If diversity is valuable, why aren’t we seeing millions of dollars directed toward it?
For many of us, a strong philosophical belief in the value of diversity translates into a trickle of charity contributions and perhaps some support for diversity-oriented government programs. But if we believed in diversity the way we believe in, say, new technologies, we should see massive amount of private capital finding its way into businesses that rely on diversity for their markets, their work force or their suppliers. And we’re not seeing that. Not even close.
What gives? Either people controlling financial resources do not believe in diversity as a competitive weapon, or there is some inefficiency in the resource allocation system. There’s arguably a bit of both. Many investors are skeptical that diversity matters economically and in all fairness, nobody has yet made a compelling data-driven case for the return on investment (ROI) of diversity. And for those who believe in diversity, there are few investment vehicles that leverage diversity as a strategy.
And so diversity devolves into this oatmeal of bland corporate statements about the merits of a diverse work force as the firm’s most valuable asset, mandated corporate diversity programs attended by yawning managers eager to return to their daily operational tasks, or minimalist corporate charity programs aimed at diversity-owned businesses. And so, at the end of the day, business people relieve their guilt by contributing some personal money to causes that may include diversity.
After many years of advocating for co-creation as an economic model from the comfortable perch of my teaching, consulting and public speaking platform, I’ve finally decided to put some of my money where my mouth is (literally, the project is about food). I have become a small-scale venture capitalist. I’ve rallied a few similarly-minded friends and together, we’ve decided to invest a bit of our money in the development of a diversity project. My tougher capitalist colleagues still marvel at being called angel investors. As the place for our proof-of-concept, we have picked Malden, MA, a gritty suburb of Boston with a rainbow of ethnic groups comprising its population and strong business and political leadership. Because there is a budding food tradition there, we have decided to start an industrial kitchen that will house food trucks serving the greater Boston area, an event space that we hope will attract both local youth and foodies from downtown Boston, and we are starting a kitchen incubator that helps local youth become food entrepreneurs through education and financing. This is not a charity, mind you. We want to prove that we can earn an above-market rate of return while helping employment locally and fostering greater sustainability of the local food chain.
This has brought a new joy to my life. In some ways, it is a project like any other, with its cohort of cash-flow statements and competitive analysis, with a new layer of personal financial anxiety. The primary difference, though, is that the people I work with are real, from young high-school immigrant kids applying for the incubator, to heavily tattooed food truck drivers working 14 hours a day, to middle-aged cooks who view us as an opportunity to finally create their own business. I dream of convincing some of the owners of long-established Malden businesses, often with a strong Italian or Irish heritage, to invest with us in the latest generation of Haitian, Moroccan or Jamaican immigrants because they remember how they or their parents did it. I dream of giving local Republicans a platform to demonstrate they can be both good business people and have a social sensitivity, and of allowing Democrats to demonstrate that they also know a thing or two about business development. I want Malden to become the prototype of new economic development for the nation, with business as the primary driver of success, in the great American tradition that attracted me to this country in the first place.
The problems we face are equally real. We’re struggling to find both women and ethnic representatives for our angel investment group. It is not easy to find a suitable building that meets zoning and environmental requirements. Finding financing of the scale we require has its challenges. And bringing together a team of such eclectic background into a common vision for the business is a daily grind.
Perhaps the most gratifying part of the Malden project is that I feel whole again. As Stuart Kauffman describes it, I now feel at home in the universe. It does not get much better than that.
When you arrive at the Harlesden branch of the UK unemployment office – called Jobs Centre Plus – the first thing you have to do is convince a giant of a man nicknamed Tiny that you have legitimate business there. When I arrived the first time, Tiny looked amused at the sight of my suit and tie, a little rumpled from my Boston flight that morning, and waved me in. A side-glance at the unbreakable glass partitions reserved for particularly “at risk” interactions between job advisors and job applicants further hinted at the grittiness of the place.
