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What Government Should Relearn From Business (And It's Not Efficiency)

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When, eventually, sequestration has passed and Washington and its watchers have moved on to the next big debate, alongside all the recriminations there will be this: the familiar calls for government to demonstrate more of the effectiveness that we see in the most successful private sector companies.

The clamor won't be altogether misguided. After all, the best-run companies might have a thing or two to teach this D.C. drama's main players about leadership, negotiation, and protecting our (national) brand.

Of course, government has long looked to business for new ways of managing. Benchmarking was a key feature of President Clinton's effort at Reinventing Government. Public variants of outsourcing were pushed as part of George W. Bush's President's Management Agenda, and President Obama appointed the country's first Chief Performance Officer.

So it's a fair bet that when the sequester's dust has settled, government may once again turn to (or have thrust on them) the latest business bestsellers as "how-to" guides for avoiding the next crisis. Though positive results cannot be guaranteed, it is good when private sector ingenuity is offered up -- amidst other solutions -- for consideration by the public sector. American business remains the country's most vibrant source of innovation.

Problem is, where government is now most likely to look -- and where the private sector seems most poised to push -- is in the wrong place. Government has traditionally looked to business for tools and techniques to help improve productivity and cut costs through greater efficiency. Lean Six Sigma, which even made its way into a candidate pledge in the last presidential campaign, is one in a series of such business-to-government waves. Big data is rolling in after it. But these are the wrong tools for the job that now needs doing. What government needs most right now -- what it will need especially after the sequestration debacle -- are tools that build trust.

Pew's January 2013 poll drives this point home -- their survey found that a mere 26 percent of Americans trust the government in Washington to do the right thing just about always or most of the time. Post-sequestration, the only thing harder to envision than trust numbers climbing rapidly is that government officials can lead without it.

The failed deficit dialogue over the last year has shown us that staggering budget deficits at the federal level and huge unfunded pension and health liabilities in states and cities can't be bridged by squeezing the next nickel (or even 10 trillion of them) out of government operations. Addressing these challenges will require reasonable dialogue, debate, and, ultimately, decision-making about the scope of what we want as a country and how we want to pay for it. Business strategies focused on process and efficiency won't help the country manage that.

There is, however, a new wave of business techniques more suited to the job. In Boston, Mayor Thomas Menino has embraced these lessons with an engagement-driven strategy dubbed New Urban Mechanics. Companies that have learned how to foster community, cultivate trust and engender participation -- they hold the real lessons government needs now.

There is, of course, a certain irony here. After all, community, trust, and participation are (or were) the tools of the trade of government in the first place. Cities and towns -- with their squares, community groups, and network of relationships -- knew the value of "social" centuries before Facebook figured it out. It turns out that what the public sector can learn from the private sector, the private sector actually learned from the public sector.

Government would do well to look at businesses that are innovating best and fastest in the area of engagement. And as they do, business managers should take note. Millions are being invested by Cisco, IBM, Phillips, and other global companies to help cities and countries operate efficiently. Some of these efforts look too tech- and operations-laden to solve the biggest challenges. The next wave of successful public-private partnerships won't be top down, process-driven and systems-heavy. Businesses that learn to help government cultivate and harness its own strength -- in community -- will serve our democracy best and succeed for their own stakeholders.

This article originally appeared on the Harvard Business Review.