HBS Professor, CEO Co-Author Redoubling the Appeal for Systemic Policy Change

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HBS Professor Michael Porter has co-authored a new book: The political industry: how political innovation can break the partisan deadlock and save our democracy, which was released on June 23. James Meinerth photo

America has problems that never seem to be resolved. Why? Perhaps the real problem is the political system of the country itself. Did you know:

  • In the 2016 general election, less than 10% of US House races and only 28% of Senate races were competitive? The others were in safe seats, where the winner was decided in the primary.
  • Fewer than 20% of eligible voters participate in most congressional primaries, meaning the influence of more ideological primary voters is even greater in about half of the states, where primaries are closed or semi-closed to voters not affiliated with a party?
  • Direct political spending at the federal level was at least $ 16 billion in the 2016 election cycle, of which around 40% was election spending by candidates, parties, PACs, super PACs and other organizations , and 40% for congressional and government lobbying. agencies by businesses, professional associations, unions and other special interest groups?
  • As a result of underreporting, ‘shadow lobbying’ accounts for around $ 6 billion per election cycle, in addition to direct political spending – excluding politically active nonprofits and welfare organizations, such as the National Rifle Association, the Sierra Club, the American Civil Liberties Union, and Americans for Prosperity? If the revenues of all of these organizations were included, the political industry would swell to over $ 100 billion per election cycle.

Denouncing politics as a $ 100 billion industry – an industry that does what it’s designed to do, which is to exclude the vast majority of Americans – has been the mission of Michael Porter and Katherine Gehl for years now. . Porter, a longtime professor at Harvard Business School, and Gehl, a former CEO of a food company, teamed up in 2016 to raise awareness of the shortcomings of the U.S. political system, and they were written on the subject and speak to audiences across the country since.

Now, with the country slipping into recession, grappling with a pandemic, and counting its racial demons under the looming shadow of another presidential election, Porter and Gehl have a new book. The political industry: how political innovation can break the partisan deadlock and save our democracy came out this month.

“There is no doubt that there are divisions in the country, in the population, and yet they are led, exacerbated and reinforced by the political system and the way the two parties compete with each other,” Gehl said. Poets and Quants during a telephone conversation on the eve of the publication of the book. “In this duopoly, both parties are encouraged to move away as far as possible, which then creates this agonizing partisanship – but more importantly, it prevents Congress from coming together to work across the aisle,” to solve problems, to negotiate and pass the necessary legislation.

QUESTION OF IF “COMPANIES PLAY THE ROLE THAT THEY MUST PLAY”

In their September 2017 article, Why Competition in the Political Industry Fails in America, Gehl and Porter present a four-pillar approach to reforming the American political system. The first pillar: restructure the electoral process, including the establishment of non-partisan primaries among the first four and preferential voting. Gehl and Porter further call for restructuring the governance process to remove partisan control from House and Senate rules and processes. The third pillar is a series of detailed reforms aimed at the influence of money in politics, designed to “change the incentives of politicians to respond to voters, instead of to donors”. Finally, they call for a series of innovations to open up electoral competition without waiting for structural reforms. “The two main parties,” they write, “should always operate under the potential threat of competitors who better serve the public interest. ”

Last spring, the duo came to San Francisco for a presentation at the Commonwealth Club sponsored by the School of Management at the University of San Francisco. Explaining their strategy for reinvigorating democracy in the United States, “Gehl Porter’s Theory of Political Industry,” they talked about reforming a system that seems to be getting worse. “We can never forget,” Porter said, “that the political system we have today was designed by our own elected officials – the people we elected. This system has been corrupted over time, and most of us haven’t even noticed it. We have the power to reinvigorate our democracy, and we must. “

Talk to Poets and Quants This month, Porter, a Bishop William Lawrence University professor at Harvard Business School, said business schools and B schools can play a vital role in the coming political paradigm shift. It’s a message, he adds, that he shares with his MBA students.

