How Would You Rule?

8 MBAs Solve World Hunger. In Theory.

Back in October 2006 I started this blog, Trust Matters, by looking back from the vantage point of my 30th MBA reunion, in a post called Harvard Business School 30 Years Later: Bring Back Joe. That was five years ago.

A few weeks ago I had the pleasure of joining a golf outing with 7 classmates. For three days, we enjoyed some much-needed Arizona sun, golfed, dined—and talked. One night we decided to compare solutions to the Major Problems facing the United States. We were all surprised at what we heard. See what you think.

Look Who Came to Dinner

Among the 8 of us were 6 present or former CEOs, and 6 former or present management consultants. Industries represented included communications, manufacturing, restaurants, airlines, banking, healthcare services and forest products.

We’re all male, ages about 60-63. Most had children; some have kids still in their teens; some are on the cusp of grandparenthood.

If You Were Emperor of the US

We posed the question to each other, “If you were the emperor of the US, whatever that means, what policy steps would you put in place?”

Here is the list, together with the number of us who agreed (note there were some abstentions on a few questions):

  • Change the presidency to one six-year term, no renewals (7/8)
  • Imprison about 250 financial industry executives (3/6)
  • Shift House of Representatives terms to four years (8/8)
  • Reinstate some form of Glass Steagall (8/8)
  • Embark on major public works investments (6/8)
  • Adopt means-testing for social services programs (8/8)
  • Break up big banks (5/8)
  • Institute electoral campaign finance reform (8/8)
  • Increase immigration of high-education high wealth-creating people (7/8)
  • Cut the defense budget (8/8)
  • Some form of single-payer system for health care (5/6)
  • MBA programs take leadership role in creating an ethos of service in business (8/8)
  • More consumer responsibility for health care payments (7/8)
  • Cut back on scope of public sector benefits programs (6/8)
  • Increase age of social security (8/8)

(There were several substantive side comments, e.g. solve banking issues by shifting regulatory authority from the Fed to the Office of the Comptroller of the Currency; move public pension plans to 401ks; index social security).

I know of no reason why these 8 MBAs would differ from another group of similar vintage. And we were all quite serious in our recommendations.

Why Those Ideas Are So Not Happening

Lots of people think that the US is run by 60-ish ex-CEO’s from ‘top’ MBA programs. (Picture our two foursomes as the opening scene of a Wall Street-like movie about ‘who really pulls the strings in this country.’) But those ideas don’t seem to represent policy of either of the two major political parties. In fact, the odds are very low that most of them will be implemented.

There are many explanations for the discrepancy but two big ones are:

1. Our group of 8 was not representative
2. The world is indeed run by a small number of people, but MBAs are not at the center of it.

I vote for number 2. If we’re the ones pulling strings, apparently the strings we’re pulling aren’t attached to much.

Trust and Policies

One classmate (not in attendance) who did find his way to public office said it’s easy to explain why politicians don’t express those views: “You’d never get elected saying those things.”

Which leaves us all in a bit of a trust dilemma (assuming you think our ideas are not crazy–perhaps a big assumption):

• Are voters really that ignorant? (We all agreed that ‘yes’ is not an implausible answer).
• Is it reasonable to expect politicians to commit career suicide-by-truth-telling? (Probably not).
• Is our system broke? (We think so: that’s why we had such unanimity around social responsibility for business, and campaign finance).

In one respect, I imagine that we eight are like the majority of US citizens—we hold a set of beliefs about how things ought to be that is not mainly reflected in policy.

When most people feel their views are in the minority, social trust issues lurk. When it’s not one minority but many different ones, those issues are even tougher.

As one of our wiser golfers said, “Occasionally some of our global friends are inclined to over-simplify when looking at the US–this is one ungodly-complicated country to run.”

 

9 replies
  1. peter vajda
    peter vajda says:

    I might have added another question/statement: impose truly meaningful consequences (with teeth!) for bad behavior – politicians, CEOs and others in business and industry, real estate, healthcare, pharma and the like.

    The closest any of your statements came to this is “Imprison about 250 financial industry executives” and 3/6 were in favor with two abstentions. Not a huge bandwagon. Wonder why. Hmmm.

    Voters might be ignorant, but it’s the politicians and the corporations, in collusion, that perpetuate the broken system.

    Interesting, IMO, that with all the wisdom and experience of this 60-63 age-group, consequences for bad behavior did not come to the fore. Curious how these CEOs and consultants would (or did) respond to bad bahavior within their own organizations or in the organizatioins with whom they consulted.

    You may have been quite serious in your recommendations but I, for one, feel you could have been more serious.

    And, yes, we are a complicated country. But that’s an “excuse” not a reason to give folks a pass on bad behavior. What’s complicated (or not so) is understanding the lack of self-responsibility and accountability for bad behavior.

    Wonder how they deal/dealt with bad behavior with their children…and whether consequences were a part of their child-rearing (teaching) process and, if not, how healthily their children are faring.

    Reply
  2. Rich Sternhell
    Rich Sternhell says:

    Several thoughts…first let me heartily agree with Peter. The same folks who argue for stronger sentences for drug crimes, immigration violations, etc., make great excuses for the failures of CEOs, public officials, etc. Consequences are a great cure.

