28 February 2015

Combating Fiscal Uncertainty: A Call to Action

Austrian essayist, Hugo von Hofmannsthal, once commented, "Perception of the strange is hindered by strangeness; recognition of the familiar is prevented by familiarity." Executives in the federal resource management profession have been tasked with navigating their respective organizations out of a morass of competing resource constraints, yet their ability to build the necessary momentum is often inhibited by the alluring comfort of the status quo.

This resistance to change is tantamount to transformational paralysis. In an environment of declining budgets and fiscal uncertainty, an entity that fails to act is left vulnerable to additional cuts, increasing pressures, and a steadily worsening state-of-being. In contrast, the ability and willingness to adapt and overcome allows savvy leaders to protect their operational resources. Survival in this hostile climate requires a break from the impulse to dig in, the equanimity to put aside complacence and pride, and the courage to conduct an honest assessment of current business practices.

Furthermore, to be an agency that thrives while others merely survive, action is a necessity. Leaders must be agile and receptive to incorporating new methodologies, particularly those that harness available technology as a force multiplier.

A broad survey of organizational woes would reveal myriad, unique situations; it stands to reason that no two federal agencies are exactly alike and that their needs are accordingly diverse. However, recognizing the shared problem of dwindling resources, and agreeing upon the need to mitigate the associated consequences, enables the development of a systemic view wherein many disparate organizations clearly share elements that drive toward a common goal.

Adm. James Winnefeld, Vice Chairman of the Joint Chiefs of Staff, recently described a budget trifecta – a crisis composed of a decline in resources, a rise in constraints, and an overarching uncertainty over resources. These, he warned, would result in "little margin left for error or strategic surprise." This statement defines the challenge faced by all resource managers. Although the exact ramifications may differ between agencies, the pathway to a solution typically traverses four stages of reasoning.

Defend!

Facing scrutiny, broad reductions, and decreased purchasing power, agencies and programs need the ability to defend their current resources and employees, and to ensure continuity. The federal executive’s first inclination is often a knee jerk response – an ad hoc call for information from multiple sources. This is where many organizations struggle.

Without common formats, controls, or standardization of practices and data, the resulting clamor produces a level of stress that far outweighs any yield of reliable reporting. Precious labor hours, whose endangered status is so fiercely guarded, are ironically spent cobbling together mismatched data into aggregate sets, which in turn are prone to errors, misinterpretation, and artifacts borne of desperation. What arrives on the beleaguered executive’s desk is sometimes adequate, but seldom comforting. Thus, change is sought, and the focus shifts to...

Discover!

"Don’t know what you got, till it’s gone."   – Cinderella, Long Cold Winter

In economics, the Law of Demand states that as the availability of a commodity decreases, the inversely related value of that commodity will naturally increase. Accordingly, declining resources force organizations to identify opportunities to optimize tasking, improve performance, and maximize the efficient utilization of what remains in the coffer.

Many programs comply reluctantly, doing only what is needed. However, this can be a productive process for the shrewd and forward-thinking – those who realize that the discovery of cost-saving opportunities is paramount to success. Fortunately, when a problem is so prevalent and widespread across both government and private sectors, human ingenuity has a tendency to produce multiple solutions. Segue into...

Adapt!

"Everybody gets so much information all day long that they lose their common sense."   - Gertrude Stein

Big data. Data explosion. Data revolution. Financial decision-makers find themselves bombarded with catch-phrases almost as often as they are inundated with actual data. A fraction of them understand the implications. Data management has quickly grown into a prevalent topic across the industry, and smart agencies already seek to harness available technologies to remain at the forefront of operational effectiveness.

Although the exponential boom of accessible information can be a marvelous wind in the sails of those who possess the tools to harness it, that same surge can be nightmarishly overwhelming for the unprepared – an unfiltered onslaught of data that goes wasted at best, or is crippling at worst. Executives with foresight must plan to be amongst the former. Education and open-mindedness will allow the astute to recognize opportunities to candidly assess current readiness and improve their stance.

A responsible leader is obligated to explore and develop an understanding of the agency’s business systems and how they align with future requirements. The growth of data is both inevitable and unavoidable. Ignoring the trend will only leave organizations woefully vulnerable to an issue that must eventually be addressed.

In the paraphrased words of one Program Manager, "It’s shocking to see that your multibillion dollar organization builds the world’s most advanced, cutting-edge platforms, yet is stuck using Excel. Meanwhile, a local police department fields an analytics dashboard that is decades ahead of us.

