As we all watch the City of Detroit bankruptcy proceedings unfold, one has to wonder where do we go from here? As messy as it looks, at the end of the day the debts of the city will be settled through this process and the city will have a relatively clean financial slate. But what then? Remember that part of this process is the restructuring of the city’s operations, and that I hope that doesn’t mean that they contract out every service and declare victory.
Much thought and care needs to be given to the question of not only how do we deliver an a reasonable level of service, but how do we truly return Detroit to greatness? If you look outside of the bankruptcy headlines, you will see that lots of private investors both big and small are betting on Detroit. What may be even more important though are the people that are starting to come back to the city to live. They see the same thing that the big investors see: an opportunity to get in on the ground floor of something special.
In this vision lies the future of the city, and Kevin Orr has a duty to be sure that what he leaves behind isn’t limited just a set of balanced books. Detroit is uniquely positioned to offer opportunites and experiences that can’t be replicated elsewhere, and it will continue to attract urban innovators determined to participate in Detroit’s resurgence. The one outcome that they can’t control is where does the City government go from here? That rests solely on Mr. Orr. He must not squander the opportunity for the City to provide their piece of a great place and that is the services that we all look for when choosing a place to live, work, and play. If he fails in that piece of the mission, this will have all have been for naught because the city will not be able to sustain itself. Any city’s economic engine is the ability to attract and retain residents and businesses, and Detroit’s post bankruptcy ability, or lack there of will be the legacy of one man.
I hope he gets it right.
Local government in Michigan has been operating under the shadow of the Economic Vitality and Incentive Program, or EVIP for the last two years. The EVIP program has three basic components, transparency, cooperation & consolidation, and employee compensation. The State of Michigan has set arbitrary requirements that if met, allow local government to get 2/3 of the revenue sharing money they had previously received without any strings. Why did this happen? The state needs to create incentives for good government, because the locals clearly can’t achieve these objectives without help from above (please note sarcasm).
What has been accomplished through EVIP is nothing short of remarkable! We have a program that has created new levels of bureaucracy at both the state and local level. Added additional costs. Stymied cooperative efforts. Confused labor negotiations and contract administration. Most importantly we have established a system that rather than spur innovation, encourages communities to manage to the prescribed targets.
Hitting a target is easy, it’s like checking a box…done. But is that what we really want? Take the second leg of EVIP. It requires one additional cooperative effort each year to receive funding. Knowing that I need “ONE” every year, how many do you think I will implement on an annual basis? When the state tells me to get funding I must publish certain information on my website, what gets published? Its not what I think my community cares about, I “HIT” the target. If I am negotiating labor agreements can I maximize my leverage when certain outcomes are predetermined, or do I ensure that I hit the target and receive our funding?
Clearly EVIP is needed. Without the new vision from the state as it relates to transparency, cooperation and managing benefits, local government could never have conceived of such innovations. The hundreds of examples of cooperation and consolidation that already existed before EVIP should not be interpreted as working together or creating efficiency. The countless ways that locals shared information previously doesn’t mean that we are being transparent. And if we aren’t following a one size fits all approach to benefit design, then we must not be managing our benefits.
Fortunately, that has all been figured out for us. We now have a target to hit, and we will it it every time.
One good thing about working in local government is just when you think that you have seen it all…surprise! The latest “you have to be kidding moment” comes courtesy of the federal government. They are proposing to make municipal bonds taxable as one of the ways to plug the holes in their budget. The same municipal bonds that help local government to build critical infrastructure.
What’s especially interesting about this idea is it doesn’t just mean that investors pay more in taxes. It has the added effect of raising the cost of every local infrastructure project in the United States of America! That’s the same US of A that has identified so many deficiencies in local infrastructure that most consider it to ba a crisis, is now considering a way to make projects less viable and more costly. Municipal bonds are currently funding over $3.7 trillion worth of essential infrastructure across the country. Ninety (90) percent of this amount went to improve schools, hospitals, water and sewer facilities, public power utilities, roads and public transit.
I recognize that the federal government has budget issues that are almost beyond definition, but this “solution” takes money away from local projects and throws it into the federal abyss. Every dollar the feds will take in taxes, is one less dollar we have to maintain our communities. Is this really a step forward?
Mark me down as a no.
This Blog Post by Heidi Grant Halvorson is worth checking out, as it debunks the notion that we should only give positive feedback. There is a classic scene in the movie “Meet the Fockers.” In the movie, the lead character’s (Greg) father-in-law is stunned to find out that they make 9th place ribbons. He makes this discovery while perusing a shrine to Greg still maintained by Greg’s parents that feature a number of the mementos to mediocrity. I think it rather brilliantly illustrates the idea we should only encourage and never criticize. Criticism though is an important and necessary component of staff development, and understanding when to use each is important.
