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Why Innovation Matters Now
More than Ever
Karen Thoreson, Alliance for Innovation
Vuja de
Navigating the Fiscal Crisis: Tested Strategies for Local
Leaders
What did we Ask?
•What defines the current crisis?•What has worked in previous
efforts?•Which organizations cope better?•Why innovation is critical?•How can local governments
contribute to the recovery?
Deeper and DifferentThan the Last 50 Years
• Housing Market
• Auto and Financial Services
• Manufacturing and Exports
• Service and Retail
• Even Energy is ImpactedAll Levels of GovernmentAll Sectors of the EconomyNone of Us Have Experienced Before
Deeper and Different
• Sales Tax
• Property Tax
• State Government Transfers
• Capital Markets – Public and Private
• Pension and Other Investment Funds
Lessons from the Past
•Tax cuts have less impact than cash investments.•Investment in capital projects is
better than support for operating costs.•Continue projects with low versus
high operating costs. •Block grants speed recovery
compared to competitive grants.
Lessons From the Past
Cutback Management?• Across the Board Cuts• Freezing the Workforce
Or Strategic Management?• Predict the Decline• Focus on Core Mission• Educate the Public• Long Term Savings, Not One Time
Contributing to Recovery
• Maintain Spending, Don’t Cut Revenues• Avoid Across the Board Cuts• Don’t Cut Capital Projects With Low
Operating Costs• Avoid Random Hiring Freezes• Lead Inclusively• Draw on Ideas from All Sectors
Opportunity in Crisis
• Improve the Organization
• Resize or Restructure
• Develop New Partnerships
• Focus on Community Priorities
• Proactive, Not Reactive
• Embrace the Future’s Possibilities
So What Have We Seen?3 Strategies:
1. Hunker Down
2. All Expenditures are Equal – Lower Tide, Lower All Boats
3. Transformation – “What If,” Not “Why Me”
CRISIS IS AN OPPORTUNITYRIDING ON A DANGEROUS WIND
Who Copes Best in Hard Times?
• Strong Management Capacity • Targeted and Flexible Spending
Choices• Revenue Diversity• Have a Long Term Financial Plan• Maintain Adequate Reserves• Fees for Service Reflecting Cost of
Delivery• Educated Stakeholders• Adaptive but Resolute Organization
Promoting Constructive Change Cut Quickly, Avoid Delay Long Term View Core Mission, Highest Priorities Innovation and Continuous Improvement Manage Revenues, Not Just Expenditures Organizational Design and Processes Employee Stewardship Embrace Inevitability, Stick With It Communicate with Stakeholders
What do Transformed GovernmentsLook Like?
Anchored Around Purpose, Mission & Values
Risk Tolerance Profile – Innovation Matters Understand the Brutal Facts but Focused
on the Possibilities Not the Problems Engaged with all Stakeholders See a Path to a Desirable Future that
others don’t Individuals & Organizations Use Both Left
and Right Brain
Areas of InnovationTop 22 in 2004 (Joshua Franzel, Review of Policy
Research, 2008)• Managerial/Administrative (3), e.g., 3-1-1• Technological (10), e.g., web portal, video
streaming, online GIS, online transactions/applications, wifi, online training
• Area-Specific (9)Emergency coordinationTraffic photoHydrogen fuel cellsLED signals and smart signsMonitoring traffic flowsCrime technology-shoe wearNatural storm water runoff controlAffordable housingPublic-private partnerships in parks
Areas of Innovation-CurrentThoreson and Svara, Municipal Year Book 2009
• Sustainability• Youth
advancement• Law enforcement
and technology• Health and
wellness• Business process
reform• E-gov
• Organizational improvement
• Succession planning and regeneration
• Citizen participation /engagement
• Community renewal
• Cities and schools
Correlates of Innovation
• Wealthier and larger organizations • Sunbelt• Cities/counties without unions • Cities/counties with public pressure for change• Cities/counties competing with other
governments• Democratic vote• Council-manager form cities/counties
Correlation does not mean causation.What’s happening on the inside to convert these conditions or overcome these conditions to produce innovation?
Six Qualities Linked to Innovation
1. Leadership2. Creativity3. Internal Collaboration4. External Partnerships5. Community Connections6. Results Focused
“I’m happy to give you
innovative thinking.
What are the guidelines?”
