Guiding principles for financial resiliency.

• Author: Johnston, Heather

Most governments are developing ways to provide a high level of services with fewer resources. The best way to accomplish that over the long term is to weave strong, goal-oriented financial practices into the fabric of your organization. These are the organizations guiding principles, and they ultimately lead to resiliency, which can be defined as an ability to recover from or adjust easily to misfortune or change. Given the many changes that are underway in local government, anything we can do to make it easier for the organization to adapt to change is critically important.

BENEFITS

Avoid Short-Term Thinking. As much as government officials want to act in the best interest of the public, pressing challenges sometimes arise that require immediate reaction--and that can lead to decisions that are inadvertently in conflict with an organization's long-term interests. To help avoid this situation, governments should adopt guiding principles that articulate the organization's values. Doing so ensures the government's long-term ability to provide valuable services to its citizens, which is what financial resiliency is all about--making sure that decisions are aligned with the organization's most fundamental beliefs about what is in the best interest of the community in the long run.

Identify Conflicts and Alignment. The guiding principles are intended to provide direction to everyone--elected officials, appointed managers, finance officers, and departmental staff. It's helpful to achieve some distance from short-term emotions and compare your decision to the organization's guiding principles for financial resiliency. In this way, you can better identify any potential conflicts and make sure you are aligning the organization's allocation of resources with its goals.

DEVELOPMENT

Help Leaders Express their Vision. People typically find it difficult to articulate what guides their decision making, but there are ways to help them with this. The finance officer can get the process started by talking with elected officials and members of the governing board about their vision for the future of the organization. The organization's goals and values are an excellent place to start the conversation. Ask probing questions about the future--for example, ask elected officials to describe what a thriving, growing organization would look like in the future, while also identifying some of the risks to achieving that vision. The ensuing discussion will help shape the guiding principles.

Review Past Decisions. It's also possible to discern the organization's core values by reviewing past decisions, both good and bad. For example, all the council members of one city referred to a downtown...