The state of Rhode Island is in serious financial trouble. Government, as we know it, is now officially too expensive. Every business person, elected official and taxpayer knows this to be true.
Unfunded liabilities are spiraling upward while revenue is spiraling downward. People cannot afford to pay more taxes, and business cannot afford to be taxed more. They both are tapped out, and many are moving out. Yet many of our social programs and organizations are in desperate need of additional funding.
In the meantime, special interests are dug in like ticks on a Georgia hound, and our government’s response to closing spending gaps has been to increase taxes and fees or to use one-time windfalls to cover our excesses.
Nothing is giving, yet everything is straining.
So what is happening to us? What is happening is that we are at the end of a very large sigmoid curve.
Most of us in business are familiar with the sigmoid – or “S” – curve and the vitally important story it can tell. Unfortunately, I don’t think many people outside of business or science are familiar with the curve, and this is one case in which ignorance is not bliss.
The S-curve is applicable to many aspects of life, although it was first used to explain the rise and fall of biological phenomena. Jonas Salk, the creator of the polio vaccine, was the first to adapt the S-curve for use beyond the natural world.
It can be used to sum up the story and timeline of sports dynasties, fads, technological innovation and, in this case, the way we govern ourselves.
Essentially the story of the S-curve is that you start out doing something a certain way. At first it’s a bit bumpy, but as you find your way you begin to prosper. You then continue doing what you are doing and experience more prosperity. You interpret that prosperity to mean that you have learned how to do that particular thing the “right way.”
Then, without understanding why, you plateau. Finally, if you don’t revise your thinking and actions, you experience a precipitous downturn that if left unaddressed results in a crash. John O’Neil asserts in his book “The Paradox of Success,” that a key cause of the crash is that the thinking and actions that originally make you successful, if unchanged, eventually result in your demise.
Salk himself warned that to survive over the long term, any entity would need to change or learn new adaptive behaviors to escape disintegration into the disappearing, downward tail of the curve.
Changing existing thinking after experiencing a long trend of success, or even the numbing comfort of a painless plateau, is extremely difficult. The reasons are legion, not the least of which is that people do what they know how to do, and they only know how to do what it is they have been doing. In addition, they are invested in their previous success and find it difficult to imagine another path.
So the financial collapse and ensuing political calamity we are just now beginning to feel in Rhode Island is symptomatic of our being on the dying end of the S curve that defines the lifespan of our longtime vision of government. This concept accepts that spending can grow at rates that outpace intake, and a reckoning, if there is one, will happen at some point well into the future.
So where does that leave us? The state is facing enormous deficits, and the tax burdens on our people and our small to medium-sized businesses are already crippling everyone. In addition, there are no more financial rabbits to pull out of the proverbial hats.
When facing downward on the end of an S curve, there is no reversing it. You must get off the curve you are presently on and create a new one. That process is never easy. However, we must have the courage and determination to make that change.
While Rhode Island’s government may be cash poor, Rhode Island itself has a sultan’s bounty of intellectual and creative talent. I look forward to the day when our circumstances are such that more of our political leaders have no choice but to work inclusively with one another and with business leaders in order to design an effective – and inclusive – turnaround strategy.
The work of creating Rhode Island’s next great S-curve must include those who understand its principles and its dynamics. Our elected officials cannot do it alone. We should not expect them to nor should we allow them to.
Governments are not natural innovators. But they can foster the environment from which innovation is allowed to spring forth from its people. That would be an effective role for Rhode Island’s government in the 21st century. It would also be the new S-curve we create for our children to ride into their future and on to prosperity.
Jeffrey S. Deckman is a senior consultant with New Commons and co-founder of the Enterprise Club of Rhode Island.
