Step 7: Recovery Plan
The recovery plan sets forth the strategies that will be used to achieve financial recovery. It helps the recovery leadership crystallize, focus, and summarize strategic direction and key turnaround strategies and tactics. The process of developing a plan also allows the organization to begin and/or practice the cultural and behavioral changes needed to reach financial sustainability. Before staff can develop the plan, they must analyze goals, priorities, and services, and do so while thinking strategically about finances and working as a team. A written plan also gives stakeholders greater confidence in the recovery process.
A Portfolio of Strategies
Noted authority on government reform, Bill Eggers (et al), observes that trying to accomplish too many initiatives or a lack of balance or coherence between initiatives can sabotage recovery strategies and, therefore, the entire recovery process.
Eggers recommends following a process to evaluate potential recovery strategies and select a limited, balanced grouping of the most promising. In his view, there are four justifications for eliminating a strategy from consideration:
- The strategy is not politically feasible
- The potential net savings aren’t large enough (Eggers cautions that potential savings are often overestimated and sometimes by a large margin)
- The savings are significant, but it has excessive negative side-effects over the long-term, either in terms of operations or finances.
- The savings are significant, but the strategy is not consistent with other strategies or larger considerations about the organizations direction.
A Comprehensive, Yet Concise Format
A recovery plan need not be an overly formal or large document. Time is at a premium during a recovery, so a simple plan will be easier to produce and will be understood more easily by others. The purpose of the recovery plan is to put the strategies on paper and define the actions and accountabilities needed for their execution.
The plan should be broad in scope, it should address expenditure and revenue issues, hard and soft concerns, and short- and long-term priorities.
The diagnosis performed earlier helps identify those issues with the most potential to make a difference in the recovery. The recovery plan should focus on those.
Essential elements of a recovery plan are:
- External environment analysis
- Financial projections
- Description of goal
- Recovery strategies
- Budget process analysis
- Budget reform plan
- Operational analysis
- Operational action plan
- Risk assessment
Communication is important so that the right people understand and support the recovery plan. Communications should be judicious and focused on the appropriate audience. Here are a few points for selecting the audience:
- Communicate upward to the governing board and other enabling authorities. Make sure that those with final decision-making power are on board.
- Communicate outwards to important partners. Communicate to outside groups that will have a direct and powerful influence over the success of recovery. This might include lenders, rating agencies, courts, state agencies, or influential community groups or members.
- Communicate with surrounding and regional jurisdictions. They can be a source of innovative recovery ideas and share information about what is going on in the political and economic environment.
- Communicate downward to the organization. Employees will directly determine the success of most recovery strategies. Make sure they understand what is going on. Ask for feedback and suggestions.
Internet and e-mail are an excellent way to distribute mass updates to a focused list of subscribers.
There is no substitute for personal communication. Effective ways of disseminating the message include one-on-one meetings with board members, attending a meeting of an influential community group, and staff meetings.
If possible, include a communication plan element within the recovery plan, naming the individual(s) who are responsible for getting the messages out as well as the contact person for inquiries.
Use a Team Approach
A team approach to developing the plan can bring additional resources to bear on the problem, broaden the support base for the plan, and build capacity for future teamwork.
Here are some keys to the success of the team-based approach:
- Keep team size manageable
- Use volunteers
- Take steps to ensure good teamwork
- Be sure teams are up to task
Team Building for Temporary Teams
The basic teambuilding approach is the same for temporary teams as it is for permanent teams. Team members must build relationships, create an emotionally supportive climate on the team, and establish methods for working together.
- Develop a Realistic Priority of the Teams Work
- Share Expectations
- Clarify Goals
- Formulate Operating Guidelines
Consider Citizen Engagement Carefully
Citizen engagement is an important democratic value for local government and it helps align service levels with financial capacity by learning about citizens tax/service preferences.
Below are some broad principles to consider when designing a citizen engagement mechanism during the recovery process.
- Frame perceptions
- Structure the engagement activities
- Don't dominate the process
- Deal with politics
- Accept and promote a model of shared governance