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Strategies for Success in the New Normal


Strategies for Success in the New Normal Dr. Joe Saviak, J.D., Ph.D. Associate Professor & Assistant Director Public Administration Program Flagler College – PowerPoint PPT presentation

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Title: Strategies for Success in the New Normal

Strategies for Success in the New Normal
  • Dr. Joe Saviak, J.D., Ph.D.
  • Associate Professor Assistant Director
  • Public Administration Program
  • Flagler College

Redefining Government in the 21st Century
  • The New Normal
  • The Monopoly Is Dead
  • High Performance Government
  • Use of Analytics
  • High Performance Workforce
  • Redesigning Government Partnerships,
    Contracting P3s, Vouchers
  • Redesigning Public Pensions Employee Health
  • Strategic Planning
  • Program Evaluation
  • Organizational Culture
  • Communication
  • Leading Change/Innovation in the Public Sector
  • Moving from Government to Governance

Redefining Government in the 21st Century
  • Its malpractice when we do not provide managers
    and professionals with the understanding, skill
    set, and the ability to use all the tools they
    should have in their problem-solving tool box for
    the challenges of the 21st century
  • Organizing government around the realities of the
    20th century can no longer be justified
  • Real lessons from the 20th century (the
    professional public service model a vast
    improvement over the incompetence and corruption
    in early 20th century local govt.) - some lessons
    still applicable (retain employ what still
  • But so much has changed that what worked last
    century simply will not work now!
  • As Starling would say, We cant be the Post
    Office in the age of the Internet.

The New Normal
  • Heres the current fiscal health of state and
    local government in America (Martin, Levey,
    Cawley, 2012)
  • GAO estimates that collectively local governments
    face a 225 billion structural budget deficit
  • Pew Center for the States (2011) estimates that
    state and local government pension plans may be
    underfunded by 1.33 trillion.
  • Municipalities nationwide ended 2010 with the
    largest year-over-year reductions in general fund
    revenues and expenditures in the last 26 years
    (National League of Cities)
  • American Society of Civil Engineers (ASCE) rates
    the condition of the majority of Americas
    infrastructure as mediocre or poor. The ASCE
    estimates that it may cost up to 3.6 trillion to
    bring the nations infrastructure up to good
    condition (ASCE, 2013)
  • Since 2008, the number of public sector jobs
    eliminated by just local governments alone has
    been variously estimated at between 236,000 and
    850,000 - many of these jobs will not return when
    the Great Recession is over are gone forever.

The New Normal
  • As the economy recovers, life in local government
    will be just like it was in the 1990s - this is
  • Punctuated Equilibrium resulting in a New Normal
    - many changes are here to stay and more change
    will be on the way - no single status quo during
    a career in local government change will be the
    constant change will be our new culture
  • Reduced revenues, smaller public sector
    workforce, tough choices on service levels, and
    adoption of new means of financing/delivering
    public services (Martin, Levey, Cawley, 2012)
  • Solutions cannot be short term tactical in
  • Solutions must be strategic, structural, long
  • We will need to use all of the tools in the
    toolbox of successful public managers we will
    need to be change leaders.

The New Normal (Martin, Levey, Cawley, 2012)
  • Specific Strategies
  • 1. Evaluate current services mandates, needs,
    wants, things we dont need to be doing
  • 2. Assess current service levels based upon the
    evidence, what can we decrease?
  • 3. Rethink service delivery crisis offers
    opportunities for reform time is now to
    rethink, reorganize, and reengineer service
  • 4. Consider more privatization and less
    privatization on a case by case analysis,
    should we outsource or in-source? Just the mere
    process of considering new service delivery
    choices will usually generate cost savings
    (Goldsmith Model)
  • 5. Explore more shared services - you dont have
    to consolidate govts. to engage in joint service

The New Normal (Martin, Levey, Cawley, 2012)
  • Specific Strategies
  • 6. Identify new revenue streams - improve tax
    collection consider user charges where
    applicable selling services cost recapture -
    diversify from dependence on ad valorem - dont
    leave money on the table
  • 7. Un-freeze assets conduct a lazy assets
    analysis optimize value of all assets use P3
    concessions and leases of roads, bridges, and
    facilities to produce new revenue streams for
    local governments (Chicago Skyway) sell public
    property not serving a public purpose
  • 8. Automate, automate, automate achieve greater
    efficiencies with IT solutions
  • 9. Reform employee health care and pension plans
    incentivize wellness prevention, new hires go
    into defined contribution

The New Normal (Martin, Levey, Cawley, 2012
Saviak 2013)
  • 10. Program Evaluation - We can ill afford to
    not measure what we do each day - culture of
    program of evaluation builds public trust
    confidence (Saviak, 2011)
  • 11. Partnerships for funding, service/program
    delivery, regulation, and to finance, build,
    operate, and maintain infrastructure (Saviak,
  • 12. Use all tools in the toolbox - need to
    access the full set of tools
  • beyond the traditional 20th century tools of
    government of legislate, regulate,
  • direct delivery by govt. (Salamon, 2002)
  • 13. Continuously communicate and effectively
    educate conduct honest adult conversations with
    citizens about services, costs, finances,
    choices make sure they have the facts the
    communications burden is yours also let them
    know about your successes (no one else will!)

