Lessons From the Front Lines of Change
The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.
By Andrew Kleine
September 1, 2023
My professional mission is to help governments get better results from their available resources. The torch I carry is for fundamentally changing the way governments make budget decisions, which means taking on a deeply entrenched bureaucracy. I don’t have room in this column to enumerate all the shortcomings of traditional government budgeting, but suffice to say it is backward-looking, incremental and indifferent to policy objectives. (There are reasons why traditional budgeting persists, which is another column.)
As budget director for the City of Baltimore, I replaced traditional budgeting with a forward-looking, goal-oriented process called Outcome Budgeting and lived to tell about it in my book, City on the Line. I have spoken to thousands of people about Outcome Budgeting at conferences, on webinars and in book clubs. The kind of question I get more than any other is not about the concepts or technical details of the process. It is about how I dealt with the challenges of organizational change.
My lessons learned about managing change are woven throughout City on the Line, but until now I haven’t summarized them in a column.
I had no grand plan for leading my organization through the change to Outcome Budgeting; in retrospect, I broke some rules (and some China). In addition to my own instincts, I had help from wise colleagues and took guidance and inspiration from two books: Switch: How to Change Things When Change Is Hard by Chip and Dan Heath and Leadership on the Line by Ronald Heifetz and Marty Linsky. These books offer many examples of how to take on the status quo, and I will reference them in my lessons below.
Lesson 1: Leadership support is necessary but not sufficient
When Mayor Sheila Dixon interviewed me for the budget director job in Baltimore, she told me that the budget was like a “black box” to her and that it seemed like “99% of the budget is on autopilot.” She was ready to make changes, and her vivid language became useful in conveying the rationale and urgency for change to the organization.
Having the Mayor’s backing was vital, but it did not guarantee success. Across city government, any number of people could frustrate our efforts. For the most part, resistance did not take the form of frontal assault. I would describe it as more like passive-aggressive guerrilla warfare. The weapons were apathy, cynicism and a “this too shall pass” mentality. I couldn’t ask a busy mayor to intervene against such quiet and elusive foes when I couldn’t even fix on a target.
Heifetz and Linsky write, “To act outside the narrow confines of your job description when progress requires it lies close to the heart of leadership, and to its dangers.” It was on me to lead from the middle. I realized that as much as I wanted everyone to embrace Outcome Budgeting, I needed to spend my time building a community of champions, not trying to convert opponents. By engaging, rewarding and amplifying those who gave Outcome Budgeting a chance, I was able to bring a critical mass of influential people on board.
Lesson 2: Change is as much emotional as rational
In Switch, the Heaths organize their change management ideas around the analogy of riding an elephant. Change requires us to Direct the Rider, Motivate the Elephant and Shape the Path.
Outcome Budgeting may be a logical alternative to traditional budgeting, but logic is not what motivates most people to change. The changemaker’s challenge is to get people to feel the change in a way that appeals to their hearts and opens their minds to new possibilities.
To get the Mayor and her senior team to feel Outcome Budgeting, I asked for time at a weekly leadership meeting for something I called the Monopoly game. Each team member was given $100 of Monopoly money and asked to distribute it into seven paper bags marked with names of the City’s Priority Outcomes, such as Better Schools, Safer Streets and Stronger Neighborhoods, based on how they thought the budget should be allocated.
My staff and I quickly tallied up the dollars and showed the team a pie chart of the results. Overall, their choices represented a balanced spending strategy across the outcomes.
Then we showed them a pie chart of the City’s actual budget. It bore little resemblance to theirs, with more than half of the funding going to public safety (police, fire, prosecutors, courts). Seeing the two pie charts side by side sparked intense discussion about priorities, the gap between ideals and realities and how to better align spending with the mayor’s goals. In other words, the Monopoly game had exactly the intended effect: it connected budget process reform to deeply held beliefs about the city’s future direction and galvanized the senior team around Outcome Budgeting.
Lesson 3: People are too nice to tell you how they really feel
=The change management playbook calls for “shrinking the change” by starting with a pilot project, building on small wins and phasing in new ways of doing business. We did none of that. Our first cycle with the new process asked every agency to build its entire general fund budget from zero. We had spent more than a year laying the groundwork for change, including telling everyone to expect disruption. Even so, the shift felt sudden and dramatic.
I kept waiting to get an earful from scared and angry department heads and finance officers, but my phone was quiet. The reason wasn’t because Outcome Budgeting came out of the gate like a Preakness winner. Hardly. We made a bunch of mistakes.
To assess year one implementation, we hired an outside consultant to run a series of focus groups, which is how we got brutally honest feedback about what went well and, mostly, what didn’t go well. We repeated the focus group assessments for the next two budget cycles, each time sharing the results with key stakeholders and making adjustments to address concerns and perfect the process as best we could.
For better or worse, humans are by and large too polite to criticize you to your face. Instead, they complain behind your back and undermine change through actions, or inaction, rather than words. Giving people a safe space for airing concerns is vital for sustaining a change effort.
There’s more to say about leading change, which I will save for future columns. Please leave comments about what change management strategies have worked and not worked in your organization.
Author: Andrew Kleine is Senior Director – Government & Public Sector at the EY-Parthenon practice at Ernst & Young, LLP. He is the author of City on the Line: How Baltimore Transformed Its Budget to Beat the Great Recession and Deliver Outcomes (Rowman & Littlefield, 2018) and has served as Baltimore’s budget director. Email [email protected], and connect on LinkedIn at www.linkedin.com/in/andrew-kleine-1370 and Twitter @awkleine. The views expressed by the author are not necessarily those of Ernst & Young LLP or other members of the global EY organization.
