CEOs and Presidential Candidates: Can You Learn What to Stop Doing?
With the Republican presidential debates now in full swing, most of us are probably already tired of hearing all the empty promises. Each candidate has new solutions, new amendments, new laws they would add to the old ones — each new program guaranteed to fix everything. But many of our problems would be solved if we just stopped doing certain things. If we simplified, if we eliminated the detritus of prior eras, our economy would have a better chance to grow.
As with any business, when you reduce complexity to focus on the essential, the remaining problems become easier to solve. Instead, we currently fight over how to make a complex thing even more complex, pitting one group in society against another. Without growth, the future looms as one of scarcity, no matter what individual Republicans or Democrats are pitching.
It strikes me that our politicians have made the same well-intentioned mistakes business leaders often make – trying to do too much, thinking that for every problem there’s a solution, failing to prioritize rigorously, and neglecting to measure what matters most. Many smart business leaders are always launching new programs to attack the next set of perceived challenges in their companies. For their counterparts in government, this means new laws, new regulations, and, of course, new taxes — with unintended consequences for all of us. While initiatives are sometimes wise, there are seasons for consolidation, for simplification, for clean-up. We are in such a season.
One of the great lessons of business turnarounds is to cut back to the core, to get out of “hobbies,” and to stop doing dumb things. While I’m no student of government, I can look at it as a business and see that it’s broken and needs a turnaround. One would begin with zero-based budgeting – starting over with a clean sheet of paper. This exercise always creates a different budget, a different set of priorities than simply building from last year’s flawed budget.
No senator would design a 70,000-page tax code if she had a clean sheet in front of her. But large organizations are like battleships, taking much time to change direction. The best way for an organization to do this is to figure out what’s at the core: What are the essential goods and services it delivers? And how to do so in the most efficient manner? One way to begin the turnaround process is zero-based budgeting – starting over with a clean sheet of paper, thereby “sunsetting” many programs that have outlived their usefulness. This exercise always creates a different budget, a different set of priorities than simply building from last year’s flawed budget.
The father of modern management, Peter Drucker, once said, “We spend a lot of time teaching leaders what to do. We don’t spend enough time teaching leaderswhat to stop doing.” Most businesses are like our closets – full of things we’ll never wear again. Keeping the business closet full distracts people, creates complexity, costs money, and slowly bleeds an organization. Keeping it full at the government level steals jobs, generates waste, and makes us uncompetitive. Worst, because government – unlike an individual business – reflects all of us, governmental bloat makes us cynical.
I’ve watched a good friend oversee large and successful turnarounds. He doesn’t ask, “What can we cut?” Instead, he starts with “What can we afford?” That thoughtful M.O. clarifies priorities. It eliminates the temptation to cut everything by 5% and focuses on cutting out waste altogether, while growing those efforts that are working. It’s true that national budgets are not the same as a business or family budget, but we long ago stopped attempting to prioritize our spending. We simply promise more, create new programs to dole it out, and print more money to fund it.
Oliver Wendell Holmes Sr. famously wrote: “I wouldn’t give a fig for the simplicity on this side of complexity [but] I would give my right arm for the simplicity on the far side of complexity.” In companies, it’s vital to sort through market complexity to figure out your “secret sauce” – to know what makes your offering unique, to get to “far-side simplicity.”
Were he still alive, Drucker might advise our politicians, just as he did our business leaders, to figure out what to stop doing. And, in certain cases, when to start over with a clean sheet of paper.
By Joel Peterson