Bloemfontein, Free State, South Africa August 28-29, 2008

1. Presentation of Commissioner Valerie A. Lemmie Public Utilities Commission of Ohio at the Fourth Provincial Senior Management Service Conference: All Hands on Deck to Speed Up Service Delivery Bloemfontein, Free State, South Africa August 28-29, 2008

2. Managing Organizational Change “The time is out of joint, O cursed spite that ever I was born to set it right!” Hamlet (I.v.) William Shakespeare

3. Building a Responsive and Effective Local Government Organization: The American Experience Presentation will cover: • Ideas that inspire and guide American democracy and our democratic institutions. • Politics of governance. • Local government organizational form. • Dynamics of change: How Global Economy, Devolution and Wicked Problems are changing role and responsibilities of local government managers. • Role of public managers in leading andmanaging high performance organizations. “The American experiment is still in the laboratory. And there could be no nobler task for our generation than to move that great effort along.” John W. Gardner

4. The Fundamentals of American Democracy “In sum, democracy is invariably popular self government and variably something else – something culturally specific that has adhered to it. In the United States, that something else has been individual self-determination.” Richard Wise • Lockean Empiricism and Romanticism inspired founding fathers to adopt popular self-government or democracy as governance structure. • American Democracy founded on principles of sovereignty of the people, legitimacy of government from consent of governed, power of government limited to public good.

5. The Fundamentals of American Democracy • While these principles remain the ideals that inspire and guide American Democracy, it is our governance structures and our civic character than moves democracy from an abstract philosophy to real life – something that is palpable and tangible – our enactment of democracy.

6. Politics of Governance “We must look beyond mere mechanical refinements of the legislative process or of the executive operation. What we need to understand more clearly is the relationship of people in a representative democracy to its government. The “citizenship gap” – that dead-air space, so to speak, that vacuum – between the people and their government…is a greater threat to our government and our social structure than any external threat by far.” Hubert H. Humphrey • Constitutional Framework: • The constitution • Laws • Rules • Procedures

7. Politics of Governance • Electoral Framework: • Citizen beliefs, attitudes and values. • The level of public participation in the governance process. • The knowledge and commitment of citizens to public work.

8. Politics of Governance • If we think of political structure and civic character as inputs into our democracy, then its outputs – the expectations citizens have about what they expect from government, include: • Promulgation of individual liberties • Freedom • Justice and Equity • Efficiency, effectiveness and economy • Fix problems individuals can’t

9. Politics of Governance • There are four distinct periods in our history where our democratic practices reflected changes in political structures and civic character. Michael Schudson describes them as periods of: • Political assent – rule by gentlemen elites elected by consensus in open elections. • Political parties – rule by non-elites who educated and mobilized voters and developed political leaders. • Politics of Information – Progressive Era reform ushered in professional public management and removed emotions associated with political party affiliations. • Rights Era - Political participation takes place beyond the voting booth and reflects legal claims upon government.

10. Local Government Organizational Form: Politics Versus Scientific Management “The role of the public executive is to be the get-it-all-together person…it’s best practitioners are those who are able to mold specialists into groups, organizations, and networks to get something done in the public interest.” Harlan Cleveland • Latter part of the 19th century saw exponential growth in population of cities and towns as factories increased production to sell goods nationally rather than just locally. Farmers and immigrants flooded into cities to fill these new jobs. • The dramatic changes in the urban landscape brought fourth two competing visions of governance. • One was the “boss” system, which saw personal power, connections and patronage as the way to “get things done.” • The other was the progressive reform movement which saw experts, efficiency and “public service” as the way to build and run a city. “The cities were where most government was, where most action was, where most problems were [and] where the services of public administrators could most dramatically be more effective, more honest, and less costly.” Frederick C. Mosher

11. Local Government Organizational Form: Politics Versus Scientific Management “What was at stake was who would control the future of the metropolis – political bosses who engaged the masses but served their own ends, or the middle-and upper-class elite reformers who, through the use of experts, would bring efficiency and economy to the administration of government.”

