Effective Change Management in Equity Implementation

Public Policy

This white paper was a collaboration between myself and Matt Stitt, as primary writers and researchers, and Mike Nadol as editor. It was created as part of PFM’s work in the Bloomberg Results for America City Budgeting for Equity and Recovery program in 2021. Due to formatting limitations, footnotes have been excluded from this text-based version. The fully designed PDF, including all citations, can be viewed here.

Introduction

Changing practices to drive greater equity can be extremely intimidating for cities not yet substantively educated or exposed to the relevant concepts, and, for those within cities that perceive their status or authority as being threatened by the adoption of new principles. This is especially the case given today’s turbulent environment.

Creating a sense of urgency for change can be relatively easy as an executive, but significantly less so as a subordinate. Finding champions can seem impossible if cities are struggling to get stakeholders to even entertain a particular topic. Simultaneously, both proven and emerging change management practices can be deployed to help overcome these challenges and dramatically improve the probability of success.

If an individual seeking to make change lacks a traditional leadership position, active supporters for their cause, or simply does not know where to begin, this guide can help them model an approach to lead from where they sit, and effect sustainable, enduring organizational change.

As part of our ongoing work with the cohort of cities looking to make transformative change through the Bloomberg Philanthropies/What Works Cities/Results for America City

Budgeting for Equity and Recovery (CBER) Initiative, the following represents a combination of lessons learned and promising change management practices that have emerged over the duration of the Initiative.

What is Change Management?

Fundamentally, change management speaks to the process that ultimately drives a city’s culture (and, to quote the renowned Peter Drucker, “culture eats strategy for breakfast”). We are more specifically speaking to the process that drives a city’s new program, initiative, or strategic focus to gain additional, necessary buy-in from stakeholders across the entire government. This can take place at any level within the organization – from one’s mind to one’s team, and from one-on-one relationships with global institutions – and many of the critical factors will remain very similar. Some of the standard best practices include

Creating a sense of urgency; action must be taken quickly.
Finding champions to help spread the word, implement changes, and eliminate barriers.
Establishing working groups, committees, or task force teams (composed of champions and subject matter experts) to lead change effort(s) across government.
Focusing on short-term wins to build momentum on the way to long-term success.
Reinforcing the established change at a systems level.
Creating continual, evaluation and feedback loops to better inform future refinements.

While these are tried and true tactics that can support your city’s /team’s leading efforts to improve upon the existing culture, and to achieve the brighter future your city envisions, it must be acknowledged that aligning a large organization can be challenging, particularly in the public sector. To tackle this specific type of change management challenge related to equity, PFM has curated a series of promising practices from across the U.S. that can be applied to your unique opportunity to refine your department’s operations, municipal operating budget, or capital improvement plan.

Promising Practices in Change Management for Equitable Principles

Traditional change management best practices assume a certain level of power for decision-making and political capital committed by the initiative’s champion, a certain level of responsibility vested in the person or team charged with leading the change, and a general level of awareness that the existing culture must be altered or disrupted to achieve desired outcomes. The practices that follow not only recognize these dynamics, but also seek to foster and leverage them for impact.

Conduct a brief, informal environmental scan

The goal for this is to make certain you have a general understanding of how equity work has been conducted in the past and to what extent it was successful. This can include a consideration of peer organizations – however, their relative success or lack thereof is not necessarily predictive of your own experience. Keep cultural, political, and demographic realities in mind when making comparisons and avoid digging too deeply into quantitative data at this stage.

In a recent project with the City of Chula Vista, CA, the project team spoke with several departments that had previously published equity-centric documentation to ask about their process and goals. The team was able to collect equity definitions and other data points to bolster their own work. This also led them to uncover additional equity champions that could be aligned to their specific project goals.

Identify the key players, both champions and detractors

If you cannot make the final decision, who can? Who else has influence over the decision, or the ultimate implementation of the decision? Is there a way to turn our detractors into champions? If so, how should we pursue the best path to securing that buy-in?

Start by creating a rough power map as it relates to your city’s goal. A simple format to consider is an “x” and “y” axis showing more or less influence in one dimension and more or less support for your position in the other. Understanding these change management power dynamics and how they impact decision-making authority and workflows, will help you plot the most efficient course of action.

Establish a working group, steering committee, or task force comprised of champions to lead change

Establishing working groups, committees, or task forces can further support communication, coordination, and collaboration efforts across the government. If existing, effective groups are already up and running for cross-cutting initiatives or priorities, joining those committees might be an effective way to make progress and find others that support your cause. The larger and more complex the government entity, the greater the need to join or establish a formal working group or committee to lead these efforts. These teams should also include “A-Team” members, to ensure that the change remains a substantive and visible priority. Diversity of department and positions is crucial as was outlined in a recent ICMA study of the City of Evanston (IL). In this example, Evanston intentionally built their equity committees through diversity of positions, departments, and supervisory responsibilities.

