Flattening the economic curve

The last six weeks feels like six years. It’s incredible how much has changed so fast. There have been so many new federal and state programs rapidly pushed through, all with the intent of helping our people and companies through this crisis.

The speed of the legislation has been great to see—but it’s also caused confusion in the details for implementation and administration of the various programs and benefits.

It's forcing us, as a company, to do everything we possibly can to find ways to keep our people safe while our factories remain open.

We’re the type of company that likes to get out in front of a situation rather than react to it. That means we’ve needed information; lots of it.

So, when the crisis hit, we started making calls—hundreds of them—to our local contacts at places like the Occupational Safety and Health Administration to get answers to our questions about creating a safe environment for our people.

But we didn’t stop there. Even though our factories remain open for the moment, we continue to take a big hit.

Revenues and earnings are down across the board. That means we need to answer a new series of questions related to how we can protect our people financially.

We got back on the phones to talk to people at the Chamber of Commerce and the Department of Workforce Development.

We want to get answers to questions like: What help from the government can we take advantage of to keep our people whole in terms of their paycheck and their benefits?

As a fully transparent company that is accountable to its employee-owners, we want to double- and triple-check every action we take to make certain it's the right move.

For example, as a worst-case scenario, we want to clarify between what it means to furlough someone versus laying them off. Whatever we are forced to do, protecting our people is our highest priority.

Let me just take a minute and thank a few of those people on the other end of those calls. You have been heroes. You have been a huge help to us in finding answers as we’ve worked to navigate the uncertainty of the past few weeks. The list of incredibly helpful people includes:

State of Missouri

Mardy Leathers, Director of Workforce Development
Chris Slinkard, Director, Missouri Division of Employment Security
Tom Kliethermes, Shared Work Claims Specialist, Missouri Division of Employment Security
Delores Rose, Strategic Communications Director, Missouri Department of Labor and Industrial Relations

Springfield Area Chamber of Commerce

Matt Morrow, President
Sandy Howard, Senior Vice President, Public Affairs
Emily Denniston, Vice President, Public Affairs

City of Springfield, Ozarks Region Workforce Development

Sally Payne, Interim Director of Workforce Development

When these folks didn’t have the answers to our questions, they got back to us promptly—often within 30 minutes—with the answers. That was huge for us.

I think that it’s fair to say there’s not always a lot of trust in the government. But we’re usually thinking about the politicians in Washington—the elected bigwigs who can’t seem to agree on anything.

What we forget about are the people on the front lines—the first responders who are keeping this country running.

Maybe there might even be some local officials in your community you might want to thank. Perhaps this crisis will change some people’s minds about the critical role our local governments play inside our communities. These are the unheralded public servants that we often seem to take for granted.

Hitting The Ground Running

One of the public servants that comes to mind from our community is Cindy Stein, the elected auditor of Greene County, Missouri. (Darren Dahl and I wrote about Cindy in our book, Change the Game. We highlighted how Cindy was the driving force in inspiring the county offices to embrace transparency and the leadership system they call “The Great Game of Government.”)

Unlike other communities today, who might only now be realizing that a devastating second wave of the pandemic is headed their way—the economic impact stemming from our extended lockdown—Cindy and her associates immediately sprang into action when the pandemic first hit.

They rolled up their sleeves and got a head start on what it’s going to mean to flatten the economic curve as we try to restart the economy.

The county’s budget is largely driven by sales tax revenue—which is clearly going to take a hit with most businesses essentially shut down. But rather than panic or freeze, Cindy said the County Budget and Treasurer’s offices immediately began analyzing each industry segment of the local economy as a way to understand how it will impact their cash flow.

They wanted to know if the impacts would be immediate, deferred for a while, or maybe even in a permanent decline. They also wanted to understand where the risk is in terms of things that would be billed, but not collected, and if increases in some areas would be simply tied to decreases in related areas. In short—they wanted to be proactive rather than reactive.

Several leaders then got together in a conference room and, following strict social distancing guidelines, laid out the facts regarding the forecasted cash flow and the county’s budgetary needs.

“It was comforting in a way to talk through it all,” says Cindy. “It was almost a luxury to have that face-to-face time. Because we were armed with the Great Game™ system’s tools, we couldn’t have been better prepared for this.

It didn’t become a fear factor. We have just continued doing methodically what we have been doing for the past several years. We know we have to tighten our belts like everyone else, but we’re doing it from a base of knowledge. That is so powerful.”

How many other communities can say their local government has an operating plan in place to cope with such an uncertain future? “I often wonder where we would be today without the Great Game,” says Cindy.

