Mini Case: Why the Democrats Are Making Every Mistake in the Book

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Today's Read: 14 Minutes.

Quick Links & Fresh Thinking

 1. Canada’s unprecedented fire season burns into fall. (WaPo)
 2. Surgeons are killing themselves at an alarming rate. One spoke out.  (Guardian)
 3. How to stop AI deepfakes from sinking society—and science. (Nature)
 4. This stunning court ruling could destroy the Trump Organization. (NR)
 5. Time to panic? The home insurance market in California is collapsing because of climate change. (LAT)

Today's Issue. Why Organizations Make Mistakes.

My little dog Snowy, when I take him out in the morning? If you're whizzing by on a skateboard...he might try to get you. He can be a little...getty. So sometimes I call him "little John Paul Getty." This isn't like that. It's not a get. We're going to dive deep into...

The Democrats. There they are. Struggling. The polls are tied. Their donations are sinking. Biden's numbers are a little scary. What they're doing isn't working. The pitch, the strategy, the approach. But everything's at stake—democracy itself. It's painful to watch. So much so that many of us casually say, holding our heads, "why do they keep making these mistakes?"

We're going to examine all this, as objectively and analytically as we can, through a mini-case. Like I'd do if I was teaching a grad school course. Using the lenses of strategic thinking, organizational theory, and management and marketing theory. The Democrats, as we're going to discuss, are making every mistake in the book. That's not an insult. Literally—as in, I'm going to teach you some theory, and you're going to say, hopefully, "ahhh, so that's why they keep making those mistakes!" This is how we learn in social science—the case method, often.

Let me emphasize, this isn't about politics. It's about understanding how organizations make mistakes, through a mini-case study. The organization here happens to be a political party, but it could be any kind, from a corporation to a pension fund. Americans get discussions of politics, you see, but at a not-very-serious level. Poll numbers and punditry. But the deeper problems are rarely discussed, and we all deserve to learn about why they happen.

What do you see when you look at the Democrats? What's the most elementary mistake they're making? They're overpromising...and underdelivering. Mistake 101. At least that's how many feel. The Dems will go out and talk about how fantastically well the economy's doing. Meanwhile, there's a litany of statistics to show that it's not, from falling real incomes, to 70% under financial stress, to generations in downward mobility. "The economy" is just an abstraction—it's people's experience of it that matters, and clearly, right now, that's not a good one.

What happens when organizations overpromise and underdeliver? Trust is broken. Cynicism rises. In this case, it's true, there's a thing called Bidenomics. And that's a wonderful and smart and brilliant idea—as an industrial policy. But that's all it is—an industrial policy. It's not enough to just promise a society...an industrial policy. Because it operates at the macro level, and only works over the long-term. If your house was burning down, and I said to you, let me go away and design a better sprinkler system...how would you look at me?

Now. That's not the real problem. The real problem? It's about why the Democrats are overpromising and underdelivering. So...what else do you see here? There's an absence. What's the pitch? The promise? It's about...Bidenomics. An industrial policy. What's absent from that? A higher level vision of what kind of society the Democrats want to forge. What the social contract will be. What its norms and values should be. What it's ideals and vision is. That's almost entirely absent.

So. First real mistake. There's no vision. Not at the level there needs to be. See how large organizations go to great lengths to painstakingly craft visions? There's a reason for that. An industrial policy's a good thing. Bidenomics is smart and wonderful and brilliant—I'd never say otherwise. But it's not a vision. People roll their eyes at "vision." But when we're trying to build organizations? Unite people? In common endeavour? They're absolutely vital. Here, a lack of vision means that if I ask you, what do the Democrats want American life to be—from healthcare to education to employment to social norms and values to social mobility, the nitty gritty of daily experience—nobody can really say. Not well. Not precisely. Not in a sentence. Because there's no clear articulation of such a thing. And without one, uniting people behind a common cause is all the more difficult, if not next to impossible. That much easier to tune out in apathy, or even walk away shaking your head.

