By Steve Kelman

Blog archive

Harsh budget reality hits home

When I was at the Executive Leadership Conference in Williamsburg, it was obvious that the tight budget situation was very much on the minds of the government participants. Interestingly, contractors seemed as a group to be more in denial than the government folks -- many somehow thought their companies would be spared or that cutbacks would end up not being so significant. I think the perception of the government folks is closer to reality than that of those contractors who don't think that much will change. I think the most realistic expectation is that following the last 10 years of feast we are most likely to have 10 years of famine -- unless the economy turns up more dramatically than most experts expect it will.
This change in mood among feds has come fairly suddenly. I have seen evidence of this just recently, among the class of about 60 GS 15's (and uniformed counterparts) in one of our recurring executive education programs at the Kennedy School. For this program, each participant prepares a one-page case summarizing a management or leadership problem they are currently needing to grapple with on the job. I always read these cases before classes start, to get a better feel for what is on people's minds. In the past, the cases have been all over the map – the closest thing to a pattern has been human resources issues such as problem employees and interpersonal conflicts in the organization.
This time, all of a sudden -- this wasn't even on the screen of the participant cases as recently as the last session of this program in May -- what stood out was the number of cases involving tight budgets.  This wasn't all the cases, to be sure – only about 10 of 60 -- but the number went from zero for years to 10, suddenly in this session of the program.
The specific sub-themes were diverse -- how to develop more cost-effective program delivery, will funding be cut off for IT or other administrative modernization efforts in midstream, can the agency reduce its use of leased space, etc. The participant cases were all about trying to find ways to cut costs, but the size of the cutbacks meant that agencies would be moving beyond the cliché of  "doing more with less" to the reality of doing less with less.

One participant, whose agency I will not name to protect anonymity but which I feel confident almost every reader will agree has a mission that is absolutely vital to the future of the world, wrote: "With less manpower available and more tasks to accomplish, the end result is a diminished quality of work on each project. In the past, we were able to balance the workload such that the more important projects received the most attention and the lesser projects received a lesser amount of attention. However, we have devolved into a situation where all projects, regardless of their importance, are receiving minimal attention." 
Clearly, this is going to be a tough time for agencies. The reality is that -- despite what many Americans believe (a la $16 muffin) about the prospects of eliminating the deficit by eliminating waste -- muscle and bone are going to need to get hit. Still, everyone in government, and everyone outside who cares about good government, needs to focus on ways to save money by operating more efficiently. I have been making this point since the 2008 economic crisis to contracting professionals inside the government. No group of civil servants can make a huge dent into this problem by themselves, but if a lot of people focus on this, collectively it will help reduce the pain.

Posted on Nov 08, 2011 at 12:09 PM


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