UNIVERSITT.,.
MarieA. Danziger
Adjunct Lecturerin Public Policy
Director, KSGCommuni cations Progn m
Tel: 617-49$2686
marie_d
anziger@harvard.edu
www.ksg.haruard.edu/comprg
JO|{N F.XEr{NEOY
scHooL oF GovEll{}tEMr
OPTION AND DECISION MEMOS
BASIC COMPONENTS
L Define the problem: Why areyou writing andwhy shouldthe
readerbe interested?
2 . Summarizeyour findings
a
J.
Stepback and show how you got there:Givea roadmapof
the frameworkof your memo
4. Generatecriteria for evaluatingoptionsfor change
5 . AnalyzeeachoptioDaccordiDgto your criteria: Whatarethe
prosandcons?What's feasible?Whatarethepredictable
outcomes?
6 . Support assertionswith relevantdata
7 . Considerqualifications,caveats,counterarguments
8 . Suggestnext stepsor other implementationissues
Copyright I 988, Harvard University, John F. Kennedy School of Government Communications Program
79 JohnF. KennedyStreet,Cambridge,Massachusetts
02138
This
first
page of
a student
memo i-s a good example of
"skimmable"
formatting.
MEMORANDUM
To:
From:
Re:
Date:
Mayor ColemanYoung
John S. Smith
Raisingthe non-ResidentIncomeTax
March 13.19xx
The budgetproblem facingthe city is serious.The deficitis projectedby theBudgetDepartrnent
to reach$72million in fiscalyear1976-1977
andreach$500million by 1981-82.Giventhe sensitivityof
the autoindustryto the nationalandintemationaleconomy,permanentrelief may only comefrom a national
economicrecoverythat is not expectedfor a periodof years. Thus,while it is unfair to project current
recessionary
spendingandrevenuepatternsinto the 1980s,the short-termproblemsare seriousandrequire
immediateaction.
The city needsto cut the deficit by at least$30million in the short run. Completelyclosingthe
deficitis not in the city's interest.A deficitreductionplanwhichraisedtheentire$72million couldcausea
severeeconomicshockto an alreadyfragile economyandexacerbate
out currentproblems.lnstead,we
shouldaim to maintainthe deficit at its currentlevelusingthe appropriateaccountingmethods,andawaitthe
morepermanentrelief that cornesfrom an economicrecovery.
As part of a generaldeficit reductionproblem,the city shouldtake stepsto raisethe nonresidentincometax rate fromYzto lo/o. Severalshongarguments
existfor raisingthenon-resident
income
tax rate. They include:
o
The suburbsare underpayingfor serviceprovidedby the city. Currentlynon-residents
payonly
half of l% to Detroit in incometaxes. Residents,on the otherhand,pay2%o.While service
reimbursement
taxesareuseful,manyservices,suchaspolicy andfire protection,streetcleaning,
etc.,deff easyreimbursement
schemes.
r
Raising the tax rate from %o/oto 17ohas a relative low costto non-residents. The median
incomefor a suburbanworker is approximately$15,000to $16,000.An increasein the tax rateto
onepercentonly decrease
the annualpay of a workermaking$ 16,000by $60, or just of $3 per
bimonthlypaycheck.
o
The current relativeincometax levelscreateincentivesfor Detroit residentsto moveto the
suburbs. Cunently residentsof Detoit payZYoin local incometa:ces,while suburbanites
pay only
lo%.lncreasingthe non-residenttax rateto lYowould changethe suburbaniteta>(rate to at leastI
%%oandattenuatethe currentdisincerrtive.
HAl'VATD
UNIYERSITY
I
I
EEI
F
J O H N F .K E N N E D Y
JCHOOT Of GOVTRN}IENT
MarieA. Danziger
Adjunct Lecturcrin public policv
Director,KSGCommunicatbnsprogram
Tet: 617-49$2686
marie_danziger@harvard.edu
www.k sg.haruard.edu/comprg
CITECKLIST FOR WRITING ACTION MEMORANDA
Structure
o
r
o
Directlyaddressyour reader'sneedsin theopeninglines.
cover backgroundin just a few wordsandthin go quictty into a summary
of your recommendations.
Breakdownyour discussioninto meaningfulseciionsin a significant
order,reflectthat order very briefly in your
openingparagraph,andthenstick to it.
Usesubheads
to summarizekey points,like headlines,
for easyskimming(in boldfaceor underlined).
Statethemainideaof eachparagraphwithin thefust two sentences.
Therestof theparagraphsupportsor qualifiesthemainideawith
concretedata.
Distill andgroupinformationinto bulletpointswith appropriate
headings.
