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Osborne & Gaebler, Reinventing Government (1992)

Students' Outlines

Compiled (with thanks) by Dr. Jeremy Lewis.  Revised 8 Nov. 2007
Overview | Preface | Intro | 12 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | Appendix A | App'x B |


Introduction: Perestroika.
by Amanda Blessing, Fall 2005
• America’s public schools are the worst in the developed world. Health Care is out of control, prisons are overcrowded. National debt is soaring, and many states are bankrupt.
• In the late 1980's, only 5% of Americans would choose government as their preferred career. 
• Americans believe their dollar has less value than it did 10 years ago. 
• Americans have consistently demanded more performance for less money. 
• Leaders only offer options of fewer services or more taxes.
• In 1978, in Visalia, CA, preposition 13 cut tax base by 25%. A brand new high school had just been built, and needed a swimming pool.
• A used pool was offered, a deposit of $60,000 was needed. 
• School board needed two weeks to advertise, hold board meeting, and get approval. 
• A third-level parks and rec. employee beat the red tape and got a check for $60,000.
• Because of the expenditure control budget, managers could respond quickly to circumstances.
• Budget rolled over fiscal years, unlike normal government budgets, which rush managers to waste money since there is no rollover.
• Visalia called their new budget “public entrepreneurial management”
• In East Harlem, one of the poorest communities in America, only 15% of school districts 4's students read at grade level. District 4 placed 32nd out of 32 in test scores. Alternative Junior Highs were opened, East Harlem Career Academy, Academy of Environmental Services.
• Uniforms were implemented at these alternative schools, teachers felt that they “owned” their schools, which is a needed feeling for proper teaching. These alternative schools became competitive for students.
• Government and services have become bloated and worn-out. They have failed to change with time. 
• Max Weber described bureaucracies as “precise, speedy, unambiguous”
• Most entrepreneurial governments promote competition, empower citizens, focus on outcomes, are driven by goals, offer choices, prevent problems, earn money, decentralize authority, and catalyze all sectors. (Public, private, and voluntary.)
• A Government is not a business, and cannot be run like one. A government must remain democratic and open. 
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Chapter 1: Catalytic Government: Steering Rather than Rowing.
By Amanda Blessing, Fall 2005
  • Government is a Greek word which means to steer. The job of government is to steer, not row the boat.
  • St. Paul Minnesota (over 15 years ago): population was lower than even during the depression. Business was down 41 %. Mayor George Latimer knew there wasn’t enough tax dollars to change the city, so he used an Urban Development Action Grant, Also catalyzed government and asked McKnight Foundation for 10 million dollars to rebuild Lowertown, the warehouse industrial area. 
  • Lowertown had 22 million put into it, and it brought back to the city over 350 million in new investments.
  • Latimer constantly catalyzed outside of the public sector, which allowed for maximum government impact while cutting back on spending. 
  • For the past 50 years, most have assumed that government’s role was one-dimensional: to collect taxes and deliver services. 
  • Government’s most profound role is to steer institutions such as families, neighborhoods, organizations, and businesses to health.
  • Steering is more important than rowing when dealing with the global economy.
  • Separating steering from rowing means separating the policy decisions (steering) from service delivery (rowing).
  • Steering requires people who can look at the big picture and can balance change and resources. Rowing requires those who focus intently on one mission and perform it well. 
  • Separating steering from rowing allows the most effective and efficient service. There is competition between service providers. There is flexibility to respond to change. And there is accountability for responsibilities.
  • Public workers often fear for their jobs when steering dominates. However, the government can move their jobs to private firms or different departments. Red tape becomes minimal. Jobs seem less monotonous. There is more public worker retention.
  • Privatization is not shifting responsibility from public to private. It should be the transfer of the delivery.
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    Osborne Chapter 2
    Community-Owned Government:  Empowering Rather Than Serving
    By Emily White, Fall 2007
    I. Intro
    a. Houston police chief transformed their police force to be neighborhood oriented by first building relationships with churches, businesses, parent groups, and other local organizations.
    b. The police officers encouraged these people to target the issues that promoted Houston’s heavy crime rate.  They established neighborhood watch programs, cleared abandoned lots, petitioned community leaders, and created job placement programs.
    c. This example shows that by making public safety a community responsibility and not just a job for the police to handle, crime can be prevented and not just punished.
    II. Pulling Ownership Out of the Bureaucracy, Into the Community
    a. With the emergence of mass industry in the early 1900’s, our present bureaucracy was formed.  This led to our system of ownership by rank, and the system of bureaucrats.
    b. However, this chapter suggests putting ownership back into the community.  It argues that pride comes with ownership, and when you are proud of something, you are going to treat it well and put a lot of effort into making it work.
    III. Public Housing:  A Case Study
    a. Kenilworth-Parkside housing development was one of the most dangerous areas of Washington, D.C.  Its streets were an open-air drug market, its windows were broken, and its homes were infested with rats because the garbage collectors were too afraid to go there.
    b. Resident Kimi Gray finally had enough and decided to transform Kenilworth-Parkside.  She began by raising money to send some of her neighbors to college.  She set up a college fund and multiplied the area’s number of college students by 350 times. 
    c. After that, the other residents were inspired to pressure the mayor into letting them manage their own property.  They wrote a constitution, and they trained and hired residents to manage and maintain the property. 
    d. They encouraged their neighbors to pay rent and report crimes.
    e. By 1989, Kenilworth-Parkside’s crime rate had dropped from 15 crimes a month to two.
    IV. Professional Service Versus Community Care- 8 Reasons:
    a. Communities have more commitment to their members than service delivery systems have to their clients.
    b. Communities understand their problems better than service professionals.
    c. Professionals and bureaucracies deliver services; communities solve problems.
    d. Institutions and professionals offer “service”; communities offer “care.”
    e. Communities are more flexible and creative than large service bureaucracies.
    f. Communities are cheaper than service professionals.
    g. Communities enforce standards of behavior more effectively than bureaucracies or service professionals.
    h. Communities focus on capacities; service systems focus on deficiencies.
    V. Managing the Transition From Service to Empowerment
    a. Argues that government should not stop running everything it’s in charge of; rather, it should use its power to create opportunities for local citizens to act and contribute. 
    b. This shift of power must be transitional, not sudden.  Leadership skills must be practiced and developed to be most effective.
    VI. Empowering Citizens Through Participatory Democracy
    a. The ultimate sense of ownership is the ownership of one’s government. 
    b. Americans don’t necessarily yearn for more meetings, more titles, or more elections.  Instead, they want more control over issues that affect their daily lives, like safety, education, and water quality.
    Chapter 2: Empowering Community.
    Community–Owned Government: Empowering Rather Than Serving
    Elizabeth McLain, 2003

