New L.A. ‘Jobs Czar' Austin Beutner Seeks To Change Culture at City Hall

Let me touch first on three strategic imperatives in what we are trying to do in this role. When I took this on, my conversation with the mayor centered on how much he believed this effort was important and how much he empowered me to do, and to do it differently than before. If we wanted to just do things that were done before-to bring out somebody to talk to groups like this and say the right set of words-that isn't why I would be interested in doing it. If we are prepared to make changes-fundamental changes-than you might have the right guy.

The first, and probably hardest thing we have to do is change the culture at city hall. For most of my formative years and most of my professional career in the service business, the first thing I would do in the morning is sit down and right five things I was going to do for a client that day. What are you going to do to serve your clients?

The city is fundamentally a service organization. In the 13 departments that report to me, there are 16,493 people. Each of those people is meant to provide a service-it's that simple. We don't rule the city. I am not here to make more rules in how you do your work or how you live your lives; we are here to provide a service.

For those of you that deal with the city on a regular basis, that's not the reality. The city has its own, very inbred culture. That's not to say that people don't work hard; it's not to say they aren't smart; it's not to say they aren't making an effort-my point is that the city has to expand its horizons. It has to remind itself on a continual basis that we are here to provide service to you and every other private sector employer in the city. Easier said than done.

The second thing is that we need to develop a strategic framework about where we, as a city, are going-where we'll be after five, ten, or 25 years. I've looked, and it doesn't really exist. There are lots of suggestions on how the city could do things differently. But they aren't made with the context of a long-term framework for where we think Los Angeles is competitive, where it will be competitive in the future, and where we are no longer competitive. It would certainly help guide us within the city on where to spend our relatively scarce resources. It may also help us figure out where we can't spend resources.

So that exercise, and everything tied to it-whether that means community plans or understanding how we provide incentives for jobs of the future and no longer provide incentives for jobs of the past-needs to be developed. That is something that the private sector has to be a part of, the City Council has to be a part of, labor has to be a part of-everything that makes the city work, to the extent it does work today, has to be part of that discussion.

The third thing is that we want to take a different approach to how the city can leverage the work of any private sector employer to create jobs within our city. Part of the reason that I have as many departments reporting to me as I do is that it was my view that what the city has done historically was to isolate economic development like it was something that doesn't touch everything the city does. Like with "green." People say, "Well why do I want to be green?" Well, a building can be green, but a building can't be green if it doesn't work. It is part of what you do.

I would say the same thing about the economic activity of the city. For the first time, we have taken in, reporting to me, the port, the airports, and DWP, which have enormous leverage; they touch enormous surface area. They buy goods and services around the world; they need to buy more of those goods and services here in Los Angeles. Their activities are a multiplier.

You probably read the recent editorial on LAX; it is actually worse than that individual wrote. When you get off the plane at LAX and it feels like Calcutta, you are less inclined to come back and less inclined to spend money. International tourists are their own little economic engines. Each of them spends between $4,000-$5,000 when they come visit. We need more of them.

We own land around the airports; we need to think of that more strategically. You go to Dulles or O'Hare, when you get off the airplane you see development. You see plans for communities around airports that make sense. You get off the plane at LAX and you look around and your not quite sure what is going on. We need to address that.

For DWP, if you spend any time in the south, utilities (which is what DWP is) do an awful lot to help make it easier for you to do your work. They are part of the entitlement process and part of the infrastructure process. They can actually lead, compared to the backwards way it happens here, which is you get something done and then you wait six months for DWP to turn on the power. Meanwhile you have an empty building and nothing happening. Those three pillars strategically are what we working on.

How we are organized in our office is different than in the past. Since we have lots of different responsibilities coming together that we didn't before, the first thing we had to do was focus our team from disparate parts of the city, as well as a handful of outsiders. I brought in some people with backgrounds similar to mine, and others from the private sector, who hopefully understand what it means to service a client, what it means to get a project done, and who understand what we are doing and that we can make a difference. We are also bringing in new positional parts of our team.

