I recently facilitated a city council retreat to set goals and priorities leading into their budget process. One council member strongly advocated for “the lowest tax rate in the region.” The Mayor responded with an incredibly thoughtful and wise explanation regarding the need to link tax rate decisions to both current and future needs (such as aging infrastructure) and that a tax rate should not be an end in and of itself, but a means to accomplish the policy goals of the council and the quality of life goals of the community.
This wise Mayor understood that the tax rate is an important part of the equation to be deliberated, but just one part. A one dimensional focus on the tax rate empowers bad decision making. It is like awarding the cheapest bid for new police cars, but ignoring that the cars included in the lowest bid did not include engines.
The budget is not a financial document so much as a policy document which has financial implications. And the tax rate provides the means to implement the policy decisions of the elected officials… but it should not be an end in and of itself.
A one dimensional obsession with the tax rate, unaccompanied by an understanding that it has a direct impact on the type and quality of services delivered reminds me of the little boy visiting his grandfather who was an avid baseball fan. They were watching the game together when the doorbell rang. The grandfather got up and asked the boy to watch the game and tell him what happened when he got back. When the grandfather returned, he asked what the score was. “Five to four” the boy replied. “In whose favor?” he asked. The boy thought a moment and replied “The fives.”
When the only question is “do we have the lowest tax rate?” the answer is like the little boy who knew the score but not what the numbers really meant. An effective budget process helps the governing body ask the right series of questions to understand underlying implications and in so doing advance their policy goals:
- “What services do we want to deliver?” allows a governing body to answer the philosophical questions of what business lines their organization should be in.
- “How are we delivering these services?” allows a governing body to address efficiency and effectiveness as well as the level of quality they are committed to.
- “Who should we be delivering the services to?” allows a governing body to wrestle with different service configurations for different populations such as central versus neighborhood libraries and non-resident utilization of city services.
- “What are we willing to pay to provide these services?” allows the governing body to determine if they are really ready to pay for what they say they want. If the governing body is unwilling to set the tax rate at a level required to deliver the array of services at the desired quality of service level, then the governing body should rethink whether they want to quit providing a service, whether they want to provide it at a lower quality level, or whether they do not want to provide it as broadly.
- “What are the long term implications of our intended funding level for these services?” provides a fiscal stewardship reality check. What looks like a fiscally conservative decision in the context of a two year time horizon often looks like fiscal irresponsibility when considered over a 20 year time horizon (think under-funding infrastructure needs). Evaluating and understanding the long term implications of current funding decisions is an essential and routine part of any responsible budgeting process.
Asking the right questions in the right order equips governing bodies to engage in more sensible budget deliberations to set tax rates that ensure both fiscal responsibility and a vibrant and healthy future.
In electing me to office, my fellow citizens have entrusted me with the sacred duty of shaping the future of our community. Because I am committed to creating a future that is brighter and healthier and more beneficial to all citizens than when I was called to lead, I will:
- Base my decisions on the next generation more than the next election, committed to the ideal that my loyalty must be to the entire community (both now and in the future) and not merely to those who got me elected.
- Focus on mission, vision and values as the benchmark for my decisions and recognize that my responsibility is the pursuit of the greatest good for the entire community and not the satisfaction of any particular group’s agenda.
- Make decisions based on fact based evidence and not allow myself to be manipulated into bad decisions for the future based on the decibel level of critics.
- Recognize that “it takes a smart man to know where he is stupid” and have the wisdom to be smart. Accordingly, I will value those who have the courage to tell me what they really think and will listen sincerely to those who disagree with me to truly understand their perspective, recognizing that understanding other perspectives makes me a better leader.
- Embrace my responsibility to govern rather than to manage; recognizing that if I am doing staff’s job I am not doing my job, while also understanding and embracing the appropriately exercised governance role of holding staff accountable.
- Place a greater emphasis on solutions than on problems; while refusing to offer solutions before I understand the problem.
- Understand that mutual trust is the foundation for everything and that if I refuse to trust others they will be unable to trust me.
- Protect the integrity of the process more than the rightness of my position; I will fight hard for my issue but then unify behind the governing body when the decision is made because the decision was made with integrity of process, even if I disagree with the outcome.
- Understand that my deeply held beliefs, values and positions will be strengthened, not compromised by courteous, respectful and civil discourse. I will not treat someone as the enemy just because we disagree.
- Treat everyone with dignity and respect because of who I am as a leader… not because of how they treat me or what I think about them.
- Be a role model for civility. I will not treat my colleagues or staff in any way that I would be embarrassed if my five year old child treated someone the same way.
As part of my MBA program at Texas Tech (Wreck ‘em), I am taking a Business Analytics course. Recently, we did an exercise in class where we had to rank how certain we were about answers to random trivia questions (80% sure the answer is A, etc.). It looked like this…
Answer: A or B
Confidence in your answer: 50-100%
(Obviously, if it is less than 50% you would choose the other answer.)
After we completed the questionnaire, the instructor called out the correct answers and we tallied the results to show which we answered correctly/incorrectly and how accurate we were when we guessed our confidence level in our answer. Some of you may already realize this… but we were ALL over-confident. Everyone in the entire room, law school graduates, CPA’s, CEO’s, future CEO’s, and one Managing Director of Development and Collaboration were all more positive that we knew the correct answer than we really did. (I think my statistic was something like when I say I am 70% sure, I am only correct 30% of the time. Scary right??)