By the time I’d reached the top of the back stairway to our temporary office, I had learned that our mission was to help the local staff engage with the various Harlesden ethnic groups, particularly the Somali and Afro-Caribbean communities, including young black males who occasionally have, in the euphemistic language of the government, “law enforcement issues”. (I later learned that partnering with probation officers is a key part of the solution for job advisors assigned to those populations). I had touched tough neighborhoods before, particularly in our work with the French Post Office and with a difficult Boston neighborhood called Malden, but we’d never explicitly tried to engage those populations. I resisted the urge to jump on the first flight back to Boston.
The first sign of hope came from a conversation with my consulting colleagues who had already interviewed a lot of the Job Centre personnel the previous week. The team on the ground was young and enthusiastic. There was a twinkle in their eyes, a “what do we do now, chief” look that shamed me into rising out of my jet lag. Some advisors had told them about communities they wanted to engage. All we had to do was partner with their local management to set them free and ride the wave of their passion.
One of the advisors wanted to go to local schools and help organize a “work week” program that would allow young students to discover what working in local businesses is like, with the hope of giving them the desire to become productive later on, rather than passively gliding into unemployment. He told the touching story of his own kid who had learned through such a program that he was good at transcribing music into a music score, which had given him a lot of self-confidence. There was a quiet eloquence about him. There was one challenge, however: the program was supposed to be short-term focused (putting people back to work quickly) while his idea was to prevent people from ever coming to the unemployment office in the first place. With great pragmatism, the new head of the Harlesden office endorsed the idea and gave him a team. He was off to the races.
There were to be many other magic moments involving the Harlesden staff. Two women advisors took on the task of organizing the Somali community, from claimant and staff to employer and volunteer agencies. They painstakingly convinced young Somali males to come participate in workshops run by them (the women in the Harlesden office display a wonderful mix of compassion and toughness, which proved able to overcome even deep culturally engrained gender bias), then proceeded to invite to the party small Somali shop-keepers who could give job applicants a first work experience. They also convinced several local Somali agencies to work together in partnership with Jobs Centre Plus (strangely, these agencies had never worked together before). From September on, these Somali agencies will run a Somali desk inside the Harlesden office, a first in the history of the UK unemployment administration.
Perhaps the simplest, most brilliant idea, was generated by the new head of the office: let the advisors co-create the mode of engagement they wish to have with their job applicants. Experienced advisors instinctively know who is truly looking for a job and wish they could spend more time helping them. Conversely, they also know who is trying to exploit the system and collect unemployment money while pretending to look for a job, and wish they could stop meeting as frequently with those people. Until now, administrative rules required that all advisors follow the same process with all claimants. In the system piloted by the new office head, each advisor gets to pick two claimants and can invest whatever time they desire to get them a job. This has liberated a massive amount of energy on the part of both advisors and job applicants who can now jointly define their unique path to success, thereby producing a quicker path back to employment for deserving applicants and generating faster off-benefit results for the office.
I am writing this from my hotel room in London, awaiting my flight back to Boston tomorrow. Today was the final presentation by the Harlesden team to the top management of Jobs Centre Plus in a posh downtown office in central London. These are the best moments in the life of the teacher that I try to be (in those moments, I always wonder who is teaching whom). The management of Jobs Centre Plus was impressed and praised the team, consultants and advisors alike. Watching the smile on the face of the Harlesden advisors proudly presenting their work to their management was the most gratifying thing in the world. I just wish Tiny had been there.
The scientist reviewed the existing scientific literature on the topic, consulted with world-class experts on the problem, and concluded that what the issue needed was a $100MM grant proposal to build a genetic data base of all sepsis patients. He went to the National Institutes for Health and talked its management into endorsing his study. He recruited three leading pharmaceutical and medical equipment powerhouses to fund the proposal. The Obama administration financed the rest of the effort and the scientist became a poster child for government-funded research, next to clean energy and electronic health records. He launched a peer-reviewed, double-blind, 20 year longitudinal effort to identify the genetic markers that put patients at risk of developing sepsis. “It is time to eradicate this killer off the face of the earth”, he told the New York Times.