    Charlie, I’m not at all surprised by the level of agreement, but the devil is in the details. Does electoral finance reform mean no more public money or no more corporate money? Does a single payer system mean the same for everyone or multiple systems? Does means testing start at $100,000, $250,000 or $1,000,000? My own perspective is that the electorate tends to be poorly informed and quite self-righteous about their lack of knowledge. I really like the idea of 4 year terms for representatives although it would wreak havoc on local television advertising revenues.

    Reply
  3. Paul Hebert
    Paul Hebert says:

    While I probably agree with most of the suggestions – the real reason that this doesn’t happen (IMHO) is more core than just – Politicians won’t vote for this stuff because they won’t get elected.

    The bottom line is that a job in public service (Senator, Rep, etc.) is rewarded too well. The loss the individual has to incur for not being re-elected is greater than the good they can do in the position.

    Eliminate the perks of the office and you free up the system to attract those that want to make quality changes – and have no incentive to stay past their “best if used by date.”

    The problem is that it is too lucrative (financially and psychologically) to remain in office than to do what’s right and get out…

    Reply
  4. Shaula
    Shaula says:

    An interesting conversation.

    > Increase immigration of high-education high wealth-creating people (7/8)

    That’s nice. And making more H1-B visas available, and creating a framework where workers who come in on H1-Bs aren’t paid shamefully below-market wages, would be a help.

    But I confess, I read this as: “America needs more people like me. So let’s import them.”

    The flaw is: importing education isn’t sustainable.

    Remember in 2005 when Toyota moved plants from Alabama to Canada becasue they didn’t want to have to train workers using picture books?

    There isn’t a single line item on the list about funding and improving the American education system. A better overall investment for a thriving, wealth-creating society and a healthy participatory democracy would be to improve K-12 public education, and make higher ed accessible and affordable.

    I’d quibble with you on some of the other items, too. But I’ll leave that to people with the facts and figures at hand.

    . . .

    Now, I think you’re deliberately playing Pollyanna with us, because I don’t believe you are really that naive.

    1. You want campaign finance reform, and at the same time you wonder why the US doesn’t slash it’s military budget? Really?

    The US has the best government money can buy. Literally. Look at funding by industry at a campaign finance tracking site like opensecrets.org. Look at how much lobbying money comes in from, for example, the military-industrial complex and the financial sector. Now take a wild guess at how likely those industries are to be regulated or face budget cuts.

    2. There’s two sides to the question of voter ignorance. If you want to address it, put reinstating the Fairness Doctrine on your priority list, and abolish the Citizens United Supreme Court ruling. At the same time, please recognize the gross disconnect between what American people desperately want, and what they get. For example, take a look at polling numbers in support of single payer health care during the national healthcare debate. People wanted it, but that’s not what they got.

    3. I’m somewhat surprised by your resignation to the idea that politicians are lying to you. I don’t know if you remember, but back in November 2008, you and I had a chat about reframing American political cynicism in terms of self-orientation. I still don’t know why American embrace such low standards for their politicians.

    4. There’s a flaw in your core assumption. Why are your ideas “so not happening”? Because the government is run as a profit center. That’s not a popular idea in America, but it still presents a framework where the actions of government stop looking erratic and irrational and make sense. Look at how the response to Hurricane Katrina was handled: ignore advice from the Army Corps of engineers that could prevent or minimize the disaster; delay relief efforts to maximize the damage; shut out International aid efforts and relief from other states; hand out no-bid contracts to your friends and supporters who are also your biggest financial contributors. Responsible government or profit center: which explanation makes sense?

    5. As far as those 250 financial industry executives you want to throw in jail go, how many of them hold MBA’s? You might want to revisit the Gallup Honesty and Ethics Survey: in 2010, 23% of respondents reported high trust in banking, compared to 15% in business executives. Ouch. The view in the trust mirror isn’t that flattering. Do you think Americans want MBAs running the country?

    I firmly believe that having a conversation about how to fix what’s broken with the American political system is important and urgent.

    At the same time, before MBA’s point their fingers elsewhere…if they want to have credibility in the conversation, they may want to clean their own house first.

    Reply
  5. peter vajda
    peter vajda says:

    Thanks Shaula. So clear and so right (IMO)! You say: “I firmly believe that having a conversation about how to fix what’s broken with the American political system is important and urgent. At the same time, before MBA’s point their fingers elsewhere…if they want to have credibility in the conversation, they may want to clean their own house first.”

    The more I reflected on this post during my run this morning, the more upset I became. I have no idea of the make-up of this group, of their perhaps social, enviromental etc. contributions, etc., (but you say thay are representative and I’ll go with that…) and so I kept hearing the loud and clear echo of “old white men” running the country….and we know where this has gotten us. And, too, the vision came to me of Pogo sitting with your group and saying, again, “We have the enemy and he is us.” Would your group, to a person, agree?

    Where is the “we” in the suggestions, “our” responsibility,” our need to change “us?”