    -In 1982, Lee Brown started what he called “neighborhood-oriented policing.”
    -He thought that the police should not just respond to crimes, but help neighborhoods solve the problems that underlie crime as well.
    -The basic idea is to make public safety a community responsibility rather than the responsibility of professionals. 
    -The police can be the most effective when they help the community help themselves. People act more responsibly when they control their own environment rather than being controlled by someone else. 
    -Our nation has several self-help organizations but we let bureaucrats run our public services.
    -We rely on professionals rather than families and communities to solve our problems which establish dependencies. Our most severe problems are welfare dependency, alcohol dependency, and drug dependency. 
    -“Clienthood”: Clients are people who are dependent upon and controlled by their helpers and leaders whereas citizens are people who understand their own problems in their own terms.
    -Our industrial economy of mass production caused us to hire professionals and bureaucrats to do what families, churches, and voluntary association had done.
    -Studies have shown that parent and community involvement in schools has increased educational programs and the success of students.
    -Similar measures have been taken and have been effective in courts, prisons, and hospitals.
    -Public Housing: Kimi Gray helped the Kenilworth-Parkside development in finding jobs, getting drugs off the streets, and students going to college.
    -Professional service vs. community care
    -Communities have more commitment to their members than service delivery systems have to their clients.
    -Communities understand their problems better than service professionals.
    -Professionals and bureaucracies deliver services, communities solve problems.
    -Institutions and professionals offer “service”; communities offer “care.”
    -Communities are more flexible and creative than large service bureaucracies.
    -Communities are cheaper than service professionals.
    -Communities enforce standards of behavior more effectively than bureaucracies or service professionals.
    -Communities focus on capacities; service systems focus on deficiencies.
    -The transition to a community-oriented society is not an easy one. There must be some kind of government assistance whether it b funding or regulation. There must also be a leader in the community who is willing to take charge.
    -Also, the government can’t force a community to help themselves. The community must choose to take action. 

    Osborne Chapter 2: Community-Owned Government
    By Amanda Blessing, Fall 2005

    • Houston, Texas 1982 - Black Police Chief Lee Brown desired to change his station’s reputation of racism and brutality. 
    • He started “neighborhood-oriented” policing, which required his officers to take in active role in the community, such as getting to know families, the PTA, churches, and businesses. This makes public safety a community issue, not a momentary one. 
    • Empowerment is an American tradition; people take more responsibility when they are doing something for themselves.
    • However, dependency has been created. Client hood- we are defined by our bureaucracies. 
    • Urbanization created mass production, which leads to professionals and bureaucracies doing what individuals had done before.
    • 1960’s- neighborhoods fought against city planners, minorities fought for control of Great Society programs. 1970’s- Welfare Rights, public housing control, and a holistic chronic healthcare movements emerged. 
    • The government has responded to such concerns and in some cases handed responsibility over. In Seattle, neighborhood captains were elected to run recycling. In Chicago and New Haven, CT, Parent Governance Management Teams voiced in on school decisions. 
    • Washington D.C., 1980. Kenilworth-Parkside Public Housing was in shambles. Drug-dealing, violence, and lack of amenities was nothing new for residents. 
    • Kimi Gray, a welfare mother of 5 began to tutor students, created “College Here We Come,” a program in which students fund-raised and applied for scholarships and to colleges. In the first year, 17 students left for college. In the following 15 years, over 700 attended college. 
    • In 1982, residents were allowed to manage the property. Residents wrote their own constitution, required young parents to get jobs, and trained in the fields of management and maintenance. Businesses were set up to keep money in the community. Rent Collections went from below 50% to 75%. Residents also moved police into the neighborhood, and crime dropped from 12 to 15 incidents per month to less than 2 per month. 
    • Weak Communities must have confidence built into them. 
    • Communities are more flexible, offer more care, and understand their own problems better than bureaucracies. 
    • Government cannot force citizens to take responsibility, but the door must be left open. 

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    Chapter 3: Competition in Services.
    By Amanda Blessing, Fall 2005
    • Phoenix, 1978- In the middle of a tax revolt, garbage collection is contracted out to private sectors. Government divided the city into districts, and demanded private companies to hire city workers that had been laid-off. Now, public and private sectors were competing.
    • There must be competition to drive down costs and make the public sector work, and not take their jobs for granted because they are a necessity to the citizens.
    • Competition thrives on innovation.
    • There are 3 varieties of competition: public v. private, private v. private, and public v. public.
    • Minnesota, District 4. A bill was introduced that allowed students pf low-income families vouchers to use at any school, public, private, or college. 
    • Students and their families were very receptive to these vouchers. 
    • This competition required public high schools to add more advanced placement classes.
    • There is an equity issue when dealing with competitive government: in this instance, was it fair to only give these vouchers to low-income families? Could the affluent add money to their vouchers?
    • This is a situation that called for “controlled competition.”
    • Public institution use is down, and competition is up. The U.S. Postal Service has lost many clients to FedEx and U.P.S. Public Police are losing ground to private security firms. 
    • The competition between sectors can not be ignored; it must be used and embraced to revitalize our government. 

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    Chapter 4: Mission-Driven Government.
    Angie Dahlke, Fall 2005

    -More efficient than rule-driven organizations.
    -More effective than rule-driven organization: they produce better results
    -more innovative than rule-driven organizations.
    -more flexible than rule driven organizations
    -Have higher morale than rule driven organizations. 

    The dysfunctional Housing Authority of Louisville
    •Created a nonprofit subsidiary, Louisville Housing Service, that could do many things the housing authority can no such as spend money on awards dinners for employees, run a scholarship program for kids in public housing, and even develop new housing.  The trick, Louisville Housing Service has no employees.  It is ran by a half-time consultant, who contracts with private firms.

    •The U.S. postal service has a rule book the size of a collegiate dictionary. The New York City school system has an even larger rule book.  It is hard to fire teachers and impossible to fire or transfer a principle.

    •The public sector has become a massive attempt to de-motivate the employees, by not letting them exercise their minds-telling them exactly what the have to do and when they have to do it.

    •Every year, the typical business is forced to winnow out of some of its products or services, because they no longer sell.  But in government, managers have no incentive to winnow out of their product mix.  They just add more and more services and regulations until finally a fiscal crisis or tax revolt forces a massive cutback—“Which is typically executed with all the subtlety of a meat ax.

    •Rule driven government protects from some corruption at the price of monumental waste.

    •Our budget systems actually encourage every public manager to waste money.

     -Give every employee an incentive to save money.
     -free up resources to test new ideas.
     -Give managers the autonomy the need to respond to changing circumstances.
     -create a predictable environment.
     -Mission driven budgets simplify the budget process enormously.
     -Save millions of dollars on auditors and budget officers.
     -frees legislators to focus on the important issues.

    •Rules make it impossible to respond to rapidly changing environments.

    Organizations should be mission driven, rather than rule driven.

    Its mission should be the fundamental purpose, not the rules or regulations.
    Define the mission first and then develop rules a budget system that will free up employees to   pursue those missions.

    Politicians must stop responding to problems with a “blizzard of new rules.” (A business would fire the individuals responsible, but governments keep the offenders on and punish everyone else by wrapping them up in red tape.)

    Free up the hiring method.
    Broader classifications and pay bands.
    Market salaries, and performance based pay
    Give managers the power to promote, not personnel.
    Allow more freedom in firing.

    Reform the grandfather stay on, and young, eager employees get laid off to performance, rather than seniority.
    Work toward one clear mission, rather than several different and conflicting.
    Give permission to fail.  Entrepreneurs are people who fail many times.

