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How Congress failed Altimeter’s social governance test

Ed Terpening

According to Gallup, 65% of Americans are dissatisfied with the way government works and it ranked as the #1 problem in the US, even topping the economy and unemployment.  What’s behind this governance failure? 

In our recent report, “Social Business Governance: A Framework to Execute Social Business Strategy”, Charlene Li and I introduced a new framework for governance.  I’m always looking for ways to test our ideas by applying them to real world situations, and since our news cycle here in the US is filled with stories about the recent power shift in D.C., I thought it would be interesting to apply our model to something that is generating a lot of conversation.  This is a test of US governance against our framework, which consists of a system of: People, Policy, Process and Practice:

The 4 P's of Social Business Governance

People are the starting point for our governance system, as leaders and key stakeholders (citizens) are decision makers that set (or live with) policy.  We believe alignment of leadership is key, as little gets done otherwise.  So how does the US system of governance map?  Our Congress and Executive branches have not been aligned, which has contributed to the last Congress being one of the least productive in history.  We see the same issue in our experience every day in our client interactions: if the C-suite isn’t aligned on social business strategy, little happens.

But I have to call out citizens too, for not living up to their potential in governance.  According to The Washington Post, only 36.4% of those eligible to cast a ballot and participate in their own governance choose to do so.  That’s the lowest turnout for a midterm election since 1942.  Our research indicates that broad participation of both leadership and other stakeholders are key to success. That applies here, too, pointing out 2 failures.

Policy represents the codified agreements of key stakeholders.  Applying this to the US governance system, these agreements take the form of our founding documents like the Declaration of Independence and the US Constitution, as well as federal, state and local laws.   If we look again towards the People component, alignment among state legislatures is stronger than the federal level, so more is getting done in terms of policy.  Those state legislatures have been passing bills by the thousands.  This is yet another sign of how effective governance is tied to alignment and participation, and why the current situation at the federal level fails our test.

Process makes policy actionable.  Mapping this to US governance, process takes the form of elections, government agencies and their regulatory activity, policing, courts, and finally—among the most controversial right now—executive action by the president.  We can again see in this component how lack of alignment between Congress and the President has contributed to dysfunction, in the form of lawsuits over potential overreach by President Obama.  In our research, the best functioning organizations use steering committees and other cross-functional groups to bridge between silos and work out differences.  Two key branches (silos) of US governance fail to do so.

Practices support the governance system, through tools, education, and playbooks that manage execution of processes.  Applying this to US governance, practices like health inspections, product recalls, and (something coming up on my calendar) automobile smog checks in California.  I won’t judge the US governance against our framework only because it’s far too complex and vast to make conclusions.

This application of our governance system reinforced one important learning from our research, represented by case studies from Bank of the West and USAA: leadership alignment is essential to governance, and this is at the root of current failures.

Does this practical example of our governance system bring it to life for you?   What challenges do you face in getting leadership aligned around social business?