In the New Normal, The Monopoly Is Dead (Benest,
  • Government no longer has a monopoly government
    now competes!
  • Citizens should be seen as customers citizens
    now have options in the 21st century, when the
    public does not like your agency or policies or
    level or quality of service or its cost, the
    public an do something about it
  • They can fire your agency they can still get
    the service without using you!
  • Options available to policymakers and taxpayers
  • Annexation
  • Consolidation
  • Incorporation
  • Privatization
  • Contract with another public provider
  • Reorganization
  • Reduced funding
  • Service elimination
  • Or just fire staff start over

In the New Normal, The Monopoly Is Dead (Benest,
  • Each local government must now compete for
    customers prove communicate that its policies
    and services represent the best product at the
    best price
  • Citizens will no longer be content with thats
    the way we have always done it, you dont
    understand, its none of your business, etc.
  • Govt. has to continually explain justify its
    spending, policies, services to win and
    maintain public support dont assume it, prove
  • Citizens cannot just be told they must also be
  • Program evaluation effective communications are
    key evaluate and communicate!
  • Local governments also compete in a marketplace
    as they attempt to retain and attract residents,
    businesses, shoppers, tourists, utility and
    transit users, service customers, and arts
    patrons. Public agencies compete for peoples
    cooperation and political support, whether that
    support involves complying with codes, conserving
    water, or paying higher trash fees.
    Realistically, local government cannot force
    people to do anything unless they are willing to
    comply. Because citizens are bombarded with
    communications from all sources, local
    governments must vie for their attention. Cities
    and counties literally must compete on a daily
    basis for peoples hearts and minds.
  • Dr. Frank Benest, former City Manager of Palo
    Alto, California (1996)

Local Government in the 21st Century Declining
Social Capital (Putnam, 1995 2000)
  • We regulate human behavior either through private
    institutions, public institutions both as
    private institutions decline, a greater burden to
    address needs, solve problems regulate conduct
    can be placed on public institutions (informal to
    formal, internal to external regulation, social
    norms to laws, private to public
  • Social capital helps communities thrive trust,
    engagement, networks, norms enable communities
    to more effectively organize/mobilize/support/resp
    ond to prevent problems, meet needs, maintain a
    higher quality of life strong predictive
    relationship with quality of governance quality
    of life life is different in communities with
    low levels of social capital
  • Major decline in social capital in America in
    recent decades - over the last 25 years
  • 58 decline in club and civic organization
  • 33 decline in family dinners
  • 33 decline in church attendance
  • 45 decline in having friends over
  • 35 decline in involvement in community life
    (public meetings)
  • While 55 percent of American adults in 1960
    believed others could be trusted most or all of
    the time, only 30 percent did in 1998, and the
    future looks bleaker because the decline was
    sharpest among our nations youth.
  • Roughly 75 percent of Americans trusted
    government to do the right thing most or all the
    time in 1960, a figure that sounds quaint today
    when less than 25 percent trust the government.
  • What does this mean for managers in local
    government? 1) Design policies which foster
    social capital, 2) avoid policies which harm
    social capital, 3) deal with changing citizen
    expectations, 4) influences decisions
    on programs services, 5) managing in an era of
    distrust, 6) how to engage citizens?

High Performance Government (Abels Lee, 2010
Benest, 1996 IBM, 2008 2011 2013)
  • Priority Issues
  • Redesigning government at all levels from 20th
    century to effectively operate in and respond to
    21st century realities
  • Citizen engagement visioning articulate
    values, hopes, fears educate! Not passive
    consumers but active partners in problem-solving
    - Vending Machine vs. Barn-raising models -
    Neighborhood Empowerment
  • Moving away from sole dependence on traditional
    hierarchical bureaucratic model for
    organizational structure/service delivery -
    Service boundaries matter less service delivery
    matters more service delivery will be organized
    differently (e.g. not one single dept.
    networks, collaboration, joint service delivery)
  • Expect surprises doing risk management right!

High Performance Government (Abels Lee, 2010
Benest, 1996 IBM, 2008 2011 2013)
  • Priority Issues
  • Focus on results managing for performance
  • Meeting citizen expectations for on-line, real
    time, high quality service coordinated
    response/integrated service delivery - being
    transparent accountable
  • Culture of Innovation in Government
  • Leadership

High Performance Government Use of Analytics
(Bachner, 2013 Partnership for Public Service,
  • Increasing use of analytics by wide range of
    government agencies at all levels to enhance
    outcomes performance reduce crime, prevent
    epidemics, improve agriculture
  • Analytics converts data into actionable
    information to guide decision-making identifies
    patterns, opportunities, and relationships to
    drive decisions
  • Analytics confirm predictive relationships -
    predict prevent problems before they occur or
    in real time as they are occurring confirm
    causes to select solutions target limited
    resources to prevent or react rapidly to the
  • Case Studies
  • 1. Stopping Starvation USAID FEWS NET
    target food aid - use of partnerships
    public-public leverage data tools of other
    agencies dont reinvent the wheel confront
    policymakers with hard data to incentivize action
  • 2. CDC PulseNet identify food-borne disease
    outbreaks identify clusters collect data from
    state public health labs - 291 ROI
    cost-avoidance accounting monetizing value of

High Performance Government Use of Analytics
(Bachner, 2013 Partnership for Public Service,
  • Lessons Learned
  • Strong support of agency leadership is key
  • Users need analytics that deliver actionable
    information when, where, and how they need it
    must be able to easily access and comprehend the
    tools and modify them to suit their needs
  • Data-driven decision-making must become fully
    integrated into the organizational culture of an
    agency its how we do business here
  • First understand your current operations
    objectives to ID data needs value of analytics
    - where can I obtain data where can analytics
  • Collaborate with other agencies capitalize on
    their knowledge tools share successes
    lessons learned
  • Create a team to manage the initiative who have
    agency history, analytical abilities, subject
    matter knowledge
  • Sell success to incentivize agency leaders
    employees to support use analytics prove the
    value of analytics with ROI

