NICHOLS Applied Management
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_Articles - Innovation Perspective

_Municipal Change and Informed Decision Making

In this article, Peter Nichols reviews some of the challenges to implementing municipal change and discusses a number of aids to informed decision-making.

Let's face it. It's not easy these days for councils and managers to make decisions that involve significant changes from the status quo. Decision-makers must wrestle with:

  • the complexity of issues. Nothing seems easy: issues are complex and often inter-related. A decision made in isolation can have unanticipated effects in other areas. Various stakeholder groups can be affected, in different ways. Political considerations intervene. Some impacts can be measured and quantified; others must remain in the "qualitative" realm. All of these different factors and impacts must somehow be synthesized and weighted.
  • trade-offs. Unfortunately, most decisions are not "win-win" but instead involve trade-offs: some pluses and some minuses; some winners and some losers; and even opposing short-term and longer-term impacts (for example, expenditures today for benefits tomorrow). Improved service levels often (although not necessarily) imply higher costs. Improved efficiency through downsizing has negative effects on the affected staff. Municipal grants and related benefits provided to a particular community group may imply higher taxes for all ratepayers. And so on.
  • uncertainties and risks. Decisions often must be made in an environment of uncertainty and unknowns and the probabilities and potential significance of different eventualities must be considered. However, things can unfold far differently than expected and can invalidate the decisions that have been made, necessitating reversals and modifications as new information and events unfold. Such risks are associated with many decisions but do not negate the need to make them: even greater risks can arise from a conservative "do-nothing" approach.
  • decision-support information that is unclear, incomplete, overly detailed, or unduly technical. The difficulties faced by Councils and senior management in making informed decisions are often compounded by deficiencies in the form and content of the information made available to them. It is a rare skill to be able to convey the appropriate level and range of decision-support material to the executive team in a clear and concise manner.

These are some of the challenges facing decision-makers. Fortunately, although the complexities of issues grow, there are new tools and techniques and information sources available to senior executives and managers to help them sort through the various issues and uncertainties to make more informed decisions.

Some of the aids to decision-making include the following:

  • the use of cost-benefit analysis, to measure the expected costs and benefits of various alternatives in a consistently comparable manner.
  • the use of statistically valid public and stakeholder surveys, to provide a gauge of views, preferences, and expected impacts.
  • new information sources, such as the internet, which can provide ready access to lessons learned in other communities.
  • impact assessment, which examines the expected effects of alternative courses of action and identifies opportunities for enhancing positive effects and mitigating or reducing negative spin-offs.
  • formal program and operational evaluations, which can provide the analyses that examine and support necessary changes.
  • planning, forecasting, and simulation models, that allow municipalities to examine the implications of different scenarios. Our consulting firm, for example, makes extensive use of computer-assisted financial planning models to test the financial impacts of alternative growth, investment, program, and policy decisions, and has applied evaluation models to test the implications of alternative emergency response solutions on response times and delivery costs. New computer and software technology has considerably improved the ability to evaluate many decision alternatives facing municipalities.

These and other decision-making aids will not eliminate the difficulty of making informed decisions or the risk of making the wrong choices, but they will improve decision-making performance. That is, if you have time to prepare adequately for a decision. No matter how powerful the techniques are that can assist in decision-making, they will require some time to execute and they imply that the decision process has been anticipated. It follows that crisis management makes good decision-making harder. It also follows that decision-making is best conducted in the context of an orderly business planning process.

 
 

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Articles
Service Models
Contracting-Out
Innovation and Business Planning
Innovation Perspective
Infrastructure Financing Policies
Reserves Policies
Role of Performance Measurements and Benchmarks
Implementation of Performance Measurements and Benchmarks
Municipal Councils and Innovation
Municipal Change and Informed Decision Making
Municipal Lessons from New York
Approaches to Organizational Improvement
Innovation and Municipal Infrastructure
Strategic Budgeting
Public-private Partnerships
Gainsharing to Reward Employees
Mechanisms for Funding Capital Requirements
Municipal Elections and Continuity
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