change at the state and local level is occurring every day and will gain momentum. Now is not the time to pout and demand a return to the good old days. Now is the time to embrace opportunity, engage in new pursuits, and become fully open to new possibilities. As always, I ask, ‘Is your community fully 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

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

Celebrating the Planning Process

Nothing can make the eyes glaze over faster than an announcement that the organization is preparing to undertake another strategic planning process. Throughout most organizations there will be lamentations and gnashing of teeth at the mere mention of an annual planning activity. “But we just did a plan in 2005, why do we have to do another plan so SOON?” Or, “All we do is plan, plan, plan. The last four plans are sitting on the shelf, gathering dust.  Why is THIS plan going to be any different?” And so it goes.

Has strategic planning become so laughable in public agencies?  Top managers, executives and elected officials still seem convinced that planning has merit, and certainly, many professionals are exceptional planners.  But quite apparently, the most common theme among employees is “Why do we have to do this?  It is a waste of time.”

As evidenced through various discussions about possible and probable futures, strategic thinking and planning has become one of the most critical elements of public management. Even though we have witnessed the advent of multiple planning activities over the past three decades, it is clear that overall strategic thought has become a key success factor that must be built into the fabric of every organization. In terms of professional development, the ability to think and plan strategically is one of the principal skills every responsible manager should possess and integrate into every work team, no matter how large or small. (Don’t discount the previous statement. I have heard managers try to convince others that their department is just ‘too large’ or ‘too small’ to require strategic planning. Neither is accurate. Large and small organizations must engage in planning- it will benefit organizations of any size.) As noted in previous Blogs, it is important to understand that strategic planning is a process and not a program.  While the central elements of a plan can be taught, it is the process of collaboratively planning and implementing that pays the greatest dividends.

The Concept of Executive Planning

It dawned on me one day that, from the early 1970s through the first decade of this new millennium – over the 35 years I have worked in and for state and local government, I have never seen or even heard of a comprehensive executive planning system. Having done planning for Fortune 500 companies and many smaller firms with revenues ranging from $1 million to over $3 billion as well as for state and local government, I am aware of and have been schooled in many planning approaches – often finding them merely retreads of previous processes. I have enjoyed using and incorporating various elements of Systems Theory, Malcolm Baldridge National Quality Award criteria,  Balanced Scorecard, Six Sigma, Total Quality Management, Management by Objective, ISO 9000, its applications and updates (quality standards from the International Organization for Standardization in Geneva), and other continuous improvement approaches. All have merit if applied properly but do they equate to a complete executive planning system for government? Not really. While various components have value, when used alone they don’t connect all the dots.

 Many state and local agencies have annual plans (some strategic, some not), operations plans, and annual budgets; communities are responsible for developing multi-year comprehensive plans; utilities are required to have solid waste, water and wastewater system plans; and public safety has annual plans that detail disaster response, crime prevention and homeland security measures. Even with this volume of planning activity I have only occasionally seen a local government that has an aligned planning system with guidelines, internal training, linkages, templates, shared measurement, and a summarized annual reporting process. Though I am somewhat biased, the city of Henderson, Nevada has one of the best integrated strategic and financial planning systems I have seen. The bias is due to Henderson using the strategic planning system first created by The Futures Corporation, but quite frankly, the city has taken it to a remarkable level.

 In my view, the absence of any such comprehensive planning system is one of the multiple factors that inhibit the progress, adaptability and stability of state and local government. This is especially critical now in an era of declining revenues, greater public scrutiny and the importance of transforming to leaner, more accountable government.

 Four Planning Drivers

 It would seem apparent that for practical reasons and to promote efficiency it is essential to pursue more integrated planning at the executive level of state and local government. That typically means involvement by all executive department directors as well as by commissioners, city managers and mayors who serve as chief executive officers (it is not as critical for governors to be deeply involved). Generally, elected officials receive plans but are not instrumental in their development. To properly plan, develop, and operate essential community services, local governments need an overall executive planning process that includes strategic planning, operations planning, organization improvement planning, and financial planning.