Within our team we have three differing types of things we have to do. One is to work with our departments. We have the responsibility within the city to communicate with private sector employers. My sense is that there was very little of that being done before. If there were any communications it was basically responding to those who managed to make it into the fortress of City Hall-that is not exactly the best way to talk to your clients.

My staff has a burden: I have told them that they have to talk to five private sector employers we don't know each week. The mayor is behind the program, all the senior staff, my staff, everybody is in the program. The idea is very simple: in business you have to make a cold call. If you want to build your book of business, you want to develop a set of relationships, you want to understand what is going on, and you have to get out there and meet people you don't already know. We are doing that. That effort will bear fruit after a period of time...

...I want to touch on [a project] that is perhaps most relevant to the folks in this room. One of our departments is the planning department. They have to learn to work and do more with less. That is the environment that we are in. It's not easy. We have a general fund shortfall that is scary. If there is less work activity and lower revenues, they are going to have to learn to do more with less.

In order to do more with less, we have to take a step back. "12-to-2" and some of the things that are bandied about are duct tape around a broken set of tools and services. If we take a step back and say, "How do we help our Planning Department become the Planning Department of the 21st century?" We should take a step back and ask, "Who does it really well?" We should bring in an outside resource to find where we change process, where we retrain people, where we introduce technology to make us more efficient. How do we become more transparent? How do we define our service to our customers? At the end we would have the Planning Department of the 21st century.

We also have to have the community plans updated, so we're going to do that. We are going to bring in an outside resource. We are going to work with the Planning Department-Gail and all the colleagues. My hope is that within a relevant period of time we will have a Planning Department that is transparent. We will have a Planning Department that makes a commitment to a level of service to the folks in this room and your clients, so that you know what to expect. The example I used-and it's not to find fault with what happens in the Planning Department today; it's a conceptual comparison more than a critical one-is Zappos. It's an amazing company. For $20 you can buy shoes and they will let you know when they leave the warehouse, get on the plane, get off the plane, get to the van, are five minutes from your doorstep, and when they are going to ring your buzzer-twenty-four-seven. They tie into other service providers with their technology-UPS or FedEx-so if you get up and the morning and your shoes aren't there, you can log in and find out where they are.

I don't think we'll be able to turn around your plans in 48 hours-that's not the objective-but we should be as transparent. You should know where it stands-twenty-four-seven. You should have a very active understanding of where our workflow stands. We should, when you first come to us, be able to make a commitment of service level to you. When you order your shoes, Zappos says: two days, that's our commitment to you. We should be able to make a commitment like that. Hopefully that allows you more certainty and it allows your clients more clarity as to how the process will evolve. If we do it right, we will do it better, smarter, faster, and all those things....

...We are here to help. We want to learn. We want to see what we can do. Your feedback, in particular, will be helpful as we go through the planning process-how we try to redesign that and create a service level that you are paying for.

My point is that you are going to find willingness within the city of Los Angeles to change. We are an aircraft carrier in the Hudson River; we're not just going to turn left or right like we are in open waters. But we can move the bow just a little bit and move the stern just a little bit in the other direction. That incremental change will hopefully make your job easier and create more employees in your industry and in the industries that rely on you. There is a real multiplier with opportunities like that.

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Out of the first two things-out of our discussions with the community and better understanding what their needs are and out of our working with the departments-we wind up with projects. One of those projects is, for instance, tax policy-working to roll back the rate at which internet companies pay tax. The current business tax system was designed a set of businesses that existed before anyone in this room was born. It is this archaic construct that has survived of its own momentum and when new business arises there is an attempt to shoehorn it in. We have a category for plot tug operators in the port. Those are relatively easy to define. On the other hand we have a category for professions and occupations. I don't know what exactly that is. In an attempt to garner revenue (and we at the city have our own budget challenges), anything that is not "pilot tug operator" is pushed up to the high category. The internet companies fell into that trap. Internet companies receive no value from being in the city of Los Angeles. Their customers are through a screen around the world. If we aren't careful they will move somewhere else around the world. They are mobile, and we provide very little value-added in the city. But they are the job of today and tomorrow. They are high-paying jobs with a big multiplier.