13. Local Government Form Management by Strong Chief Executive • Prior to municipal reform movement operations of city government performed through boards and commissions, each elected on long ballots, making it difficult for citizens to know much about individual candidates and more susceptible to party influence. • The theory was democracy strengthened by citizens voting for as many candidates as possible.

14. Local Government Form Management by Strong Chief Executive: Council-Management Government • Reformers saw Council-Manager form as the best way to ensure local government was resistant to the evils of political party machines as it shifted power away from party bosses to professionally trained experts: • Small number of nonpartisan elected officials. • Appointment of a professional administrator to manage day-to-day operations under the policy guidance of the council. • Authority of the manager to appoint key executive officials. • Council acts as legislative and executive authorities, city manager responsible for government operations. • Incorporation of “Scientific Management” theory into the practice of local government administration.

15. Local Government Form Management by Strong Chief Executive • Most American cities have either a Strong-Mayor, Council-Manager form of government, or a hybrid of the two. • Common feature, strong chief executive, whether elected or appointed, responsible for the executive functions of municipal management. • Today, Strong mayors appoint chief administrative officers to handle day-to-day management responsibilities, and city managers, share more administrative authority with the mayor. Both promote professional public administration. • Mayors are “masters of the art of politics,” and rely on professional staff to manage governmental operations. • City managers non-partisan “masters of management” as accountable for government operations.

16. Local Government Form Management by Strong Chief Executive • City manager requires council approval of actions. Mayor can undertake executive actions without council approval. • Mayor has a political machine behind her, city manager stands alone. • Success of both depends on an effective and responsive governmental organization.

17. The Dynamics of Change: Why What We Use To Do Is No Longer Good Enough • If you drop a frog into a pot of boiling water it will jump out. But if you put that frog into a pot of water and gradually raise the temperature, it will not notice the temperature change until its too late. • The same is true of local government managers who labor in bureaucratic organizations lulled into a false sense of security. Organizations will go the way of the dinosaur if they cannot respond effectively to changing demands and conditions.

18. The Dynamics of Change: Why What We Use To Do Is No Longer Good Enough • Rigid, slow moving bureaucratic approach won’t work in the 21st century: • Local government structures rooted in command-control management model advocated by Frederick Taylor. • Taylor believed management was the head, should do the thinking work; workers were the hands, should do technical work. • “Thinking” was management responsibility and “doing” was left to the workers.

19. The Dynamics of Change: Why What We Use To Do Is No Longer Good Enough • Model worked in the industrial age, when most workers were not highly educated and the nature of business was production. • As America moves to service and information technology based economy (every year more manufacturing is shipped overseas), model no longer works. Today, everyone in the organization must think and do, lead and manage.

20. The Dynamics of Change: Why What We Use To Do Is No Longer Good Enough • The fabric of society is changing. More economic, racial and ethnic diversity. • The U.S. baby boom generation shifting balance of wage earners and retirees, creating conflicting expectations for public sector. • Fiscal constraints and institutional limitations at all levels of government require new thinking about role of government and civil society.

21. The Dynamics of Change: Why What We Use To Do Is No Longer Good Enough • Growing crisis of expectations – Americans use to high quality on demand services from local governments, who can’t keep pace with higher demands and fewer dollars. • Technological advances are constantly changing how we work, play and interact with others. • Poverty – Institutionalized, turning the American dream on its head.

22. The Dynamics of Change: Why What We Use To Do Is No Longer Good Enough • What is working • American public managers and leaders are developing innovative and creative solutions to the changes brought by global economic markets, urban sprawl and increased concentrations of poverty in core cities. • Leveraging our resources – visionary leadership, sound fiscal and organizational management practices, and institutionalized public participation to create high performance organizations.

23. The Dynamics of Change: Why What We Use To Do Is No Longer Good Enough • High performance organizations give public managers the means to improve organizational efficiency, economy and effectiveness, allow us to address issues of social equity and justice, and meet the challenges of “wicked community problems” within framework of existing resources and organizational structures. • To achieve this, we must manage our organizations in a new way.