High Performance Workforce (Nigro, Nigro,
Kellough, 2007 Starling, 2008)
  • Public sector HR will need to be able to prove
    its contribution to organizational performance -
    1) getting the right people 2) maximizing
    performance and 3) maintaining an effective
  • workforce
  • Public sector HR should embrace performance
    metrics and program evaluation (measure for
    outcomes) opportunity to prove your value
    document your successes
  • This is the key question for your careers - Are
    your HR policies procedures obstacles to the
    goals of management or do they facilitate and
    enhance organizational performance and can you
    prove it?
  • HR policies, procedures outcomes must optimize
    organizational and employee performance prove
    that your policies 1) promote low absenteeism
    2) reduce turnover, 3) foster
    dependable performance 4) create a culture where
    employees are willing able to do more than
    their formal job requirements 5) recognize/reward
    performance for example, use well designed
    effective performance appraisals merit pay
    plans (Volcker, 1989) all of these improved
    outcomes can be validated by collecting
    analyzing the data
  • Public sector HR must clearly contribute to a
    culture of performance where employees are
    selected, trained, evaluated, promoted,
    rewarded for performance as opposed to
    non-performance criteria (length of tenure yes,
    there are legal/political constraints to this)
  • If there are policy or managerial obstacles to HR
    contributing to optimizing organizational
    performance, then it is HRs role to identify
    help remove these barriers to performance
    recommend reforms so performance truly matters
    (recommend organizational policies, HR policies
    procedures, incentive disincentive structures
    for performance)

High Performance Workforce (Nigro, Nigro,
Kellough, 2007 Starling, 2008)
  • Anticipatory HR - strategic planning workforce
    planning - need to anticipate future workforce
    needs and pro-actively design implement
    specific solutions for those challenges solve
    the problem before it becomes a problem - cannot
    be reactive in HR in the 21st century
  • Aging of the public workforce a historic amount
    of institutional knowledge is being lost with
    retirements of Baby Boomers need to recruit and
    fill positions agencies needed to have strong
    succession planning, career tracking, mentoring,
    and professional development/training programs or
    you will have a big problem! The organization
    needed to be learning while the person was
    still on the job so the knowledge does not leave
    when the employee does - knowledge management
  • Recruitment and retention must always be a top
    priority (Volcker, 1989) high demand real
    competition for knowledge workers you compete
    with private sector against other public sector
    employers too need for working conditions,
    wages, benefits, career tracks, organizational
    culture, management style, other incentives, etc.
    to be competitive to attract retain knowledge
    workers especially in a recovering economy,
    these workers have options and they change jobs
    and careers several times during their working
    lives (for example, what will happen with your
    best IT employees when the economy ramps back
  • Public employers will have to sustain ongoing
    major investments in workforce planning, training
    employee development - need to continuously
    upgrade skills technical abilities of employees
    the organization needs it, the public expects
    it, and employees want it it will cost but
    failure to plan invest could carry an even
    higher price tag (its just like defer/delay of
    maintenance with your infrastructure, theres a
    point you pass where costs go way up because you
    did not do it when you should have)

High Performance Workforce (Nigro, Nigro,
Kellough, 2007 Starling, 2008)
  • Highly diverse increasingly diverse workforce
    and service population in Florida which will
    affect all aspects of HR different employee
    expectations needs new and different
    generations within the workforce HR policies
    need to match the needs expectations of
    changing demographics within the public sector
  • HR should always have a seat at the senior
    management table when all major decisions are
    being made almost every policy decision affects
    and involves HR mgt. needs to always
    effectively integrate HR into the mission, goals,
    and performance of the agency never view or
    allow it to be an isolated support function
  • HR needs to help managers effectively manage
    help prepare employees for management roles
    responsibilities help ensure their success once
    they are there! (if nothing else, teach
    supervisors to always call you before making a
    decision with potential HR consequences!)
  • Help make sure that your organizational culture
    is a positive productive one - employees
    internalize the organizations mission values
    (make the mission and values of the organization
    their own) - the right organizational culture
    facilitates communication, coordination,
    attainment of goals, reduces risk liabilities,
    ensures consistent performance, enhances
    retention, sustains morale, boosts productivity
    performance, maintains public trust - tools
    include selection, policy, training, supervision,
    rewards/discipline, teachable moments,

High Performance Workforce (IBM, 2009, 2013
Spreitzer et al, 2012)
  • Priority Issues
  • Make sure your employees thrive! Vitality
    Learning. Keep employees healthy, make work
    meaningful, opportunities to learn, innovate,
    lead, provide decision-making discretion,
    information sharing, minimize incivility, provide
    performance feedback, promote diversity
  • Managing a Multi-Generational Workforce
  • Attracting and retaining high quality employees
  • Design, implement, evaluate, if needed, reform
    pay for performance performance evaluation
  • Offering benefits that match, motivate, matter
    - flexible working arrangements
  • Measuring employee satisfaction employee
    satisfaction programs

The Public Managers Toolbox (Salamon, 2002)
  • Tools are the means by which policies operate
    produce results pick the right
  • tool for the right job and know how to
    effectively use and evaluate it strengths
  • limitations - avoid selecting the wrong tool or
    using the right tool the wrong way
  • 1. Re-engineering Reorganization
  • 2. Contracting Public-private partnerships
  • 3. Vouchers
  • 4. Grants subsidies
  • 5. Regulation economic/social
  • 6. Distribute benefits
  • 7. Government insurance program
  • 8. Social marketing
  • 9. Needs assessment
  • 10. Technical assistance
  • 11. Impact fees
  • 12. Development agreements
  • 13. Sale, use, exchange of property
  • 14. Information technology
  • 15 Tax Budgetary Policy

Partnerships (Saviak Christiansen, 2013)
  • We can effectively partner with other agencies
    (public-public), non-profit orgs, private firms
    (public-private) for
  • Funding () grants, new revenue streams, cost
  • Service/program delivery
  • Regulation
  • To finance, build, operate and maintain
  • Two counties who build staff a single fire
    station at the county line to serve a large
    development which extends across the borders of
    both (joint service agreement)
  • Local govt. engaging a private sector partner to
    handle agency technology needs or a non-profit to
    deliver a specific program for citizens
  • State government partnering with a private firm
    who will design, build, finance, operate
    maintain a major highway to serve a major port
    city and several counties in a region of the
    state (public-private partnership)
  • Many success stories across the world nation
    partnerships can help obtain needed expertise and
    skills, reduce costs, improve service, enhance
    efficiency, enhance citizen satisfaction, secure
    financing for infrastructure deliver new
    infrastructure on time and on budget
  • Not a silver bullet solution to every problem but
    it is a potential problem-solver when wisely
    selected, appropriately designed, effectively
    implemented, and rigorously evaluated

