October 5, 2000

Strengthening the American State in the New Economy:
Principles for Transition into the Information Age

by Governor Mike Leavitt

Minutes before I was to take the podium at the state Legislature to deliver a budget address, a member of my security team came to me and said, "Governor, there is a fire at the mansion." I left the Capitol and went directly to the mansion. Billows of black smoke were pouring from the windows. I found Jackie and our threeyearold son, Westin, standing in the parking lot. Jackie explained that she was standing in the bedroom when she heard a crackle and a pop and the roar of flames. She looked through the open oval on the second floor as she leaned over the balcony railing and saw the 26foot Christmas tree engulfed in flames that were shooting up through the oval. She saw her assistant carrying a small fire extinguisher trying in vain to put out the fire. She and Westin ran down the back steps and met four workmen, who had been in the basement, rushing to the back door. The intense heat had caused a back draft, and the men were trying in vain to wrench the door open. Finally, they resorted to using a ladder to force the door. Everyone inside was able to slip out before the door slammed shut.

We watched the fire grow. There was a huge explosion, and suddenly a 20foot fireball was shooting out the windows. The fire became more intense. The fire marshal came and explained to me what was happening. Fire seeks oxygen. When a fire burns that hot, there is a serious need for oxygen. It goes into the screws and light sockets. It exploits any oxygen wherever it finds it. When those natural forces are set off, change is going to happen.

When the forces of change in the marketplace begin to operate, our reactions may determine survival. The forces can be cruel in their certainty. We are at a time in history when the Internet and information technology are fueling change unimaginable in scope and with mindnumbing speed. I'd like to build on that experience to introduce a very important mantra for the 21st century.

An entrepreneur that I greatly admire, Ray Noorda, talked about change and our adaptation to it in the 21st Century. He said that when it comes to change, you have three choices: you can fight it and die; you can accept it and survive; or, you can lead it and prosper.

I believe that there are at least three forces that are driving the change that we must respond to as government.

The first is expectations by our constituents. There is a change in the way our constituents are beginning to view government. If I buy a computer over the Internet, it is shipped to my home. I can plug it in, and typically it will work. If there is a problem, I can call and get help to fix it at any time of the day.

Contrast that to what happens today in most government agencies. If you want help with Medicaid, you have to call between 8:305, Monday through Friday, and if you do not call between those hours, you do not get help. That is different from what we expect to happen with any other service we demand. Obviously, the Information Age has changed the way we communicate.

I would like to share a story that illustrates this point. I was in Europe on a trade mission. I got up in the middle of the night to check the Jazz playoff game on the Internet. A familiar voice interrupted. "You've got mail."

The email was from my 8 year-old son, Westin. "Dear Dad. I just stapled my thumb. Love, Westin."

I could picture Westin in my study, stapling drawings into a scrapbook. A staple in the thumb is world news for someone, so he reached for a tool now commonplace: the Internet. I responded in an e-mail with some affection and advice on using a Band-Aid and Neosporin. But this is our world now, where an 8 year-old can reach across the globe for instantaneous sympathy and comfort from a father.

The expectation we have of making instant connections is going to drive this change. If we fight it, we die; if we accept it, we survive; if we lead it, we prosper.

The second area is competitiveness. Our nation is an economic team. Global competitiveness will be dependent upon governments' willingness to change, to adapt, to be fast. If we choose not to respond adequately and fast enough to this change, we will drag our economy to a point where it will not be globally competitive.

The third force is just sheer mechanics. I walked into a business recently and saw a typewriter sitting on a desk. I remarked that I hadn't seen one of those around in a while, and asked why it was being kept.

"To fill out government forms," I was told.

True story. There are businesses all over the country that are preserving this relic to fill out government forms because we have not been responsive.

I would now like to outline five principles I have learned in leading this transition.

First, leadership starts at the top. Not long ago I met with a senior executive from Oracle. He was talking about his efforts to market businesstobusiness transitions and systems, and how he was implementing them. I asked, "What is the one thing you have learned that always seems to apply to you in your business?"

He said, "Leadership has to start at the top. It takes someone who says, `This is the way we're going, this is what the outcome is going to be. We're going to get this done.'"

I agree with this statement. In my own experience, I have found that for government to adapt to new technologies, to literally rethink its processes requires a strong executive voice with a clear vision at the top demanding it.

Second, in government, collaboration is an absolute necessity. Despite the fact that you might have someone at the top setting a tone, very few of the changes we make in terms of systems or processes can be done unilaterally within government.

For example, we have been working to radically streamline the licensing of automobiles. One of our objectives has been for people to be able to go to a car dealer, to buy their car, and to walk out with the license plates in hand not to have to go back two weeks later, either to pick them up or to have them sent to their homes.