Fortunately, for this defeated group of students, this was exactly the point the instructor was trying to prove. We rely on gut instinct and intuition, and we are wrong… A LOT. Then, once the facts do show that we are indeed incorrect, we actually rationalize our error (typically using extenuating circumstances beyond our control). We say things like, “that would have been successful, but we ended up having to switch gears to focus on something else” or “it really was a great idea, but the customer base ended up needing something else…” or “nobody could have predicted that downturn in the economy.” Next, we repeat this situation, time and time again.
So, how do we overcome this over-confidence? Well, the answer is really not that black and white. We can make use of metrics, data, and algorithms, but we have to be careful. As Mark Twain once said, there are “lies, damned lies, and statistics” but, numbers can be powerful and algorithms are more accurate than our gut feeling (seriously, it is true, read this). When you track data over a period of time, find trends, form algorithms and analyze, you are able to look at results in a more unemotional state that lets you make truly informed decisions without your own preconceived notions, desires and bias weighing in. This type of decision-making can also lead to greater efficiency organization wide, because instead of multiple people using debate and brainstorming (or worse, group think), you can implement tools and processes for making quick and accurate decisions.
That said the POWER of over-confidence is actually very beneficial to an organization. Yes, you heard that correctly! When looking back over the course of history, we see inventions and innovations like the first car, first flight, and medical advancements. It is clear that without some creative humans setting lofty goals, brainstorming, and trying again, and again, and again (despite the overwhelming statistics showing they would fail), we would not have progressed as a society like we have. Innovation is the key when starting new initiatives and staying on the leading edge (being in the 16%). Especially in local government, it would be detrimental to eliminate or even stifle the creativity that over-confidence brings to the organization. Sometimes success is not about what would be supported through numbers and data, because only a human can make a JUDGMENT call.
All of this is to say, while we all think we are more correct than we really are, it is important to acknowledge and understand and use it to our advantage. Leaders in local government face an even more unique challenge, because while most are driven to serve the public and create a learning organization, they are also focused on streamlining operations and overall efficiency. As leaders, we must find the right balance to utilize the over-confidence to spur innovation, while being aware of the impact over-confidence has on accurate decision-making.
My boss, Ron Holifield, often says, “I would rather try ten things and only succeed at five than to try three things and succeed 100% of the time.” This is a truly innovative approach and has allowed the entire company to take risks and think outside the box.
So, what are you doing in your organization to overcome over-confidence? Are you using it to spur innovation?
Managing Director of Development and Collaboration
Five Questions to Help You Determine the Right Path
No leadership competency is more critical than recruiting, assessing and developing current and future leaders. And while decisions regarding how to fill vacancies impact quality of operational management – they also profoundly affect employee engagement and motivation, organizational culture, and ultimately mission success. Failure to carefully choose who fills a vacancy as well as how the vacancy is filled – can profoundly impact the leader’s credibility. Any time a vacancy occurs, it is not just those who are drawn to the prospect of being promoted into the vacancy who have a stake in the process… everyone who could be affected by the ripples of someone receiving the promotion feel a stake in the outcome – especially those who will work for whoever fills the vacancy!
In an ideal world, you would always have a strong pool of internal candidates to choose from but that is not always the case… and determining whether to simply promote from within or to open up an external recruitment process can be challenging.
Do We Have an Adequate Pool to Promote from Within?
The following questions will assist the leader in evaluating whether to promote from within, or to conduct an external recruitment.
- Do you have internal prospects with the essential technical qualifications to do the job? Too many organizations confuse essential and ideal, and as a result miss out on promoting exceptional candidates.
- Do those internal prospects who meet the essential technical qualifications have a track record of success in their current position? Some people make success happen and others are along for the ride. Know the difference.
- Have those internal prospects, who meet the technical qualifications and have a track record of success, completed leadership development programs to prepare themselves for promotion? Look for employees who are investing in their own growth even if internal development programs are not offered.
- Do those internal prospects, who meet the technical qualifications, have a track record of success and have they completed preparatory leadership programs while maintaining a reputation for a positive attitude and great teamwork among their current employees, peers and supervisors? Unpleasant people who are promoted become unpleasant bosses.
- Are those internal prospects who meet all of the above standards philosophically aligned with the organization’s stated mission, vision and values and do they have a reputation for walking the talk? Nothing damages credibility more than “do as I say not as I do” leadership.
These questions form a bit of a funnel, moving from the easiest criteria for evaluation, to the more challenging (but still critical). Proceeding through each of the five questions, it is likely the number of prospects still considered viable diminishes. In an ideal situation, you can answer all five questions affirmatively for at least three prospects. If so, an internal recruitment process only should be adequate. However, still opening up the process organization wide ensures everyone has a fair opportunity to compete, and that someone who has great potential has not gone unnoticed.
Remember, these questions are not designed to determine who to hire… they merely help determine whether adequate options exist internally to avoid an external recruitment process. Hiring decisions are almost always much better if options are available to contrast and compare to.
If you cannot answer in the affirmative on all five questions for at least three internal prospects, it is likely that an external recruitment process is appropriate.