    Osborne Chapter 4: Mission-Driven Government
    By Amanda Blessing, Fall 2005

    • Government needs to be driven by its fundamental purpose.
    • Entrepreneurial governments focus on their mission.
    • Rules and red tape are necessary to prevent bad things from happening. Too much of these, though slows government and change down.
    • There are 5 advantages of mission driven governments:
    • more efficient than rule-driven organizations, more effective than rule-driven organization, they produce better results, more innovative than rule-driven organizations, more flexible than rule driven organizations, have higher morale than rule driven organizations. 
    • The Housing Authority of Louisville created Louisville Housing Service that could do many things the housing authority can not, such as spend money on awards dinners for employees, run a scholarship program for kids in public housing, and even develop new housing. Louisville Housing Service has no employees.  It is run with private firms. 
    • The government’s budget systems actually encourage public managers to throw away money, because the budgets do not roll over.
    • Rules make it impossible to respond to rapidly changing environments because it slows sown government’s pace.
    • There are 8 strengths of mission driven budgeting: every employee is given incentive to save money, resources are free to test new ideas, managers have the ability to respond to changes, the environment is predictable, the budget process is simplified, millions are saved, and legislators can focus on other important issues. 
    • Organization needs to be mission driven, not rule driven.
    • The fundamental purpose needs to be focused on.
    • Entrepreneurials are people that have failed many times before they succeeded.
    • The obstacles of mindsets, the desire to pork-barrel, and the shortage of trust between legislators and executives need to be surpassed. 

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    Chapter 5: Results-Oriented Government:
    Funding Outcomes, Not Inputs
    By Brady Lamborne, Fall 2007

    • They focus on inputs, not outcomes, They fund schools based on how many children enroll, welfare based on how many poor people are eligible, police departments based on police estimates of manpower needed to fight crime.
    • They focus on results.
    • Private organizations focus on results because they will go out of business if the key numbers go negative.
    • But Governments stay in business because or them being able to secure reelection.
    • Pleasing the voters is their performance evaluation.
    • Now new ways to measure and reward outcomes are being developed.
    • In Arkansas and Florida an adult program that repeatedly fails to place 70 percent of its graduates in jobs lose its funding.
    • If you don’t measure results you can’t tell success from failure and you end up throwing money down the drain.
    • When Bush declared war on drugs, it had no idea what worked. So it poured most of its money down the same holes the Reagan administration had already poured which was about $21 billion dollars.
    • In order for these performance measures to work you have to pay, manage, and budget.
    • As a result of just focusing on inputs the government is doing double the work and wasting money on programs.

    • The solution for the bureaucratic programs is to spend less money and cut back on the work.
       Chapter 5: Results-oriented Government.
    Funding Outcomes, Not Inputs
        Charles Walters, Fall ‘05

    Often in government the principle of a bureaucratic program is in effect for the right cause. Even though the principle is pure and has been put in place to help citizens often it hurts them. Such as was the case with the Illinois Nursing Homes. The Department of Public Aid was granting less money to nursing homes with patients who did not need as much care, thus, more and more people became bedridden the Department realized. The nursing homes had no incentives to help the people get better; they were only after the money from the state thus, making more people dependent than independent.
    Thus, a role of government should be to sponsor, result-orientated policies. These policies would look at the outcome of a program to see whether it is effective in its current form or not. 
    Sunnyvale, CA
    Sunnyvale, California has been leading the way in result-orientated government. The city sets “goals”, “community condition indicators”, and “performance indicators”. 
    The city also does not tell the Department of Public Works what it wants done, it tells them what the results of what they want done to be, and thus, explain exactly what to do, and when it should be done by- giving decision makers the information they need.
    Power of Performance
    - What gets measured gets done
    - New York was having fiscal problems and rewarded crews who kept the cleanest streets
    - Thus, incentives were created dropping the city from 43% filthy streets to only 4% 
    - When the measurement of process starts- people begin to think of the goals of the organization
    - If you don’t measure your results, how can you tell success from failure?
    - The majority of legislators do not know if they cut muscle or fat in terms of what is succeeding and what is not succeeding, the reason for this is that they are uniformed
    - Large groups with a loud mouth and good connections usually are provided with the most amount of money, even though they may not be as productive as a group who gets its budget cut because it is not adequately being represented
    - If you can’t see success you can’t reward it
    - Our tendency to reward failure by giving more aid to students who don’t do as well, giving more money to police when the crime rate is rising, etc, is only crippled our efforts to help the poor and also has created perverted incentives
    - If you can’t see success, how are you going to learn?
    - If we do not measure our success or failure, how are we going to learn what actually works and what does not? 
    - Also, if we don’t recognize something as a failure how are we going to correct it?
    - Because no one outside the bureaucracy can tell if offices and commissions do anything worthwhile because the work is not measured. 
    - 1963 President Kennedy tried to deinstitutionalize the mentally ill by getting them out of hospitals into the “warmth” of the community. The Institute of Mental Health handed out millions of dollars to help get this initiative passed to firms who promised to build Community Mental Health centers, when it was investigated 20 years later, it was found only 43% had filled their obligations
    - If you can demonstrate results, you can win public support such as in the case of Florida’s Department of Transportation. Initially in answer to a question “Should the legislature increase gas tax by 4 cents a gallon for improvements on state transportation” only 43% said yes, but when asked, “Would you favor a four-cent gas tax hike if the legislature made sure the increase would take effect only if the Florida DOT improves its performance?” Amazingly the number of yes’s went to a majority of 59%. 
    - Putting Performance to Work
    - How do governments use the information they provide to improve their performance?

    o Some organizations link pay to performance
    o Others use performance information primarily as a management tool, with which to continually improve their operations
    o Others tie their spending to results
    - Paying for performance (MBO- management by objective)
    o a merit or bonus system for high performing individuals or groups
    o probably least effective approach because the objectives have little to do with key results: quantity, quality, and cost of services
    o Managers set objectives low so they can be sure to meet them
    o Also MBO systems create an internal conflict, because each department focuses directly on meeting its goal, while ignoring the ultimate goal= customer satisfaction
    - Managing for Performance
    o more effective than management by MBO or MBR (results). 
    o Gives workers the tools to change the systems that lie in their problems
    o TQM, or Total Quality Management has been embraced by public organizations at all levels
    o Tries to isolate and pinpoint problems, and creates solutions
    - Budgeting for Results
      o mission driven budget is important because the budget is the system that drives behavior most powerfully
      o result oriented groups know they need to fund outcomes rather than inputs and thus, they need to:
    • add output or outcome measures to the budget
    • actually budget for the service level desired
    Osborne Chapter 5: Results-Oriented Government 
    By Amanda Blessing, Fall 2005
    • Traditional bureaucratic governments focused on the inputs and ignored the outcomes, which are the true measure of a program’s success.
    • Private organizations focus on results, which is the measure of their success and staying power.
    • Public schools are funded based on how many students enroll not retention or graduation rates. Welfare is given based on how many poor people qualify; police departments are funded based on how many cops are needed to fight crime. These programs actually tend to get more money when they fail. 
    • Sunnyvale, CA has led the performance revolution that focuses on results. Sunnyvale’s managers measure the quantity, quality, and cost of every service they deliver. Sunnyvale has increased productivity by 4%.
    • Managers use goals to define and get what they want and need. 
    • Results must be measured to be able to separate success from failure.
    • Success cannot be rewarded if it can’t be seen. 
    • Less public support if results can’t be tangible.
    • If you can see the results of something, consumers can be certain it got done.
    • Unseen failure cannot be corrected.
    • Paying for performance: bonuses, merit system. Managing for performance: use data to pinpoint problems. Budgeting for results: budget systems need to fund outcomes rather that inputs, this will enhance the mission-driven budget. Budget needs to be decentralized.
    • The most desired outcome of all is a happy, satisfied customer.
    Chapter 5: Results-oriented Government.
    Funding Outcomes, Not Inputs
    By: Krista Leachman Fall 2003

