In our work at the Center for Priority Based Budgeting, we've been overwhelmed by success stories stemming from partnerships, involving the convergence of results with what any given community wishes to achieve, and sound economic development plans. In fact, one of the key reasons cited by so many of our most recent PBB implementers for initiating the process is their desire to identify the most opportune partnerships, both public-public and public-private partnerships, worth pursuing in support of achieving the community's well defined results. We're so excited about this, it begs the question: at what point does Priority Based Budgeting become, in part, the systematic discovery of Priority Based Partnerships?
We are moved by this glimpse of what becomes possible when local government understands the Results it is striving to achieve, it's role in achieving them (even when that role is less prominent), and aligns resources to bolster success. The Decade of Local Government 2.0, and the opportunity to achieve Future City USA status, stands for all of us in local government. The opportunity is upon us!
Your Definition of Victory?
Recently Alan Webber, Founding Editor of Fast Company magazine, delivered the controversial and innovative key note message to kick-off TechFestNW in Portland, Oregon. Webber stated "In 1993, in the first issue of Fast Company, we published a brilliant essay by Mark Fuller, a former HBS professor, co-founder of Monitor Consulting, and a military strategy expert. The essay was called “Business As War,” and it compared business strategy—or I suppose urban strategy—to military strategy."
"In Mark's essay he raised a provocative
question about business strategy, using the context of the
Vietnam War. How was it possible, he asked, for the United
States to win every battle in the Vietnam War, and lose the war?
The answer, he said, was that the United
States failed to ask the last question first. The last question, whether for a
business or a military engagement—or for a city—is, "What's your
definition of victory?"
Or to put it a slightly different way, "What's
the point of the exercise?"
If you go to war, and you don't have a clear
definition of victory, how do you know how many resources to commit, how to
make the case for the conflict with your own people, how long to stay, what "results" you're trying to achieve, or when to
leave—or even whether you're winning or losing?
The same is true for a business—or, for that
matter, for a city seeking a strategy. You need to be able to answer the
question, "What's your definition of victory?" "What's the point
of the exercise?" "What are the Results your community seeks to achieve?" so you can begin to know why you are doing what you are
doing, and how well you are doing it.
Which is why having a definition of victory—why asking the last question first—establishing the results a community seeks to achieve -- is fundamental to any military engagement, any business strategy or entrepreneurial startup, or any urban planning exercise.
Portland, Oregon: A Case Study
From Webber's keynote address: In 1970 I graduated from college. In the fall, my college roommate and
I piled our stuff into my blue four-on-the-floor 1968 Mustang and drove across
country to Portland, Oregon. It was late afternoon, early evening
when I crossed the Steel Bridge and found a place to park in the run-down
warehouse district behind the railroad tracks next to Skid Row. I remember
getting out of my car, looking toward the non-too-tall office buildings in what
passed for downtown 40-some years ago, and thinking, “Well, here I am. In the
big city.”
In fact, what I quickly learned—what
I would have already known if I’d grown up in an actual big city or gone to
college in one—was that Portland was far from a big city. Portland in 1970 was more like the
rest of America in the 1950s. It was a backwater town—some would even say a jerkwater town. But to use those words is not to be unkind or even harshly
judgmental. If Portland in 1970 was America in the 1950s, there were a
lot of things to like about it. In its conservative, slow-to-change
way, Portland had managed to avoid many of the faddish traps and trendy
disasters that faster-moving, more dynamic cities had already succumbed to.
The best and brightest of America’s
prestigious urban planners, transportation experts, economic development gurus,
and social engineers had already laid waste to most of the country’s big
cities. Urban renewal had been used as a tool to bulldoze slums,
displace minorities, and erect sterile single-use zones that in many cases
reflected an architectural style best described as “Mussolini modern.” Everyone who counted knew that freeways were the wave of the
future—that massive concrete channels needed to be carved through old and
uninteresting city neighborhoods to make it faster, easier, and more convenient
for former city dwellers—the ones with money and choice—to make the morning
commute from the sprawling suburbs to the rapidly rotting urban core—and back
again at night. All that old housing stock, all those old neighborhoods, what
difference did they make? They were the past.
As were downtowns. In keeping with
the best thinking of the best minds, downtowns had been zoned off by function.
So there was a government center, where federal, state, and local government
buildings were clustered together. There was the financial district, where
high-end office space was grouped. The performing arts deserved their own
buildings all in the same area, as did the shopping district, the hotel and
hospitality area—and so on. All of those zones contributed to a sense of
order—and an overwhelming sense of sterility, a profound lack of diversity and a
total absence of the energy engendered by mixed uses. Not that it mattered all that much, since downtowns operated more or less like bathtubs, filling up in the morning
rush hour, emptying out in the evening rush hour, and then remaining silent, empty
and deserted until the next morning brought the next wave of commuters. And again, since everyone knew,
absolutely knew, that suburban shopping malls and office parks were the future,
what difference did it make if the old downtowns, once the heart of cities,
gradually shriveled up and died?
