Politics must learn from business – to communicate a vision of change 'until it hurts', writes DONAL CASEY
THE GLOBAL Irish Economic Forum a little while back was an excellent initiative. There is a vast reservoir of relevant knowledge in the Irish diaspora and right now we need all the help we can muster to deal with a national crisis.
The world of business has much to offer the political system. The principles of commercial success are utterly transferable to national leadership. The first and most basic principle is that successful organisations are built on talented people. Apparently the debate in Farmleigh was honest and robust but the clearest message from the guests to the hosts should have centred on the talent deficit in our political system.
The capability of our political leaders has never had more relevance in our day-to-day lives. A lack of international experience on the part of our recent ministers for foreign affairs was bemoaned on these pages recently. A much more damaging skills gap exists in the Cabinet. This is the absence of senior management experience, skills and formal business education.
Leadership in the corporate setting is centred on the ability to deliver change. Only adaptive organisations endure in today’s rapidly changing business environment. Change management is a core part of advanced management training. It is a clearly defined multi-stage process with distinct components that are readily transferable from business to politics.
All change must start with a clear and compelling vision of the future. A powerful coalition for change is mandatory and building momentum with visible early wins is vital. The key components of the new future must be institutionalised in tandem with a growing intolerance towards old behaviours. Eventually the change process passes a tipping point and becomes the new norm.
The glue for the management of change is communication. The vision must be sold relentlessly to a sceptical audience. A lovely phrase that captures this challenge is the need to “communicate until it hurts”.
This is not the time for complex third-degree language. The plain unvarnished truth is as follows: We are broke. Spending €57 billion against receipts of €33 billion is utterly unsustainable. Borrowing on this scale from future generations to pay for current consumption is morally wrong.
Our national sovereignty is draining away at the rate of €60 million a day. Deeply indebted countries lose control of their own destiny. It is not long ago that we cherished our national freedom above all other values. Now we are passively handing that liberty back to the international debt markets.
There is only one way out of this crisis. Everything in Ireland must become cheaper. Salaries and prices must fall by at least 20 per cent to enable us to compete internationally. The cost structures assembled in the final years of the Celtic Tiger are predicated on wealth that never existed.
Consider the topical example of education cuts: our children are in the most overcrowded classrooms in the OECD while thousands of teachers join the dole queues. Surely it would be better to have everyone working, but at lower salaries?
It is a case study in national self-harm rather than the educational foundation for our “smart economy”. Craig Barrett called this for what it is at the forum.
In his recent book, The Ascent of Money, Niall Ferguson claims that the root causes of national economic crises such as debt default or hyperinflation are political rather than economic. They stem from a breakdown in social cohesion – an unwillingness to make collective sacrifices for a better future.
The response of every single interest group to An Bord Snip Nua has been a denial of the €57 billion versus €33 billion equation. We have splintered into self-interest and division. The sacred cow of social partnership has been shown to have all the durability of our property bubble. The unspoken message in these reactions has been a willingness to leave our economic pain queuing outside the social welfare offices.
This is a shameful response from the protected sectors. The lasting legacy of the global credit crunch may prove to be structural unemployment. The social consequences of isolated and deskilled workers are far worse than economic impacts.
These debits in our social capital balance sheet are potentially more damaging than our spiralling budget deficit. Shocking examples of waste in public expenditures have accelerated this weakening of social solidarity. Allied to all of the proposed recovery initiatives, we need completely new standards of transparency, visibility and ethics for those spending our hard-earned taxes.
The last 12 months have been a failure of change management on the part of our political leaders. With the laudable exception of Brian Lenihan, they have failed the “communicate until it hurts” challenge.
The management shortcomings of our politicians extend far beyond communication. The establishment of the HSE is regularly bemoaned as the root of our health service woes. Any assessment of the HSE’s performance has to be balanced against the executive decision to leave several thousand disenfranchised senior managers wandering around the new organisation, undermining the CEO’s change vision at every opportunity. This “strategy” won’t be found in many business school case studies.
The diaspora weekend at Farmleigh concluded with a trip to the All-Ireland football final. This was a fitting way to show visiting delegates much of what is unique about Ireland. However, glinting just beneath the passion, colour and vibrancy of the occasion was an insight into our parochial nature. This is the part of our national DNA that celebrates local differences above any unifying issues of national importance.
This parochial reflex lies at the heart of our talent deficit in politics. We select our politicians on local issues and then expect them to grapple with global challenges. No successful business would ever select its leaders on criteria so divorced from the leadership challenges they will face.
The painful truth is that a country gets the government it deserves. We need a new job description for our legislators – one that doesn’t involve potholes and all manner of other local services and issues. We need a new recruitment process. We need change.
Actuary Donal Casey is managing director of Aon Consulting (Ireland). The views expressed here are personal. Garret FitzGerald is on leave