Transcending the Cost of Mistrust

1. Transcending the Cost of Mistrust Presented by Beverly Stein Thank you, Sophia, for that welcome and thanks to GFOA for putting us together virtually for this webinar. I want to introduce my colleague, Jennifer. We�d like to take a few questions during the program and Jennifer will tell us how that works. Jennifer? {Jennifer describes questions. When finished click to next slide}Thank you, Sophia, for that welcome and thanks to GFOA for putting us together virtually for this webinar. I want to introduce my colleague, Jennifer. We�d like to take a few questions during the program and Jennifer will tell us how that works. Jennifer? {Jennifer describes questions. When finished click to next slide}

2. This is particularly important today with the concern about budgets and the role of regulation in governmentThis is particularly important today with the concern about budgets and the role of regulation in government

3. Questions and Comments Use the Q&A tool on your screen!

4. What Do We Mean by the Cost of Mistrust? This is not deregulation This is about accountability This is about reducing the cost of unnecessary steps, processes, etc. that don�t contribute to accountability Wouldn�t we have avoided the current financial crisis if we had more regulation? Sometimes regulation creates less accountability, not more (multiple sign offs) What we really want is the best way to get accountability for compliance Paul Light in a commentary as the bailout was considered suggested some actions to take to assure accountability--- keep agency flat (see article) Wouldn�t we have avoided the current financial crisis if we had more regulation? Sometimes regulation creates less accountability, not more (multiple sign offs) What we really want is the best way to get accountability for compliance Paul Light in a commentary as the bailout was considered suggested some actions to take to assure accountability--- keep agency flat (see article)

5. A crisis is a terrible thing to waste! Polling Question: What�s your budget situation?

6. What is the Cost? Time to maintain records, carry out inspections, make reports, etc. Expense of reports, reviews, inspectors, chasing people down, etc. Loss of productivity; loss of credibility Less accountability, not more VP Al Gore called them �agents of mistrust� and estimated 1/3 of federal employees were checking on the other 2/3�s Traffic enforcement - chasing people down; MN timesheets and Hutchinson, pg. 211; OR Ochoco ForestTraffic enforcement - chasing people down; MN timesheets and Hutchinson, pg. 211; OR Ochoco Forest

7. How Does the Cost of Mistrust Build Up? Response to scandals �We�ve always done it this way� Mistrust between citizens and elected officials Mistrust between levels of government Response to scandals: new laws to prevent something from happening again--- closing the barn after the horse is out. Status quo: City of Winnepeg travel expenses (see Armi notes) Mistrust b/t citizens & gov�t: Mistrust b/t levels of gov�t: also non-profits, contractorsResponse to scandals: new laws to prevent something from happening again--- closing the barn after the horse is out. Status quo: City of Winnepeg travel expenses (see Armi notes) Mistrust b/t citizens & gov�t: Mistrust b/t levels of gov�t: also non-profits, contractors

8. Isn�t Mistrust Warranted Sometimes? Yes! The point is to decide when it makes sense to invest in mistrust and when it doesn�t make sense What is the cost:benefit analysis --- what produces the most accountability? Are there viable alternatives that assure accountability? �Trust can be foolish, na�ve, gullible and blind.� -Solomon and Flores Need to make a conscious decision --- the point is to get accountability Before we go on let�s see what people emailed in as their experience with the cost of mistrust --- Jennifer? Quote from Building Trust in Business, Politics, Relationships, and Life by Robert Solomon and Fernando Flores --- their point is that the issue is building trust --- creating, maintaining and restoringNeed to make a conscious decision --- the point is to get accountability Before we go on let�s see what people emailed in as their experience with the cost of mistrust --- Jennifer? Quote from Building Trust in Business, Politics, Relationships, and Life by Robert Solomon and Fernando Flores --- their point is that the issue is building trust --- creating, maintaining and restoring

9. Cost Benefits of Trust Opens up possibilities for collaboration Helps alignment with incentives Focuses on results not process and helps deal with complexity Encourages innovation and risk taking Improves morale �Trust is an opening up of the world, not a diminution of it.� --- Solomon and Flores

10. Questions and Comments Let�s take some of your questions. When have you not been trusted and as a result money and time were wasted and/or you were less productive? Use the Q&A tool on your screen to send your experiences!

