Ready for Your Budget Emergency? (Opinion)

"The Governor will soon be announcing an early retirement plan. Exact details are still in negotiation. However, only one in four employees will be replaced, one-third of our managers will likely leave, employees cannot come back on contract, contractors cannot be hired to fill voids and budgets will be cut equal to staffing cuts. We expect about 20 percent of your overall staff to leave. One more thing -- no additional overtime will be authorized."

Devastating news; fortunately it was just an exercise.

Oct. 1, 2009, Michigan's infrastructure directors were gathered offsite at a management planning meeting, and we were all relieved that our state government had just avoided a shutdown. We were immediately challenged with the above message from our public information officer. Some people seemed a bit stunned by the announcement; others were smiling, since they would be eligible to leave.

For decades, emergency management offices have used scenario-based planning exercises to test our ability to respond to natural disasters, and other emergencies. And more recently, to mitigate cyber-threats. We learned during the weeks and months after 9/11, organizations that prepare for the unexpected perform much better following emergency incidents.

Tabletop exercises can enhance communication, foster team building, improve coordination, clarify roles and help with issue identification. Going further, many businesses use scenario planning to improve all aspects of their service delivery.

But can responding to budget cut scenarios help technology teams improve? What if the budget cuts never happen? Might this be a waste of precious time? Our experience with scenario-based planning in Michigan demonstrates an excellent return on investment for all involved. Here's what we did -- and what you can do:

• First, we asked our infrastructure directors to come to the meeting prepared. They brought org charts, office budgets, prioritized project plans, contract information, retirement eligibility lists and more. After setting the stage with the early out announcements, we discussed various aspects of the situation. What would you do first, second and third? How would you communicate to staff? What reaction do you anticipate? The discussion was lively, and stories revealed issues from previous early retirements in Michigan.
• Next, directors were asked to list three core mission functions that couldn't fail in their areas. For essential government services to be maintained, these critical activities must go on no matter what else happens. Infrastructure examples included answering help-desk calls, ensuring e-mail delivery, providing desktop support and supplying network availability.
• Each leader was also asked to identity three activities that could potentially stop in this new environment. This information was reported to the wider group, with constructive criticism offered by everyone during follow-up Q&A sessions. While flexibility and "outside the box" thinking were encouraged regarding delivery of various services, this process helped us clarify core missions for each infrastructure area.
• Our conversation quickly turned to customer expectations. Several asked, "Can we really stop offering that service?" We discussed our service catalogs, rate structures and related service-level agreements. Using early-out ground rules, directors were tasked with clarifying staff allocation plans after the exercise.

Several weeks later, plans were discussed with selected customers. Some improvements are being implemented, while other changes will be saved in case of an early retirement or budget emergency.

What did we learn from the exercise?

• When the future budget scenario changed, so did the level of discussion.
• When "people issues" were addressed (under this scenario, many staff retired happily), different budget approaches emerged to open up new opportunities.
• While some noncritical functions must continue under mandated budget cuts, these activities might be offered to customers at an hourly rate rather than eliminated. Each director went away with the task of identifying potential optional services.

I encourage you to challenge your team by offering a tabletop exercise with scenarios that include budget emergencies, such as an early retirement. You'll be surprised by what you learn.