If usinga conclusion,frameyour recommendations
ina broadercontext,ratherthanmerelysummarizingyour main
ideas.
r
e
r
o
o
Content
o AnticiPateyour reader'smostpressingneedsand
focuson whatyou knowandsheor he doesn,t.
.
Speci&your assumptions
andjustifi themwhennecessary.
o Keepdiscussions
of problemsandtheirpotentialsolutionsclosetogetherandindicated
as such.
.
Find creative,meaningfulwaysto expresskey statistics.
o Evaluateyour optionsby balancingout theircosts
andbenefits.
'
Briefly discussalternativesor counterargunents
wbeneverfeasibre.
o Balancerecommendations
with discrssionsof theirevaluationandimplementation
'
Considerthepolitical implicationsof yourrecommendations
wheneverrelevant.
o wheneverpossible,provideyour readerwith fallbackpositions
in caseyourpreferredoptionsarenot attainable.
o Make sureissuesof equalimportancetakeup equivalent
space:themoreimportant,the morespace,andvice versa.
r Considerclosingwith a discussionof "next steps"-short-andlong-termimplementation.
Audience
'
e
o
e
Give your readera clearanswerto his or herparamountconcern:"Wly am
I readingthis?
Recognizeyour intendedreader'sdegreeofprior knowledge:try not to
over-or under-explain.
AnticiPateyour reader'sprobablequestions,
concerns,
andobjectionsandanswerthemdlectly.
chooseyour wordscarefulry:your memomaybe forwardedto secondary
readers
Style
o
r
e
r
.
o
o
Avoid suchwordy inhoductionsas"It is an importantconsideration
to keepin mind that . . . ..
Instead,youjust get right downto thepoint.
Neverusetwo wordswhenonewill do.
Usetheactivevoicewheneverpossible.
Useparallelismin all typesof lists.
choosetheplain Englishword overits moreinllatedLatinateequivalent.
Matchvocabulary,word choice,anduseofjargon to yourreader'sbackground
and level ofexpertise.
Copyright 1998Harvard University,JohnF. KennedySchoolof Government
program
Communications
79JohnF. KennedyStreet,Cambridge,
Massachusetts
0213g
JoscphNp
'
1.
BriefGuidelinesfor Writine Action Merporanda
Incerrtirc:
La yorr bossknow urbyhc or sbcsbouldbc couccrnedwith this issueat this time. Wh1'
is this on his or bcr desknow? Why can't h wail
2.
Assmryriors:
Spcc$ broadassrytions rhrt fi2* thc mcm. Why arc somethingsin or out ofrhe
mcmo?*Assuoingour currcd Policy....'
Congresswould Dot....'
3.
Options:
Prescatclearcboiccof options lvlakesne all rnqjoroptionsarc considered,but aroid
chrnerofirrclevzot oprionsGstiry.u/hy sou 8renot elaborarcd).Ideori$ zuboirtions
so tbat decisiomakerscanquickly obscrvebow tlrcy ditrer. Somcsirrylificarion is
ascstial but it Dcedsjustificatioubcyond<e"dwicbinga prcferredoprion betweenforoal
dternatives. Bewareofbrneaucratictendenciesto tradeawayoptiors in advanceand
prescntlowestcolomoDdeno-ittotors.
4.
Context:
relateto other issuescurreuttyundercoosideration?Would thc
How docsthis Lssue
oprionslook differeotifthe contelitwcrc prescoreddift'ercmty?
5.
Fallbacks:
Murpffs lawand pr€pareyour bossfor thewo6t. Identifythecoss ifa
Remernbcr
prcferredoption feilc. q/ha1are the fillbacks? Will tlc rwoDgscquenccof actionsclosc
of sonr frIlbactcs?Bewareof bning the best(your prefenedoption) desroy thc good
(a lessdesirablebut mre attainableoption).
Probabilities:
Dcsqibe the probabilitiesthrt the costsandbcnefitsof rrariousoptiors will bc reatizcd
How scnsitivearc theyto changesin rrariou assunptiors? Ifsonr largerframcwort
cbanges,wouH thc probabililies(andweiehtingof the issues)changesignificanty?
Page2
7.
Time Horizon:
Action rnsnos mrst focrrson thc spccificissucc h.nd, but actiou-forcingevcas oftcn
provideopggrnnlies to dircst attcciosto tonga rcrm issncs A good Esnxr writer often
canput tbc irediac issueiuo a longcrraa framvort
t.
Brcvirrr
Be brief. Your mcmois onc of mauyon a crowdeAiesf Avoid telling yonr bosswhat
(s)hcalrcadyknows. Avoid ovcrly etaboruc8oalJlsis
andtcqtarions to show off
(Usc
tcchical skinc
appeodices
ifneccssary).