24. The Dynamics of Change: Why What We Use To Do Is No Longer Good Enough • Wicked problems are defined by Rittel and Webber as those complex problems that don’t lend themselves to quick fixes or easy solutions and that require multiple levels of government cooperation across political jurisdictions to resolve. • They include problems like street corner drug sales, poor schools and neighborhood blight.

25. What are the words you would use to describe today’s most successful organizations? I’m sure your lists includes the following: Public Engagement Ethical Cutting-Edge Best Management Practices Role-Model Inclusive of Different Ideas Diversity encouraged and celebrated What Does A High Performance Organization Look Like? “The pursuit of human dignity is the essential active ideal that we serve. It is therefore the measure for the worth of all acts pursued in the service of democracy.” Robert Matson • Efficient • Effective • Cost Competitive • Customer Value • Service • Responsiveness • Satisfaction • Stellar Reputation • Equitable

26. What Does A High Performance Organization Look Like? • How would you stack your organization against your ideal? • What do you need to do to have your organization recognized as best in class? • How do you go about getting started? • Is it worth a try? • Why or Why not?

27. What Does A High Performance Organization Look Like? Once upon a time there was a work unit with four members named everybody, somebody, anybody and nobody. There was an important job to be done, and everybody was sure that somebody would do it. Anybody could have done it, but nobody did. Somebody got angry about that because it was everybody’s job. Everybody thought anybody could do it, but nobody realized that everybody wouldn’t do it. It ended up that everybody blamed somebody when nobody did what anybody could have done.

28. The Role of Public Managers in Leading and Managing High Performance Local Government Organizations “It is insanity to expect to receive the data of wisdom by looking on. We arrive at moral knowledge only by tentative observant practice. We learn how to apply the new insights by having attempted to apply the old and having found it to fail.” Jane Adams • You must lead the change to: • Increased organizational capacity. • Higher organizational performance. • The engagement of citizens in fixing wicked problems.

29. The Role of Public Managers in Leading and Managing High Performance Local Government Organizations • You must manage the organization at two levels: • Conduct core business of service delivery without missing a beat. • Change systems, structures, strategies and work culture to create a high performance organization that maximizes organizational efficiency, effectiveness, economy, equity and engagement.

30. The Role of Public Managers in Leading and Managing High Performance Local Government Organizations “I believe the most important contribution we can make to the pubic bureaucracies we lead and manage is to create strong, competent organizations that promote democracy, add customer value, are flexible enough to meet the diverse needs of citizens, engages citizens in addressing “wicked problems” and effectively uses the skills, talents and abilities of all employees.” • This requires a new set of policies, procedures and practices: Organizational Culture • Vision • Values • Principles of Management Functional Side of Business • Process re-engineering • Outcome based performance measurements • Adoption of best management practices • Continuous learning and improvement

31. The Work of Leadership: Leading the Change • Leadership is needed when you: • Want people to “go somewhere” they are not currently headed. • When you want them to change what they are doing or how they are doing it. • When you want different behavior, processes or results. The Power Cycle How can I be more accountable for: The De-Powering Cycle Disappointment, upset, hurt, anger, fear Breakdowns, Unfulfilled Expectations, Broken Agreements Assign Blame, Attack “Fight” Incomplete communication, little/no dialogue & problem solving or Renegotiation

32. Improve Performance: • Examine, streamline work processes • Begin strategic thinking and planning (what we will do). • Obtain and analyze public input on our “preferred future.” • Eliminate any unneeded activity • Evaluate service/product profiles for effectiveness (doing the right thing), efficiency (produced and delivered in the right way), economy (cost competitive), and equity (serving the right people).

33. Improve Performance: • Eliminate organizational silos and share business information throughout the organization—up, down and sideways • Produce strategic plan—goals, objectives, activities and accountabilities—at the enterprise (city) and unit levels. • Identify and communicate a limited number of critical success measures at the enterprise and unit levels. • Calculate the cost of each service and program • Align budget, financial systems and technological enhancements with strategic plans and community profiles.

