Sunday, November 07, 2010

Big Changes Take Long Term Planning

America has a lot of big problems: high unemployment, inadequate education, huge unfunded entitlements, energy dependence, and impending major climate change damage, to name a few. Informed citizens pretty much agree that "government" must tackle these challenges, either by taking direct action and/or enabling the private sector to take action. What is lacking, however, is a political consensus that long term planning is key to success. In fact, our political system is a hindrance to progress - perhaps a fatal one.

It's obvious that none of these problems is susceptable to instant solution; there are no "silver bullets". Neither electing a new crop of politicians nor throwing a lot of short term money at them will have much effect. What is really needed is a vision of where we would like to be in the longer term and a systematic approach to getting there. If we look at the meteoric rise of China since Mao's passing, for example, it's easy to see that this resulted from the slow implementation of very well-conceived and multi-faceted plans. We need the same sort of strategies if America is to solve its seemingly intractable problems.

In a former life I played a big part in effecting major structural change in the way a corporation accomplished an important function. The change began with conceiving a vision of the desired "end state", which was so dramatically different from the current state that the human and technological challenges to achieving it were daunting. Yet, by developing a long term plan and slowly, over six or seven years, taking logical steps in the right direction, we accomplished what lots of smart people thought was impossible. The measured pace of the change minimized disruption and chaos in the ongoing function. America's problems must be addressed in the same way - we need to get to very different places while keeping disruption at an acceptable level.

Our democracy, while having many laudable characteristics, is often a dis-enabler when it comes to tackling big problems. Since major change creates "winners" and "losers", politicians are extra sensitive to the concerns of the "losers". For example, the changes needed to put Medicare on a sound financial footing will excite the giant "senior citizen" voting block; a politician willing to work for change is likely to lose his/her seat at the next election. "Losers" in all the other area needing structural change will be similarly energetic. Consequently, democracies have real difficulties overcoming roadblocks set up by powerful constituencies that favor the status quo - things that "must be done" often can't be made to happen.

Unfortunately, democracies seem to enact major changes only when problems reach the crisis stage and great damage has already been done. The cost of this damage, and of the hugely disruptive and expensive "crash projects" that follow, usually far exceeds the cost that would have been incurred if the needed change had been implemented earlier and in a measured fashion. For example, slowly adjusting Medicare benefits and taxes would be much preferred to abruptly shutting down major aspects of the plan because the government ran out of money to pay the bills. Understanding this, is it possible for the American democracy to avoid the crises that it will almost certainly face if it fails to act now?

My answer to this question is that the "commission" strategy often used by presidents and the congress is the best potential solution. The commission, composed of members with many points of view, gathers facts, calculates likely scenarios, and produces one or more variations of a long term plan to solve the problem. Congress and the president then debate the alternatives and are forced to choose one of them by the "rules" that set up the commission. The "choice" also requires the congress to pass legislation and appropriate the funds to carry out the plan, and the administration to take positive implementation steps. Years ago, my management set the stage for major change by doing much the same.

Perhaps the "commission strategy" is not do-able in our democracy. If so, we will end up with crisis after crisis and pay dearly for our lack of long term planning. This would provide a lot of evidence that our democracy does not work, and set the stage for some sort of revolution and the installation of a much stronger executive - Hitler was Germany's solution in the 1930's. Do we really want this? It's time for our leaders to pull up their pants and skirts and get going on the right path.