    - funding formulas were producing the exact opposite what state's intended them to- they were more focused on the
    inputs and ignored the outcomes and this is exactly what traditional bureaucratic governments do
    - they reward there employees based on other things such as there longevity, the size of their budget, the staff they manage, and their level of authority
    - private organizations focus on results because if they sgo negative they will go out of business
    - politics focus on perception and ideology
    - now we have technology so we can actually keep up with figures and tell outcomes but not everything government
    does can generate results that can be measured
    The Performance Leader: Sunnyvale, California
    -should lead the performance revolution
    -measure the quantity, quality, and cost of every service delivered
    -this gives its decision makers the information they need to make intelligent decisions
    The Power of Performance Measurement
    -defining measures is enlightening to many organizations
    -they have come to the conclusion if they don't measure the results, you can not tell success from failure
    -therefore if you can't see success you can't reward it
    -Sunnyvale has increased its productivity by 4 percent a year
    -If you can't reward success then you are probably rewarding failure which is the case most times in education
    -entrepreneurial public organizations can't ;earn from failure because they don't see any success
    -they constantly try to find out things that work and learn from their experience
    -Peter Drucker states that "the greatest opportunities for innovations in business are unexpected success"
    -of course if the states cant recognize the failure then they arent going to be able to correct it either
    -you also need to be able to demonstrate results to win the publics support- for instance how govenors do when they are campaigning and they bring up taxes
    Putting Performance Measures to Work
    -performance measure in education is criticized
    -governements use the information they provide to improve their performance by:
    some organizations link pay to performance, others use performance as a management tool and others tie it to their spending results
    -most entrepreneurial do all three
    Paying for Performance
    -most common strategy is performance pay like some kind of merit or bonus system for people who do good
    -solution is to reward groups rather than individuals
    Managing for Performance
    -use performance data to pinpoint problems
    -gives employees tools they can use to analyze them
    -isolate their roots causes
    -develop solutions and implement them
    Budgeting for Results
    -need to develop budget systems that fund outcomes rather than inputs and this will add to a mission driven budget
    -need a defined level of quantity and quality
    -so the budget system must be mission driven, decentrtalized, and result oriented

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    Chapter 6: Customer-Driven Government.
    By Amanda Blessing, Fall 2005
    • Few people in government rarely ever use the word customer.
    • Democratic governments exist to serve their citizens, businesses exist to make profits.  However, businesses tend to be a lot more consumer-oriented.
    • It is this way because most public agencies don’t get their funds from customers.
    • Many view government as hopeless, yet demand proof that things are changing, America is getting better.
    • The government has not changed with the global economy.
    • Entrepreneurials, however, have begun the transformation. They listen carefully to their customers, with customer surveys, customer follow-up, customer contact, community builders, and customer councils.
    • Organizations should constantly ask their customers what they want, and then shape their entire service and production process to produce it. 
    • Customers need to be put into the Driver’s seat.
    • Customer-driven systems force service providers to be accountable to their customers. Customer-driven systems depoliticize the choice-of-provider decision. Customer-driven systems stimulate more innovation. Customer-driven systems give people choices between different kinds of services. Customer-driven systems waste less, because they match supply to demand. Customer-driven systems empower customers to make choices, and empowered customers are more committed customers. Customer-driven systems create greater opportunities for equity; however, information must be available to all individuals.
    • A customer-driven system must be user-friendly. A more holistic approach within single programs satisfies more customers.
    • The one-size fits all government cannot last. 
    Customer-Driven Government: Meeting the Needs of the Customer, Not the Bureaucracy
    Rob Flynt, 2003

         Democratic governments exist to serve their citizens, whereas, businesses exist to make
         Many of us ignore government, but we refuse to be passive towards government. 
         The world is constantly changing, but government stays the same which makes it
         Entrepreneurial government, however, have begun to transform themselves. 
         They listen carefully to their customers. 
         Organizations should constantly ask their customers what they want, and then shape their
         entire service and production process to produce it. 
         In the public sector, unlike business, most institutions have multiple sets of customers. 
         The single best way to make public service providers respond to the needs of their
         customers is to put resources in the customers' hands and let them choose. 
         Most customers know what is important to them. 
         Providers must constantly seek feedback on their needs and then do what is necessary to
         meet them. 
         Customer-driven systems force service providers to be accountable to their customers. 
         Customer-driven systems depoliticize the choice-of-provider decision. 
         Customer-driven systems stimulate more innovation. 
         Customer-driven systems give people choices between different kinds of services. 
         Customer-driven systems waste less, because they match supply to demand. 
         Customer-driven systems empower customers to make choices, and empowered
         customers are more committed customers. 
         Customer-driven systems create greater opportunities for equity.

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    Chapter 7: Enterprising Government: Earning Rather than Spending
    Elizabeth McLain 2003

    -Our budget systems drive people to spend money, not to make it. We have 15 million trained spenders in American government, but few people who are trained to make money. 
    -People such as librarians, social workers, police, etc. believe they are doing “God’s work.” They are awarded by public opinion. 
    -Olympics in Los Angeles: The Montreal Olympic games had accumulated a public debt of 1 million dollars. But Los Angeles raised the money through sponsors, recycled old facilities, and got volunteers to work everything. They made a profit of $225 million. 

    Turning the Profit Motive to Public Use
    -The question to ask before actually solving a problem is “how could it profit us?”
    -Most cities do a project and see what the expense is. To be successful though you have to figure out how much money we can make.
    -In the age of fierce resistance to taxes, the government cannot look at itself as a nonprofit organization. 
    -Men’s softball league: they paid $25 a team to play when it was actually around $140 per team to run the league. When the price was raised to $90 the players were angered, but when the price was raised to $400 they were pleased because they realized that they could get sponsors to pay the amount. The city profited $260 per team which they used to invest in a girls’ softball league and recreation for senior citizens. 

    Raising Money by Charging Fees
    -Making profits through development deals is one of the more aggressive methods used by enterprising governments. It is also riskier than many of the alternatives. 
    -Perhaps the safest way to raise nontax revenue is to simply charge fees to those who use public services. The public clearly prefers this approach. 
    -User fees have two advantages: they raise money, and they lower demand for public service. Both help balance public budgets. 

    Spending Money to Save Money: Investing for a Return
    -By measuring their return on investment, people understand when spending money will save them money.
    -Businesses focus on both sides of the balance sheet: spending and earning, debits and credits.
    -But governments look only at the spending side of the ledger. Ignoring returns, they concentrate only on minimizing cost. Frequently they refuse even to consider significant investments that would generate significant returns—simply because of the cost. 
     -They postpone spending on road repair until the road has to be rebuilt, at three times the cost of simple resurfacing. 

