What business leaders can teach government
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.
November 24, 2009; 7:25 AM ET
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