Partnerships (Salamon, 2002 Cohen Eimicke,
  • To make partnerships successful, managers need to
    be skilled in procurement, partner selection,
    rethinking service/infrastructure delivery,
    relationship management, contract design and
    management, risk allocation, and program
  • The proposed partnerships must make sense
    whats the rationale - complementary capabilities
    each partner does what they do best - benefits
    outweigh costs for both partners citizens
    experience improved outcomes - risks rewards
    appropriately allocated both partners must be
    all in
  • Nothing new that is really interesting comes
    without collaboration. (Watson Crick
    discovery of the structure of DNA)

Two Types of Partnerships Contracting and P3s
(Martin Saviak, 2014)
  • Contracting for goods services
  • P3s for infrastructure
  • Renewed interest today in a valuable tool of
    public management whose successful use in our
    country pre-dates our birth as a nation
  • Dont let policy choices precede research do
    the business case analysis each time
  • Contracting out should not be seen as a challenge
    to but as an opportunity for public
  • In recent years, many state and local governments
    have dealt with their budget deficits is by
    deferring maintenance on existing infrastructure
    and delaying the construction of new
    infrastructure - somewhat helpful in the short
    term but results in longer term financial
    problems. Is there another strategy available to
    state and local governments?
  • How do we close this funding gap and meet our
    infrastructure needs for the 21st century?

  • Guarantor Government government guarantees
    the service will be delivered to citizens but
    non-governmental providers do the job
    government provision/private production (Martin,
    2001 Salamon, 2002)
  • Government decides to purchase outcomes (Eggers
    Goldsmith, 2004) government goes from the
    funding business to the buying business
    (Hoogland DeHoog, 1985)
  • 2 Key Questions
  • 1. Is this a legitimate governmental
    responsibility? often unasked but a good place to
    start the analysis should we be doing this in
    the first place?
  • 2. If YES to Question 1, then its the classic
    Drucker make or buy question (Martin, 2001)
    evidentiary question need to collect analyze
    the data on all key performance measures
    conduct the CBA based on the empirical
    analysis, will it be direct delivery by
    government (govt. funds govt. delivers) or do
    we choose to purchase outcomes (govt. funds
    private sector or non-profit provider delivers) -
    the evidentiary analysis may yield different
    answers depending on the specific service

  • Issues to Analyze and Address
  • Accurately identify the pre-privatization
    conditions whats the nature of the problem or
    crisis (failing/underperforming program, fiscal,
    restore policymaker/public confidence, enhance
    quality, etc.) or is there no crisis but a
    potential opportunity for improvement?
  • What will be our major benefit or benefits (cost,
    improved service, choice, etc.) and what will be
    our major challenge or challenges? (identifying
    proven providers, procurement process, contract
    management, cost containment, customer
    satisfaction, etc.)
  • Operationalizing Outcomes selection of
    standardized performance measures to make
    effective comparisons between providers (public
    or private or among competing private providers)
    and conduct the cost benefit analysis cost,
    quality, safety, efficiency, service-specific
    measures we need to measure what matters and
    utilize valid, reliable, and accepted performance
    measures measure success/failure by actual
    outcomes not with outputs or inputs (Martin,
  • Select the right method of compensation avoid
    perverse incentives (Goldsmith Eggers, 2004)

  • Requires a different skill set for public
    managers you are no longer managing direct
    delivery of the service managing the contract
    and the contractor need expertise in contract
    design, selection of performance measures,
    contract management/monitoring performance,
    making needed modifications during contract
    performance, contract renewal and termination,
    contract/program evaluation (Hoogland DeHoog and
    Salamon, 2002 Kelman, 2002)
  • Avoid bureaucratization of private and
    non-profit providers (Martin, 2005) manage but
    do not micromanage accountability without
    overregulation measure by outcomes not by
    dictating the exact production process dont
    potentially rob yourself of the intended benefits
    (lower cost, increased efficiency) discourage
    good providers from doing business with you
  • We need to ask Who is the customer?, what do
    they consider to be value, and how do we confirm
    customer satisfaction how does each customer
    define measure satisfaction (policymakers,
    agency/program administrators, taxpayers, program
    participants, program staff, etc.) customers
    will vary by program - collect evaluation data
    from all customers

  • Program evaluation matters! Confirm that
    intended objectives were translated into actual
    outcomes avoid non-evidentiary means employ
    rigorous and objective methods of program
    evaluation using agreed upon, valid and reliable
    performance measures many statistical
    analytical tools available to public managers and
    providers to confirm program/ service
    effectiveness, efficiency, and equity
  • Be careful about potential costs possible
    pitfalls identify/understand and properly
    structure/account for liability issues, adverse
    selection of clients, information asymmetry,
    statutory/legal/administrative barriers to
    successful implementation, there will be costs to
    government to establish maintain a contracting
    out process, loss of institutional capacity,
    public employee displacement, any potential for
    service disruption, possible blurring of lines
    of responsibility (Cohen Eimicke, 1998
    Hoogland DeHoog Salamon, 2002 Chi, Arnold,
    Perkins, 2003)
  • Opportunities to achieve cost savings, improve
    service, introduce competition, strengthen
    accountability, create consumer choices, enhance
    policymaker/public/customer confidence and access
    the experience and specialized skills of
    non-governmental providers (Cohen Eimicke,
    1998 Osborne and Gaebler, 1992 Chi, Arnold, and
    Perkins, 2003)

Public-Private Partnerships (Martin Saviak,
  • An alliance between government and the private
    sector decisions, risks, rewards are shared
    trust is key true partnership long term
  • State local govts. have only begun to realize
    benefits of P3s - financing and delivery of
    infrastructure and facilities (capital projects)
    HB 85
  • Partner (government or private sector) best
    positioned to deal with the risk should assume
    the risk.
  • Key differences from traditional govt.
    1) Change in government/private sector
    roles and responsibilities
  • 2) Longer contract time periods - involve
    longer contract time periods (5, 20, 25
  • years) - can last as long as 99 years