If you think of the economic life cycle of an internet company. It starts with developing an idea about a service they might provide. They raise capital; they begin to engineer that service, provide that service, and they wake up one day if it worked and they have revenue. They start to seek to commoditize that revenue, go public, sell themselves, whatever they might do. They look at their cost structure and say, "Wow, we are paying x to the city. I wonder what happens if we move next door to Santa Monica or if we go to San Jose? We can pay a tenth, a fifth, or a quarter." And they move. We have worked the city to the point where we have re-written the policy analysis. The existing policy analysis looked at a scattered pool of companies and decided that if we taxed them x percent, which is more than y percent, we would have more money. That is not the basis on which any sound business decision is made. If we raise the tax, will they move? If they do move, the lost wages would mean less homes bought, less services bought, less bus rides, fewer meals, and fewer kids in school. The multiplier from losing those high wage jobs means we all would be worse off. We are having our people rework that analysis, and we are working our way through council. With a little bit of luck, it was read for the first time today, but next Friday we might change the law [The City Council passed the new internet tax on March 9,2010]....

...Let me leave you with some cause for hope. I started with the change of culture. I see some signs that it actually can happen. I can give you one example: We have been courting a company that makes electric cars. It is a well-known, high profile company of the future that could someday be a tremendous employer somewhere in the United States. They come from overseas. The first meeting I went to with them was my second or third day, so really I was not the one who prepared for it. When they came in I asked what we had for them. It was this massive pile of stuff. There was no view of, "We're from the city; we're here to help." It was, "Here is stuff." I said, "Rather than give you stuff, why don't I say a couple of things. We are the nexus of the battery powered electric storage marketplace of the future. There is a lot of that technology and DWP is going to have a local preference. We buy thousands of vehicles over a period of time for our fleets. We have all kinds of monies from federal agencies and ourselves to build smart grids and charging stations and make your cars more accessible to our customers. Looking at the registries for Priuses: they are all here. The transitional technology is in our marketplace." Then they said, "If we had a headquarters here could we do a sign?" I said, "To market? Sure and I can do one better. We'll take your car and hang it over the roadway at LAX, where 60 million people come and go every year. I don't care where your building is, your not going to have 60 million people see it." Then I said, "The mayor is hosting an Oscars party. If you want, I can get Brad Pitt to drive it. You take your car to his house, shrink wrap it so everyone knows it's your car." They said, "You can do that?" And I said, "Yes; we are your partners. We are the city of Los Angeles." We are not the city of Topeka, Kansas. My point is that we can bring value to your customers; we can help. We can also hopefully help get out of the way in other parts of what you are trying to do.

Based on that conversation, the company stayed an extra day to talk more. They came back in and, like you would expect, it became a negotiation. They said, "Here are 15 things you can do for us." They asked for a lot. I said, "Here are five things you can do for us: you put your headquarters and do your design work here, distribute and engineer here, manufacture here, and bring your car through the Port of Los Angeles." Now we are doing business: we are past "Why they would come here?" and we are on to "On what basis would you come here?" That's good. I asked the folks on my staff-we had 12 people, in addition to myself, which is a little embarrassing-for their reactions. A few people gave me, "I am on my second pension. I haven't moved the needle yet; I am not going to do it now." There were a few people who started to comment about it being a big business and why that is good-is it union or non-union? What kind of job is this and if they aren't to our standard we don't want to talk to them. But a clear majority of them began to pipe up: "At LAUSD we have this program where we want solar panels on school buildings. We need to get DOT in here because we are switching over our streetlights to LED, and they have technology there." Each and every one of them had a different idea of how they could help. I am hosting a dinner for the CEO of this company next week; we are making progress.