When defining equity in your jurisdiction, focus on metrics, not just language

While a baseline understanding of the definition of equity (for example, how it is different from equality) is typically helpful in regards to getting your team thinking similarly, the conversation will inevitably move to “how do we measure this abstract concept?” In many places, governments are adopting place-based, third-party definitions that are often set by and monitored through federal agencies, such as the Center for Disease Control’s Social Vulnerability Index or HUD’s Qualified Census Tracts (QCT). Focusing on these types of metrics, initially, helps to alleviate pressure on any individual that may be seen as “defining equity” for an entire community (that person should be, but may not be, engaged in this process). It also generally aligns with federal and state funding streams, which can be a useful leverage point when discussing the fiscal implications of this type of focus (e.g.., if we use HUD’s definition, it is highly likely we can apply for grants that support impactful programming on this metric).

In Harris County, TX, City officials have started to use the CDC’s Social Vulnerability Index more consistently across multiple areas of their operating and capital budget processes, including flood plain project prioritization and small business relief. Using the same metric across both programs allows for a comparison of outcomes, and consistent reporting across departments.

Be aware of existing leadership priorities, as well as timing of electoral cycles

When pursuing equitable change, it is critical to understand where leadership stands in relation to your own vision of equity. If appropriate, consider ways to elevate this work to the executive themselves, or, more likely to their deputies and key support staff. If the elected official can take things a step further by issuing a jurisdiction-wide mandate, or even an executive order, it will likely set the tone for equity work across the organization, and can also further the push for more alignment with larger organizational goals, as well.

For example, one city in the City Budgeting for Equity and Recovery cohort that is working to increase equity in its capital budget discovered that a key driver to completing more equitable work is the amount of available discretionary capital funding each year. If the Mayor, City Manager, and other city leadership can articulate the need and scale of deferred maintenance, and can make a collective, unified push for additional funding from other entities (e.g., philanthropic and state and federal government), it would be a more powerful push than coming from the budget office alone, and, should increase the chances of securing additional funding for all proposed capital projects.

If your city’s administration and leadership are coming up on the end of their term(s), consider how this kind of work may be impacted (positively or negatively) by the result of a primary or general election. While there should be urgency around equity in all cases, the timing of when to pursue certain conversations, policy or process changes – and potential presentations or reports – must follow a logical cadence that considers the practical and feasible focus of the administration(s) at any given moment.

Understand the perspective of your key detractor(s)…

If your internal detractors are substantively reliant on key data for their work, this factor should inform how you formulate a persuasive argument, and strategically approach the conversation or meeting with these stakeholders. For example, if your city’s team is attempting to change public works’ policies, your team may need to dive deeper in regards to where the more granular data stems from, how often projects are similarly (or identically) rated, and what level of subjective prioritization comes into play at more senior levels of the organization – to offer a more relevant context or perspective.

In San Diego, CA, street projects are prioritized based on street condition, proximity to one another, etc. This can be considered an asset quality-centric approach to budget allocation. In Oakland, CA, a similar process is used, however, Oakland also incorporates equitable factors in their prioritization criteria. For instance, individual complaints are not included as rationale for paving a particular street, and geographies considered “underserved” by the City’s definition receive preference in project funding. This additional layer of consideration can potentially counteract persistent underfunding of some community priorities.

…And, where possible, use these conversations to create champions

To further the capital budget example, perhaps your equity team meetings with this department team reveal a lack of sustainable, discretionary funding for projects that are not tied to grants, nor state or federal aid. One potential solution is to use your team’s equitable push as a starting point to request increased funding for all capital projects, and, in particular, those aligned with equitable principles. In Oakland, CA, when the city was revamping its capital improvement plan, working groups focused on getting feedback and input at multiple points along the way to ensure buy-in, and to create champions for the plan. This type of broad engagement approach allows you to aggregate feedback and frame your goals in a shared, inclusive context that can be supported by all involved.

In all cases, advocate for low-effort reporting and transparency initiatives

For example, if your team would like to change the decision-making process for funding new programs in the local government’s jurisdiction, that may take significant staff time

and effort to design ahead of upcoming budget cycle(s). However, if your internal team could introduce a new variable in a shorter timeframe for reporting on budget figures, it may be possible to clearly demonstrate a need for new decision-making criteria when faced with data on the growing disparities among various communities.

In Baltimore, Mayor Brandon Scott has made a significant push towards transparency and open data on many city services, including those related to COVID-19 recovery. This includes real- time, public dashboards that show spending trends for the City and its agencies. Recall the prior recommendation on initially using metrics as definition(s) of equity – by simply including a report of spending by the CDC or HUD geographical variable, any city could display potential opportunities to increase equitable spending.

The Three Cs of Change Management

When in doubt, focus on the Three Cs: Coordination, Communication, and Collaboration

As the COVID-19 pandemic demonstrated, an increasingly unpredictable future requires new ways of thinking about government operations. When the critical moment is upon you, it is too late to plan for what you might do. Preparing for these scenarios is ideal – however, if your organization is facing a new challenge, the “three Cs” should be your default methodology for quickly establishing alignment, effectively sharing information, and working across silos to deliver critical services and save precious time and resources along the way.

