Broke: The Plan to Restore Our Trust, Truth and Treasure by Beck Glenn

Author:Beck, Glenn [Beck, Glenn]
Language: eng
Format: mobi, epub
Tags: Patriot Bookshelf
ISBN: 9781451693447
Publisher: Simon and Schuster
Published: 2012-11-06T06:00:00+00:00

CHAPTER 16.

Step Four:

Decentralize and Disconnect

The world of innovation and the world that is our federal government are on two separate bullet trains headed in opposite directions. Technology is getting smaller, faster, and is doing more with less; the federal government is getting bigger, slower, and doing less with more. The new trend in business is decentralization; the trend in government is exactly the opposite.

Over the last century the government has taken control of virtually everything it could get its hands on, from education to energy, from finance to health care. It’s hard to understate the enormity of what has happened, but consider this: The number of federal regulators has more than tripled over the last fifty years to keep up with the government’s growth.

And yet, for all the talk about innovation and technology, most of government’s policy prescriptions remain surprisingly clunky and outmoded. When they want to “fix” the auto industry, they appoint a czar. When they want to tackle environmental issues, they appoint a czar. Health care? Green jobs? Bank bailouts? Czar, czar, czar.

It’s ironic, but to cut through the bureaucracy and get things done, politicians like to create another level of bureaucracy.

That, of course, is the opposite of how successful companies operate. The tendency in business is toward shifting away from centralized technology and a top-down management style and replacing it with a looser, flattened, decentralized management. Out with the old mainframe computer, in with the iPad; out with middle managers in corporate headquarters, in with franchise owners or branch managers who have real authority.

The reason this trend is happening is simple: It works. Just look around at the companies that are doing well. I can guarantee you that very few of them have a centralized bureaucracy with workers paid to punch the clock instead of innovate, create, and make informed decisions.

Take Johnson & Johnson, for example. It has 76 years of sales increases, 25 consecutive years of adjusted earnings increases, and 47 years of dividend increases. Not too shabby. And right there on its website, the hypersuccessful company gives away one of the most important reasons for its success: “Johnson & Johnson is organized on the principles of decentralization management.”

CEO William Weldon told a conference at the Wharton School of Business that the decentralized approach sparks innovation “in that it allows different people with different skills, different thoughts, to bring together different products and technologies to satisfy the unmet needs of patients or customers.”

ADAPT OR DIE

It’s too bad there aren’t more true capitalists in government. If there were, they might understand the term creative destruction and be more concerned about whether it applies to countries in addition to companies.

Coined by Austrian economist Joseph Schumpeter, creative destruction, according to the New York Times, describes “how capitalism destroys companies as more innovative ones succeed.” Kodak, for example, used to be a leading camera company, but they failed to adapt to digital. Meanwhile, a startup like Netflix was able to take down a powerhouse like Blockbuster precisely because it was able to see that what Blockbuster was doing would soon no longer work.

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