The '70's
Now the good news for Portland in
1970 was that the city leaders were so conservative, so slow, so
Now if this were a different group in
a different city, I’d do my best to draw out the drama of Portland at its
moment of decision. How do you revitalize a city where
the mayor and city council averages more than 70 years of age—and makes their
decisions over private lunches in a private room in the Congress Hotel before
acting out political kabuki in the public council sessions? How do you even begin to clean up the
air in a city that violates Federal clean air standards three days out of five? How do you kill not one freeway—the
ill-named Mt. Hood Freeway that never actually was designed to go to Mt. Hood—but
an entire freeway map designed for the city after World War II by legendary New
York master builder Robert Moses? A freeway map that described Portland as a
mini-LA, a shell of a city with one out of every 10 houses either bulldozed to
make way for a freeway or sitting directly adjacent to one? How do you convince downtown
merchants that it is in their own best interests to rip up the two most popular
streets and install an untested, unproven transit mall? Or impose an absolute
lid on the number of downtown parking spaces—when everybody knows that
unlimited free parking at suburban shopping malls would mean the demise of
downtown? How do you convince the Port of
Portland that its plan to extend a runway into the Columbia River isn’t a bad
idea only because of its impact on that historic river. It’s also a bad idea
because of the impact on the neighborhoods in Northeast Portland of thousands
of additional cars streaming through their streets to get to the expanded
airport—with no thought of mass transit as an option?
Portland’s vaunted livability was
preserved, and today, 40 years later, it is easily America’s favorite
big-little city with an unparalleled quality of life, great coffee, artisanal
restaurants, more breweries per capita than any city on earth, and its own cult
TV show. It is known far and wide as the place young people come to retire.
Portland as an Urban Startup
Except that’s not quite how—or more
importantly—why it happened. The real story has a much more direct
bearing on this gathering—and on what you do next on Portland’s behalf as a
result of this gathering. Make no mistake. Portland in 2013 is
at a “what’s next?” moment, much as it was in 1970. Except in 1970 we were trying to save
Portland from urban ruin. In 2013 you have the opportunity to propel Portland to urban
greatness.
The first thing you need to know
about Portland circa 1970 was that it was an urban version of an
entrepreneurial startup. We didn’t know it at the time. And the language of
entrepreneurship wasn’t part of the public conversation the way it is today. But that’s what it was. What we were
advancing back then was an alternative business model for a city—even though
nobody at the time had heard of business models.
But think about it: What Portland did
in the 1970s was to zig when everyone else zagged. We didn’t try to be more like Seattle
or more like San Francisco. We tried to be more like Portland—the best Portland
we could imagine and then implement.
To do that, we disrupted the status
quo. We challenged conventional wisdom. We advanced an alternative theory of
the case—as they say in business school—one that ran counter to the way every
other American city was developing at the time. We were an urban Apple: Portland
dared to “think different.”
What's Next?
The second thing you need to know
about Portland in the 1970s is that livability was never the goal. True, it was always a component of a
well-integrated urban strategy. But it was always a building block, an
essential Portland attribute and a deeply held Oregon value. But it wasn’t the
definition of victory for the city. It was an input for creating the Portland
strategy, but it was never the sole output.
So if livability was an input, not a final goal, what was the
point of the exercise 40 years ago in Portland, the definition of victory? The answer was something we called the "population strategy.”
The population strategy was a product
of some world-class detective work by David Yaden, who, at the time, was
Portland’s premier pollster. Both going door-to-door to conduct interviews and
looking deeply at data on emerging demographic trends, David discovered that
Portland was at risk of becoming a city with its middle missing—that is, if
political, economic, and social trends were to continue, Portland would end up
as a city with very old people and very young people—and very few people in the
middle.
Why did that matter? Because the people in the middle—the
middle-income, employed families with children—are the people who provide the
glue that holds a healthy city together. They’re the people who volunteer to
be Cub Scout and Brownie leaders, soccer coaches and PTA presidents. They get
involved in their neighborhoods. They keep eyes on the street. They turn out to
vote. If a city is fundamentally about more choice for more people,
they are the people who enable and amplify—and often pay for—more choice for
more people.
With David’s analysis, we had our
definition of victory—we knew what we were solving for in the
equation that was
Portland. Our definition of victory was, how do
we retain and attract middle-income families with children? How do we get them
to vote with their feet? How do we get them to stay in the city, to cast their vote
for the city? Livability would absolutely help
influence their choice. But so would good schools. And quality jobs in convenient
locations for the residents of Portland’s neighborhoods. So would safer, calmer streets, and
sidewalks with lower levels of stranger-to-stranger street crime. And better parks with more choices
for recreation inside the city.
Here’s the deal—for business
entrepreneurs or urban strategists: Once you know your definition of victory,
then you can begin to connect the elements of your strategy into a coherent,
internally consistent whole. But until you have answered that
fundamental question, until you know the definition of victory, you really have
no strategy. You have an assortment of programs, a loose collection of policy
initiatives—but no clear strategy.
PDX's Definition of Victory?
