Despite the great recession, U.S. cities are uniquely positioned to be drivers of national prosperity and individual economic opportunity. Unfortunately, many systems at both the state and city level that could move the economy forward are fragmented and ineffective. Last month, state and local economic and workforce development leaders gathered at the Brookings/Living Cities State and Metropolitan Prosperity Collaborative meeting to discuss the development of effective cross-sector strategies to increase the number of middle-skill jobs in the growing manufacturing sector. The two-day gathering provided opportunities for high-performing public sector leaders to share innovative ideas and promising practices and to learn from each other’s successes and struggles.

The U.S. manufacturing industry has the potential to address regional high unemployment in struggling economies. Currently there are 300,000 vacant manufacturing jobs in the U.S., with an expected 750,000 additional jobs
to be added in the next 10 years. These manufacturing jobs usually offer good wages, and often only require a two-year post-secondary degree or an even shorter-term
certificate-training program. In order to lessen the growing skills gap, state and local leaders are developing deep cross-sector collaborations and innovative practices to effectively connect those looking for employment to a vast array of available manufacturing positions.

The economic and workforce challenges facing state and local leaders are significant. With national unemployment at just under 8% and some regions dealing with even higher figures, putting people back to work and reviving local economies is a top priority for the state and metro leaders who attended the convening. Key barriers to a high-performing workforce and economic development collaborations that many of the attendees are working to overcome are: bureaucratic silos, weak industry and cross-sector partnerships, lack of incentives for success, and poor state and metro implementation of workforce development strategies. Below are examples of effective strategies to create middle-skill jobs highlighted at the convening:

Strong Industry Partnerships – Small and mid-size businesses continue to be the engine of the U.S. economy. The 21st century manufacturing industry is comprised not only of large firms, but also includes small and medium-sized firms that require a steady supply of skilled workers that reside in cities and metropolitan areas. Many of these manufacturing firms do not have human resources departments. Economic and workforce development leaders need to form deep partnerships with industry leaders in order to align education and training with industry and private sector needs. In Washington State, local workforce boards (LWIBs) convene sector-specific industry skill panels that bring together employers, labor organizations, and education and training
organizations to identify and address current and near-future skill needs. In Kansas and Washington, industry centers of excellence were created. Through these centers (which are often housed at community colleges), industry leaders work with faculty to ensure that training curricula are continually updated and modernized to meet employer needs.

Deep Cross-Sector Partnerships – Partnerships like the greater Cincinnati’s Partners
for a Competitive Workforce, which brings together businesses, workforce investment boards, chambers of commerce, educational institutions, labor, community organizations, and philanthropic funders is an effective model of a partnership for improved population-level results. Cincinnati’s Partners is also an example of a cross sector partnership using the “one table” approach – a leadership table comprised of key decision-makers representing a wide range of institutions coming together to achieve a better result. This partnership allows them to move beyond fragmented systems to increase the region’s success in decreasing the skills gap.

Funding Incentives– Kansas utilizes funding incentives to encourage workforce-training outcomes that align with regional industry needs and strengthen the economy. Kansas’
strategy is a reorientation of policies and funding streams to invest in the future of the states’ young workers instead of managing the decline of both the educational and workforce systems. Universities received $101 million in state funding to enhance the number of engineering graduates. In order to maintain that funding, those higher education institutions were required to grow the number of engineering graduates, make sure those graduates were connected to Kansas businesses, and received interviews for available positions. Their funding strategy further incentivized educational institutions by providing a differential pay rate to colleges for FTE production in technical programs based on the cost of the technical program.

State Leadership, Local Implementation – In structuring their state-wide strategy, both
Kansas and Washington aimed to be clear on the goal and flexible on implementation. This meant that the state would take the lead in developing the framework for the overall regional workforce and economic development strategy, but the metro regions would control how that strategy is implemented at the local level. A critical element of this model is having clearly defined outcome metrics developed in partnership with business and industry leaders. These outcome metrics measure the number of industry credentials earned, job placements attained, and number of living-wage salaries workers received.