The nurse went to her hospital. She recruited her colleague floor nurses and took them to the lab in the hospital’s basement. They started talking with technicians and infectious disease leaders on how they could reduce the incidence of sepsis. The hospital’s infectious disease specialist explained to nurses and technicians how the risk of death increases by 8% with every hour that passes before treatment. The nurses learned to identify early signs of sepsis on a patient’s chart and draw blood earlier. They were taught to calibrate the amount of blood required by the various tests. The technicians were permitted to walk up to the floors, and nurses came to the lab. The lab manager was convinced by the technicians to buy better equipment to test for a wider set of pathogens and produce results faster. They made sure the test results did not end up in a mail basket, even on week-ends. They hounded the doctors to look at the results of the tests and act upon them promptly. They told the patient’s family when results were available, urging them to have a conversation with doctors on the test’s outcome. “We won’t solve sepsis,” she told her colleagues, “but maybe we’ll save a few lives along the way.”
The scientist received fame and glory. He appeared at scientific conferences in Cancun and Ibiza. The pharmaceutical firms flew him to colloquia and symposia where he vowed audiences with his protocols. The Sepsis Foundation featured him on their web site. The Journal of Sepsis and Sepsis Daily wrote columns about his seminal work.
Meanwhile, the nurse continued to fight for the right to hold sepsis sessions in the basement of her hospital. The hospital’s Chief Medical Officer told his doctors he had reluctantly agreed to the effort: “they seem so motivated”, he said. The Chief Nursing Officer cajoled the truth a bit and told her nurse colleagues: “the CMO is fully on-board”. The Quality people started tracking infection results from the nurses’ data and showed sepsis going down at the hospital. Together, they went to the CFO and showed evidence of the improvement. Intrigued, the CFO agreed to go talk to the CEO.
“Of course, we can improve some medical outcomes through practices of this type”, the hospital CEO conceded. “But this sort of stuff is incremental and people-dependent. But our resources are so scarce with the new healthcare regulation coming on and we’re already on projects overload. I can’t very well generalize grass-roots initiatives of this type to the rest of our network, can I? What we need is an authoritative study with a peer=reviewed, double-blind protocol. I think there is a national study on sepsis, and we should join in and contribute our patient data to it.”
The nurses and technicians stopped meeting in the basement. The scientist continued to triumph on the lecture circuit. One day, the great genetic predictive algorithm for sepsis may emerge. Meanwhile, patients will continue to die.
Working with a good editor involves a disturbing intimacy. The ostensibly professional relationship unavoidably grows into an invasive friendship when the editor gets inside your head. While massively grateful for the creation of order out of their synaptic chaos, most authors I know feel violated when someone rummages inside their head in this fashion (my wife expresses similar feelings when a cleaning crew shows up at our door).
I‘ve been working with the same Harvard Business Review editor for close to thirty years now (Steve Prokesch, senior editor), and we just completed our third article together. While an article every ten years does not exactly make me into Balzac (or Peter Drucker, for that matter), our relationship has gone through the same cycle every time, something I await, dread and ultimately love. I‘ve found there are editing seasons, each with a distinct experience of the interaction with him. Only upon completion of the full seasonal cycle does the beauty of our co-creation reveal itself.
When I approach Steve with a new idea, it feels like fall. We may have enjoyed sunny beaches together, but the leaves are long gone. I’m getting wet at the HBR door, he’s dealing with publication deadlines on more developed articles, and his mental space is limited. He points to the overlap between what I’m advocating and material already published by others. It feels like I’m being coached into oblivion, with an occasional ray of hope. I imagine Steve at editorial meetings, wondering whether to throw his weight behind my concept, in what I imagine to be a free-for-all of passionate editors each with their pet projects. Our experiences are inextricably linked: I’m looking for business immortality and I hope he’s looking at my proposal from an equally selfish standpoint, evaluating whether I’ll be fun to work with. He knows most authors to be arrogant and mercurial (Harvard professors are trained in condescension, particularly toward editors), allowing me to offer myself as a French pussy cat who’s modestly trying to express thoughts in a second language. Paraphrasing Victor Borge, I remind Steve periodically that English is his language and I’m just trying to use it.