So what purpose does positive and negative feedback serve? Positive feedback does help to increase staff commitment by enhancing their experience and boosting their confidence. Negative feedback is more explanatory as it provides feedback on where staff needs to spend place additional effort, as well as offering insight into how they might improve.
With that understanding, you can see that positive and negative feedback each serve a purpose. For an inexperienced staff member, positive feedback may help them to stay optimistic and comfortable given the challenges they are facing. This added encouragement is something novices tend to need more than the seasoned pro. When you are dealing with an expert, and they essentially are looking for those opportunities for incremental improvement, it’s negative feedback or criticism that will help them achieve at the next level.
Keep this lesson in mind when trying to develop staff. This isn’t second grade soccer, so we don’t have to hand out 9th place ribbons. Negative feedback may be exactly what certain members of your team need to be on top of their game.
After a long break, I am glad to get back to blogging. While researching ideas, I read a great Blog by Rosabeth Moss Kante called Nine Rules for Stifling Innovation. While we all probably think that we would never engage in these type of activities, don’t be so sure. You’ll definitely want to read the complete post, but briefly the 9 rules are:
- Be suspicious of any new idea from below
- Invoke history.
- Keep people really busy.
- In the name of excellence, encourage cut-throat competition.
- Stress predictability above all.
- Confine discussion of strategies and plans to a small circle of trusted advisors.
- Act as though punishing failure motivates success.
- Blame problems on the incompetent people below
- Above all, never forget that we got to the top because we already know everything there is to know about this business.
If you’re honest you probably engage in some of these practices from time to time. recognize it, and take steps to foster, not hinder innovation.
Can you feel it? It’s the time of the year when Jack Frost starts to nip at our nose and we all dream of what could be. No not the holidays silly. The lame duck legislative session. Every lame duck session is packed with action. Lets be honest, its a time in the legislature when issues that have been debated at length, but languished because they are tough votes tend to move. It’s part of the process. What lame duck shouldn’t be used for is ramming through major policy changes that have not had the benefit of debate and our best collective thinking. Unfortunately, that is exactly what is happening with personal property tax(PPT) reform.
Just to be clear, I am not in favor of the PPT. It’s a bad tax. It’s tough to administer and can be a disincentive to business investment. That said, the reality is the PPT provides critical funding to vital local services like police, fire, parks and the like and they are already drastically underfunded. This means any reform must provide guaranteed replacement revenue. The plan that is on the table attempts to provide replacement revenue but requires a statewide vote, potential local referendums, new levels of government,added bureaucracy, and the possibility of zero replacement revenue if votes fail. Oh by the way, at this point we only have a plan outline. We don’t even have bills to read. So what we have on the table is a plan with more questions than answers.
So my question is what’s the rush? If we all agree reform is necessary, why hurry such important tax policy changes without making it the best system we can? We have toiled for years under a cobbled together tax system and that hasn’t exactly been working out so well. There is too much at stake, and no reason to do this in the next two weeks. Let’s start a new trend and focus on getting it right, not just getting it done.
Well It’s finally over. As of this morning we do not have to watch an endless stream of political ads that tell me yes means no and which candidate is the only real American. My Facebook friends will no longer have to share their political wisdom and personal beliefs, and my twitter feed won’t be filled with “he said, she said” tweets. I welcome back with open arms commercials to grow hair and lose weight. I am excited to see pictures of my friends dog wearing a tuxedo and tweets about how amazing the new IPad and how it will change my life. Yep life is back to normal.
Unfortunately we are still left with a polarized political system. Normal also means far too many of our elected officials are guided by views at the far ends of the spectrum, and somehow compromise has become a four letter word. The challenges that remain are significant. I implore my friends on both sides of the aisle to work together to make Michigan and the United States the best they can be. It is in everyone’s best interests to find common ground and develop sound public and fiscal policy that moves us forward. The alternative is unacceptable.
The American model of democracy is the envy of the entire world. One person, one vote, the pursuit of happiness, free speech, you know that sort of thing. Here we have the chance to vote on issues that matter without fear that money or greed would influence our system, we can always rely on truthful information from all sides and gold at the end of every rainbow.
Well at least we have some of those things.
