Today’s America is a nation under pressure, its resources pinched, its civic skills dated, its emotions out of focus, its leaders confused. At a time when America’s essential competence is in question, it would be difficult to imagine a more all-sided set of crises. Workforce earnings are stagnant, economic growth is sluggish. Key industries operate in ways that undermine America’s future – banking, medicine, energy, agriculture, food, public schools – the list is long. America’s discarded computers flood the waste dumps of the third world and poison the children who make their living as scavengers. Both political parties habitually run deficits in order to reward supporters and win reelection. America’s indebtedness rises and rises. And what of the Boomer generation retirement surge? America is anything but ready. This is a nation adrift, its maneuvering room diminished, its people and its thought leaders disoriented.
When so many parts of a single nation perform poorly, that’s a telling signal. Dr. Edwards Deming, the quality guru, returned again and again to an essential insight, which I expand here only slightly. We live in a world of systems, and the design by which any system operates counts for a great deal. In poorly designed systems, even the most well-intentioned will produce mediocre results; in well-designed systems, good people acquire the ability to produce great results.
In other words, America’s failures reflect the pervasiveness of ill-designed systems. Too many good people working in bad systems, too much failure.
In a democratic republic such as ours, every citizen has a dual role. Individually we are subject to the nation’s laws, collectively we are sovereign, co-authors of America’s future. This essay invites all its readers to step up to our larger civic role, our co-authoring role.
What ought to capture our attention in this troubled era is that America’s future turns on its talent for good system design. If as Americans we are sloppy thinkers, we will continue our downhill slide. But if we bring the right qualities to the task, we can meet the test of twenty-first century competence. As it happens, twelve steps are essential to our success.
1. Practice asking good questions. As humans, we share a common trait. Our energies are drawn to questions that we understand, not to questions that seem out of reach. Yet not all questions are of equal importance. Daily life floods us with small scale issues; if we’re not careful, we quickly find ourselves investing our energies in the pursuit of small goals and ignoring our larger goals. Small-scale questions are like junk food. They’re fun to discuss but they have little nutritional value. When we focus exclusively on the details, we allow the larger questions that affect America’s destiny to be elbowed off the table. A competent public watches for the nation’s larger questions. It willingly invests its attention in finding answers to its most important questions. What is true for individuals is equally valid for nations. Those who practice asking good questions grow in competence more rapidly than those who don’t.
2. Practice a spirit of optimism. We are guided by what’s in our hearts. If we are pessimists, we will achieve less; if we are optimists, we will achieve more. Optimism is self-fulfilling. Optimists see America as a nation that values its principles and therefore expect more of themselves and of the nation as a whole. Optimists ask the good questions because optimists expect to find the good answers. Optimism helps us be more productive. To choose a personal outlook is also to choose an outlook for the nation. Should we choose cynicism, our imaginations will paint bleak portraits of America’s future and our pessimism will be self-fulfilling. Better that we should choose optimism.
3. Acknowledge the reality of scale – its benefits, its risks, its responsibilities. Modern society is marked by its capacity to produce goods and services at a vast scale. Its engines of replication have the power to make endless copies of almost anything, a power that often delivers benefits at great scale but always contains the potential for damage at great scale. In Disney’s Fantasia, its relentless army of marching brooms aptly symbolizes the danger of vast scale run amok. Yes, the benefits of vast scale are obvious in the prowess of companies like Boeing, organizations whose vast capabilities flow from their vast scale. At the same time, one also sees the damaging consequences of mismanaged scale in the economic meltdown of 2008. Toxic but profitable business practices were replicated so aggressively that it wasn’t long before the global financial system had been brought to its knees. Scale is a perennial challenge. Sensible supervision of systems operating at vast scale is a permanent obligation of modern citizens.
4. Be alert to rational irrationality. Profit-seeking behavior is a rational activity, and if it benefits the common good, society benefits as well. But profit-seeking behavior in systems that are poorly designed will damage the common good. Adam Smith was an evidence-based thinker. Different industries operate by different logic and therefore, in Adam Smith’s view, rules must be written the fit the situation. Free market rules were often a good choice but not always. New Yorker writer John Cassidy uses the expression rational irrationality to capture situations in which free market principles are inadequate. In a situation of rational irrationality, individual actors behave rationally, but the overall system behaves irrationally. The greater the success of its individual firms, the greater the damage society suffers from the misbehavior of the larger system. Opportunities for rational irrationality are repeatedly in every complex society. The more of it we tolerate in America, the more damage we suffer as a nation. A competent public recognizes the danger. It asks the good question, “How are we to shape systems that avoid rational irrationality?” And then it persists until it has found good answers.
