Government Must Fail

Nova Newcomer

Some of our country's most enduring mythologies involve massive and even public failure. Think Henry Ford. Steve Jobs. The mythical Bill Gates, himself, said, "Success is a lousy teacher. It seduces smart people into thinking they can't lose." The lessons of the free market have a lot to say about individual achievement and loss. There are so many stories of business failure and later triumph that companies now see failure as an integral part of doing business. The concept of embracing failure isn't breaking news. A Harvard Business Review article from 2002 entitled, "The Failure-Tolerant Leader" asserted that "A business can’t develop a breakthrough product or process if it’s not willing to encourage risk taking and learn from subsequent mistakes."

Another concept that isn't new is the concept that government should be run like a business. I couldn't agree more, but not in the same way that most people mean it. Government must be run like a successful business that is allowed to fail, and out of these lessons, see a new path to better delivery of services and infrastructure. Government needs to be able to develop strong research and development projects and not just at the federal level. We are asking for more and more from all of our public institutions with fewer resources. The only way for better services to be provided from our local governments is to give them and their employees the agency to fail.

The recession we are still digging ourselves out of has put many of us in a state of permanent risk-aversion, especially with the bad taste left in our mouths from large financial organizations whose risk-taking went well beyond healthy innovation-seeking behavior. Annual revenue forecasts have made our local and state governments scale back programs, staff, and vision, to the detriment of our shaky recovery as public sector job loss continues to depress employment figures. And yet, in these difficult times, embracing failure can have the biggest payoff. In macro-terms, it's the difference between arguing for austerity vs stimulus. "Starve the beast" is the rallying cry of small government advocates and yet that argument is what encourages risk-averse behavior within government and stifles creative approaches to our societal ills. I would argue that delivery of government services could be better served if risk (particularly investment risk) could be taken without fear of starvation (e.g. What if the most common first points of contact with government could be invested in to match other customer service environments and provide hard-working union employees with a more inspiring workplace in which to engage with their "customer" base?) And as a side-note, it certainly doesn't look like more standardized tests requirements in our education system, where healthy risk taking must continue to be encouraged, not removed from our approaches.

Government and large business really aren't that different of animals when it comes to organizational structure and revenue (one has "customers" to whom they deliver products and services in exchange for money, one has "citizens" to whom they deliver services and infrastructure in exchange for money). What is different is that businesses aren't under the same microscope as government in how they run their day-to-day operations. Certainly, public companies have mandatory reporting they must do, but government has a level of transparency and public accountability for its day-to-day operations to which it must and should answer that business does not. Given its source of revenue, this type of accountability makes sense for government. Business, conversely, answers to customers and its own profits and losses. As you might imagine, there are benefits to running a business that government does not and perhaps arguably should not enjoy. But to both expect government to be run like a business but also pursue policies and positions that impede its ability to have any possibility of running that way is hypocrisy at its best, intentionally destructive at its worst.

Some solutions to our problems (and in particular, people-centric problems) just don't fit well in tidy, risk-averse boxes where every dollar yields immediate return on investment. Any good business person knows that. It's what many in government also know, but have little opportunity in our current resource-strapped environment to employ. I am not suggesting that risk taking in this environment is easy or even politically likely, but I will say we can't keep playing the shell game and expecting things to improve. Find me a country in the world without good government services and infrastructure that is thriving? You can't. Government isn't going away nor should it, why not invest in its exceptionalism? I think the free market would welcome it.

What ideas do you have for creative risk-taking for government?

By Nova Newcomer Feb. 07, 2013