Starting a company is not easy, and unfortunately there is no way to really learn about it other than by doing it. No book, school, mentoring, or even apprenticeship can substitute for hands-on experience and that’s why our politicians are lacking fundamental business management skills, writes Alex Pirouz.
When you consider that doctors spend a minimum of two years in pre-med, four years in med school, one year in internship, and two years in residency before you would consider putting yourself in their hands, why do we allow politicians to enter parliament with little or no experience and expect them to improve the state and welfare of our nation?
Even barbers need to have at least two years’ experience and pass a rigorous state licensing exam before they can work on their own… and as the old saying goes, “I’d prefer that you learned to shave on someone else’s whiskers!”
As the years go on I seem to feel increasingly disdainful of most politicians; not least because I am coming to understand the complete bubble they work in, spending their time surrounded by arrogant and clueless Whitehall mandarins, policy wonks and cunning corporate lobbyists who monopolise their attention.
Very, very few of these people, not least the politicians themselves, have any experience of ever having built or created a business. All of these government figures pay regular lip service to how entrepreneurship and small businesses are the lifeblood of the economy and vital to society’s well being, but they actually have no understanding of, or insight into, what society’s most responsible, independent and creative people need and want.
It seems crazy to me that a country should be governed by the least able and most parasitic and why the electorate doesn’t demand that politicians should have some experience of creating a profit-generating enterprise.
According to the Australian Financial Review only 33 out of our 226 members of parliament have any entrepreneurial, executive or board level experience. That’s only 14.6%.
Now I am no maths genius but those odds don’t look good at all when you consider we are paying our hard earned money in taxes to a bunch of unqualified and inexperienced individuals to run our country.
I therefore believe it is especially important that politicians have some personal experience of what it’s like to risk everything they have, to battle waves of new regulations and struggle to meet payroll for employees and be able to meet increasing tax liabilities.
Small businesses, often scrambling to make ends meet, cannot afford to spend the vast amount of money that publicly listed corporates do on influencing and shaping policy and remain the least understood and most overlooked political constituency.
Doing business is not as easy as politicians think it is. There are many aspects that a person must know and take care of to run a successful business; most politicians are not aware of this simply because they haven’t experienced it for themselves.
All businesses require a team of intelligent and intuitive business-minded people for running the affairs of the business on a daily basis.
However, if the leader of the company or the owner is not so bright and insightful, then having the best business team is not going to help a company in prospering any further.
Such a company will in fact not be able to survive in the market. Thus, the person running the company should be one who knows business inside out and is capable enough to take the company on the path of progress.
So not only is it important for members of parliament to have business experience but, more importantly, the leader (Prime Minister) needs to be the one with the most amount of experience and education.
To gain a deeper insight into the topic, I recently spoke with Atlanta-based entrepreneur and columnist Eric Holtzclaw, who is the author of the book, Laddering: Unlocking the Potential of Consumer Behavior. He recently compared the United States Government to a failing business.
Having experienced the recent crisis with the American government both as a citizen and a business owner, Eric believes the key to better government performance is to have a set of criteria that hopeful politicians need to pass before they are approved to enter parliament. He shares them here.
1. Understanding cash flow
To survive, a business owner must understand their cash flow – how the money flows in and through their organisation. While the 2008 recession was caused by the practices of financial institutions and banks, the challenges it created were felt by business owners as they attempted to manage cash flow and work within a new economic structure of limited access to capital.
2. Living within limits
A business is naturally limited by resources and must learn to survive within those limits. The government has the ability to raise its debt ceiling and print money anytime it feels like it – the ultimate and unrealistic safety net.
3. Immediacy of feedback
If a company fails its customers, the customers have the ability to provide the company with immediate feedback through their buying behaviours. The election cycle insulates the politician from feeling the immediate effects of their decisions…
Excerpted from an article originally published in the February/March 2014 issue of Think & Grow Rich Inc. magazine. If you are a subscriber to Think & Grow Rich Inc. magazine, you will receive this article in your February/March 2014 issue of TGR. If you are not a subscriber, click here to subscribe.