Public Sector Uncertainties
Perhaps the most important reason that cities, counties, and regions need scenario planning is that they have less control over their markets than do the businesses and people who live there. Unlike people and businesses, these political entities are fixed in space. They may occasionally annex some new territory, but they are essentially swapping among themselves. Outside of Hawaii, no new land is being made, in fact, in some places, the land may get smaller. And that last statement is a good place to start with scenarios for cities, counties, and regions.
Here are a few general uncertainty questions for these constituencies:
- If global warming increases sea levels, what is the impact on waterfront property, huge bases for property taxes and tourist income?
- What if a major anchor business leaves the area? (5% of corporate headquarters regularly move around – no, it won’t be you, but it will be somebody. Oh, it may be you)
- What if a natural or manmade disaster occurs and people decide to leave the area?
- What if a natural or manmade disaster occurs and it takes decades to rebuild?
- What if your local industries begin to sunset?
- What if you see a massive migration to cities? Away from cities?
- What if citizens demand the reclamation of polluted land, regional leadership on environmental issues?
- What if a more conservative local government is elected? A more liberal one?
- What if income and revenues dig precipitously?
Many areas are continuing to manage through the aftermath of the recession, and we don’t have clarity on the future of the US economy. Those areas will take longer to recover than individual businesses because of the lag between recovery and revenue, and recovery and employment. If there is a continuous period of slow or no growth, then the state of those areas will remain under pressure. It is important that cities, counties and regions, and the not-for-profits that support the economic ecosystem put on a name on uncertainty, and understand the nature of the pressure on their area. This can lead to dialog about innovative ways forward, about risk mitigation, about what is really important and what isn’t. It may even help take the politics out change because scenarios remove the partisan and replace it with a way to reason together.
Each area has its own unique uncertainties, its own unique threats, and opportunities. As I have said in this blog since the beginning, it is critical that leaders put a name on uncertainty and generate strategic dialog about how to navigate through change. Scenarios offer the best tool for doing that. There is no data about the future, only speculation. You can speculate aimlessly, or you can speculate too narrowly – or you can speculate using a structured approach that helps focus your organization on its strategic imperatives. That is a choice you do get to make.
Here are a few more uncertainties that the public sector needs to keep in mind: