I remember Ross Perot’s 1992 run for president of the United States. He ran his campaign largely on his acumen and experience of being a businessman and promised to run the government like a business. Being young and impressionable, I recall thinking that was an awesome idea. After all, governments are wasteful and businesses are not (more on this later). Business is held as a pinnacle of success in society.

Fast forward 22 years (yikes, that long?). I have owned a business for 13 years. A particularly wonderful type of business — a service provider business. With 20 to 30 new clients per year that I’m exposed to, plus their related vendors and service providers, I would say I’ve had a relatively good look during those 13 years at how more than 250 businesses are run.

During that time I have seen my fair share of extremely well-run organizations and organizations that have a glossy exterior but are pure chaos on the inside. (My organization has fallen into this category more than a few times!)

There is one reason that businesses are perceived as the pinnacle of success in society. It’s called marketing.

Businesses can be just as inefficient or poorly run as any government in the world but they have marketing dollars to mitigate that exposure. The businesses that are run excellently are also spending time and money convincing us that they are the greatest provider of their goods or services so there should not be any surprise that the public perception is that businesses have their act together.

When we hold businesses up as “successful” we have another statistic to consider: most businesses fail. Yes, there are many successful companies that do great work in our community; however, for every one of those that exist, there are at least four that did not make it.

Do we really want to model our city’s governance structure after an ideal that has such an aggressive rate of failure?

A business is successful if it is able to increase revenues at a faster pace than it increases its expenses. At the most basic level this sounds obvious and straightforward. However, a piece that is often missed is that a successful business is not necessarily one that is well run — it just has a high enough revenue stream to mitigate its exposure to put significant dollars on the bottom line.

Based on my experience, a business tries first to increase its top line revenue by growing, extending price, extending region or diversifying its revenue stream before it looks at the expense side. Once a company starts to mature and starts to saturate its market, it begins to examine efficiencies as that is the only way to grow profit if the top line is flatlined.

In my experience, a business that is looking solely at fixing its efficiencies and is no longer innovating or attempting to grow its business is at the beginning of its death spiral. Yes, businesses do look at efficiencies (we are doing this at rtraction) but in many cases it’s not directly to decrease expenses, but rather it is to allow for growth in the top line. “Grow or die” is a mantra of many businesses — that growth has to come from top-line revenue growth.

A business is also often successful by finding a niche market for their product or service and catering exclusively to that market. For example, if you think of Apple, you can almost conjure up a picture of their target demographic.

Compare and contrast that, then, to the running of any level of government — municipal, provincial or federal — and you will notice two glaring differences.

First, a government should not strive to increase its top line (i.e., taxes) as a way to generate profit (in fact, a nice balanced budget would be great, don’t you think?). Secondly, a government needs to cater to the needs of all of its citizens, not just the select few who fulfill a particular market segment or demographic.

Let me illustrate with an example of how I would run the City of London as a business if I were a pure for-profit type of business manager, which I’m not, but work with me here…

The City pretty much has a monopoly on garbage collection. When a business has a monopoly or oligopoly, they exploit the market by charging additional fees for services that maximize profit (see, for instance, Canada pays amongst highest cell phone rates in the world).

Therefore, what I would do is start charging a $2.50 per bag pick-up fee, without reducing the related tax charges already in the budget. With approximately 100,000 households in London and an average of 3.5 garbage pick-ups each month per household, collecting two bags of garbage per household, that’s 700,000 bags of garbage per month generating an extra $1.75 million per month, or $21 million per year.

And here is the best part about what I would do: I’d allocate $250,000 of that extra profit to a marketing campaign and greenwash the whole thing to make you, the citizens of London, believe we’re doing it for environmental reasons to encourage you to reduce your garbage, and extend the life of our landfill site. I just increased our bottom line as a council by $20M per year. Good deal!

(Oh, and if I were particularly evil I would tell workers that we have to cut back wages because the $2.50 garbage collection fee has reduced the amount of bags being collected, so we couldn’t pay what we used to back in the “heyday,” but it’s all for the good of the environment. Not all marketing campaigns are 100% externally focused.)

My second point is how the city would cater to a particular niche market. Who pays the most taxes? Well, people with larger houses and presumably higher incomes, so we would cater the city to them. Lots of sprawl, room for cars, etc. We would service the heck out of those people and they would continue to love us back (think “Apple fanboy/fangirl”) and it would appear awesome on a balance sheet.

However, cities are not like that. Cities, and the people who run them, need to be visionary and plan out the next 20 to 40 years. If we exclusively cater to the folks who have already established themselves financially and pay the burden of the taxes we will turn away the next generation of income generators for our city.

The person who will be responsible for this city’s next major employer is attending UWO or Fanshawe (or perhaps just high school) right now and will graduate with $40,000 in student debt. Those student loan payments will preclude car ownership. So where is our graduate going to start her new business: in London or a city with reasonable transit for her non-car based modes of travel (bike, bus, car-share, etc.)?

All too many times people say, “I won’t use the bus. Why do I want my tax dollars to go to transit?” It is not about you. Yes, you are my City of London-as-a-Business target demographic but you are not the future of economic growth for our city.

I have a lot of respect for business and they are the top vehicle in our society for generating wealth, prosperity and economic activity. However, their model is completely unsuitable for anything even remotely close to a functioning government. A business looks after one need: that of the shareholders (which most people define as profit; I define as prosperity, which is not just economic, but I digress…).

A government looks after the needs of all its citizens and grows its capacity not by increasing its revenue (taxes) but by unlocking the natural potential of all its citizens, working or not working, well or not well, as well as business, non-profit organizations, other government agencies, etc., by providing a common agenda and funding those activities.

So next time you hear a political candidate say, “I am going to run the city like a business,” ask yourself (or even better yet, the candidate), what does that really mean? I think in most cases it’s the concept of “efficiency”; however, based on my experience in the business world, the most successful businesses are those that make culture, innovation, market growth, marketing, demographic targeting and a strong mission, vision and values their top eight concerns, with efficiency as the ninth.

We need our politicians to provide governance and direction to the staff to execute. We need policymakers of a government to act like a government, one that has a vision for its citizens of today and tomorrow.

The only people who should be running anything like a business are those running businesses. Give us the environment to prosper and let us do the rest.