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Broke, Broken or Both

How to discern clues that a public-sector program is out of money and underperforming.

I used to have a sign in my office: "Nothing stimulates the imagination like a budget cut." It's often true. But the urgency, breadth and depth of budget problems facing state and local governments today -- to say nothing of the intense level of partisan positioning -- may be distracting even gifted leaders from the need for basic rethinking about how we deliver public services.

Put another way, everyone being "broke" financially distracts from the programs that are broken functionally. There's the rub: Receding revenues and budget cuts put stress on programs and public managers, and it takes a discerning eye to tell whether there's opportunity within that stress to correct serious structural or organizational problems.

I started thinking about the clues that a public-sector program is broken -- that is, underperforming due to lack of focus on outcomes and results, indifferent leadership or low imagination quotient. Conversely, what are the indicators that strong leadership could produce better results with the same or less investment in resources?

Let's consider a few clues that suggest it's worth digging in for some serious process re-engineering.

Clue number one: When asked, "How do you know how you're doing?" The usual answer is, "We don't get complaints." We can set aside the obvious, that unresponsive public agencies discourage citizens from complaining, to address the more basic problem that managers who aren't thinking about results aren't asking themselves what's working and what's not. For them, it's all about administrative process, and success is having no major service failures this month.

Clue number two: When asked basic budget and operations questions, managers don't pull out well-thumbed reports, but instead rely on ad hoc, hand-written notes because information systems aren't providing them with the information they need. Line managers should be able to discuss budget variances without deferring to budget staff. Managers should understand the cost drivers in their programs and view them dynamically, preferably through the lens of a financial model that captures variables as they change.

Clue number three: Challenges to improve performance are countered with "We need more staff," and challenges to reduce costs are countered with, "That is out of our control." Despite decades of performance improvement initiatives there are many public agencies that still respond to challenges this way. Thinking proactively about service prioritization, questioning accretions of mission creep that drain energy and resources, and partnering with other agencies to solve shared problems are frequently given short shrift in favor of placing blame and insisting there's no other way.

Clue number four: Questions about performance and "How do we know how we're doing?" are met with bluster or thinly-veiled disdain. An overly sensitive response may be a legacy of prior fault-finding leadership, but it may also be a sign that the organization is defending unseen work practices that serve the workforce better than they serve the public. Inflexibility about work rules, schedules and overtime restrictions are often wrapped in rhetoric about the "lives and families at stake," but may really be about a system that facilitates second jobs and lifestyles supported by guaranteed levels of overtime.

Clue number five: There are too many hands on the steering wheel. Discounting legislative oversight committees, is it clear who's responsible for performance? An organization answering to multiple boards of governance, where the appointing officials may be out of reach or out of touch, is likely a place where inertia or administrative paralysis has marginalized any striving for impact and results.

Clue number six: The public managers are thinking in silos. They can't describe, nor seem to understand, how other agencies affect their work nor how their work affects others. The interconnected agencies have not acknowledged nor acted upon their interdependence for outcomes or budgets.

On this last clue, I'll close with an example provided by Phil Goldsmith, a former managing director in Philadelphia, in his weekly column. Observing the sequential appearance of criminal justice agency heads before City Council, he asks: "Rather than track them separately, why not have them at the budget table together? The issue of police overtime is [a prime] example of interdependence. The police bear the brunt of courtroom overtime costs even though some of the problem is created by the district attorney's office (which may subpoena too many cops) and judges (who allow too many continuances, requiring officers to reappear again and again). Ask them how they are working collaboratively to reduce crime and costs."

If this crisis is to be exploited for lasting reform, public managers will need to prioritize the high-yield candidates. Some are hiding in plain sight with clues right in front of us.

Elizabeth Daigneau is GOVERNING's managing editor.
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