The General Fund is not your friend. Most public organizations, and almost all personnel, are funded with general funds. While familiar, the General Fund has its limitations. General fund appropriations are based on a scarcity model that does not match services to need well. When you run out of General Fund dollars, you run out of service - resulting in deficiency requests or waiting lists.
Instead, consider getting off the general fund. Open yourselves up to other revenue sources, from fees for service to residuals on products developed. Receiving funds for value produced allows financial resources to grow with demand. It also heightens accountability to customers.
My favorite example of this comes from a large, urban school district. This district's Board of Education decided to end the central stores monopoly. They dispersed the stores' general fund money to the schools and told the individual schools they could shop for supplies anywhere they chose. In order to keep the schools' business, central stores leadership concentrated on service quality. Their turn around time went from 6 weeks to 24 hours and their business volume went up 20%!
Divest in order to invest. Most public services have lived through several rounds of budget cuts in their lifetimes. It's not a pretty sight and most sane people abhor the prospect of more. However, some of our clients have voluntarily chosen to go beyond imposed budget cuts - in order to reallocate funds from lower to higher priorities.
One client had his leadership team develop a dream list of the changes they'd make if only they had money. That dream list proved so compelling that the architects of it found the resources from across their budgets. Another client starts each fiscal year by taking money off the top, allocating out 95% of what was appropriated. The kept money is invested in innovation that improves customer outcomes. A third client has in hand a prioritized list of one-time investments to make from end-of-year savings. We have dubbed this last divest-invest technique off the bottom.
Time is money. Divesting in order to invest is equally applicable to time. Given that public organizations' budgets are primarily in salaries, we have helped several clients examine how the same level of staffing could advance additional strategic ends. At times, we've asked clients to name the "time munchers" - i.e. items that sap time but aren't mission critical. For others, we help them design new ways of work in order to free up time.
Want an example? We recently helped a state arts council develop a design for significantly reducing time spent on their grant applications processes. Using design lab methodology, 50-60 % of the application review time was identified for elimination, while process integrity was maintained. Together, we also designed areas in which to invest time, including additional leadership and service offerings to arts organizations across the state. (The investment side is always fun - and needs to occur to help spur on the divestment side.)
Stay ahead of your customers. One central administrative service we were working with was pretty unconcerned about finances. They had a revolving fund and their customers were required to use them. Then at an action planning retreat, one manager said, "I predict we will be left producing high quality 8 tracks when CDs put us out of business." Her analogy was right on. While they had a high quality service, their customers needed something else entirely.
A dated, but relevant, example: Back in the 1980's, a centralized typewriter repair service had the foresight to see that their world was ending. They got ahead of it by hiring new staff and by training their existing staff to become a computer technical support center. Needless to say, they are still thriving.
These are a few of my favorite cool ideas for accomplishing greater end results even in times of scarce resources. I feel as if I've only scratched the surface. We know of more examples. We offer two different workshops you might be interested in. One is called "Finding the Money for Information Technology Investment" and the other is "Delighting Customers in time of Scarce Resources." Let me know if you'd be interested in sponsoring either one.
My partner, Larry Grant, has delivered the first one multiple times. Larry says, "What I like best about working with clients in times of scarce resources is fanning the flame of hope. They come into the conversation with the belief that innovation is doomed. They leave excited, armed with concrete ideas for finding the funds to keep innovation alive."
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