By Paolo von Schirach
August 24, 2012
WASHINGTON – America is now a two tier country. There is the country of leading innovation and creativity, the country of Apple, Intel, Cisco and Google. This is the country that just managed to send and safely land on Mars a car sized robot equipped with an on-board state of the art laboratory. But there is also the country incapable of shaking off mediocre or failing public schools, the country unable to get rid of below standard contractors who cannot even execute ordinary projects in a timely and cost effective fashion.
Best practices are not contagious
How the two countries coexist side by side, sharing the same language, culture, geography and institutions is a bit of a mystery to me. One would assume that “best practices” are contagious. One would think that just knowing that there is excellence somewhere would make all the others curious to learn how the smart people (in the same country) work, so that the laggards can also learn and catch up.
No. It is not so. Tyler Cowen in his celebrated book The Great Stagnation makes the case of a general American economic slow down due to lack of significant innovation outside of IT and a few other sectors. (See above for link to a related piece). I fully accept this assessment as a general explanation about the causes of lower US growth rates. But here I am talking about declining standards of performance in traditional activities that do not depend on state of the art innovation.
Broken down escalators in Washington DC
Tom Friedman and Michael Mandelbaum in the introduction of their book That Used To Be Us shed light on this very issue with an illustrative example. The Washington, DC Metro, the city’s subway system, has escalators that routinely break down. In one particular case, given more extensive work needed, the forecast is that it will take several months to properly fix the problem. (In the same time it takes to fix an escalator in Washington, the Chinese have added miles and miles of track for their latest super fast trains.)
So, here is the picture. In the very same country that can successfully send a large robot to Mars, it takes months to fix an escalator (a low tech job) located in its capital city. Worse yet, this is considered “normal”. There is no outrage regarding this technological backwardness concerning just a simple escalator.
Inefficient condo management
And let me add another example in which the issue is culture rather than technological know how. I know of a large condominium located in a wealthy part of Washington, DC in which units lost value in part because of the inordinate amount of time it takes to execute necessary condo-wide renovation projects. Mind you, the money is there. But there is an incredibly cumbersome process in place that causes delay upon delay.
The condo association Board of Directors is composed of intelligent and educated people. Well, you would think that educated people who are not themselves architects or engineers would do the smart thing when it comes to major, multi million dollar capital projects. They would instruct their paid, professional management to identify consulting engineers who would be hired to produce the specifications according to the highest standards and then call for bids to execute the project according to the specs drawn by the consultants and approved by the Board.
Time is money
Since here we are not talking about another mission to Mars but rather of garden variety renovation projects, following this “best practices” approach should not be that difficult. Well, instead it is. The Board of Directors created an immensely long and cumbersome process of ad hoc committees, reviews, more reviews, legal opinions and endless deliberations.
As time is indeed money, the extraordinary delay in the execution of needed condo-wide renovation projects (several years from conception to execution) has penalized the properties, leading to lower values. Well, you would think that this realization of self-inflicted economic damage would provide the impetus to adopt speedier, more effective project management procedures. But no, it does not.
Second tier America is clueless
And here I get to my point. Second tier America is not just patently inefficient. It is also clueless. Amazingly enough, second tier America in many cases has no idea that there is a first tier America that performs at a higher speed, with higher productivity. Or, even worse, second tier America may know about best practices, better management and better systems; but it is unwilling or just incapable of putting two and two together, ditch inefficiency and embrace best practices.
For mysterious reasons, in second tier America mediocrity has become the accepted and unshakable standard. Moving away from systems that under perform would entail change; and change would imply getting out of a comfort zone. Therefore we continue doing as we have done until today.
Of course we can choose this course of (in)action. But there is a price to pay. Those who believe that mediocrity and under performance are quite acceptable are inexorably left behind.
Mediocrity cannot survive
Indeed, in this unforgiving super fast and “hyperconnected” world, (as Friedman and Mandelbaum call it), entire sections of the US economy have been wiped out or downgraded because of low standards. Other industries will follow, unless they wake up and modernize themselves. Downgrades mean industries gone, jobs lost or jobs that pay less and less because of relentless, lower cost foreign competition.