11. Your Experiences? Put up some of the examples people emailed inPut up some of the examples people emailed in

12. Traditional Approach to Accountability Usually accountability equated with supervision, rules, audits, inspections, enforcement, and punishment Based on fear and mistrust --- assumes people forced to do something they don�t want to do Cause is less important than failure to comply These may work but they are expensive �People are motivated more often by pride, peer pressure, rewards, and recognition.� --- Osborne and Hutchinson Indirect, lack immediacy, rely on outside forcesIndirect, lack immediacy, rely on outside forces

13. A Quick Poll

14. 21st Century Accountability Be accountable to customers not boss Distinguish compliers from customers Win voluntary compliance Use enforcement as last resort �Compliance is best achieved by establishing and promoting community norms.� --- Osborne and Hutchinson Focus on results --- get the best value from enforcement dollars Enforcement is a blunt instrument Peer evaluations by teachers in some school districts: teachers evaluate each other, monitor, involved in firing and discipline--- they are in closer contact to know We will be looking at ways to do thisFocus on results --- get the best value from enforcement dollars Enforcement is a blunt instrument Peer evaluations by teachers in some school districts: teachers evaluate each other, monitor, involved in firing and discipline--- they are in closer contact to know We will be looking at ways to do this

15. Customer vs Complier Customer�s are the chief beneficiary of government action Compliers deliver obligations on behalf of the community as a whole (the community as the customer) The issue is how to best get the compliers to meet their obligation to the community Important to distinguish customer and compliersImportant to distinguish customer and compliers

16. Alternatives for Compliance Most governments rely on enforcement as main method; expensive and based on coercion Recycling example --- no recycling police, inspectors, ticketsMost governments rely on enforcement as main method; expensive and based on coercion Recycling example --- no recycling police, inspectors, tickets

17. Strategies for Winning Compliance Build support for standards Work in partnership with compliers and other stakeholders Make regulation results based Leave it up to the compliers to figure out what works best Build Support: OSHA, pg. 215 Results based regs: Metals and EPA, pg. 216 Build Support: OSHA, pg. 215 Results based regs: Metals and EPA, pg. 216

18. Strategies for Winning Compliance Educate compliers Move from �gotcha� to help understanding Make compliance easy Simplify rules and streamline processes Educate: US Customs, pg. 217; MN DOR, pg 213; recycling, pg 214 Easy compliance: travel expenses, pg.218, bottle bill in OR Educate: US Customs, pg. 217; MN DOR, pg 213; recycling, pg 214 Easy compliance: travel expenses, pg.218, bottle bill in OR

19. More Strategies to Win Compliance Make quality of delivery to compliers consequential Create service standards and redress Report compliance information People respond to feedback and information Quality consequential: MA EPA, pg 219; Medicare won�t reimburse hospitals for cost of treating patients in their care (see article); FSA call center Compliance information: Enviro Facts, pg. 220; performance measures make good mediaQuality consequential: MA EPA, pg 219; Medicare won�t reimburse hospitals for cost of treating patients in their care (see article); FSA call center Compliance information: Enviro Facts, pg. 220; performance measures make good media

20. More Strategies to Win Compliance Base complier treatment on performance Different tracks for different track records Employ continuum of consequences/rewards Add carrots to the sticks Treat based on performance: Base complier treatment on performance (situational compliance); NRC - more oversight on those with bad records; IRS/Kansas, pg. 220; cap and trade Continuum: Orange County and OR, pg.222; cap and tradeTreat based on performance: Base complier treatment on performance (situational compliance); NRC - more oversight on those with bad records; IRS/Kansas, pg. 220; cap and trade Continuum: Orange County and OR, pg.222; cap and trade

21. Questions and Comments Use the Q&A tool on your screen!

22. Other Types of Approaches Reduce management layers Be transparent with the public and don�t threaten to close the Washington Monument Be collaborative with other jurisdictions and negotiate agreements based on outcomes Peer accountability In addition to winning compliance Paul Light in Washington Post 10/2/08: on financial crisis response; keep agency flat as possible to reach front lines as fast as possible rather than childhood �telephone� game which diffuses accountabilityIn addition to winning compliance Paul Light in Washington Post 10/2/08: on financial crisis response; keep agency flat as possible to reach front lines as fast as possible rather than childhood �telephone� game which diffuses accountability

23. Techniques to Reduce Cost of Mistrust? Identify customers and compliers and learn from them Bureaucracy Busting Review all enforcement activities Are there better methods to achieve goals? Can they be situational? How much currently spending on the enforcement --- is there a cheaper way to get the same or better results �Trust is a social practice, not a set of beliefs.� --- Solomon and Flores BB: Salt Lake County, SJBB: Salt Lake County, SJ

24. What Works? What have you seen work to get compliance at the least cost? Phone lines are open for your calls!

25. Resources Building Trust in Business, Politics, Relationships, and Life by Robert C. Solomon and Fernando Flores Price of Government by David Osborne and Peter Hutchinson Banishing Bureaucracy by David Osborne

26. Give us Your Feedback Go to www.gfoa.org Under �Announcements� (top left-hand side on the home page) click on the link about GFOA-PSG web series Download evaluation form for this event

27. Contact Information: Beverly Stein, President The Public Strategies Group www.psg.us Email: beverly@psg.us Phone: 503-789-3457 Finally, if you want to reach me or Chris, feel free to send us an email or give us a call at The Public Strategies Group and Municast, respectively. Thanks again for your participation and we look forward to your feedback. [end}Finally, if you want to reach me or Chris, feel free to send us an email or give us a call at The Public Strategies Group and Municast, respectively. Thanks again for your participation and we look forward to your feedback. [end}