  • 3) Private sector partner sometimes
    provides all or some of the funding for the
  • project may assume significant risks from
    the government partner

  • 4) Involves a potentially higher degree of
    risk for the partners
  • 5) Contracting process does follow
    traditional government procurement and
  • policies and procedures (note with several
    key differences)
  • Florida is a national leader in P3s

Public-Private Partnerships
  • Benefits
  • 1) Accelerating infrastructure maintenance and
    2) Substantial risk transfer from government to
    the private sector
    3) On-time and within budget delivery of
    infrastructure projects
    4) Source of infrastructure
    5) Cost

    6) Equal or better
  • The Impact of P3s on Project Duration, Cost,
  • The Virginia Pocahontas Parkway (Route 895) was
    completed for 10 million less than the original
    cost estimate.
  • The Denver, Colorado E470 toll road was
    originally estimated to cost 597 million, it was
    completed at a cost of 408 million.
  • A study conducted by the Federal Highway
    Administration found that design-build
    infrastructure P3s performed well on all 3
    metrics - reduced project duration by 14,
    reduced total costs by 3 and maintained the same
    level of quality

Public-Private Partnerships
  • Most Common Public-Private Partnerships (P3s)
  • Airports
  • Bridges
  • Highways
  • Hospitals
  • Parking Facilities
  • Prisons
  • Rail Systems
  • Roads
  • Tunnels
  • Water/Wastewater
  • 2011 - 377 public-private partnerships (P3s) have
    been initiated in 24 states - 104 of these P3s
    for transportation infrastructure - Florida (16),
    California (12) and Texas (9) have initiated the
    greatest number of P3s.

Port of Miami Tunnel P3
  • The Port of Miami actually sits on an island.
    Traffic entering and exiting the Port of Miami
    must do so on surface streets. 26,000 cars each
    day on those surface streets entering leaving
    the port congestion.
  • The Florida Department of Transportation (FDOT)
    has entered into a transportation P3 with a
    private sector consortium partner, MAT
    Concessionarie LLC, to design-build-finance-operat
    e-maintain (DBFOM) a tunnel that will connect the
    port with interstates I-395 and I-95.
  • The total cost of design and construction of the
    tunnel is 903 million. The private sector
    partner contributed 80 million to the project
    with the remainder of the funding in the form of
    debt and loans. Once the tunnel is open to
    traffic, all operating and maintenance costs will
    be paid by the State of Florida. The FDOT will
    collect container and passenger fees to provide
    the revenue stream to fund the partnership.
  • Construction of the tunnel began in May 2010 and
    completion is expected by May of 2014.
    Operational control of the tunnel will revert to
    the FDOT at the end of the P3 contract in October

Vouchers (Salamon, 2002 Cohen Eimicke, 1998)
  • Vouchers Instead of direct delivery, citizens
    are given a choice by funded access to
  • multiple competing providers Examples GI Bill
    another partnership tool
  • 3 key issues for public managers to assess in
    considering use of vouchers to provide
  • public program or service
  • Choice When the govt wants the receiver of the
    good or service to have some choice of the
    supplier of the good or service
  • Efficiency When the govt wants to promote
    efficiency. A voucher can allow for competition
    and thus lower prices
  • Equitable Vouchers can promote equity and are
    often driven by concerns with fairness (ex
    children stuck in failing or low performing
    public schools low income families provided
  • Challenges
  • Need competition capacity among providers

  • Ensuring informed consumers - information
    asymmetries (when consumer lacks sufficient
    information to make choices providers knows
    everything consumer knows little)
  • Evaluate provider performance
  • Potential for adverse selection (customers will
    select bad providers or providers will end up
    with bad customers screen providers via
    procurement match providers to diff. customer
  • Should we depend on a public sector monopoly (the
    VA) or give our veterans the power and choice to
    pick their doctors and health care providers?

Redesigning Public Pensions Employee Health
  • The traditional implied contract less pay, more
    benefits is changing
  • Collective bargaining agreements - some services
    in some localities are pricing themselves out of
    the market (Benest, 1996)
  • I can afford 1 fire department I just cannot
    fund 2-3 fire departments at the same time
    (Moore, 2011) cost of retired employee
    pension/benefits obligations
  • GAO unfunded state and local govt. retiree
    health care obligations total 530 billion
    (Martin et al, 2012)
  • SLGE study 68 of city county govts. pushing
    to have retirees assume more of their health care
  • 85 of state local govt. employees still in DB
    retirement programs
  • State local govt. pension plans underfunded by
    1.3-3 trillion (Pew Center, 2011)
  • In 2008, state local govts. spent about 132
    billion annually on employee health benefits
  • From 1996-2008, the average single employee
    premium increased 156 - for family coverage,
    169 (Barro, 2011)

Redesigning Health Care (Barro, 2011)
  • What makes public plans so costly?
  • In the 4th quarter of 2010, public workers earned
    an average of 4.66 per hour in health benefits
    compared to an average of 2.08 per hour in the
    private sector a difference of 124 The plans
    are different in the public sector!
  • Lower employee contributions to premiums 10
    less compared to private sector
  • Fewer and smaller co-payments and deductibles
    insurance plans pay a greater of the bills and
    lower cost sharing increases utilization which
    increases costs - 75 of private sector employees
    have a deductible just under 50 of public
    employees have one
  • 74 of private plans impose a waiting period for
    eligibility only 58 of public plans do and
    when they are required, they are shorter this
    means people take jobs with health benefits
    anticipating a likely claim (adverse selection)
    which means more costs to the plan
  • Only 20 of private plans offer health benefits
    to retirees under age 65 (pre-Medicare) but 66
    of state local plans do
  • 99 of full time state local employees have
    access to benefits (86 in private sector) and
    only 16 of public employees waive them (compared
    to 26 in the private sector)
  • Superior physician networks higher provider
    reimbursement rates

