exam

Lessons  from  the  Oakland   EDA  Project

Pressman  &  Wildavsky Book

Proposed  Scope  and  Cost  of  Oakland  EDA   Project

1. Airport  hangar  and  support  facilities  (for  World  Airways) $10,650,000 2. Marine  Terminal  and  access  roads  (Port  of  Oakland) 10,125,000 3. 30-­‐acre  industrial  park  (Port  of  Oakland) 2,100.000 4. Access  road  to  coliseum  area  (City  of  Oakland) 414,000

TOTAL $23.289,000

Goals/Objectives

• Jobs,  Jobs,  Jobs. • Projected  to  provide  2,200  jobs  when  completed,  with  more  jobs  to  follow  

from  later  spin-­‐offs.

• Loans  for  participating  businesses  ($1,600,000)  to  generate  800  additional   new  jobs.

Conditions  for  Participation

• Businesses  will  be  required  to  submit  employment  plans. • Businesses  will  make  a  commitment  to  recruit  from  the  hard-­‐core  

unemployed  in  the  City  of  Oakland.

• An  employment  review  board  composed  of  representatives  from  business,   labor,  and  the  poor  will  review  employment  plans  before  loans  are  granted

Internal  and  External  Opposition

• Direct  incompatibility  with  the  department’s  (Commerce)  other  priorities   and  competing  programs.

• EDA  was  viewed  as  a  competitor  for  scarce  resources  considered  by  many   insiders  as  an  anomaly  – a  program  for  cities  drawing  funds  from  what  was   essentially  a  program  for  rural  areas.

• Outside  agencies  have  other  “more  important”  projects,  for  example,  the   port  architect/engineer   was  busy  with  other  projects.

Opposition  to  Oakland  EDA

• World  Airways,  a  key  private  component  of  the  project,  wanted  to  develop  a   general  building  program  instead  of  making  the  EDA  project  a  priority.

• Other  problems 1. Other  stakeholders  do  not  share  the  same  sense  of  urgency  EDA  project  proponents  

had.

2. Differences  of  opinion  on  organizational  and  leadership  roles. 3. Legal  and  procedural  issues.

Operational  Management

• The  Essence  of  Management  – the  self-­‐conscious  skilled  deployment  of   legal,  financial,  material,  and  human  assets  to  produce  concrete  results.

• Delivering  the  envisioned  value  (Example:  the  Oakland/EDA  experience;  had   it  succeeded.)

Risks  and  Opportunities

• Apart  from  the  ability  to  plan  action,  strategic  managers  know  how  to   exploit  unanticipated  opportunities as  they  arise.

• Old  Chinese  saying:  “In  danger,  there  is  always  opportunity.” • Important  managerial  trait:  Recognizing  opportunity   in  the  midst  of  

unfavorable,  even  disastrous,  circumstances.”

Broad  Strategic  Directions

• From  James  Q.  Wilson’s  article:  “When  goals  are  vague,  circumstances   become  important.”

• Real  world  application  of  policy  always  take  into  consideration  what   circumstances  the  operator/manager   finds  himself  in.

• Circumstances,  more  than  policy,  dictate  how  the  operator/manager   will   resolve  an  issue  before  him.

Case  Study:  Harry  Spence  and   the  Boston  Housing  Authority

• Court  decision  to  place  the  Boston  Housing  Authority  (BHA)  into   receivership.

• Reason:    that  the  Housing  Authority  Board’s  “alleged  gross   mismanagement,  nonfeasance,  incompetence,  and  irresponsibility   have   been  shown  to  exist  beyond  any  question.”  In  effect,  the  court  declared  the   BHA  bankrupt.

Harry  Spence  and  the  Boston  Housing   Authority

• Now  under  court  ordered  supervision  by  a  “special  master”  – another  layer   of  management  on  top  of  existing  one.

• Vacancies  in  the  top  of  the  management  hierarchy. • Hostility  between  management  brought  in  by  the  special  master  and  

management  in  place.

Problems  at  Boston  Housing  Authority

• Centralization  caused  loss  of  discretion  on  the  part  of  Housing  Project   Managers  who  were  more  knowledgeable   with  the  conditions  in  the   projects.  In  some  cases,  managers  live  in  the  projects  they  manage.

• Loss  of  power  and  discretion  resulted  in  loss  of  any  sense  of  responsibility.

More  Problems  at  BHA

• Fundamental  dilemma  – BHA  was  conceived  and  created  as  an  agency  to  provide   decent  housing  to  upwardly  mobile  renters  but  “mission  creep”  dictated  that  it   provide  housing  for  the  very  poor  instead.

• Result:  Living  in  the  projects  lost  its  appeal  to  renters  who  are  employed  and  able   to  pay  reasonable  rents  adequate  to  cover  cost  of  operations  and  long  term   recapitalization  of  units.

• Result:  Predominance  of  renters  who  became  collection  problems. • Result:  Progressive  deterioration  of  units  because  of  lack  of  funds  for  maintenance.

Lessons  from  BHA-­‐Spence  Case  Study

• Reaching  outside  the  organization  for  support:  from  policy  and  funding   authorities  (translation:  political  and  business  interests)  and  organized   labor.  Why?

• Assessment  of  agency  staff  for:  competence,  energy  and  orientation   (inward  looking  or  customer-­‐oriented?)

• Raising  the  bar:  in  expectation,  performance  and  core  competencies.

Implementation  Starts  with  Change

• Re-­‐organization  of  Boston  Housing  Authority  in  order  to: 1. Refocus  the  agency  on  its  key  mandate/tasks   as  a  public  housing  agency. 2. To  exploit  the  skills  and  competence  of  its  key  people  – putting    round  pegs  in  round  

holes.

• Making  construction  management  an  agency  priority  in  order  to  improve  physical   condition  of  housing  stocks.

• Placing  long  term  emphasis  on  security  and  maintenance  of  housing  projects.

Decentralization  

• Individual  housing  project  managers  where  granted  authority  and   autonomy.  Why?

• Granting  budget  responsibility  to  project  managers  with  expectation  of   accountability  (“owning  their  budgets.”)