    Turning Managers into Entrepreneurs
    -If managers cannot keep any of their earnings, they are not likely to pursue them. If we want public managers to think like entrepreneurs, we have to give them incentives to do so. 
     Shared Savings and Earnings: Mission-driven budgets solve this problem by  allowing departments to keep all or part of any funds they save or earn.
     Innovation Capital: In the private sector, businesses routinely raise capital to  pursue attractive investments. In most governments, managers can raise  innovation capital by only securing an extra appropriation from the council or  legislature. 
     Enterprise Funds: If we want public employees to become “revenue conscious”  we need incentives that encourage them to make money as well as spend it.  Guaranteed incomes create all the wrong incentives. A manager with a hefty  budget supplied entirely by the legislature will act much like a teenager with a  hefty allowance. Neither will beat the bushes for new ways to earn or save money.
     Profit Centers: In reality, there are several good reasons why government should  sometimes compete with the private sector. Some services are natural monopolies. 
     Identifying the True Cost of Services: Most governments have no idea how      much it costs to deliver the services they offer. Public managers cannot think like  investors or pursue profits if they don’t know their true costs. Governments all  over America are unintentionally subsidizing softball teams, golfers, developers,  and corporations—because they can’t tell if their charges cover their costs.

    Osborne Chapter 7: Enterprising Government
    By Amanda Blessing, Fall 2005

    • There are 15 million trained spenders in America working in the government. Only a few are trained to make money.
    • If government ran like a business, we would spend less and earn more. 
    • The word profit typically does not exist in the government’s vocabulary.
    • Los Angeles, Olympics 1984. The Olympics had always been publicly funded. Los Angeles convinced the international Olympic committee that the 1 million dollar public debt was ridiculous, and that they did not need public money to fund the Olympics. Sponsors and volunteers raised money, creating a profit of $225 million. 
    • Entrepreneurial governments are looking for nontax revenues, and recycling their money.
    • Before a problem can be solved, it must be established how it will profit the program?
    • The government cannot say it is a non-profit organization.
    • In Visalia, softball teams were charged $25 per season. Each team in reality cost $140. They had been no research; no problem had been looked at. The price was raised to $90. Players were angered at the rising cost, yet happy when the costs were raised even more because sponsors could pay the $400 fee. There was now a profit of $260 per team. These extra funds were used to create a senior center and more softball leagues.
    • Making profits through development deals is an aggressive method used by entrepreneurial governments. 
    • The public prefers the approach of paying a fee to use public services. This is a safe approach with 2 advantages: raising money, and lowered demand of public services.
    • Businesses focus on the 2 sides of balance: spending and earning, and debits and credits. 
    • Government only looks at the spending side, and minimizing costs. The government ignores small problems that would be cheaper to fix, instead letting them turn into expensive and bigger problems. 
    • We must treat public managers like entrepreneurials that is giving them incentives to keep their earnings.
    • Shared Savings and Earnings help keep funds in the sector that earns them. 
    • Managers need to know the full cost of the service they are delivering. Most governments have no idea of much their services cost to deliver. 
    • Government should be enterprised, as this is the American dream. 

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    Chapter 8: Anticipatory Gov't.
    R. Walker Garrett, 2003

     As America moved into the upper half of the 20th century following WWII, our traditions of prevention shifted to a show of our technological power with more emphasis on stifling the problem once it was already in movement. In comparison, Europe started to move to a prevention based government focusing on several key issues such as:
    fire prevention
    disease prevention
    and stronger environmental restrictions to prevent disasters in nature. 

    Not only is an anticipatory government logically feasible for a country or region, but it is financially feasible as preventative funding generally provides an excellent return on whatever investment made.

     A trend has been started in America of instant gratification:
    1. Americans borrow $1 of every $5 spent
    2. Our national debt has reached a staggering 3.6 trillion dollars, 
    3. $14, 000 for every man, woman, and child in America, yet we continue to merely pay the interest, while expanding funding for other areas.

    Prevention not only saves the government substantial amounts of money( in some cases a $10 return on every $1 invested), but it also saves citizens of a country substantial amounts.
    1. With poverty control, preventative measures such as loans, security deposits, and rent payments can prevent the probable homeless from ever losing their homes in the first place which can be done for 1/13th of the cost of placing them in welfare hotels.
    2. Running government like a business, such as providing financial incentives to make more efficient policies leads to preventive organizational standards within fire departments and environmental agencies
     i. Why would an organization want to be preventive if that meant they couldn’t expand?
    1. Give them lump sum funding
    2. Allow them to keep excess
    3. They will find a way to do their job more efficiently in the long run
    a. Ex. Rural Metro, private fire dept.

    With the Health Care industry, public awareness was raised on issues such as smoking, funding shifted to providing preventative care, and the trend will continue to move away from the much more expensive treatment based policies.

    How can we make our government an “Anticipatory Government”?
     Focus on the future
    Strategic Planning

     In order to plan for future crises and problems, we must organize to prevent them.
    This can be done through the establishment of futures commissions.
    1. A futures commission should have some general questions in mind:
    a. What needs to be done?
    b. How will it be done?
    c. When will it be done?
    d. What tools and resources are available?

    A futures commission should anticipate the problems of the future by creating possible scenarios of future problems and then determining how to prevent those in the first place. 
    Strategic planning should include the following basic steps:
    1.  analysis of the situation 
    2.  diagnosis, or identification of the key issues facing the organization 
    3.  definition of the organization's fundamental mission 
    4.  articulation of the organization's basic goals 
    5.  creation of a vision 
    6.  development of a strategy to realize the vision and goals 
    7.  development of a timetable for that strategy 
    8.  measurement and evaluation of results

    Through several changes in the way we budget and allocate funding, we can work to prepare for future problems so that they may be prevented.
    a. We can budget long term, not year to year
    b. Distribute budgets among departments to encourage more prevention investment and keep deficits low
    c. Create reserve funds for possible crises
    d. Look for ways to pay off debts or prepare for projects in the future now and establish goal plans
    e. Create more local government responsibility through regional agencies

    Strategic planning means that we must focus on leading away from the obstacles which may confront us in the future, that is to steer rather than row, because rowing leads to focusing on moving through obstacles as they come at us. Why expend that energy why we can avoid them through planning? 

    We cannot always know what is going to be our next crisis, but it is clearly to our advantage to work on preventative measures and establish ways of dealing with our problems of the future by our actions and planning now.


    Anticipatory Government: Prevention Rather Than Cure
    By Marie Wilkerson, 2001

        Traditional bureaucratic governments focus on supplying services to combat problems.  To
    deal with crime, they fund more police.  To combat fires, they buy more fire trucks. 
    There was a time when the government focused more on prevention like building swater and
    sewer system to prevernt disease.  They also enacted on building codes to prevent fires. As
    governments developed the capacity to deliver more sevices the attention shifted from prevention
    to services. 