Paradoxically, getting accepted for publication marks the beginning of winter in our relationship. After the Christmas party anticipating the literary birth a few months down the road, comes a season of barren landscapes and tall shadows. What I thought was a masterpiece in search of a few punctuation marks turns out to be a scarecrow with a carrot for a nose and sticks for limbs. Steve moves into his patient, but unrelenting mode. I‘ve learned over the years that an HBR article (at least in my field) needs a core framework, an anchor narrative showing a company applying the framework in some detail (ideally with live characters), a smattering of vignettes confirming others also use the approach, and a process sidebar for readers adventurous enough to who want to try it at home. Steve’s role at this stage is to poke at crevasses in the snowy landscape, exposing content holes and logic flows. When I start shivering in total nakedness in the bleak mid-winter, wondering why HBR accepted such a flawed project in the first place, he starts mentally rebuilding the piece and its author bit by bit, convincing me this is what I had in mind all along. When I hear “let’s work on the introduction first”, I know the snow blizzard is over and the slow march out of the winter woods has started.
Spring is now in the air. Steve is now like Edward Scissorhands, clipping leaves and carving out branches in our bushy manuscript, hacking at the Track Changes-induced multi-color foliage. Every paragraph that survives his cuts is a new bud. Corrections are the easy part, because I’m just asked to agree or comment. Queries are to be feared, because their Socratic framing often hides a “you don’t really know what you’re talking about” implication. Most anguishing is the laconic “huh?” that unavoidably conjures up the Niels Bohr-like comment that “this theory does not even rise to the level of being wrong”. The word count is still too high, the exhibits too numerous and the sentences too long. Steve’s favorite author is William Faulkner, mine is Marcel Proust, and while both are noted for their very long sentences, Steve keeps chopping up my paragraph-long lyrical sentences into small factual bits. Stress level grows higher at this time, as publication deadlines become more proximate. (HBR deadlines are still roughly patterned on the Gutenberg printing press process, the advent of digital printing notwithstanding).
It’s time for summer and fun in the sun. Publication time is close, bringing with it the anticipation of the finished product. Steve moves back into the shadow, his deed done, leaving me in the hands of other types of editors. It feels like being dropped at the beach with kids you don’t know, hoping your parents will come get you at the end of the day, though you’re not really sure. Executive editors come in with different views of what the piece should be about (no editing adventure is complete without at least one major thunderstorm late in the process). I‘ve learned to say “head” and “deck” instead of “title” and “introductory paragraph” to look good in publishing circles (Steinbeck-like cargo pants are my next move). HBR’s editor-in-chief makes the ultimate call when it comes to head and deck, giving him the right to call co-creation schmo-creation if he’s so inclined. Other types of editors become involved in nitty-gritty aspects (there are as many types of editors at HBR as there are pages in an average Dostoyevsky novel).
My first thought when I see the finished article for the first time is always for Steve. Of course, other people play a key role in the development of business articles: my co-author who’s framed the core argument with me, or the managers who’ve been the true actors of the stories we tell. When it comes to the quality of writing, though, the world may never know the extent of his contribution, but I do. I often think of E.B. White’s Charlotte’s Web’s last line: “It is not often that someone comes along who is a true friend and a good writer. Charlotte was both.” So is Steve.
PS: Steve has not edited this blog entry, which is why it contains mixed metaphors, split infinitives, Gallicisms and assorted grammatical and vocabulary errors.
