Trends for Local Governments to Watch in 2014

It’s that time of year when pundits and poets lob their loftiest thoughts on the near-term future into cyberspace.  Not wanting to be left out of the melee, I’m offering the trends I’ve been watching that could have a big effect on local governments…things we ought to be not only watching, but developing strategies to address.  My thanks to Trendwatching.com, The Economist, The Futurist, About.com, and the Christian Science Monitor for their insights.

 
1.  In 2014, the economy will grow faster, unemployment will decline, inflation will stay low, and the housing market will continue toward normal YET buying and owning things will increasingly go out of style in favor of renting, paying-to-use, and subscribing, which will have implications for our sales tax-based revenue streams.

Economists are generally optimistic for small gains in GDP; forecasts anticipate GDP growth of 2.8% to 3.2%, with unemployment dropping to 6.3-6.6% and inflation running at 1.4-1.6%, well below the Federal Reserve’s target of 2%.  These are all good signs for the economy, and good signs for local governments.  Borrowing rates will stay low, so infrastructure investments should accelerate.  A long-term view, however, shows sales tax revenues weakening due to social changes including online purchasing and the growing tendency to pay for the temporary use of things rather than buying them.  Smart local governments will begin developing plans to offset revenue losses from weakening sales taxes over the next few years, and will look for systems to reliably capture use taxes.

2.  Society will be increasingly “crowd-shaped”.  From IBM’s Dublin research lab that used smartphone data to identify the most-frequented transportation routes to remap transit, reducing average travel times by 10% and increasing ridership, to the ICMA Conference planning process that requires crowd-sourcing of conference offering ideas, our citizens will increasingly become accustomed to being given the opportunity to have their ideas and expectations shape policy and other decisions.  Local governments will need to navigate the First Amendment and other considerations that some have used as reasons NOT to move more quickly into crowdsourced solutions.  Even fund-raising for special projects by crowdfunding (think Kickstarter or Indiegogo) will be embraced by forward-thinking local governments.  Everything from library hours and collections, to park and recreation offerings, to crime prevention and response can be reshaped by intelligent systems that aggregate data on preferences or behaviors of citizen/customers. 

3.  Privacy.  The Pew Research Center reports that 86% of US internet users have attempted to remove or mask online activities.  People want to be served, but not watched.  As local governments struggle to engage citizens through electronic and other means, new strategies will be needed to build trust and demonstrate that outstanding, customer-focused service and open, transparent communication can be achieved without undue intrusion.  Don’t be frustrated by the reluctance of many citizens to provide electronic information; provide ways for them to customize and personalize their information requests, and document systems that will protect their privacy. 

4.  The Internet of Things will focus on people.  Gartner predicts that the internet of connected things will add $1.9 trillion of economic value to the global economy by 2020.  In 2009, there were 2.5 billion connected devices…In 2020, that number will rise to 30 billion connected devices.  Cars will soon display a driver’s heart rate and will increasingly warn and adjust for road hazards.  Products will link to deliver personalized versions of allergy-sensitive clothing.  Headphones with integrated monitors will sense a user’s mood and select mood-appropriate music to play.  Online grocery delivery apps will provide pre-packaged grocery bundles so that busy consumers will only have to choose a “lifestyle”, then the products will be selected for them based on historical preferences.  What will that world mean to local governments?  Increasingly, pressure will be applied to allow for individualized service options based on price, geography, age or other demographics, health, etc., and laws and regulations will be forced to catch up, while still insuring equal access to services for all residents and taxpayers.  That analysis and preparation should begin now.  

5.  Guilt-free consumerism.  In a global study reported on Trendwatching.com, one-third of global consumers (2.5 billion people) were identified as “aspirational consumers”; 92% of these people reflect a desire for responsible consumption, and 58% trust their favorite brands to act in the best interest of society.  What this means to local governments is that increasingly it will be crucial to demonstrate a commitment to reducing the government’s negative impact on the planet, and likewise to demonstrate a commitment to helping citizens to reduce their own impacts of consumption and other behavior.

6.  Following the disastrous year for politics in Washington, local governments will need to develop and implement specific strategies to strengthen public trust in government.  While public confidence is worse for the federal government, this general frustration with the inability to move forward cooperatively will continue to spill over on to local governments.  This will be particularly important as the 2014 election season ramps up and candidates use the lack of public trust as a campaign issue.  Smart local governments will earn and strengthen public confidence by objectively reporting their performance successes, establishing and communicating new collaborations across issues and agendas, and proactively reaching out to inform candidates and potential candidates of their performance results quickly and consistently.

7.  Pension reform.  With recent rulings that have spanned the gamut from allowing pension cuts in Detroit to preventing certain pension changes in San Jose, CA, pension reform efforts will continue to be the subject of ongoing legal challenges.  Cash-strapped local and state governments should watch the legal evolution of this topic closely as they struggle to fund long-term liabilities in the face of limited revenues.