        -organizations that focus on rowing don't steer much 
        -they wait until a problem becomes a crisis, then offer a new servict to fix the problem 
         or crisis 
    Anticipatory governments do two fundamental things: 
        1. They use and ounce of prevention, rather a pound of cure 
        2. They do everything in their power to foresight into their decisions making 

    They also use strategic planning 
        -planning is the process of examinign an organization's or community's current situration and
    future trajectory, setting goals, developing a strategy to achieve those goals, and measuring the

    Basic steps of strategic planning: 
    1.  analysis of the situration 
    2.  diagnosis, or identification of the key issues facing the organization 
    3.  definition of the organization's fundamental mission 
    4.  articulation of the organization's basic goals 
    5.  creation of a vision 
    6.  development of a strategy to realize the vision and goals 
    7.  developmetn of a timetable for that strategy 
    8.  measurement and evaluation of results 

    Government is future-blind

    Osborne Chapter 8:  Anticipatory Government 
    By Amanda Blessing, Fall 2005
    • Government used to have a more preventative take on America.  As government’s power to deliver services grew, their attention focused more on the delivery aspect than the prevention. 
    • Anticipatory Governments use prevention, foresight in their decision-making processes, and they also utilize strategic planning.
    • Strategic planning looks at the current situation, and the future trajectory, and then developing a strategy to prevent the bad, and extend the results.
    • There are 8 basic steps of strategic planning: analyzing the situation, identification of the key issues, definition of the fundamental mission of the organization, articulation of the basic goals of the organization, creating a vision, developing a strategy, developing a strategic timetable, executing and then measuring results.
    • Rowing is moving through obstacles as they come to us, steering is prevention of these obstacles. 
    • Planning and action now can prevent costly crises in the future.

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    Osborne 9: Decentralized Government, From Hierarchy to Participation and Teamwork
    Notes by Erin Baker, Fall 2007

    * “In today’s world things simply work better if those working in public organizations… have the authority to make many of their own decisions.”
    * As changes come faster decision making must also be faster….there are two possible responses:
    o 1. strengthen the center of government
    o 2. reduce the decision load by sharing it with more people
    * Our instinct tells us to go with response 1 but that increasingly leads to failure
    * Advantages of a decentralized institution
    o Far more flexibility; they can respond quickly to changing circumstances and customer’s needs.
    o More effective
    o More innovative
    o Generate higher morale, more commitment, and greater productivity
    * Governments have clung to the hierarchy system and consistently emphasize choosing the safest route – this has left public employees docile and passive
    * The problem is that they are taking control away from the only people who are close enough to do anything about it
    * The starkest example of decentralization occurred in the department of defense – successful armies always have decentralized authority, This contributed to the failure in Vietnam, Johnson wound up taking full control
    * W.L. Creech took over the TAC in 1978 and through decentralization got much better results with no new money and less work experience
    * One way of decentralizing organizations is through participatory management: human nature dictates that people work harder and invest more of their creativity when they control their own work
    * Strategies of participatory management include:
    o Quality circles
    o Labor-management committees
    o Employee development programs
    o Attitude surveys
    o Employee evaluation of managers
    o Invention policies
    o Innovation champions
    o Reward programs
    * A lot of public managers believe that unions are the biggest obstacle to entrepreneurial government, no layoff policies are a good way to get union cooperation
    * The most serious resistance to teamwork often actually comes from middle managers, not unions
    * Decentralization can work only if leaders are willing to invest in their employees
    * Decentralization is needed in the federal government, for example we need a new model of grant program.

    Osborne 9: Decentralized Government, From Hierarchy to Participation and Teamwork
    Al Zachos, Fall 2005

    1. 50 Years ago- centralized institutions with slow communication, primitive technology, and an uneducated work force were the NORM.
    Today- information is limitless, communication is instantaneous, and many employees are well educated. There isn’t time for information to go up a chain of command.
    Decentralization is the answer. In today’s world things work better if those working in public orgs can make their own decisions.

    2 Responses for the "pressure of quick decisions: 
    1. further strengthen center of government
    2. reduce the decision load by sharing it with more people.

    Traditional leaders- reach for the first response
    Entrepreneurial leaders- reach for the more decentralized approach. They move decisions to the periphery.
    Advantages of decentralized institutions:

    1. More flexible-can respond quickly to circumstances.
    2. More effective- frontline workers are closest to problems.
    3. More innovative- innovation doesn’t usually happen because someone at the top has a good blue print.
    4. Generate higher morale, more commitment, and greater productivity.
    Rest of society has run away from hierarchies, most governments, however, have NOT changed.
    Entrepreneurial leaders have started to use participatory government.
      1. Employ teamwork
      2. Create institutional champtions
      3. Invest in their employees.
    Organizations that decentralize authority have to articulate missions and measure results.
    1. The World According to Creech
    Best example of decentralization came in the largest and most centralized bureaucracy: the Department of Defense.
    Successful armies have always decentralized Authority.
    Vietnam- Johnson took control of the war and our military paid the price.
    Iraq and Kuwait-Bush gave them objectives and let them figure out how to do it best.
    General Bill Creech- legend in U.S. Air Force. Took control in 1978 of Tactical Air Command (TAC).
    Problem: there was a lack of passion, the airforce used a one-size-fits all approach.
    Control was at the top of command..
    Cure: Radical decentralization. Improved living quarters for repair and supply people, invested in their training.
    Publicized results and embraced competition.
    He said, "There are many people out there waiting to get some responsibility."- He had enormous success in management, costs, and efficiency.
    Decentralization through Participatory Management
    Creech doubled the productivity of the TAC just by recognizing human nature: 30-40% increase is common.
    Participatory management is flourishing in entrepreneurial public organizations from schools to police departments.
    1978- Ronald Contino is hired to manage departments of the Bureau of Motor Equipment in New York.
    He introduced top level labor committees and labor management committees, brought 85% of the once inefficient garbage.
    Gave day to day operations to line employees.
    Madison, Wisconsin embraced participatory management with a program called Total Quality Management- $ 700,000 saved.
    Their police department- employees elected their own captains and lieutenants, did their own staffing and work schedules.
    Participatory government- is spreading to public education, give as much authority as possible to the principals and teachers.
    Labor management Cooperation
    Problems are a symptom of bad management. Contino’s reforms made sure that labor representatives had genuine power.
    More suggestions came in, "profit costs" and "contracting in".
    No layoff policies- no one wants to innovate themselves out of a job. If job security is there, their attitude toward innovation changes dramatically.
    Flattening the Organizational Hierarchy
    -Most serious resistance to teamwork and participatory management often comes from middle managers not unions.
    -Sponge effect- they stop info on its way up the ladder, and on its way down also and overcontrol sets in.
    The Teamwork Organization
    Participatory organizations force teamwork to be present. Madison Wisconsin used quality circles.
    Organizations push authority into the hands of the employees. To handle these problems they were forced to use teamwork.
    Small groups are the "building blocks" of excellent companies.
    1972- Roger Harrison says that power organizes itself into 4 types of orientations:
    1. Organizations with POWER orientation, many traditional businesses.
    2. Those with ROLE orientation, traditional government bureaucracies.
    3. Those with TASK orientation, technology oriented businesses that are results oriented.
    4. Those with PERSON orientation, such as social groups.
    One major roadblock to innovation is segmentation, where structures are divided sharply into levels and departments. Innovative organizations foster constant communication.
    Teamwork Organizations display other strengths
        1. Cross department teams bring different perspectives to bear on problems or opportunites.
        2. Team members think outside the box.
        3. Teams break down turf walls, fostering collaboration across depts..
        4. Build lasting networks throughout an organization.
        5. Teams hold employees to high standards.
    Creating an Institutional Champion for Bottoms up innovation
    Must protect employees. Many participatory management efforts of the 1980s failed because managers didn’t support the workers.
    Participatory management is risky.
    -must share information and confront underlying issues.
    Rick Perpich governor of Minnesota created a kind of "institutional champion" designed to empower and protect entrepreneurs deep within the bureaucracy.
    Efforts to improve productivity usually undermine both productivity and morale, efforts to improve morale by empowering employees, usually heighten both morale and productivity.
    Decentralization can work only if leaders are willing to INVEST IN THE EMPLOYEE.
    In today’s globally competitive knowledge economy, constant updating of skills is a prerequisite of survival, businesses have dramatically increased their investments in employee training.
    Decentralization in the Federal System
    1960s-1970s- many activities of government were overcentralized.
    There were good reasons behind this.
    -Washington had more information and capacity than those in state and local govts.
    States complain about overregulation from Washington, and local governments do the same about state governments.
    New Federalism- imposed by Ronald Reagan did little more than cut federal aid., it is also known as "fend for yourself" federalism.
    The closer people are to government, the more that they trust it. 
    The federal government, if it adopted decentralization, might have fewer employees but its role in "steering" would decrease.
    They would still have:
      1. Policy areas that transcend the capacities of state and local govs.
      2. Anti-poverty policy, that requires the investment in precisely those regions with fewest financially funded resources.
      3. Social insurance programs like social security and unemployment compensation.
      4. Investments that are too costly.
    Challenge grants create competition for national funding.
    Must embrace missions defined by states and push for results that the states want.
    Must create incentives for state and local governments, BUT, would leave the job of designing and running the programs to the state governments.
    These grants could replace categorical and block grants in the heart of a REAL NEW FEDERALISM.

