Business professor Mark Mizruchi whose recent book The Fracturing of the American Corporate Elite was published by Harvard University Press, asks this exact question in a Harvard Business Review blog post entitled: Why The Decline in Corporate Statesmanship? See:  http://blogs.hbr.org/cs/2013/04/why_the_decline_in_corporate_s.html 

Professor Mizruchi highlights the postwar developments that he believes caused the elite U.S. business lobby to devolve into its now sadly predictable reflexive vehemence against most all tax increases (despite the fact rates are far lower then when the CED advocated for increases) and most all regulation – even after thirty years of de-regulation.  What professor Mizruchi does not explore is the counter trend of digitally empowered entrepreneurial business leaders self-organizing to give expression to their patriotism and their longer-term self-interest in an emerging global knowledge economy that requires the public investments in education, research, infrastructure and our environment that the U.S. Chamber of Commerce and Business Roundtable effectively oppose.  

Mizruchi first comments on the change that manifest in the cultural and economic tumult of the 1970s.  When the rise of a rebuilt Japan and Germany coupled with an energy ciris and run away inflation to challenge American economy hegemony and life in the C-Suite of America’s top corporations became more stressful.  Mizruchi then highlights three developments in the 1980s.  First, he asserts that by the 80s big business had so thoroughly vanquished its structural counterweights in government and labor that business leadership lost its ability to organize across sectors since “having won the war against its adversaries” big business and its leaders no longer felt the need to coordinate across sectors.   

Second, challenged by new technology, “large commercial banks increasingly turned toward fee-for-service activities morphing increasingly into quasi-investment banks.”  One consequence of this was that CEOs of non-financial corporations were far less often invited to serve on the Boards of large commercial banks which added to the fragmentation of business leadership.  Finally and most important, a massive wave of “junk bond” fueled acquisitions inverted the traditional relationship so instead of capital markets responding to top corporate boards, even top corporate board became the mistress of capital markets.  After almost a century of stability, nearly one-third of the Fortune 500  disappeared during the 1980s hostile takeover binge and the role of CEO became extraordinarily lucrative but on average a position of far shorter tenure.    

All this created a culture of insecurity among super wealthy corporate CEOs.  Mizruchi believes this reduced the ability of big company CEOs to offer public leadership in the national interest.  What he does not explore is the counter-trend of genuine leaders in business who are beginning to step forward publically to give expression to their patriotism and passion for long-term value creation.  Since the turn of the century, businesses adding jobs in the U.S. are increasingly led by well educated innovators in dynamic knowledge economy sectors such as value add consulting in high-tech, life sciences, health care, social media and clean energy.  These business leaders are entrepreneurial students of science who are very concerned about unstable financial markets and an unstable climate as well as America’s role in history and its role in an increasingly global economy they have worked in since they left graduate school.  They are used to dealing with risks many multiples of intensity beyond the “risks” managed by large cap CEOs.  A growing number are concluding that the traditional U.S. business lobbies are not representing their perspective on the need for effectively regulated financial markets or environmental protections or the need for increased investments in education and research required by the emerging knowledge economy.  Just how these leaders of America’s growth economy are being empowered by digital media to connect, explore public affairs and offer a new voice of American business, will be the subject of subsequent posts.  I invite your suggestions and submissions to inform it.  Thanks!  

That is, however, exactly what the CEOs, entrepreneurs and  investors who make up the Alliance for Business Leadership have learned from years of speaking with top experts and state and federal policy-makers.  As stated in the Alliance’s Leadership Commitment (see: http://www.allianceforbusinessleadership.org/who-we-are/leadership-commitment/), Alliance Leaders agree that “economic development and social justice are mutually reinforcing.”  Specifically,  Alliance leaders have agreed on the need to substantially increase public investments in education at all levels, to implement universal access to affordable healthcare and to effectively price carbon pollution to better meet the challenges of an increasingly global economy.   

