By Paul Grimes

In September 2013, I wrote an article for PM about the impact of aging communities on local government and how that shift would change our management priorities. In "The Growing Challenge of Shrinking Birthrates," I wrote that these changes would include the challenge of paying for costs associated with the rising "old age dependency ratio," or the relative proportion of the number of retirees to the working age population, as well as the shift in priorities from an aging society.

While the hypothesis of that article is bearing out—since 2013, the World Bank reports that the national old-age dependency ratio has increased from 20.9 to 22.8—it is incomplete in capturing the challenges we face in local government. In fact, it is but one headwind buffeting our journey into the next several decades.

Structural Challenges

State legislatures are rolling back authority of local government, thereby shackling our ability to manage issues at the local level. In Texas, local government was barely able to fend off the legislature's efforts to limit local property taxes.

State legislators, however, did successfully pass legislation that will roll back municipal annexation authority, thus making it far more difficult for local governments to plan for and absorb a booming growth in population.

Then there is the dysfunctional federal government. As I first wrote in 2013, federal outlays and entitlements will only continue to balloon, leaving less and less to distribute to state and local governments.

As a result, local government, in a sense, will have to live off the land in the coming years as the federal coffers are emptied and younger taxpayers grow weary of paying ever higher taxes to pay for entitlements that they may never see in return.

Challenge of Complexity

In addition to the structural challenges, there is the challenge of complexity. Author Stanley McChrystal, author of Team of Teams: New Rules of Engagement for a Complex World, likens it to a mathematical equation with a lot more decimal places. Complexity is not to be confused with complicated, which can be compared to the working of a machine, where one part turns, impacting other parts, but in a predictable way with fairly predictable outcomes.

Complexity, however, is the result of far more potential outcomes and unpredictability. Add to that the radical connectivity and speed of social media and the Internet of Things, and our work environments become a dizzying array of unpredictability, or what some refer to as VUCA: volatility, uncertainty, complexity, and ambiguity.

So why is high-performance organizational culture, or HPO, a necessity in a 21st century organization? At first, one might think that technology can equip managers with the information needed to close the gap between leaders and subordinates.

We have access to unprecedented information, and leaders are able to understand what is happening almost in real time. In a sense, we have more tools available to us with which to micromanage than ever before; however, the deluge of information will only drown leaders in data, no matter how smart we are or how efficiently we may think. McChrystal cites the work of Dan Levitin, author of the book The Organized Mind: Thinking Straight in the Age of Information Overload, to underscore a startling observation:

"In 2011, Americans took in five times as much information every day as they did in 1986, the equivalent of 175 newspapers. During our leisure time, not counting work, each of us processes 34 gigabytes or 100,000 words every day. . .[and] 20 gigabytes of audio-video images."

New Operating Environment to Navigate

If that was the case in 2011, now with the proliferation of phone apps, YouTube, on-demand entertainment, and social media, this information tsunami has only gotten larger.

As a result, McChrystal asserts that the paradigm shift for leaders, in a VUCA world, must be from command-and-control "puppet master to empathetic crafters of culture." And, nothing is more important for leaders to focus on than culture. As author Peter Drucker once remarked, "Culture eats strategy for breakfast."

Author Nicco Mele wrote a fascinating book in 2013 titled The End of Big. His hypothesis was that the Internet of Things is rendering many institutions obsolete, irrelevant—and doomed. The size of a company or organization, normally an advantage in the 20th century, will actually serve as immaterial or even an impediment to success.

Access to data and information has lowered barriers to entry across many institutions, from education to news media to entertainment—and to government. While cause for celebration in some circles, this shift will also fracture many of the institutions to which our field has grown accustomed.

That earthquake in our operating environments will require a legion of smart, thoughtful, nimble, and empowered people to navigate, which is no longer the exclusive domain of what McChrystal terms a single "heroic leader."

One window into how we deal with these sea changes is provided by Dr. Edward Hess of the University of Virginia's Darden School of Business and author of Humility Is the New Smart. I recently had the opportunity to attend a lecture by Hess, where he argued that leadership of the 21st century will require leaders to shift from being good at "knowing" to being good at "un-knowing"—not an easy leap for management.

And if it is hard enough for some of us to let go of the construct that prioritizes experience and knowledge, imagine the challenge of changing the viewpoint of many of our governing bodies that invested in hiring executive staff based primarily on knowledge and experience. Their expectations and archetypes of local government management may not align with the demands of a 21st century leader.

In his book, Hess also argues that the Smart Machine Age will expose human limitations in cognitive thinking. We're not good at it compared to where artificial intelligence will be in a few short years.

Thus, in the Smart Machine Age where machines will do cognitive work far better and faster, we have to move to thinking and leading in those areas where machines cannot: critical thinking, innovative thinking, creativity, and high-emotion engagement with others that fosters relationship building and collaboration.

But first, we need to move our approach away from traditional confirmation bias (listening to confirm) toward diversity of thinking and empathetic listening. The New Smart approach coined by Hess means we will have to use networks of thinkers in a system of thinking more than relying on our own limitations shaped by our personal experiences and knowledge. Adhering to the "old smart" approach, Hess claims, could become the "new stupid."

Learning Organizations Produce Smarter Results

For all these reasons, the structure of the parallel organization contemplated in the HPO model is well-suited to this workplace shift. Our production work will be greatly aided by artificial intelligence, software, deep-learning machines, apps, and more.

Understanding the value of this, however, and making it work for people is not something that machines will ever do, but that people can.

Persuading employees to participate in a learning organization that focuses many creative and innovative minds on a problem will yield a far better customer solution than a hierarchical production model where the decision on whether to innovate and how rests at the manager's desk. Imagine nodes in a neural network versus a single trunk fed by roots.

The high-performance structure, leaning on unified organizational vision and values, culture, teamwork, and parallel structures of production and problem solving, provides the framework for the resilience, creativity, and flexibility that we'll need to deal with the increasing complexity in our management work.

Communities will need it to contend with the manifold challenges we, as managers, face. Furthermore, over time, our governing bodies will also value responsiveness and smarter results; and employees will appreciate it for the engagement and meaningful contributions each one of them can make in the New Smart workplace.

Paul Grimes, ICMA-CM, is the city manager of McKinney, Texas (pgrimes@mckinneytexas.org).