Redesigning Public Pensions Employee Health
Care (Brookings, 2014 ALEC, 2013 ICMA, 2013
GFOA, 2011 Barro, 2011)
  • Employee Health Care
  • Identify your cost drivers
  • Manage choice of providers
  • Manage eligibility eligibility audit change
    time to eligibility
  • Cost sharing increase contributions, co-pays,
    deductibles variable premium contributions
  • Offer diversity of plans to employees 1) High
    deductible plan HSAs 2) High deductible, low
    premium catastrophic insurance policy
  • Self insure
  • Implement wellness, health literacy, disease
    management, physical fitness programs smoking
    cessation programs reduce utilization
    decrease costs
  • Surcharges for smoking 9 states reward
    non-smokers make smokers pay more 39 states
    with smoking cessation programs

Redesigning Public Pensions Employee Health
Care (Brookings, 2014 ALEC, 2013 ICMA, 2013
GFOA, 2011 Barro, 2011)
  • Leverage Points of Cost Management
  • Change benefits
  • Manage plan participant choice of providers
  • Cost sharing with employees
  • Reduce utilization
  • Right combination of outsourcing insourcing
  • Maximize value
  • ROI All Stars
  • Onsite clinics
  • Variable premium contributions
  • Wellness programs
  • Self-insurance
  • Cooperative purchasing
  • Value-based insurance design disease-management
    (VBID) Asheville Model

Redesigning Health Care (GFOA Colonial Life,
  • To succeed with these strategies, local
    governments should
  • Secure stakeholder support
  • Use employee benefit committee they participate
    in plan decisions increases buy in
  • Provide employees with benefits value statement
    with costs educate them about the real costs
    of HC
  • Sell the benefits of specific types of reforms to
    employees (on-site clinic convenience, HSAs help
    them accrue savings, self insuring can better
    match employee needs)
  • Emphasize ROI to decision-makers
  • Compensation study to show public compensation in
    line with other local governments
  • Implement long term reform incrementally!

Keeping the Promise State Solutions for
Government Pension Reform (Liljenquist, 2013)
  • The sad fact is that political calculations give
    legislators strong incentives to promise generous
    benefits and few, if any, incentives to make good
    on those promises. (p. iii)
  • Local govt. can go bankrupt restructure
    states cannot
  • States can have increasing pension burdens rob
    them of discretionary spending decisions
  • 76 of 126 (60) major state and local plans below
    the recommended 80 funding ratio
  • Unfunded liabilities ranging from 730 billion to
    4.4 trillion

Redesigning Public Pensions (Brookings, 2014
ALEC, 2013 ICMA, 2013 GFOA, 2011 Barro, 2011)
  • Specific Potential Pension Reform Solutions
  • Leaders must commit to permanently fixing the
  • You must confirm the actual scope of the problem
  • Dont exempt public safety employees retire
    earlier so price tags are larger, exempting them
    may make your reforms legally vulnerable,
    citizens support public safety but they also want
    fiscally sustainable pension plans
  • Know the legal limits (case-law)
  • Effectively communicate sell reform
  • Tools of Reform
  • Delaying retirement (increase age service
  • Stop double dipping eliminate pension spiking
    (cashing in a large amount of sick leave or OT in
    the final year of employment)
  • Limit COLAs/make COLAs contingent upon the
    financial health of the plan
  • Change from non-contributory to contributory
  • Increase contribution requirements
  • Change the calculation of final average salary
  • DB to DC for new hires, hybrid plans, CB plans
  • Decrease the multiplier
  • Place a hard cap on pension payouts

Redesigning Public Pensions (Brookings, 2014
ALEC, 2013 ICMA, 2013 GFOA, 2011 Barro, 2011)
  • How to Sell Pension Reform
  • Assess the Environment for Major Reform
  • Develop a Winning Message
  • Talk with System Stakeholders
  • Message Math not Ideology
  • Reforms need Strong Champions
  • Accurate Data Effectively Communicating Pension
    Liabilities are Key
  • Prove the Impact of Pensions on Taxes other
    Public Spending Priorities
  • Anticipate and plan for Legal Challenges
  • Ensure People Understand that We Cannot Grow Our
    Way of the Problem
  • Ensure People Comprehend that Inaction is not an
  • Sell Benefits to Public Employees More take
    home pay, sound retirement
  • Build a Strong Support Coalition
  • Identify What Can Be Negotiated and What Cannot
    meet commitments to current retirees take steps
    for a troubled plan (close the plan to new hires,
    freeze the amount accrued by current participants
    (do not add to your problems), move to a more
    sustainable model
  • Understand that Plan Administrators are in a
    Predicament as far as Public Statements Go they
    dont want to alarm employees or bring their own
    management into question you need them to make
    accurate statements use outside expertise too

Strategic Planning (Cohen Eimicke, 1998)
  • This process seeks to arrive at the best fit
    between the organization its environment so
    that organizational goals are attained
  • It is about our mission, our customers, our
    future how we will best survive, succeed,
    serve for years to come - planning involves
    identifying threats opportunities in the future
    designing plans which optimize those
    opportunities and reduce/thwart those threats in
    the present
  • Enables us to be pro-active identifying
    opportunities to optimize our success - driving
    events instead of always being driven by them
    leading change playing offense - no longer
    reacting to the issue of the moment only
    playing defense
  • SP facilitates success in leading and managing
    change - times change successful organizations
    change with them - organizations which fail to
    anticipate, lead, manage change will at best
    compromise their performance or at worst, begin
    to write their own organizational obituary - It
    is futile, for instance, to try to ignore the
    changes and pretend that tomorrow will be like
    yesterday, only more so.(Drucker, 1999)
  • Given our mission, strengths, weaknesses,
    opportunities, threats, stakeholders, history,
    capacity, and resources, what should our
    objectives be and which strategies can we design
    and implement to achieve them?
  • R ? M ? G ? O ? S ? T ? I ? E