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Lessons From the Front Lines of Change
The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.
By Andrew Kleine
September 1, 2023
My professional mission is to help governments get better results from their available resources. The torch I carry is for fundamentally changing the way governments make budget decisions, which means taking on a deeply entrenched bureaucracy. I don’t have room in this column to enumerate all the shortcomings of traditional government budgeting, but suffice to say it is backward-looking, incremental and indifferent to policy objectives. (There are reasons why traditional budgeting persists, which is another column.)
As budget director for the City of Baltimore, I replaced traditional budgeting with a forward-looking, goal-oriented process called Outcome Budgeting and lived to tell about it in my book, City on the Line. I have spoken to thousands of people about Outcome Budgeting at conferences, on webinars and in book clubs. The kind of question I get more than any other is not about the concepts or technical details of the process. It is about how I dealt with the challenges of organizational change.
My lessons learned about managing change are woven throughout City on the Line, but until now I haven’t summarized them in a column.
I had no grand plan for leading my organization through the change to Outcome Budgeting; in retrospect, I broke some rules (and some China). In addition to my own instincts, I had help from wise colleagues and took guidance and inspiration from two books: Switch: How to Change Things When Change Is Hard by Chip and Dan Heath and Leadership on the Line by Ronald Heifetz and Marty Linsky. These books offer many examples of how to take on the status quo, and I will reference them in my lessons below.
Lesson 1: Leadership support is necessary but not sufficient
When Mayor Sheila Dixon interviewed me for the budget director job in Baltimore, she told me that the budget was like a “black box” to her and that it seemed like “99% of the budget is on autopilot.” She was ready to make changes, and her vivid language became useful in conveying the rationale and urgency for change to the organization.
Having the Mayor’s backing was vital, but it did not guarantee success. Across city government, any number of people could frustrate our efforts. For the most part, resistance did not take the form of frontal assault. I would describe it as more like passive-aggressive guerrilla warfare. The weapons were apathy, cynicism and a “this too shall pass” mentality. I couldn’t ask a busy mayor to intervene against such quiet and elusive foes when I couldn’t even fix on a target.
Heifetz and Linsky write, “To act outside the narrow confines of your job description when progress requires it lies close to the heart of leadership, and to its dangers.” It was on me to lead from the middle. I realized that as much as I wanted everyone to embrace Outcome Budgeting, I needed to spend my time building a community of champions, not trying to convert opponents. By engaging, rewarding and amplifying those who gave Outcome Budgeting a chance, I was able to bring a critical mass of influential people on board.
Lesson 2: Change is as much emotional as rational
In Switch, the Heaths organize their change management ideas around the analogy of riding an elephant. Change requires us to Direct the Rider, Motivate the Elephant and Shape the Path.
Outcome Budgeting may be a logical alternative to traditional budgeting, but logic is not what motivates most people to change. The changemaker’s challenge is to get people to feel the change in a way that appeals to their hearts and opens their minds to new possibilities.
To get the Mayor and her senior team to feel Outcome Budgeting, I asked for time at a weekly leadership meeting for something I called the Monopoly game. Each team member was given $100 of Monopoly money and asked to distribute it into seven paper bags marked with names of the City’s Priority Outcomes, such as Better Schools, Safer Streets and Stronger Neighborhoods, based on how they thought the budget should be allocated.
My staff and I quickly tallied up the dollars and showed the team a pie chart of the results. Overall, their choices represented a balanced spending strategy across the outcomes.
Then we showed them a pie chart of the City’s actual budget. It bore little resemblance to theirs, with more than half of the funding going to public safety (police, fire, prosecutors, courts). Seeing the two pie charts side by side sparked intense discussion about priorities, the gap between ideals and realities and how to better align spending with the mayor’s goals. In other words, the Monopoly game had exactly the intended effect: it connected budget process reform to deeply held beliefs about the city’s future direction and galvanized the senior team around Outcome Budgeting.
Lesson 3: People are too nice to tell you how they really feel
=The change management playbook calls for “shrinking the change” by starting with a pilot project, building on small wins and phasing in new ways of doing business. We did none of that. Our first cycle with the new process asked every agency to build its entire general fund budget from zero. We had spent more than a year laying the groundwork for change, including telling everyone to expect disruption. Even so, the shift felt sudden and dramatic.
I kept waiting to get an earful from scared and angry department heads and finance officers, but my phone was quiet. The reason wasn’t because Outcome Budgeting came out of the gate like a Preakness winner. Hardly. We made a bunch of mistakes.
To assess year one implementation, we hired an outside consultant to run a series of focus groups, which is how we got brutally honest feedback about what went well and, mostly, what didn’t go well. We repeated the focus group assessments for the next two budget cycles, each time sharing the results with key stakeholders and making adjustments to address concerns and perfect the process as best we could.
For better or worse, humans are by and large too polite to criticize you to your face. Instead, they complain behind your back and undermine change through actions, or inaction, rather than words. Giving people a safe space for airing concerns is vital for sustaining a change effort.
There’s more to say about leading change, which I will save for future columns. Please leave comments about what change management strategies have worked and not worked in your organization.
Author: Andrew Kleine is Senior Director – Government & Public Sector at the EY-Parthenon practice at Ernst & Young, LLP. He is the author of City on the Line: How Baltimore Transformed Its Budget to Beat the Great Recession and Deliver Outcomes (Rowman & Littlefield, 2018) and has served as Baltimore’s budget director. Email [email protected], and connect on LinkedIn at www.linkedin.com/in/andrew-kleine-1370 and Twitter @awkleine. The views expressed by the author are not necessarily those of Ernst & Young LLP or other members of the global EY organization.
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