Tag Archives: skill set

The Business of Government

Americans like to believe that government should be run like a business. That belief–pernicious and naive– helped elect Donald Trump, and its persistence is evidence (as if any additional evidence is needed) of the public’s profound lack of civic literacy.

Should government be run in a businesslike fashion? Of course. Is managing a government agency “just like” managing a business? Not at all.

A former colleague recently shared an article addressing the differences between business and government. Addressing the “myth” that anyone who can run a successful business can manage government, the author noted

This is not a 21st-century — or even a 20th-century — phenomenon. In a classic 1887 article, Woodrow Wilson, then a professor at Princeton University, maintained that there was a “science of administration” — arguing, in effect, that there were principles of management that transcended the context in which they were applied. “The field of administration is a field of business,” wrote Wilson. “It is removed from the hurry and strife of politics.”

Later observers and scholars of public administration thoroughly discredited this notion. The pithiest statement on the topic came from Wallace Sayre of Columbia University, who argued in 1958 that “public and private management [were] fundamentally alike in all unimportant respects.” In 1979, Graham Allison, then dean of the Kennedy School of Government at Harvard, used Sayre’s comment as a launching point from which to examine similarities and differences. He noted that both private firms and governments must set objectives, develop plans to achieve those objectives, hire people and direct them toward the achievement of objectives, and manage external environments. But he observed that the way in which these things occur is often fundamentally different from one sector to another.

The article lists some of the important ways in which private enterprises differ from public ones.

Government is about this thing called the “public interest.” There is no such animal in the private sector. Private firms care about their stakeholders and customers; they do not generally care about people who do not invest in their businesses or buy things from them. Thus, accountability is by necessity much broader in government; it is much more difficult to ignore particular groups or people.

Private-sector performance is measured by profitability, while performance measurement in government needs to focus on the achievement of outcomes.

Compromise is fundamental to success in the public sector. No one owns a controlling share of the government…. The notion of a separation of powers can be anathema to effective private management. It is central to the design of government, at least in the United States.

Government must constantly confront competing values. The most efficient solution may disadvantage certain groups or trample on individual or constitutional rights. In the private sector, efficiency is value number one; in government, it is just one of many values.

Government has a shorter time horizon. In government, the long term may describe the period between now and the next election. Thus there is a strong incentive to show relatively immediate impact.

Government actions take place in public, with much scrutiny from the press and the public. There is no equivalent of C-SPAN showing how decisions are made in the corporate boardroom. Corporate leaders do not find it necessary to explain their every decision to reporters.

When corporate executives are elected to run cities or states, they often expect to operate as they did in their companies, where they made the decisions and others obediently carried them out. But legislative bodies–even those dominated by the political party of the chief executive–are not “minions.” They too are elected officials, and they bristle (rightly) when a mayor or governor or president presumes to issue orders. Successful relations between the legislative and executive branch require negotiation, diplomacy and compromise–and those aren’t management skills generally found among corporate CEOs.

Trump and most of his cabinet nominees lack any government experience. Most also lack any education relevant to the missions or operations of the agencies they have been tapped to lead. They don’t know what they don’t know.

And it has become quite obvious that the concept of “the public interest” will be new to all of them….