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The Art of Transformation

Various trappings of success and progress have so far gilded Q1 of 2013, perhaps signaling an even greater probability for a continuing upward trajectory. It feels good, the numbers are decent, and momentum seems to have escalated past the doldrums experienced during much of last year. It almost seems inappropriate to begin the next sentence with that anxiety-producing and negating word, However…

 A deeper examination and greater reflection reveals signs worth considering. Optimism is often another word for self-delusion and can be the ultimate counterproductive characteristic of a transforming economy and culture. Since the DOW peeked over 14,000 and continues to hover in the high 13s and a newly amended jobs report indicates even more jobs were added over the past three years than originally stated, there is some evidence that an elusive corner has been turned. But, as Lee Corso is apt to rejoin, Not so fast my friend!

 The current transformation is global and all-encompassing. More critically, it will continue for the remainder of this decade as developed and underdeveloped countries experience structural, political, economic and social changes that are inherently difficult and unsettling. It is now clear that the Earth is warming much faster than predicted in 2007. An enormous amount of ice has been lost from glaciers and sea ice throughout the world, temperatures are generally hotter, drought is becoming more prevalent and unpredictable, and violent storms are becoming the norm. Paralleling such evolutionary climatic change, society and business should be revising and recalibrating various elements of agriculture, financial services, water distribution, building codes, emergency planning, service delivery and new product development. Unfortunately, far too little is being done while we foolishly postpone action, incorrectly assuming there will be a magical return to ‘normal.’ Or, as the fiscal cliff debacle indicates, continue diddling with decisions that, were government a business, would be made in one brief meeting.

 Historically, the shift from agriculture to an industrialized society brought enormous new social, cultural and economic opportunities. While neither seamless nor without difficulty, American society made the rural to urban shift during the past century, while inadvertently positioning itself as leader and benefactor of much of the free world. Similarly, we are now experiencing a momentous shift from manufacturing to a service economy, but acceptance and understanding of its value has occurred far too slowly. Why should this concern us?

 During the 1920s, as so brilliantly reported by Timothy Egan in The Worst Hard Time (Mariner Books 2006), there was a perfect storm of climatic shifts, poor agricultural decisions/ policy, an unprepared financial system, a preoccupied federal government, and the convergence of industrialization and urbanism. While the recession triggered in 2007 may not equal the Great Depression in terms of its catastrophic depletion of this country’s will and resources, it revealed corrupt practices, foolish policies and social inequities that contributed to a tipping point that was barely averted by action, grit, and the accumulation of enormous debt. We spent our way clear…but for how long?

 My concern is that few apparently grasp the fact that this country and the entire global community is undergoing a transformation of epic proportions. Virtually nothing is or will be immune from major technical, economic, social, political, climatic or cultural shifts that will change everything we know. Entire regions are in play in Africa, the Middle East, Europe and Asia, cascading toward…something different.

 Transformation requires understanding the forces energizing and motivating implosive or explosive activity, as well as those technical innovations that drive social evolution. As noted here before, it is essential to look past what is occurring or spend too much time wondering why it is occurring and focus on impact. There is a certain art here; the ability to understand what and why, but to also be prescient enough to recognize value, opportunity and emerging options. My best advice remains to read all you can, analyze what is happening and understand how it might impact your community, family and organization.

 Social evolution occurs whether we like, understand, or accept it. The ability to remain clear, knowledgeable, and responsive to emerging challenges has become an essential characteristic of this transforming world. The best part is that old adages continue to apply to every community – go slow, look before you leap, seek first to understand, and know when enough is enough. Good advice as we power through this first quarter and set our sights on a sound, progressive 2013.

JFL Pic Blue Shirt-Yellow TieWith 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).

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The Keynesian Debate

Since he published his most famous work, The General Theory of Employment, Interest and Money in 1936, John Maynard Keynes has been either celebrated or reviled by economists and fiscal policy enthusiasts. Even though Time magazine named Keynes one of the 20th century’s most important and influential people and he is widely known as a founder of modern macroeconomics, his theories are the source of relentless debate.