?.
Bias:
You oftcn camot a\rcidhavi[g a pcrsonalor hrEau point of view, but you canavoid
slaftiag tbe assrnrytionsor opions. Your ogressionofyour pefcrcuccswill be more
srcdiblc ifil is opeoly,li"closcdand ifpu havefirlty and8dequsrclyprcscotedalternative
views.
10.
Leaks:
Memosoften rcceivewider distributionthantbcir arntrorsidcnd- Wbile frar*ness is
inpona$, as authorschoosctheir wordg tbcy sbouldimagtlehow tbeynight appearin
print-
To: Director, PanamaWater Authority
Frrogu--- '.Rer ServiceElparsion CampaignProblems
Date lUarch21,7990
Sunmary
Current dnanOaftrendsat the Water Authority are discouragrog. Liquidity ts
dangerouslylow, and the combinationof titiog'elqrensesand stagnantreverruesis
creating problens inith solvencyand proEtabiliry. f"fost importanL water saleshave
actrrally deseased during the past year,despiteinceasing erpenditures on the
servica elqraruion progran While theseproblerrs may h tanporary representing a normal lag time betweenelgmditures and their resulting impact rrea$,rresshould be takento: 1) Improve the AuthotiVs U$ddiry, and, 2) Increase
sales.
ProblernAnalysis
1. Liguidiqv. This is probablythe mosi urgenthnancialprobleru Accordingto the
data. the Authority may be unable to neet its obligaHonsduring the coming yezr,
and.will have trouble collectingwhat it is owed.
. Liabilities exceedassets.\\te antzen!assalsto dtnent liabilitiyrafio is now
.85. This is alanning for two reasors: 1) Most experts'atreethat a healthy
utilit/ shoul.l havea CA/CL ratio of 1 or more; and, D The Authorig/s
ilT from Ul7 in lgneA/g-t"t
When inventoriesare excluded,the ratioof 'qui&- cssds- those.qhich
can be dasilycon"ett.d into cash- to liabititiesb.J:2,which is considered
acceplablefor a utility. This indicatesthe Authotity is relatively wellequipped to handleshort-tErsrobtigations;desiite the CA/CL ntio.
Nonetheless,the trends indicate that there is still re;$on to worryc the
-quicK'ratio hasdectinednpidly frorn 1:6 in l97Z
.
. @
Customersarepayingtheirwaterbills an averageof86 .:
.daysafter receivingthen, an improvenentfrom 125 dayrstwo yearsago.
This'is a bit slow,comparedto other.u6litiei. Worse,the Authority now
'
mr:st waii ggg days,on avenge,to receiveour rnlorization tax zubsidy,
through propertytaxesI morethan twiceas tong as in l97L
. Performanceis declining. Tbetwnoot ntio has hllen to J0 fmm JG in
-tltlit' of acsetsnow produces
7yn- This meansthat one
only J0 units of
operating revenue Utilities should produce a hrrnover ratio of .25.
2 Solvenqy.The results of the debt analysisare urixed- Totat debt is retaEvelylow,
and the Authority is not under-capiteliued However, interest payments are taking
over an increasing proportion of income
.
.
The long-fmn ilebtto capitalizitionrafrois.s0.
This neans that about half of capital receivedby the Authority is coming from
loans; the 6gure is not unreasonablefor a utility. Abo, the lotal debtstoassets
rdio,measudng all debtas a prolrortion of att assets,is safeat j5.
. Interestpaymentsarebecomingdiffictrlt to meet. The ntio of revenues
(beforeinterest)to interesthas npidly fallen to L05 from 5.19in lgT2 fhree
problemsbecomeapParenthere 1) All but a fraction of revenuesare now
b"iog used to pay interest,leaving very little money to reinvesi; ? This ls a
result of rapidty ddining revenues; 3) The trmd indicates the situaEonis
npidly deterionting.
3. Profitability. Sincethereis no absolutemeanrre of a utilil/s profitability, ntios
are used to comparea utilig/s comparativeefficimcy over tirne. By
arrailable
"ll
measures,profits are declining at the Water Authori$n
.
o As a proportion of revenues,net profits have fallen to a mere .007from -28 in
lg?2 Corrpared to patrimony (i.e., contributions),net profits have fallen to .
.002 from .092 Comparedto assets,net profits havefallen.to.0007from.0{14.
