Leadership in the Fiscal Crisis Robert O’Neill’s Presentation 2010 WCCMA Summer Conference Winthrop, Washington August 20, 2010

Navigating the Fiscal Crisis: Tested Strategies for Local Leaders

Leadership in Times of Turbulence: Five Stages of Decline ** Stage 1 Hubris Born of Success Stage 2 Undisciplined Pursuit of More Stage 5 Capitulation to Irrelevance or Death Stage 3 Denial of Risk And Peril Stage 4 Grasping for Salvation Note: 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 Strength Note: 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 Problems Note: 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 for Top Performers They want: To be assigned to your biggest challenge You to invest in them Recognition High performers don’t think they have a job – they have a passion for the mission