Lessons from The Past

It was back in 2011 when Cindy—with some behind-the-scenes coaching and cheerleading by an associate of ours named Rhonda Chapman—who kicked off weekly county-wide Huddles, which were treated like budget study sessions that anyone from the community was invited to attend.

I’ll be the first to admit: I wasn’t sure it would stick. I’m not sure anyone did—except Cindy and Rhonda. They kept Huddling—and teaching—even as the skeptics and the cynics inside their own organization told them they were wasting their time.

You can’t imagine how hard that must have been for Cindy and her team, wondering at times whether all their hard work was having any kind of impact or if it was all falling on deaf ears.

Then, one day, Cindy shared a story with me about two of the county’s maintenance workers. She told me how they, after being taught the kind of economic impact they could have through their work, saved the county more than $10,000 simply by safely diluting the cleaning chemicals they used on a daily basis.

They realized they could do their job just as well with less. That blew me away. It also got me thinking: Wow, maybe this system really could work in government.

At a more macro level, the lessons of the system helped the county greatly improve the accuracy of its budget forecasts and the health of its cash balance.

They got hungry for data and information and learned how to hunt for it. The better they got at looking for data, the better their forecasts became. That, in turn, helped the county boost its resources as well as its credit rating—which helped earned the trust of the community, something that could become a key factor in how the county rides out our current crisis.

Today, Cindy thinks back to how she reacted in the wake of the 2008-2009 recession. She admits that she, along with everyone else, was paralyzed.

“We were all going about trying to solve our problems in our own ways,” she says. “But we couldn’t find solutions. I remember telling myself back then that I was a knowledgeable person, but I was so frustrated because I couldn’t figure out how to fix things. No matter what we did, it wasn’t the right answer.” Finally, as a last resort, their final line of defense, Cindy says they turned to the system for help.

Cindy credits Rhonda for coaching her how to the system could actually fit inside a government organization. “We could not have asked for a better pairing than with Rhonda,” says Cindy.

“She made it a point to understand the unconventional business of government. She traversed uncharted territory to learn right along-side our team, about what it meant to open the books for government. I know a lot of folks may be somewhat cynical about government, but she came in with an open heart and mind. She brought to the table constructive recommendations and she has been our biggest fan and supporter.”

Getting Ahead of the Curve

Cindy said that what the system has taught her in the years since is that it’s not for her to figure anything out alone.

It’s about letting the team in and asking them for help. That created a major culture change inside the county offices that continues to ripple forward today.

“Over the past few weeks, I didn’t have to ask anyone to take action,” she says. “Everyone mobilized on their own because they knew their role to play. The Great Game gave us the tools to educate our workforce. And when the crisis hit, those tools were there when we needed them. We didn’t have to think about it; people just knew how to take action.”

“Our Budget and Treasurer’s offices did a great job of making the information available and for making realistic assumptions. We then used that information to arm our department heads and employees so they could understand what the numbers mean and why we took actions like putting a hiring freeze in place. We didn’t have that during the last recession. The information would have stayed within a small group only.”

Cindy admits that, going into the forecasting process, she made her own assumptions about how the county’s sales taxes would be impacted.

Her guess was that they would be looking at a 30% decline over a three-month period. But when the team reported their forecast, they projected a 7% to 8% hit instead. “The end result of the exercise was far more encouraging than if I had been left alone to forecast how things might work out,” she says.

“Of course, a lot of assumptions went into those forecasts. So, we continue to meet regularly to monitor the situation and to continue to watch our key indicators.”

Cindy says that before the county began engaging everyone with the system, they would have been much more reactionary to the situation, maybe even paralyzed not knowing what to do.

Now, they’re getting ahead of it and flattening the curve. “There’s not much we can do to get ahead of the pandemic,” she says. “But what we can do is plan ahead for what we need to do as an agency to keep our people employed and working to help our community. We’re very fortunate that the system guided us and gave us the tools to be as prepared as possible for a situation like this.”

Thank you, Cindy, for everything you and your team at the county continue to do. Thank you for believing in the system and keeping to it over all these years. We’re fortunate to have you as a leader in our community.

We’ll all get through this crisis by working together to flatten the economic curve and get people safely working again. We can only hope that other governments will follow your lead—maybe by using the same system.

They can start by having the courage to pick their heads up and look at what’s coming next. That’s how we’ll be ready as a nation to make a comeback when the upturn comes.

With business and the economy in chaos, there’s one thing we know for sure: YOU HAVE TO MAKE BOLD MOVES TO CREATE YOUR NEW NORMAL. Don't let circumstance dictate where your company will be tomorrow...YOU decide. Where will you be in 90-days, 1-year, even 5-years down the road?

Take control of your situation
Harness the collective wisdom of your people
Create focus, alignment, and accountability around your financials
Execute with a sense of urgency
Get ready for the upturn