Running For A Change
Ann Arbor venture capitalist and former Gateway COO Rick Snyder, MBA ‘79/JD '82, recently launched his campaign for Michigan governor. It's time to bring private-sector practices to government, he says.
ANN ARBOR, Mich. — Ambition has never been in short supply with Rick Snyder, MBA '79/JD '82. Always in pursuit of lofty goals, he usually quiets naysayers with concrete achievements. Snyder earned three Michigan degrees by age 23, made partner at then-Coopers & Lybrand in six years, left to run computer manufacturer Gateway Inc. (where he became president and COO), and then set up venture capital fund Ardesta in Ann Arbor. Snyder also helped create and lead Ann Arbor SPARK, the public-private economic development organization for the Ann Arbor area.
Now Snyder is running for governor of Michigan on the Republican ticket, joining fellow Ross alumnus Pete Hoekstra, MBA '77, to battle for the party's nomination. Snyder has never held political office, but he thinks that might be a strength right now. The state's economy is reeling, with the Democratic governor and Republicans in the state senate battling over the budget. Snyder has seen enough, and says it's time to bring private-sector innovation to state government.
Dividend: Why did you decide to run for governor, despite never having held office before?
Snyder: The most frequently asked question I get is, "Why would you want to be governor?" And the interesting part is the intonation as much as the question. People wonder why someone would want the job given the circumstances. But I really do, and it's for the intersection of three reasons. One, Michigan is an economic disaster. We're losing a million jobs this decade, we have 15 percent unemployment (and that's probably understated). We're losing a family every 12 minutes. Two, I believe there's a fundamental lack of leadership in Lansing. There's no clear direction, there's no vision, they're ignoring problems, and using Band-Aids instead of long-term, structural fixes. And they're in conflict instead of working together for the common good. Three, I don't believe that a traditional politician is the answer. I think [traditional politicians] come from a culture that's broken. We need to bring the knowledge and tools from the business world to get us on a positive track and fundamentally reinvent the economy in this state and in our government.
Dividend: We've heard plans to reinvent government before from others. How can you, as a political outsider, get that done?
Snyder: Look at the business world: We reinvent ourselves multiple times or we wouldn't be in business. There have been a number of periods where that's the case. You can look at the period we're in now, or look at the tech bubble period. You can identify multiple periods where if we didn't reinvent our practices we would have been put out of business. Those are the kind of skill sets we've learned that we need to apply to government. A simple case I like to talk about is the budgeting process. It's been an absolute failure in the state of Michigan. We shut down in 2007 and we shut down again this time. They didn't hit the midnight deadline. What's underlying that, besides a culture that doesn't work, is that it's an old-fashioned cost-activity budget. Your business would never survive if you did cost-based budgeting. There's where departments ask for money, say they're doing to do a whole bunch of stuff, and then next year ask for more money so they can do more stuff.
What we need is outcomes-based budgeting, which lays out a set of outcomes to achieve. We would be held accountable and measured against other states and even other countries. We want to deliver results and tell people, 'This is how we're going to build up a budget. You, as citizens, customers, want to buy these services and deliver these outcomes.' They say you can't do that in government. Well, it's worked successfully in other places, why aren't we looking at it here? The state of Washington has been doing this since 2003. They had a major budget crisis, a $2.5 billion deficit, they had to cut 10 percent of the budget, and they went through outcomes-based budgeting. I like to call it value-for-money budgeting because we need to show value for money to our customers, the citizens. And they went out and surveyed people from both parties. And people from both parties thought the process worked. Independents thought the process worked. So here you have a situation where you can get everyone on board. Everyone might not be thrilled, but they understand it's a fair and open process involving citizen input in a way that builds up a project with real outcomes and real results. Why aren't we doing that? It's been done. It's not impossible in government.
Dividend: You've been successful in business, and very community-oriented, but you're running for a statewide office against some people with big name recognition and political machines behind them. What's your plan for getting to the governor's office?
