debt ceiling | CorporateIntel

Last week more than eighty corporate CEOs signed and published a manifesto, agreeing that our nation needs both spending cuts and revenue increases to move forward. It was a simple, clear statement, meant to advise Congress and our soon to be elected President that it is time to break the stalemate. Here is the text that appeared in the Wall Street Journal, October 25, 2012, reprinted for convenience:

“Policy makers should acknowledge that our growing debt is a serious threat to the economic well-being and security of the United States.

It is urgent and essential that we put in place a plan to fix America’s debt. An effective plan must stabilize the debt as a share of the economy, and put it on a downward path.

This plan should be enacted now, but implemented gradually to protect the fragile economic recovery and to give Americans time to prepare for the changes in the federal budget.

In order to develop a fiscal plan that can succeed both financially and politically, it must be bipartisan and reforms to all areas of the budget should be included.

The plan should:

Reform Medicare and Medicaid, improve efficiency in the overall health care system and limit future cost growth;

Strengthen Social Security, so that it is solvent and will be there for future beneficiaries; and

Include comprehensive and pro-growth tax reform, which broadens the base, lowers rates, raises revenues and reduces the deficit.

The recommendations of the bipartisan Simpson-Bowles Commission, which saved $4 trillion and addressed all parts of the budget, provide an effective framework for such a plan.

The plan should be conducive to long-term economic growth, protect the vulnerable, include credible enforcement mechanisms to ensure that debt reduction is achieved and leave the next generation better.”

Strangely the formation of this consensus among competitors from a sample of highly influential business leaders on multiple sides of the political divide did not receive more attention. No, it’s not a perfect proclamation or unusually eloquent, but it could be a spark to ignite meaningful pressure on those in our government who need it most.

Perhaps there is too much noise out there to hear the unified voice of corporate direction demanding an end to party stalemate. Agree or disagree with the particulars, but it is time for the entire population to embrace the same demand. No action by Congress is not a reasonable response to the Fiscal Cliff we face together. No deal in Congress means all Bush-era tax relief will be eliminated at the end of 2012, while across the board federal budget cuts will be mechanically enacted in virtually all areas of non-entitlement or interest expense as a result of sequestration in our failure to address the debt ceiling. Both parties agreed late last year to sequestration in the event that well-considered budget policy could not be deployed on a line by line basis, with expected care and diligence applied to the hard decisions that have to be made rather than whacking the morass with a machete. You would think dedicated, elected officials would have long ago embraced the gravitas of their charge. Sadly, the time for surgical precision is quickly running out.

Any common ground has to agree that the Fiscal Cliff is not worth any ideological mandate. The nation cannot afford a repeat of last fall’s debt ceiling fiasco, which in my opinion was one of the worst failures of democracy and representative government in a generation. We need to get back to business.

As I have written before with respect to innovation, building a consensus is not the same as caving to compromise. There is cop-out compromise and there is collaborative compromise. Cop-out compromise means walking away from one’s core values, abandoning that which is fundamental to being constructive, the undermining of sound judgment. Collaborative compromise arises from acknowledgment of the real prize — progress that likely cannot include every single designated component serving an agenda. Collaborative compromise is guided by consensus, a combining of good ideas around an agreed set of goals articulated and guided by sound leadership. The eighty-plus CEOs who delivered their move-ahead manifesto understand how to build a consensus because they have to do it everyday to hold teams together, get stuff done, and create economic value.

When compromise means abandoning one’s truest values to survive then I agree that is not a good definition to support, but I don’t see that in our economic dialogue in Washington. If compromise means reasonable give and take to support a well-advised consensus as illustrated in the CEO Manifesto, then it is time for our government to compromise. More than time. It is the essence of representative democracy. It is what they were elected and hired to do.

We must get back to business. People need to work. Government services have to be provided so we don’t bump into each other. Taxes need to be fair and they need to be paid. Credit markets need to flow. The economy needs to function. All of this underlies the free markets we cherish.

No candidate should ever take your vote for granted, you award it as your precious right. Reasonable action by Congress is overdue. Contact your representatives now. Tell them that walking us over they Fiscal Cliff will cost them their authority. Sequestration means they didn’t do their jobs. Demand leadership, demand shared vision. We need to overcome the impasse immediately following the Presidential Election.

Let’s get on with it. Back to business.

Looks like we dodged a bullet. The United States of America will not default on its debt, We The People will be allowed to borrow more money to stay current in our obligations by way of a vague deal to curb deficit spending going forward that the House, Senate, and President will find a way to stomach late in the 11th hour. Why don’t I feel proud?

In my mind, the process for resolution which was recently described by Senator McCain as “bizarro” has been a farce of such epic embarrassment, it is impossible to comprehend as somehow reflective of our shared values. Last minute threats and posturing and leverage and mano a mano entrenchment ignore the obvious framework of achieving a shared vision — that working relationships must continue long after the dirty work is done. Last week in a fairly heated discussion thread about the debt ceiling on another social networking site, an astute friend of mine wrote:

…the whole situation is disappointing. No one on the national scene has really acted that well. Should we even give them praise for negotiating? Has it come to that–we have to praise people for doing what sensible people do?