34. Improve Performance: • Incorporate from internal and external sources best management practices. • Evaluate best practices and determine measures and benchmarks. • Use appropriate technology to improve operations. • Articulate and measure performance at all levels of the organization. • Determine and communicate “nested” strategic visions at enterprise and unit levels. • Determine and communicate working mission statement at enterprise and unit levels.

35. Improve Performance: • Acknowledge and reward positive performance outcomes. • Develop performance expectations for the enterprise, unit and individuals. • Assess performance at all levels against the work program and performance expectations. • Identify and develop micro businesses internal to the organization. • Instill and support continuous improvement ethos.

36. Create New Organizational Culture • Seek input from all levels. • Establish leadership teams at enterprise and unit level. • Create, maintain and repair adult to adult relationships. • Articulate values and expectations throughout organization. • Define and determine new work culture (how we will act). • Discuss beliefs about individual and collective leadership abilities, knowledge, creativity, motivations. Create and communicate a shared vision throughout the organization. • Determine and communicate consistent leadership philosophies. • Define and communicate acceptable behaviors consistent with core values and leadership philosophy.

37. Create New Organizational Culture • Increase communications up and down and across the organization. • Develop a consultative decision-making process organization wide. • Reinforce a customer-service friendly attitude and a citizen-centered approach to governance. • Identify where culture is lagging and provide feedback, resources, development and/or corrective action to units and individuals. • Identify and reward internal best practices in work culture.

38. Create New Organizational Culture • Promote success and acknowledge high performance. • Build values-based skills through city university, individual development plans, mentoring and challenging assignments. • Orient new employees to desired work culture and expected behavior. • Reward positive behavior; confront to correct negative behavior. • Promote the alignment of hiring, development, appraisal, reward, promotional and discipline systems with philosophy, values and behavioral expectations.

39. Create New Organizational Culture • Seek and listen to input from customers, co-workers, suppliers and the public. • Engage in public deliberations on key community issues and problems. • Institutionalize mechanisms for engagement. Ex. Neighborhood councils. • Encourage and reward “innovative ideas” that save money, time or add value.

40. Create New Organizational Culture • Make decisions at the most appropriate level of the organization. • All staff should be doing work of leadership and management. Executive level staff should have highest percentage of leadership responsibilities; mid-level highest percentage of management responsibilities.

41. Sidebar: Likert’s Four Management Styles Adapted from: Paul Hersey and Kenneth H. Blanchard, Management of Organizational Behavior: Utilizing Human Resources. 3rd ed. (Englewood Cliffs, NJ: Prentice-Hall, 1977) pp. 72-73.

42. Charting the Course: HPO

43. Building Blocks of Organizational Change Low Hanging Fruit Advance Teams Attack Critical Issues Successfully meet the challenges facing Dayton as we move into the 21st Century. Re-engineer Systems & Structures Redesign those tools that we will need to provide services and manage local government in the future. Establish HPO Strategic Foundations Define and communicate the principles that will steer the organization, and achieve a commitment to those principles by stakeholders. Become a Team Create a regenerative environment where members become Both collaborative and interdependent. --------------------Relentless Patience --------------------

44. Cultural Change in an Organization

45. Levels of the Policy Change Cycle

46. Developing a Shared Vision and a Set of Organizational Values These describe the ultimate or “end” values that the organization is seeking to achieve; provide a test of an organization’s worth in society; answer the questions: “Why are we doing what we are, what is the higher moral purpose the organization is trying to serve?”A statement of philosophy explaining the assumptions upon which management actions are taken and judged; answers the question: “What do we believe about the nature of people and how does this affect the way we choose to manage?”These define the “human side” of the organization’s culture, provides a standard for edging interpersonal behavior; answer the question: “How are we going to treat each other.” VISION: an image of what is trying to be accomplished, a direction for the organization; it must inspire members of the organization and galvanize them into coordinated action directed at a common future; answers the questions: “What are we trying to accomplish, for whom, and to what standard? MISSION and/or STRATEGIC PLAN (with goals and objectives) may follow from the shared vision. SharedVision Ultimate or “End” Values Mission Leadership Philosophy StrategicPlan(goals & objectives) IndividualBehaviorValues OrganizationalOperating Values These define the “technical side” of the organization's culture; provides a standard for judging the organization’s strategies, structures, systems, and work processes; answer the question: “What organizational values should guide our operating processes?”