Racial Equity and Reconciliation Initiative Team, City of Long Beach (CA) – In June 2020, City Council members in Long Beach, CA, unanimously approved a resolution to review historical inequities related to Race and other demographic factors. This cross- departmental team was responsible for engaging residents on how best to eliminate systemic racis
Stimulus Task Force, City of New Orleans (LA) Following the announcement of $375 million in federal funding, New Orleans Mayor LaToya Cantrell convened a 28-member task force with five sub-committees representing priorities for the City. This group was tasked to identify the best opportunities for spending, as well as explore potential funding available through subsequent rounds of ARPA guidance.13 The City adopted this strategy based on multiple prior experiences with federal relief funding, in the wake of hurricanes and associated flooding. Ultimately, this team delivered a comprehensive report and recommendations for enhancing racial equity in the City.

Conclusion

With increased federal funding to support economic recovery in the wake of COVID-19, cities are being handed the keys to allocate CARES, ARPA, and any future federal dollars toward more equitable programs and services. Resistance to equity may show up in an organization as skepticism around these funds and their purposes – however, the guidance for CARES Act, ARP Act, and (likely), any eventual Infrastructure Bill all incentivize investment in previously neglected communities. Sharing plans for this spending alongside the annual operating budget can further demonstrate a comprehensive response to constituent needs and goals, regardless of the funding source. As these federal programs pave the way, one’s change management muscles must be well-developed to take on budgeting for equity, and other equitable initiatives in additional contexts.

Ultimately, change management is about shifting the existing culture – preserving the great things about an organization while restructuring and updating its activities and service delivery to better align with its core values and priorities moving forward. In an ideal world, this might happen with the flip of a switch – however, even the best plans cannot be
developed nor successfully implemented in the real world without a receptive and supportive culture.

Equity in Capital Improvement Planning Processes

Public Policy, Strategy

This white paper was a collaboration between myself, as primary writer and researcher, and Matt Stitt and Mike Nadol as editors and contributors. It was created as part of PFM’s work in the Bloomberg Results for America City Budgeting for Equity and Recovery program in 2021. The fully designed PDF can be viewed here.

Why This Matters?

Capital budgets and improvement plans present exceptional opportunities for governments to drive equitable outcomes in municipalities, particularly when budgeting for recovery. The significant spending power authorized through capital budgets – multiple billions for some jurisdictions – can allow for increased, targeted spending on geographies that historically lacked investment from the public and private sectors. In addition, the job creation necessary to complete these projects offer workforce and economic development opportunities for residents and businesses. Because the Capital Improvement Plan (CIP) typically requires a multi-year plan and planning process, it provides a framework that can be adapted to equitable purposes rather than created from scratch. When taken together with the scale of funding available, the CIP presents a ready-made strategy for planning, implementing, and evaluating projects that achieve enduring equitable outcomes.

Introduction

Infrastructure is the fabric that enables community connection, economic opportunity, and civic life in the United States. Eighty percent of public spending on these vital projects (from roads and bridges to parks and recreation centers) is provided by state and local governments. Yet despite its importance to everything from commerce to public health, the national total deferred maintenance on infrastructure assets could be as high as $1 trillion.^[1]

Additionally, most cities have no structured mechanisms to incorporate equity considerations into their capital investment planning. Equity-based approaches to funding, project selection, and community input are still evolving and imperfect at best – but such approaches are now developing rapidly for operating budget allocations. To next integrate equity into longer-term financial strategies, Finance Directors, City Managers, and senior Elected Officials must all double-down on their efforts, sharpening their focus on capital investment planning. While there is no single solution that works for most cities – when it comes to matters of equitable impact, the best option is one that is place-based and reflective of the needs of a specific community. Ultimately, the process for equitable capital budgeting must be developed collaboratively and implemented through a thoughtful change management strategy.

This resource outlines a few strategies and case examples (related to equity in capital planning), from across the country, that can be adapted to the local context.

Using Capital Improvement Planning (CIP) Process to Drive Equitable Outcomes

To approach the CIP process in a manner that creates consistent, measurable, equity-focused results, PFM recommends first mapping the current process being used (including a timeline for key milestones) and bucketing the tasks into phases. Each of the following examples can be considered as a potential improvement to one key phase (i.e., swapping a current practice for a new tactic) or as part of a more comprehensive effort across the full process. Depending on local readiness, needs, and priorities, government staff can choose an approach that is politically feasible while building toward maximized impact.

Prioritize Projects that Align with Long-Term Strategic Goals

The Government Finance Officers Association identifies “identifying, tracking, and communicating” performance measures in budgeting, including the capital budget, to be a financial best practice.^[2] To make such performance measures most impactful, city staff must align these metrics to the overall goals set by city leadership. In the City of Seattle, WA, for example, equity goals have been set by the Seattle 2035 comprehensive plan – and the City’s scorecard for capital investments uses detailed, quantifiable criteria to rank projects in terms of alignment with these goals.^[3] Projects that score high on these measures (and, thus, are highly aligned to the plan) receive higher priority for funding than those with relatively lower scores.