His exasperation is well-founded, and leads me to ask again, why must we accept one set of standards of conduct for business and a different set for government? This is especially troubling since so many people in government have spent at least some of their career working in the private sector, where market forces determine the kinds of norms of acceptability and consequence our elected officials seem to ignore.

To be clear, I am not talking about mission structure — government service is not profit minded by design, so of course decision-making is not intended to be ROI focused, that would be absurd. We go to war because our security is at stake, it is a cost. We fix roads and build new infrastructure because they are the backbone of our shared needs, they are cost centers paid for by taxes, they are not profit centers so boardroom discussions will always be different. I am talking about standards of conduct, behavioral norms — like honest discussion and earnest debate and timely resolution.

Consider that last one for a moment: timely resolution. Anyone who has ever worked on a project knows the meaning of the term deadline. Anyone who has ever taken a class knows that the date does not move for the final exam. Anyone who has ever paid a bill knows that the due date is not negotiable, miss it and you pay a penalty out of your pocket and potentially suffer a credit score impact. Anyone who owes a balance on their taxes knows that April 15 is not negotiable — it’s not magical, it’s just not negotiable, it is the law. Although deadlines appear to be abstracts — fictitious creations of human imagination imposed as structure on others to compel action — deadlines are part of life. They are real. We learn as children to address them and as adults to manage them, or we suffer the consequences personally and professionally.

Deadlines teach us to manage two of the great success factors of businesses and careers: timeliness and urgency. Timeliness means just that, occurring at a suitable or opportune time — being appropriately on time according to expectation and need. Urgency is the competitive advantage of not being satisfied with timeliness, getting ahead of the curve so that winning is more possibly in reach by better applied and more efficient use of time to create distance ahead of the competition.

What can we learn from government with respect to timeliness and urgency? Does government consider these to be core values, even expectations of government’s viability? Does government consider timeliness and urgency as Nice-to-Have or Must-Have? We observe their philosophical commitment in their actions. My sense is, there is not much here worth emulating. If anything, government process is the antithesis to lessons a good business understands — and that includes leaving big blocks of time for rigorous review.

Our elected officials for whatever reason simply do not seem to take the notion of deadlines as seriously as the rest of us. In some ways, a lack of respect for deadlines is the very notion of an entitlement culture — if you do what is expected, you get paid, and if you don’t do what is expected, you still get paid, right up until you get thrown out by the voters. When you get thrown out by the voters, you get a pension. Perhaps we are seeing the reason why deadlines don’t seem to matter in the halls of Washington.

Perhaps the reason our government has become so dysfunctional is because we have allowed it to be so. In the working world, there are rules, and if you violate them, there are consequences. In elected office there only seem to be two rules:

1) Don’t be party to a scandal that your opponents can manipulate to your demise.

2) Get elected, then reelected.

Pretty much everything else seems to be forgivable. A missed deadline is a missed deadline. Since there is no profit motive, there is no personally assessed penalty. That’s just wrong. It lacks humility.

Bosses are often accused of setting arbitrary deadlines. What is the difference between an arbitrary and real deadline? Not much, really. If the boss sets a schedule and declares that milestones must be accomplished according to the schedule, there is usually nothing empirical or even mythical about the published dates — well, maybe the December holidays for retail, or similarly calendar driven events. Most deadlines are made up, they are criticized and chastised and the stuff of Dilbert moments — but imagine a business enterprise without them. Someone has to be Dilbert. Someone has to create urgency. Urgency combined with innovation are the stuff of success, creativity combined with timely delivery are the stuff of investment payoffs.

Most of us hate deadlines, but we all know they drive us to make hard decisions sooner, get past analysis paralysis, come together as teams and deliver. Deadlines are the stuff of anger and stress and resentment — and the stuff of competition and collaboration and reward. We hate them, but we embrace them, because we aren’t given a choice. Arbitrary or organic, deadlines make us get stuff done to the best of our ability given the time allotted, and with some success, we then often get the chance to come back later and improve on our progress. Deadlines are motivation and measurement, realities we learn to meet as challenges. That’s why bosses set “arbitrary” deadlines — because timeliness is an expectation for compensation, and urgency is often a path from good to great.

I am not a big fan of rules just to have rules, but as a boss, I have to insist on a few or work does not get done and value is not created. Deadlines are sometimes extended or forgiven for good reasons, but anyone who has worked in a high performance environment knows not to take forbearance for granted. An occasional exception for truly improved work or some extenuating circumstance? Of course, that’s possible. The same rotten outcome I could have had yesterday a week from tomorrow? Not a chance.

Just hitting a date with no breathing room and a lousy set of deliverables is not making a deadline, it is surrendering to mediocrity and living to play another day. If that is allowable process, dysfunction has triumphed over reason. It’s not urgency, and it’s not okay. In business, you would likely get fired for it, or your business would go under.

Urgency is hard. Urgency is a factor in competitive advantage. Urgency matters.