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Cost Reduction Strategies for Budget-Constrained Governments

Building flexibility to better position for tomorrow


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Imperative for change

In response to the economic downturn, governments have had no choice but to reduce costs. However, the time is now - to start building flexibility to be better positioned for immediate mobility when the economy turns around.

Governments are trying to manage budget deficits through traditional cost reduction strategies, such as reducing staff or cutting programs. But according to the Center on Budget and Policy Priorities, states project that deficits will continue well into 2011, which could mean that traditional cost reduction methods may not be enough. The 2009 American Recovery and Reinvestment Act stimulus package provides temporary relief, but does not solve the long-term, fundamental challenges with government service delivery exposed by the economic crisis.

The fallout from the recession has triggered a shift that requires government leaders to change now. Carl Steidtmann, Chief Economist, Deloitte Services LP, commented recently that as a direct result of these extraordinary economic conditions, “the size, role, and purpose of government will look different.” The mandate for change is here: what can leaders do to lay a foundation so that we emerge stronger?

Methods to help make change stick

Today’s economic conditions have underscored the need for fundamentally new approaches to government service delivery. Below are 10 suggestions for consideration in your efforts to make change last.

  1. Get leaders to lead
  2. Connect with your people
  3. Avoid everybody’s job, nobody’s job
  4. Adapt your performance management system
  5. Remember your culture does not define itself
  6. Anticipate “we don’t need it,” “we can’t do it”
  7. Plan for transition early
  8. Build your believers
  9. Become a learning organization
  10. Remember where you came from

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Related Content:

Webcast: Cost Reduction Strategies for Budget-Constrained Governments
Library: Driving State Transformation in an Economic Downturn
Resources: Administration of Change: Perspectives on the Obama Impact
Library: Government Dbriefs Webcasts

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