8.  Demographic shifts.  Hispanics, women, seniors and young voters will have another undeniably significant impact on the 2014 mid-term elections, as well as on service demands and social trends.  Local governments should be thinking about how they will demonstrate their commitment to all minority groups and be able to illustrate their long-term plans for serving specific demographics.

9.  Mental health.  Increasing attention will continue to be focused on the many gaps in services and funding for those at risk due to mental health and substance abuse issues, particularly in light of the accelerating evidence of mental health as a related cause of mass shootings.  There is no single solution to the mental health crisis, but local governments must be conveners and facilitators of change, and must help to implement collaborative solutions with non-profits, the health care industry, insurers, law enforcement, and the faith-based community.

10. The Face of Poverty.  Recent trends show that middle and low income families are now making less in terms of inflation-adjusted dollars than they were in the 1970’s.  This income gap will not only affect the overall economy’s efforts to rebuild, but it will have long-term impacts on access to higher education and training for 21^st century jobs.  If we are to truly restore the American Dream, cities and counties must lead the effort to bring communities together to strengthen economic opportunity, with programs like the “Bridges out of Poverty” effort.

All this means that innovative, well-managed local governments will need to be increasingly aware of external trends, responsive and flexible in adapting to change, and will need to build support for change through “moral momentum and clarity of purpose”, as noted by Randy Pruett in Texas CEO magazine.  Your focus on your core mission and purpose has never been more critical.

The Three Keys to Sustainable Creativity

The Three Keys to Sustainable Creativity

In his book The Accidental Creative, Todd Henry states that there are three components to being sustainably innovative: 

Prolific + Brilliant + Healthy = producing great work consistently and in a sustainable way.

He goes on to say that many creative people consistently perform very well in two of these areas, but are lacking in at least one of them.  For example:

Prolific + Brilliant - Healthy = Burnout

Hardworking, highly motivated and productive people are often the ones bosses look to for heroic efforts, but they rarely can sustain that level of productivity indefinitely, and often fall to burnout when they can no longer sustain their pace and the fruitfulness of their ideas.   Without focusing on maintaining their health, all the hard work can be for naught, as family relationships, friendships, and personal support suffer.

Further, to be prolific means that you not only have great ideas, but that you actually do something with them.  You have to have the discipline, the teamwork, and the competencies to deliver.  If the focus is too much on being creative, but not on the real-world application of the ideas, the result can be a great deal of work for little value to the customers served.

Brilliant + Healthy - Prolific = Unreliable

Lastly, brilliance is about the ability to see clearly and incisively to the core of the problem, and identifying workable solutions quickly.  Being healthy and prolific but lacking the ability to cut to the core of a challenge and identify ways to improve that can be implemented can make work groups churn unproductively without solving the real-world problems that demand attention.

Healthy + Prolific - Brilliant = Fired

Where do you and your work group fit?  What strengths can you build on, and what will you do to enhance those areas that aren't functioning at peak?  Remember to think of all three  --  striving to be consistently Prolific, Healthy, AND Brilliant -- in order to have a sustained capacity for innovation in your organization.

Leadership means never having to say "No negotiating!"

This week, as the people of America and the world watch, Congress stumbles through the shutdown showdown.  Regardless of one's politics or perspectives on the content of specific solutions, it's a good time to reflect on the leadership lessons that a major conflict like this one presents:

1. Most conflicts end in negotiation, so if we want to save time and relationships, start negotiating at the front end. Conflicts in which either or both sides believe that their position is non-negotiable may end up achieving compliance with a forced solution, but research and history show us that compliance with a solution doesn't lead to agreements that last or that are enforced as agreed to.  In order for agreements to be kept as agreed, the parties must develop commitment, and effective negotiation, in which everyone finds a way to collaborate on important values, is more likely to lead to commitment to the solutions.
2. "Lines in the sand" don't resolve conflicts.  Before we pre-announce that there are lines that cannot be crossed, we'd better be ready to accept the consequences of impasse, because public statements of rigid positions rarely lead to quality conflict resolution--they lead to gridlock and impasse because everyone is backed into a corner and must save face by refusing to compromise.  And if impasse is going to be the likely result, we'd better have a strategy for successfully managing the absence of a resolution before we back anyone into a corner with "lines in the sand".
3. Win-win negotiations generate significantly better quantified results, and they work to enhance the relationship in the process.   A commitment to win-win negotiating has been shown to produce better results over the long term on an objectively quantified basis.  Traditionally, people may be reluctant to go the extra mile for win-win negotiations because they feel there is not an adequate basis of trust.  But pursuing win-win negotiations as a default strategy helps to build the trust that will produce better outcomes in the future, so it's a better approach overall.
4. Win-win negotiations require that each side identify their own and the other party's UNDERLYING NEEDS--not just positions.  A labor union's position may be increased wages, but its underlying need may be greater job security for members, so perhaps by agreeing to prevent lay-offs and extending the steps of salary growth, the organization can reduce the financial impact that higher wages would cause.  Creative solutions involve exchanging what's valuable to the other side but lower cost to you.
5. We will never resolve conflicts if we aren't willing to listen openly and constructively to understand the other side's perspective.  Listening is the most important leadership skill we have in our toolkit.