“MBA students will be the business leaders of tomorrow,” says Porter, author of 19 books and more than 125 articles. “They are the ones who notice that the business confidence in America and our society’s support for business is eroding, and there is ample evidence of this.” Young business school students want companies to do more, and you’re probably familiar with this movement from pure maximizing shareholder value to having a more positive impact on society. More and more companies are adopting what is called a social purpose.

“When our business school students who want to be a part of this kind of future see this and hear this, then they look at what’s really going on and our government’s ability to function, I think they start to wonder. if businesses play a role they need to play.

“MORE THAN A BOOK FOR US”

Most Americans see Washington as broken and accept the stalemate that characterizes current politics as normal, Porter and Gehl say. Those who have not succumbed to helplessness often double their political party, certain that the other side is the problem. Others place their hopes in this mythical candidate for change who will finally fix things, whether through “hope and change” or by “emptying the swamp”.

But little change, because the system is designed to stop wholesale change. Did you know:

  • A clear sign of the high barrier to entry into American politics: No major new party has emerged since 1854, when the anti-slavery members of the Whig Party split up and formed the Republican Party. The Progressive Party (1912) and the Reform Party (1995) succeeded in electing only a few candidates and were dissolved within a decade.
  • Sore losers laws – laws in 44 states require candidates who run and lose their party’s primaries not to appear on the general election ballot, even as independents – may also change. radically the election results.
  • In California, 79% of state and congressional races were deemed “uncompetitive” in 2012. After the implementation of the first two primaries, the number of races deemed competitive across the state immediately doubled and the number of incumbents who started losing in the general election increased. . In 2016, the California legislature’s approval rate reached 50%, down from a dismal 10% in 2010.
  • Voting measures in 26 states allow citizens to bypass politicians if they want to bypass legislation from the voting booth. With electoral referendums, a bill is first proposed by a representative in the state legislature, and lawmakers can choose to return the proposal to the polls for citizens to decide whether it will become law. With voting initiatives, citizens write the proposal themselves and place it on the ballot, most often through a process of collecting signatures.

In their new book, Porter and Gehl state that the system actually works: the Democratic-Republican duopoly “encourages politicians to prioritize highly engaged constituencies that vote or donate money in the most reliable way” and , therefore, “they perpetuate – button problems that get them re-elected, instead of finding solutions.” They propose a two-step process called Final Five Voting: First, replace party primaries with a single non-partisan primary in which the top five, regardless of party, qualify for the general election, thereby eliminating the problem. eye of the needle and give legislators leeway to achieve results in the public interest without the constant fear of being ‘primary’, while creating competition in general elections with a wider range of candidates . Second, they would replace single candidate voting in general elections with preferential voting, which allows voters to rank candidates in order of preference. This would eliminate the “spoiler problem”, which is the main obstacle to further competition in politics.

Coronavirus pandemic is a real X factor in this election year, says Gehl, an MBA from Northwestern Kellogg and former chairman and CEO of Gehl Foods, a $ 250 million high-tech food manufacturing company located in Wisconsin with approximately 350 employees. But it is also a chance to go further in the effort to redefine American policy.

“While much in our world remains uncertain, we are sure of at least one thing: the need for non-partisan political innovation is even greater today than before this pandemic,” Gehl said. “As writers, part of our job is to believe in the importance of our work, but we also put our money where our mouths are: Professor Porter and I agreed that we would give all the profits out of this. book to the Institute for Political Innovation, the organization that I founded in parallel to pursue the critical changes in our political system that we prescribe in the book.

“The purpose of the analysis of Political industry and how competition works in politics was to identify leverage points where we can act best in reality – not theoretical changes, not ambitious changes, but realistic and achievable changes that would alter the system powerfully enough to change the results that the system provides regularly. “

Click here to learn more about Porter & Gehl’s book, Political industry, whose profits are donated to charity. See the next page for a Q&A with the authors and Poets and Quants, edited for length and clarity.

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