    Chapter 9: Decentralized Gov't.
    Liz Arnett, 2003

    Main Idea: Changing the Government to a decentralized Government
    Meaning: Transferring the power from a small group of people at the top of an institution to the workers of the institution.

    Main points for doing this: 

  • Decentralized institutions are more flexible than centralized institutions and respond quickly to changing circumstances and customer’s needs.
  • Decentralized institutions are more effective than centralized institutions because the responsibility is transferred to the frontline workers.
  • Decentralized institutions are far more innovative than centralized institutions because the good ideas come from the employees who actually do the work and deal with the customers.

  • Decentralized institutions generate higher morale, more commitment, and greater productivity because employees realize their importance when given the opportunity to voice their opinion and see it put into action; this is accomplished through decentralized institutions.
    Air force- Creech changed the philosophy of “one size fits all” to giving the pilots and mechanics responsibility. He published results of how this affected their performance and created competition between different groups. This resulted in an 85 % increase in the amount of planes being rated as mission capable. Fighter jets were averaging 29 hours a month of flying time. TAC doubled their number of sorties. The amount of time to deliver a part dropped from 90 to 11 minutes. Crashes dropped from one every 13,000 flying hours to one every 50,000. The reenlisting rate for first term mechanics doubled.

    Osborne Chapter 9: Decentralized Government 
    By Amanda Blessing, Fall 2005

    • 50 years ago, centralized institutions were indispensable. Information was slow, and the public work force was uneducated.
    • Today, information is limitless, and communications can be instantaneous. Conditions change with blinding speed. Decisions must be made fast.
    • Decentralized Governments have 4 main advantages: they are more flexible than centralized governments, they are more effective, they are more innovative, and they generate higher morale and greater productivity.
    • For decentralization to work, the leaders must be willing to invest in the employee.
    • Ronald Reagan imposed New Federalism, also known as “fend-for-yourself” federalism.
    • W.L. Creech helped decentralize the department of defense.
    • He publicized results, embraced competition, and allowed individuals to focus on their missions.
    • He invested in the military, and the individuals in the military.
    • The productivity virtually doubled as a result of the organization, of getting authority down to its lowest level. 
    • It is proven that people respect and cherish what they do, and will take more pride and responsibility in it. 

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    Chapter 10: Market-Oriented Gov't:
    Leveraging Change through the Market
    Negin Ahmadi 2001 (another below)

    A: Market Oriented Government
    I. Most government programs structure the market place to fill public need
    II. It works because it moves people in the direction the community
    wants to go while leaving the decisions up to the individual
    III. They work because they are decentralized and can keep up with changes in public need
    IV. They will continue to work as long as Government observes supply, demand, accessibility and information

    B: Government should move away from programs
    I. Programs aren’t driven by the customer, but the constituent
    II. They’re driven by politics and not need
    III. They create turf wars, botched delivery, and don’t change even when
    IV. They usually lack impact on the target population

    C: Government can move to the market with some modifications
    I. By changing how it moderates the marketplace, e.g. Car Safety
    II. Give information to the consumer about government services
    III. By using the private sector to fill the needs of the public, that
    Government creates
    IV. By using taxes to leverage control to force private companies to do
    the Government’s work

    D: Command and Control vs. Incentives
    I. Don’t concentrate as much on penalizing violators as rewarding
    companies that comply with regulations
    II. For those that violate policy tax them and use the money to fix the
    III. Give a credit system so that there will be competition among
    private companies to comply with regulations

    E: Add competition to the public sector
    I. Make the government run like a business
    II. Reward civil servants that do more with less
    III. Make government sell ideas to the private sector.

    Osborne, "Market-Oriented Government:
    Leveraging Change Though the Market" 
    Joshua D. Cooper, 2003

    I. Franklin Roosevelt created the (FHA) Federal Housing Administration.
    a. Required only 20 percent of down payment of a house and let them pay off the rest over a 30 year period.
    b. This forever changed the market place of buying houses.

    II. Many states have a litter law.
    a. So they came up with a “bottle bill” that gives people five cents for every bottle or can they bring back.
    b. This decreases the litter around cities and towns and creates a market for bottles and cans.

    The Trouble with Government by Program
    I. Programs have no flexibility so they fail in the market place.  Market places have to be free flowing, or there would be no competition.
    a. The programs are not run by customers.
    b. Politics dive the programs.
    c. “Turf” is created which agencies defend.
    d. Fragmented service delivery systems are created.
    e. Programs do not correct themselves.
    f. Programs hardly every go away.
    g. They hardly make any impact on the market.
    h. They use commands not incentives.

    How Governments are restricting the Marketplace
    I. Rules for the Market place.
    a. You have to have a supply.
    b. You then have to have a demand for the supply.
    c. You must have accessibility to the supply to meet the demand.
    d. Customers have to know about the product to demand it in the market.

    Applying Market-Oriented thinking to Governments Other Job: Regulations
    I. Regulations put restrictions on what you can and cannot do in the market.  Such as health standards.  What is healthy and unhealthy. 
    a. People will find ways around the regulations.
    b. Government agencies try and threaten them with penalties.
    c. Third they will have to go to court.
    d. Try to use technology to help control the situation.
    e. They cost of requirements on industries all over the country is very expensive.
    f. They focus on large industries.
    g. They focus on the symptoms rather than the causes. Which does not help any.