Alliance Leaders have applauded the emphasis of progressives on greater collective responsibility and the emphasis of conservatives on greater individual responsibility as Alliance Leaders have advocated for greater social and environmental responsibility.  Alliance Leaders have discussed reconciling the progressive and conservative impulse towards “greater” responsibility through recognizing that the proper end of increased collective responsibility is to help empower individuals to embrace and master greater responsibility.  As governments and businesses are made to serve the purposes of citizens exercising  greater personal and public sovereignty. 

This approach is both individually and collectively demanding and, in the eyes of many Alliance Leaders, no less than required for competitive success in an increasingly knowledge  based, global economy.  It is also consistent with professor Jerry Muller of Catholic University recognition of the need to focus on “human capital” formation in his recent cover article Capitalism & Inequality; What the Right and Left Get Wrong for Foreign Affairs March/April 2013.  This call for greater individual and collective responsibility to empower the personally and publically sovereign citizen as the proper end of both public policy and business  - might well be described as a commitment to “Revolutionary  Responsibility.“ This effort, however, is stymied by some think tanks, paid media and some politicians who assert U.S. “business” and “job creators” will be hurt if taxes are raised for investment in human capital formation or regulations are promulgated to advance citizens’ interests in the integrity of U.S. financial markets or to protect citizens’ air, water, soil and food from excessive pollution.  

This is frustrating to Alliance Leaders who actually add high-paying U.S. jobs as they build or help build  companies in high-tech, life sciences, health care, social media, the professions and in clean energy.  As often wealthy Americans and business executives, Alliance Leaders know that the wealthiest 1% of Americans and global businesses are enjoying an absolutely unprecedented amount of liquidity and that the emerging global economy demands both ever better educated workers as well as dramatically increased concern about our environment.  Furthermore, Alliance Leaders know first-hand that increased capital does not increase the number of U.S. jobs; they know instead that it is an increase in the purchasing power of U.S. customers that increases U.S. jobs (a fact of business life vividly explicated by venture capitalist Nick Hanauer in a recent Tedtalk; see:  http://www.youtube.com/watch?v=1w5OovJX8KA&list=PL2AE2611B1A749B87  ).  

When Alliance Leaders have shared this perspective with policy experts and leading U.S. Governors and U.S. Senators who share Alliance Leaders’ commitment to greater social and environmental responsibility as a way to increase U.S. competitiveness, we have been told nothing would make a greater impact than having innovative business leaders who are expert at adding and investing in U.S. jobs step forward in their capacity of business leaders to help explain the short and long-term advantages of greater social and environmental responsibility. Which is exactly why the greatest unmet need in U.S. public affairs is for science respecting, innovative business leaders to step forward and lead publicly towards Revolutionary Responsibility. 

Like their last set of recommendations, the revised package calls for both revenue increases and expenditure cuts in defense, entitlements and discretionary spending.

Unlike that first failed attempt, however, Simpson and Bowles are bypassing the Washington decision-makers who lacked the political will to pass real reforms and this time are working instead through the Moment of Truth Project and the Campaign to Fix the Debt in an effort to engage directly with corporate leaders and business organizations who can serve as advocates and thought partners.

Your Turn
This is where you come in – as a partner in the Campaign to Fix the Debt, the Alliance for Business Leadership is working to collect feedback to this latest plan, which will then be used to produce a more detailed plan with specific revenue and expenditure reduction targets. They plan to release this version in the next two weeks, so time is of the essence – we need your feedback now!

Several Alliance leaders sit on the Campaign’s CEO Business Council, including David Belluck, David Gasson, and myself, and we believe this pragmatic and non-partisan agenda for reform provides a strong platform for business leaders to endorse and ask their legislators to support. We encourage all our members to read the plan. You can also try your hand at running the numbers by using this interactive budget reform tool, courtesy of the WSJ.

Please let us know your thoughts, concerns, or “a-ha moments” soon so we can share your feedback with Erskine and Alan as they prepare phase two of their plan, which will form the basis for a concerted campaign by the Fix the Debt coalition. We look forward to your input!

