Emerging Issues: What Will Be the ‘New Normal’ in Your City?

October 12, 2009

Use of the term "new normal" has become the new normal.

The idea that transformative economic change is occurring showed up recently, for example, in "Business Week," a Brookings report, an ABC news series, the front page of "The Wall Street Journal" and "The Economist."

The optimistic economic vocabulary that we conventionally use disposes us toward an expectation of continuity, not radical change. Standard metaphors of the business "cycle" and "recovery" suggest a return to the status quo ante, that is, to "normal."

But that's not what the chattering classes are telling us. They're saying that the norm to which we will now turn will be "new." In every industry, "it's all going to be different," the president of the American Chamber of Commerce Executives told "The New York Times." "America is heading for an era of slower growth," opined "The Economist."

Not perhaps what we want to hear. As old maps are said to have noted at the edges of unknown places, "here be dragons." *

Despite dragons, perhaps it's useful and important to challenge assumptions about the return of previous conditions and to ask: "After the crisis, what comes next? Are there any silver linings in the clouds? How will we deal with whatever the new situation may be?"

Some leaders in Kalamazoo, Mich., recently wrestled with those questions.

The Kalamazoo Process

"It was amazing. It was absolutely the right thing to do."

Hannah McKinney, vice mayor of Kalamazoo, persuaded top local government staff from Kalamazoo, neighboring Portage and Kalamazoo County to come together to think the unthinkable and to consider how they might make the best of the likely changes their communities will confront.

New ways of thinking and operating, she says, don't emerge spontaneously. They require people to "become aware of and critique their taken-for-granteds," to understand the problems they will face, and to begin to imagine and create new paths forward. 

In a set of five breakfast sessions over three months, McKinney and her colleague Kiran Cunningham - both professors at Kalamazoo College - arranged for outside experts to provide solid information to 15 city and county managers and others.

Larry C. Ledebur of Cleveland State University walked the group through the basic economic situation and raised questions about some likely scenarios. For example, what if the "recovery" produces a "strong economy" but fewer jobs? If household saving rises, where will the spending come from to promote growth?

Michael Pagano of the University of Illinois- Chicago sketched the implications for local government finances. All tax revenues will be reduced for several years. If fees are raised or services cut, can the decisions be framed to avoid stoking anti-government hostility? Obligations for post-employment benefits will be woefully underfunded because of the diminished value of investments.

Deliberating about the facts and trends was just prelude to challenging assumptions, especially unspoken ideas about what "recovery" would mean and about discontinuity of old patterns. Such processes are difficult; they evoke strong feelings. Charles Fleetham, president of Project Innovations in Farmington Hills, Mich., led the group through an exercise designed to have participants engage with the issues at an emotional level.

In another session, participants worked in small groups to balance the budget for the fictional "City of Schlechtesten" after it suffered a 30 percent decline in revenues. 

The group began to create a better framework to guide their work in the new normal. In addition, through this process, participants have become a cadre of local experts who can support and help each other as they navigate their new situations.

Some specific initiatives are underway and evidence has already accumulated of some changed attitudes about the possibilities for collaboration. McKinney and Cunningham reproduced the essence of the process for the Kalamazoo County Board of Commissioners during its budget retreat.

The major positive outcome of these sessions, McKinney claims, is that "we are not paralyzed by the unknown."

Uncertainty

It's not certain, of course, that all of this will lead to successful outcomes. But turning a blind eye to these challenges would probably increase the risk of unsuccessful outcomes. As one of the session participants stated, local government did not cause the economic meltdown and the associated hardships facing residents. "But local government is the closest to the people so it is our problem now." 

Does all of this seem that it would be a bit uncomfortable and that results will not be guaranteed? Should local leaders across the nation find ways to recognize major changes and grapple with their implications for local governments?

Well, it does seem that now is not the time to stop thinking about tomorrow.

Details: For information about the Kalamazoo process, contact McKinney at mckinney@kzoo.edu. Documents and summaries of the sessions are at www.citylinksllc.com.

McKinney and Pagano will speak at the NLC Leadership Training Institute's "Leading Through an Economic Storm: Navigating the New Normal in Local Government," January 28-30 in Palm Harbor, Fla. Call (202) 626-3170 or lti@nlc.org. for more information.

*Readers may want to know that the "dragon" phrase does not, in fact, appear on any extant old map. A Latin version - "hic sunt dracones" - does appear on one early 16th century globe. But it's a great phrase anyway! For details, see http://www.maphist.nl/extra/herebedragons.html.

Bill Barnes is the director for emerging issues at NLC. Comments about his column, which will appear regularly in Nation's Cities Weekly, and ideas about "emerging issues" topics can be sent to him at barnes@nlc.org

Read previous columns on the Emerging Issues webpage.