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What business leaders can teach government

John Baldoni
John Baldoni is a leadership consultant, coach, and speaker. He writes the "Leadership at Work" column for HarvardBusiness.org, and his most recent book is Lead Your Boss: The Subtle Art of Managing Up.

Two senior citizens, one an artist, the other a businessman, are speaking out.

"[The U.S. is] becoming more juvenile as a nation. The guys who won World War II and that whole generation have disappeared, and now we have a bunch of teenage twits." That's Clint Eastwood lamenting the state of our national psyche.

"It's time to get off our butts, cure ourselves of an aggravated case of short term-itis, and create a movement that makes it safe for our politicians to opt for the hard choices and unsafe for them to continue to do nothing--to deny the undeniable and pretend we can sustain the unsustainable." That's Pete Peterson, former Commerce Secretary and founder of the Blackstone Group.

Eastwood states what many Americans feel; Peterson offers a solution. You can boil down both comments to a cry for enlightened leadership, one that rises above partisanship to create solutions for an economy and a nation in deep trouble.

Peterson believes that business can lead the way. Some might say this is only fair since it was business that plunged the economy into free fall a year ago. Governments came to the rescue, but now is the time for business leaders to pay back the favor. Such leadership can show governments and society at large there are better ways to lead.

Let me offer a process that mirrors the way successful businesses leverage leadership in ways that lead to sustainable results. This is not a call for a business take-over of government; rather it is a call for shared learning. This process focuses on leadership practices that business executives use successfully in their own businesses.

Identify the problem. This should be easy but, in reality, it can be tricky. Take health care reform, for example. The goal may be to provide care to all citizens, but in a way that does not add to the deficit or denigrate the interests of health-care providers. The issue becomes even more complicated when special interests weigh in. Yet business executives know how to deal with complexity; they do it every day in the ways they optimize operations, reduce costs, and improve quality. But first you need to define the problem by quantifying it, labeling it, and measuring it. Specificity rules; vagueness is a weakness.

Seek solutions, not blame. The political process is funded by special interests that can raise money on hot issues - be it abortion or taxes - rather than the efficacy of their solutions. Businesses do not tolerate ideology; business people are pragmatists. They favor doing things that work rather than create friction over partisan issues. Putting pragmatism that favors the whole country over partisanship that favors the few is something government leaders need to embrace.

Execute for results. Now is the time for action. Put the solution into practice. Too often in the political process ideas are admired but not implemented. Business leaders know how to get things done, and so they put plans into action. This is what good businesses excel in doing.

Be fiscally prudent. Solutions that do not consider the bottom line will create greater financial headaches in the future. While businesses do face short-term financial challenges provoked by market cycles, most businesses weather these crises with discipline as well as creativity. You need the discipline to tighten the belt, but creativity to think of new ways of doing business. That is something business leaders can teach government leaders.

Evaluate the process.
Once a project is completed, it is important to debrief about the results. Consider what went wrong and what went right. If you did achieve the right outcome, how did you do it? How much did it cost and what was the return? Human capital has a cost, too. If the project succeeded, but it required too much time, money or manpower, then the project is not truly a success, unless success can be achieved at a lower cost the next time.

Look over the next horizon. It is not enough to achieve results; good businesses make them sustainable. Replication of results is only one step; it is also necessary to consider what comes next. Can our solutions be improved and how so? What's the next challenge we need to be thinking about? These questions are easy to develop but profoundly difficult to answer.

If you are skeptical of business leaders' ability to look beyond their own self interest, you can't be blamed -- the headlines have been full of the follies of short-termism in business. But it was not always so. For example, Peterson cites the founding of the Committee for Economic Development in 1942 as an example of business leaders rising to the challenge of mobilizing business to support the war effort.

A more recent example is Bill Gates leaving Microsoft to lead the foundation that bears his and his wife's name. His good friend, Warren Buffett, endorsed Gates' example by donating the bulk of his fortune to the foundation. In doing so Buffett was being pragmatic; why create another foundation in his own name when there was already a foundation in place that could achieve the same aims? This is how smart business executives think and act -- even if they don't always act smart.

The problems facing our nation today are too big for government to solve; they require the involvement of well-intentioned men and women from every sector, including business people. Business executives who apply the leadership principles they use in the private sector can teach government leaders new ways of approaching, identifying and solving problems that make our nation stronger for all of us.

By John Baldoni  |  November 24, 2009; 7:25 AM ET  | Category:  Leadership skills Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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I enjoyed the article. I linked it to my latest post on my blog - GubinskyCPA.blogspot.com entitled "The University of Private Business". I hope you like.
Sharon

Posted by: GUBINSKY | December 2, 2009 7:22 AM

All valid points from Mr. Baldoni, and all platitudes.

Everyone has heard about 'trying to run government like a business'. How passe. How about 'trying to run a business like a government?' That would be new! If so, the "well-intentioned men and women" of the business world truly WOULD be identifying and solving problems that make our nation stronger for all of us.

Not playing executive cutthroat and working to squeeze another 2% of corporate profit for executive bonuses.

Posted by: maddoctor | November 30, 2009 2:01 PM

The political process is funded by special interests that can raise money on hot issues - be it abortion or taxes -

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hmm . . . Actually the most influential of the special interests are businesses and industry groups who pragmatically know that it is easier to write the rules of the game than to play it well.

Posted by: writinron | November 24, 2009 11:57 PM

Of course, if you're saying that Government should be run like a business, you could use the Bush Administration as an example. Two wars, financed by "off the books" credit supplied by China; a real estate bubble fueling the economy, jobs efficiently outsourced, regulations removed, not funded or ignored resulting in a financial meltdown; and all because "business" seeking short-term profit was able to influence national government to the detriment of the average citizen.

So my question is "what of the social responsibility of business"? It certainly appears that some leaders don't care if the U.S. is reduced to the state of pre-revolutionary Russia or France as long as they receive their bonus.

Posted by: shadowmagician | November 24, 2009 10:06 AM

Sigh - I'm in California as I write this, and speak from experience. Governor Schwarzenegger ran as a businessman with solutions, our State Legislature, led by democrat John Burton, resisted them and him. Meg Whitman sounds like more of the same. California has gerrymandering, entrenched special interests, extreme politicians who vote as a party block on ideological grounds, no matter how sensible the law (who proposed it is more important than what it says), and the notorious Proposition 13. I have great respect for Schwarzenegger, but there is no simple way to govern California using business principles.

That said, yes unregulated business greed caused the nations' economic problems; outsourcing and "exotic financial instruments" resulted in massive job losses, and a massive (measured in TRILLIONS) wealth transfer from the taxpayers to the gamblers on Wall Street. Now belatedly, the claim is these business leaders can apply their expertise to solve the nation’s problems THAT THEY CAUSED!

Give us some specifics, John. How would you reduce unemployment from over 10% when jobs are still being outsourced? Why is single payer healthcare "off the table" when health care solutions are discussed? Is it because the insurance industry would be distressed to lose their 30% cut from the premiums? Even though single payer is better and cheaper in dozens of countries? Or does just yelling "socialism!" end the debate, despite your claim of efficiency?

I look forward to another column with specifics, not business platitudes.

Posted by: shadowmagician | November 24, 2009 9:04 AM

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