In order to accomplish that, we had to develop collaboration between the automobile dealers and the local governments and all the taxing authorities. So even a strong hand at the top demanding that kind of progress is not enough. This requires a clear vision set by leaders, and then a collaborative atmosphere.

Third, question every assumption. This means not just asking, "Can we automate this process?" But asking, "Is the process necessary?"

I was told that when a person gets picked up for drunk driving, the stack of forms in our state for a patrolman to fill out is about half an inch thick. The paperwork takes between 3.5 to 4 hours to complete, and the officer is off the road that entire time. The paperwork involved filling out the name, address, phone number and license number several different times on several different forms. Then that packet of material would be photocopied and sent to five different places. It was a hugely expensive, timeconsuming process. We concluded the first thing we ought to do was put a computer in the patrol car. That required keyboard training for our patrolmen. We then went through each of the different forms and asked, "Why do we have to have this form?" Most of the time it turned out it was some agency that had the same information but wanted it on their form. Over time we have been able to get to the point where patrolmen can enter the information one time. The next step is to swipe the license information off a Smart Card, then transfer it electronically to the five agencies. This dramatically reduces the time it takes to process that kind of a transaction.

Streamlining this process required multiple agencies to collaborate; it required a clear direction; it required us to question every assumption along the way; and it required people to give up some of their proprietary interest in their different forms.

I see this not just among and between agencies and local governments; this is also a profoundly important issue with respect to how we interact between states. I am beginning to see the whole concept of federalism put under an entirely new pressure. And the pressure is the marketplace.

I had a business person who I know to be an ardent defender of state regulatory responsibility say to me that he had been trying to license himself to do the same thing in 50 different states. He happened to be in the insurance industry. He said, "The process of being licensed to sell insurance in 50 different states is beyond belief. 50 different applications, 50 different regulatory attitudes, 50 different checks." He had to employ a fulltime person just to fill out the forms. He felt he could not be required to do this and remain competitive.

Now, this ardent supporter of state regulation is going to Congress saying, "You've got to solve this problem for me; something's got to be done." We're seeing something other than the federal and state inclination to want to have power; we're seeing the market comparative saying, "You've got to solve this, or I can't remain competitive."

If the states do not solve this problem, they will lose their capacity to regulate what goes on in their communities. If that happens, local consumers will lose the ability to be protected because you can not protect communities from Washington.

What's the solution? A website, coordinated among the states, where a person can go one time, enter the information, have the information made available to all 50 states. The state continues to maintain the decision process, but the information is made centrally available. Central coordination with local control will need to become another mantra for the 21st century.

The fourth principle: not underestimating the time that this takes to happen. What seems like it will take three years sometimes takes five in the transition and training of employees. The curve is steep here, but it has to be done. In my experience, this is not easy. But it absolutely has to be done.

And last, it is critical that we recognize the importance of learning from others' mistakes.

Now, I would like to shift gears and talk about the role of leaders, particularly executives and governors, in economic development.

Over time government leaders have played a critical role in economic development, but we have tended to see it as the process of working the levers of power within a regulatory system, in simply being the salesperson for the state, in making certain the laws are correct, that the tax structure is correct. I'm beginning to understand that for a community to prepare itself to be a 21st century community, that it requires a different level of leadership. That is, the leadership to coordinate and the leadership to be a catalyst to make things happen between the public and the private sector.

In our state, we are in pursuit of hightech jobs. We have noted that we have a particular geographic advantage in that we are only an hour from Silicon Valley. In fact, you can get from Salt Lake City to Silicon Valley faster than it takes to drive across Silicon Valley.

Silicon Valley is a boiling pot of ideas and money. But it has a couple of challenges: there are not enough workers to supply its need, and it does not have space for anybody anymore. A 1,500 square foot house in Silicon Valley costs $750,000. A square foot of office space costs about $12-14...per month! In Utah, a square foot of office space goes for $15-18...per year! We have a workforce growing at twice the national average. We have the capacity to become a growout location for these companies.

We formed the Utah/Silicon Valley Alliance to partner with hightech businesses to bring jobs to Utah and to discover how we can make ourselves more attractive to these companies. People are responding; they are participating in the alliance.

This experience has taught me that the most important thing I can do in my role as governor is to bring people together. The role of an economic development executive, or a state executive or a county executive today is not just to operate the functions and levers of government; it is to lead the important collaborations between the public and the private sector that will bring a better quality of life to our communities.

Change is going to happen. These are grand, shaping forces. We can fight them and die; we can accept them and survive; or we can lead them and prosper.

I would just leave you with this challenge. This is a grand opportunity we have to be in public service at a time when this transition is occurring. Let it be said of us that we were the ones who made the transition into the Information Age, that we met every challenge and did not waver. Let it be said that we believed, that we cared, and most of all that we did it with our eye on the next generation. Thank you.