4. Efficiency. Two effciency probleErsare readily apparmE Erst, the AuthoriE/s
ability to use iesourcesto produceand disUibute water is deteriorating;and secon4'
experures
have beentaking an increasingchunk of revenues:
. -Water productionand saleshavedeclinedas a proportion of asseB.The
ra6o of water productionto assetshasfallm to 27 from 36 in l97Z while
the ntio of water salesto asseBhas hllm to J9 from.28. The aEsolltelevel
of water productionhasbln,incr.easin& but the absolutelevd of assets
- used has beenincreasingmore qgickly.
..
. Wateris beinglost in the process.An averageotTLpercentof water
producedis actr.rallysold. This meansthat more than a qparteris lost
through leakageor theft, or is not adeqgatdybilled to customecs=
Good
/
perfontrancein a water utility is 85 to 90 percent dearly the Authority couid
be doing better.
'I\e
. Expensesare increasing faster than revenues.
opaating ratio,
measllring experutesits a percentage of revenues, has rism to 87 percent,
way above an appropriate levd for utilities. Little significant change has
occurred,in the composition of operating exPenses.
Recommendations
1. Raise liquidif.rn Improve collection. Collection of valorization taxesis a problenu
The Water Authorify receives a zubsidy from property taxes; it appears that the
govemment recently shifted from a six-month to a one-year propertj' tax collection
schedtrte. To combat the resulting tiquidify problem, the Authority could reqpest
that the government return to the six-month schedule; an alternative would be to
simply indude the nlorization tax with the water bill irutead of cross-subsidizing
from properfy bxes. Also, the collection of water bills, now between 50 and 90 days,
could be quickened to betrreen 30 and 50 d"yt.
The Authorily should attempt to learn more about the current assets-liabilities.
irnbalance. Frorn the baiance sheet,it appearsthat most of the deterioration this year
is atEibutable to a new entry of 1.2 million balboasfor payrrents to autonomous
agencies;it is undear what this signifies.
2 Increasesales: lmprove distribution and billing. The inability of water salesto
keep up with e.tperrsesis at the root of most of the problems describedabove. A
major aspectof this problem is that the Authority has not been reisrbursed for huge
amounts of water it produces. Even in PanamaCity, only 79 percent of water
produced is finally sold, while in the interior provinces the ratio has fallen to 54
percent. The Authority should examine its distribution system for leakagesand
possible securify breaches,especially in the interior.provinces. AIso, the Authority
shoutd look at its billing procedures to find out which customersare not paying or
not being informed about, their bills. It may be that many people, partiarlarly in the
outer provinces, are simply unable to pay.
Finally, the Authoriiy should attempt to discover why the recent exparsion
program has not done more to increasewater production.
3
W C :1 , 0 0 0
SPRINGEXERCISE.
MEMORANDUM
POLICY MEMO:
THE BIG PICTUREON ARMY RECRUITMENT
TO:
DAVID CHU,UNDERSECRETARY
OF DEFENSEFORPERSONNEL
AND
READINESS
FROM:
CURTGILROY,DIRECTOROF ACCESSION
POLICY
SUBJBCT:
ENSURING EFFICACY OF RECRUITING INITIATIVES
DATE:
5t2/05
EXECUTIVE SUMMARY
The U.S.Army mustaddressfour key challenges
in orderto turnaroundtheominous
currentdecline
in accession,which is threateningthe integrityof the U.S. force structure.In February,the Army
facedits first recruitingshortfall in 5 years,and March saw recruitmentshort by more than3OYo.
The following factorshavecometogetherin a perfectstormto precipitatethis crisis:
(1) Negativepublic opinionaboutthe military in key demographics
and negativepublicity about
I&q
(2) Muddledmarketingapproachis not penetrating
today'syouth
(3) More teenagers
pursuingcollege
(4) ImprovineU.S. economyincreases
labormarketcompetition,compoundingthe factorsabove
It is difficultto pinpoint how eachof theseconditionshasaffectedaccessionrates,but it is certain
that thisconfluenceis to blame.Thougheachissuepresentsdifferent practicalobstacles-in scope,
in measurement,
andin time horizon -the challengesarenot independent,and their solutionswill
overlapto our benefit.
EXISTING EVIDENCE
1) Public Opinion and NesativePublicity: Recentpolls suggestthat the war in Iraq has
seriouslydamagedpublic opinionin demographics
criticaltoaccession.