    Market-Based Regulatory Policy: Incentives Rather Than Commands
    I. The EPA takes these companies to court and sues them for polluting.  But there is nothing done about what they have done other than a fine.  The fine is cheaper then fixing the problem the has caused the fine.  So it is a vicious cycle that just keeps going and going.  They increase taxes on things that create pollution but noting is done to fix the problem.

    The Emergence of Smarter Markets
    I. Technology is starting to help measure the amount of pollution that goes into the air.  They are trying to get people to use more efficient ways to get around and live their life that causes less pollution. 

    Restructuring Markets Within the Public Sector
    I. Jobs that are in the private sector are called systems, such as the education system.  These jobs help generate the market in the public sector. 

    Balancing Markets and Community
    I. Many thing change in the market, suck as the competition, demand, and system change.  All of these thing play a great deal in the market place.

    Osborne Chapter 10: Market-oriented Government
    By Amanda Blessing, Fall 2005

    • When most think of government, they automatically think of program.
    • Many programs are actually market mechanisms.
    • Most are actually administrative mechanisms: monopolistic organizations that send appropriated money to deliver a service.
    • There are 8 flaws in administrative programs: programs are not driven by customers, but by constituents; they are driven by politics, not policy; they create turf, which is what the agencies defend foremost; they tend to deliver services fragmented; they are not self-correcting; they rarely die; they use commands, not incentives; and they rarely make a significant impact. 
    • The market place is structured by the government to fill public need.
    • Modifications need to be made to the market, such as giving information to the customer about government services, using the private sector to fulfill the needs of the public, and using taxes to force private companies to help government’s workload.
    • Competition needs to be added to the public sector, so the government will run more like a business.
    • Changes must be made to build community, create incentives, and to manage demand.

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    Chapter 11: Putting it all Together.
    Joey Hollis & Larry McLemore, 2001 

    Osborne uses Education, Health Care, and Crime (3 of the nation's problems) to theoretically
    illustrate what the differences under the entrepreneurial system would look like. 

    Creating a better health care system:
    Problems with the Present: 
    -uses 12% of the GDP 
    -34 million people have no health care 
    -doctors have complained about over regulation by governments and insurance companies 
    -Reactive and not preventive 

    Under the Entrepreneurial system: 
    -Government would steer, setting rules and perhaps creating a mechanism for negotiating limits
    on costs, providing funding, and requiring that all have it.
    -Competition would be encouraged, allowing customers to shop for the best price. 
    -Would create strong incentives from preventive care 
    -Less Hierarchy 
    -non centralized system 
    -structure the marketplace to meet social needs 

    Traditional education epitomizes the bureaucratic model, being centralized, top down, with each
    school being a monopoly. It ensures stability, and not change. 

    Creating better public education: 
    Problems with the present: 
    drop out rates are higher in 1990 and 1980 
    In tests used to compare student achievement tin advanced industrial nations, worse off in 1990
    than 1980- 
    Scores of college entrance exams increase by 1.5% By 82 and 87, then leveled off and dropped. 

    In September of 1989, the president met with governors, with the consensual thought of
    restructuring - endorsing the principles for entrepreneurial governance. 

    In the entrepreneurial system: 
    -Set minimum standards, measure performance, enforce social equity, and establish financing
    mechanisms necessary. 
    -contract of voucher basis- by many different organizations- teachers, colleges, even community
    -parents would have great deal of control over their childs school 
    -school would have to compete to attract students, and funding might be dependent on retention
    and enrollment 
    -greater freedom to do what it wanted to do 
    -each school develop an independent budget, retaining left over funds 
    -tenure would be eliminated or radically defined 
    -school seeking prevention rather than cure- might begin to work with parents to eliminate home
    problems, and communities to attach the problems that we use to undermine the process 
    -would be encouraged to earn more money

    Creating a better crime approach:
    Problems with the present: 
    -violent crime has increased 12 times faster than our population 
    -murder, rape, and robbery rates are highest in the world 
    -bankrupting state and local governments 
    -government does not play a catalytic role 
    -no one steers, bc the govt. is different and is fragmented differently 
    -doesn't give citizens control over public safety 
    - no choices 
    -rarely use competition 

    In the entrepreneurial system: 
    -system would be managed at the state and local levels 
    -local council could steer their local systems, but not row 
    -funding would again be on a competitive basis 
    -local councils would use many different mechanisms to achieve goals 
    -community organizations would 
        push public housing authorities to adopt resident management 
        contract with organizations that work with troubled families 
        partial insurance to banks that invest in high crime areas 

    A shift in the basic model of governance in America 

    The Entrepreneurial Revolution: 
    Crisis: Necessity is the mother of invention. Need creates a demand for change. 
    Leadership Leadership is most important- important element of leadership is having the ability
    to protect those within the organization who are willing to risk change 
    Continuity of Leadership: important that is organization is not shaken when a leader leaves,
    because the top leaders in government are busy climbing the ladder of success 
    A healthy civil infrastructure: Informal networks of civic commitment that differentiate strong
    communities from weak communities. Those cities with a healthy infrastructure are those in
    which citizens, organizations, businesses, and media are committed to the general welfare. 
    Shared vision and goals: Collective vision. 
    Trust: Trust based on personal relationships 
    Outside resources: foundations, civil organizations, other governments 
    Models to follow: no single model, but able to see people doing what you desire to promotes

    Osborne Chapter 11: Putting It All Together
    By Amanda Blessing, Fall 2005

    • Osborne and Gaebler use education, health care, and crime as the problems that the ten principles can change.
    • A better education: traditional education is centralized, and the perfect example of a bureaucratic model. Each school is a monopoly, rarely changing.
    • Problems of traditional public education include drop-outs, testing rates, and the change of the customers- students and families.
    • In the entrepreneurial system, schools would be encouraged to earn more money, they would seek to prevent problems rather than trying to remediate failure, there would be minimum standards set, and each school would have more freedom. There would be competition to attract and retain students.
    • A better healthcare: the current healthcare system uses 12% of the GDP, it is not preventive, there are complaints about over-regulation, and 34 million+ people have no healthcare at all.
    • In the entrepreneurial system, government would steer, setting rules and perhaps creating a mechanism for negotiating limits 
    • on costs, providing funding, and requiring that all have it, competition would be encouraged, incentives for preventive care would be created, and it would be structured to meet changing needs.
    • A better crime approach: The problems with the current crime-prevention approach are seen in the statistics: violent crime has increased 12 times faster than our population, murder, rape, and robbery rates are highest in the world, there is no one steering, citizens have no control over their own public safety, and there is no competition.
    • In the entrepreneurial system, the program would be managed at state and local levels, funding would become competitive, and there would be incentives for fighting and preventing crime.
    • The entrepreneurial (r)evolution- the following are what spur change: a crisis, leadership, a healthy civic infrastructure, shared visions and goals, trust, outside resources, and models to follow.
    • Entrepreneurial government has become a global revolution, proving it is not just a fad.
    • Lack of a new vision holds us back. Fundamental change is necessary to the government’s future success, and our success as a world leader. 

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    Appendix A: 36 Alternative Service Options.

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    Appendix B: Performance Measurement.