As often cited in current literature, Keynes suggested that, to fuel economic activity when private enterprise is reluctant to invest, hire and expand, governments should spend, even if deficits result. In fact, the 1999 Time article that celebrated Keynes’ influence, actually noted that, “His radical idea that governments should spend money they don’t have may have saved capitalism.” For those readers interested in political science, there were parallel developments during the 20th century relative to government’s role in economic stimulation, social evolution, and global affairs. Earlier economic theorists believed that capitalism was the sole and best engine of prosperity and that government should remain a peripheral player. Classical economists during that period were disciples of Say’s Law, which held that supply creates its own demand, and that free market workers would refrain from wage demands that would inhibit their employers from generating a reasonable profit. In other words, the premise was that workers would never demand wages or benefits that would negatively impact or jeopardize their employers’ ability to prosper. Whether this was a rational theory at the time remains questionable, but it has since proven to be highly inaccurate.

Keynes’ General Theory opus provided justification for interventionist policies, boldly countering the neo-classic economic belief that, without government interference, the market would naturally generate growth, demand, opportunity and full employment. Working with government and business through the 1929 stock market crash, Keynes forged a theory that the critical element of stability and growth is demand and not supply. Within this context, and what has led to a resurgence in Keynesian economics since 2008, is Keynes’ belief that aggregate demand must be defined as the sum of all investment and consumption, and that demand is comprised of all un-hoarded income. In other words, this approach simply embraces the belief that, when consumption declines, investment must be increased by any means possible.

Without taking a polarizing position here, it is clear that the debate centers on a larger discussion about the role of government. Frankly, much of this is philosophical and driven by personal opinion. For the more practical minded, government is seen as a tool. Certainly, a tool that must be forged, honed and maintained by and for the people, but a tool nonetheless. So, how is that tool to be used? Keynes argued that, when there is unused production capacity and high unemployment, society can best enhance employment and total income by first increasing expenditures for either consumption or investment. And, assuming that government is an elemental factor in this equation, it is the perfect vehicle to stimulate demand during high unemployment through various projects and initiatives (WPA in the 1930s and multiple infrastructure projects since 2008).

As noted in virtually every business and financial journal, enormous wealth is currently being hoarded, expansion is tentative, unemployment is high and the system is in a state of imbalance. Classical theorists have been proven incorrect in their assertion that workers would automatically reduce wage demands to preserve their employer’s ability to maintain a profit margin or to add additional jobs. Only through rampant brinksmanship and litigation are employee demands acquiescing to private and public workplace realities. If you don’t believe that, remain vigilant for emerging reports detailing pension, benefit and wage reductions that will sweep this nation for the next five or more years. As always, the plot is turning.

Keynes was not a proponent of big government. He saw it as part of a larger cultural equation that contained multiple facets and accountabilities. He provided an early warning that a shift to private power and the growing influence of financial speculators could bring about the same loss of control that was rampant after World War I. Unfortunately, Keynes’ lack of financial modeling and the surge in powerful financial interests began to reduce his influence after 1979 and detractors such as Milton Friedman and Hyman Minsky began to gain greater support. The irony here is that many of his admonitions are proving accurate, as financial speculators have undermined and seriously damaged the reputation of the U.S. financial community and banks have grown more omnipotent (for context, see economist Ed Lotterman’s recent column, Big Banks Pose Threat to U.S. Economy, Idaho Statesman, June 8).

More recently, in 2008, Martin Wolf, chief economics commentator or the Financial Times (13 November 2008), announced the death of free-market capitalism and James Galbraith provided a powerful, supportive commentary on the value of Keynesian economics rather than continuing the more monetarist approach advocated by Keynes’ detractors. Ironically, Galbraith’s comments were made in a speech at the 25th Annual Milton Friedman Distinguished Lecture, University of Texas, 2008. Has there been another turning point? Are we returning to a more rational theoretical approach to economics and fiscal policy? It is difficult to say.

However you view economics and various theoretical approaches, the message here is that the days of trusting the system and self-serving decision-makers are over. Whether you view government as a tool in the financial and economic took kit or are a steadfast non-interventionist, there is wisdom in understanding Keynes’ practical approach. Believing that every facet of business, government, and the financial community takes the Nation’s and each individual’s best interests to heart when making decisions is naïve. Since 2007, there has been a renewed interest in Keynesian economic theory in China, Europe, South America and the U.S. as stimulus has helped several economies weather economic storms. The exact formula remains elusive, but trust that Keynes’ theories and remedies will factor into the equation. Whatever your view, one of Keynes’ strongest critics, Friedrich Hayek, may have said it best…

He was the one really great man I ever knew, and for whom I have unbounded admiration. The world will be a much poorer place without him.

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

Foresight

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

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

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

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

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

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

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

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

                                                -Woodrow Wilson

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

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