Time for New Ideas, Greater Cooperation
The fiscal crisis in which we find ourselves – with sequester standing in our path and the debt ceiling looming overhead – cannot be solved by old ways of thinking and continued stalemate around what’s possible. Simpson-Bowles and other deficit reduction plans have mapped out ways to reform our tax code, reduce spending and sustain our entitlement programs. We now need Congress and the Administration to move past entrenched positions and embrace a plan that puts country, not party, first. That may not sound all that innovative, but there hasn’t been much (if any) compromise happening in Washington, DC lately.

The Business Leader’s Role
And it’s not just political parties that need to think and act differently. As the President pointed out, we need to accelerate the job creation being driven by business. It’s true that Caterpillar, Ford and Apple are bringing manufacturing jobs back to the U.S. But by supporting further innovation – in biomedical research, renewable energy development, upgraded infrastructure and educational programming – business can work with government to generate prosperity for all.

That’s a mindshift for some in the business community. At the Alliance, we believe in the role of government, but recognize that more government is not always the answer. Sometimes it’s less. And other times it’s having just the right balance of public and private sector ingenuity that saves the day. The power of innovative public-private partnerships to drive change is a big part of what makes our country great.

P-Tech Schools Lead the Way
Let’s consider education. The President noted the potential of the P-Tech School in Brooklyn – an innovative collaboration between IBM, New York Public Schools and the City University of New York – to graduate students with a high school diploma and associate’s degree in computers or engineering.  This “grades 9 to 14 school” focuses on STEM in attempt to prepare our young people for the jobs of the future. 

In Massachusetts, where the Alliance is headquartered, we’ve seen first hand the promise of public-private partnerships in education. At Newtown North High School, the state’s first innovation lab prepares students for the 21^st century workforce by linking them with the world around them. There, students have the opportunity to partner with the likes of legendary restaurant Legal Sea Foods to convert cooking grease into fuel. These hands-on experiences help our youth realize sustainable career opportunities.

It is precisely these sort of innovative, cross-sector partnerships that must be embraced by business and government if we are to truly make the state of our union stronger.

What did you think of the President’s speech? And what other examples of innovation and public-private partnerships should we be looking to for inspiration? Leave your comments below: 

As Congress and the President, State Legislatures and Governors, Mayors and City Councils gather to discuss their agenda for 2013, it’s time for those who care about the tech economy and the tech sector to gather to celebrate our agenda for 2013.

Join with fellow tech enthusiasts, start-ups, small and large businesses for a fun social event and a chance to learn what is on the agenda for tech on the state, local and national level. Come hear more about the things that Tech will be focusing on in 2013 and ways we can work together to promote innovation and reduce barriers to success.

We’ll provide the cocktails, snacks and fellowship as well as a brief program outlining our top line issues facing the community, followed by a live viewing of the State of the Union address.  You get the chance to gather with your friends  and make new ones as well.

Please join us on February 12th at 7:30 PM and together we can work to grow the tech economy here in Massachusetts.

Event Partners:

• Cambridge Innovation Center
• Venture Café
• Kendall Square Association
• Cambridge Chamber of Commerce
• Engine Advocacy (nonprofit based in SF advocating for pro-startup policy)
• Google

Date: Tuesday, February 12th Time: 7:30 – 10:00 p.m

Location: Cambridge Innovation Center, One Broadway Street, 4th Floor, Venture Café, Cambridge

Ron Shaich, Founder & co-CEO, Panera Bread, opened his 5th Panera Cares location in Boston, MA

Panera Cares is the brainchild of Ron Shaich, founder and president of the very successful Panera Bread chain and an active Alliance leader. (Read Ron’s excellent case study at MIX) Supported by the Panera Bread Foundation, Panera Cares breaks new ground in several ways:

First and foremost, it has created a self-sustaining economic model for addressing hunger in our cities. At Panera Cares, you pay what you can for the meal based on a suggested “donation” listed on the menu. The working premise is that those who can afford more will pay more to support the cafe’s mission to provide for those who can’t.  So far this model has proved successful in three other markets with 60% paying full price, 20% paying less, and a generous 20% paying more than suggested. 