47. Application of Ingredients for Organizational Change ENVIRONMENT Leadership Philosophy Role Management Style Beliefs Vision Values Strategies Structures Systems Performances Actions Interactions Cultural Side Focus of Application Functional Side Management Focus

48. Factors Affecting Organizational PerformanceCasual Variables (Causes) Intervening Variables (Symptoms) Outcome Variables (Results) ENVIRONMENT • Leadership • (philosophy, role, style) • Degree of Employee Commitment to Organization Mission and Goals • Degree of Creativity, Innovation, and Risk Taking • Level of Employee Morale • Degree of Trust, Mutual Respect, and Support • Quality of Communications • Degree of Coordination and Cooperation • Quality of Problem Solving and Decision Making • Effectiveness of Systems, Controls, and Procedures • Effectiveness of Conflict Management Techniques • Product and Service Quality; Responsiveness; Customer Focus and Satisfaction • Financial Performance (profit, return on investment, cost reduction, budget performance) • Productivity and Competitiveness • Schedules, Deadlines, and Goals Accomplishment • Job Satisfaction (turnover rate, absenteeism, strikes, work stoppages, etc.) • Organization Vision • (choice of a • preferred future) • Organization Values (ultimate/end values, management values, behavioral/operating values) • Strategy • Structure • Systems (work processes – formal and informal)

49. Sidebar: Know Your Authorizing Environment Authorizing Environment Values (Personal & Public) Internal Capacity

50. An Expansion of the Change “Levers”“Theory of the Business” • LEADERSHIP:(philosophy, role, style) • Philosophy: A Change in Beliefs about the Nature of People • -Nature of People: McGreggor’s Theory X vs. Theory Y • -Motivation: Hetzberg’s hygene factors vs. motivators • -Distribution of Knowledge and Creativity: at top vs. widely distributed • -How Work Gets Done: individuals vs. groups • -Block’s Bureaucratic (“critical parent-child) Model vs. Entrepreneurial (“adult-adult”) Model • Role: Changing from Directing and Controlling to Empowering and Leading • -Building a shared vision and set of organizational values to replace traditional controls • -Empowerment has a management part (e.g., delegation) and a psychological part (e.g., removing conditions causing feelings of helplessness) • -Bureaucracy busting • -The new leadership role is centered around supporting, teaching, enabling, and building commitment • Style: Leadership by Teams vs. Individuals • -Creating a “parallel organization” with new rules outside the hierarchy • ORGAINIZATION VISION:(image of a preferred future) • Must answer the questions: • What are we trying to accomplish, for whom, and to what standards? • Must inspire and galvanize members into coordinated action. • Does the vision include customer focus, product/service quality, and continuous improvement? • STRATEGY: • Organization-Specific Approaches • Strategic and Tactical • Must Support Other Parts of Model • STRUCTURE: • Flat vs. Hierarchical • Decentralized vs. Centralized • Management Teams vs. Single Headed, Top-Down Approach • Multi-Functional, Autonomous, Self-directing Work Teams vs. Boss-directed, Solo-performers • Structure: Functional “silos” vs. Program/Project/Product Unit, vs. Matrix – or a Recent Hybrid Approach: “Chunking” • Must Support Other Parts of Model • ORGANIZATION VALUE: (captures meaning and creates a culture) • Must answer the questions: • -Why do we do what we do; what is the organization’s higher moral purpose? • -What do we believe about the nature of people and how does this affect the way we choose to manage? • -How are we going to treat each other? • What organizational values should guide our operating processes? • Do the values support a work environment which is challenging, rewarding, and fulfilling? • SYSTEMS: (both formal and informal) • Human Resource (recruiting, developing, rewarding, etc.) • Financial/Accounting • Communications • Technology • Information Resources • Planning (Strategic/Tactical) • Decision-Making/Problem Solving • Conflict Management • Integrating Mechanisms • Must Support Other Parts of Model Words in italics above indicate characteristics of High-Performance Organizations