So the second “what’s next?” question
for Portlanders today is: What is your definition of victory? Forty years after the design of the
population strategy, simply continuing with that original goal seems an
unlikely answer—especially at a time when, from all appearances, the success of
that strategy has, inevitably, caused a new problem: the displacement of poorer
Portlanders to the inner rings of the suburbs. So perhaps a new goal needs to be
about re-balancing the city, about economic and social equity for all Portlanders,
if this is to be a great city.
A second question that needs to be
addressed also comes, I believe, from that misreading of livability as a goal
rather than an input. Making livability and environmental sustainability a
hallmark of the Portland story has tended to obscure the key role that jobs and
economic development always played in that original strategy. From the beginning, it was always
clear that the environment and the economy were inextricably linked. Two sides
of one coin. Far from being mutually exclusive, a healthy economy combined
with a healthy environment would make the Portland strategy work—at every step
of the way. In fact, I don’t think it would be
wrong to say that the livability agenda was only possible because of a
pragmatic business strategy.
Take the Mt. Hood Freeway. It could only be killed once it
became clear that neither the money for the freeway nor the construction jobs
associated with it would be lost—only transferred to light rail and surface
street improvements across the entire metropolitan region. When that transfer
became possible, the Mt. Hood Freeway became both a business deal and an
environmental deal.
The Downtown Plan became real not
when it was adopted by the City Council—there’d been too many doorstop-sized
plans passed over the years. It became a living, breathing vision for downtown
when the mayor and his team made a pilgrimage to Seattle, sat down with the
Nordstrom family and offered them a package deal that resulted in the first new
department store built in downtown Portland in decades—and on the exact block
where the plan called for such an investment from the private sector. That
business deal gave the plan credibility—and allowed the rest of the plan to
move forward.
Today, issues of livability seem to
overshadow issues of economic viability. And that raises another “what’s
next?” question for Portland: Where is the pragmatic economic vision that will
support and sustain, in pure business terms, the city’s treasured quality of
life initiatives? Will that economic agenda come from a vibrant tech community?
Will it emerge from hackathons and creative apps? Will it come from small and
medium size businesses that need help to reach critical mass? How can Portland
afford to pay the bills that are part of a genuinely sustainable strategy?
How Do You Overthrow a Successful City?
How do you overcome the complacency that comes with success? How do you resist the temptation
That’s the ultimate “what’s next?” question that stands
before the Portlanders of today. And it’s a much harder, and a much easier,
task than the one we faced 40 years ago. It’s harder because success is such a
seductive trap. Success breeds its own kind of
complacency. It’s why so many old and successful companies stop innovating,
loose their creative spark—and stop asking challenging questions in the service
of disruptive answers.
The
success of the original Portland strategy should lower the barriers to experimentation;
you have a sound basis from which to try new things—knowing that the
fundamentals are in place, the values are sound and the underlying framework
makes sense. Portland works. And now the question is how to make it work even
better, for even more people, in even more ways.
And you have more tools with which to
work. Forty years ago, infrastructure
investment was more or less limited to the hardware of the city—housing stock,
transit lines, parks. Today, you have the software of the city with which to
experiment—social media, the rise of the sharing economy and the evolution of
the city not as a bunch of buildings, but as a platform, an operating system.
And you have the benefit of
perspective—a way of looking at and evaluating the two largest issues
confronting the whole country: the challenge of fixing public education and the
need to address the growing gap between the rich and the poor—our current
national crisis of the missing middle, the middle class.
That’s the “what’s next” question for
Portland today.
That’s the “what’s next” opportunity for Portland—and you—to embrace.
The Implications
For many of us who have heard this argument before, and who have reasoned tirelessly either for it, or against it, we must still be able to ponder the implications – what are the best and most applicable concepts of the business world that might actually help us in local government management? Of most interest to us is the concept of the “intended use” of resources based on the results a community desires to achieve, or what we would call “alignment of resources with results” in Priority Based Budgeting.
As
we wrote about in 2012 for PM Magazine, Priority Based Budgeting has unveiled
a way for local governments to spend within their means by continuously
focusing on the results most relevant to their communities and the programs
that influence those results to the highest possible degree. The concept
involves leveraging each tax dollar so programs with the greatest impact on
results are distinguished from programs with a lesser influence.
In fact, communities that have embraced it have redefined the notion of return on investment—it’s a
(For more on the City of Boulder's Resource Re-allocation Breakthrough we offer this graphic depiction on ICMA’s Center for Management Strategies blog.)
Central to PBB is the idea that all local government organizations can determine the role they're suited to serve best within a community, and amongst all potential service providers within a region - identifying the overlap, the potential for partnerships, consolidated services, and spinning off of services between city, county, school district, non-profit and private sector organizations. The end goal is nothing short of the most efficient use of a community's resources as a whole, to achieve the results of a region – it’s "bang for the buck" for the provision of public services.
If you're thinking of jumping into the world of Fiscal Health and Wellness through Priority Based Budgeting we would certainly like to be part of your efforts! Contact us to schedule a free webinar and identify the best CPBB service option(s) to meet your organization's particular needs.
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