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A Silver Lining for a Dark Cloud

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Tommy Engram
September 20, 2016

We have all been taught that even the darkest cloud has a silver lining. For those engaged in the practice of public administration, finding the clouds is usually easier than identifying the hypothesized silver linings.

As we watch economic indicators turning down once more with the slowing of the Chinese economy, most state and local governments realize that tighter times are coming. That is an easy prediction. It is the nature of the free-market economy to cycle between highs and lows. If you are not in a downturn, one is probably on its way.

So, what is the silver lining?  It is necessity.

As resources begin to dwindle, the need to operate more efficiently reemerges. Public managers and elected officials have been through this before. They know how to defer employee raises, postpone necessary infrastructure maintenance, and make across-the-board budget cuts. If that is not enough, they can go back to furloughs and layoffs.

These actions will align revenues and expenditures with the classic elegance of the butcher’s cleaver. But, perhaps there are some other options that could offer the same alignment with fewer negative side effects.

One possibility is to cull unnecessary work from your agency’s to-do list. Unnecessary work is defined as work operations that produce little to no benefit for customers. Most departments and work groups do some things because that is the way it has always been done. Either technology, market conditions or customer preferences may have made some of these operations superfluous.

For example, many water and sewer systems have been upgraded to include electric monitoring devices. However, some of the agencies providing these services continue to perform manual monitoring of lift stations, water tanks and wells. While this manual observation may give the manager a warm and fuzzy feeling, the customer gets nothing other than a higher cost of service.

Another example is local recycling programs. These popular programs may be either lucrative or ludicrous, depending on the current market prices of recyclable materials. With the contraction of the Chinese economy and the decline in energy costs, recycling of many items is simply not cost effective. Single-stream recycling often ends up in the landfill. However, politicians find it difficult to confront real economics. So, their community continues to provide the pretense of recycling, even if they have to pay a third party to take the recycled materials.

One final example is the paper check. Although direct deposit has been the standard in the private sector for at least a decade, many government agencies continue to issue paper checks to pay employees. Likewise, many local governments pay bills to suppliers via paper checks. Since virtually all transactions may be made electronically with lower administrative costs and quicker turnaround, this is an economy with little, if any, downside.

Even if we think that every work operation we perform is pure gold and nothing can be eliminated, there is always the chance that the gold may be mined more efficiently. The first step in improving public sector productivity is figuring out what to count. Most agencies count outputs – tons of trash collected, E-911 calls answered, or square yards of pavement resurfaced. Few calculate the cost per unit of providing that output. Even fewer make comparisons of their costs with those of other public and private sector providers.

Peter Drucker theorized and 50 years of experience has confirmed that what gets counted gets done. Logically, if the work getting done in similar agencies is similar, the cost per unit of that work should be similar. If costs are not comparable, management should look for the cause of any differences. Benchmarking has been a necessity in the private sector for decades due to the pressure of competition. Perhaps the pressure of the next dark cloud will provide the necessary motivation to elected officials and public managers.

Everyone wants things to be better, but few want change. We are all big fans of homeostasis. Eliminating unnecessary work will be seen as a threat by public employees. Comparisons of unit productivity will be threatening to both employees and managers. Likewise, elected officials will dread the phone call from an irate voter over the elimination of a program or service.

There will be resistance. That is exactly why we need the blessing of a dark cloud. It takes energy to overcome resistance and necessity generates that energy.

Author: After a career with BellSouth, Tommy Engram completed his doctorate in political science and taught college courses in government and public administration.  He has done extensive research in municipal government and has managed three small cities in Georgia and Tennessee.

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