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How Business Principles Can Be Applied in Government

IF we look at government the same way we look at business, and our politicians as managers, then that would make us citizens its shareholders. Sadly, we Filipinos would have to give our country failing, or at best, uneven marks. Despite its mandate to help citizens enjoy better quality of life, the government seems to be perpetuating a broken system that still sees millions stuck in poverty with thousands more preferring to leave the country.

What are some business principles that might help us, as “citizen shareholders,” understand how government should be run? These are some of those lessons:

  • The most successful businesses are those obsessed with solving problems for its customers. Customers “hire” a company to accomplish a functional and socio-emotional job. The most valuable brands such as Coca-Cola, Apple, Netflix are recognized because they reliably and consistently accomplish their respective jobs of quenching thirst, connecting and computing, and entertaining. I once asked a former governor (currently a congressman) of a small, northern province in the Philippines why it was only in his term that he was able to connect all the barangays (villages) in his province with paved roads. Why was it so difficult for the previous governor (and his father’s political ally) to do so? He answered: “It’s not hard to understand. When I went to the office, I actually did work from 9 to 6. I actually did what I was supposed to do. Yes, it’s difficult and full of headaches. But it’s your job.” As a “customer” of a business, you choose one product over the other because one gets the job done better. As a “citizen shareholder,” you must conscientiously do the same with your candidates for public office. You decide what specific issues are important and choose who can solve them. Whether your representative had your vote or not — your role is to make that person accountable to get the job done for the issues you agree on.
  • Successful companies balance productivity and execution and creativity and experimentation. The deliberate strategy of focusing on productivity and execution organizes resources and processes to efficiently maximize the company’s current core business. The emergent strategy that dabbles into creative and innovative means of “delivering on the company’s promise” is based on experimenting with new ideas and opportunities that will drive growth.  The lesson for government is to create the structures that will help their citizens be productive while helping them capitalize on their natural advantages. On a macro level, we must credit President Duterte for jump starting an infrastructural boom that will ostensibly improve productivity. Simultaneously, officials must coherently pursue policy and investment initiatives to help Filipino talent and technology flourish in naturally competitive areas such as agriculture, minerals and the creative economy.
  • Successful businesses are good at managing change. When a company’s bottom line is affected, managers know something is wrong. They examine their “logic of success” and make the necessary changes to its business model, lest the company sustains huge losses or even worse, crashes. Jeff Bezos, the world’s richest man and founder and CEO of Amazon, proclaimed last year that, “Amazon is not too big to fail…In fact, I predict one day Amazon will fail.” Even the head of the world’s currently most successful company, questions its logic of success, helping keep his staff responsive and ready to reform the system.

The sad reality is that our political system is so broken that its current logic of success is, in fact, not logical at all. The latest political debate about honesty being a requirement of political candidates is both maddening and amusing. In our system, honesty simply does not get rewarded.

The real exercise of leadership is recognizing and renewing what is broken in our system. A courageous politician points out the dysfunctions of power, personality, and kinship networks as obstacles to getting real, long-term strategic work done for citizens. Whether one personally benefits or not, this politician works to reform the system towards the public interest.

As citizen shareholders, we can help keep our government accountable in getting the work done; understand whether officials are crafting and executing sensible policy; and ultimately, determine if they are indeed working for the public interest.

By Faustino John Lim

John is Director of International Affairs at the Center for Asia Leadership, an organization that addresses business, policy, and social challenges in Asia through leadership training and research. He heads the Philippine Emerging Leaders Initiative, a platform that channels talent and resources from Harvard University to help leaders initiate positive change in their organizations and communities.