The threat of sequestration—the $109 billion in automatic, across-the-board spending cuts set to take effect on January 2 unless Congress reaches a compromise budget deal—is making federal leaders and employees very nervous.
Managers are bracing for significant program and service cutbacks and staffing changes, including possible furloughs and layoffs. In some agencies, the impact includes delays in filling critical vacancies and in signing new contracts or renewing existing ones. It’s also made it difficult for agencies to invest in program and service improvements or to engage in sound, long-term planning.
There is a general assumption, or at least the hope, that reasonable heads will prevail and sequestration will be avoided after several dramatic rounds of brinksmanship. However, there are no guarantees. And even if a deal is reached to avoid the huge across-the-board reductions, the likelihood is that there still will be fewer resources available for many agencies to accomplish their missions.
The Office of Management and Budget has directed agencies to continue normal spending and operations, since five months remain for Congress to act. In addition, there will be a bit more clarity early next month when the Obama administration, as required by Congress, provides details on where it expects the cutbacks to occur and explains how much flexibility will be given to agencies to manage reductions.
As a federal leader, how can you best manage under these circumstances? There are at least two major responsibilities: Plan to the best of your ability for the different possibilities, and communicate with your employees.
Plan for the worst case scenario. Managers and senior leaders need to put plans in place that address the possibility that sequestration will go into effect and there will be deep across-the-board reductions. It’s important to identify programs and activities that can be cut or put on hold in order to continue those that must survive. In some instances, the worst case includes the possibility of unpaid employee furloughs or actual reductions in force. Better to have a plan of action than to scramble at the last minute.
Plan for the hopeful scenario. The scenario that we hope for envisions Congress and the administration reaching a compromise in a timely fashion and avoiding sequestration. This option will likely require cutbacks, although likely not as severe or arbitrary as sequestration. As a federal manager, set priorities in terms of what programs get carried out with reduced but not draconian funding reductions. Consider where you might switch funding to continue the most essential functions and pinpoint programs that might have to be put on life support.
Engage your employees. Your employees are obviously unsettled and morale may be low. They also have probably figured out that business as usual may not be possible. So a first step is full disclosure. Let them know what you're doing and what you know—and what you don’t know. You may want to seek their ideas on what changes might be made either short term or long term.
Treat your employees like the adults they are. You don’t have to put names on the white board of who’s going to get cut or furloughed in a worst-case scenario, but you can share with them that you are doing your best to plan for all contingencies. Also let them know that you will share the facts as you get them—and then follow through. You should also avoid being either overly optimistic or overly pessimistic. Make it clear that nothing is gained by acting precipitously, such as quitting the organization for a less desirable job in fear of a lay-off that is unlikely to happen.
Above all, as a leader, stay focused on what’s important. Remind yourself and your employees that your agency has an important job to do and that the main focus will be on the mission.
The bottom line is that federal managers have to do their best to follow the Boy Scout motto: Be prepared.
Federal managers, how are you planning for the threat of sequestration? Please share your ideas in the comment section below or by emailing me at email@example.com.
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