Posted by: dstieglitz | October 31, 2013

RESULTS, NOT RHETORIC

“Effective leadership is not about making speeches or being liked. Leadership is defined by results.”   – Peter Drucker

     In an article last April, I prematurely cited Davey Johnson (Manager of the Washington Nationals) as an extraordinary example of leadership.  Despite their colossal collapse in the 2012 playoffs, his rhetoric elevated the Nationals into a Las Vegas favorite to win the 2013 World Series. However, his results were 86 wins and 76 loses – 10 games behind the Atlanta Braves and out of the playoffs. The team had the skill and desire to win but failed to execute. The losses got blamed on injuries, slumps, and bad luck – just like everyone in Washington blamed someone else for the government shutdown. The National’s rallying cry “wait until the 2014 season” is eerily similar to the “wait until the 2014 elections” cry in the halls of Congress.

      Results – Not Rhetoric.  Washington is the Major League of government and its leaders should be world class. Unfortunately, their recent leadership failures are akin to the Nationals missing the playoffs. A disengaged president and a gridlocked Congress preach change, but results didn’t happen because their execution didn’t match their words. Without effective execution, deadlines pass, breakthrough thinking breaks down, and the situation deteriorates. The country ended up in worse shape than if the rhetoric had never occurred in the first place.

      Washington’s Results.  The shutdown and sequestration are just Washington’s most recent in a decades-long series of failures. The World Economic Forum currently ranks the U.S. as the world’s seventh strongest economy – down from #1 as recently as 2009 – due to under-investment in infrastructure and R&D, deteriorating educational and health care systems, and ballooning debt. For example, the American Society of Civil Engineers grades the U.S. infrastructure (e.g., roads, aviation, mass transit, power and water distribution, and sewage treatment) as “D” – a single grade away from the point where everyday things simply stop working. Experts, including several former Secretaries of Transportation, have warned about the decline, but only after disasters like superstorms Katrina and Sandy does anything happen. As long as lights come on, water flows from faucets, streets are reasonably smooth, and planes don’t crash, the decline is ignored.

The U.S. Remains Ahead, but…  American power is eroding faster than any of us like, but the U.S. still leads the world in GDP.  Despite gridlock in Washington, the U.S. economy continues to expand at a modest pace and an energy boom is fueling growth, creating jobs, and revitalizing manufacturing. But how many jobs could have been created if Washington became a positive influence instead of a ball-and-chain that the economy drags along?

Arguing about the Wrong Things.  Washington is stuck in endless debates about continuing resolutions and debt limits – topics that are only marginally related to the country’s real opportunities and needs. S&P estimates the shutdown reduced GDP growth by 0.6% – 40 times the controversial medical-device tax that represents only 0.015% of GDP. Furthermore, Congress hasn’t passed a national budget since fiscal 1994 – 20 years ago. The budget deficit is a second-order issue compared to stagnant growth, chronic unemployment, and a declining percentage of citizens participating in the economy.

The Highest Priority.  Actions that matter in the long run should be priorities for the White House and Congress. Debates about growth and jobs are more important economically and more palatable politically than sequestration and budget deals. The Congressional Budget Office estimates that an annual add-on of 0.2% in GDP growth would eliminate the budget gap in about 10 years. In addition to curtailing debt, rapid growth would raise household incomes, make the U.S. more competitive globally, enable state and local governments to balance their budgets, and push industry to make new hires and invest in R&D. Growth-accelerating policies would be felt more strongly on Main Street than measures to raise taxes or cut spending.

Accelerating Growth. Neither political party has a monopoly on good ideas to accelerate growth. We need more investments in renewable energy sources and exploitation of the natural gas deposits that have recently been discovered. We need better education and increased accountability for those who deliver it. We need investments in public infrastructure and reductions in regulations that inhibit private investments. We need to cut greenhouse gas emissions that contribute to climate change and invest in new oil pipelines and power distribution networks. We need higher minimum wages and a job for every American.

Call to Action.  If a fraction of the mindshare spent on budget deals over the last five years had been invested instead on growth strategies, the American economy would be flourishing and government finances would have been restored as a bi-product. An over-whelming majority of the American people say the country is moving in the wrong direction, but reducing political in-fighting is just part of the solution. The White House and Congress must focus on issues that matter to everyone: jobs and growth. Lasting prosperity can only be produced through excellence in execution – in both government and the private sector. Execution is the vital link between rhetoric and results. Effective leaders execute – they move smoothly from debate into action and implement course corrections if things get off-track.

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