Develop a More Impactful Community Benefit Agreement Structure

If well-designed, Community Benefits Agreements (CBAs) centered on equity issues can be extremely impactful for cities. In Sacramento, CA, for example, a recent CBA developed for a multi-billion-dollar mixed use development generated $50 million in funding for affordable housing, anti-displacement investment, prioritized hiring for residents, and improved public transit infrastructure. These benefits were developed, prioritized, and supported by direct resident input. The evaluation firm highlighted dialogue with community members (versus presentations) – designing projects that not only increase revenues, but also deliver non-monetary benefits to residents and businesses. The firm also recommended reevaluating success measures (i.e., rethinking straight, or traditional, financial return-on-investment).^[4]

Formalize “% for X” Investment Goals in Major Capital Projects

The strength of the capital budget and plan as a tool to promote equity is that its spending power, especially when viewed over a multi-year time horizon, can dwarf the operating budget of a municipality. With this scale in mind, cities should consider a formal set-aside of X% in major capital projects (e.g., all projects with budgets over $2 million) – for the sole purpose of funding an equitable priority project. As an example, the City of Austin, TX, recently dedicated $300 million of a +$7 billion transit expansion program to affordable housing and anti-displacement programs for near neighbors.^[5] Not only does this provide funding for an equitable priority, but also enhances the value of the transit assets themselves through potential increases in ridership.

Connect Capital Budgets and Workforce Development

All cities seek a robust, skilled workforce and a strong local economy – however, oftentimes workforce development funding is tied to imminent or even pre-existing job opportunities. By taking advantage of capital investments to drive small business growth and the development of local supply chains, municipalities that design creative programs (or partnerships) can generate a positive feedback loop of a stronger labor market, growing local firms, and increased quality and efficiency of capital projects. For example, one city in the current Bloomberg Philanthropies/What Works Cities City Budgeting for Equity and Recovery cohort is working to design a sidewalk maintenance program that would include a set amount of work conducted each year by apprentices and workers seeking employment. This helps to improve walkability and economic activity, while also training residents to work in trades that offer family-sustaining wages and add value to businesses in the City.

Seek Strategies for Co-Investment

State and federal funding can be a source of “fuel” for capital project development. Enterprising city staff can apply for grants that award funding for not-as-obvious capital investments that expand program capacity, and, in the best-case scenario, generate a return to both the city and its residents. The Philadelphia Energy Authority’s Solar Savings Grant Program, for example, leverages funding from the Commonwealth of Pennsylvania for green energy projects to offset the cost of installing solar panels on low- and moderate-income households’ roofs.^[6] The grants lower the overall costs of the program, residents save money on their electric bills each month, and the city decreases its overall carbon footprint.

Set a Future-Focused Investment Strategy

An additional way to better leverage capital budget dollars is to invest in growing service areas based on demographic trends, and strategies that can reallocate funding to more equitable priorities. For example, there are mobile crisis teams operating in at least 25 cities across the country, and many more around the world. In Eugene, OR, the CAHOOTS program, a pioneer in this space, cost approximately $2 million to operate (in 2019), and is estimated to have saved approximately $23 million in public safety and public health costs.^[7] While models for service delivery vary depending on the local context, cities that choose to develop this capacity internally can leverage capital investment to establish facilities, and potentially to procure first-response vehicles and other durable goods, that contribute to the treatment process. With such support, mobile crisis programs have the ability to lower the needed capacity in public safety (e.g., police and/or EMS/EMT first responders) and public health (e.g., hospital beds and social worker FTEs) over time. Investments like these also create an equitable outcome of clinically appropriate care delivered to residents in need (i.e., instead of holding residents in prison or police custody without timely treatment) while diverting from corrections populations and overburdened emergency rooms.

Callout Features – Case Studies

Redefining Return on Investment (ROI) through an Equity Lens

Moving towards equitable formulas for funding CIPs will naturally raise questions regarding ROI (i.e., will projects generate a financial return). Evaluation is a critical component of all capital investments, and these examples provide a clear guide.

In Harris County, TX, officials recently moved away from the historical practice of using traditional ROI based on the financial value of property protected by its flood projects (which tilted investment heavily towards high-income neighborhoods) to using a social-vulnerability index created by the Centers for Disease Control and Prevention (CDC), which moves more funding to areas with the most at-risk populations.^[8]
In Raleigh, NC, the city explicitly measures environmental and social, as well as economic, outcomes of projects (the “triple bottom-line”) in its 2030 Comprehensive Plan.^[9]

Use Change Management Best Practices to Build Support

Our most successful clients take a strategic approach to engaging internal and external stakeholders who are considered potential champions or detractors to implementation.

For example, traditionally information is presented to community groups for comment and approval, but a fully equitable approach would be to engage the community up-front in a true dialogue to understand priorities, concerns, and opportunities for both sides while the program is still under design.
Tools to consider include using steps from Dr. John Kotter’s Model^[10], adapted and customized for more effective “place-based” or local use.

Conclusion: Importance of Investments in a More Equitable Future

Many municipalities currently face a myriad of deferred maintenance and equity imperatives – all of which have been exacerbated by the COVID-19 pandemic. The path to reversing severe long-term under- and disinvestment must include large-scale, strategic capital program initiatives. Through engaging their communities, cities can address both historical disparities and identify investments that can build towards a more equitable future.

“The best time to plant a tree was 20 years ago, the second-best time is now.”