Fast Tracking Credentials –In Washington, workforce and economic development partnerships are shortening the time it takes workers to get industry-valued credentials,
another example of a state/metro collaboration that is nimble and adaptable. A variety of strategies are under way, including working with industry to establish short-term, stackable credentials, and creating protocols for granting credit for prior learning or work experience outside of the training program. This way, the training programs are responsive to both the workers breadth of experience and the needed skills articulated
by employers.

Bridging Economic and Workforce Development Silos – Another example of public sector collaboration and agility are the efforts by state and metro leaders to bridge
silos between workforce and economic development. Across the nation, state and local economic development leaders court industry executives to set up shop in their regions without their workforce development counterparts at the table. Kansas is a leader in bridging those silos by having their Director of Workforce Education and Training jointly appointed to the state’s Department of Commerce and Board of Regents. In Washington, local workforce boards develop strategic plans in partnership with local economic development agencies, while at the state level; the Workforce Board and Economic Development Commission have overlapping memberships.

At a recent meeting of the mayoral chiefs of staff network that Living Cities partners with the Harvard Kennedy School to convene, there was a discussion of the structural
ways to break down silos in the public sector. This discussion was spurred by a
keynote address given by business and government innovation expert Clayton
Christensen on the use of “heavyweight” teams for public sector innovation. The concept of heavyweight teams was developed by Christensen’s Harvard Business
School colleagues Kim B. Clark and Steven C. Wheelwright.

Christensen defines heavyweight teams as a group of people who are taken out of their
functional role and placed in a team structure with others from outside of their functional area. These teams are often located in the same geographic area and dedicated to creating new processes within an organization. Heavyweight team members bring their “functional expertise” to the team, but once on the team they are not there to represent their function’s interest. Their only interest is the success of the project – even if what is required for success is not optimal for their function or department.

In 2011, Minneapolis entered into a priority-driven budgeting (PDB) process using heavyweight teams to minimize silos between city agencies. Heavyweight teams are a perfect companion to the PDB approach that a small number of U.S. cities and counties have adopted. PDB is a departure from the commonly used incremental budgeting: where the current year’s budget is the basis for the next year’s budget. With PDB resource allocation, decisions are based on if a city program provides the greatest
value to the community and how well that program is aligned with the city’s priorities.

Prior to using PDB, Minneapolis’s budget process was siloed. Department heads created their budgets with little input from any other department. The old process made
it more challenging for the Mayor or city council to determine exactly what programs needed to be cut or continued based on its performance or strategic value. “There were just all these walls in the old budget process that needed to be broken down,” said Latonia Green, Budget Director.

As a result of this knowledge gap, the city would typically use across-the-board cuts in
order to achieve savings. These cuts often led to weakening of critical programs and continued funding of programs that were no longer operating effectively. In these lean economic times, continuing that type of cutting was not politically or economically optimal. “We needed to be more selective and strategic about what was cut and how those decisions were made,” said Jay Stroebel, Deputy City Coordinator.

In search of a solution, the city began to do some research and was inspired by what other cities, like Baltimore, were achieving with PDB. Their first step in implementing the PDB approach was to have department heads actually write funding proposals for programs that were currently in place and for any new programs they wanted to develop. The unifying element of these proposals was that they demonstrate the program’s alignment with the city’s six major priorities.

The next step was to create six teams for each of the city’s priority areas. Those teams
were comprised of 10-12 mid to upper-level staff from an array of city departments. Minneapolis’s budget review teams mirrored the characteristics of a heavyweight team described above. They were cross-sector, democratic, and charged with putting the goals of this new process over the interests of their agency.

The teams used a unified scoring rubric to rank each proposal. The overall rankings for
the various proposed programs were shared with the department heads and the
Mayor. After the rankings were submitted, a larger review meeting was held with
the Mayor, department heads, and review team leads. Here department heads had
the chance to defend proposals that scored low. This was a very bold step for
the city and for the Mayor.

City officials believe significant progress was made in achieving their goals of greater transparency, collaboration, and alignment. This year, several departments submitted joint proposals for programs that would be managed jointly and could lead to significant cost-savings and greater efficiency. “That would have never happened before…we have a long way to go in our silo busting efforts, but we’ve for sure taken small steps in the right direction,” said Latonia Green, Budget Director.