Innovation: #1 Key Qualities
Leadership:• Elected Officials• At the Top• In the Middle• Organization-wide• Unselfish - Shares:
• Credit and Recognition• Level 5 leaders
• Looks to the Next • Generation to Sustain
Creativity• Unleashing the potential• Not Satisfied with Status Quo• Look for ideas elsewhere• Working on Multiple Fronts• Allows for Failure • Constantly Revising and Changing• Breakthrough and Incremental
Innovation: #2 Key Qualities
Innovation: #3 Key Qualities
Internal Collaboration• Unusual• Non-Hierarchal Teams• Diverse teams• Disrespect the Silos• Staff are Supported & Heard• Members Want to Be There
Innovation: #4 Key Qualities
External Partnerships• Public, Private, NGO• Not Quid Pro-Quo• Know How to Disagree• Are Willing to Trust and Take Risk• Understanding Value From New
Perspectives• Deep Level of Cross-fertilization
Innovation: #5 Key QualitiesCommunity Connections
• Real connection, Not Lip Service• Deep Sustained Involvement• Public: Not “me-centric”• Looking for Long –term Value
Innovation: #6 Key Qualities
Results Focused• If You Count It, It Will Change• Useful and serves need• Sustained Impact, Not Flash in the Pan• Knowing Who Benefits
Fostering Innovation
If you create the qualities, will innovation come? • No, Innovation is never automatic• Yes, Will generate the ideas and foster the
spirit that supports innovation• Support with a culture of innovation• Consider what has worked and not worked in
your organization• Consider the straddler (and the stragglers)• Set the bar high. Invite all to determine how
to get over it.
Combination of Individual and Organizational
CharacteristicsOrganization is
reactiveOrganization is
proactive
Staff members
hunker downDenial
Resistance/Anxiety over risk taking
Staff members are
resilientFrustration Constructive
Can you be constructive but still be tired and discouraged?
What Kind of Change?
Continuum of response to crisis:
INNOVATION< Reaction Adaptation Adoption Invention >
“Re-Invention”
Continuum of outcomes:< Status quo Improvement Transformation >
Characteristics of Innovative Leaders*
Senior executives of the most innovative companies—only 15% the total—don’t delegate creative work. They do it themselves.
*Jeffrey H. Dyer, Hal B. Gregersen, & Clayton M. Christensen, “The Innovator’s DNA,” Harvard Business Review (December, 2009). Study of the habits of 25 innovative entrepreneurs and survey of more than 3,000 executives and 500 individuals who had started innovative companies or invented new products.
Five “Discovery Skills” that Distinguish the Most Creative
Executives• AssociatingSuccessfully connecting seemingly unrelated ideas. • QuestioningConstantly ask questions that challenge common wisdom; ask Why, Why not, What if…• ObservingScrutinize common phenomena, particularly the behavior of potential customers. •Experimenting
Try out new ideas and approaches.• Networking Find and test ideas through a network of diverse
individuals.
How Innovators Stack Up
What is Working?
Reassess Community Priorities
• Delray, FL (60K)• Polk County, FL• Jefferson County, FL
What is Working?
Re-engineer Organization
• Montgomery, OH (10K)• Oakland Park, FL (42K)• Olathe, KS (100K)
What is Working?
Fix Structural Deficits (personnel)
• Dublin, OH (38K)• Washtenaw County, MI• Palo Alto, CA (57K)
What is Working?
Advance Technological Solutions
• Decatur, GA (17K)• Winter Park, FL (25K)• Southlake, TX (26K)• Palm Bay, FL (100K)
What is Working?
Increase Revenues
• Charlottesville, VA (41K)• Hickory, NC (40K)• Howard, WI (16K)• Leesburg, VA (28K)• Sarasota County, FL
What is Working?
Partnerships
• High Springs, FL (4K)• Morgan Hill, CA (38K)• Manassas, VA (35K)
What is Working?
Management Flexibility and Transparency
• South Jordan, UT (51K)• Fort Collins, CO• Las Vegas, NV
• Reassess Community Priorities• Re-engineer Organization• Fix Structural Deficits (personnel)• Advance Technological Solutions• Increase Revenues• Partnerships• Management Flexibility and
Transparency
What is Working?
• Re-engineering Organization• Partnership
What is Working for You?
Thank You MCMA
Karen Thoreson, [email protected] Gerlt, [email protected]