242 – A Grand Strategy.

850 words (10 minutes reading time) by Colin Weatherby and ChatGPT

“And lo, the Local Government was filled with aspirations for the community. But when the State government imposed a rate cap, limiting their capabilities, the leaders knew they must align their aspirations with their limitations through strategy. And Richard Rumelt, a wise strategist, spoke unto them saying “A good strategy addresses the most important and high stakes challenges through a coherent set of analyses, concepts, policies, arguments, and actions.” But many Local Governments strayed from this path, with strategies that lacked a clear central idea and failed to address important problems or opportunities. And Rumelt warned them “If thou fail to identify and analyze the obstacles, thou doth not have a strategy, but instead a stretch goal, a budget or a list of things thou wish would happen.” And the leaders heeded his words, and developed a good strategy to overcome their challenges.”

Source: The Book of Local Government (c/o ChatGPT)

I have been inspired for the title of this post by John Lewis Gaddis, who says strategy is necessary for ‘the alignment of potentially unlimited aspirations with necessarily limited capabilities’.  It is strategy that aligns our most important aspirations with our capabilities so that we can achieve them. It is especially important when capabilities are being limited.

Local government is full of aspirations. We deliberately ask the community what they want to create a list of things to do. We don’t wait for them to tell us. Our workers are expert at identifying new needs. We like to say that we really understand community needs and expectations. I suppose, this is where the problem starts when a State government disagrees and decides that people are being charged too much for councils to meet their needs and they introduce a rate cap.

Worse still, is when the State thinks some of those needs should not be met by the council at all or they are being met in ways that are inefficient or frivolous.

“The days of ratepayers footing the bill for Arnold Swarzeneggar impersonators are over.”

Labor leader, Daniel Andrews, 2014

I have recently re-read Richard Rumelt’s book ‘Good Strategy/Bad Strategy’. It is over 10 years old now and remains a classic on strategy. I also read his new book, ‘The Crux’. He has recently described his ideas about strategy as ‘challenge-based strategy’, which is useful when thinking about them in the context of local government. We have challenges.

Rumelt says that good strategy does more than just urge us forward and state a set of ambitions. He also laments the word strategy being used in contemporary business teaching and writing to mean so many things that is has become meaningless. Fortunately, he has a clear view.

“The core of strategy work is always the same: discovering the critical factors in a situation and designing a way of coordinating and focusing actions to deal with those factors.”

He says that, to be effective, strategy must addresses the most important and high stakes challenge (or aspiration). It does this through a ‘coherent set of analyses, concepts, policies, arguments, and actions’. It all starts with identification of the most important challenge through careful diagnosis, then development of guiding policy to address the obstacles identified in the diagnosis, and, finally, a set of coherent actions to achieve the policy intent.

What is the most important challenge for your council?

This is a question I often ask colleagues. I get so many different answers that it is apparent councils don’t see one common challenge. In some cases, they can’t decide on any one challenge. This is common and leads me to bad strategy, which Rumelt says it is more than the absence of good strategy because it misdirects the efforts of the organisation. He says it is an ‘edifice built on mistaken foundations’.

Strategy is bad when it actively avoids analysing obstacles because it is difficult or seen as negative, or it is simply an exercise in goal setting. Hard choices are avoided so that no one is upset. Rumelt’s hallmarks of bad strategy are:

  1. Lack of a clear and cohesive central idea or concept.
  2. Failure to address the most important problems or opportunities.
  3. Confusion between goals and intentions.
  4. Lack of coherence or alignment between different parts of the strategy.
  5. Reliance on hope, as opposed to a realistic assessment of resources and capabilities.

I have used this list to assess some existing council strategies. Most get 5 ticks, and it is apparent that they follow a set format of ‘vision, mission, and goals’, which Rumelt describes as ‘template strategy’. This approach seems to studiously avoid focusing on the one big challenge or making any hard choices.

“If you fail to identify and analyse the obstacles, you don’t have a strategy. Instead, you either have a stretch goals, a budget, or a list of things you wish would happen.”

In local government, we like to make lists. It is always good to see everyone’s ideas written down. It is important that everyone has input and ownership. Plus, we don’t like saying no and disappointing people or alienating constituencies.

Based on the recent series of posts about rate capping, if we think that expenditure growing faster than revenue as a result of the rate cap is the biggest challenge, we should develop a strategy.

A good strategy.

