My entire professional career has been spent in the private sector. I worked at IBM for 37 years until I retired in June of 2007. I now consult on innovation and technical strategy with IBM, Citigroup and other companies. Through all this time, I have enjoyed my career in business, dealing with products and services and working with clients.
But when I look back over the past forty years, some of my most rewarding times have been my involvement with government boards and committees. From 1997 to 2002, for example, I was a member of the President’s IT Advisory Committee (PITAC), and served as co-chair of PITAC for part of that time. After the 2008 elections, I was part of Barack Obama’s transition team, working in the Technology, Innovation and Government Reform (TIGR) group. In the last two decades I have been involved with a number of Department of Energy initiatives and have served on the boards of Fermilab and Argonne National Lab.
Part of the reason I enjoy my government oriented activities is the idea of giving back to a country that embraced me as a refugee from Cuba fifty years ago and provided the financial support for my physics education in the 1960s. But, there is also the pleasure of collaborating with experts from business, academia and government to jointly tackle some of the most important and complex problems facing the nation and the wider world.
As we know, the complexity of our problems is only increasing, and so is the need for even closer collaboration among business, government and academia. Which is why the present conflicts - some call them war - between business and the Obama administration are so disconcerting. At times, the rhetoric coming out of business and business publications is just plain ugly.
These anti-Obama business attacks have reached a point of frenzy. Stephen Schwarzman, one of the richest men in America, was so enraged at the administration’s proposal to increase taxes on private equity funds that he compared the Obama administration to Nazi Germany: “It's a war. It's like when Hitler invaded Poland in 1939.” Mr. Schwarzman later apologized for his unfortunate remark.
The administration is not blameless in its conflicts with business, as a number of reasonable publications and writers have been pointing out. A recent article in The Economist notes:
“In the ever-lengthening list of Barack Obama's unforced errors, his almost complete alienation of American business must come pretty high. It is certainly true that Mr Obama inherited a horrific situation, and one that obliged him to put some noses out of joint. But, against that, he came to power with a great deal of goodwill from some sections of the business community, particularly in Silicon Valley and Wall Street. Everybody knew that everybody was in a mess; and almost everybody was excited by the idea of a young, educated, black president.
“Why did he blow it? Partly because he shows no signs of appreciating business . . . Partly because he is infatuated with ‘best and brightest’ Ivy League types. Thus he has surrounded himself with the likes of Larry Summers . . . He might have prevented the business backlash if he had brought a few business people into his entourage, or if he had brought a prominent business person into his Cabinet.”
In a July NY Times Op-Ed, Roger Altman offers a balanced analysis of this conflict: “This poisonous dynamic between Washington and business must be fixed. Both sides should make adjustments, but the business community - of which I am a proud member - especially needs to make efforts to mend this relationship. Yes, the administration has made some mistakes. But, on balance, its actions have supported business.”
Altman then reviews the President’s actual record over the past two years: avoiding a depression and setting the economy on the path to recovery; restoring the health of the finance industry, which has directly led to a turnaround in corporate profits and the stock market; helping GM and Chrysler survive their near-death experiences; and restoring American’s standing around the world. He then asks:
“What adjustments should President Obama make to repair ties with business? For starters, no important member of his administration has ever met a major payroll. Such an absence of business experience in a presidential administration is unique in recent decades and carries negative connotations; certainly, no other comparable interest group is so unrepresented. This could be remedied by recruiting a senior industry figure for one of the four or five key economic policy positions.”
When dealing with the extremely complex problems we face, the business community has much to offer government. For example, last month The Technology CEO Council released its One Trillion Reasons report, including a set of recommendations aimed at reducing US government spending by one trillion dollars over the next decade. The Council’s recommendations are based on real-world expertise, information technologies and organizational practices that are already being successfully applied in the private sector.
They are also very timely. In the past few weeks, two bipartisan panels have issued reports on how to rein in our mounting deficit, the National Commission on Fiscal Responsibility and Reform and the Bipartisan Policy Center. I would hope that as the administration considers the panel's recommendations, it will leverage the expertise and advice from business leaders such as those associated with the One Trillion Reasons report.
But we also need to keep in mind that government and business have different objectives and operate by very different rules. I am a strong believer in free, open markets, and in the disciplines imposed upon business by the invisible hand and the forces of creative destruction. But, there is a huge difference between failed companies and failed communities, cities or countries. Clients can easily find other companies to do business with in place of the ones no longer around. This is not the case with citizens.
So, when it comes to major societal and economic needs - including job creation, health care, shared infrastructures and education - we are all in this together. A company cannot possibly succeed if the communities around it are failing. We must all do everything possible, as citizens as well as employees, executives and professionals, to help the nation achieve a prosperous economy and a healthy society. Government cannot possibly do this job alone.
Universities have a big role to play as well. A number of universities have established multi-disciplinary programs between technology and business, such as MIT’s Engineering Systems Division, in which I am a visiting faculty member. Their research and education initiatives have done a lot to bridge the gap between engineering and management.
Similarly, we need universities to establish research and education programs bridging the existing gaps between the private and public sectors. We need to study their differences and similarities and understand which best practices apply to both and which do not. We also need to train leaders and managers who are comfortable collaborating with colleagues on either side of this divide, as well as being able to easily move back and forth between them in their careers.
I totally concur with Roger Altman parting words in his Times Op-Ed:
“The tension between President Obama and the business community is hurting both sides and may hamper economic recovery. Closing that divide requires the business community to mute its criticism, and the administration to make personnel and policy adjustments. Neither should be hard.”
I agree with all you say, but it's very hard in practice.
The function of business is to compete. Think of the Microsoft Office salesman, and the Lotus Notes salesman. A customer is hardly going to buy into both office productivity solutions; and it's the job of a good fraction of the 400,000 IBM employees around the planet to give the Lotus Notes salesman the best pitch. I assume it's similar, but the other way around, in the Microsoft camp.
But that isn't really the function of government. It may be the function of a Democrat president to compete with the loyally-opposing Republicans on the question of who is to be the next President; but fundamentally the function of the US government is to ensure the continuity of the United States of America.
And that's a completely different aim than the private 'commercial squabbles over money and customers' that the Oracles, Hewlett-Packards, Microsofts, Apples, and IBMs of this world are engaged in.
Do tell us more, as and when you can.
Sam Palmisano for President ? An interesting thought.
Posted by: Chris Ward | November 25, 2010 at 03:47 PM