A Lean Startup for Italian Reforms

HOW TO APPLY TO POLITICS THE METHODOLOGY THAT HAS ALREADY HELPED CREATE NEW SUCCESSFUL BUSINESSES IN THE WORLD, WHILE MINIMIZING COSTS AND THE RISK OF DOING USELESS THINGS. THE WAY STARTUPS ARE LAUNCHED IN SILICON VALLEY CAN BE AN EXAMPLE FOR ITALY'S REFORM PROCESS

In Italy, every election campaign and every formation of a new government are followed by solemn announcements about momentous reforms that will change the lives of citizens and the fate of the nation. Then a long debate starts among political factions, mostly on television, on what is useful for the country and the best measures to be implemented. This is followed by a round of binding opinions by labor unions and employers’ associations adding a further level of complexity.

A long process of mediation and compromise then ensues. If evertything goes well, in two-three years the reform becomes law of the state. After a further two to three years, the first effects of the reform become visibile, and the debate starts again about whether and how the law should be changed. If the answer is affirmative, you need another two or three years to mend the existing law. End result: it takes a decade and two iterations to have a functioning reform in Italy, with all attending social and political costs, and loss of the country’s competitiveness.

This top-down approach, where laws are imposed on the economy without any evidence of what is working, is no longer sustainable in an era of digital velocity. A new method and approach is needed. Lean government must supersede heavy-handed government, by following the lean startup method adopted by fledgling firms, in order to understand quickly and with minimal waste of resources which business model can best work and meet consumer needs.

Implemented for the first time in the mid-2000s by Eric Ries and Steve Blank, this is how successful startups are made in Silicon Valley today. In short, the guiding principle is to treat any new entrepreneurial activity as a business experiment, identifying assumptions/presumptions that need to be actually validated before being turned into marketable products. Through a prototype given to potential customers, firms figure out which product features better meet the needs of consumers, so that some ideas are implemented and others rejected. All through an iterative process that maximizes learning and minimizes the cost and risk of making something that nobody wants to use.

The method has already been successfully applied by the Obama administration in 2010, first to create a new agency for the protection of citizens from risky financial products and services (the Consumer Financial Protection Bureau), and then to the creation of an agency for the protection of health (healthcare.gov). The latter was set up in just 90 days, and at a very low cost, but with an effectiveness that has proven disruptive. A similar experimental approach was recently implemented by the former Minister for Territorial Cohesion Fabrizio Barca in Italy, and with excellent results.

Adopting the startup approach in policymaking would not only reduce the inefficiencies and costs of politics, but it would also increase the effectiveness and benefits of policies, contributing to the professional management of public affairs based on sound data.

by Carmelo Cennamo, Dept. of Management and Technology, Bocconi
Translated by Alex Foti