On Grand Strategy (2018) by John Lewis Gaddis

Good Strategy/Bad Strategy (2011) by Richard Rumelt

The Crux (2022) by Richard Rumelt

241 – Rate capping – the final words (from our future)

250 words (3 minutes reading time) by ChatGPT (with some help)

The Victorian government has implemented a policy requiring councils to operate and deliver services within the constraints of annual Consumer Price Index (CPI) increases. This means that councils must fundamentally re-think the way they deliver services to the community in order to meet this requirement.

If there are certain services that cannot be delivered within this framework, councils must identify these “special” services and seek a higher rate cap for them. The need for these services must be explained and justified through a community engagement process, as it is essential for the council to have the support of the community for this change.

These special services could vary, such as infrastructure projects that are partially funded by the government but the operating costs fall on the local community, or natural issues specific to a region such as tree canopy coverage or flooding.

To request higher rate caps, councils must demonstrate responsible and efficient use of resources in delivering their regular services within the CPI increase constraint. This will require a dedicated team within the council to understand and work with the Essential Services Commission, the regulator overseeing this policy.

Overall, while it may require a re-thinking of current processes and the development of new skills, there is a pathway for councils to live within the rate cap and meet the needs of their community.

Footnote

It is somehow fitting that the last post on this topic (at least for now) is written by AI using information taken from previous posts. It is illustrative of the efficiencies the rate cap must drive if councils are to deliver services with only CPI increases. Over 500 words in random paragraphs were reduced to 250 words of clarity in seconds. The essential actions were gleaned from many ideas. Councils need to do this.

Footnote to the Footnote

When asked to take the Footnote and re-write it, ChatGPT became quite chatty about itself …

The task at hand for councils is clear: to deliver services to the community within the constraints of annual Consumer Price Index (CPI) increases. This requires a fundamental re-thinking of the way services are currently delivered, and an emphasis on efficiency and productivity. The use of AI, like in the example of this post, serves as a reminder of the potential for technology to aid in streamlining processes and identifying key messages. It is now up to councils to take this concept and apply it to their own operations, in order to meet the demands of the community within the rate cap.

240 – In the beginning …

1000 words (10 minutes reading time) by Carole Davidson

The posts so far about the impact of the rate cap explain what is happening, but do they really help to work out what to do about it? Councils can tighten their belts and, perhaps, raise alternative revenues to replace lost rates. My question is will that be enough?

I thought I would go back to the beginning. Why did the Victorian Labor government think the rate cap was needed and what were they hoping to achieve? I am pretty sure that unless they see the changes in local government that they were after, they will not change their position. Even if they did, it is my understanding that the rate cap has bipartisan support, so the opposition will need to agree or they will simply reintroduce it if they win office.

The earliest information I can find is a report in The Age on 4 May 2014 saying that the then Labor opposition leader Daniel Andrews was promising a rate cap if his party were to be successful in the election being held in November that year. Their stated intention was to give ratepayers a ‘fair go’. Under the rate cap, councils would have to detail where every dollar they spend goes.

“The days of ratepayers footing the bill for Arnold Swarzeneggar impersonators are over”

Source: State councils must cap rates under Labor plan, The Age 4 May 2014
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239 – Zombie councils

500 words (5 minutes reading time) by Tim Whistler

I have read Lancing and Colin’s posts with some interest. As a long-term, self-appointed local government pundit, I don’t think the rate cap can be an existential threat to local government, but it is going to turn councils into zombies. Like zombie companies, councils will become dependent on others for their survival. They will be alive but unable to think or act for themselves. Despite what people would like to think, ultimately, they will be simply the local branch of the state government delivering the services the state decides they must. This is at odds with what many councils currently think they are doing.

“Councils have autonomy to provide services that meet the needs of their local community, and will establish a range of discretionary processes, including local laws, to guide certain activities that can occur within their municipality.”

Municipal Association of Victoria, ‘Vic Councils’ website
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238 – Il comune povero- ‘The poor municipality’

1600 words (15 minutes reading time) by Colin Weatherby                                                                                                                

Great post by Lancing Farrell. I like the link to the creative and enduring solutions people have devised in response to food scarcity. Human ingenuity can be a marvellous thing.

The impact of declining financial sustainability on asset management is disturbing. As anyone directly responsible for council assets knows, for many years the biggest challenge for local government in Victoria has been the cost of caring for assets. The Institute of Public Works Engineers (IPWEA) has been advocating for better asset management for years. I would argue that the principal council service is to own and care for assets on behalf of the ‘community. The rate cap has rapidly made this much more difficult, and as Lancing showed, the challenge is not spread evenly across councils.

What can councils do in response to funding scarcity? Will our commitment and creativity help us find new ways to provide the services the community needs and expects? Our own il comune povero.

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