    Not how many only hold MBAs but how many would (have) sign(ed) the MBA Oath had it been available at the time, or now.

    I just keep shaking my head and have this deep, visceral feeling that something’s “off” here, really “off.”

    Reply
  6. julian powe
    julian powe says:

    Charlie

    Love the passion of the Arizona golfers. I like the ideas, and sign up for them all. I agree about the social trust issues lurking.

    And I was drawn to the statement…’As one of our wiser golfers said, “Occasionally some of our global friends are inclined to over-simplify when looking at the US- this is one ungodly-complicated country to run’.

    just sharing three perspectives stimulated by that.

    At precisely the same time as your blog arrived, a very good friend in the Yemen, a senior civil servant, wrote to me, ‘ the situation is very worrying, people are apprehensive. armed forces are on the seen with crack among them. we are in a very delicate moment where wisdom is very much needed to save the nation and to avoid further blood shedding. the president stand is getting weaker.’

    In Sierra Leone a few weeks ago, the lovely young man who kindly drove me around told me that he earned $1250 a year, working 7 days a week. He is probably in the top 5% of earners in Sierra Leone.

    And I cannot help noticing that much of the resistance and unhappiness in my part of the world, the UK and Europe, is shaped by a whininess and a sense of entitlement about all we are ‘owed’, by function of being part of wealthy and democratic societies, with all that we have got used to in our splendidly munificent lives.

    Just sharing.

    Take all care and thanks, Julian.

    Reply
  7. Charlie (Green)
    Charlie (Green) says:

    Oh my.

    I guess I needed my semi-annual reminder not to touch on politics.

    Allow me a bit of pushback. Those comments were expressed in fewer words than a twitter tweet; we’re talking bumper sticker territory. It’s tough to be that brief and as nuanced as some of you might like.

    Honestly, one big take-away for me was how left-ish many of the comments sounded. Of course a big chunk of 250 imprisoned would be MBAs; breaking up banks would break up MBAs; we argued that our MBA education needed reforming; we’re as cynical as anyone about the money-politics connection. It honestly wouldn’t surprise me if every one of those 8 would sign the MBA oath.

    That struck me as pretty self-critical for a bunch of white sixty-something CEOs;it’s not pointing outward, it’s pointing inward.

    The truth is, there has been a sea-change in attitude among MBAs. Michael Porter is writing about Shared Value–a near complete reversal, on some dimensions, of his previous competitor-centric view of companies. See http://ow.ly/4k6cU. Bob Eccles is redefining accounting to internalize externalities; see http://ow.ly/4k6eJ. Last November, at http://ow.ly/4k6rP, I wrote about Trust Trending, mainly about MBAs.

    Many of the quickie talking points we listed would be drowned out as “socialist” if introduced by the Democratic Party. At the same time, this was far from a dinner of Obama’s left-wing critics; the direct practical knowledge of the world expressed by Julian above, mixed with know-how regarding the mechanics of regulation, is a combination you don’t easily find outside such a group. Naive is the last thing I’d accuse this group of being.

    One of the hardest themes for me to sort out is the tension between being cynical about voter stupidity and politicians’ venality on the one hand, and being arrogant and dismissive on the other. It’s not hard to point out how voters are cynically manipulated; several of at that dinner used the line ‘we’ve got the best business money can buy,’ and one of us commented that, “It’s amazing how cheap US politicians are compared to foreign ones; it doesn’t take much.”

    But it’s important to remember that with the claim of insight comes the assumption that we ourselves are blessed with clear vision and uniquely immune to such manipulation. To say that voters are blinded requires believing we alone are sighted. Cynicism vs arrogance: it’s a trade-off I struggle with.

    Reply
  8. John Gies
    John Gies says:

    Charlie and all

    Thanks for the post and the comments, (often as enlightening as a post). From where I sit I could agree with the golfers. I also recognize that as Rick said the devil is in the details.

    When I was growing up (not that long ago) there was a general agreement in the sense of what it means to be American. We would quibble over money for schools or defense but in general we felt this was a land of opportunity. Where it wasn’t (minorities or poor) we felt we should find a way to present an opportunity.

    Over the last several years, I have noticed that we seem to be becoming more polarized. Many of us recognize that, and yet…

    What I have observed time and time again is that when we strip the politics away and have a serious conversation and we are open to the others point of view, we mostly agree with each other. ( and I have some Red meat Republicans and some Airhead Democrats in my circle).

    So I think we have to find a way to foster the conversation, we have to step away from the 24 hour news cycle and back into our communities and we have to continue to have these kinds of conversations even on line. (My bet is that each of us has forwarded this link and we have or will have at least one conversation about this conversation.)

    There is a field between Right and Wrong… I will meet you there
    Rumi

    Reply
  9. Ed Drozda
    Ed Drozda says:

    Well Charlie you have most certainly kicked the hornets nest. Though there are many thoughts to share and comments to make, I will focus on this: Is it reasonable to expect politicians to commit career suicide-by-truth-telling? Reasonable- no (because the electorate likes to dream; necessary- yes. Because some day we are going to have to embrace the truth.

    Reply

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