The Often Fictional Organization Chart

Plus: States giving cities the shaft, letting citizens sit on pension boards, and more
 

We've never liked organizational charts. It always seems to us like they're an effort to fit a three-dimensional phenomenon into a two-dimensional space. What's more, when you talk to people who really understand how a city, county or state works, they'll tell you that some fellow who appears to be far off from the center of power on the chart is really the one who runs the show.

Bob Behn, the well-known lecturer at Harvard's Kennedy School of Government, seems to agree -- in spades. In the March issue of his Public Management Report, Bob says that "the organizational chart is a fiction -- an attractive but misleading fiction. It suggests that the organization functions through formal orders carried out by methodical functionaries while concealing the relationships that create the ability to produce real results." Of course, that's far from the case in any government. Writes Bob: "Hierarchical organizations work -- and have worked for eons -- only when they contain a very large number of informal networks."


How well do states treat their cities and towns? We asked that question last month, and some of the responses we got were astonishingly negative. Here's one from Scott Taylor, director of public works in Wichita Falls, Texas:

"In Texas, it appears that our legislature has a bias against cities. This not only goes to unfunded mandates but has moved into trying to tell cities how they can set their property tax rate, controlling annexation and other laws that restrict the ability of the city to govern."

From the other side of the country, we heard from Bruce DeJong, finance director of St. Louis Park, Minnesota. As he wrote:

"My state does not care much about cities. In Minnesota the governor proposed millions in bonding for road construction as a good idea for the state, but turned around and proposed levy limits on cities to keep us from raising our spending and wanted to subject most debt service payments to that limit. I guess consistency isn't always high on the priority list if you can score political points!"


While we're in the e-mail box, we wanted to share the following note from John Kysylyczyn, a former member of a relatively small pension board. He was responding to an item we wrote arguing that pension board members should be required to have a reasonably high level of training and education in the field before being entrusted with huge sums of money.

We haven't changed our mind, but Mr. Kysylyczyn brings up a perspective that deserves attention. He wrote:

"I sat on the Roseville [Minnesota] Fire Relief pension board for the paid per call firefighters.... It is true that we were essentially do-gooder citizens, but in Minnesota, groups like ours have the option to invest our pension funds with the Minnesota State Board of Investments. This is a professionally managed system with the State of Minnesota. They have a professional staff and all of the executive level state elected officials have a seat on the board like the governor, attorney general, etc. Financial professionals also serve on the board to my understanding.

"The Roseville Fire Relief pension board invests all of our funds with them. They invest the money in one of 6 different generalized funds and take care of all aspects of managing these funds. Our only policy choice is which of the 6 funds to fully invest in or how do we spread the money between multiple funds. The Board can provide advice on this and our pension board had a simple investment policy which guides us.... While things may be different in other states, in Minnesota you can actually have a group of do-gooder citizens sit on a pension board or serve as a treasurer without having the professional educational background."


Be honest now. How many of you have played solitaire while on a government-owned computer? Or hearts? Or pinball (that's Katherine's favorite). Turns out that some public-sector employees have found the practice so prevalent that they now think it's part of their job descriptions.

When workers at the Montana Department of Public Health and Human Services got new computers that didn't include some of the popular games, they complained that they were being treated unfairly, as most of their officemates had them. This little issue of game discrimination found its way into the Associated Press. The predictable outcome: The agency took the games out of every department-owned computer. Nobody could complain about that. The systems administrator for the department has had a no-games policy since 2001.


A former editor of ours used to set his watch ahead 10 minutes in order to fool himself into arriving at meetings on time. We thought that was kind of silly. He was a bright guy, and it seemed to us that he must have long ago started compensating for the 10 minutes.

The city auditor of Atlanta, Leslie Ward, believes that her community is engaged in much the same kind of effort in its revenue estimating. As a result, the city may be facing a $70 million shortfall this coming year, and will likely see a $120 million shortfall for fiscal year 2009, which could mean a 25 percent reduction for operating departments.

One root of the problem goes all the way back to 1937, when the city charter was changed to require the city to estimate revenues for the coming year as no more than 99 percent of revenues that came in the previous year. That was probably a swell idea during the Depression. But as time passed, it became clear that the city ran surpluses nearly every year, and so it started to anticipate the surplus and include those dollars in its spending as though they were certifiable revenues. For a long time, Atlanta put together its budget after the end of the fiscal year, when the surpluses were in and the numbers were clear, and so this system -- however convoluted -- worked.

