An editorial lead in the current issue of Chief Executive Magazine caught my attention. It essentially suggested that CEOs of the major companies are finally waking up to the realization that a renewed and primary emphasis on competitiveness is the key to the restoration of business credibility on a range of issues, including the multiple threats of globalization, and that a sense of urgency on this renewal will help to repair the damage that has been done to their image and standing in the body politic. It struck me that, aside from the fact that this is almost self-evident, this theme is common to many of our other beleaguered institutions, and that business opinion leadership is critical to the restoration of these as well.
For example, I speak quite often on issues related to public education reform, and I am often questioned and, in fact, sometimes chastised on my frequent use of the word “competition” to describe a solution to many of the perverse incentives that plague the delivery of education. And this critique comes not only from members of the education establishment, among whom the word itself is anathema, but often from business owners and CEOs, the constituency that should understand the concept better than most. As so well explained by Caroline Hoxby of the Hoover Institution’s Koret Task Force on K-12 Education, there is an obvious thirty-year old productivity crisis in public education, and a major key to a turnaround in student achievement is competition among education delivery systems. Why this age-old concept is lost on the many business leaders who want to continue to pour more money into an underperforming monopoly is a mystery to me.
Other examples are health care and retirement benefits programs. Business leaders who truly respect and want to defend the power of the dynamics of competition and free markets to enhance productivity, expand availability, and lower costs should be at the forefront of leadership in demanding the deregulation of medical insurance finance through such innovations as Health Savings Accounts and the conversion of Social Security to defined contribution plans, but often seem to fear the invocation of the “c” word in addressing them. Again, it remains a mystery that business opinion leadership on these initiatives, particularly among large corporate CEOs, has been tepid at best and completely missing at worst.
It is well accepted that business leaders have responsibilities that transcend the purely parochial interests of maximizing the profitability of their economic units, but even if this is their only concern, it is long past time for them to “wake up and smell the coffee”, for many of these public policy problems have a direct impact on their economic viability, their leadership is absolutely critical, and the solution to them in many cases can be found in the same place—enhanced competitiveness.