Friday, March 21, 2008

10 Ways Our Government Does Business that You Shouldn't

10. Secrecy. Somebody once said that secrets “are government's excuse to lie.” All of you in web 2.0 have seen the success of platforms that are open to scrutiny. That's democracy in action, and we know it works. From the arcane and hidden accounting fiascsos of Enron, WorldCom and now Bear Stears, from Dick Cheney's secrecy fetish and his energy roundtables, secrecy's hidden cost is everywhere these last few years. Private citizens deserve privacy; public entities deserve and, I would say, flourish from scrutiny. Put your stuff out there. Did anyone say Diebold?

9. Unclear Mission Statement. “I just want you to know that, when we talk about war, we're really talking about peace.” (George W. Bush). Anything as big as our government will have some inherent contradictions, but, as a business leader, you should be careful to have a single goal and communicate it effectively.

8. Phoney Services. A good example of this is the Walter Reed Scandal. Our government touts its patriotism as awe-inspiring and our president never misses a chance to be photographed with a boy in uniform. Yet, when it comes to taking care of our veteran amputees, our president leaves the room faster than you can say “cut and run.” Lesson: don't advertise big love for your customers when all you are really doing is giving them peanuts. Don't say you are a green company when you invest .005% of your budget in that area...

7. Know your customer. Somewhere near 100% of the U.S. senators are millionaires, and nearly all of them get even richer when they leave government. This leads to a situation known as “being out of touch.” As economists have shown, the rich are getting richer and the poor are getting poorer, and that real wages compared to inflation have been in decline, especially since 1980. This is not a good way to do business and, eventually, it will catch up with you, as it did for congress in 1994 and 2006. Your customers are busy and, because of you, working harder every day, but, eventually they realize that “trickle down” means “piss on.”

6. Use your own product. This is not unrelated to number 7. Once you become a top government official in the house or senate, you will get healthcare—and good healthcare it is—for life. If you are in charge of producing a product (or refusing to produce a product) or regulating such a product's availability, you should live by those laws too. If the version of Windows you run at MS headquarters has magic features that allow it not to crash and bring on the blue screen of death, you should at least give your customers the same version, right? (See number 8)

5. Watch out for hostile takeovers. When a new boss comes in and starts replacing all the key staff members with people you know you shouldn't trust, look out. For example, when Bush puts the lawyer for mine companies in charge of mine safety, or when complete hacks with false resumes get put in charge of FEMA, watch your rear. Before you know it mass displacement (layoffs, firings, forced migration, etc.) will come. Sure, some forseeable "natural" event (a hurricane, a recession, foreign competition) will be the excuse, but--and you knew it all along--this group of bosses actually likes the hurricanes and has lots of friends running that foreign factory...

4. Don't kill your customers (too quickly or at all). This is an interesting one because the government actually does better here than in other areas. Philip Morris has shown that killing your customers slowly can still be a viable business model. The government's food pyramid, drug-approval system and its lack of universal health-care tend to emulate this model. If people die slowly and in ways that are hard to correlate with your product, then you might do quite well. If, however, your product kills quickly, make sure that the public is willing to make the sacrifice. Developing a strong mystique of manliness that is deeply interwined with the national identity is good way to do this. Marlboro man almost worked, but the government actually wins this battle with the second amendment and the military.*

3, 2 and 1. Get rid of unecessary paperwork and bureaucratic nightmares and focus on what you are good at. Now I know this is going to be controversial, but I'm not talking about taxes here, though I think there is a lot of room for improvement there too. I'm talking about cutting the size of the world's largest military. I'm talking about getting out of wars that are not doing us or the world any good. When the need arises, you can still create a large military—that's what happened in all the wars we won—so focus on your strengths. I'm talking about getting rid of health insurance companies that spend 25% of their budget on paperwork and management compared to medicare, which spends less than 10. (That is right, the government is more efficient at delivering healthcare than insurance companies.) So, lesson numbers 3-2-1: Cut out the middlemen and focus on what you are good at and on delivering it efficiently to your customers. The same goes for school vouchers. Why would the government give tax dollars to citizens to then send those dollars to private schools which have the right to refuse those students. Public education works—when you do it right and fund it. Focus on your strengths, such as not doing top 10 lists when you are really good at top 7 or top 8 lists. So, when I say focus on what you are good at, I really mean focus on being good.

*If you do happen to kill customers or if happen to some homicidal costs on your balance sheet, it helps if they are poor and brown and live in places like New Orleans, Baltimore, Iraq and Bhopal. This is immoral and not recommended, but the national media will probably let you get away with it as long as it does not adversely affect their shareholders or put "the system" into question.