Even though public planning has evolved considerably over the past decade, those efforts will be consistently driven and defined by four factors:

  1. The importance of understanding current and emerging issues and preparing for future challenges that have high probability of significant community impact.
  2. Greater attention dedicated to accountability through efforts that assess program value and contribution to the community, and the explicit requirement that every program show measured performance, progress toward planned outcomes and value for resources expended.
  3. Greater clarity about agency and program missions (why they exist), long-term goals (expected outcomes), annual objectives, tangible performance indicators and scheduled strategies/ actions that will be undertaken to achieve goals and objectives.
  4. Detailed reports that describe agency and program efforts toward continuous internal improvement. Regardless of funding levels, the question must be posed, How is this agency improving its efficiency, effectiveness, productivity, and quality while keeping costs as low as possible?

The basic question is, What does Executive Planning for city, county and state government entail? I recommend that every governor, mayor, city manager, municipal board, county commission, etc. establish a series of plans and reports that address specific aspects of public management. In addition to a performance-based budget four annual documents should be required from all agencies: Strategic Plans, Operations Plans or Summaries, Organizational Improvement Plans, and Annual Reports.

While the term ‘strategic planning’ has in some agencies perhaps earned its reputation as a laborious time consumer with questionable merit, I would question whether it was done well and actually fit the needs of a government organization. Planning makes sense. As times become more challenging, triage will become commonplace. Without a plan, funding battles will rage – fueled by questions of value, purpose and contribution to the community. Invest in a decent process – it will provide huge returns and bring harmony to a difficult process.

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).

Competing for the Heartland

Back in November I wrote a Blog titled ‘Best in Class,” citing a Forbes article that listed the Top 10 best cities in America to build a business. Review of that article and its rationale for selection into this elite class encouraged more consideration of Richard Florida’s superb book Who’s Your City, which describes characteristics that generally attract young talented people and new business enterprises. Florida’s premise is fairly straightforward – if you want a vibrant, growing and competitive city, it must have the ability to attract the best and brightest.

As I was developing predictions for 2010, I found myself more interested in the questions surrounding out- and in-migration of people, why they choose to leave (or stay) and what might prompt a talented person to pull up stakes and search for a new city. For those of us who spend considerable time working on economic development and building efficient communities, this seems a central question.

For those elected officials and professional public managers who have not read the new book by Patrick Carr and Maria Kefalas, it is a must-read. Hollowing Out the Middle: The Rural Brain Drain and What It Means for America is a marvelous book about the motivations and heartache that accompanies hard decisions related to abandoning a nurturing rural community. Journalist Nick Reding has captured similar sentiments and causative factors in his equally powerful book, Methland, which documents the new economy, changing social structures and the corrosive polarity that exists between the communities celebrated by Richard Florida and those he, Carr and Kefalas describe.

Let’s be clear – the U.S. landscape is changing. And it is not a slow, passive trendline. Current economic forces are accelerating the evolution of many communities. Young and mid-career people who cannot find work are leaving for larger, more dynamic cities. While those cities are and will continue to prosper in the New Economy, communities that do not evolve quickly will slowly fade. While this accelerating trend has been well documented, remedies have also been proposed. Unfortunately, far too many communities have not responded or waited too long to mobilize resources.

As I return to my predictions for 2010 (out next week) I encourage you to think about the status of your community, your department, and your citizens. Is there magnetism that can be used to attract new business and talent? What is the mood of the community? Is there a reasonably high level of ‘can-do’ spirit? What are out-migration trends among both employees and residents? Are you seeing new residents choosing the community and asking why?

Communities must be more Prepared For Challenge than ever before…and must develop a plan. Take time to pick up the books mentioned above. They may provide insight and encouragement, if the depression doesn’t get you first.

