Now that Senator Obama is the U.S. President-elect, everyone has recommendations for what he needs to do (read sample on Marketwatch here). What we know from the campaign is that as President he has promised change. Listening to him speak, you could imagine a lot of change.
Do you recall any Presidential campaign where the candidate didn't promise change? It has certainly been a common call during the modern era. Yet, election after election we hear the repeated refrain about how "those in Washington" are bad, and the candidate will provide change. As the decades have passed, it appears that "Washington" (whatever that means) has been more resilient than the candidates have been change agents. In some ways this is similar to outside CEOs that join organizations promising change, yet they get chewed up by the machinations of their new employer and find themselves without a job when the Board decides it must replace them. Few "change" CEOs actually pull it off – and one would think changing a company is easier than changing the U.S. government. So does that mean we should not expect change from an Obama presidency?
The federal government is pretty well Locked-in. Not only does it have the behavioral Lock-ins of a large bureaucracy, but it creates laws when designing its structure and decision-making processes. It is substantially harder to change the software used in a federal agency than it is in a corporation, for example. Or even a supplier. The rules, the laws, create Lock-ins which keep the government operating pretty consistently – despite who's in the Presidency or Congress. For any President to make a change, that person has to find a way to Disrupt selected Lock-ins and open up some White Space to do new things. That is possible, and we've seen some Presidents use the tools very effectively.
For example, John Kennedy shocked everyone by undertaking an enormous Disruption when blockading Cuba (read about blockade here). People clearly saw this was a change in "business as usual." Then he threatened to nationalize the steel industry if the executives didn't make concessions to striking union workers – a threat previously almost carried out by President Truman. These actions were deliberate in their intent to change how people thought about the decision-making of his administration. He wanted people to thinking differently about what could be done during his presidency. Then, to develop new technology solutions via innovation he created the "man on the moon" project. He exploited NASA's extra-ordinarily wide charter (wide permission – read here) to spend money on new technologies — which just happened to have quite a few applications in defense.
More recently, Ronald Reagan entered the presidency promising significant change. But he took on the job in a very weak economy with incredibly high interest rates. Spending on "entitlement" programs (like welfare and social security) were skyrocketing with inflation, while "real" program expenditures like defense and roads were declining. President Reagan needed a Disruption, and he found one when he fired the striking air traffic controllers. No one ever believed he would fire them all. But he did. And he did not waiver. No one who had any doubts things were going to be different after that action. (Read about the PATCO firings here.)
President Reagan didn't try to "fix" what he perceived as a broken system of unions holding up employers for better benefits and cost of living pay hikes – he simply fired all the controllers and made it clear unions would have far less voice. He intended to fight them. This dramatic event opened the door for people to start thinking about new solutions – ones that had never been tried. And in short order President Reagan pushed through the largest personal tax cut in the history of the country. He took the entire Office of Management and Budget into White Space by forcing them to explore whether the "Laffer Curve" (read about Laffer Curve theory here) would work and whether tax receipts could increase due to a better economy under lower taxes.
For Mr. Obama to provide significant change in his presidency he must find and implement a Disruption. He must identify a Lock-in (lower defense spending was Kennedy's, and the power of union's was Reagan's) and attack it. He must not waiver in his commitment to the Disruption in order to establish that there is another way to get things done. And then he must create White Space in which he can explore new solutions.
Disruptions and White Space are much tougher to create in the federal government than they are a corporation. The President must weave between complex laws – and even tightrope whether proposed actions are legal. Sometimes taking actions that are at risk of failing a potential review. And White Space is hard to find because who wants to give the new President permission and resources to experiment? But that is what Mr. Obama must do if he really is hoping to "change how things get done in Washington."