And, with that realization...

Act!

"The fishermen know that the sea is dangerous and the storm terrible, but they have never found these dangers sufficient reason for remaining ashore."   – Vincent Van Gogh

Fear is a natural reaction to the unknown. When taxpayer dollars hang in the balance, and lawmakers demand justification for every decision, an executive’s trepidation is understandably magnified. One mark of leadership is the ability to set aside those reservations and to act when action is justified and clearly required.

The move to modern data-driven analytics, financial management, and strategic planning awaits. Numerous federal, state, and local agencies have already taken the plunge in an effort to harden their programs against furloughs and sweeping cuts. Not only does the transition drastically increase the power, reliability, and effectiveness of the organization’s tools, it institutes sustainable and repeatable practices that ensure a highly trained and capable workforce.

A common reservation of budget-pressured leaders arises from sunk costs. An organization (or individual) that has previously invested substantial time and funds into a given toolset may feel anchored by that expenditure. Often, this is a purely psychological state. Even when evidence shows that the current system is outdated, or that a superior solution is available, some decision-makers still favor upgrades to existing tools over integration of new technology. Worse yet, they will order round after round of investigations, never committing to a course of action.

Consider, however, that every moment expended in deliberation is the result of a choice. That choice is to not act. This ultimately culminates in a quantity of lost time that could have been spent implementing a better solution and subsequently reaping the rewards. That is, in and of itself, an unrecoverable opportunity cost.

Success stories detailing potential rewards abound, involving commercial and government entities alike. Automation of repetitive and time-consuming tasks can free up analysts to perform actual analysis. Reduced risk of errors and increased traceability allow managers to trust the numbers. Centralization of data – migrating from spreadsheets to databases – produces immediate benefits including speed, security, accessibility, accuracy, trainability, accountability, and efficiency. Rapid reporting increases readiness. Reliability of data increases certainty. Flexibility of data increases an organization’s versatility and reach.

Any foray into new technology is both an investment and a calculated risk. A well-researched, intelligent decision to modernize existing tool sets can yield substantial ROI. Imagine the spectacular change in confidence, morale, and performance reflected below.

Defend with Authority!

Effective data management allows the comptroller or executive to be an advocate of the organization. Understand your programs with organized real-time views of data. Produce rapid customizable reports to address questions as they arise. Better yet, capitalize on visibility and empower yourself to ask the necessary questions before they are asked of you.

Discover with Clarity!

Take full advantage of the transparency and traceability of modern data-driven systems to match workloads with funding and schedules, then map directly to the mission. Spot inefficiencies, creeping scopes, and elements in danger of sliding. Know the impacts of every entity in your program.

Adapt with Insight and Foresight!

Knowledge begets power. Master when, where, and how to align your efforts for maximum performance at minimal cost, even in the face of fact-of-life changes. Know the nuances of your business dynamics and predict the outcomes of any change. Understand your program better than anyone else.

Act with Confidence!

Support your decisions with ease and quickly provide verifiable evidence that you can explain. Protect your program from sequestration. Engage the full capabilities of your data. Change your mindset. Stop playing catch-up and choose to lead the pack.



References

Hofmannsthal, V. H. (1990). Le livre des amis: Buch der freunde. Paris, FR: Maren Sell.

Garamone, J. (2015). No room for more risk in defense budget. DoD News: Defense Media Activity. http://www.defense.gov/news/newsarticle.aspx?id=128097

Keifer, T. (1988). Don’t know what you got (till it’s gone) [Recorded by Cinderella]. On Long cold winter [CD]. Bearsville, NY: Mercury.

Stein, G. (1973). Reflection on the atomic bomb. Santa Rosa, CA: Black Sparrow Press.

Roskill, M. (2008). Letters of Vincent van Gogh. New York, NY: Touchstone.

U.S. Department of Defense. (2013). Defense budget priorities and choices fiscal year 2014. http://www.defense.gov/pubs/DefenseBudgetPrioritiesChoicesFiscalYear2014.pdf

U.S. Government Accountability Office. (2015). Financial audit: U.S. government’s fiscal years 2014 and 2013 consolidated financial statements (GAO publication No. GAO-15-341R). http://www.gao.gov/products/GAO-15-341R

Boyd, A. (2015, Feb 13). Report: Feds slow to modernize enterprise systems. Federal Times. http://www.federaltimes.com/story/government/it/management/2015/02/13/feds-slow-modernize-enterprise-systems/23362641/

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