The second contribution is that each cafe is creating a community of people with a shared mission that can have many positive spin-offs for those in need.  Already the Boston location is planning to hold workshops for at-risk youth on how to get and keep a job, and it hopes to hire from this community in the future. In other locations, successful mentoring and internship programs have sprung up around the Panera Cares core.

Last but not least, the Panera Cares model provides much-needed nourishment and inspiration for the soul (or at least mine), as you break bread with others, feel the energy and commitment of the staff and enjoy a simple way to support something so important and transformative over lunch. Hats off to Ron and the entire Panera Cares team!

Next time you are near 3 Center Plaza in Boston’s Government Center (or their other locations in St. Louis, MO, Dearboarn, MI, Portland, OR, or Chicago, IL), make sure to stop by the Panera Cares cafe and take part in this innovative experiment. And as always, share your thoughts below.

The 2013 Edelman Trust Barometer makes clear the stark leadership challenge most countries now fact. The most powerful institutions in society – government and business – remain the least trusted by the general public, with rankings for each below 50% in most cases. 

Although neither institution ranked well, it is worth noting that in most countries, citizens did express a significantly higher level of trust in their business leaders than in their government. One telling statistic is that 26% say they trust business leaders to “solve social or societal issues,” while only 15% say they trust government. On the Edelman blog they cite several events that have contributed to this lack of trust in our major institutions, including the recent banking crises, widespread corruption, and an overall democratization of power and social responsibility.

Restoring Trust
For the Alliance, the study is fuel for our fire, highlighting the need for both business and government to dramatically shift how we address society’s greatest challenges – separately as well as together. Through the Alliance’s work in forging public-private partnerships and fostering innovative business practices, we believe we can help both the private and public sectors earn back the respect and trust of society.

Proven Leaders
Already several members have been recognized for their role in restoring society’s trust in business, including Alliance Board Members Rosabeth M. Kanter, Professor at Harvard Business School, and Ron Shaich, Founder and Co-CEO at Panera Bread, who were just named to Trust Across America’s list of Top 100 Thought Leaders in Trustworthy Business Behavior 2012.  And that is just the beginning, as we take our message to CEOs and business leaders throughout the country.

To join us on this journey back to trust, become a member today, or add your name to our mailing list.

In his second inaugural address, President Barack Obama outlined several priorities for his final term, including: immigration reform, equal pay, poll access, renewable energy, marriage equality and gun control. While everyone may not agree with each piece of this ambitious agenda, we at the Alliance urge all Americans to embrace the central theme of his speech – America can seize the moment, as long as we seize it together.

Speaking of our nation’s proud history of innovation and enterprise, the President stated,

“We have always understood that when times change, so must we; fidelity to our founding principles requires new responses to new challenges; preserving our individual freedoms requires collective action.”

As business leaders actively working to change how we approach our role in society, we could not agree more. It’s about innovation – business does not survive any other way.

We are a non-partisan coalition of CEOs, entrepreneurs and investors working to build an economy that supports long-term economic growth and prosperity for all. No longer are we content to sit back and watch as government struggles to meet the social, economic, and environmental challenges we face – the time has come for the private sector to step up and contribute our unique strengths and talents towards driving the change our country needs.

Our hope is that by working through our businesses and with policy makers, we can engage the ingenuity and entrepreneurial spirit of business to create lasting solutions to our most pressing challenges.  The answer is not more government, it’s better government.  And, we firmly believe, effective public-private partnerships can leverage the best of government and business to meet these challenges.

So, yes, we’re all in this together. Let’s get going. Let the President’s speech be a call to action for us all.

What was your takeaway from Obama’s speech? How will you respond to his call for new responses and collective action?