Each of us at one time or another has likely wished that government would be run more like a business. But beware, for your wish may come true. Many of the nearly 28 million American businesses are poorly run. Half of all new companies don’t survive past five years. What we really yearn for is that our government employ the practices of successful companies.
Paramount among those “best practices” is accountability. America’s top preforming businesses, large and small, have strong systems of internal controls. Employees at all levels understand what is expected of them. Bosses use measurements and metrics, and give feedback.
When expectations are met, there are rewards. When not, there are consequences. No executive or employee is allowed to do simply as they wish. Everyone’s behavior and conduct has to support, and be aligned with, the company’s strategy and mission. Things happen according to a plan. And it all works because everyone knows they have a responsibility to a higher authority: a boss, the board of directors, or the shareholders.
Another practice good companies excel at is getting to the root of problems. They find the systemic cause of business dysfunctions.
The notion of accountability did not simply develop as a good business practice. Nor did it come out of our nation’s business schools. It came, perhaps surprisingly and certainly ironically, from government.
The genius of our constitutional form of governance is accountability — in the form of checks and balances imposed on all branches and departments — baked into the Constitution’s DNA. The Framers had a profoundly deep understanding of human nature. They knew that left to one’s own devices, one would always make decisions and take actions favoring self-interest over the conflicting interests of others. It is how evolution wired our brains.
Yet over time the institutional brake pads on human nature have worn thin. Accountability by those who govern has become a thing of the past. And the consequences to society are severe. Look no further than to my home state of Illinois. The state has been without a budget in over a year. The Land of Lincoln teeters on the brink of disaster.
The root cause of Illinois’ dysfunction: State law makers are no longer accountable to the voters. Gerrymandering has allowed legislators to create their own districts. In the upcoming election, only 63 of 158 legislative seats are even contested, a testament to what a good job elected officials can do at self-preservation when given the opportunity. The Illinois story is not unique. Fundamental lack of accountability at the state, local, and federal level abounds.
Fixing businesses by instituting effective systems of accountability is easy. All it takes is principled leaders who understand how strong corporate governance produces companies more valuable to employees, customers, and shareholders.
Restoring accountability in government is not so easy. Constitutional amendments are often required. In Illinois, half a million citizens and dozens of civic groups are pushing for an amendment to prevent lawmakers from picking their own districts. But the politicians are fighting it. In the absence of accountability, self-interest triumphs.
If you are a business owner or manager, you can do your part to make your company great by following best practices regarding corporate accountability. As citizens, sadly, we will have to wait for politicians who want to make America accountable again.
To learn how Integrated Growth Advisors can help you solve your business challenges, contact David Landrum, Partner, at 860.295.1459 or 312.882.3266, or firstname.lastname@example.org.