Why City Governments are Floundering

Note: This post originally appeared on my Optimize Business Results blog on January 23, 2011.

Across the U.S., scores of municipalities technically are bankrupt, as their financial obligations far outstrip their ability to cover them. Some cities already have declared bankruptcy legally. Politicians nationwide desperately are seeking ways to stave off bankruptcy by stemming the flood of red ink that threatens imminent financial disaster. So far the red ink is winning.

What is preventing decision-makers from devising an effective process for allocating their cities’ scarce resources in ways that will allow them to re-group successfully in the aftermath of slashed budgets, plummeting revenues, forced furloughs, and layoffs?

A major impediment is the lack of a clearly articulated “big picture” – i.e., a city-wide mission statement or vision. A quick check of half a dozen large cities across the U.S. reveals no city-wide mission statements on their official web sites. Yet most of the departments in each of those cities do have mission statements prominently displayed. And therein lies the problem. Although having department-specific mission statements surely is desirable, the departments’ individual efforts must be directed toward the same collective end. Unless those diverse missions are aligned with the city’s mission, all you have is a set of competing and conflicting interests – hardly the basis for setting priorities effectively.

The importance of having an overall big picture has never been more critical for cities than it is now, when resources are exceptionally scarce. Given the need to change decades-old structures, programs, processes, systems, and regulations that no longer work, at the same time that demand for government services has skyrocketed, setting clear priorities to allocate scarce resources most effectively is key to a successful rebuilding effort. In order to set priorities, however, there must be a unifying frame of reference. Otherwise, how can decision-makers and stakeholders agree on what programs or services should take precedence over others? Some groups’ “must have” lists are viewed as “nice to have” or even “unnecessary” from others’ perspectives. Absent the touchstone of a clearly articulated overall mission or vision, who is to say which group is “correct?”

For example, in February 2010, the Los Angeles City Council was considering drastic actions such as laying off over 1,000 employees, eliminating departments, and cutting public safety budgets and staff in order to erase a $208 million shortfall. During discussions about how to close this gap, one City Council member went on record as saying that he wanted to do whatever was necessary to preserve the $1 million allocated to paying a handful of city employees who work as calligraphers – i.e., those who handcraft the ornate certificates of recognition that elected officials like to hand out to constituents and other supporters.

Who is to say that this council member’s priorities were misplaced? After all, while most Los Angeles departments have their own mission statements, the City itself has none. As a result, there is no definitive basis on which people can decide whether keeping calligraphers on the job is more or less important than providing adequate levels of public safety or keeping libraries open.

While there are no easy solutions to allocating scarce resources, you first must have an effective process to guide the tough decisions. Trying to set priorities without benefit of a city-wide big picture is akin to trying to put a 1,000-piece jigsaw puzzle together without knowing what the picture is supposed to look like – and while both hands are tied behind your back. When I advise clients how to prioritize their scarce resources, step one necessarily is articulating a clear, overall big picture. That picture becomes the touchstone by which all decisions are made, and by which priorities may be set.

What is your organization’s big picture? Making sure that you have one – and that all stakeholders know what it is – ensures that you have a solid foundation upon which to set organizational priorities.

© 2012 Pat Lynch. All rights reserved.