I will always remember an old professor colleague of mine. I had not seen him in twenty years. He was the last person coming off the plane in Boston at midnight and looked quite old. He was disheveled, slowly dragging his oversized suitcase up the jet way, holding a half-open shoulder bag full of flip charts. He was still wearing the same patched-at-the-elbows rumpled suit, and his shirt was stained by markers ink. He saw me waiting for him, and a large smile illuminated his face.
“I’m just back from the West Coast”, he shouted at me from twenty feet away. “Three-day-workshop with a bunch of kids managing a high-tech start-up. Not so bad for a ninety-year old guy who does not even use Facebook”.
This image of my old friend’s triumphant smile has stayed with me all these years. The ancestral anxiety of any educator is irrelevance. This is particularly true those of us who teach innovation. I want to look like my old friend when I’m 90. I want to come off the plane, physically exhausted, but exhilarated at the thought of having just learned about a new industry. When my consciousness starts waning on my hospital bed, I want someone to whisper in my ear how neural networks and 3D reservoir modeling algorithms are built.
I’m not quite 90 yet, so I’ve got a bit of a head start. The front-end discovery part of any new business is by far where I have the most fun (I feel like I’m being paid to go to school). Writing-up success stories based on consulting work I have done and teaching them on the lecture circuit is the second best part. Everything in-between is just hard work.
I’m learning about six industries right now and feel like a butterfly in the orchard of knowledge. Three of them are fairly easy to grasp at the beginner’s level: we can all visualize how a grocery store, a hotel or a movie theater chain work. Three others have a higher educational bar: few of us have an a priori knowledge of flow cytometry, software-designed networks, or smart grid optimization tools. And even the “simpler” industries become complex beyond the basic level: there’s nothing trivial about figuring out how to manage the supply chain of a grocery store, optimize the occupancy rate of a hotel chain, or improve the average spending per spectator in a movie theater chain. As my synapses fire at decreasing speed, I pray that the wisdom of my years and the presence of younger brains around me cover for my reduced mental agility.
This is where the power of a cross-industry framework helps. In the co-creation business, one sees opportunities for new connections everywhere. Some people’s experiences can be connected together to form “chains of empathy” (for example, suppliers, employees and customers can all help a grocery store figure out what its strategy ought to be). One can fairly easily visualize data flowing across previously disconnected individuals and companies, and new insights being generated between them (in the medical, telecommunication or energy worlds, for example). I am like the Haley Joel Osment character in the movie the Sixth Sense: I see dead people. Unlike him, though, I arrogantly think I can make them come alive.
If you one day see an old disheveled guy dragging heavy luggage and coming last off an airplane at midnight, do not feel sorry for me. My dream is being fulfilled.
Strange things grow in the darkness of many businesses’ economic models. If you think that businesses serve the needs of customers and make money by earning their trust, think again. Businesses are platforms balancing the needs of multiple constituencies, and their economic model is rarely what you think. More importantly, businesses don’t want you to understand how they earn their profits, because if you found out, you’d know many are not telling you the truth.
When you go to a grocery store, you assume the products being offered are those that the consumers want. You envision a customer democracy driving shelf space. But the grocery store is responding as much to the spiffing from suppliers as to the needs of customers. Customers matter some (the grocery store cannot really do without the brands that people love), but shelf allocation is really driven by the rebate terms granted by suppliers to the store, not by what you want.
If you’re an investor who’s placed money with a large bank (or even more so a private bank), you may naively believe your advisor has your best interest at heart. But in many cases, your advisor is investing into assets managed by the asset management division of the bank, with the asset management division “retroceding” a good chunk of its profit to the banking division. How can you trust your agent when you have no idea what incentives he responds to?
Why are investment bankers so despised? Because nobody understands how they generate their money. Given the darkness in which they operate, we assume they’re making tons of money (which is largely true), using reprehensible schemes (which is sometimes true). The inability to identify the real costs and risks involved drives a general suspicion. If we were to understand costs and risks, corporate CFOs and treasurers (and the public at large) could start trusting investment bankers again.