Here's hoping for cooler heads to prevail! 

 

Katy Simon

President, Simon and Associates Consulting

ksimon@simonandassociates.us

775.232.7077

Follow me on twitter @katysimoncm

What's your resilience capacity?

This week finds me in Boston for the 99th annual conference of the International City/County Management Association, where the executive leaders of the world's cities, counties and other local governments come to connect and to better lead the 50+% percent of the world's population that lives in cities into the future.

As the conference opened, an apropos theme song played: Ain't No Mountain High Enough...to keep us from our goal of a world that works for everyone.  And how aligned that theme is with the resurgent spirit of the city of Boston and Boston Strong, in rising out of the ashes of this year's Boston Marathon bombing.

The people of Boston have demonstrated a characteristic that is increasingly critical for our communities--resilience.  As noted on the website of the Rockefeller Foundation's 100 Resilient Cities Challenge, building resilience is about making people, communities and systems better prepared to withstand catastrophic events, both natural and man made.  No tragedy of mass violence, no natural disaster, no "mountain" of economic devastation can defeat resilient people and resilient communities.  The core characteristics that resilient systems share, both in good times and in challenging times, are:

• Redundancy or use of spare capacity to insure a back-up or alternative when a vital system fails.
• Flexibility--the ability to change, evolve and adapt in the face of disaster.
• Limited or "safe" failure, which prevents failures from migrating or "rippling" across multiple systems.
• Rapid rebound--having the capacity to quickly re-establish functions and provide continuity of operations.
• Constant learning, with feedback loops that anticipate and implement new solutions as conditions change.

What's your resilience capacity?  What can you and your team be doing today and tomorrow to best provide the needed leadership that builds resilience, whether it's about food security, energy use, smart grid technology, floodplain management, or the establishment of partnerships with community organizations for business relocation if needed?  What should we all be doing to honor the spirit of Boston Strong?

Learn more at www.rockefellerfoundation.org/blog/building-resilient-cities.

Innovation + Action

As I write this, a shooter has fired on workers at the Navy Yard in Washington, DC. SWAT teams have mobilized, and victims have been rushed to area hospitals, with at least 12 dead.  Flooding still rages in Colorado, and heroic rescues have been watched by millions worldwide, while more than 17,000 homes have been lost or damaged.  And off the coast of Italy, the shipwrecked Costa Concordia is being righted in a first-of-its-kind salvage operation involving a ship two and one-half times the size of the Titanic, with only one chance to get it right.  Our thoughts are with all the courageous people dealing with these historic crises.

 

Each of these events grabs our hearts and our attention and each demands a level of disciplined execution that seems almost unimaginable.  Lives are at stake, and the world is watching as dedicated law enforcement officers, fire and rescue workers, engineers, and just plain compassionate citizens organize and take action to do extraordinary things...things that they would never have wished to be called upon to do.

 

These incidents and effective management of them illustrate some of the very same principles we know about innovation + action.

1. The greatest achievements come from shared purpose.
   Whether it's finding and neutralizing an active shooter, or organizing the logistics of a complicated and dangerous rescue, or simply finding a better process by which to meet our customers' and citizens' needs, a clear, shared purpose will focus and energize our actions.
2. Use and share data to make better decisions.
   We can't act effectively to move forward without objectively knowing where we are and what others around us require from us.  Making good decisions demands that we take the time to determine what we need to know, discovering it, and then sharing the information with those whose performance we rely on.
3. Communicate fully, timely, inclusively and regularly.
   Timely and thorough information to those affected is crucial when facing change or action, and is most effective when people are provided knowledge of what the problem or situation is, what you plan to do about it, how it will affect them, how regularly you will update them, and then what the results are once you've taken action.  This builds trust and confidence, and will help others to give you the benefit of the doubt when you need to move forward through uncertainty.
4. Have courage.
   In order to create something that does not yet exist or to take action toward creative solutions, we need to clarify the goal and purpose, use data strategically, communicate, and then demonstrate the courage to monitor results transparently, correct course if needed,  but keep moving forward to achieve the shared purpose.
   The future belongs to those who risk.

Katy Simon, ICMA Credentialed Manager
President, Simon and Associates Consulting
ksimon@simonandassociates.us
775.232.7077 (wireless)