Are groups outside government
better able to solve our toughest societal problems?
A Civic Caucus
Focus on Competitiveness
Interview June 26, 2014
Dave Broden (vice chair),
Steve Dahl, Pat Davies, William Eggers, Paul Gilje (coordinator), Lars
Johnson, Randy Johnson, Ted Kolderie, Dan Loritz (chair), Paul Ostrow,
Dana Schroeder. By phone: Amir Gharbi.
According to Deloitte
Research's William (Bill) Eggers, some of the more challenging
problems around the world are being solved in a different way than in
the past. More and more, big societal problem solving, he says, is
taking place outside of government by businesses, foundations and
nonprofits, and social entrepreneurs. He points out that there is a
large movement of social entrepreneurs who are new problem-solving
innovators and investors, trying to create businesses on the backs of
either market failure or government failure.
Eggers explores this major shift in his book
The Solution Revolution: How Business, Government, and Social
Enterprises are Teaming up to Solve Society's Biggest Problems. He
cites examples of businesses trying to solve societal problems, while
also expanding or increasing their profits, such as Unilever's efforts
to help fight diarrhea in India, while also expanding its business
into small villages there.
He contends that with significant problem
solving being done by nontraditional entities, government is no longer
always in the center of these efforts. However, he believes, there is
a role for government in creating the environment for these problem
solvers to flourish by being a convener and facilitator. He states
that a number of larger cities and every federal agency are using this
approach, but change has been slower at the state level.
Eggers and Deloitte's Steve Dahl believe
that, given Minnesota's long history of very strong civic, nonprofit
and business engagement, the state is poised to be a world leader in
advancing this new model of innovation and nontraditional problem
Steve Dahl is national
financial management and business transformation leader and the
Midwest region leader for Deloitte Consulting LLP's Public Sector
practice. He has been with Deloitte for 25 years and is the company's
lead client service partner for the state of Minnesota.
He has extensive experience in process,
organizational and system assessments, as well as business and
technical strategy with qualitative and quantitative supporting
business models. He is a certified public accountant.
Dahl graduated summa cum laude from
the University of Texas at San Antonio and was a scholastic All
William (Bill) Eggers is a director at
Deloitte Research and is responsible for research and thought
leadership for Deloitte's Public Sector industry practice. He is the
author of eight books, including his newest, co-authored with Paul
Macmillan, The Solution Revolution: How Business, Government, and
Social Enterprises are Teaming up to Solve Society's Biggest Problems
(Harvard Business Press, Sept. 2013). He coined the term "Government
2.0" in a book of the same name.
Eggers' other books include the
Washington Post bestseller If We Can Put a Man on the Moon:
Getting Big Things Done in Government (Harvard Business Press,
2009), Governing by Network (Brookings Institution Press, 2004)
and The Public Innovator's Playbook (Deloitte Research, 2009).
His books have won numerous awards, including
best books on policy,
leadership and public services from The Guardian, the 2014
Axiom book award for best book on business theory, the Louis Brownlow Award for best book on public
management, the Sir Antony Fisher Memorial Award for best book
promoting an understanding of the free economy and the Roe Award for
leadership and innovation in public policy research.
A former manager of the Texas Performance
Review and appointee to the U.S. Office of Management and Budget's
Performance Assessment Rating Tool (PART) Advisory Board, Eggers has
advised governments around the world. He graduated magna cum laude
from the University of California, San Diego.
Some of the more
difficult problems around the world are being solved in a way that
differs from past approaches. Eggers noted that in his book
Governing by Network, written with former Indianapolis Mayor Steve
Goldsmith, they tried to move away from looking only at the
one-to-one, bilateral relationships and more at public-private
networks, as well. "We said it's now more about government
leveraging networks of nonprofit, private-sector providers and
entities to create more public value through contracting and other
means," he said.
In his latest book, Eggers said he and his
co-author, Paul Macmillan, further evolved this concept. Society is
witnessing a step-change in how it deals with its own problems, a
shift from a government-dominated model to one in which government is
just one player among many.