But more recently, the city started to come up with a revenue figure somewhat earlier -- which, by itself, would be a good thing. But that meant that the surpluses were still a matter of conjecture and left the city open to the kind of shortfalls it now faces. Ward is now trying to get the charter changed -- and institute the kind of clear-headed revenue estimating process that most other big cities use. For a copy of the auditor's report, send an e-mail request to Eric Palmer, the audit manager for the report, at epalmer@atlantaga.gov.


Wisconsin just halted development of a $150 million computer project designed to replace about 100 accounting and other software programs across the state, according to the Wisconsin State Journal. But the paper suggests that there might be a silver lining around this particular cloud. Delaying the project "frees up millions of dollars to help fix the state's budget crisis and spares taxpayers from spiraling costs while the state tries to get a better handle on the project."

But we're not particularly silver-lining types. And aside from the fact that the state needs better technology, there's an even bigger cloud: How can Wisconsin, and a host of other states, allow projects to go this far -- with ample warning signs along the way that there are problems -- before somebody pulls the plug? We've dubbed one personal theory the "failure snowball": As a project moves downhill, more and more men and women buy in (often because the person before them did), and everyone grows increasingly reluctant to say "no more." Finally the snowball hits a tree and everybody winds up looking bad.


Smaller class sizes are better. Everybody knows that's true, right? And, generally speaking, there's no question that educational outcomes are better when students aren't jammed into overcrowded classrooms. But a new study, "Class-Size Reduction: Policy, Politics, and Implications for Equity," makes some important points for managers to consider. Author Douglas D. Ready asks, for example, "In light of the limited fiscal resources currently available, what opportunities are lost when districts and states implement large-scale class-size reduction policies? Would other policies better serve the needs of traditionally disadvantaged children?"

These are exactly the types of questions people should be asking about any program that seems intuitively worthwhile. As Education Week points out, a recent national survey about kindergartners and first-graders found that "while children do seem to learn more in classes with 17 or fewer students than they do in classes of 26 or more, the learning gains that pupils make in small and medium sized classes -- those with 18 to 25 students -- are about the same as in classes of fewer than 17 students."

Bottom line: Silver bullets are very rare. Anytime anyone tells you that there's a simple answer to a hard question, it's likely that it's also a simplistic answer. In this field, as Ready points out, "meaningful education reform requires much deeper transformations than class-size reduction alone can provide."


Speaking of class sizes, apparently charter schools in Texas have been systematically overstating their admissions numbers -- either by accident or on purpose -- for a while now. As a result, according to an article in the Dallas Morning News , they've "reaped $26 million in undeserved state money." Of course, overstatements of attendance can be an issue in traditional public schools as well, but the problem appears to be significantly greater in the charters.

"There is a kind of perverse incentive for a charter school in financial distress to look at [attendance inflation] as a way to get more money," Dr. Lisa Dawn-Fisher, deputy associate commissioner for school finance, was quoted as saying in the newspaper. "If they can't get the warm bodies in the building, they may feel an incentive to falsify records."

Let this be a warning to the other states.


How do you provide adequate incentives for employees? Cash? Time off? Plaques? Praise? The following is another notion -- not one we'd advise -- as reported by San Antonio's KSAT.com: "A teacher at a Hill Country school has alleged that the principal of her middle school threatened her and other teachers' lives if benchmark test scores did not improve." As one teacher was quoted by KSAT, "He stated if the scores were not to his liking, he would kill us all and then kill himself."


If you didn't already think that Wal-Mart and the other giant retail outlets were good places to buy nearly everything, here's something else to put on your government's shopping list: disaster preparedness.

A fascinating study by Steven Horwitz, a professor at St. Lawrence University, argues that big chains represent a critical cog in the disaster-recovery machine. Horwitz points to the remarkable success the big chains had in preparing for Katrina -- by contrast with any number of governmental agencies. According to a study from the Mercatus Center at George Mason University (as described on Newswise.com):

"Wal-Mart, Home Depot and Lowe's made use of their local knowledge about supply chains, infrastructure, decision-makers and other resources to provide emergency supplies and reopen stores well before FEMA began its response. Their local knowledge enabled the big-box stores to make plans ahead of the storm and put them into effect immediately after. Also, leadership gave tremendous discretion to store managers and employees to make decisions rather than waiting for instructions from upper-level management, allowing for more agile disaster response.