A common theme across the strategies documented here is the importance of change management to creating sustainable change. Whether starting from a top-down directive (e.g. executive order) or a bottom-up approach (e.g. employee-led, department level change), understanding the stakeholders involved and the relevant processes is critical to designing a more equitable approach. Another factor embedded in each of these strategies is the availability and monitoring of disaggregated data to ensure that all residents benefit from the changes implemented.

As equitable considerations take hold and begin to shift the balance of capital investment dollars to the previously neglected corners of the local map, municipalities should become better places to live, work, and enjoy for all residents. When combined with strong community engagement, data-driven project criteria, and thorough measurement and evaluation, funds that seemed too limited will deliver results above and beyond their scale. With the first American Rescue Plan Act (ARPA) funds arriving to cities, states, and counties in the last month, and recent, additional infrastructure spending discussed at the federal level – now is the time to prepare stakeholders to rise and meet the moment.

[1] Zhao, Jerry Zhirong, et al. The Volcker Alliance, 2019, pp. 1–40, America’s Trillion-Dollar Repair Bill.

[2] Performance Measures, http://www.gfoa.org/materials/performance-measures.

[3] City of Seattle, Office of Planning & Community Development. Community Planning: Practice + Prioritization, pp. 4–32.

[4] Hackler, Darrene. Smart Incentives, 2021, pp. 1–5, Community Benefit Agreements: An Equitable Tool for Innovation District Development.

[5] Young, Harrison. “Austin Transit Partnership OKs Anti-Displacement Funding.” Austin Monitor, 18 Mar. 2021, http://www.austinmonitor.com/stories/2021/03/austin-transit-partnership-oks-anti-displacement-funding/.

[6] Philadelphia Energy Authority, “Solar Savings Grant Program.” https://solarizephilly.org/solar-savings-grant-program/

[7] Reach out Response Network, November 2020, pp. 1-91. Final Report on Alternative Crisis Response Models for Toronto.

[8] Wallace, Don. “A Climate Plan in Texas Focuses on Minorities. Not Everyone Likes It.” The New York Times, 24 July 2020, https://www.nytimes.com/2020/07/24/climate/houston-flooding-race.html.

[9] City of Raleigh, Office of City Planning. 2030 Comprehensive Plan – Update, pp. 123-124.

[10] “The 8-Step Process for Leading Change: Dr. John Kotter.” Kotter, 7 May 2021, http://www.kotterinc.com/8-steps-process-for-leading-change/.

Understanding Strategy vs. Tactics

Strategy

This post was inspired by Mr. Timothy Richards, who I had the pleasure of studying under while attending the University of Pennsylvania. His graduate-level course, “Strategic Engagement with Governments,” was among my favorite I’ve taken at any academic level.

Whether you are reading about sport, politics, movement building, or are just mindlessly scrolling your social media feed – you are engaging with strategy almost constantly. Though it is ubiquitous, it is also often misunderstood or misapplied within organizations. Many of my clients came to us with problems that were merely symptoms of deeper issues. “We need to rebrand because the restaurant down the block is crushing us.” “Our website is outdated, so our online donations are down this year.”

It is important to address these surface-level issues in most cases, but in others, you need to start at the beginning. Is that other restaurant really more crowded because of its logo? Are you asking enough supporters to donate to make your goals? These questions move you beyond your presenting symptoms to your central issue. They lead you to strategy.

What is strategy?

In simple terms, strategy is your plan to get from A to B under ideal conditions. With zero friction, changes, or challenges your strategy would lead you on the most direct path to success. It represents why, how, and what for your organization, your team, or a campaign.

For example, your strategy for getting your car washed might be:

Get in the car
Drive to the car wash
Wash the car
Return home

While it is not the most complex strategic approach, it does fit our definition, and it isn’t the only path forward. For example, an alternative strategy might be to simply walk out to your driveway and wash your car at home. This would still get you from A to B – your current state to your desired future state – just in a much different way from the first strategy.

Knowing which approach is best for you will require three pieces of data – knowledge of the past, observation of the present, and forecast of the future. Historically, have you been happy with your local car wash? Do you have time to drive across town and back? Are there other services (waxing, vacuuming, etc) that you will need that can’t be done at home easily? You can imagine applying this to your organization, department, or individual contributions as well.

What are tactics? And how do they interact with strategy?

Once you decide you’d prefer to go out to the car wash, you can begin implementing your strategy. Go outside. Get in your car. Start driving to the car wash. But what happens if something external interferes with your strategy? Let’s say, even though it wasn’t forecast, you notice rain clouds rolling in as you drive to the car wash. No one wants to wash their car right before a storm that will muck it up again. In this situation, you might want to abandon your strategy.

But you have a goal! You want to get your car washed. Do you continue following your strategy? Or do you need to make a change? This is where tactics come in to play. A tactic can be thought of as a tool to use in case your strategy doesn’t work out exactly as it should. You will be reading and reacting to the environment as your strategy unfolds, and tactics are how you course correct or take advantage of opportunities. In the case of the car wash, your tactic might be “retreat” for now, and go back out after the rain clears. This way you still get from A to B, but you are not sacrificing reaching your goal of a clean car (for more than a few hours).