What does a lack of vision point to? It often goes hand-in-hand with a muddy, unclear brand. "Brand," again, is one of those ideas that people on the center and left don't like to engage with—they think, haughtily, they're above such pedestrian concerns. Folks, we are trying to accomplish something here. Not just win a grad school debate. A brand is really just the articulation of a vision, even in unsaid ways, and without one—good luck getting people to buy in. But let me explain what I mean. If I went out and asked people about "The Democrats," what that phrase, institution, organization, meant to them—what do you think people would say? The results wouldn't be good, would they. Meanwhile, we all know what Trump and Trumpism stand for, and nobody has to even say a word, and that's true across the entire world. See the gap there? That's a real problem. You cannot organize without social and informational bonds, which are just what "brand" is.

So. Lack of vision. Lack of brand. What does all that culminate in? Reveal?  There's no strategy here, and that's the Even Bigger Problem. The Democrats appear to think that not losing is winning. But that's emphatically not true. This is a zero-sum contest. Not losing isn't winning. Either you win, or you lose. This much risk? What's called sovereign risk, that democracy declines suddenly and rapidly? Add that into the equation, and this is an existential, zero-sum contest. To make that point clearer, anything less than a pretty handy win, especially some sort of "tie," amplifies that risk to an unbearable degree, like a Constitutional Crisis, or another Jan 6th.

So the next problem, which is almost immediately apparent, is that...the Democrats appear to have no real strategy. No compelling way, apart from the one they're offering, which isn't working. To win. Not just trying...not to lose. There's a huge difference between those two things, and that difference matters. There's no real articulation of we're going to win by this much, in these places, through these constituencies, by doing this, this, and this. That's a strategy, and it's missing. The just-not-losing mindset  is the absence of strategy. Let me explain.

What's the first thing we do in boardrooms, as Chief Execs, in marketing campaigns, etcetera, at an elementary level? We break the big strategy down into smaller objective and goals. So for example, we might say, we need to reach young people, or women, or what have you, to, in a corporate setting, increase our market share, or in a philanthropic one, to enhance our impact. The Democrats aren't doing any of that. It's pretty shocking to behold. Again, this is striking evidence of the attitude that we're trying not to lose—but not really to win. And it's what happens when you don't have a strategy to begin with–there's nothing to then break down into smaller objectives and goals, which are, together, what a strategy is. The absence of any smaller goals or objectives reveals without a shadow of a doubt—as does the absence of a pitch or promise or play—there's no strategy here.

This is a super serious problem, because without one...what do you even do? You do what the Dems are doing, which is, you flail around, a little haplessly and clumsily, chasing your tail, maybe finger-pointing, clutching at straws. So...why? Why don't the Dems appear to have a strategy? Why do they seem to be trying not to win...but just not to lose? Now we can begin thinking seriously, having defined the problem a little bit better.

No...strategy. To win. Just...not to lose. What or who does that remind you of? This is what we call in organizational and management science an "incumbency problem." The classic example is of course IBM way back in its heyday. Men in the same suits who'd come to talk to you about mainframes and software. IBM had such a massive market share back then that their job wasn't really even to try to sell you anything—that part'd take care of itself—just not to lose the account. An incumbency problem, where a Big Fish focuses on not losing—but that only sets it up for disruption, later, as rigidity and inertia sets in, and it grows afraid of taking risks and innovating.

Why do incumbency problems happen? What do they point to? They're the plight Big Corporations often face. And in this case, how are the Democrats often described? As a "machine." People will say "The Democratic Machine," and we all know what they mean. They're speaking, funnily enough, in almost classical sociological terms: the great Henry Mintzberg, a management thinker of the first calibre, drawing on one of the fathers of sociology, Max Weber, defined he called a "machine bureaucracy."