Where societal problems arise, markets are
forming around them and incentives are driving a diverse breed of
problem-solvers, including businesses, citizens, social enterprises,
and governments, too. Instead of trying to patch a market failure, the
innovators in the solution economy create a market for the solution.
More and more big societal problem solving
is taking place outside of government. "We began seeing big
companies, like Unilever," Eggers said, "taking on problems such as
how to reduce childhood deaths from diarrhea and being a major player
on trying to resolve the issue in India. Coca-Cola, Procter and
Gamble, Pepsi and others were making precompetitive, collective-impact
efforts to address the issue of clean water in Africa. They were
working with government, but government was not in the center of it."
There is also a huge movement of social
entrepreneurs trying to create businesses on the backs of what they
see as either market failure or government failure. "These new
problem-solving innovators and investors power the solution economy,"
Eggers said. "They're closing the widening gap between what
governments provide and what citizens need." Often times, they receive
no support from the public sector.
Other entities beyond government have
entered the market of problem solving. Eggers observed, "This is a
massive sea change, a paradigm shift." He said the earlier work on
alternative delivery of public services focused on how government
could get more value and saw government at the center of things.
"Increasingly, we saw that was no longer the case," he said. "All
these other problem-solving entities beyond government had entered the
market of problem solving." He pointed out the major growth in
philanthropy, foundations and mega-foundations.
The buyers in these markets purchase impacts
or outcomes: healthier communities, kids who can read, reduced
recidivism. Sellers provide the outcomes for the buyer: they design
and sell cheap, solar-powered lights; write the code that tracks
salmonella outbreaks using government data; and build the cross-sector
networks to fight scourges like human trafficking.
a new way of looking at how we solve big problems in society.
Eggers said the book reveals a burgeoning economy where players from
across the spectrum of business, government, philanthropy and social
enterprise converge to solve big problems and create public value.
"It looks at who the wavemakers are, the
impact of technology, and the new exchanges connecting people who are
buyers and sellers of societal solutions," he said. (Wavemakers are
people driven by social or profit motives to act individually and
collectively to develop new solutions and/or to motivate others.) He
said the big problems they examine include issues as diverse as human
trafficking, traffic congestion and criminal recidivism.
Many MBA students now say they want to go
into a field that allows them to have a social impact. "That was
unheard of before," Eggers said. He said there are lots of jobs now
for social entrepreneurs, who can get start-up capital to solve big
problems using market mechanisms. For example, Parag Gupta of
Waste Ventures in India is trying to make the lives of trash-pickers
in India better, while also solving the issue of inadequate waste
Steve Dahl added that in Deloitte's
on-campus recruiting across all industries, one key question the
company representatives get from recruits is what kind of social
impact the company is having. "That's really of critical importance to
a very large percentage of people entering the workforce now," he
One big issue around the world is safe
water, with 1.1 billion people lacking access to safe water.
Eggers said a lot companies, including Unilever, Procter and Gamble,
Coca-Cola and Pepsi, are now involved in this issue. "If they want to
expand into emerging markets, they need clean water," he said. "These
competitors have gotten together collectively hundreds of millions of
dollars in resources to try to fix this problem. They've teamed up
with inventors and others, including the United Nations."
Unilever's CEO has said companies should be
able to work toward making the world a better place while also making
a profit. Eggers said Unilever is very involved in many social
causes, including fighting diarrhea, the second-largest killer of
children in the world. Diarrhea spreads easily in places where people
fail to wash their hands regularly. Unilever, Eggers said, wanted to
both help fight diarrhea in India, but also to expand its business
reach into small villages there.
One problem they encountered was that there
was no distribution channel for Unilever's soap, shampoo and other
products. So the company started training women to be saleswomen in
the villages and to connect with schools and families. Project Shakti
started with 17 women and now involves more than 50,000 women in India
Unilever has made a profit from this, Eggers
said, while also saving hundreds of thousands of lives. "This type of
thing has become more and more of a movement among businesses," he
said. There are an estimated two million social entrepreneurs
worldwide, along with impact investors and venture philanthropists.