Snyder: Our campaign is a startup. I've done multiple startups. It's the same fundamentals you have in any business. You start with a vision, you put a plan in place, you build a first-class team, and you have an underlying culture. We've put all of those in place, we're executing well, and we've already shaken these people up. I think they've gotten the message. This campaign is for real and it's really about re-inventing Michigan. So we have their full attention now and we're only going to keep putting on the pressure. The way I view it, I'm not running against other people. I'm running for the right reason, to re-invent Michigan. And we're running a clear, positive campaign with a vision and a plan of action. It's all about the economy, this election. That's the big issue. Priority number one is the economy. So is priority two, priority three, and all down the list. And I'm a person with experience in the economic sector and I know what it's like to create a job. These other people don't. So I'm going to run this positive campaign, I'm going to focus on the economy, and get it on track to build it for the next generation or two. I think the [other candidates] are going to be trailing after me. They're already picking up on my language on how to handle economic issues because I don't think they understand it as well as they need to.
Dividend: We have an incumbent leaving and a poor state economy, so if there were a time when the public might embrace an outsider, do you think this is it?
Snyder: I think people are excited. When I talk to people, I get a great response. My main issue is name recognition, getting out there and getting known. People know most of this stuff is common sense. Politicians have lacked transparency and have been caught up in this win/lose attitude. It's a culture that just doesn't work. We need to get out of that and break out in the open and say, 'We can all win together. We can make Michigan a great state again.' It's about Michiganders stepping up and taking our state back from people who are not doing their job right so we can run it the appropriate way. I often ask, 'If our government were a business, what would you do with these people?' And the answer I get from many people is, 'Fire them.' So why do we put up with this?
Dividend: You sound frustrated, so in deciding to run for governor, was there a moment, an event, where you said, 'That's it. I'm going to do this.'
Snyder: It was more a family process. I never had been focused on running for governor. When I was 15 or 16, I built a career plan. I said I was going to have three careers. My first career was going to be in the private sector. I wanted to be where most people are, out in the 'real world' and do financially well enough where I could take care of my family. My goals there have been, make money, help people, and have fun. Those were my guiding principles. I thought in my 40s or 50s I would drop the 'make money' part and focus on fun and public service, things like volunteer work and Ann Arbor SPARK. The third career would be to teach again. And I really had been focused on that. We had a family agreement that it would be another five years or so before I would do public service because my youngest is in the eighth grade, and we were going to wait for her to get out of high school. So Sue, my wife, actually came to me and said, 'I can see how you feel about the state, how messed up we are, and you're the best person to go solve this problem. We should talk about it as a family to see if we're up for this challenge.' And we were. We spent about a month talking to the kids.
Dividend: You talk a lot about innovation. You've done it, and we talk a lot about it at Ross. What kind of innovations have you developed in the campaign?
Snyder: One true innovation that reinforces the Re-invent Michigan message is a program called Run with Rick. We have a vision for a new era: a 10-point plan and a set of cultural values. We are encouraging anyone to run for office on a similar platform. If they want to adopt the vision plan and culture model that we have, we're encouraging them to run on the same platform. And we've already signed up about 100 people who are interested. Most of them are for precinct delegate, but we're interested in people running for state legislator, county commissioner, or city council. I'm even encouraging incumbents to join the platform because it's the right thing to do for Michigan. I think that's an innovation because most of these people are new to politics. Here's an opportunity to enter a process because you believe it's broken, and be part of the solution. That's innovation
The second thing we did is launch something called Rick's Innovation Network, which is some cool 'get-out-the-vote technology' that even Obama didn't optimize. So we're trying to go to the next level there. And we used that for our conference on Mackinac Island where we basically leveraged computer databases with cell phone cameras. So if volunteers wanted to participate, they could go around and do things to log in and say they've gone out and voted in a straw poll, attended the debate, or talked to somebody interested in the campaign. Then we set up symbols around the island where they could use their cell phone camera to take a picture and it would be logged in the database. So we're hoping to leverage that as the campaign progresses. These career politicians have been around forever, and in the space of just a few months we've shown more innovation than they have in their careers.
Dividend: You are a product of the new economy, or what we used to call the new economy, and you've lived in other states. You've also led a big tech company. What does Michigan need to do rebound, and how would you get that done?
Snyder: We need to change the concept of government from bureaucracy to customer service. The role of government should be to serve our citizens and customers. And everything we do shouldn't be through the lens of, 'We're government and we're going to go out and do stuff.' It should be, 'If you're a citizen, how can we help you be more successful?' And within that we need to be much more competitive on our tax and regulatory system. The MBT is the dumbest tax in the United States. Our regulatory system is biased toward assuming people are bad and they need to be controlled, versus the average citizen is a good and you need to deal with the exceptions. So we need to actually make a much more competitive playing field and reduce these Band-Aid things like incentives. If you have a competitive playing field, you don't need Band-Aids. The second thing is to go to the concept of value-for-money budgeting. What's the return on investment we're giving you? Why are we a good shopping choice? We need to be showing our worth to be on your shopping list.