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)

Numbers Please

During a program presented at a corporate planning conference last week, I again stressed the value of first seeking a variety of data, then engaging in collaborative analysis to determine meaning and potential impact. Data by itself is merely information. We place values on it and determine its positive or negative impact on enterprise, program, or community. Like most aspects of strategic thinking and planning, the process is typically more valuable than the product. Merely getting together to review data, establish parameters, and calculate probability will pay enormous dividends. Unfortunately, far too many public leaders and government agencies neglect this intrinsic management activity.

 Let’s talk numbers. I encourage state and local leaders is to seek the best possible sources to gather data that is central to an issue. Once gathered, convene subject matter experts who focus on the community, believe in the common interest, and have the capacity to collaboratively develop remediation strategies. Below are just a few examples of numbers (there are thousands of data reports that can be used to generate thoughtful conversation). For these I offer neither analysis nor interpretation. Many don’t need much thought…they need action.

 Today, during the Meet the Press panel (Ed Gillespie, Rachel Maddow, E.J. Dionne, David Brooks) it was noted by New York Times columnist David Brooks that the federal government has had “tax revenues for the past decade of 18 percent of GDP.  That’s just the level.  We’ve had spending of about 20 percent.  After all we’ve been through in the past year and after healthcare reform, it’s going to go up to 25 percent.  We’ll just have this gigantic gap between 25 spending, 18 revenue.” Now, IF that is true and those numbers are accurate, what does this mean to future funding for state and local programs?

 Each year there are 79 million more people who need to be fed worldwide and approximately 3 billion people on the planet are consuming more grain-intensive livestock products. This is happening at a time when world grain consumption has grown from approximately 20 million tons annually to over 40 million tons and ethanol production has escalated – creating competition between fuel and food for growing populations. What happens when food AND oil prices soar and availability declines?

 Compounding the above, data from the Earth Policy Institute reveals that China and India are the world’s two largest wheat producers (the U.S. is number 3) and also dominate world rice production (Viet Nam is the number two rice exporter). Glacier melt is the principal water source for rivers in both China and India and both the Himalayas and Tibetan Plateau are losing their glaciers at an astounding rate. Viet Nam is facing epic flooding due to rising oceans whereby only a 3 foot rise in sea level would destroy half the rice fields in the Mekong Delta and over half the rice fields in Bangladesh. What will this mean to global and local food availability and prices? And certainly, to the health and well-being of a billion people?

Since 1981, oil extraction has exceeded by a significant margin the number of new oil fields discovered. The latest 2008 figures indicate that the world used nearly 31 billion barrels of oil but discovered new deposits equating to only around 7 billion barrels. As noted in a recent Blog, Christopher Steiner’s new book, ($20 per Gallon, How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better), provides fairly stark but enlightening data on why gasoline prices will rise and the potential impact on American society.

 In 2008, around 7.9 billion tons of carbon were emitted from burning fossil fuels and another 1.5 billion tons were emitted through deforestation – a total of 9.4 billion tons. Since the global ecosystem can only absorb around 5 billion tons into the oceans, soil, and various forms of vegetation, the rest stays in the atmosphere and escalates CO2 levels. An untold amount of CO2 is being released from melting permafrost (Arctic and close to 9 million square miles of northern latitude soil contains more CO2 than is currently in the atmosphere), pointing to the phenomenon of ‘dynamic acceleration’ as the planet heats and frozen latitudes begin to release both methane and CO2 faster.

 We have evolved into an urban species. In 1900, only 150 million people lived in cities; a hundred years later, 2.8 billion people live in cities – over half of the global population. 2.5 billion people lack improved sanitation facilities; the EPA estimates that 680 billion gallons of potable water is lost per year  through leaky municipal water systems; half of all water in American homes is used for showers and flushing. Costs for water extraction, transport and treatment make water a critical element of every community plan. Certainly, water availability is central to economic development, health and overall quality of life.