When we say "The Democratic Machine," and everyone immediately knows what we mean, we're talking about an organizational form: The Dems are an ultra-classic Machine Bureaucracy. Exactly the kind of organization ripe to become rife with incumbency problems. But those problems go way, way deeper than just trying-not-to-lose. Think of how Mintzberg and Weber's principles apply to the Dems. Hierarchy and seniority are everything—so much so that younger people have to fight to have a place at all, far from being welcomed in, and of course, seeing that, whole generations tune out. Everything's ultra tightly formalized, leaving little room for expression, or even differences. Labour's divided up super tightly, and everything's super stilted, role-defined, impersonal and weirdly corporate. Insiderism is everything: nobody much on the outside can even really send a message to those on the inside, because there's an Iron Curtain in place Those are all signs of a classic Machine Bureaucracy.

Worst of all, the Dems are ultra hierarchical. Their campaign woes trace back to Biden's manager, in many ways, but the point isn't that that's "his fault." It's that ultra hierarchical structures create problems of centralized authority nobody can really check, until the farm's lost. In times like these, as we'll discuss? They probably aren't going to work in the first place. And yet nobody can challenge it or even seem to point out that it's not working, the approach, the attitude, the plan-that-isn't-quite-one, the mistakes of not having a strategy—because the organizational wal of a Machine Bureaucracy l is like an Iron Curtain of formality, impersonality, and division of labour, which nothing can penetrate.

To really make that point, contrast the Dems with the right. The right's actually...way more sophisticated organizationally. They've come to rely on more a network structure than a bureaucracy. So various groups team up to do things like replace educational curricula or reshape laws to circumscribe rights for women or what have you. The point is that the networks coordinate all this—not a rigid hierarchy. It's a more flexible, and thus innovative, form of organization, and  that makes it's attacks on democracy more and more potent as time goes on.

Think for a moment of...people. What else happens in Machine Bureaucracies? People's potential is badly stifled, because everything's about ultra rigid roles, rules, and hierarchies. That means there's a lack of investment in new ideas, thinking, approaches. Now think of the Democrats...and people. There are legions of bright people out there, who'd love to lend a helping hand—research, marketing, ideas, law, outreach, whatever, doesn't matter. And they're totally, completely iced out. So instead of a PhD student running a research team figuring out how to win the election—let alone solve clean energy—they're working at Starbucks. Meanwhile, on the right, there are whole careers waiting for people of all kinds, like this—they'll throw money, titles, resources, roles, at you.

Again, that's precisely because it's more a network now than a rigid hierarchy. In a bureaucracy, finding a role is hard, maybe next to impossible, unless it already exists. And so there's a yawning people problem here, too—the Dems just leaving game-changing amounts of talent on the table, not even letting it ever have a foot in the door.

Mintzberg developed a whole Theory of Organizational Forms. It goes like this:

What happens on the right? Today's right is organized much more like an Adhocracy. Various elements in a network, from pressure groups to party insiders to lobbying groups to thinktanks to marketing agencies, come together, on a task or project basis—like rewriting this kind of law, or defining those kinds of people as scapegoats, etcetera. The right in Mintzberg's terms is much more like an Adhocracy now than a Machine Bureaucracy.

And that gives it serious organizational advantages. It's not just that it's "better at" reaching people and defining issues or what have you. It's that its more flexible, adaptable, capable, and robust, because of how it's organized, which gives rise to those advantages. Think about the People Issue above—on the right, you'll have an instant career waiting for you, if you're a certain kind of person, loud enough, I guess. But that's because the Adhocracy form of organization makes it possible.

But being a Machine Bureacracy leaves the Dems incapable of much of this. There, the problem isn't just that the Dems need to fight off the GOP—it's the Dems must fight themselves to get much of anything done. That doesn't even mean holdouts. It means, for example, that networks coordinating on tasks just doesn't happen—while the network form of organization on the right lets all these kinds of different players coordinate to mount stunningly effective attacks on democracy, on the other side...you have to fight the machine...before you can do anything else. That's why for example, this disparate cast of players, thinktanks, pressure groups, lawyers, doesn't matter whom, really, doesn't much coordinate to form network organizations on the other side. How can it? The Machine Bureaucracy's standing in your way, like a mountain, not investing, coordinating, connecting, and good luck to you if you can move it one nanometer, because it's not designed to be moved, or even gotten around.