Organizations don’t always do the best with tactics. Oftentimes, leadership promotes their goals over all else. The strategic plan either reigns supreme or sits on a shelf and is replaced with the desires of executives. Tactics can be viewed as “failures” or “abandoning the strategy,” when in reality they are simply a pivot or, to borrow from the negotiation field, the BATNA. If your strategy is to increase turnout at your events, but volunteers aren’t responding well to your free t-shirts, you might consider changing tactics. Maybe diverting that funding to food, entertainment, or childcare would help to bump up your numbers. It doesn’t mean that you were failing, it just means a new tactic was needed.

Conclusion

Your strategy is your plan A – what you would do if there was zero friction and no change in the wind. Tactics are what you need when you rollout your strategy in the real world, and you find that your strategy runs into blockers. Knowing the difference is helpful, but its even more important to get comfortable with moving between the two as you approach your mission.

Smarter Government: Why the best strategy for governing fails

Public Policy, Strategy

What is Smarter Government?

Governor Martin O’Malley wrote Smarter Government in collaboration with ESRI in November 2019 as a capstone on his political experience. In it, Mr. O’Malley outlines his career-long pursuit of more effective government through “Stat” programs. He was initially inspired by Jack Maple and his CompStat program in New York City’s Police Department. Eventually, the two would collaborate on what might soon become known as the single most effective strategy to govern a city or state.

CompStat was a revolutionary idea at the time – it was originally known as Charts of the Future and involved sticking colored pins into a paper map to display data on the intersection of crime and police activity. While it was significantly upgraded in terms of technology, the core tenets remained: timely and accurate information or intelligence, rapid deployment of resources, effective tactics, and relentless follow-up. The result was a major shift in the success of the police department to not only solve but also prevent crime by strategically deploying officers and other resources across the city.

Over the first few chapters, Mr. O’Malley tells the story of working with Mr. Maple to bring CompStat to the city of Baltimore when Mr. O’Malley became Mayor. They called the new system “CitiStat.” There are six main elements of the CitiStat strategy for performance management:

Performance management and data-driven processes
GIS technology
Customer service technology (like a 311 call number for city services)
Collaborative, informed decision-making
Openness and transparency
Getting things done by bringing people together regularly (and optimizing the meeting space and project management process)

Mr. O’Malley’s administration made extremely impressive progress during his time in office – both as Mayor of Baltimore and then as Governor of Maryland. He reduced crime and blight, reduced healthcare costs, and quite possibly saved the Chesapeake Bay Watershed from total destruction. His book includes several contributors, but it is obvious from the language and the content that Mr. O’Malley is a true expert in this area. He now teaches the concepts at Universities in the region, and consults on bringing Stat programs to the Federal Government level and beyond.

Why won’t it work in my city?

If there is a “secret sauce” for effective city and state government, why is this not the standard operating procedure for all public administrators? The truth of the matter is performance management in general, and CitiStat in particular, can be controversial and difficult to implement. Not everyone is on board with showing their peers “how” they work, and getting potentially a dozen departments aligned on a schedule and goals is challenging, which creates significant barriers to entry. I believe that it can work anywhere, but it will only work where an administration can manage these three risks.

Leadership

One thing that becomes clear through Mr. O’Malley’s war stories is his indisputable strength as a leader. This is not a boast or exaggeration by someone telling his own story. By highlighting both his wins and losses, Mr. O’Malley reveals much about the thinking behind his actions. His ability to see the opportunity that CitiStat offered, rally his colleagues to the cause, and consistently participate in the process at the appropriate level made the success of his subordinates possible.

You cannot implement one half or one third of CitiStat – you have to dive in head first and stick with it through your time in office. Not all leaders are prepared to take that plunge, but if they can believe in the fundamental value of the system, it can lead to massive successes.

Capacity

Similar to the leader’s capacity, the administration must have sufficient capacity to establish the processes needed to establish CitiStat. They must be the ones to conduct the meetings, measurement, and implementation of improvements to their service area. To be clear: any administration has the ability to choose CitiStat as a framework for performance management, but not all administrations will succeed in its total adoption.

Mr. O’Malley talks about the crucial first few months of an administration. It is here, he says, that you must move confidently and completely towards CitiStat or else you will miss the opportunity entirely. Without the buy-in and quick action taken to make these changes, too many in the administration will have the built in excuse that changing how we work will reduce velocity.

Ego

The final risk is maybe most existential to the CitiStat methodology. For an incoming administration, it is just the last politician’s shiny object. Any executive entering a political office will be most concerned with their priorities and promises from the campaign trail, as well as their own legacy that they must begin to write.

When Mr. O’Malley left Baltimore, his successor did keep CitiStat in place, but without the same zeal. Gradually the interest and urgency eroded, and eventually there were departments going months without the customary bi-weekly meetings. The succeeding Mayor did not view the CitiStat process as their own, and they did not give it the same attention or resources that they lavished on their own projects. Unfortunately, their ego kept them from embracing a strategy that may have helped them achieve exactly what they were setting out to do.

Conclusion

Despite being a very systematic and data-driven approach to management, CitiStat absolutely needs enthusiastic leadership and shared sense of responsibility to carry out. Many cities use data to make decisions, and some might even have transparency across departments. There are many fewer though that perform the rituals associated with CitiStat that cement it as the overarching framework for how governing gets done.