"Also examined by Horwitz is the conventional wisdom that businesses take advantage of disasters through price-gouging and other unsavory business practices. The paper details how Wal-Mart, Home Depot and Lowe's actually sent truckloads of free supplies to the hardest-hit areas and that this behavior was motivated not only by a sense of being part of the communities where stores are located, but also by a desire to build long-term customer loyalty, rather than focus on short-term profits."

Here's the full report.


Our Source of the Month award goes to Newswise.com, which led us to the previous item. We use it regularly as a great way to keep up on all sorts of information, and thought we'd pass the tip along to you. According to the free service's self-description: "Journalists look to Newswise as a trusted resource for knowledge-based news, embargoed research results and expert contacts from the world's leading research institutions: universities, colleges, laboratories, professional organizations, governmental agencies, and private research groups active in the fields of medicine, science, business and the humanities." Thank you, Newswise.com.


Tax reform is tough business. Most efforts don't succeed, and it's hard to tell which ones will and which won't. So, we're not making any guesses about the new effort begun in Mississippi. But we will say this: We were invited to speak at the first session of a state commission assembled to address the issue. The session lasted four hours. Governor Haley Barbour was there all four hours. And he wasn't fiddling with a BlackBerry. He was thoroughly engaged and asked some of the best questions.


All too many governmental programs claim substantial, if unsubstantiated, benefits. The latest of these to cross our desk came from a study by the Associated Industries of Massachusetts Foundation. Apparently, many public agencies in Massachusetts have been claiming savings of $3.90 for every dollar spent on electricity efficiency programs. But the study found that the actual savings were far lower -- closer to $1.70.

That's still not bad, but it's not nearly as much as claimed. The argument follows that the state wouldn't have to mandate electricity efficiency programs if they really paid off as well as claimed. The private sector would jump at the opportunity to save that kind of money. We're not so sure about that, but given the growth in the number of state efforts to save electricity, it seems to us that managers should be very careful to make sure the benefits are really as much as promised.


New York State legislators recently agreed to a two-year ban on using test scores to inform teacher tenure decisions. It's a knotty issue, and it's central to the debate over what measures can best be used to fairly judge the success and failure of teachers. WNYC's Brian Lehrer recently explored the New York measure, and if you're interested, we'd recommend that you listen to the show.

As to the broader topic of performance measures for schools themselves, you should read a terrific study that came out of Arizona's Morrison Institute a few year ago: "Why Some Schools With Latino Students Beat the Odds and Others Don't." It compared top-performing and poorly performing schools with mostly poor/Latino populations and found that one significant difference was that the top schools used all kinds of data to manage on a daily basis.

And if you're still reading this item, then we assume you also might be interested in a new book, "Leading with Data: Pathways to Improve Your School," by Ellen Goldring and Mark Berends. Berends is an associate professor and director of the National Center on School Choice at Vanderbilt's Peabody College of Education and Human Development. We had an interesting chat with him last week, in which he maintained that the emphasis on testing obscures the way all sorts of performance data -- including home-grown performance measures that tie into individual school missions -- could and should be used to make schools better. "We need to get school leaders to deal with their data, peeling that apart and then using it for school improvement," he says.


Ed Harrington has been controller of San Francisco for 17 years, a remarkable span of time in that kind of job in a big city. He just left that job to become General Manager of the San Francisco Public Utilities Commission and was kind enough to share his goodbye-party speech with us. One portion was particularly inspirational and seemed well worth passing along to other government managers -- either to make your own day a little better or to help do that for someone else. Said Harrington on April 3:

"If all you think you are doing is processing a paycheck or a contract amendment, or issuing an audit or balancing a budget, it can be somewhat rewarding. But if you can envision that you are paying a doctor or nurse that will save someone's life, that's more important.

"Or that the contract you're setting up will allow us to build a new water pipe that can withstand an earthquake and protect our water supply, then the paper becomes important, and you can feel more connected.

"Or that the budget and audits we do allow the libraries and rec park and fire and police and all the other parts of government to provide services in an effective manner. It gives people a reason to come to work and care about what they do -- and we are all better for it."


California's got lots of big problems. In that spirit, we'd like to wish the state the best of luck in moving forward after Elizabeth Hill, the state's legislative analyst, retires at the end of this session. While we wish Liz the best of luck in all life's endeavors, we can't help but feel a sense of distress for the state. She has been an island of calm in a stormy sea, basing recommendations on facts, not politics. Every state could use someone like Liz. And up until now, California had one.


Research Assistant: Heather Kleba

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