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STRATEGIC HR
Nov 30, 2010

How well can you play the deficit game?

The New York Times' 'Budget Puzzle' provides a blueprint for simulations that could guide organizational decision-making
    

By Dave Crisp

What’s the deficit in the United States got to do with human resources and leadership? Plexus Institute follows applications of complexity science to thorny issues.

In their last weekly post, they pointed out a game the New York Times has set up called “The Budget Puzzle” — on bailing the U.S. out of its huge and growing financial deficit. It’s an approach we can think of adapting to a number of management situations, and playing offers insights into leadership and associated challenges.

The gist of the game is you choose among tax increases or budget cuts that have been discussed or proposed by President Obama, senators, representatives and financial experts — and you keep choosing until you “balance the budget” for 2015 and 2030… two different requirements. It turns out to be easier than you might think, although clearly there could be complicated intermediate options — like partially reducing certain health care spending rather than cutting it entirely. A game can’t include every possibility in a complex situation without becoming unwieldy. Nevertheless, it’s instructive.

Among the surprises — there are actually solutions knowledgeable people have proposed that, when put together, solve the problem. It isn’t insoluble at all, which many of us have certainly wondered about. Second, those solutions are apparently feasible, though one wonders what unforeseen long-term impacts some might have, but how is that different from any choice of strategies we might make in any arena?

At the end, you can’t help but wonder why this isn’t being solved faster... or whether it is at all. The answer, if you think about problems you’ve faced yourself, is we choose to solve problems when we’re ready, when we’ve had enough of lacking a solution. We’ll quit smoking when we worry, finally, it will kill us or our loved ones. So, too, will the U.S. solve its budget issues — when enough citizens fear the alternatives. Unfortunately, that appears to remain some years or even decades in the future, and you can see why through the eyes of this game — a potentially valuable gift it offers.

Clearly each interest group will resist giving up its pet tax breaks or benefits. Can leadership speed things up? Obama did a great job, at least in U.S. terms, in bringing in health care, yet got hammered in the recent elections. On the other hand, voters stopped short of upending his hold on the Senate so the gains couldn’t be erased easily. Why? It looked like lots of misunderstanding of issues on both sides from here, but only those actually in the midst of the mess can draw useful conclusions. The rest of us have to wait to see what Americans will do, even though their economy affects much of ours and many other nations.

The game offers a possibility of making the choices clearer to voters and some variation of it could likely do the same for thorny problems businesses or even individuals face. Yes, it would take some doing to put together the list of options for a given situation, but this makes it look even more like it’s worth taking the time to do that. Simulations are growing in importance as decision-making aids, and this is a chance to see why.

And yes, leadership definitely makes a difference, but doesn’t solve things in total. Clearly if Obama hadn’t been in power, no progress on health care would have occurred and 30 million Americans would still be without health care they’re now entitled to. Two steps forward, one back. Can our teams be different? Nothing worth doing seems easy, but anything which shed some useful light and clarity on the inevitable debates has to be a gain.

Dave Crisp is a Toronto-based consultant with a wealth of experience, including 14 years leading HR at Hudson Bay Co. where he took the 70,000-employee retailer to “best company to work for” status. For more information, visit www.crispstrategies.com.

    
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