Cities that want to make CitiStat the standard must ensure that there is a process in place that can make it viable with or without strong executive leadership and that make it more durable than a political project would normally need to be. To achieve this, administrators might consider:

Establish a cabinet-level position to manage CitiStat.
Create administrative policies, or if possible legislation, requiring Departmental CitiStat meetings to take place regularly.
Limit the discussion of or praise for CitiStat in public – the more it is associated with one administration or individual, the less durable it becomes!

Kotter’s Model: How a change management approach improves digital projects

Strategy

This post was originally written in September 2019 for the Message Agency blog.

Digital projects usually seek to both decrease costs and increase efficiency through the use of technology. If the choice was “either-or,” these projects might not be as attractive to decision-makers. Most want to understand the “both-and” proposition.

John Kotter spent nearly three decades on the faculty at Harvard Business School. His 1996 book, Leading Change, was an international best seller. In 2011, TIME® magazine listed it as one of the “Top 25 Most Influential Business Management Books” of all time.

While it is most commonly taught in leadership and management contexts, I find his 8-step process for managing change to be invaluable for managing projects with our clients. To paraphrase Kotter on the topic, there are two fundamental goals at the heart of most digital projects:

Increase revenue / equity or decrease costs
Become more effective / efficient

Many astute managers would ask the question: Why not both? Digital projects, in particular, usually seek to both decrease costs and increase efficiency through the use of technology. If the choice was “either-or,” these projects might not be as attractive to decision-makers. Most want to understand the “both-and” proposition.

Fortunately, by following some of the key steps in Kotter’s eponymous model, you can manage costs and increase the effectiveness of your digital project. Achieving this goal is particularly important for nonprofit organizations and others with limited budgets, who need to ensure a substantial return on their organizations’ investments.

Urgency, Urgency, Urgency!

Like the famous rallying cry of real estate agents everywhere regarding location, the one thing your project simply can’t do without is Urgency. The unfortunate reality is that some projects will fail for one reason or another. You’ve probably been part of projects that got off the ground but couldn’t stay the course. Or maybe one decision maker’s flavor of the week replaced a more sustained effort from years past.

Regardless of the context you find yourself in when embarking on a new digital project, it is imperative that you find a source of urgency. This can come in many forms, including:

Executive sponsorship and support (e.g., your new ED recognizes a need to improve the website);
Alignment with a key milestone (e.g., your organization is celebrating its 50th year in operation);
Acknowledgement of the danger in maintaining the status quo (e.g., your website is end-of-life next year, and you need to raise funds for a redesign).

Wherever you find your sense of urgency, Kotter recommends that you should do what you can to protect it! We agree, as 50% of transformations fail at this first crucial step. Maintaining a sense of urgency means your project will be more likely to get prioritized by you and your colleagues.

Great Guiding Coalition

Your project team is another major variable in the success of your new digital strategy, website, or public education campaign. While you need dedicated resources to manage the day-to-day of your project, you also need to go beyond the usual suspects in order to ensure success.

A great guiding coalition will include:

Diversity in diverse forms (e.g., level, tenure, ideas, and departments);
A strong project manager to consolidate communication; and
Accountability to the project goals.

Accountability in this case goes beyond attending meetings and checking boxes. The project team should have the goals aligned with their own department or functional goals. Digital projects can often be considered “internal work,” but should be prioritized in the same way as serving end users.

Generating Quick Wins

During project planning, it is imperative that milestones are agreed upon early. At the same time, coalition members should be asking: “What can we show (or implement) at the end of each phase?” This evidence of change could be as simple as a list of actions taken, lessons learned, or an immediate process improvement. Quick wins build credibility and generate support for the digital project across relevant teams.

For example, if your user research uncovers that most donors are donating online, but you don’t have a link to donate on your homepage, could you simply add a donate button today? If so, you can address a specific, evidence-based need and demonstrate to colleagues that you are focused on tangible outcomes.

Sustain Acceleration, Institute Change

Your coalition is collaborating at a high level. You’ve maintained your sense of urgency along the way. The quick wins are piling up, and your digital project has become the envy of the office. So, you’re good right?

Not yet.

During the project, you’ve surely bumped up against a few barriers, or found elements of your internal processes to be restrictive. Now is your chance to consider how they might be improved. Use your success so far to address a new goal that fits the overall project vision.

For example, in creating a content strategy to drive more volunteer sign-ups through your site, you realize the intake form is not very user-friendly. To maximize the effectiveness of your website redesign, work with your volunteer coordinator to make improvements that can launch with the new site.

Getting the additional input from their department while making an update that improves user experience is a win-win. As you build momentum in your digital project, don’t overlook opportunities to fuel further positive change.

On the path to digital transformation

Kotter’s model can be applied to any change management process, but it is especially helpful for digital projects, where multiple stakeholders, complex technologies, and competing interests can quickly hamper progress. Change is always challenging, but if you follow some of these simple steps to help build trust and maintain momentum, it doesn’t need to be painful.

How a Business Acceleration Team can help Philly’s business community

Public Policy

This memo was drafted in September 2019 for informational purposes for the City of Philadelphia Department of Commerce. It does not in any way represent the Department of Commerce’s opinion or policy on this matter.

