Hey, America! Keep It Simple, Stupid

I’ve talked about it before, and here’s another reason that America should be run like a business.

Each and every bill that goes through Congress has many pieces yet most of those pieces don’t pertain to a bill’s raison d’être.

Why?

Self interest and politics.

It’s for those same reasons that bills we need don’t get passed and the country continues to suffer as a result. Self interest and politics are also the reasons that the Democrats and the Republicans are fighting.

If America were run like a business – especially a business in crisis being run by a turnaround manager, with every issue being vetted as it affects the bottom line – then self interest and politics would be swept aside to make room for survival and positive cash flow.

Going forward, I recommend we take it one issue at a time. In business – especially turnaround – we take everything one issue at a time. It’s how we focus, make progress, and ensure that we’re not muddling our priorities or success.

Consider the President’s job bill as an example. I am not judging the merit of any of those elements tacked onto the bill, but I am saying that the very act of tacking them on was foolish. The tax increases in the bill and other elements included were purely a function of self interest – not public interest and certainly not a jobs bill. A jobs bill is likely the result of an unusually high unemployment rate, and a bill about unemployment and jobs is not a bill about taxes. Had the Buffett tax been excluded, the jobs bill may have had the ability to pass on its own, but when Congress makes singular bills about more than their primary subject, the country cannot move forward.

Focus, America! Keep it simple.

I guarantee that if Congress addressed only one issue in each bill, it would make more progress. If we could get a bill making every bill about one thing, we’d dramatically reduce partisan fighting because all bills would be based on the merit of the individual issue at hand.

For us to move forward and survive we need to Keep it Simple Stupid.

Have you ever been overwhelmed by too many issues and been crippled to affect even one?

Politics Sinks Companies, But It Doesn’t Have to Sink Yours

All organizations have politics. If there’s more than one person involved – or one person with split personalities – you will have politics. Whether a 50,000-person enterprise, a non-profit, a school, a small business or a club, there will be politics.

The question is: How do you minimize politics?

Remember that everyone has an agenda. Even keeping one’s head down and doing a job for the paycheck is an agenda. As you can imagine, so is sucking up to your boss for a promotion. But those are ordinary personal-level agendas. If this is the culture of the company the aggregate of these individual low level politics could be crippling, but these are not the politics that concern me.

I’m concerned about the kind of senior-level destructive politics that slows down the operations of a company. At this senior level key decisions are made, so when people jockey for their political interests, they are making – or more likely breaking – their companies.

At one large company I turned around, there were some old directors who wanted to continue in the manufacturing business, while other directors preferred to morph into a licensing company. As a result, valuable time was lost, resulting in a 6-month delay – and a ton of monetary losses – before the company pulled together on the project that would save them.

Now, a disagreement amongst board members is a healthy way of fleshing out the best ideas – and a normal process – but problems arise when a board member or senior manager tries to undermine the process of normal negotiations and discussions within the board by currying the favor of senior management or board members who skew assumptions and therefore strategies towards their desired outcome.

I’ve seen numerous companies fail for these reasons.

As a board member, manager or director, it’s your job to minimize the politics around you – and to recognize when you’re a culprit in creating those politics.

I don’t know that you can stop politics, but you can mitigate it. If you, as a manager, see politics going on, you need to nip it in the bud by speaking directly to people about their actions and emphasizing that by working as a team, you are all working towards the same goal: the success of your company.

The bigger a company becomes, the more layers of management are created and the more political the team gets – and the less “team” things become. No matter how big your company gets, try to keep your business from being too political. Life is too short for politics.

When internal politics heavily influences people’s behaviors, leaders don’t get the right answers quickly enough. When a business is in trouble, this results in a slower turnaround; even when a company is healthy, internal politics creates unnecessary barriers to honest communication and collaboration.

What kinds of politics does your company face? How do you handle them?

Avoid America’s Bankruptcy by Bringing a Turnaround Guy to Washington and Treating the Country Like a Business

This article was published in its original form in the Atlanta Business Chronicle here.

The United States is a capitalistic society, so I often wonder why the government isn’t run like a business. We had a surplus 12 years ago, but now our debt is astronomical: nearly 14 and a half trillion dollars. This isn’t a political issue. It’s a business one – or at least it should be.