At Google.com, you may think the search results you’re provided are the result of some objective assessment of the relevance to the question you posed. But Google makes money from its advertisers, not from you, so whom do you think they cater to when you ask your question? They have resisted any probe from regulators on how their search algorithm works (most recently in Europe), which would be the only way to figure out whether the search is indeed honest, or whether it tilts results to Google-biased suggestions? As a result, many of us may use Google as the dominant option, but few of us trust them.
At Internet sites like Lending Tree, TV advertising urges you to come to them because they will get lenders to compete to lend you money. But what they really do is “source” you as a customer and bring you tied and gagged to one of their chosen (often second-tier) suppliers based on some pre-arrangement they’ve struck with them.
All of that is as old as business. Newspapers, radio and television have always been financed by advertisers, while pretending to be accountable to their readers, listeners, or viewers. Large cultural institutions like symphonies, ballets, and museums routinely raise more money from grants and donations than from people paying for performances or visits at those institutions. As a result, the editorial or content integrity of those institutions is constantly in question, since the economic model does not match the purported consumer-oriented intent.
So what’s wrong with that? The lack of transparency is what’s wrong. Customers should have the right to know the economics of the businesses they patronize. They should understand the motivation of the store being spiffed by suppliers, or how much money the asset management division earns from their business with the retail banking division. If they did, they might decide to not buy from those businesses, go to more transparent suppliers who do the same thing but make it transparent, or choose to engage directly with the other members of the ecosystem. After all, grocery stores increasingly invite customers to talk to their suppliers on issues of sustainability for example, so why not do it on price or profit issues? They might help small suppliers struggling to break into the store shelves’ line up without paying a ransom, or punish spiffing suppliers who over-buy space.
I have repeatedly found that people, when confronted with the economic reality of business, make intelligent choices. Customers want their businesses (and their businesses’ suppliers) to be successful. They’re often eager to participate in the co-creation of the business’ economic model. The only time where they want to punish businesses is when they’re not honest with them, as has happened with car dealers playing back-room pricing games: consumers have deservedly pushed the industry close to zero profit on the sale of new cars through the power of Internet transparency.
In the future, economic models will be increasingly the result of a co-creation between customers and suppliers, with businesses earning their profit through the intermediation they create between them. Making your business model transparent is the first rule in the new economic order.
I always wanted to be a tour guide and last week, I got my chance. As a favor to a group of French retailers visiting the US, I took them on a tour of Wegmans, WalMart and Costco. Not too many international visitors pile up on a bus to visit New Jersey in mid-January, but we did. I had set it up as a Compare and Contrast exercise – teachers can’t ever organize anything without some pedagogical purpose– but one of my visitors suggested the trip should have an entertainment theme instead. “Like in Club Med” he suggested. We toyed with a Soprano or Bruce Springsteen motif, but agreed the trip should be called The Good, the Bad and the Efficient (sorry, WalMart!).
At Wegmans, the quality of the food display earned great respect from my French colleagues, although I sensed some contempt for a culture that would deem food so unimportant as to be consumed inside a grocery store. When I suggested we should have lunch at Wegmans’ restaurant upstairs, I was told we needed “a proper place” instead. That place turned out to be the Bahama Breeze in Woodside, New Jersey. I learned this choice had resulted from a close call with the Olive Garden next door. We went for the not-so-tropical hamburger and fries, which everybody ate with exquisite fork-and-knife manners.
One of the greatest joys of being a guide for professional retailers, I found out, is to learn how to reverse-engineer anything you see into the store’s profit model. After a few minutes at Wegmans’, they concluded Wegmans could not earn investor-grade returns with such a high-quality, low-turnover food, particularly when served by such knowledgeable employees (they correctly inferred employees had to be trained and well-paid to answer customer service questions as competently as they did). Interestingly, few of the visitors spoke English, but watching employees answer my questions was enough for them to assess their competency. “I’d love to be a customer there” one of the French visitors concluded (although apparently not to the point of wanting to have lunch there), “but I would not invest in this store.” When they discovered the chain is private and only opens two or three stores a year (officially to control quality), they looked at each other with a knowing smile.