Minneapolis has a chance to be a leader in
social enterprises, because it has the second largest nonprofit and
foundation community per capita in the country, outranked only by
Washington, D.C. In addition, our private sector here is already
involved to a good extent in social problem-solving. Eggers mentioned
Target and Medtronic as two companies that already have social-impact
programs in various parts of the world.
Government's role is to create the
environment for these problem solvers to flourish, by being a convener
and a facilitator. Eggers said a lot of nongovernment leadership
in problem solving has arisen because of market or government failure.
"Much of this is very market-driven," he said, "but not from an
ideological perspective; in fact much of the momentum behind this
movement could be categorized as more left-of-center."
He said the Cameron government in the U.K.
and the Obama administration are the two governments in the world
that have been the most proactive in creating an environment and
incentives for the growth of the solution economy. "The Obama
administration is actively trying to grow the solution economy by
working outside of government to bring the best private-sector
innovations to bear on bigger societal problems," Eggers said. "It
combines the best of the right and of the left."
"It's a pretty rapidly growing new model,"
We must look outside the traditional problem
solvers; government is not always in the center of many of the
problem-solving ecosystems any more.
"That's a really big paradigm shift," Eggers said. For example,
Walmart is playing one of the leading roles in reducing obesity by
teaming up with Michelle Obama to reduce the number of "food deserts,"
places where people don't have access to fresh produce.
The movement toward paying for results is
all about new methods of solving problems outside of the typical
processes. Eggers noted that in dealing with most of these
societal problems, government is usually the biggest purchaser of
goods and services, either providing them in-house or contracting for
their provision. "Government could start to move its purchasing power
to catalyze these nontraditional approaches and leverage what's going
on elsewhere," he said.
Some larger cities have created
public/private partnership funds, called mayor's funds, in which some
public money is used to leverage private money. "It's the notion
that government should not do anything itself that could be done
better collaborating with the greater community," Eggers said. "Having
that mindset is really, really important."
Governments should look at what regulations
are impeding this approach, he said. Policymakers should ask business
and social entrepreneurs what government can do to help, not hurt,
these efforts. He said that many cities are doing great things in this
area and noted that Boston and Philadelphia have created programs
called New Urban Mechanics, which bring in innovation from the
Eggers said nearly every federal government
agency is involved in this new approach, but that change has been
slower at the state level.
Minnesota has the advantage of being a
leader in digital social engagements, starting back in the 1990s.
"Minnesota has a long history of very strong civic, nonprofit and
business engagement, so the state starts off way ahead," Eggers said.
"Some areas that could be accelerated include social enterprise,
social entrepreneurship and innovation, especially in areas like
health care." There are companies here doing these things
internationally; they could be encouraged to bring that sense of
corporate social responsibility back to the local region, he said.
"What could the mayors or the governor do to accelerate and facilitate
that?" he asked.
This approach involves no ideology; it's all
about problem solving. "It's the exact opposite of today's
political environment," Eggers said. "Young people who want to solve
societal problems tend now to look outside the political system for
opportunities to have a broader impact. "
He noted that there is a bipartisan
coalition working on things like reducing recidivism and fostering
public-sector innovation. "But the public's overall disillusionment
with government remains at a record high," he said.
One of the biggest problems in government
execution is design-free design, that is, Congress or legislatures
passing laws that create programs that have never been tried. An
interviewer commented that in the book Engineers of Victory:
Solvers Who Turned The Tide in the Second World War,
author Paul Kennedy looks at how people with new ideas helped the U.S.
succeed in World War II. Kennedy came to the conclusion that the
leadership at the top created a climate in which people were
encouraged to try things. The interviewer said that in education today
there is no concept of letting teachers, the people closest to the
students, try things. Education leadership is "obsessed by the need
for sameness." He went on to ask how to get the notion of trying new
approaches more established.