When a business finds itself in this much debt relative to its capacity to repay, the bank, Board of Directors or shareholders say, “No more!” and send in a turnaround professional. We are the shareholders, and it’s time to send a turnaround guy to D.C.

When my clients have problems with cash flow they don’t print money. They raise money, close plants, layoff people or cut spending; they tighten their belts to survive.

Despite insurmountable debt, the U.S. government isn’t doing those things. Businesses with negative cash flow would have been bought, liquidated, merged or otherwise gone at this point, and I don’t want to see us become like Greece or Iceland in five years. Worse still, I don’t want to be a part of the United States of China, since in the business world a company with increasing debt is subject to acquisition or dissolution by a larger and wealthier business.

I always say that 100% of spreadsheets and projections don’t work because the assumptions are wrong, yet people rarely revisit and alter the assumptions regularly to produce more positive results. Even today, the Office of Management and Budget, which hasn’t made an accurate P&L projection in years, thinks that our revenue is going to increase by x if we do a, b and c. But x is an assumption that’s based on the unlikely actualization of a, b and c, possible only if we overcome party politics. And as the deficit skyrockets, the assumptions are increasingly wrong and the parties are increasingly polarized.

The only way we’re going to resolve our financial crisis is by treating the government like a business.

As we repeatedly hear, a balanced budget is the first step. The second step, however, is a repayment plan of our foreign debt. Next, raise taxes. No one likes tax increases – especially me – but it’s part of the solution.

The corporate amnesty program allowed businesses to return profits from foreign soil to the U.S. at lower tax rates, which created more jobs in America. This was a wonderful and creative idea, but it equates to peeing in an ocean: it doesn’t change the levels. While thousands of these ideas will amount to an aggregated long-tail effect, we need to begin with more drastic measures.

Turnaround 101 dictates that we start by slashing all spending by at least 15%. We must tell every division, department and agency that it needs to cut its cash needs – no exceptions. The pain will be shared across the whole country as it would be across an entire business. This kind of mandatory budget cut provides time to fine tune operational requirements based on the improved results.

Before you ask, this 15% cut would affect entitlements, social security, health care, the military, and education – everything.

It’s easy to buck and cry, What about the children? Shouldn’t they be exempt from budgetary cuts? What about the sick and the poor? What about defense?

Here’s what I ask every department at a business: “Do you want your company to survive until tomorrow or do you want to quibble about who’s more deserving of money that doesn’t exist? I don’t care how you do it. Just do it.”

Internal politics kill companies in the private sector because politics and business don’t mix. Similarly, politics has no place in America’s budgetary discussions, and our issues must be addressed by those who can truly set aside political or personal biases and run this country like a turnaround professional in the private sector.

As a turnaround guy, I act like an ER doctor; my first step is to stabilize the patient and prevent shock. As a country, we’re already in shock. Nobody wants to lose an arm or a leg, but if there’s only enough blood for the torso and the leg is gangrenous, you better believe I’ll lop it off to save the body. In five years, the prosthetic surgeon can make us pretty again. I’m in a unique business, but it’s the business of making sure we’re still alive in 2025 with or without a leg.

In addition to the 15% cut, we must freeze all raises and expansions. That means no more foreign aid increases (also subject to the 15% cut), and we put a reasonable mandatory repayment plan in place for foreign aid. We can’t continue to write off receivables and survive. It doesn’t work that way in business, and it can’t work that way in government.

This also means no cost of living increases for government employees, social security beneficiaries and pensioners. In addition, congressmen can enjoy normal health care services – not VIP lifetime benefits for two years of service.

Unfortunately, tenured positions can’t be affected, but we can stop giving tenure. All rules for entitlements (e.g. pensions) must be reviewed. The private sector has largely eliminated pensions because it can’t afford them, and government needs to do the same. In capitalism when you can’t afford something you stop doing it.

I don’t have every last answer for how to save the trillions we need, but by making – and enforcing – these tough moves we can save America from bankruptcy, collapse and ruin. We must empower people to save money, and punish them for spending it needlessly in order to get a line item the following year.

Legislators keep asking that we have faith. Our economic stability has been built on faith: full faith and credit in the U.S. We can’t retain faith after twelve years of increasing debt. We need to deal with hard facts and run America like a business. Business is not about faith. It’s about trusting what works, and what works in business is what I know. Treat America like a business, and we’ll all live to buy another day.

I’m the Turnaround Authority and my bags are packed. Washington D.C., please call!