With the election rapidly approaching, I feel compelled to weigh in on Proposals 5 and 6. In my view, the impact of a yes vote would be devastating. In case you have elected, no pun intended, to tune out to the messaging surrounding the proposals let me give a quick overview. Proposal 5 would permit a minority in the legislature to prevent any change in taxes no matter the need or reason. Proposal 6 would ensure that the only viable international trade crossing between Southeast Michigan and Canada is privately controlled held by a single individual. Frankly one needs only follow the money to figure out who benefits and who doesn’t.
Proposal 5 is simply put the let minority rule proposal. It boils down to this, even if 135 members of the Legislature voted in favor of closing a tax loophole, ending a special interest tax break, or raising or lowering a tax, just 13 senators could block it. How hard do you think it would be for a billionaire to control the votes of just 13 state senators? Sadly not very. Imagine the power well funded special interests could wield if just 13 legislators could block a policy supported by the other 135 members of the House and Senate. Scary stuff! Not exactly what the founding fathers had in mind.
Proposal 6 seems so simple, let the “people” decide. In reality this is the billionaire full employment act or the international free trade restriction proposal. The “people” in this case are a single family that have made a fortune controlling this international crossing. In a post 911 world, how can we rely on the whims of a single family to manage this critical trade route, which by the way was built 83 years ago? More importantly the economic impact that would be provided by an additional crossing would be extraordinarily positive for southeast Michigan, just not for the ruling monarchy. This region stands to benefit greatly from expanded import/export capacity in the form of jobs and investment. There is only one beneficiary from not building an additional crossing, and it’s not you.
I think the choice is abundantly clear. VOTE NO on Proposals 5 & 6
If I can figure out how to license the phrase cooperation and consolidation, I could retire tomorrow. As I travel around the state and country working on local government issues, I find that it may be the most overused, and in my view, over heralded phrase in local government. My concern isn’t that I hear it so much, but rather that there is a belief that this will solve the ills created by of a decade of declining revenues and a couple generations worth of underfunded legacy costs. I think we are more likely to see Sasquatch flying a space ship than we are to solve a broken financial model with consolidation.
Contrary to popular belief, local governments are for the most part well run and operate fairly lean. Are their advantages to be gained by cooperating with your neighbors or consolidating services? Probably. Economies of scale generally will yield efficiencies that can lower the cost of service delivery, but to what end? If our starting point is two communities that do not provide services to the level we all expect, isn’t it like combining two cars in need of repair and declaring victory because it drives? Is this our vision for the future?
I don’t believe that the greatest challenge is being more efficient nor is the greatest benefit in combining departments or merging services. The single biggest financial burden that our core communities are struggling with are legacy costs. Pending legislation in Michigan will help communities to draw a line in the sand and many already have, but they have no ability change the cost structure for those who have vested benefits or have left service. More needs to be done. In many established communities, the ratio of retirees to active employees is more than 2 to 1 with far more being spent on healthcare for retirees than is spent on active employees. The hurdles both on both the human and political level to address this are substantial, but without real change it is not inconceivable that the only services a community might offer will be to hold elections, collect taxes, and pay and insure retirees.
It’s simply unsustainable.
So if you’re like me, half your friends on Facebook post uplifting pics, sarcastic pics, stupid pics, people I would like to punch in the throat pics (okay I do like that one). Most of the time I either ignore, chuckle, or shake my head as appropriate and move on to bigger and better things. This one however resonated with me.
“Everybody is a genius, but if you judge a fish by its ability to climb a tree it will live its whole life believing that it is stupid” This made me wonder to myself, how many tree climbing fish do I know? Or more importantly, how many fish am I trying to get to climb a tree?
How much energy might we be wasting trying to get conformity, or trying to get people to do something they are not wired to do? The answer to that question might be scary. Are the right people not on the bus, or are we putting them in the wrong seats? As leaders we need to leverage our resources to maximize our output. That is not going to be achieved with an extensive tree climbing training program for our fish, and I certainly don’t want to be judged by my ability to teach fish to climb.
Now if there isn’t a roll for fish in our organization, that is a different problem. But we need to let the monkeys climb and let the fish swim. In other words, let people do what they do best. Leverage their skill sets to your mutual advantage. I regularly see marketing people struggle to produce a spreadsheet, and it falls short of the mark anyway. If they had asked anyone in the finance department it would have been done in minutes, and done better. Conversely, I can try and make an accountant artistic, or maybe I could let them do accounting. Different skill sets, different roles perhaps?
Justin Verlander isn’t judged by his ability to play shortstop or hit a ball. Barry Sanders wasn’t kept out of the hall of fame because he never kicked a field goal. Are we judging our fish on their tree climbing? I think that Big Al might be on to something.