Archive | May 2016

Executives ≠ Leaders; Business Operations ≠ Government Operations; Business Executives ≠ Political Leaders

“We must reject the idea – well-intentioned, but dead wrong – that the primary path to greatness in the social sectors is to become ‘more like a business.’” — from Jim Collins’ “Good to Great and the Social Sectors

(“Social sectors” can be easily replaced with “government agencies.”)

When I first read that passage, I wanted to dance a jig. Finally, someone well known and highly respected for his ability to bridge academics to practice says something that I, with little public reputation, have been arguing for quite some time.

imgres-2While a great leader – with talent manifested in a track record of sound judgment and excellent decisions outcomes – may be able to transfer her talents from business to social sectors and government, the entities themselves are not quite comparable. Using Mr. Collins’ language, both the input and output of business operations is money. In government operations, money is only an input; the output measurement is largely effectiveness. Furthermore, many functions and objectives within a government may compete with each other, such as environmental concerns versus energy production.  Comparatively speaking, focusing on only making money seems more straightforward.

When a business runs into trouble, it allocates money to finding solutions, fixing things, and/or generating PR campaigns – in real time. A government agency doesn’t get to allocate money easily, or quickly. A typical business executive may choose from a diverse range of options for any issue at hand, and most of the time, the boss doesn’t need to consult with others beyond those few the boss likes. The president of United States has to work with many body collectives; within his inner circle, he may occasionally get pushback, but outside of the West Wing, the opposition has grown fiercer over the decades. Being tough is a requirement for the US presidency, but it doesn’t give anyone the right to shout louder, talk incessantly with made-up stuff, and insult others with impunity.

Many candidates of this year’s presidential campaign have been making racist, misogynistic, inflammatory, and simply false statements. These people would have been fired long ago had they been employed in private companies or public sector entities. Yet, one of them is now the presumptive nominee in one of the major parties in our country, which is regarded as the leader of the free world. For now.

More importantly, on the matter of running government as a business, as one writer, John Harvey, argues well in a 2012 Forbes leadership column, “not everything that is profitable is of social value and not everything of social value is profitable.” The various government agencies have different types of functions and purposes, but their purposes are not to make profits. And even if we debate till our faces are blue, we cannot ever agree on which agency and which function should be privatized. Further, to think that somehow private businesses are more efficient – think about hospitals, phone companies, most airlines, your local cable company, to name only a few – is just not realistic.

In today’s private industry, many large-ish companies run like government: top-down decision-making, little transparency, little attention to consumers’ voices, blatant intrusion into our privacy…etc. Market mechanism doesn’t recognize morality and it isn’t always effective in checking and catching abusers and cheaters, from both within and without. How many colossal private industry meltdowns do we have to go through before this lesson is learned? Should we take that kind of risk in running our government like business?

I am by no means arguing against checking the efficiency and effectiveness of government, but the metrics for measurement are not readily transferrable from private sector to government, certainly not without careful calibration. Running a government and operating a business are fundamentally different. In fact, many government agencies’ budgets are so constraining (with most employees’ pay, especially most senior executives’ pay, at much lower levels than private industries) that from a financial perspective, perhaps some of these agencies are more efficient than private businesses?!imgres-1

Again, it’s not that government cannot learn a thing or two from private industries…or vice versa. Let’s just not mindlessly associate private industry’s practices with virtue and government’s practices with evil. And if we really want some business executives (with true leadership qualities) to lead our government agencies or branches, let’s choose executives who have a history of wisdom instead of self-indulgence, who recognize talent over sycophancy, who show a willingness to work with other wise people, who exhibit breadth of knowledge and passion for truth, and feel deep compassion for all people. Such leaders would have a higher probability of creating effectiveness, financially or otherwise.

Most of today’s politicians deserve the scorn from the general public. They are as responsible for the rampant bureaucratic waste as the executives and managers running the various agencies. However, when it comes to government waste, we the voters have to take some responsibilities. These “wastes” are totally socially constructed reality. It seems that a good portion of people use the term only on the programs with which they disagree. The left thinks the defense budgets are wasteful corporate welfare, and the right thinks the Affordable Care Act is wasteful public welfare. Who’s right?!

Eric Schnurer in The Atlantic points out that most of us have some pet government programs we want to keep while eliminating others. While many have complained about the growing federal budget and “wasteful” programs, by and large, the ones we might consider giving up would amount to a miniscule dent in the budget. And how do we go about agreeing on what’s truly “wasteful” and to be eliminated? “The public — not just here, but everywhere — demands a wide range of government services. On the other hand, the public is unwilling to pay for the government it demands. Yes, that means taxes.

images-4And just about all experts, and non-experts too, agree that indiscriminately cutting budgets across the board is the most inane way to go about reducing our waste. Yet, that’s exactly what Congress has given us, through “sequestration.” In the meantime, we think building a wall across our southern border is a wise way of spending money? (Hint: Rome tried that on its northern border in Britain, China tried that on its northern border in Asia, Russia tried it on its western border in Berlin, France on its eastern border with Germany. Admittedly, nobody seems to have tried it on its southern border, so maybe that will work better.) Strangely, these days, it seems the comedians have a better grasp of the nuances of public policy. For another perspective on building this wall, please take some time to view John Oliver’s delivery on the topic.

In general, I have avoided talking about politics in this space. However, the pervasive insistence that business operators know better how to run our government in the face of evidence to the contrary, has compelled me to cross the line. I am sure I have overlooked many aspects, so I invite you to help me learn more in this area.

Till next time,

Staying Sane (and Calm) and Charging Ahead.

Direct Contact: taso100@gmail.com