Strategic Planning (Cohen Eimicke, 1998)
  • The temptation in many organizations is to go to
    a retreat, or go through a strategic planning
    exercise, develop the strategy, and then ignore
  • Strategic Planning
  • Need leadership organizational commitment to
    the process
  • Resource constraints are important
  • Strategic goals must reflect organizational
    capability or they will not happen
  • SP connects ends to means
  • SP helps the organization collectively think
  • There are risks 1) Goal definition will have
    explicit trade-offs heres what we will do and
    what we dont do may spur political opposition
    from internal and external groups who dont share
    those objectives 2) SP can fail wrong mission,
    goals, or objectives selected, lack of
    leadership, lack of capacity, no real commitment,
    lack of accountability, objectives not measurable
    or measured, action plans not well designed or
    effectively implemented, organizational barriers
    (agency culture, personnel, policies, procedures
    not geared towards performance),
    politics/external constraints

Strategic Planning - Benefits to Planning in
Public Management (Cohen Eimicke, 1998)
  • Clarify our mission, goals and objectives
  • Optimize organizational performance
  • Efficient allocation of limited resources
  • Boost morale employees internalize the mission
  • Attract resources its easier to get agency
    stakeholders citizens to invest in a winning
    plan they can see, understand, support
  • Enhances public confidence with a clear plan
    and demonstrated outcomes, the public can
    understand and support what our agency is doing
  • Anticipatory government being prepared for the
    predictable and theres a lot that is capable of
    being predictable - limit the of surprises,
    their duration, intensity
  • Enables us to successfully introduce lead

Proving Performance Program Evaluation
  • Program evaluation must be a priority why?
  • 1. Limited/shrinking resources - in Florida, a
    multi-year recession and Amendment 1 have
    significantly reduced revenues and triggered
    scrutiny of spending review of programs by
    local govt. - restraints on resources force
    choices to be made (Rossi et al, 2003).
  • 2. Demand for greater accountability by
    policymakers public Continued consistent
    pressure to constrict or terminate programs that
    fail to demonstrate effectiveness and/or
    efficiency (Rossi et al, 2003).
  • 3. Need to restore public trust confidence -
    Program evaluation can demonstrate to the public
    that you are operating both effectively and
    efficiently - program evaluation enables you to
    make the case to citizens that you are doing the
    job right and you are the one to do it for them.
  • 4. Its required for - Program evaluation
    often is automatically required as a condition of
    receipt of a federal or state grant 1/3 of
    local government budgets consist of fed. state
    grants if you like grants, then you need to
    learn to love program evaluation.

Proving Performance
  • What is program evaluation/policy analysis and
    what can it help us do? (Royse, Thyer, Padgett,
    Logan, 2006)
  • Apply the tools of the scientific method to the
    problems, causes consequences of public policy
    - predict which programs would likely work
    explain why a policy failed
  • Help us document need, better allocate resources,
    aid in program planning design, aid in program
    reform or modification, assist policymakers and
    administrators (executive decision support),
    identify best practices replicate them
    actually help citizens
  • It can also aid us in building public confidence
    that we actually know what we are doing why we
    are doing it.
  • Can enable us to separate the signal from noise
    and determine the real causes of a problem
    which policies actually address those true causes
    to produce better outcomes

Proving Performance
  • Tools to measure validate program
  • experimental design
  • quasi-experimental design
  • single system research design
  • meta analysis
  • Tools to measure validate program efficiency
  • data envelopment analysis (DEA)
  • cost benefit analysis (CBA)
  • cost effectiveness analysis (CEA)
  • Tools to measure validate program equity
  • equity evaluation
  • use of major ethical frameworks
  • All of these are done can be done by local
  • Not always a need to do the study, someone else
    has probably done it for you
  • (Royse, Thyer, Padgett, Logan, 2006)

Proving Performance
  • What gets measured gets done.
  • If you dont measure results, you cant tell
    success from failure.
  • If you cant see success, you cant reward it.
  • If you cant reward success, youre probably
    rewarding failure.
  • If you cant see success, you cant learn from
  • If you cant recognize failure, you cant correct
  • If you can demonstrate results, you can win
    public support.
  • - Osborne and Gaebler, Reinventing
    Government, 1993

Proving Performance
  • What can PE tell us? (Royse, Thyer, Padgett,
    Logan, 2006)
  • ? Program Need the extent to which a program
    meets a community need and the extent to which a
    program is reaching its target population
  • ? Program DesiGN are the hypothesized
    relationships between the causes of the problem
    effects of the program correct?
  • ? Program Implementation is the program being
    implemented/service being delivered as intended?
  • ? Program Effectiveness program outcomes are
  • ? Program Efficiency best use of limited
  • ? Program Equity - the extent to which all groups
    of the population are representative of those who
    should be and are being served by the program
    benefits burdens shared by all groups in the
  • A program whose effectiveness is secured through
    its inefficiency (got results by dumping money on
    the problem) is poorly managed
  • Can be trade-offs might increase one at the
    expense of another - Cheaper, better, quicker
    pick 2 out of 3 but you might not get all 3
  • We cannot assume performance we must prove it.
    Have to demonstrate the effectiveness
    efficiency of our programs services

Organizational Culture (Starling, 2008)
  • The dominant value system of a workplace - a
    strong well defined organizational culture
    makes communication easier, can boost
    productivity, facilitates decision making, can
    create increased cooperation commitment
  • If successful, everyone should both understand
    and live the organizations mission, values,
  • Employees have internalized the mission and
    values it is inscribed upon their hearts
  • You know when you are in an organization with a
    distinct organizational culture (shared set of
    values) you know when you are in a Ritz Carlton
    or a Publix there is a clear culture of
    customer service
  • You know when you are around a group of United
    States Marines there is an easily identifiable
    sense of mission and shared and specific set of
    values among them their culture defines them

