Two

The Cleveland Operations Improvement Task Force

The success of the Operations Improvement Task Force is due in great part to three people who played integral roles: E. Mandell “Del” de Windt, the chairman of Eaton and the representative of the business community with whom I worked most closely; Jack Hushen, Eaton’s manager of public affairs, whom Del appointed executive director of the OITF steering committee; and Ben Bryan, Jack’s public-sector counterpart and implementation coordinator for the OITF. In this chapter, I have drawn on their perspectives on all the important components of an effective P3.

As I described in chapter 1, when we began, the city’s finances were declared unauditable by the State of Ohio, and the city could not pay $15 million in notes called in by local banks. Cleveland had gone into default and was essentially a ward of the federal government. Its infrastructure was deteriorating, with roads, bridges, sewers, and water lines buckling and crumbling. The city was unable to obtain credit because it had not been paying its bills to vendors. There was an overwhelming feeling among Cleveland’s business leaders that something had to be done quickly to get the city off its downward spiral and onto an upward track. The situation was critical.

Foundations for a Successful P3

I had an important advantage even before I became mayor: personal relationships built over many years. Many leaders in the business community had been frustrated by elected officials, especially those at Cleveland City Hall, who had considered them adversaries. So when they urged me to run for mayor, they assured me that they would step forward to assist should I be elected. These were people I knew and trusted and with whom I had worked before when I held public office in Cuyahoga County. Their pledge of support was what helped me decide to run. We agreed that the future of our city depended to a large extent on the involvement of business and that no one sector of society can go it alone. The private sector can’t, local government can’t, and neither can unions or nonprofits.

When developing a P3, one of the first steps that a local government executive—whether mayor or city manager—must take is to ask for help in solving the city’s problems.

Another is to establish trust. Like many big cities at the time, Cleveland had been studied to death. Each study ended with a thick, spiral-bound notebook and little or no action. Businesses do not run on pretty pictures and multicolored charts. They run on results. The private sector will not commit time and resources to a P3 unless assured that it will result in action rather than rhetoric. I made a pledge that I would personally back the recommendations of the OITF and participate in their implementation. Without the commitment of a chief executive officer to carry out—not just talk about—change, I doubt that any such initiative will succeed. Only when a level of trust has been established can the public and private halves of the partnership begin to work together.

The next step is to secure the resources needed to begin the project. Cleveland commissioned a private consulting firm to propose a program and a plan of action to bring modern management techniques to the city, streamline the administration of government, and eliminate duplication and overlap. The ensuing proposal was keyed to extensive participation by the private sector. The business community would have to help recruit the people and raise the money needed to get the job done. The consultants could act as advisers, but the studies, recommendations, and implementation would have to be carried out by a task force of committed partners.

Smart business owners and managers know that the success of their companies is tied to their communities and to the quality of life of their workers, and if they don’t know it, you should lay it out for them as plainly and persuasively as you can. Call it the principle of enlightened self-interest. You should look also to individuals who sit on the boards of charitable or nonprofit organizations; they will have experience in persuading others to respond to the needs of a cause.

In Cleveland, we established an executive committee of top-level corporate officers from major firms in the city, much like a board of directors. We also assembled a ways and means committee and gave its members the job of securing pledges for people and money.

The response in Cleveland was quick and dramatic: ninety men and women of exceptional talent—$3 million worth of exceptional talent, in fact—volunteered for task force duty. Employers were willing to loan employees, among their most skilled, to work on the task force. Two Cleveland foundations underwrote a $250,000 challenge grant that was matched with contributions from more than 250 companies of all sizes. Organized labor, as well as church and community development organizations, made substantial contributions. In all, more than $800,000 was raised.

Another key to success in any P3 is communication. It is important that each partner have a point person who acts as a clear channel to the others. In Cleveland, we were lucky to have Del de Windt, for example, as representative of the business community. Without him and others like him, we would not have had the OITF and many of the other P3s that resulted from it. Each partner in the shared enterprise should be represented by a trusted and reliable spokesperson. And always say what you mean and mean what you say.

