Government Executive - Authors - Rose Mueller-Hanson

Analysis: Leading Through the Budget Downturn

Adam Cole and Rose Mueller-Hanson — Fri, 05 Apr 2013 12:42:48 -0400

Federal leaders are facing significant challenges in dealing with budget cuts, public scrutiny, political turbulence and a disgruntled workforce. Leading through this crisis requires vision and fortitude to facilitate major transformations. Fortunately, government executives have the benefit of seeing how the private sector has navigated similar challenges.

The government’s financial situation is reminiscent of industry challenges that developed during the recession and linger today: uncertainty, employee disengagement and risk aversion.

Starting in 2008, a series of high-profile bankruptcies and financial meltdowns led to an environment of intense uncertainty. A recent study by CEB, an industry advisory company, showed that 28 percent more chief executive officers anticipated substantial budget changes in 2009, compared with 2006. Similarly, the ambiguity of operating under constant continuing resolutions and the threat of sequestration makes long-term planning difficult. Government leaders are used to doing more with less, but now they must try to meet their missions in a landscape of shifting budgets and priorities.

Massive layoffs, frozen wages and a lack of job security during the recession contributed to a significant decline in morale throughout the U.S. workforce. CEB research shows the number of employees who have become disengaged increased by 50 percent from 2008 to 2010, and the amount of discretionary effort employees are willing to put forth decreased by 29 percent. In government, looming furloughs, ongoing pay freezes and harsh criticism of civil servants have hampered their ability to stay engaged and focus on their mission. The Office of Personnel Management’s 2012 Federal Employee Viewpoint Survey showed a decline in job satisfaction for the second consecutive year.

During the financial crisis, high-profile scandals among well-respected financial institutions resulted in calls for increased oversight and regulation. Mounting public pressure led to a climate of avoiding risk at a time when more innovation was essential. In the first year of the recession, manager support for new ideas declined by 10 percent, while 97 percent of senior leaders indicated that more innovation would be needed in the years ahead, according to CEB research. In government, allegations of improper spending have resulted in layers of new rules that stifle innovation and progress. Restrictions on travel and training make it difficult to make the investments needed to prepare for future challenges.

Just as private sector organizations have been able to overcome these challenges, so can government. Lessons from the economic crisis highlight the importance of three essential leadership attributes: adaptability, engagement and courage. Federal leaders can leverage the same capabilities to lead through tough times.

Adaptability: Effectively navigating a shifting landscape requires leaders to keep abreast of changes and provide guidance to employees on how to adjust accordingly. This requires remaining optimistic amid uncertainty, recovering quickly from setbacks, persevering despite obstacles, and experimenting with new approaches to identify what works. Beyond adapting themselves, flexible leaders develop these skills in others and cultivate a dynamic environment that is conducive to high performance.

Engagement: Leaders can foster engagement by establishing clear mission-related priorities and regularly talking to employees about how their activities fit into the broader scheme. Effectively managing poor performers is key. If leaders can get them to engage, these employees are three times more likely to produce quality work. Leaders must address performance issues fairly and directly. Moreover, they must provide nonmonetary rewards -- praise and recognition for high performers and opportunities for those who have potential.

Courage: In this budget climate, it is tempting to avoid risk. But courage to experiment and protect investments is needed now more than ever to drive innovation. Courage means speaking up to preserve resources, holding stakeholders accountable for results, confronting those who fail to uphold values and ethics, encouraging open and honest discussion, and keeping fear or risk aversion from stifling new ideas.

The private sector’s experience does not offer an exact recipe for success, but as the saying goes, “those who ignore the past are destined to repeat it.” Government leaders must learn to navigate uncertainty, proactively manage performance and embrace reasonable risk-taking. These strategies can help agencies retain top talent and focus on their mission amid the distraction and chaos.

Adam Cole is a senior director at CEB specializing in employee engagement, employment branding and performance management. Rose Mueller-Hanson is director of organizational and leadership development consulting with PDRI.

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Engaging Employees in Tough Times

Elaine D. Pulakos and Rose Mueller-Hanson — Wed, 25 Apr 2012 00:00:00 -0400

During the past several years, millions of Americans working for private sector companies and state and local governments lost their jobs, while the federal government kept hiring. But the landscape has changed. Federal positions, traditionally regarded as the most stable, are now at risk under President Obama’s plan to trim $24 billion from the federal budget in 2013.

The private sector is actually showing signs of economic recovery, with the Dow crossing the 13,000 mark this year for the first time since May 2008. Now, as government struggles to retain its value proposition, it risks losing critical talent resources at the hand of more attractive, viable and profitable private sector employment opportunities. As Ted Kaufman, former Delaware Senator, recently said, “At some point, instead of 10,000 [government employees] retiring in one year, you’ll have 40,000 retiring in six months . . . if this economy comes back . . . and people have options.” Agencies face a difficult challenge: retaining top talent in a time of uncertainty and fluctuation while also battling fierce competition from the private sector.

When budgets get tight, agencies must get creative about how to attract and keep the best and brightest professionals. Fortunately, most federal employees are more motivated by the opportunity to contribute to the greater good than by financial rewards, so engagement is an especially important factor in attracting and retaining these individuals. Engaged employees are more likely to persevere in times of difficulty, produce more and higher quality work, stay in their jobs longer, and be more satisfied with their work and organizations.

According to the Corporate Leadership Council at the Corporate Executive Board, an industry research firm, emotional engagement is four times more powerful than tangible rewards when it comes to inspiring positive attitudes and high performance. In a survey of more than 50,000 employees at 59 global corporations, the council found that increasing engagement leads boosts performance up to 20 percent and reduces the likelihood they will leave by 87 percent.

So what produces engagement? It essentially stems from three factors: a sense of purpose, control over the work environment and the ability to do what one does best. Leaders play a critical role in creating a climate that makes engagement possible. Organizations must provide training and hold leaders accountable for demonstrating 10 key behaviors that drive employee engagement.

Paint the big picture. Tell people how the organization works in plain language that everyone can understand.

Connect the dots. Make sure people understand why their work is important to achieving the mission. If this connection isn’t clear, then restate what employees are being asked to do.

Manage the outcome, not the process. Set clear expectations for what success looks like, but allow people the freedom to determine how to achieve those goals.

Don’t be a chicken. Challenge the status quo and take smart risks that will advance the organization’s goals; encourage and reward others to do the same.

Find the sweet spots. Learn what people are good at and help them structure their work to play to their strengths.

Push people outside their comfort zones. Give them stretch assignments that enhance current skills and further develop their competence.

Critique with compassion. Deliver direct and candid feedback in the spirit of caring and genuine desire to help people succeed.

Treat staff like customers. Pay attention to employees; get to know them, find out what’s important to them, show appreciation and fulfill their needs.

Drive healthy interaction. Demand respect and tolerance for others; broker issues but make people responsible for working things out with one another; reward collaboration.

Model engagement. Attack your own work with enthusiasm; allow for and contribute to fun in the workplace.

Agencies need their best talent to do more with less and accept more uncertainty, and an explicit focus on employee engagement is more important than ever. Organizations that proactively develop leaders who foster this work culture will be able to fuel their talent engines to withstand the threats of a challenging economic environment and build the bench strength needed to meet and exceed mission demands.

Elaine D. Pulakos is president of the management consulting firm PDRI. Rose Mueller-Hanson is director of the firm’s Leadership and Organizational Consulting Group.

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