WalMart was deemed uninspiring, but cheap. “We used to have stores like that 20 years ago”, was the most favorable comment I heard. They pointed out everything that could be improved, from cleanliness to the spacing between screws on the hanging racks. There was an Apple table with a few iPhones on it, trying its best to look like a mini-Apple store, but there seemed to be few geniuses around, and even fewer customers. We asked a friendly-looking clerk how big the store was. Her response was emphatic: “I have no ideaaaaaa!” I guess we were not at Wegmans anymore. My visitors were back in the bus within 30 minutes (Wegmans kept them interested for close to an hour).
Costco turned out to be the hands-down winner. “They must have about 4000 SKUs in here, probably about one thirtieth the number of WalMart” one of them estimated. We later found out they were right on the money. They estimated total sales for the store, sales per square foot, average ticket price for the store by looking at a few cards at the cash register, average demographics of the crowd, and split of brands vs. store brand sales. They even assessed the frequency of visits by building a quick model of yogurt and cereal consumption by an average American family buying two giant packages of each at every trip. Beyond that, they concluded, an average American woman would no longer be able to push her cart all the way to the parking lot.
I hope I never have to teach or consult for those guys. Being a tour guide is a much safer profession.
It is a bad outcome when the main lesson learned from the recent US Presidential election is that future political leaders will win through a better understanding of demographic segmentation. The conventional wisdom emerging from the recent victory of Barack Obama is that Republicans lost because they failed to understand that the United States is becoming more diverse, and consequently over-relied on older, white votes. Conversely, Democrats are deemed to have won the Presidency and gained seats in the Senate by energizing the vote of Latinos, African Americans, women and younger voters.
The problem with this argument is that it represents a static view of the situation (yes, the numbers are as advertised in the re-election of President Obama), but fails to recognize the dynamic role of political innovation in electoral success (no, there wasn’t any of that in the recent election). Like in business, political innovation does not reside in the ability to activate one’s traditional segment by honing in messages specifically crafted for them (the proverbial “red meat” for the equally proverbial “base”), but in rearranging the segments and building new creative coalitions among them. The name of the game should not be to grind out electoral victories through micro-segmentation and predictive modeling of votes county-by-county or citizen-by-citizen. The role of a political leader should be to engage a large electorate of diverse people in not only redefining their relationship to the candidate, but to each other. There is room for operational micro-segmentation processes as a second implementation step, but it is hardly a substitute for the broad democratic engagement process a candidate should orchestrate. In the election, both candidates had a lot of the former, and precious little of the latter (particularly if one compares Barack Obama’s 2012 campaign to 2008).
Successful campaigns are those where demographic frontiers get blurred and new relationships develop among supporters of widely varied ethnic, gender, sexual preference or age backgrounds, triggering new electoral coalitions. A campaign platform should be about drawing as many people as possible to become active members of the system and co-create with the candidate what he or she stands for. Voting is but the tip of the democratic co-creation iceberg, with day-to-day life in the community its underwater part.
Political campaigns should start in wide open form, not as manifestos. The pressure put by pundits on candidates to define their programs very early, down to the specific tax deductions they will eliminate and the energy programs they will support, is a negation of democracy, not an enhancement thereof. In a co-creative electoral system, there ought to be room for the much derided “listening campaign” of Hillary Clinton in her first senatorial run, or for the highly ridiculed etch-a-sketch views of Mitt Romney. Thinking that candidates should state their views once and for all, then execute them flawlessly once in office under penalty of becoming flip-floppers is as ridiculous as would have been to ask Steve Jobs to define the Apple strategy down to the scroll wheel of the next iPhone, all the while testing whether Latinos or women respond favorably to it.
