Why Nations Work The Way They Don’t

October 26, 2010 5 min read 0 Comments

After 20 years of teaching MBA students and executives in eight business schools around the world, I recently took a professorship at the Lee Kuan Yew School of Public Policy. While the school is based in Singapore, my students were from all over the globe. The national mix was not unlike the mix I had in my business school classes, but the discussions were completely different. It took me a while to understand the dissimilarities, but I finally put my finger on it: business school students all fundamentally agree on the end goal of any decision – public policy students do not. 

MBAs measure their success in any case study by economic growth (revenue and/or profit). Students of government (many who, like their MBA counterparts, have been in the profession for 5 or 6 years before going back to school) seem to have little consensus around the end-goals, and spend most of their case-study discussion time on trying to develop a process for determining the way forward.

Process versus goals

This is not to say that discussions in a public policy classroom are unhappy events. It feels less cut-throat than an MBA discussion. MBAs (and Executive Education participants) will gladly rip each other apart for a financial error or strategically non-competitiveness suggestion. But my Masters of Public Administration students are actually kind during the discussion. I leave the room smiling and feeling good about the interaction.

Only after I get back to my office, does the feel-good haze clear and I realize that we really decided nothing. Or we came up with a process to study the decision more carefully in the future and involve more people in the decision-making. For instance, we discussed the case of an educational reform that improved student test scores in inner-city schools by 40%. In an MBA program, this would have been an unqualified success story – and we would have spent most of the time in the classroom looking for ways to import the best-practices of this case into other organizations. But for my policy students, there was sturm and drang – the process of school reforms had not been inclusive, it was top-down with “many constituents unrepresented.”

If you don’t know where you’re going…

This new way of understanding differences between business and government has thrown a completely new light on our political issues in the US.  

Take healthcare reform. We have no national consensus (or even top-down directive) on what our end-goal should be. Goals inherent in many of the arguments I hear range from living longer to being more inclusive to cost cutting to individual choice to…. Depending on that end goal, how you get there can (and should) be completely different. Little wonder that Congress and the President find themselves bogged down in process. Interestingly, the one stakeholder group in the whole debate who is pretty sure of the end-goal is insurance companies – who are pursuing revenue and profit growth – full stop. Little wonder that the insurance companies have been able to structure the industry to conform to their wants – they actually know what they want!

When it comes to banking and financial reforms, we run into the same dilemma – the banks know the goal: “Make Money.” But Congress is torn among issues of fairness, societal cohesion, individual rights, economic growth, happiness, religious imperatives, etc. And it is not like any of these issues are unimportant, but until we know how to prioritize them, we cannot make decisions.

The eight great goods

The goal of any business is mainly just “growth” – for the most part everything else takes a backseat to this one goal. Sure, law-abiding business executives don’t murder in order to grow their companies, but most execs have had the experience of taking away the livelihood of a father or mother (and bread from the family table) for the sake of the future growth of the corporation. 

Meanwhile, almost every political or governmental action has to weigh at least eight really important societal Goods in making every decision – life, society, growth, individuality, joy, belief, fairness, and learning. Government organizations find that all eight of these “goods” seem really important sometimes, so the focus ends up being on processes – processes that lead to ever-changing outcomes and initiatives.

There is nothing to stop our national debates from having clear priority bases. And if the ultimate “good” of these policies were laid bare, the decisions might become relatively easy. For instance, if we as Americans could decide that “Individuality” is the greatest good in the US and nothing else matters more, then the health care debate would be moot– the current system would certainly not require revising. But if the greatest good in America were clearly “Fairness” then every individual should be assured equal outcomes (access to healthcare) regardless of their inputs (hard work to pay for that healthcare).

Good government has clear goals

Japan was considered the model of good, efficient, productive government (“Japan Inc.”) as long as the nation’s unflinching goal was “Catch up to the West.” But since this goal was accomplished, Japan has floundered and it’s governmental process is now considered one of the most dysfunctional in the world. And while the institutions and “process” of government in Japan have not changed over the last three decades, the goals have become muddy and unclear.

Meanwhile, Singapore has a surprisingly efficient and fast-acting government. And it has been successful even after Singapore achieved developed nation status. Many claim that the reason for Singapore’s success is it’s size (4 million people on a single small island) or it’s professional governmental cadre (paid salaries commensurate with private business executives – some make millions of dollars a year!). But I think it has to do more with a focus on goals instead of process. Social order (and accompanying political stability) seems to have been the top priority of the Singaporean government in all of its decisions through most of it’s history. But hard on the heels of the societal goals are economic growth imperatives (with the advent of casinos in Singapore, there is even a good argument that Growth has overtaken Stability as Singapore’s greatest Good.Historically, Singapore grew quickly and constantly because the government was constantly taking steps to ensure plenty of economic growth – but never at a risk to social order. The primary and secondary goals were never confused. And the other potential goals like fairness, individuality, learning, belief, and even joy were (and are still) far behind the first two.

With the goals clear, laws in Singapore have been passed quickly, revised often, and implemented with business-like speed because there was no need to debate the underlying philosophies. When chewing gum was outlawed in the Republic of Singapore, the official explanation was to keep the island clean (social order) and ensure that time was not wasted cleaning up gum stuck on floors and under furniture (economic efficiency and growth).  A few years later, the ban on chewing gum was repealed – it was a bit hard to enforce, but you still cannot buy gum in the country unless you have a prescription from your doctor!

The US, Japanese, and European governments will never match the efficiency of the Singaporean government – and perhaps they never should. But if other nations could work toward establishing clear and un-changing priorities in the “goods” that drive our societies and our public policy process, we would be much more efficient and effective than we currently are.  A clear definition of what we deem to be our greatest goods will go a long way toward unclogging messy political processes.