Primarily,the
likelihood of adult women to recommendmilitary servicedroppedfrom 58% in May 2003 to a
low of 35o/oinMay 2004.Adult women are by far the most influential peoplein potential
recruits' decisionsabout futurepursuits;accordingto a poll of l6
-27 -year-olds,44o/oidentified mothersas the most influential in decision-making
abouttheir
future,compared
to l3Yofor the next highest,fathers.(Anotherpoll found that 8l % of potential
recruitsidentify mothersasthe biggestinfluencerson futuredecisions.)That being said,overall
confidencein the militarv is on the hieh
WC: 1.000
S P R I N GE X E R C I S EM E M O R A N D U M
end of the 30-yearspectrumat J5%o,
which is a positivesign in light of overallnegativefeelingsabout
Iraq.(Onfy 47o/onow believethat lraq wasthe right decision,down fromT4o/oin April 2003.)This low
publicopinionaboutIraq is directlyrelatedto the situationon the groundthere,throughthe lensof how
the mediaportraysit. A constantflow of negativemediareportshavebeenpublishedsinceBush
declared"missionaccomplished,"
and that negativepublicitydictatespublicopinion.The fact that
fluctuationsin adultwomen'sfeelingsaboutthe militaryhavecoincidedwith eventsin lraq suggests
that positivenews-or at leastpositivepublicity,.aboutlraq would havea positivecorrelationwith
mothers'opinions.
2)
MuddledMarketing.RecruitingRecession:
This is wherethe rubberhits the roadwith respectto
accession,
andthe Army is lagging.The Army brandis the weakestof the four branches;while the Air
Forceis considered
the high-techforce,the Navy the oceanforce,andthe Marinesthe "elite warriors,"
the Army hasno specificimage,makingit significantlyharderto marketto teenagers.
Thereis also
debateaboutthe cost-effectiveness
of TV advertisingcampaignsversusgrass-roots
recruitingefforts.
Anothermajor challengeis the questionof who to target;parents(or mothers,as the publicopinion
polls abovemight suggest),or would-berecruits?Arnry SecretaryFrancisJ. Hu*"y plansto shift the
focus to parents,and the strategyincludeseverythingfrom parent-directedTV advertisements
to
direct-mailingcampaigns.In sum,the threemajorelementsof successful
productmarketingare all in
flux at the Army; the branch'simageis ambiguous.its targetconsumergroup is splinteredbetween
recruitsand parents,and the meansof deliveringthe message
is up irrthe air. Compoundingthis is that
overallrecruitingspendinghasdippedsince2002,a time when it shouldhavebeento be rising.
3)
College Careers:Another.harbingerfor negativeaccession
ratesis that collegeattendancerose
'990's,
continuously through the
shrinkingthe pooi of would-be recruits. This fact is bolsteredby
publicopiniondatasuggesting
thatyouth from l6 27-year-olds
are increasinglyinterested
in college;
from 2003 to 2004, the number of recruiting age civilians interestedin attending college
increased from33o/oto 42o/o.A possible cause for this shift in preferences and behavior is that
the financial payoff for a college education has increasedduring the past two decades.Overall,
the general rule is that elevated college attendanceis negatively correlated with military
enrollment.
4)
Economic Prosperity: Military recruitingis traditionallyinverselyproportionaltounemployment,
and thus we can safely assume that the economy's recent improvement has negatively
impacted recruitment. However, contradicting this assumption is that recruitment is only down
in the Army and Marines, and not in all four branches of the military, indicating that declining
accession is not only about wages. Though this view adds some complexity to the calculus, it
does not refute the claim that economic prosperity is leading to lower recruitment -one
potential explanation could be, as noted in the marketing discussion above, that recruits are
more excited about the Navy and Air Force, and therefore, willing to accept less pay in those
duties. Also, considering that higher education is becoming more financially promising, the
military has another competitor in the "market" vying for recruits.
W C :1 , 0 0 0
SPRING
E X E R C I SM
E EMORANDUM
FURTHER CONSIDERATIONS
Two otherhurdlesmust also be consideredfor the Army to optimizeaccessionrates;
(l ) By 2025,Hispanicswill make up 25% of high schoolstudents,yet that demographichasextremetylow
high schoolcompletionrates(62ohfor Hispanicscomparedto 93Yofor whites).Addressingthis disconnect
is essential
to successful
futurerecruiting.
(2) Anecdotalevidencesuggests
that poor Army recruiting"culture" is draggingdown accession.
While
difficult to measure,
this is Iikely relatedto compensation
and performance
measurement;
recruitingis a
low statusjob and achievementis measuredby numberof recruitssignedon, ratherthanthe numberwho
are ultimatelyretainedas soldiers.
CONCLUSION
A setof negativerecruitingconditionshavehit the Army in conjunction,leadingto a declinein accession
attributableto the economicatmosphere
and generalpublicsentiment,as wellas the army's muddled
marketingstrategyand the growingappealof college.No one factoroperatesin a vacuum,they are
interdependent
and thereforeinseparable,
but eachmustbe addressed.