Leadership in the Fiscal Crisis

Robert O’Neill’s Presentation 2010 WCCMA Summer Conference

Winthrop, WashingtonAugust 20, 2010

Navigating the Fiscal Crisis: Tested Strategies

for Local Leaders

Leadership in Times of Turbulence: Five Stages of Decline

• **Stage 1Stage 1Hubris Born Hubris Born of Successof Success

Stage 2Stage 2Undisciplined Undisciplined

Pursuit of MorePursuit of More

Stage 5Stage 5Capitulation toCapitulation to

Irrelevance or Death Irrelevance or Death

Stage 3 Stage 3 Denial of RiskDenial of Risk

And PerilAnd Peril

Stage 4Stage 4Grasping for Grasping for

SalvationSalvationNote: from “How The

Mighty Fall” - Jim Collins

Leadership in Times of Turbulence:

Markers for Stage 4• A Series of Silver Bullets

• Grasping For A Leader-As-Savior

• Panic and Haste

• Radical Change and “Revolution” With Fanfare

Note: from “How The Mighty Fall” - Jim

Collins

Leadership in Times of Turbulence:

Markers for Stage 4 (cont.)• Hype Precedes Results

• Initial Upswing Followed By Disappointments

• Confusion an Cynicism

• Chronic Restructuring and Erosion of

Financial StrengthNote: from “How The Mighty Fall” -

Jim Collins

Leadership in Times of Turbulence: Opportunity in Crisis

• The Greatest Opportunity

• The New Normal

• Reset Priorities

• Protect Your Most Valuable Asset

Note: from “The Upside of the

Downturn” - Geoff Colvin

Leadership in Times of Turbulence: Opportunity in Crisis (cont.)

• Engage the Outside World

• Reexamine Your Strategy and Business Model

• Manage For Value

• Create New Solutions for Customers’

New ProblemsNote: from “The

Upside of the Downturn” - Geoff

Colvin

Leadership in Times of Turbulence: Opportunity in Crisis (cont.)

• Price with Courage

• Get Fitter Faster

• Understand All Your Risks

• Don’t Forget to Grow Yourself For Next Time

Note: from “The Upside of the

Downturn” - Geoff Colvin

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

Informed Stakeholders

Adaptive and Focused Organizations

Reassess Community Priorities

Re-engineer Organization

Fix Structural Deficits (personnel)

Advance Technological Solutions

Increase Revenues

Partnerships

Management Flexibility and Transparency

What is Working?

What Do Transformed Governments Look 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

Create Opportunities When Others See Obstacles

Six Characteristics of Successful Government Organizations

• Establish early-warning system to discern environmental trends and factors that will have impacts on strategy and timing.

• React quickly to those trends and factors.

• Having “migration’” strategies in place early to weather the storms of changing environments.

Six Characteristics of Successful Government Organizations (cont.)

• Understanding community values and making choices based on priorities.

• Applying the rigor required to determine whether programs are working.

• Never being satisfied with the current level of performance.

• Create alternative migration paths

• Understand their risk profiles

• Know what success looks like

• Determine the upside of stakeholders

Keys to Local Government Transformation

What We Know About Leadership of

Organizations in Turbulent Times

Leadership Matters

We are not talking about the few people at the top

Great organizations focus on anchoring around values and attracting the right people

Discovery Skills

Associating: Connect seemingly unrelated ideas.

Questioning: Ask Why, Why not, What if…

Observing: Scrutinize common phenomena: ex. the behavior of potential customers.

Experimenting: Try out new ideas and approaches.

Networking : Test ideas through a network of diverse individuals.

What Distinguishes the Most Creative Executives?

Note: from “Harvard Business Review ” -

December 2009

Transformative Leaders

• Pick up on subtle indicators that go unnoticed by the rest of us to forecast trends.

• Look further ahead.

• Know more from seeing less.

• Make finer discriminations than average performers.

Note: from “Talent is Overrated” - Geoff

Colvin

Leadership Challenges forTop Performers

They want:To be assigned to your biggest challengeYou to invest in themRecognition

High performers don’t think they have

a job – they have a passion

for the mission