5. Embrace integrity at scale. As children and teens, we receive moral instruction from our parents. If my behavior has harmful consequences, my parents teach me that I am to accept moral responsibility for those consequences. They expect me to change my behavior. If I resist – the teenager’s perennial impulse - I will claim “My friends all do it.” And I will be instructed to ignore the bad examples set by my friends, and to live my own life by a higher standard. As good Americans, we learn to take moral responsibility for our personal ehaviors and the consequences they cause. This is the essence of personal integrity. Much of America works well, at the community level, because so many American reflect these values in their own lives.
Yet it is a curiosity of American life, and a contributing part of today’s national incompetence, that integrity is seldom taken to scale as a guiding norm for America’s major organizations, industries, and sectors. Too many companies and industries conduct operations at vast scale without regard for the harmful consequences. Political parties also operate at vast scale and they, too, evade responsibility for the consequences of their actions. Government agencies are capable of doing the same. In a modern nation of vast replication powers and vast scale, integrity has to be seamless. A competent American public will embrace integrity at scale as a vital part of our nation’s future.
6. Recognize society’s dual character – Core Assets and Operating Sectors. Every society embraces a mix of core assets and equally essential operating sectors. A competent public understands this. Think first of our nation’s prized assets – our environmental capital, our human and community capital, our economic capital, and our civic capital. We value them all, and we know our quality of life flourishes best when our nation’s core assets are healthy.
Think next of our nation’s operating sectors – our industries and businesses, our nonprofits, our government agencies. In a competent nation, these operating sectors will be vigorous, competent, honorable, and successful.
Our operating sectors and our core assets continually interact. Picture the nation as a matrix, if you will, Sectors listed on its left side, Assets arrayed across the top. Operating sectors fuel themselves with resources acquired from the nation’s store of core assets. The health of the nation’s asset base is affected, in turn, by the behaviors of the nation’s operating sectors. When those behaviors are responsible, the consequences are beneficial; when those behaviors are irresponsible, America’s core assets go into decline.
This is a perennial fact of life, one that creates complementary civic responsibilities. As a civic people, we share stewardship responsibilities for the well-being of society’s core assets; as a people, we also share civic responsibility for the professionalism, vigor, and success of society’s operating sectors. When we fulfill both sets of responsibilities, America’s competence rises. On the other hand, when we duck our responsibilities, America’s competence declines.
7. Understand the role of government. A competent nation understands the role of public policy and appreciates its value. A sports analogy might help. Think about professional baseball, not just as a sport but also as an industry. The game itself is the sport, two teams competing on the field, each striving for victory. Each team is also a business organization, and collectively the teams comprise the industry. Baseball cannot function as an industry, though, without a governing body to set the rules within which all the teams are to operate. Baseball teams play games; the baseball rules committee defines the industry. It’s a perennial duality.
Industries and companies have a similar duality. Just as individual teams compete in baseball, individual companies compete in the marketplace. Just as baseball as an industry requires a framework of governing rules, so too for other industries. Contracts are to be fulfilled. Financial reports are to be honest. Hiring decisions are to be color blind and indifferent to gender. If well-designed, an industry’s governing rules protect its integrity; companies are compelled to compete fairly and responsibly within those rules. The overall integrity of the system depends on a proper separation of roles – the competitor’s role and the rule-setter’s role. When companies compete in commercial markets, the impulse to cheat never wholly disappears; hence the requirement that the rulemaking role is always to be kept distinct from the competitor’s role.
A competent nation understands this. It salutes free-market competition within a framework of honorable rules, and it keeps those roles separate. Government draws the rule-making role; private sector companies draw the competing firms role.
On occasion, powerful political forces conspire to strip government of its essential regulatory role. At such times, private sector cheaters rewrite the rules, rig the game, and weaken the nation. America’s chief line of defense against rational irrationality gets beheaded. A competent public understands this – government is society’s only legitimate tool for assuring both the overall rationality of an industry and the integrity of the competition that takes place within the industry.
When baseball regulators forget their responsibilities, steroid use spreads from one player to the next. When voters and elected officials forget government’s rule-making role, rational irrationality takes over. America’s competence declines and its freedom of maneuver shrivels. A wise public understands its responsibilities and accepts them.
8. Embrace problem-solving as the essence of citizenship. The parable of the woman with the pie shop has been in circulation for some time now. For years she had been the best pie maker in town. Whenever she was in the mood to make a pie, she’d make a few extras and give them to her friends. One day a close friend suggested she open a pie shop. The woman loved the idea. Soon she had her own pie shop. The fame of her wonderful pies spread and sales grew. She had a ball – for a while. Then her close friend asked how she was doing. “To tell you the truth,” the woman said, “I’m not enjoying pie-making as much as I used to. I don’t have any time to myself.”