That leaves the Dems with none of the power of an Adhocracy—but all the classic problems of a Machine Bureaucracy. The incumbency problem of the attitude of just-not-wanting-to lose: the absence of a real strategy. The problem of underinvestment. The problem of a lack of innovation and flexibility. The people problem, of talent just being iced out or left on the table. The problem of insiders and seniority monopolizing resources. The informational problem of not even being able to see those problems. All those culminate in deficiencies of vision, brand, and strategy, in the end.

What conclusion does that lead you to? Here's what I see, donning my Top 50 Thinkers Management Guru hat. The Dems are making every mistake in the book. I mean that not in the way of idle insult or aspersion. I mean it literally. If I was writing a book on 21st century management and organizations, which is kind of what the Issue is, the Dems would be a stellar example of what not to do.

It's not that a Machine Bureaucracy is inherently bad. That wasn't Mintzberg's point. It's just that...today...it's not an organizational form that's used often. These days, we tend to think of it as obsolete. Who wants to be IBM from the 1970s or 80s? The problems that follow are well-known by now. Today, we want organizations which are far nimbler, more responsive, more innovative, capable of radical change, which can be decisive leaders in their fields—not just tired incumbents, who, quaking in fear, cling to...not-losing. This century, we want something much more like Adhocracies, which are how more and more organizations are structured now—look at how big our problems as a world, and how fast we must respond to them.

If I went to any boardroom in the world, and proposed that they become a Machine Bureaucracy, they'd look at me like I was crazy. That's because most large organizations are spending huge amounts of time, money, resources to stop being one—and have been for decades, from Nike to Apple right down to many governments themselves. But the Democrats aren't. They're one of the world's last remaining true Machine Bureaucracies. That's the real problem. It's why they keep making all these elementary mistakes, from no strategy, to startlingly poor messaging, to a barely-there vision, to resisting change and innovation, to not really understanding how to grow and develop anymore. They all stem from the flaws Machine Bureaucracies have to begin with.

None of this is meant to be negative. This is meant to be constructive. You see, the Democrats are in dire need of help. Like many Machine Bureaucracies, sure, they don't know it. But that doesn't change the fact. Here, before us, stands an organization in severe need of...being updated. So much so that its rivals are running rings around it. It needs to be dragged into the 21st century, organizationally. We often wearily talk to one another about "what the Democrats are doing wrong," but the deeper problem is what needs fixing. And that's actually not Such a Big Deal. Organizations of all kinds are running more or less permanent "transformation" efforts these days. The hard part is...listening, understanding, starting, taking the first step.  

(By the way, I try to help them. Every few years, I reach out to them, at this point, in sheer despair. Please, guys, let's just talk for a few minutes.  They know exactly who I am. I was invited to speak to Obama's White House several times, and so forth. They're well aware of my writing and thinking. But...what happens in a Machine Bureaucracy? Nobody can permeate the Iron Curtain. I'm iced out, just like everybody else who could offer them plenty of advice about what to do, and please, don't read that in an arrogant way, this is basic advice they should be getting from many avenues right about now.)

The Democrats still have time to fix all this. The problem isn't really that the Democrats are making mistakes—we all make those. It's that this is an organization in need of profound change, transformation, updating. It's operating like a Bureaucracy Built for the Industrial Age, in an age where information, interaction, resources, and relationships move at light speed, and shake the world that way, too. Adhocracies, too, are being superseded—by what my old friend and colleague Gary Hamel, one of the world's great management thinkers, calls "humanocracies." Sure, you might not like that word—but there's a point: organizations, too, aren't immortal. They must move and change with the times. Or else.

All of that's the real problem, which is why I decided to make all this a mini-case. Organizations resist change, of course—but for the Democrats, and for America, the stakes have never been greater.

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