The new leadership we need is not about ideas, but about process. It is not about reconfiguring party lines, or even bipartisanship from the top-down. It is about democratizing democracy at the community level, and reconstructing it piece by piece.
I’ve been a private sector guy all my life. I like singing for my supper. I like fighting on any consulting proposal, executive education gig, or speaking platform. I consider myself a front-line warrior in an economic war, and I like the thrill of victory and (in moderate doses) the agony of defeat. I have created employment for others (with some inevitable ups and downs), brought back currency to the countries that have been my home, and have traditionally thought of myself as an entrepreneurial type that makes an economic contribution to society without expecting much social credit for it. Most of my fellow citizens seem to believe the wealth generated by entrepreneurial success should be my sole reward, and that’s OK with me. With most of my family members in France as civil servants of one kind or other – many teachers among them – I have run at a young age as far away from government employment as I could, even moving to America to be at the frontier of creative capitalism and avoid any public temptation.
Through the vagaries of consulting life, though, I have found myself in the last few years confronted with the challenge of helping large government entities transform. As is often the case, civil servants have morphed in my mind from abstract aggregates represented by predatory unions into real people of flesh and blood, many of whom I actually like. It was always easier for me to develop a fondness for “teachers, policemen and firemen”, these archetypical public servants US Democrats like for us to visualize when they talk about government employees. But I have discovered that people working in post offices, unemployment agencies, government healthcare or ministries can touch my heart as deeply as any private sector person trying to make a living. As naïve as it may be, I have discovered that government employees are people too.
The social net may be protecting them better than most, and there are undeniably stories of excess involving them, but I have lately found myself wondering what it feels like to only be described as a sector to be shrunk, a cost to be minimized, or a citizens service to be improved. Strangely missing is a discussion of their own professional experience, as if their life had become irrelevant to the debate, or could somehow be reduced to a collective bargaining discussion conducted on their behalf by their unions. The miserable nature of the public servant’s experience has become a bit more visible in a country like France where a wave of suicides has spread through the country when government employees have been pushed to adopt new private sector practices, as has been the case at France Telecom. At this level of distress, it becomes hard to ignore the emotional reality involved.
It strikes me that the process of transformation used by managers of public entities deserves a lot of the blame. To improve productivity and service, public managers typically set goals and cascade them down through a chain of command that pushes front-line employees to higher performance level. This top-down, process-based approach has the net effect of squeezing everybody into a tighter and tighter box, producing extraordinary pain for all involved, from top managers to supervisors to front-line employees.
The key to reversing this process is to initiate a chain of empathy that starts with the interaction between employee and customer. Front-line employees and customers know a lot more than their managers about what to do. Together, they will engage with their customers and reinvent the system at the level of each post office, each blood donation team, each unemployment office, or each ministry’s office. Out of self-interest, public employees and customers will co-create better interactions between them. They’ll even figure out how to migrate these new innovative practices from office to office through peer-to-peer mechanisms, because, believe it or not, they talk to each other on the phone or on Facebook. The French post office has done that with great success (public disclosure: I have worked with them on their transformation). If the French post office can do it, shouldn’t any other public or para-public entity be able to do it?
For this to happen, though, senior government people will need to let go. This is not how senior government managers have been taught at the Harvard School of Government in the US, or the Ecole Nationale d’Administration (ENA) in France. And yet, this is what they should do: their role should be to lay out a few top-level goals, make some central resources available, then get out of the way. From there on, local post office employees will figure out with customers how to lay out or manage the local post office. Local unemployment office agents will team up with people looking for jobs and local employers to figure out how they should work together. Local blood donation staff will figure out with blood donors when and how to schedule each session. There is nothing like the self-interest of local parties to come up with innovative solutions and migrate their solutions from place to place to solve the huge societal problems that plague us.
The time has come to reinvent government. Disappointingly, none of that is part of the current presidential campaign discussion in the US.