 Much of the above is derived from the Earth Policy Institute – a non-profit organization formed to provide data and encouragement for changing the planet. Richard Florida (Who’s Your City) and Richard Register (Ecocities: Rebuilding Cities in Balance with Nature) have written extensively about the need to transform how we evaluate, plan and develop new communities. The ‘pleasure-pain’ principle is active in this Country…we resist change until the suffering is too great. Unfortunately, with the pace of change today, if we continue this course, it will be too late. Good data will inform decisions. I have found that an insufficient number of elected and appointed officials, no matter how dedicated and well intentioned, gather enough data to be 1) properly informed, 2) able to inform their communities, and 3) able to use data to drive critical political and program decisions. The admonition “Confront Reality” is appropriate. A lot is happening locally, regionally and globally. Know the numbers, discuss the potential impact and calculate probability. Then create AND implement plans to transform your communities. Those who do so will be Prepared for Challenge and will be the celebrated leaders of tomorrow.

 NOTE: Look for other relevant data in Plan B 4.0, Mobilizing to Save Civilization, by Lester R. Brown, the Earth Policy Institute

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. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges. He holds both the MPH and MPA degrees as well as a doctorate in education.

What Constitutes Quality of Life?

A city manager once told me that the only goal established for his community is ‘To Achieve Quality of Life for all Citizens.’ While a commendable vision, in my view it is hardly a strategic goal that belongs in a strategic plan. I didn’t win many points when I asked him to list the criteria the city had established to measure quality of life or to mark when the desired level was achieved. In essence, the answer was something like, ‘We’ll know it when we see it.’

Megan McArdle has written a great article in the November 2009 issue of The Atlantic that addresses one element of the quality of life question. Titled Misleading Indicator, the article addresses the national fixation on Gross Domestic Product (GDP) as the fundamental measure of America’s progress and well being. While GDP is the accepted measure of the Nation’s total annual production (goods and services produced annually), it has virtually nothing to do with the more basic question, ‘How are we doing?’ As McArdle notes, “It counts the dollar value of our output, but not the actual improvement in our lives, or even our economic condition.”

In communities across America, questions abound about how people are faring during this transformational era. With a re-centering economy that is grappling with rising energy, food, healthcare, and infrastructure costs, is it still possible to have a great life? In middle urban and suburban America can families and individuals achieve happiness, fulfillment, joy, harmony, and security? Do these ingredients comprise a quality life?

If one poses the question: ‘Are you better off than you were five years ago?’ there is the ever present slippery slope associated with the common response, “Based on what?’

Local government leaders must attend to much more than local productivity, job creation, economic development, and preservation of tax revenues. Is it possible for a local community to experience a reduced population, an out-migration or decline of business, revenue shortfalls, and more restricted service levels and STILL be a great place to live? Can quality of life be achieved and sustained without consistent growth, renewal, and development?

Certainly, it is a matter of balance but the primary question relies more on philosophical than analytical perspectives. During difficult times, do we pursue the illusion that the community will return to its glory days and that good times are just around the corner? Or that growth is the great panacea? Is it more essential that we maintain public transportation, decent parks, serviceable water and wastewater systems, adequate public safety and good schools while promoting broad-based collaboration, shared resources, private-public partnering, and a sense of community?

 Quality of life questions are best defined by individual communities. As McArdle noted in her article, much of the progress in important, high-value areas of life are invisible to most people. What is essential to some is irrelevant to others. People want stability and predictability. Stable, communicative, honest government at all levels is precious and will become more critical in future years.

Though I have raised the question in prior Blogs, I would again ask, What are the elements of a community that are essential for stability, harmony, and a collaborative spirit? I have seen these characteristics in seemingly poor communities with minimal services, marginal infrastructure, and struggling businesses. In such places, cohesiveness and collegiality are common attributes. Does stability, harmony, and collegiality equate to quality of life? Perhaps. At the very least, they matter as much as GDP, productivity, cost of living, and new housing starts.

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. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges. He holds both the MPH and MPA degrees as well as a doctorate in education.