What is the current state of the business customer experience in Philadelphia?

Opening a new business in Philadelphia, like in all major cities, involves a series of permits, inspections, and associated paperwork and processes to obtain them. Through the Food Business Process Improvement Pilot which included both internal (city staff) and external (business owner) design thinking workshops, the City was able to map the process, identify pain points, and recommend process improvements. Commerce learned that the process is complex, difficult to navigate, and overall challenging, especially for small business owners. Drivers of some issues with Cx include:

No central office with all of customer’s data available to them
Data sharing among departments is ad hoc and inconsistent – anecdotally we’ve heard it can often take two weeks to complete some data requests
Performance metrics for these departments are not aligned to the goals of the customer experience
Process improvement is not baked into the current process due to departmental silos
No one owns the overall business Cx, and this lack of ownership means lack of accountability as well

How has New York’s model for a BAT worked?

The New Business Acceleration Team (NBAT) was developed by New York City under Mayor Bloomberg’s administration to make it easier for small businesses to work with the city. Given the number, varying size, and number of permits and licenses required, restaurants were an obvious fit. Initially the model was meant to crack down on the number of violations that occurred, but quickly pivoted to helping better serve these establishments.

NBAT consisted of representatives from all major departments interacting with these businesses including Health Department, Department of Buildings, Fire Department, and Environmental Protection. One of the key tasks this group completed was a process map, laying out all of the steps, stakeholders, and pain points for a restaurant to open in New York. Members of the team reported both to NBAT and to their own department, and mostly relied on existing administrative systems to communicate and share information on individual businesses. A small-scale Salesforce instance was later deployed, though an enterprise-level solution was not successfully adopted.

NBAT assigns a client manager to each business, with managers having approximately 75 clients each at varying stages of their projects. Their main responsibility was to make sure inspections happened just-in-time to avoid costly delays in opening and inefficient use of city resources. Cross-trained inspectors were used to help consistently and completely identify issues at client sites prior to inspections, solving a major issue for businesses who didn’t know what was expected of them.

Are there additional models to consider when developing Philly’s BAT?

In addition to the New York model, we reviewed other cities and how they’ve been able to improve Cx for businesses specifically.

Chicago, Small Business Center

City of Chicago launched an in-person, one-stop-shop for business needs related to permits, licenses, and inspections. Department representatives from each of the main stakeholder groups sat together in this new center. All necessary forms and paperwork were in one place, with consultants able to help guide business owners through the process. This helped cut down on avoidable paperwork errors, and advise businesses on inspection expectations to help them pass on the first try.

Chicago, Business District

An online system, which is connected to the user’s business account with the city, Chicago Business District allows businesses and their legal teams in Chicago to complete most of their transactions with the city remotely. The system operates through manual review and approval of the information for zoning or licenses, and integrates with the city’s larger business and tax database (IRIS) to facilitate updates and processing of tax information.

Los Angeles, LADBS Go App

The City of Los Angeles offers online tools in addition to a mobile application called LADBS Go. This is an Android and Apple application allowing business owners of any size or type to use their same city log-in to schedule inspections, check status of permits, view wait times for various service counters, and report violations they see elsewhere in the city.

Austin, Smart Start

In collaboration with a locally-based technology firm, the city of Austin, Texas now offers Smart Start on their website. Essentially, Smart Start services as a comment thread on their checklist pages of how to get started doing business in the city. Joint review and answering of questions is managed by the city’s Development Services (most similar to L&I in Philly) and Economic Development departments.

Which model would be ideal? And which would be most feasible in Philadelphia?

In lieu of recommending a particular model, there are a few aspects of each approach that should be kept at the center of any discussion of improved business customer experience in Philadelphia. Each of the cities we studied solved a few key problems for both businesses and themselves.

Map the current process. This is an invaluable first step to explore, understand, and document the environment as it exists currently.
Establish a performance baseline. Performance metrics must be developed and agreed upon, along with a plan to accurately measure and regularly report on each one. For example, should the city prioritize time to completion of permits? Or ratio of approvals or inspections passed?
Build a process for continuous improvement. While information sharing and concierge-type services are helpful, ultimate success lies in empowering front-line staff to contribute process improvements as they arise.
Assign ownership of these metrics to a team or executive. Without support and management toward improvement of these metrics, no model will be successful.

What made the New York model so impressive was their understanding of the problem: business owners were losing money, and thus the city was losing tax revenue. This created the urgency needed to get all stakeholders on the bus and moving towards their shared goal, a faster approval process for restaurants in the city. Whether or not case managers are involved, they keyed in a few areas to save time and resources, such as consulting business owners on expectations for their inspections and ensuring those inspections happened just-in-time.

It would be valuable to learn more about the problems Los Angeles and Chicago had set out to solve initially before we can determine the relative value of their models. Chicago chose a more human capital intensive program, with physical presence playing a key role. LA services much of their business transactions through web and mobile applications, which have higher start-up costs, but can be lower cost options in that they scale most efficiently. In an ideal scenario, a balanced approach would be deployed to best serve the most with the least resources required.