Suhm tries new ways to run city

01:00 AM CDT on Sunday, June 10, 2007

Pauline Graivier & Rob Hoffman mail@verbalcommunications.com

Here's a tale of a woman asked to run a 13,000-employee enterprise with 15 bosses hovering over her, each with a different agenda, each under an unwavering public microscope and many with little to no business experience. Welcome to City Manager Mary Suhm's bizarre world - Dallas.

Ms. Suhm became Dallas' head honcho just two years ago after a brief stint as interim city manager. The wearisome government she inherited wasn't exactly broken, but it wasn't very good.

Historically, Dallas has relied on city managers the way a drunk depends on a lamppost - more for support than illumination. But Ms. Suhm used an innovative business model to radically improve the delivery of municipal services.

Obsessing over customer service. Ms. Suhm set up a strategic customer office to unlock ways to make every encounter with the city pleasant. (Yes, she regards residents and visitors as customers.)

Rather than guess, Ms. Suhm went to Dallas' largest companies by revenue to find out what they really want from the city and how Dallas could improve.

Interestingly, one of the responses was to use the city's influence to improve public education, because Dallas cannot succeed without an educated workforce. As a direct result, and despite the fact that the Dallas Independent School District is outside her domain, Ms. Suhm began semi-annual meetings with the district.

City Manager Mary Suhm uses her BlackBerry to keep tabs on the business of running Dallas. She's put her focus on customer service and 'budgeting for outcome.'

Ms. Suhm and her team read every vital customer service book. She also interviewed and analyzed many of the great names famous for extraordinary service, including Carl Sewell, the Container Store, Walt Disney Co. and Southwest Airlines Co.

She personally visited every department in the city to make certain they understood that first-rate customer service was Job One. And all employees were given training to meet management's high expectations.

As a carrot, management celebrates good customer service, including rewarding and recognizing every city employee about whom a resident or visitor writes a letter.

Budgeting for outcome. In 2004, the City Council pronounced that city services should focus on five key areas: public safety, economic development, the Trinity River project, neighborhood quality of life and staff accountability.

Ms. Suhm rearranged government so that all operations aligned with these focus areas. Ms. Suhm's general fund budgets concentrate on these five areas and no others.

"Budgeting for outcome" means that every service is tied to a result. It also means that today the city budget is devoid of traditional line items such as the Fire Department, libraries and so on.

Instead, every department puts out services for bid, consistent with the City Council's five focus areas, and with corresponding benchmarks for measuring success.

For example, the Police Department may bid so many dollars for maintaining police vehicles. The bid is submitted to the purchasing team in charge of the public safety segment of the budget.

The cost and the metrics to be obtained (e.g., the number of crimes solved) are included in the bid package.

If the city dedicates, say, $400 million to public safety, once the highest-ranked bids hit the $400 million budget cap, that's it. No more bids are allowed into the public safety budget segment.

Last year, about 340 services were allowed into the overall budget. This year, the city is allowing the private sector to bid.

Over time, this outcome-based system gets rid of sacred cows. Since each bid service has a measurable outcome, the city can gauge whether the service is achieving its goal. Rewards to city employees largely depend on hitting benchmarks.

Ms. Suhm and her team have brought a best-practices approach to city government.

We expect other cities, and even businesses, to follow suit.

The only downside we see with an efficiency-based budget occurred to Mercury 7 astronaut Walter Schirra Jr., as he apprehensively thought to himself before launching into space: "This was all put together by the lowest bidder."

Pauline Graivier is president of Dallas-based Verbal Communications Inc. Rob Hoffman is a partner with Gardere Wynne Sewell LLP. (The city of Dallas is a former client of Ms. Graivier's.)