The Economist: The Future Demands High-Performing Local Government

In my early days of business and economic consulting, I tried to focus on encouraging clients to pursue excellence and high performance. Anyone who follows sports knows what that means. Some teams have come to live the passion of excellence and expect to be champions every year. Their fans have no regrets in dominating the competition.

Often it requires strong leaders determined to win, but to be truly sustainable over time, high performance in the pursuit of excellence demands a strong cultural orientation that surpasses leadership. The reality I found was most clients were so desperate to meet expenses or get the new contract that they could never focus on the long-term vision of sustainable success.

Recently, I attended a Malcolm Baldrige conference and was pleasantly surprised to see the city of Fort Collins as a presenter. They are pursuing the Baldrige Award, not for the award itself, but to get an external perspective of their standing as an organization so they can develop and reinforce a culture of continuous improvement – a prerequisite to excellence.

One of their early discoveries was the need to improve relationships with businesses. Mayor Michael Hancock pushed Denver in a similar direction when he created the Denver Peak Academy to coach all employees in improving the way government works. These efforts, and others that are being pursued in some local governments around the state, should be celebrated and copied.

Colorado and the Rocky Mountain West are unique when it comes to local governments. We have so many of them. El Paso County alone has 296 separate government entities providing public services. That’s one governmental entity per 2,365 residents. If each government has five board members on average, that’s one governor per 473 people.

This fragmented system of government stems from Colorado being a latecomer to urbanization. As municipal and county governments became more fiscally constrained in recent decades with more demands for public service and limited taxing potential, they backed away from infrastructure investment to support growth and began imposing more fees to have growth pay its own way. This results in the creation of metro districts, special improvements districts and fire districts, among others.

It’s incumbent on us to train ourselves to be good governors. And for the most part we are good – at least to the point of covering expenses and not being corrupt. Those of us from other parts of the U.S. or world know corruption and self-dealing can be rampant at the local level.

Research by Jacob and Olene in 2011 found the fiscal health of Colorado municipalities to be strong going back to 1975. Only once in 36 years did Colorado municipalities as a whole run a deficit (1987) and fortunately, the Colorado Department of Local Affairs (DOLA) has an entire division devoted to local government where audits, budgets and other critical documents are filed, and assistance is provided.

But is this enough? I don’t think so. There are numerous long-term trends demanding we do more in local governance. In addition to the most discussed long-term challenges such as unfunded pensions and changing patterns of taxable expenditures, we have the shorter-term challenge of overcoming congestion and related ecological distress and water limitations.

Some argue we should simply quit growing. That may be nice in theory, but the reality appears to be that non-growth creates even greater fiscal challenges. A more viable answer lies in local government excellence. To get there, we need to better understand and measure our performance. New Jersey has gone as far as requiring local governments to measure efficiency.

Hopefully, more local governments will follow the lead of Fort Collins and Denver and strategically commit to and invest in continuous improvement and high performance — including greater citizen participation and transparency. Real success will come if we pursue re-engineering, which was defined by Michael Hammer 30 years ago as radically redesigning processes to reduce costs by at least 30 percent while improving customer satisfaction.

This requires we set aside funding for employee training along with smart technology to create data- and quality-focused information. If successful, the financial return on investment will be dramatic, and we hopefully can restore faith in government among millennials who, during their lives, have witnessed poor governance at the federal level and are likely to assume poor performance is the best we can expect as local governors.