Organization

The OITF was designed to report and recommend methods for achieving more efficient and cost-effective operations of city government. But first, we had to organize. This took place in three distinct phases:

1. A four-week period to get prepared, funded, and staffed

2. A twelve-week full-time effort to document, study, and evaluate the problems and to propose solutions

3. The integration and editing of an approved report

Working in partnership requires coordination. Del de Windt appointed Eaton’s director of public affairs, Jack Hushen, as executive director of a task force steering committee for the private-sector partners. It was his job to make sure that things stayed on track and that all the corporate partners honored their responsibilities. The loaned executives had to be real leaders—people whose skills and services would be difficult to replace—not just tokens or, worse yet, dead weight. Del’s and Jack’s insistence on this level of quality made all the difference in the success of the program.

Ben Bryan was Jack’s counterpart in the public sector. Ben worked with the City of Cleveland as the implementation coordinator of the OITF for five years. The first two years were as the private-sector liaison for the study, a position through which he developed the task force’s recommendations and the plan for their implementation. For the next three years, he was on the city’s payroll, charged with working with my chief of staff to implement the recommendations and other associated tasks.

The volunteer loaned executives formed four teams, each headed by an expert in the discipline involved. The number of teams and the areas of expertise of the volunteers must be tailored to the specific needs of your P3. Finding the right people for the right job is tremendously important. If you don’t know or are unsure, by all means, ask for advice.

Some task force members began their work with a degree of apprehension. They soon lost their reservations, however, and plunged in with an eagerness to get more involved. They found that most city employees were dedicated and hard-working people who were more than willing to cooperate, and they also came to appreciate the unique problems of governing and managing a large city. Working together on the OITF fostered professional relationships and respect between the loaned private-sector executives and their city counterparts. I’ve stayed in touch with many participants from this and other partnerships, and I’ve heard them say that what they accomplished through the OITF was a highlight of their professional careers. Most also noted that they could not have done it without support from the people they worked with at their own offices.

Once the teams were in place, they began studying the multitude of departments in Cleveland’s city government, grouping them into four general categories:

• Public properties and public service

• Public safety

• Public utilities, infrastructure, and community development

• General governmental activities

Each team had three objectives:

• Identify immediate opportunities for increasing efficiency and improving cost-effectiveness that could be realized by executive or administrative order.

• Suggest managerial, operating, and organizational improvements for both immediate and long-term consideration by the mayor and city council.

• Pinpoint specific areas where further in-depth analysis could be justified by potential short- or long-term benefits.

It soon became apparent that two major factors were dragging the city down: the lack of a systemic management approach and a dearth of trained and experienced managers.

The final report of the task force contained more than six hundred specific recommendations to improve the operations of city government. The task force study, if fully implemented, would result in an estimated onetime savings of $37 million and potential savings of $30 million annually.1

But then what?

Implementation

As I noted earlier, the personal commitment of the mayor or other city executive is a key element in the success of any P3 plan. One of the most important things that you can do is set a positive tone for your managers and foster a culture of professionalism through all levels of administration. Part of that professionalism is the discipline to follow through, to implement the plan developed.²

First, you should set expectations for implementation. In Cleveland, using the OITF’s final report for guidance, each department head was required to write an implementation plan proposing middle- and long-term strategies for managing budgets and improving the delivery of services in their own departments. Because I had established good working relationships with department heads and commissioners, they understood that this was not to be a punitive action—though I also made it clear that progress would be the measure of their performance evaluations.

At first, the OITF leadership oversaw the plan, but in 1981, supervision of implementation progress passed from the OITF to my law director and chief of staff, Tom Wagner. He began tracking and reporting on the implementation progress in each department. By 1982, an astounding 94 percent of the task force’s recommendations had already been implemented or were in process, at which time the OITF reported that its goals had been achieved and that its work was concluded.

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As a newly elected official, you may be sticking your neck out and taking political risks by reaching out to businesses and other community groups to propose creating a P3 like the OITF. At the same time, the potential rewards in terms of productivity and more efficient delivery of public services are even greater. There are also significant intangible benefits, including establishing a culture of professionalism in city government and opening channels of communication between the public and private sectors. Indeed, many of the loaned executives from the Cleveland P3 stayed in touch with their city counterparts long after the official OITF had ended. This type of relationship that carries over even after the initial project is completed helps sustain the progress that you’ve achieved. More about that later.

Note

This chapter draws on correspondence and other contributions from E. Mandell de Windt, Jack Hushen, and Ben Bryan.