Organizational Culture (Starling, 2008)
  • Organizational cultures can either be healthy,
    positive, productive or unhealthy and
  • You can have a single culture across the entire
    organization or different cultures within
    different departments the goal is a single
    healthy positive productive culture across the
    entire organization!
  • Make sure that your organizational culture is a
    positive productive one healthy functional
    not unhealthy/dysfunctional - The right culture
    facilitates attainment of goals rather than
    undermines positive results
  • You want to avoid allowing subcultures to exist
    which run counter to the overall organizational
    culture (e.g. LAPD Ramparts scandal)
  • In general, tools for establishing sustaining
    an organizational culture
  • 1. Selection hiring those who share our values
  • 2. Socialization teaching reinforcing our
    values (emphasis on organizational history, use
    of role models) never miss a moment to
    effectively communicate core values

Organizational Culture (Starling, 2008)
  • Tools to create the right organizational culture
  • Selection - recruit those who share our values
  • Strong policies coupled with solid supervision
  • Establish training programs on proper conduct
  • Effective supervision you hired the right folks
    and trained them to policy now what? review
    actions of employees reward/punish in way that
    clearly communicates expected conduct - avoid
    mixed or muddled messages
  • Promptly vigorously investigate customer
    complaints/any allegations of misconduct to
    protect the integrity of the organization
    defend the right organizational culture - have an
    effective well respected professional standards
    office assures the complaining customer that a
    good process is in place, can often vindicate the
    employee, can ensure an employee receives more
    training/supervision to improve performance, can
    rightfully remove a wrongdoer
  • Identify/utilize teachable moments in the life of
    the organization to communicate reinforce
    organizational values

Effective Communication
  • Not enough to do a good job your key
    constituencies must know you are doing a good job
  • No longer live in a time where people will take
    your word for it or automatically give you the
    benefit of the doubt
  • We can no longer assume that we have the publics
    trust we must earn it work to keep it
  • Successful public policies do not simply sell
    themselves (Martin and Saviak, 2012).
  • Without effective communication strategies,
    stakeholders, citizens, and employees may not
    embrace a new policy or managerial initiative
  • Do not assume public understanding and acceptance
    - can easily fall victim to misinformation
  • Have a specific, detailed, and actionable
    communications plan for each major policy/program
    or managerial decision utilize skilled and
    experienced communications professionals
  • Do a stakeholder analysis to guide your
    communication/support strategies
  • Build a support coalition with a diverse set of
    organizations and individuals to educate the
    public - enlist policy/project champions
  • Factual message points easily comprehended
    sell specific benefits

Effective Communication (Wilcox Cameron, 2009)
  • Q Have you done a communications audit to
    assess your current agency image and the
    effectiveness of your current communications
    strategies and tactics? To help you identify
    communication needs, goals, opportunities?
  • Q If you asked the opinion leaders of your
    community about your agency or specific services,
    what would they say?
  • Q Does your agency have a plan to build
    sustain community support?
  • Q Are you effectively and consistently
    utilizing all available tools of communication
    earned media, public awareness campaigns, a guest
    speakers bureau, a community advisory council,
    weekly e-newsletter to opinion leaders, community
    survey/neighborhood walk, etc.?
  • Make sure your communications are research-driven
    - you have measured awareness, attitude,
    behavior via survey research, focus groups
    other data sets before you begin communicating
    if you cannot conduct primary research, then rely
    upon valid secondary research communicating
    without research is simply flying blind
    research enables us to deliver the right message
    to the right audience through the right channels
    to secure the right outcomes!
  • The public image of your agency is rarely created
    by the PIO alone many opportunities for both
    good and bad PR present themselves each day to
    all employees - it is everyones responsibility

Introducing and Managing Change/Innovation in the
Public Sector (Drucker, 1999)
  • The best change is the change we create.
    (Drucker, 1999)
  • To try to make the future is highly risky. It
    is less risky, however, than not to try to make
    it. (Drucker, 1999)

Why is it difficult to lead change in the public
sector? (Starling, 2008)
  • Why are there not more innovators in the public
  • Risk avoidance
  • Lack of rewards
  • Political pressure
  • Fear of failure
  • Willingness to accept the status quo
  • Effective public managers identify barriers to
    change and design and implement strategies to
    remove them
  • Management matters and there is no substitute for
  • You can do it there are many public sector
    success stories of strategic change!

Planned Organizational Change (Kotter, 1996)
  • Create a sense of urgency if the need for
    change is not effectively communicated and
    perceived as urgently needed, change may not
  • Build a change coalition create a broad
    coalition of internal external actors invested
    in change - build support at all levels within
    the organization identify and neutralize
  • Create a compelling vision and effective strategy
    develop a practical game plan to inspire
    support by showing the benefits to be realized
    and how success will be achieved
  • Communicate the vision effectively change
    coalition members must repeat the change message
    many times must consistently communicate the
    behaviors associated with the change through
    their words and actions
  • Empower employees to act on the vision identify
    and remove barriers to change provide resources
    to facilitate action
  • Produce early and visible victories nothing
    sells like success momentum is created by
    highly visible short term victories
  • Build on progress, preserve gains push forward
    - align operations with outcomes reward change
    agents (personnel is policy change policies
    require change personnel)
  • Institutionalize innovation within the
    organizational culture this cements successful
    change employees and stakeholders not only
    embrace this specific change but the culture
    comes to see change as a positive force in
    organizational life

Introducing and Managing Change (Drucker, 1999)
  • Policies to Make the Future
  • Organized Improvement create a culture of
    continuous improvement recognizes the need for
    identifying implementing improvements in all
    major aspects of the organization in a systematic
    and continuing fashion (3 annual improvement
    rate is possible 3 fewer errors, 3 growth in
    productivity, etc.)
  • Exploiting Success most monthly reports only
    discuss problems while ignoring opportunities
    starve problems feed opportunities staff
    the opportunities have a problem page a
    success sheet in the organizations monthly