"There is no process in government to
constantly experiment, iterate and prototype new approaches on real
people," Eggers responded. He cited the Affordable Care Act and said
that part of its concept was to try things after the law was passed to
see if they worked, learn from the successes and failures and then
adopt the successes more widely. "That's fine if there's a way to
continually tweak it and change it, but our political process doesn't
allow that," he said. "There is a real fear of failure and being in
Use prototyping, simulation and lean startup
models to try new things. Eggers said there are some enlightened
government officials who will say, "This is what we're going to do and
we're going to accept some failure." Failures are how you learn, he
said. "Seeding and facilitating others to try a lot of things through
partnerships reduces the political risk," he said. "If it works,
politicians can say, 'Great. We need to adopt it.' If it doesn't work,
they can say, 'We didn't spend taxpayer dollars. All we were doing is
testing a new approach.'"
For example, Eggers said, former New York
Mayor Mike Bloomberg got foundation and other private money to pay for
lots of experiments in education and would admit it when things didn't
work. He reduced the political risk through public/private
Considerable attention is going into
developing a set of universally accepted social outcomes measurements
that can be used by businesses, social entrepreneurs and nonprofits.
An interviewer commented that lots of businesses devise metrics
for other "bottom lines" beyond profit and asked Eggers what
confidence he has that striving for those metrics actually produces
real social benefits. "That's an evolving area," Eggers said. "If you
really want to understand the social impact, you have to be able to
measure it across these organizations and be able to grade them."
The transaction costs of getting involved in
social issues have gone down fairly significantly. Eggers said
there are organizations and websites that will match social
entrepreneurs' skills, or those of potential volunteers, to
problem-solving needs. "I'm not worried about what's going to happen
in the social enterprise sector," he said. "I think businesses are
going to get better and better in all these areas. The bigger issue is
government connecting to and leveraging all these developments and
really understanding it, so people have as much faith in the public
institutions as they do in the emerging institutions."
We've massively overregulated the public
sector itself. "We've added so much time to get anything done that
we've created massive dysfunction," Eggers said. "Whenever we have a
scandal, we add more and more regulations to those working in
government. We have to look at what processes, rules and regulations
are preventing us from getting the results we want."
The structure of government is not the
problem; it's the process of going from idea to results that's broken.
"We're trying to lay out a different way of doing that," Eggers said.
Designers of successful initiatives, he said, have certain
characteristics in common:
They took the time to listen to opposing viewpoints and often
incorporated them into the design.
They designed the initiatives to work in the real world, not
just to pass the legislature.
They encouraged thoughtful debate and didn't try to ram things
They tested programs and designs in smaller pilots before
rolling out nationally. This often happened incrementally over
They took failure seriously and took precautions against
everything that could go wrong.
Eggers said that looking at all
the social enterprise infrastructure Minnesota already has, there's no
reason why the state shouldn't be a world leader in this area. "I look
forward to continuing to see more happening along these lines in this
region," he said.
Dahl added that this new model of social
enterprise is taking off. "There is a lot of innovation, a lot of
problem solving around the globe," he said. "Minnesota is in a
terrific place to move that model forward. A lot of creating the
environment and changing the culture can come from civic organizations
and foundations. They can broker a change in culture within government
and between government and business."
The Civic Caucus
is a non-partisan,
tax-exempt educational organization. The Interview Group
includes persons of varying political persuasions,
reflecting years of leadership in politics and
business. Click here
to see a short personal background of each.
S. Adams, David Broden, Audrey Clay, Janis Clay, Pat Davies, Bill
Frenzel, Paul Gilje (coordinator), Randy Johnson, Sallie Kemper, Ted
Kolderie, Dan Loritz (chair),
Tim McDonald, Bruce Mooty, John Mooty, Jim Olson, Paul Ostrow, Wayne
Popham, Dana Schroeder, Clarence Shallbetter, and Fred Zimmerman