“Ah,” said the friend, “I see the problem. You spend all your time working in the pie shop. You haven’t set aside time for working on the pie shop. Learn how to work on the pie shop and you’ll have more time for yourself.” The pie maker followed her friend’s advice, redesigned the pie shop, and recaptured her sense of joy.
And so it is with citizenship. It isn’t enough to live in our nation; it must be in our blood that we also work on our nation. For America to be a competent nation, we the people must learn the arts of problem-solving. At scale. For the twenty-first century.
We shall not lack for challenges. Not every business sector is well-designed; some are badly misdirected. For every good law Washington adopts, it passes two or three bad ones. There is much to work on.
A competent American public sees itself as a problem-solving public. We work on the national pie shop, not just in the national pie shop. We improve our quality of life by improving our competence. We redesign, we reinvent, we develop a problem-solving discipline. And in that discipline, we regularly address four essential questions.
9. Always ask ourselves the stewardship question. A competent public always looks to the health of its nation’s vital assets. Which of its assets are doing well? Which ones are in decline? Are processes of decline related to industries that practice rational irrationality? Where?
10. Always ask ourselves the business model question. A competent public reviews the nation’s major operating sectors and flags those whose business models put the nation at risk. We approach this work in a problem-solving spirit, saying to ourselves, “There has to be a better way. Let’s understand why the current business model doesn’t work. Let’s develop better options, new business models by which this sector could flourish without harming the nation.”
11. Always ask the public policy question. Whenever we find ourselves redesigning a key industry, we also review the public policy framework within which that industry operates. Where existing law contributes to the irresponsibility problem, existing law must also be redesigned. A more competent business model often requires a more competent policy framework. Good baseball requires good rules; good business practices also require good rules. The two go hand in hand, business model wisdom and public policy wisdom. The public policy question is almost always the same: “How can public policy help this industry practice integrity at scale?”
12. Ask the small hat/large hat question. In a competent nation, we as citizens regularly ask ourselves the small hat/large hat question. As individuals, what roles are we called to fill? Are we meant to be Small Hat Americans, defending special interests at all costs? Are we meant to be Large Hat Americans as well? Insisting that the national interest has to be served first, and that special interests have to subordinate themselves to the national interest? It’s easy to be a Small Hat American. It’s not so easy to be a Large Hat American. It’s a vital matter for popular culture. Which role is an American citizen’s proper role?
Twelve recommendations for establishing American competence – let’s test their value by imagining the reverse:
1) Imagine an America that always asks the trivial questions and never asks the hard questions.
2) Imagine an America that embraces pessimism – not optimism – as its cultural norm.
3) Imagine an American public that ignores the vast scale and vast risks of modern society.
4) Imagine an America that accepts rational irrationality as a permanent way of life, that’s indifferent to the damage it causes.
5) Imagine an America that rejects integrity as an important standard for institutions of vast scale.
6) Imagine an America that doesn’t understand the continuing interaction between its operating sectors and its vital assets.
7) Imagine an America that wants to abandon government’s rule-making responsibilities.
8) Imagine a democracy whose citizens know how to work in the nation but have no idea how to work on the nation.
9) Imagine an America that ignores its stewardship responsibilities toward its human, environmental, civic, and economic capital.
10) Imagine an America whose business models for industry are often badly chosen.
11) Imagine an America that’s perennially sloppy about public policy.
12) Imagine a United States whose citizens never see themselves as Large Hat Americans.
Is that an America we would want? Is that an America that would generate the competence we require? No. That’s a vision of an all-points failure. It would create a system of vast incompetence, within which good people would almost always achieve bad results. That’s not who we are, it’s not what we want. We love America. We want our nation to thrive.
In the short run, the quest for system-by-system competence will stretch muscles we haven’t used in some time. In the long run, our capabilities will grow and our efforts will be rewarded many times over. Let’s internalize the Deming principle and use it as our guide. Great systems help good people achieve great results.
“Fine,” one may say, “but how does one initiate this work?” There is a logical starting place – the working conference. Working conferences occur everywhere. One might be an event inside a single company; another might be an industry event; a third might invite participants from many different companies and non-profits. Most of us know the genre. Think of any conference you’ve recently attended, or expect to attend sometime in the next year. In your imagination, redesign that event so that it asks the four closing questions – the stewardship question, the business model question, the public policy question, the small hat/large hat question. It’d be a valuable shift, wouldn’t it?
A good conference is a perfect setting in which to plant the seeds of national competence. Let’s try it. One or two conferences at first. Then ten or twenty. The potential is extraordinary.
We Americans are a good people, but we live today in a nation that tolerates faulty system design. With the nation’s competence slipping, it’s clearly time for a game-changing shift. It is time to create smarter systems; it is time to bring out the full potential of the American people; it is time to create more competent nation.
Steven Howard Johnson