Dividend: That all makes sense, and in the business world you can make these kind of decisions. But in the government you have a legislature that may or may not agree with what you're trying to do that also has a big say in how things are run. How would you deal with that?
Snyder: I love that question, because it just shows the lack of touch politicians have with the real world. They like to say, 'You don't understand, you can't do that.' Or they say, 'You're a CEO/manager-type and you're used to telling people what to do.' Any business person knows what an ignorant statement that is. The only way you win in business is a five-way win. It doesn't matter what your title is in a company. The only way you win is that you make it so your customers win, your shareholders win, your employees win, your suppliers win, and your community wins. If any one of those groups is out of sync, your business is at risk. So you may not be around if you don't understand how to take care of multiple constituencies and create an environment where they all win.
Dividend: True but they are stakeholders in your business and have a vested interest in your success.
Snyder: Customers don't. You have to convince them to buy from you every time.
Dividend: I guess I'm thinking about dealing with someone in the legislature from an opposing party who may be intractable, depending on the issue.
Snyder: You don't need to get everyone on board. That's the good thing about the majority ruling. The idea is much like the adoption curve when you come up with a new idea. In the tech sector, you go to your early adopters, you get your fast followers, those in the middle, and then some laggards. So you just understand how to develop those things. I've been doing that for years. Ann Arbor SPARK is one tangible illustration of bringing people together with different backgrounds. We were able to bring together the University of Michigan, Eastern Michigan University, the community college, the city, the county, many other jurisdictions, and the private sector and get them all on the same page to have one organization represent them on economic development. I wrote the business plan for the organization, I chaired it until the last few months, and now it's become one of the most successful organizations in the country. So there's a crystal clear case of pulling together an extremely divergent group of parties to move ahead on a topic of great importance: economic issues.
Dividend: What did you learn at Ross that maybe you've applied to your career and your campaign?
Snyder: I learned a lot there. That's a tough question because it's blended so much into my life. It's just part of me. One thing I really appreciated was that most of the people I met in business school had work experience. Here I was, a kid of 19, working in teams with these people. And it was just an awesome experience when people who had divergent backgrounds developed the chemistry to work as a team. It's one of those soft things, but it was a critical skill set to learn.
I've faced the challenge of people saying I can't do something my entire career. Actually, I thrive on that. I built this plan to get three degrees in six years when I was 16. So I designed it to get my bachelor's when I was 19, my MBA when I was 20, and my law degree when I was 23. I was an adjunct professor in the business school teaching tax when I was 24, 25, 26. I'd show up and most of the people were older than I was. But that's an important lesson. Teaching working people isn't taking the position that you're smarter or better than anyone else. I just happen to have more knowledge in the field, and we're there to learn together. We're all solid people. People aren't better than one another. The question is, how can you take that knowledge and share those tools with other people so we can all learn together? That's the same kind of message I want to bring to government.
Dividend: I'm sure our marketing professors would like to know why you decided to use your first name on campaign signs, Rick For Michigan, instead of the last names you usually see.
Snyder: I did it to send a message that this isn't about being isolated, being the politician who isn't accessible. This is about us working together. Short-term, people actually gave us some grief over this because nobody, I mean the general public, knew who I was. They would say, 'Are you Rick Michigan?' and I have fun with that. But as we get into the later phases of the campaign, hopefully it sends the message that this is about all of us moving together as a team. And we're having a lot of fun going around in an RV we've wrapped, tailgating at the Michigan games, and inviting people to sign the bus.
But there's a tremendous amount of hard work that needs to be done to get Michigan back on track. We need to do that with a positive attitude and we need to find parts that are enjoyable about this. Many people are suffering terribly today. It's a tragedy and some of it didn't need to happen. The government could have done much more to mitigate or prevent some of these things. It's time for us to step up, get our government on track to be that customer service business, and fundamentally reinvent out state. The goal is to get us on that long-term path to being a top-tier state again.
For more information, contact:
Bernie DeGroat, (734) 936-1015 or 647-1847, email@example.com