3 Things Business Can Learn From Government

Are you kidding? You've got be joking! I am sure this will be the reaction of most Forbes readers. We often hear businesspeople telling government to be more like businesses: to be more efficient, more focused. Fair enough and agreed.  But, just for once, let's turn that idea on its head and ask a question we rarely hear: What can business learn from government?  While working on this article, we ran into a couple of CEOs who, when told of our topic, were quick to say:"that will be a short article!"

It does seem like a silly question to many, but we believe that there is at least 3 key things that business can learn from government. Now when we say government we are not referring to the recent problems around the budget between Congress and the White House, that's politics, but the full time government people.  Are there bad ones?  Absolutely, but we believe the majority are very fine people.  The direction big business is evolving in and moving towards is a model where some of  government's key skills are particularly relevant.

This week's column was written with Paul Tellier. Paul was the CEO of Bombardier, the world's largest train maker and third largest plane maker but earlier in his career Paul was the Clerk of the Privy Council for the Government of  Canada from 1985-1992, before joining CN as CEO.  To American ears, a Clerk sounds like an unimportant position, however in Canada the Clerk is the chief executive who runs the entire government (in effect the COO). In Paul's time, this meant managing over  250,000 people on behalf of the Prime Minister.  The Chief of Staff to the President is similar but has less power.  As such, Paul has been Le Grand Fromage in both government and later with Bombardier in a big global MNE. 

There are three areas where government is particularly skilled in ways that are increasingly needed for today's corporations. The first skill is the ability to deal with complexity: To not see the world in black and white but to perceive the full palette of colors that make up the current situation. This stands in contrast to the traditional strengths of many corporate executives. Part of being a good business leader is having the ability to focus on the few critical metrics that will drive a company's success. We call these metrics Critical Success Factors, and we use Key Performance Indicators to find out how we are doing against them. For much of the time then, business is fairly simple.  Here are your targets, go get 'em tiger.  Now, this is all well and good in a world of consistency where we can sort out the few key things for a task and relentlessly drive toward them, but what if they keep coming up with a new list every year?  What if foreign competitors, from China and India, for example, keep changing the rules?  Does this sound like business today? It does to us.   Take the clothing industry for example:  For years it was a relatively protected industry, now it faces strong winds from Asia.  Some firms are succeeding, like men's suit maker, Jack Victor, by going to the high end and leveraging the integration of the U.S., Canadian and Mexican markets. Today, that strategy is clear, however at the time of NAFTA it was not at all clear, and the industry faced a number of years of numbing uncertainty as to the way forward. At Bombardier, how are they making their new C Series airplane a success?  This is an incredibly multi-faceted issue with a number of long-term variables and players.  Government support, the state of the world aviation industry, the price of oil, customer support, World Trade Organization rulings, the speed of technological progress in composite materials, the reaction of industry behemoths Boeing and Airbus are all known unknowables which cause considerable uncertainty to the board of Bombardier.  Living with this type of complexity is old hat for government, particularly in the more senior roles.  They have been dealing with it for decades.

The second key ability that is more regularly called upon in government activity is striving to reconcile the conflicting needs and wants of multiple stakeholders.  Businesspeople might sneer and called this mere politics, and in government, politics certainly enters the picture, undoubtedly too often, but this concept is subtler than that. Senior government civil servants must manage a diverse set of constituencies, each with their own, often opposing, agendas.  This adds greatly to the time needed to come to a solution and requires highly developed negotiation skills and antennae sensitive to other's issues and goals.  The sheer work of it, and lack of obvious clarity, calls for great patience and an ability to find the middle way.  The new world order for much business paradoxically means being able to move swiftly at times but at other times also to be more patient. As business needs to worry about multiple stakeholders now more than ever. The U.S. auto industry not only has to contend with shifting consumer needs, but also Federal and state regulations, Federal bailout money, pressures from unions, and aggressive, successful foreign competition. You had better not ignore them, as they are your future.  You know business is just not as simple for many as it used to be.  Hordes of foreign competitors descending on our customer base, the various generations of employees demanding different things including flexible hours, flexible dress standards and sabbaticals, governments changing course on Buy American, our suppliers in China, our IT department in India, and part of R&D in Russia. We have various parties pulling us in sometimes warring directions.  We are seeing a slow, but it seems inexorable, move in North America in many industries to a stakeholder model where the shareholder is the first among equals but not the only person at the table. Does this sound like your world, Mr./Ms. Businessperson?  Welcome to the world of government. 

Complexity and multiple stakeholders are intimately woven together. Multiple stakeholders by definition add to complexity.  The ability to successfully wind your way through the multitude of reefs and shoals to an excellent, yet admittedly imperfect, solution is a central skill of governments at their best and one that is becoming an increasingly needed attribute for top corporate leaders.  To some compromise is seen as wimping out, and sometimes they are right. But more realistically it is about learning to work in a more complex world with a multiple of interests to balance against each other. 

The third area where business can learn from government has to do with the nature of leadership.  In government most substantive issues cut across departments.  Take an environmental issue. In the Environmental Protection Agency this clearly lies in your area of responsibility, yet if it is about pollution created by airplanes, the Department of Transportation shares oversight. If it involves money, Treasury is going to be part of the solution, and on it goes.  In business, there are times when an executive has clear responsibility: it falls in your remit and you can simply act, you don't need anyone else.  There is a time when you can say, "I'm the boss, you're not" and people will respond. In many issues government faces it is simply not that straightforward.  A key leadership skill that is constantly called upon is that of persuading others, not through your authority or hierarchical position but by getting them on board with your ideas and showing how your approach fits with their individual and departmental agendas.  It often means adjusting your solution to reflect their needs and ideas.  This is frustrating, time consuming and irritating. But ultimately, it means that government can face messy problems, not perfectly from anyone's view but appropriately given the constraints. The result of this is a philosophy and attitude of working to solve problems. Your normal work day is problem solving.

These three skills of government, dealing with complexity and ambiguity, working with multiple stakeholders, and compelling leadership, represent government at its best. We are not saying every government employee shows these every day.  These are the skills which tend to be demonstrated by the best in government at their better moments.  

How can you practically learn and benefit from these skills that government has?  Three things come to mind.  Firstly, hire ambitious young people who have that vital 4 to 7 years experience in top government departments and make them high potentials within your organization.  Secondly, have a select number of your more experienced high potentials take a sabbatical and work on secondment within government. Finally, break down and invite a senior official or two to lunch or better yet for an afternoon seminar with your top team to converse (note, not lecture), about the nature of their challenges and leadership.   After they pick themselves off the floor from their shock at your invitation, they will generally be delighted and eager to engage in this kind of dialogue. Clearly, for this purpose, it would be preferable to choose a department where your self-interest is not too obvious: this is about learning not lobbying. 

Maybe there is something that business can learn from government after all. Ok, ok, we promise not to mention it again...  If you know someone in government, please send them this. In the words of an ex-government employee in California, for a government type it may well "make my day".

-Article by Karl Moore

Read full article: Forbes, April 11, 2011