Managing Risk and Performance: A Guide for Government Decision Makers

Chapter 2

The Need for Effective Risk Management

Douglas W. Webster

CEO, Cambio Consulting Group

Today's public-sector management challenge is greater than at any time in our lifetimes. That is certainly true in the United States, but is also true for much of the developed world. Decades of deficit spending resting on the belief (or at least the hope) that “investments” would result in increased productivity that would generate revenues greater than costs have failed to come true. National governments have awoken, even if slowly, to the recognition that nations, just like individuals, cannot spend indefinitely at a rate higher than incoming revenues. For many, this has changed the very nature of what it means to be a manager or leader in a government agency.

We have long heard the calls from leaders and consultants to “do more with less.” Yet such a goal requires productivity to increase faster than the rate of reduction in budgets. For most of our lifetimes that was feasible. Increasingly, however, it appears that budget challenges are making such a goal no longer credible. While not as inspiring, a more realistic goal may be to “do less with less.” The question of course is, what is it that we might no longer do in government agencies that would have minimal impact on meeting agency mission and stakeholder needs? Making the tough choices in answer to these questions is increasingly becoming job number one of leaders. However, as Thomas Stanton discusses in Chapter 10, making ...